<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ROADWAY SERVICES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ROADWAY SERVICES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
/ / 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:
Not Applicable
(2) Form, schedule or registration statement no.:
Not Applicable
(3) Filing party:
Not Applicable
(4) Date filed:
Not Applicable
<PAGE> 2
ROADWAY SERVICES, INC.
1077 GORGE BLVD.
P.O. BOX 88
AKRON, OHIO 44309-0088
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 11, 1994
------------------
TO THE SHAREHOLDERS:
You are hereby notified that the Annual Meeting of Shareholders of Roadway
Services, Inc., will be held Wednesday, May 11, 1994, at 9:00 a.m. Eastern
Daylight Time, at the Sheraton Suites Hotel, located at 1989 Front Street,
Cuyahoga Falls, Ohio, for the following purposes:
1. To elect ten directors to the Board of Directors.
Ten nominees to be presented for election will be George B. Beitzel,
Richard A. Chenoweth, Joseph M. Clapp, Norman C. Harbert, Charles R.
Longsworth, Robert E. Mercer, G. James Roush, Daniel J. Sullivan, William
Sword and Sarah Roush Werner, who are presently members of the Board of
Directors of the Company.
2. To approve the adoption of the Roadway Services, Inc. 1994 Nonemployee
Directors' Stock Plan.
3. To consider a proposal submitted by a shareholder, if presented at the
meeting, with respect to confidential voting, which the Board opposes.
4. To ratify the designation of Ernst & Young as the independent auditors of
the Company for 1994.
5. To consider such other business as may be brought before the meeting.
The record of shareholders entitled to notice and to vote at the meeting was
taken as of the close of business on March 25, 1994.
You are invited to attend the meeting, but whether or not you expect to
attend in person, please mark, sign, date and return the enclosed proxy in the
accompanying postage-paid envelope so that your shares will be represented at
the meeting or adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS. D. A. WILSON
Secretary
April 11, 1994 ------------------
PROXY STATEMENT
This Proxy Statement is furnished to shareholders in connection with the
solicitation by the Board of Directors of Roadway Services, Inc. (the Company)
of proxies to be used at the Annual Meeting of Shareholders to be held
Wednesday, May 11, 1994, at 9:00 a.m. Eastern Daylight Time, at the Sheraton
Suites Hotel, located at 1989 Front Street, Cuyahoga Falls, Ohio, or any
adjournment thereof.
The NOTICE OF ANNUAL MEETING OF SHAREHOLDERS, this PROXY STATEMENT and the
form of PROXY are being mailed to shareholders on April 11, 1994. A copy of the
Company's Annual Report on Form 10-K may be obtained without charge by writing
the Secretary of the Company at the above address.
RECORD DATE AND VOTING REQUIREMENTS
The record of shareholders entitled to vote was taken as of the close of
business on March 25, 1994. At that date, the Company had outstanding and
entitled to vote 39,022,565 shares of common stock without par value. Each share
of common stock entitles the holder to one vote on all matters properly brought
before the meeting, including the election of directors.
Shares can be voted only if the shareholder is present in person or by
proxy. Whether or not you expect to attend in person, you are encouraged to
return the enclosed proxy. Your vote is important. You may revoke your proxy at
any time prior to the exercise of the powers it confers. The shares represented
by a properly executed proxy card will be voted in the manner directed therein
by the shareholder.
Unless a shareholder requests voting of his shares be withheld for any one
or more of the nominees for director, his shares will be voted by the Proxies
for the election as directors of the ten nominees.
Where a shareholder specifies a choice with respect to any other proposal
set forth in this Proxy Statement, his shares will be voted (or withheld from
voting) in accordance with the instructions given. If no specific instruction is
given, the shares will be voted for Proposal Nos. 2 and 4; against Proposal No.
3; and, in the discretion of the Proxies, on such other business as may properly
come before the meeting. The Board of Directors is not aware of any matter to be
presented for action at the meeting other than those set forth herein.
The representation in person or by proxy of at least a majority of the
outstanding shares entitled to vote is necessary to provide a quorum at the
meeting. Directors are elected by a plurality of the affirmative votes cast.
Abstentions and "non-votes" are counted as present in determining whether the
quorum requirement is satisfied. A "non-vote" occurs when a broker, or other
nominee, holding shares for a beneficial owner votes on one proposal, but does
not vote on another proposal. Abstentions and "non-votes" will be treated as
votes against proposals presented to shareholders other than elections of
directors.
The Board of Directors has designated R. A. Chenoweth, Director; J. M.
Clapp, Director, Chairman and CEO; and D. A. Wilson, Senior Vice
President-Finance and Planning and CFO as Proxies for appointment by
shareholders to represent and vote their shares in accordance with their
directions.
1
<PAGE> 3
PRINCIPAL HOLDERS OF COMPANY COMMON STOCK ON FEBRUARY 28, 1994
Other than those named in the following table, the Company knows of no
person owning of record or beneficially more than 5% of the outstanding common
stock entitled to vote.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF % OF
NAME AND ADDRESS OF SHARES IN VOTING SHARES OUTSIDE VOTING
BENEFICIAL OWNER VOTING TRUST (A) STOCK VOTING TRUST STOCK
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sarah Roush Werner
P. O. Box 611
Marysville, Washington 98270 2,791,775(b) 7.15 885,614(c) 2.27
The GAR Foundation
Hugh Colopy and
National City Bank, Akron, Trustees
One Cascade Plaza
Akron, Ohio 44308 1,987,841 5.09 841,215 2.16
G. James Roush
P. O. Box 3123
Bellevue, Washington 98009 2,000,000 5.13 95,724(d) 0.24
Other Shareholders 257,910 0.66 711,083 1.82
---------------- ------ -------------- ------
Total 7,037,526 18.03 2,533,636 6.49
Roadway Services, Inc. Stock Bonus Plan
National City Bank, Trustee
P. O. Box 5756
Cleveland, Ohio 44101 6,359,625(e) 16.30
Roadway Services, Inc. Stock
Savings and Retirement Income Plan
National City Bank, Trustee
P. O. Box 5756
Cleveland, Ohio 44101 2,281,350(e) 5.85
Invesco PLC
11 Devonshire Square
London, England EC2M 4YR 3,670,135(f) 9.41
</TABLE>
- --------------------------------------------------------------------------------
(a) Pursuant to the terms of the Voting Trust of June 1, 1966, as amended and
restated effective November 1, 1992, and extended for a term ending October
31, 2002, the voting trustees, R. A. Chenoweth and G. J. Roush, have
authority to attend all meetings of the shareholders, to exercise consents
and to vote the shares relative to the election of directors and any other
matter that may be brought before the shareholders; provided that in the
case of certain proposals involving major decisions concerning the Company
or its assets, the voting trustees are to request instructions from each
Voting Trust beneficiary and, if such instructions are received, must vote
in accordance with such instructions. Except as set forth in the Voting
Trust Agreement, the beneficiaries of the Voting Trust have an annual
noncumulative right to withdraw approximately 5% of the shares deposited on
their behalf. The business address of R. A. Chenoweth is P. O. Box 1500, 50
South Main Street, Akron, Ohio 44309. During 1993, The GAR Foundation, and
Hiram College, Dr. George C. Roush and the Roush Family Charitable Lead
Trust, participants in the Voting Trust in the category "Other
Shareholders," inadvertently failed to report to the SEC on a Form 4 eight
transactions (one for The GAR Foundation, two for Hiram, one for Dr. Roush
and four for the Lead Trust) involving the disposition of Company common
stock owned outside the Voting Trust; the transactions were subsequently
reported to the SEC.
(b) Includes 12,573 shares in the Voting Trust as to which Mrs. Werner may be
deemed in law to have investment power but as to which she disclaims
beneficial ownership.
(c) Includes 186,147 shares outside the Voting Trust as to which Mrs. Werner has
investment and voting power although she disclaims any beneficial ownership.
(d) Includes 47,258 shares held on behalf of the family of Mr. Roush as to which
he disclaims beneficial ownership.
(e) Pursuant to the terms of the Roadway Services, Inc. Stock Bonus Plan and the
Roadway Services, Inc. Stock Savings and Retirement Income Plan,
participants are entitled to instruct the trustee as to the voting of any
shares allocated to their account(s). The trustee must vote the shares as
directed. The trustee, however, possesses the power to vote all other shares
held in trust by the Plans (including shares for which it does not receive
instructions from participants) in accordance with its discretion absent the
express direction of the respective Plan Administrative Committee. The
Administrative Committee of the Stock Bonus Plan consists of J. M. Clapp, D.
J. Sullivan and D. A. Wilson, and the Administrative Committee of the Stock
Savings and Retirement Income Plan consists of J. D. Cunningham, A. C.
Snelson and D. A. Wilson.
(f) Invesco PLC disclaims beneficial ownership of all shares since they are held
pursuant to investment advisory contracts through which voting and
investment powers may be shared with clients. No single client owns more
than 5% of the outstanding common stock of the Company, and ownership is
solely for investment purposes.
2
<PAGE> 4
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Code of Regulations of the Company provides that the Board of Directors
shall consist of ten members, except that either the shareholders or the
directors by resolution may change the number at any time. The Board recommends
that the present ten directors be elected for the ensuing year and until their
successors are elected and qualified. All nominees have consented to being named
and to serve if elected. If any nominees for director become unavailable, the
Proxies will be voted for such substitute nominees, if any, as may be nominated
by the Board.
INFORMATION ABOUT NOMINEES FOR DIRECTORS
The information appearing in the following table, regarding principal
occupation or employment and name and principal business of the corporation or
other organization in which such occupation or employment is carried on, covers
at least the last five years. The period during which each nominee has served as
a director of the Company includes service as a director of Roadway Express.
Except as otherwise noted, each person named in the following table has sole
voting and investment power over the shares beneficially owned.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES BENEFICIALLY % OF
PRINCIPAL OCCUPATION, OWNED AS OF VOTING
NAME OTHER DIRECTORSHIPS AND AGE FEBRUARY 28, 1994 STOCK
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George B. Beitzel Retired. Senior Vice President and Director of
Director since 1986 International Business Machines Corporation, a
manufacturer of computers and office equipment,
from 1972 to 1987. Director: Bankers Trust New
York Corporation, Computer Task Group,
FlightSafety International, Inc., Phillips
Petroleum Company, Rohm and Haas Company, and
TIG Holdings. Age 65. 5,616(a) 0.01
Richard A. Chenoweth Principal of Buckingham, Doolittle & Burroughs,
Director since 1980 a Legal Professional Association, Akron, Ohio.
Director: First Bancorporation of Ohio and
First National Bank of Ohio. Age 68. 2,282(a) 0.01
Joseph M. Clapp Chairman and Chief Executive Officer of the
Director since 1982 Company effective January 1, 1994. Chairman and
President from 1987 to 1993. Mr. Clapp joined
Roadway Express in 1967. Age 57. 79,757 (a)(b) 0.20
Norman C. Harbert Chairman and Chief Executive Officer of The
Director since 1981 Hawk Group, a venture capital company investing
in industrial firms, since 1988. Director:
Second National Bank of Warren. Age 60. 2,628 (a) 0.01
Charles R. Longsworth Chairman of The Colonial Williamsburg
Director since 1989 Foundation, a colonial restoration museum and
hotel complex, since 1992 and President and
Chief Executive Officer from 1979 to 1992.
Director: Crestar Financial Corporation,
FlightSafety International, Inc., Houghton
Mifflin Co. and Saul Centers, Inc.
Age 64. 266 0.00
Robert E. Mercer Retired. Chairman and Chief Executive Officer
Director since 1989 of The Goodyear Tire & Rubber Company, a
manufacturer of tires and related products,
from 1983 through December 1988 and Chairman to
March 1989. Director: Chemical Banking
Corporation, The General Electric Company, and
CPC International. Age 70. 945 0.00
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES BENEFICIALLY % OF
PRINCIPAL OCCUPATION, OWNED AS OF VOTING
NAME OTHER DIRECTORSHIPS AND AGE FEBRUARY 28, 1994 STOCK
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
G. James Roush (c) Private investor. Bellevue, Washington. Age 66.
Director since 1969 2,095,724(a) 5.37
Daniel J. Sullivan President and Chief Operating Officer of the
Director since 1990 Company effective January 1, 1994;
President-National Carrier Group and Senior
Vice President during 1993; Vice President and
President -- National Carrier Group during
1992; Vice President and Group Executive from
July 1990 through 1991 and President of Roadway
Package System through June 1990. Mr. Sullivan
joined Roadway Express in 1972. Age 47. 40,420 (b) 0.10
William Sword Chairman of the Board of Wm. Sword & Co.
Director since 1977 Incorporated, investment bankers, since 1976.
General Partner, Morgan Stanley and Co. from
1962 through 1975. Director: American Brands,
Inc. from 1976 to 1986. Age 69. 266 0.00
Sarah Roush Werner (c) Private investor. Marysville, Washington. Age
Director since 1979 63. 3,677,389(a) 9.42
</TABLE>
- --------------------------------------------------------------------------------
(a) Includes shares owned by family members of the nominees as to which
beneficial ownership is disclaimed, as follows: Mr. Beitzel, 1,180 shares;
Mr. Chenoweth, 416 shares; Mr. Clapp, 100 shares; Mr. Harbert, 100 shares;
Mr. Roush, 47,258 shares; and Mrs. Werner, 198,720 shares.
(b) Includes shares held pursuant to the Stock Bonus Plan, the Stock Savings and
Retirement Income Plan and the Employee Stock Ownership Plan as of December
31, 1993, as follows: Mr. Clapp, 25,612 shares and Mr. Sullivan, 10,493
shares.
(c) Mr. Roush and Mrs. Werner are brother and sister.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors of the Company has an Audit Committee, a Nominating
Committee, a Compensation Committee, an Executive and Finance Committee and a
Planning Committee.
The members of the Audit Committee are G. B. Beitzel, R. A. Chenoweth and C.
R. Longsworth. During 1993, the Committee reviewed the audit plan developed by
the Company's independent auditors and the professional services provided by
them to assure their independence. Additionally, the Audit Committee reviewed
the annual financial statements prepared by management prior to their issuance
and met with the independent auditors to review their opinion on the annual
financial statements and the results of their audit procedures. The Committee
also reviewed, in consultation with the independent auditors and the Company's
Director of Internal Audit, the adequacy of the Company's internal controls.
The members of the Nominating Committee are R. A. Chenoweth, J. M. Clapp and
G. J. Roush. During 1993, the Committee selected nominees to be elected
directors and officers of the Company. Written recommendations for director
nominees to be elected at the 1995 Annual Meeting that are addressed to G. J.
Roush, chairman of the Nominating Committee, at the Company's principal offices
and received before December 9, 1994 will be considered by the Nominating
Committee.
The members of the Compensation Committee are N. C. Harbert, C. R.
Longsworth, G. J. Roush and W. Sword. The Committee recommends compensation for
executive officers of the Company.
The members of the Executive and Finance Committee are G. B. Beitzel,
J. M. Clapp, R. E. Mercer, G. J. Roush, D. J. Sullivan and W. Sword. The
Committee makes recommendations for capital expenditures and other financial
matters and may act for the Board of Directors between its regular meetings.
The members of the Planning Committee are G. B. Beitzel, J. M. Clapp, N. C.
Harbert, R. E. Mercer and D. J. Sullivan. The Committee reviews plans developed
by management for the growth of the Company.
4
<PAGE> 6
During 1993, the Board met five times. The Audit Committee, Executive and
Finance Committee and Compensation Committee each met five times; the Nominating
Committee met once; and the Planning Committee met six times. Average attendance
at the meetings of the Board and the meetings of all its committees was 98%.
DIRECTOR COMPENSATION
During 1993, all nonemployee directors of the Company were paid an annual
retainer of $21,000 plus (a) an annual retainer of $4,000 for each committee
membership and (b) an additional sum of $1,400 for each meeting of the Board or
a committee, except when held the same day as a meeting of the Board or another
committee, in which case an additional sum of $850 was paid. Additionally, the
chairmen of the Audit Committee and the Compensation Committee were each paid an
annual retainer of $4,000 and all other committee chairmen (except officers of
the Company) were each paid an annual retainer of $3,000. The same fee
arrangement for nonemployee directors will be in effect for 1994.
Three compensation plans were in effect during 1993 for nonemployee
directors. These include the Roadway Services, Inc. Nonemployee Directors' Stock
Plan (the 1989 Stock Plan); the Roadway Services, Inc. Directors' Deferred Fee
Plan (the Deferred Fee Plan); and the Roadway Services, Inc. Retirement Plan for
Nonemployee Directors (the Retirement Plan).
THE 1989 STOCK PLAN: Under the 1989 Stock Plan, which was approved by the
shareholders at the Annual Meeting held on May 10, 1989, and effective on that
date, Mrs. Werner, and Messrs. Beitzel, Chenoweth, Harbert, Longsworth, Roush
and Sword each were awarded 1,333 shares of Company common stock having a fair
market value at that time of $39,990, with vesting to be phased in over a
five-year period, in tandem with a grant of options to purchase 5,332 shares at
a price of $30 per share. Since Mr. Mercer was first elected a director in
August 1989, he was not eligible to participate in the 1989 Stock Plan until May
9, 1990, on which date he was awarded 1,111 shares of Company common stock
having a fair market value at that time of $39,996 with vesting to be phased in
over a five-year period, in tandem with a grant of options to purchase 4,444
shares at a price of $36 per share.
The shares and option rights are subject to forfeiture and cancellation
according to a formula. Two years after the respective grants, based on the fair
market value of a share, 40% of such option rights became exercisable and the
related shares were forfeited. Thereafter, 20% of such shares or related option
rights become nonforfeitable or exercisable annually on the same basis. During
1993, 267 shares of the 1989 awards were forfeited by each of Directors Werner,
Beitzel, Chenoweth, Harbert, Longsworth, Roush and Sword and each became
entitled to exercise options to purchase 1,068 shares at $30 per share, and 222
of the shares awarded to Mr. Mercer in 1990 were forfeited and he became
entitled to exercise options to purchase 888 shares at $36 per share.
THE DEFERRED FEE PLAN: Under the Deferred Fee Plan, any nonemployee director
may elect to defer receipt of all or a portion of the compensation payable to
him or her for services as a member of the Board or any committee thereof.
Amounts deferred may earn interest at a formula rate or be credited in units
equal in value to the average price of shares of Company common stock acquired
by the Roadway Services, Inc. Stock Bonus Plan during the year in which such
amounts are payable. Each credited unit is payable in cash based on the fair
market value of Company common stock at the time of payment. Deferred amounts
will be payable upon termination of service as a director, or on certain earlier
dates, as requested by the director. Messrs. Beitzel and Roush participate in
the Deferred Fee Plan under the credited units alternative.
THE RETIREMENT PLAN: Under the Retirement Plan, a nonemployee director is
entitled to receive a retirement benefit in annual amounts equal to the annual
retainer in effect during the year of his retirement. Payment of such benefits
will commence upon termination of service as a director. Payments will be made
in quarterly installments for the joint lives of the retired director and his
surviving spouse until the number of such payments equals the total number of
quarters of his service as a director. The Retirement Plan also provides an
additional annual retirement benefit payable in cash equal to the market value
of 200 shares of Company common stock as of December 31 of the year prior to the
year in which the additional benefit is paid. A director must have served a
minimum of five years on the Board in order to receive the additional benefit.
If a director has served at least five years but less than eight years at the
time of his retirement, the additional benefit will be paid annually thereafter
for a period of eight years, limited to the joint lives of the retired director
and his spouse. If a director has served for at least eight years at the time of
his retirement, the additional benefit will be paid annually thereafter until
the number of such payments equals the total number of years of his service as a
director, limited by the joint lives of the retired director and his spouse.
NONEMPLOYEE DIRECTOR CHARITABLE AWARD PROGRAM: As part of its overall
program to promote the mutual interest of the Company and its nonemployee
directors in charitable giving, the Company established, effective May 8, 1991,
a Nonemployee Director Charitable Award Program which is funded by life
insurance policies on the lives of nonemployee directors. Upon the death of a
nonemployee director (or certain other qualifying events), the Company will
donate up to $1 million (or its actuarial equivalent) to one or more qualifying
charitable organizations recommended by the individual director funded entirely
by insurance proceeds. Individual directors derive no financial benefit from
this program since all available deductions for tax purposes accrue solely to
the Company.
5
<PAGE> 7
EXECUTIVE COMPENSATION AND SHAREHOLDINGS BY EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE: The following table sets forth information
concerning annual and long-term compensation for services rendered to the
Company for 1993, 1992, and 1991 by those persons who were the chief executive
officer and the other four most highly compensated executive officers of the
Company during 1993 (collectively, the Named Officers).
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
RESTRICTED STOCK
ANNUAL COMPENSATION AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (A) (BOOK VALUE SHARES) (B) COMPENSATION (C)(D)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CEO Joseph M. Clapp 1993 $325,000 $271,104 $ 206,134 $ 60,771
Director, Chairman and 1992 300,000 390,405 272,373 50,377
President 1991 275,000 309,045 219,255
John P. Chandler (e) 1993 210,000 159,157 17,689 23,010
Vice President- 1992
Administration 1991
John M. Glenn 1993 165,000 64,382 52,160 22,333
Vice President and General 1992 157,500 100,837 72,748 23,286
Counsel 1991 150,000 91,040 61,271
Daniel J. Sullivan 1993 300,000 323,276 177,087 40,436
Director, Senior Vice 1992 270,000 443,587 305,182 37,715
President and President- 1991 245,000 264,416 186,629
National Carrier Group
D. A. Wilson 1993 225,000 137,368 100,830 24,222
Senior Vice President- 1992 205,000 192,693 133,797 24,004
Finance and Planning 1991 190,000 153,395 106,469
and Secretary
</TABLE>
- --------------------------------------------------------------------------------
(a) Reflects incentive compensation earned, less amounts used to purchase
Restricted Book Value Shares (RBV Shares) under the Consolidated Restricted
Book Value Shares Plan for Roadway Services, Inc. (RBVS Plan). Amounts used
to purchase RBV Shares are included in the Long-Term Compensation column.
(b) The amounts set forth in this column do not reflect conventional awards of
restricted stock, but rather reflect amounts of compensation otherwise
provided to the executive officer that he elected to use for the purchase of
RBV Shares under the RBVS Plan. The amounts include (i) the portion of cash
incentive compensation referred to in footnote (a) above and (ii) the value
of certain stock credits awarded under the Roadway Services, Inc. Long-Term
Stock Award Incentive Plan (LTS Plan). RBV Shares are purchased from the
Company at book value. Owners of RBV Shares have the same rights as other
holders of Company common stock, including voting and dividend rights.
However, RBV Shares cannot be resold except to the Company at a price equal
to book value as of the year-end preceding repurchase. Book value was $26.60
as of December 31, 1993, $25.71 as of December 31, 1992, and $22.72 as of
December 31, 1991. RBV Shares owned by the Named Officers, including
purchases with 1993 compensation, are as follows: Mr. Clapp, 53,615; Mr.
Chandler, 1,634; Mr. Glenn, 9,471; Mr. Sullivan, 28,883; and Mr. Wilson,
39,199. For additional information about the RBVS Plan see the Compensation
Committee Report on Page 8, and for more information about the LTS Plan and
the stock credits awarded thereunder for 1993, see the Compensation
Committee Report and the Long-Term Incentive Plans Table.
(c) Reflects (i) dividend equivalents earned on stock credits awarded under the
LTS Plan and predecessor plans (Mr. Clapp, $44,393; Mr. Chandler, $6,632;
Mr. Glenn, $5,955; Mr. Sullivan, $24,058; and Mr. Wilson, $7,844); (ii)
Company matching contributions under the Roadway Services, Inc. Stock
Savings and Retirement Income Plan, a voluntary contributory defined
contribution employee benefit plan ($8,254 for each of the Named Officers)
and (iii) allocations under the Roadway Services, Inc. Stock Bonus Plan, a
noncontributory defined contribution employee benefit plan ($8,124 for each
of the Named Officers).
(d) In accordance with the transitional provisions applicable to the revised
rules on executive officer and director compensation disclosure adopted by
the SEC, the amounts of all other compensation are excluded for 1991.
(e) During 1991 and 1992 Mr. Chandler was the president of Roadway Package
System, Inc. and was not an executive officer of the Company.
LONG-TERM INCENTIVE PLANS TABLE: The following table sets forth information
concerning long-term incentive plans pursuant to which the Named Officers
received awards for 1993. It reflects stock credits awarded under the LTS Plan,
less supplemental stock credits used to purchase RBV Shares. The value of
supplemental stock credits that were used to purchase RBV Shares is included in
the Long-Term Compensation column of the Summary Compensation Table.
Until distribution, dividend equivalents will be credited in shares of the
Company's common stock. Stock credits are distributed as shares in five annual
installments after retirement. Stock credits are fully vested at age 55. For
6
<PAGE> 8
additional information about the LTS Plan and the valuation of stock credits
awarded thereunder, see the Compensation Committee Report on Page 8.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SHARES,
UNITS OR OTHER RIGHTS MINIMUM PERIOD
NAME YEAR (STOCK CREDIT AWARDS) UNTIL MATURATION(A)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
CEO Joseph M. Clapp
Director, Chairman and President 1993 6,631 2 Years
John P. Chandler
Vice President - Administration 1993 1,589 2 Years
John M. Glenn
Vice President and General Counsel 1993 869 2 Years
Daniel J. Sullivan
Director, Senior Vice President and President -
National Carrier Group 1993 2,432 2 Years
D. A. Wilson
Senior Vice President-Finance and Planning and
Secretary 1993 1,708 2 Years
</TABLE>
- --------------------------------------------------------------------------------
(a) After December 31, 1995, 50% of an executive officer's basic stock credits
awarded under the LTS Plan may be used to purchase RBV Shares in a number
equivalent to the number which could be purchased at book value as of
December 31, 1995.
ROADWAY SERVICES, INC. PENSION PLAN: The Pension Plan is a noncontributory
qualified employee defined benefit plan. The Plan provides retirement benefits
after normal retirement at age 65 equal to the greater of (a) 1 1/3% of final
five year average compensation or (b) 1 3/4% of final 20 year average
compensation up to $45,000 and 1 1/2% of final 20 year average compensation in
excess of $45,000, times total years of service not to exceed 30. Benefits under
the Pension Plan are not subject to reductions for Social Security benefits or
other offset amounts. The following table shows estimated annual pension
benefits payable as a straight life annuity under various assumptions based on
final 20 year average compensation and years of service. Annual compensation for
computing annual pension benefits includes base salary and incentive
compensation. For the Named Officers, annual compensation represents the sum of
the amounts shown for 1993 in the Salary and Bonus columns of the Summary
Compensation Table, plus that portion of the amount shown in the Long-term
Compensation column that represents incentive compensation used to purchase RBV
Shares.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS
UPON
RETIREMENT FOR YEARS OF SERVICE
INDICATED
AVERAGE ANNUAL COMPENSATION -----------------------------------
FOR LAST 20 YEARS OF SERVICE 20 YEARS 25 YEARS 30 YEARS
- ---------------------------- --------- --------- ---------
<S> <C> <C> <C>
$200,000 $ 62,250 $ 77,813 $ 93,375
400,000 122,250 152,813 183,375
600,000 182,250 227,813 273,375
800,000 242,250 302,813 363,375
</TABLE>
At normal retirement, the credited years of service and the estimated final
20 year average compensation under the Pension Plan for the Named Officers are:
Mr. Clapp, 30 years and $627,222; Mr. Chandler, 24 1/3 years and $409,474; Mr.
Glenn, 8 1/2 years and $253,588; Mr. Sullivan, 30 years and $777,480; and Mr.
Wilson, 30 years and $485,770. The current estimated annual compensation for the
Named Officers is: Mr. Clapp, $882,000; Mr. Chandler, $424,000; Mr. Glenn,
$305,000; Mr. Sullivan, $779,000; and Mr. Wilson, $506,000.
REPORT OF THE COMPENSATION COMMITTEE ON
1993 EXECUTIVE COMPENSATION
OVERALL PHILOSOPHY AND STRATEGY
Since 1956 a fundamental goal of our company has been to align the interests
of the shareholders and management by making the level of executive compensation
significantly dependent on the areas of importance to shareholders -- corporate
revenue growth, profitability, and stock price appreciation. To this end, the
1993 executive compensation package consisted of four parts: a relatively low
base salary; a potentially generous cash incentive plan tied by formula to
financial results; and two stock plans whose value depends on market price
appreciation and book value growth.
In 1993, Roadway Services officers' base salaries averaged 43% of their
total compensation. Cash incentive compensation and stock credit awards averaged
41% and 16%, respectively.
A general description of the four executive compensation programs follows:
Base Salaries: The Compensation Committee established base salaries for
1993 at a level that it considered to be below the market level for comparable
positions. In establishing these base salaries, the Compensation
7
<PAGE> 9
Committee considered industry-based comparisons provided by the Company's Human
Resources Group. The committee also considered data provided by Towers Perrin,
an outside compensation consulting firm, about companies of comparable size to
RSI in transportation as well as other industries. Industry-based comparisons
included companies in the S&P Trucking index and other large transportation
companies, including air and rail carriers.
In setting compensation for individual executive officers, the Compensation
Committee also took into account evaluation reports prepared by management and,
when available, the Committee's own evaluations of job performance.
Consideration was also given to maintaining internal equity among members of the
executive group in accordance with their respective responsibilities. The salary
for Mr. Clapp, RSI CEO, was set at $325,000.
Cash Incentive Compensation: The cash component of 1993 incentive
compensation for all executive officers, except RSI Senior Vice President Daniel
J. Sullivan (see below), was determined under the Company's 1993 Officers'
Incentive Compensation Plan formula. This plan was similar to annual plans
implemented by the Company in prior years. It was designed so that if stipulated
performance targets were met, each participant, including the Chief Executive
Officer, would earn a cash incentive bonus at a level resulting in excellent
total compensation, thus offsetting the relatively low base salary.
The amount payable to each officer under the plan was determined by a
formula where the measures of performance were return on equity (slightly
adjusted) and revenue growth actually achieved in 1993. Roadway Global Air
start-up losses and the cumulative effect of accounting changes were excluded.
The target return on equity, pre-tax, was 27%, as in the 1991 and 1992 plans. No
bonuses were payable unless a return of 10% was achieved. The revenue target was
$4,201,000,000. Both return on equity and revenue in 1993 were below their
targets. Consequently, bonus levels payable averaged 25% below target amounts.
Mr. Clapp's bonus was $440,334, 25% below his target amount of $585,000.
Cash incentive bonuses for 1993 were also below those for 1992, which is a
further indication of how directly incentive compensation is tied to financial
performance.
As mentioned earlier, Daniel J. Sullivan did not participate in the RSI 1993
Officers' Incentive Compensation Plan. The Compensation Committee felt it was
more appropriate that his incentive compensation be determined under the same
formulas that apply at Roadway Express and Roadway Package System, the major
constituent companies in the National Carrier Group, of which he was president.
Their plans are similar formula and performance-based plans.
Stock-Based Compensation: The Company maintains two stock-based executive
compensation plans that are designed to focus the Company's executive officers
on long-term performance and shareholder value. The Long-Term Stock Award
Incentive Plan provides for annual awards of stock credits, and the Restricted
Book Value Shares Plan affords officers an opportunity to use a portion of their
cash incentive compensation to invest in the Company's common stock.
Long-Term Stock Award Incentive Plan: The Company's 1993 Long-Term Stock
Award Incentive Plan was similar to annual plans that have provided for the
award of stock credits since 1981. The 1993 plan year represented the third year
in a 5-year plan initiated in 1991. In addition to officers of RSI, officers of
a number of RSI's operating companies participate in the plan. Under the plan,
each stock credit becomes distributable as one share of common stock of the
Company in annual installments following retirement.
For 1993, each executive officer other than Mr. Clapp was awarded a number
of stock credits determined by dividing 25% of target incentive compensation by
a formula price of $43.17. Although the Compensation Committee took into account
the aggregate amount of stock credits previously awarded and to be awarded under
the plan when approving this percentage, it did not specifically consider the
amounts of stock credits previously awarded to individual participants. This
formula price reflects a 16% annual increase (less dividends) over the original
price of $34 set in 1991, which represented the rounded average market price of
the Company's common stock during the six months preceding the 1991 award date
and exceeded the market price of the common stock on that date. This formula was
designed to operate as an incentive for executive officers to achieve increases
in the market price of the common stock in excess of 16% (less dividends) on a
year-to-year basis. Total compensation for Mr. Clapp reflects a proportionately
greater weighting of stock credits and lesser weighting of the salary component
than is the case with other officers, in order to provide a more direct
correlation between his compensation and the long-term performance of the
Company's stock.
Some of the executive officers also received "supplemental" stock credits,
which are designed to make up for defined contribution plan benefits lost
because of limitations imposed by the Internal Revenue Code on Company
contributions to its qualified plans. The number of these stock credits was
determined by dividing the value of the contributions which the Company would
otherwise have made to such plans by $61.47. This was the average price at which
the Stock Bonus Plan bought shares in the open market during 1993.
Restricted Book Value Shares Plan: Under the Restricted Book Value Shares
Plan, officers may elect to invest up to 25% of their cash incentive
compensation in Company common stock. Shares are sold at a price equal to their
book value at year-end and cannot be resold except to the Company at a price
equal to book value as of the year-end preceding repurchase. Since both
purchases and sales under this plan occur at book value, participants are
motivated to achieve increases in the Company's book value. During 1993, as
shown in the Summary Compensation Table, the Named Officers invested substantial
portions of their incentive compensation in the Company pursuant to this plan.
8
<PAGE> 10
STATUS OF REPORT
The Board of Directors established 1993 compensation for the Company's
executive officers on the basis of recommendations made by its Compensation
Committee. The foregoing report on 1993 executive compensation was provided by
the Compensation Committee and shall not be deemed to be "soliciting material"
or to be "filed" with the Securities and Exchange Commission or subject to
Regulation 14A promulgated by the Commission or Section 18 of the Securities
Exchange Act of 1934. The Compensation Committee is composed entirely of
nonemployee Directors. The names of the Directors who served on the Compensation
Committee during 1993 are set forth below:
N. C. HARBERT, C. R. LONGSWORTH, G. J. ROUSH, W. SWORD, CHAIRMAN
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total
shareholder return on the Company's common stock with the S&P Composite 500
Stock Index and the S&P Trucking Index, respectively, for the five-year period
commencing December 31, 1988 through December 31, 1993. The graph assumes that
the value of the investment in the Company's common stock and each index was
$100 at December 31, 1988 and all dividends were reinvested. The comparisons in
this table are required by the SEC and, therefore, are not intended to forecast
or be necessarily indicative of the actual future return on the Company's common
stock.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ROADWAY
(FISCAL YEAR COVERED) SERVICES S&P 500 S&P TRUCKING
<S> <C> <C> <C>
1988 100 100 100
1989 142 132 106
1990 133 128 87
1991 218 166 124
1992 245 179 138
1993 221 197 135
</TABLE>
<TABLE>
<CAPTION>
December 31 1988 1989 1990 1991 1992 1993
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Roadway Services 100 142 133 218 245 221
S&P 500 100 132 128 166 179 197
S&P Trucking 100 106 87 124 138 135
</TABLE>
OWNERSHIP OF COMPANY COMMON STOCK BY MANAGEMENT
The following table sets forth the beneficial ownership as of February 28,
1994 of Company common stock by the Named Officers and all executive officers
and directors as a group (excluding G. James Roush and Sarah Roush Werner, whose
beneficial ownership is detailed in the Principal Holders Table on page 2).
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
NAME SHARES(A)(B) VOTING STOCK
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Joseph M. Clapp
Director, Chairman and CEO 79,757(c) 0.20
John P. Chandler
Vice President-Administration and Treasurer 4,852 0.01
John M. Glenn
Vice President and General Counsel 14,764(c) 0.04
Daniel J. Sullivan
Director, President and COO 40,420 0.10
D. A. Wilson
Senior Vice President-Finance and Planning, Secretary and CFO 48,298 0.12
15 Directors and Executive Officers as a group, excluding G. James
Roush and Sarah Roush Werner listed on the "Principal Holders"
table on page 2 309,730(c) 0.79
</TABLE>
- --------------------------------------------------------------------------------
(a) Includes shares held pursuant to the Stock Bonus Plan, the Stock Savings and
Retirement Income Plan and the Employee Stock Ownership Plan as of December
31, 1993, as follows: Mr. Clapp, 25,612 shares; Mr. Chandler,
9
<PAGE> 11
3,218 shares; Mr. Glenn, 3,193 shares; Mr. Sullivan, 10,493 shares; Mr.
Wilson, 9,014 shares; and all executive officers as a group, 127,502 shares.
(b) Includes RBV Shares held pursuant to the RBVS Plan as of December 31, 1993,
as follows: Mr. Clapp, 53,615 shares; Mr. Chandler, 1,634 shares; Mr. Glenn,
9,471 shares; Mr. Sullivan, 28,883 shares; Mr. Wilson, 39,199 shares; and
all executive officers as a group, 183,748 shares.
(c) Includes shares owned by family members as to which beneficial ownership is
disclaimed, as follows: Mr. Clapp, 100 shares and Mr. Glenn, 1,000 shares;
and all directors and executive officers as a group, 2,696 shares.
During 1993 the issuance of supplemental stock credits to Mr. Chandler and
Mr. Newton, two executive officers of the Company, pursuant to the LTS Plan were
not timely reported to the SEC on Form 4. The oversight was corrected on the
next required Form 4 for Mr. Chandler and on Form 5 for Mr. Newton.
ROADWAY SERVICES, INC. 1994
NONEMPLOYEE DIRECTORS' STOCK PLAN
(PROPOSAL NO. 2)
On February 9, 1994, the Board of Directors adopted, subject to approval by
the shareholders of the Company, the Roadway Services, Inc. 1994 Nonemployee
Directors' Stock Plan (the 1994 Stock Plan). The design of the 1994 Stock Plan
is essentially the same as that of the 1989 Stock Plan previously approved by
the shareholders, which has been an important factor in attracting and retaining
Nonemployee Directors while solidifying the common interest of directors and
shareholders in enhancing the value of the Company's common stock. The principal
differences between the two plans are that (a) the fair market value of
restricted stock under the 1989 Plan was $40,000 and under the proposed plan
will be $125,000 and (b) a retiring director under the proposed plan will be
vested for only one additional year after retirement rather than for all
remaining years as would have occurred under the old plan. The number of shares
that may be awarded as restricted stock and released from restrictions or
acquired upon the exercise of option rights is limited to 80,000 shares in the
aggregate. Only directors of the Company who are not employees of the Company or
any of its subsidiaries may participate in the proposed plan. The 1994 Stock
Plan will be effective upon the later of its approval by the shareholders of the
Company or the date upon which the Company has received such rulings,
interpretive letters, legal opinions and other professional advice as to the tax
and other legal ramifications of the plan as it considers necessary. Once the
proposed plan is effective, the old plan will be suspended.
If the proposed plan becomes effective, each nonemployee director elected at
the Annual Meeting (except Mr. Mercer) will be awarded, effective as of the date
of such meeting, shares of Company common stock having an aggregate fair market
value (determined without regard to any restrictions) on the meeting date of
$125,000, with vesting to be phased in over a five year period, in tandem with a
grant of options to purchase a number of shares of Company common stock equal to
four times the number of shares included in the award of restricted stock. Since
Mr. Mercer has one year of remaining participation in the 1989 Stock Plan, he
may not commence participation in the 1994 Stock Plan until May 1995.
Nonemployee directors first elected after the 1994 Annual Meeting will receive
similar awards, effective as of the date of the annual meeting at which they are
elected. For purposes of the plan, the fair market value of shares of Company
common stock is the average of the highest and lowest sales prices of the shares
for a specified date.
Shares of restricted stock and option rights are subject to forfeiture and
cancellation according to a specified formula. If, on the date of the second
annual meeting of shareholders following the effective date of an award to a
nonemployee director under the proposed plan, the fair market value of one share
is less than or equal to 133 1/3% of its fair market value on the award date
(the Vesting Factor), 40% of the option rights granted to such nonemployee
director will be cancelled, and the nonemployee director will continue to hold
40% of the restricted stock awarded to him or her free of restrictions on a
non-forfeitable basis. If, instead, on such date the fair market value of one
share is greater than the Vesting Factor, 40% of the restricted stock will be
forfeited, and the nonemployee director will continue to hold the option rights
granted in tandem therewith, which will then become exercisable. On the dates of
each of the third, fourth and fifth annual meetings following the award date,
20% of the total number of shares of restricted stock awarded to the nonemployee
director will be forfeited or become non-forfeitable, and 20% of the total
number of option rights granted to such nonemployee director will be cancelled
or become exercisable, on the basis of the Vesting Factor.
If a nonemployee director dies or becomes disabled prior to the date of the
fifth annual meeting following an award date, all outstanding shares of
restricted stock awarded to him or her that have not previously become non-
forfeitable will be forfeited or become non-forfeitable, and all option rights
granted in tandem therewith will become exercisable or be cancelled, on the
basis of the Vesting Factor. In the event of the retirement of a nonemployee
director, vesting will be accelerated by one year as of the date of retirement.
Should any nonemployee director cease to serve for any other reason prior to the
date of the fifth annual meeting of shareholders following an award date, all
outstanding shares of restricted stock awarded to him or her that have not yet
become non-forfeitable will be forfeited, and all option rights granted in
tandem therewith will be cancelled, on the day following the day on which such
service ceases.
Nonemployee directors will be entitled to voting, dividend and other
ownership rights with respect to their restricted stock upon its award. If
restricted stock is forfeited, such ownership rights shall terminate. No
additional consideration will be due in connection with any award of restricted
stock. Shares of restricted stock may not be sold, transferred, pledged or
encumbered prior to the date, if any, on which they become non-forfeitable.
10
<PAGE> 12
The option price for shares under the Plan will be the fair market value on
the award date and is payable in cash and/or equivalent value in Company common
stock. Option Rights that become exercisable will expire upon the earlier of:
(i) ten years after the award date or (ii) three months after the director
ceases to serve as such for reasons other than death, disability, retirement
pursuant to the Company's director tenure policy, or other termination of
service as a director of the Company with the consent of a majority of the
members of the Board who are not then participating in the 1994 Stock Plan.
Option rights may not be sold or transferred other than by will or the laws of
descent and distribution. Option rights are exercisable during the nonemployee
director's lifetime only by him or her or his or her legal representative.
It is intended that, upon the lapse, if any, of the restrictions on the
restricted stock, the Company will be entitled to a federal income tax
deduction, and the nonemployee director will recognize personal service income,
in an amount equal to the fair market value of the shares on the date they
become non-forfeitable. Additionally, upon exercise of option rights, it is
intended that if the option price is paid for by surrender of shares of Company
common stock, no gain or loss will be recognized by a nonemployee director to
the extent that the shares received are equal in value to the shares
surrendered. However, the fair market value of the "excess" shares received will
be includable in the director's income as personal service income. The Company
will be entitled to a deduction equal to the amount of the personal service
income recognized by the director at the time the director is taxed.
The Board can amend or terminate the 1994 Stock Plan under certain
circumstances.
If the proposed plan becomes effective, and if the directors nominated for
election are elected at the Annual Meeting, the following persons will receive
the following awards of restricted stock and grants of option rights effective
as of the date of such meeting:
NEW PLAN BENEFITS
ROADWAY SERVICES INC. 1994
NONEMPLOYEE DIRECTORS' STOCK PLAN
<TABLE>
<CAPTION>
ESTIMATED SHARES
OF ESTIMATED SHARES
NAME OF RESTRICTED SUBJECT TO
NONEMPLOYEE DIRECTOR STOCK* OPTION RIGHTS*
- ----------------------------------- ---------------- ----------------
<S> <C> <C>
G. B. Beitzel 1,842 7,368
R. A. Chenoweth 1,842 7,368
N. C. Harbert 1,842 7,368
C. R. Longsworth 1,842 7,368
G. J. Roush 1,842 7,368
W. Sword 1,842 7,368
S. R. Werner 1,842 7,368
All Nonemployee Directors
as a group, excluding
Mr. Mercer 12,894 51,576
</TABLE>
* Estimate based on the average of the high and low sales prices of the shares
on March 31, 1994 ($67 7/8). Actual awards will be based on the fair market
value of shares on the award date.
VOTE REQUIRED
The affirmative vote of the holders of at least a majority of the
outstanding shares present in person or by proxy at the meeting, or any
adjournment thereof, is necessary for approval of this Proposal No. 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2.
SHAREHOLDER PROPOSAL
(PROPOSAL NO. 3)
A shareholder has informed the Company that the following proposal will be
presented at the Annual Meeting. The Company disclaims any responsibility for
the content of the proposal and supporting statement, which are presented as
received from the shareholder.
The name of the proponent, address and shareholdings will be furnished by
the Company to any shareholder, orally or in writing as requested, promptly upon
receipt of any request therefor.
CONFIDENTIAL VOTING
RESOLVED: That the stockholders of Roadway recommend that the Board of Directors
take the necessary steps to adopt and implement a policy of confidential voting
at all meetings of its shareholders; and that this includes the following
provisions:
1. That the voting of all proxies, consents and authorizations be secret,
and that no such document shall be available for examination nor shall
the vote or identity of any shareholder be disclosed except to the
extent necessary to meet the legal requirements, if any, of the
Company's state of incorporation; and
2. That the receipt, certification, and tabulation of such votes shall be
performed by independent election inspectors.
11
<PAGE> 13
PROPONENT'S STATEMENT IN SUPPORT OF THE PROPOSAL:
Voting can only fairly reflect a voter's conviction when the process is free
of potential coercion. Secret balloting is considered essential to such a
process.
Major institutional investors support confidential voting, including many of
the prominent funds that own sizable shares of Roadway stock.
Protecting confidentiality is important so that shareholders feel free to
oppose management nominees and vote on resolutions without fear of management
intervention.
Money managers can jeopardize business relationships by their voting
positions. The gravity of this problem is demonstrated by the finding by the
Investor Responsibility Research Center's study that a majority of those
surveyed faced resolicitation from company management after they submitted their
proxy.
Some shareholders of the company do business with various firms connected to
incumbent directors. Other shareholders are customers. These connections create
the possibility of pressure.
Employee shareholders at Roadway, who own more than 22% of the stock, are
especially vulnerable.
Many shareholders believe confidentiality can be assured by holding stock in
a street or nominee name. This is not the case; some brokers or nominees reveal
their customers' votes. Moreover, a shareholder who owns stock in a street or
nominee name is giving up important legal rights such as access to corporate
records that are given only to shareholders of record.
Many companies are adopting confidential voting policies, including Sears,
Baxter International, Weyerhaeuser, General Signal, Unisys and W. R. Grace.
Shareholders at Avon, Lockheed, and USX enacted confidential voting over
management opposition. At National Intergroup, management tried to get
shareholders to accept limited confidentiality, but 69.9 percent of shares voted
instead in favor of full confidentiality.
Last year, a Teamster employee-shareholder at Anheuser-Busch asked the
company to adopt confidential voting, and the company agreed.
For these reasons, we urge you to vote FOR the resolution.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
Your directors oppose the proposal to require confidential shareholder
voting, the withholding of proxies and related documents from examination by
Company representatives and the use of independent inspectors in the voting
process. The proposal would merely add costs to the Company's voting process
without serving any interest of the shareholders as a whole, and in some cases
would cause harm.
The proponent of the proposal is wrong in believing that shareholders who
wish to remain anonymous cannot do so. Many shareholders hold their shares in
street name and their nominees, under federal law, may not reveal their owner's
name to anyone. Employee participants in the Company's benefit plans own their
shares through a trustee bank, which also may not reveal how they vote.
Furthermore, there may be some occasions when an issue is of such importance
that the ability of the Company to urge acceptances from abstainers, for
example, is appropriate and necessary if the directors are to properly serve the
interests of all shareholders.
The present system of appointment of inspectors of election similarly should
be retained. The three to be appointed each year are a company officer, a
designee of the Company's independent auditing firm, and a member of the Akron
law firm of Buckingham, Doolittle & Burroughs. These representatives have always
accomplished their task at virtually no expense but with complete reliability.
The proponent would substitute for that a costly, cumbersome process for no
reason except to serve his goal of complete secrecy.
VOTE REQUIRED
The affirmative vote of the holders of at least a majority of the
outstanding shares present in person or by proxy at the meeting, or adjournment
thereof, is necessary for approval of this Proposal No. 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL NO. 3.
DESIGNATION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 4)
A proposal will be presented at the meeting to ratify the designation of
Ernst & Young as independent auditors of the Company for 1994. Ernst & Young
have been the independent auditors of the Company since 1951. Representatives of
Ernst & Young will be present at the meeting to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 1995 Annual Meeting must be
received in writing by the Company at its principal offices by December 9, 1994,
in order to be included in the Company's Proxy Statement and form of proxy
relating to that meeting. Proposals must comply with federal securities
regulations and Ohio law.
COST OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular employees
of the Company by telephone. The Company does not expect to pay any compensation
for the solicitation of proxies, but it may reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their expenses in
sending proxy material to principals and obtaining their proxies.
<TABLE>
<S> <C>
April 11, 1994 D.A. Wilson
Secretary
</TABLE>
12
<PAGE> 14
Attachment 1
ROADWAY SERVICES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
P
R THE ANNUAL MEETING OF SHAREHOLDERS, MAY 11, 1994
O
X The undersigned hereby appoints R. A. Chenoweth, J. M. Clapp
Y and D. A. Wilson, or any of them or their substitutes, as Proxies,
each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all
the shares of common stock of Roadway Services, Inc. held of record by
the undersigned at the close of business on March 25, 1994, at the
Annual Meeting of Shareholders to be held Wednesday, May 11, 1994, or
any adjournment thereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before
the meeting.
This proxy, when properly executed, will be voted in the
manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted FOR the election as
directors of the nominees listed, FOR the 1994 Nonemployee
Directors' Stock Plan, AGAINST the shareholder proposal with
respect to confidential voting, and FOR the ratification of
independent auditors for 1994.
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. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 15
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
1. Election of / / / /
Directors
Director Nominees: G. B. Beitzel,
R. A. Chenoweth, J. M. Clapp,
N. C. Harbert, C. R. Longsworth,
R. E. Mercer, G. J. Roush, D. J. Sullivan,
W. Sword, and S. R. Werner.
For, except vote withheld from the following nominee(s):
_________________________________________________________________________________
FOR AGAINST ABSTAIN
2. Approval of the 1994 / / / / / /
Nonemployee Directors'
Stock Plan.
DIRECTORS RECOMMEND A VOTE FOR
FOR AGAINST ABSTAIN
3. A shareholder proposal / / / / / /
with respect to
confidential voting.
DIRECTORS RECOMMEND A VOTE AGAINST
FOR AGAINST ABSTAIN
4. Ratification of Ernst & / / / / / /
Young as independent
auditors.
DIRECTORS RECOMMEND A VOTE FOR
SIGNATURE(S) ____________________________________________________________ DATE ______________
SIGNATURE(S) ____________________________________________________________ DATE ______________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. Please mark, sign, date and return the proxy
promptly in the enclosed postage paid envelope.
</TABLE>
<PAGE> 16
Attachment 2
***************************************************************************
* *
* This Roadway Services, Inc. 1994 Nonemployee Directors' Stock Plan is *
* filed pursuant to Instruction #3 of Item 10 in Schedule 14A. This *
* document is not being distributed to shareholders. *
* *
***************************************************************************
ROADWAY SERVICES, INC.
1994 NONEMPLOYEE DIRECTORS' STOCK PLAN
ARTICLE I
PURPOSE
The purpose of the Roadway Services, Inc. Nonemployee Directors' Stock Plan
(the Plan) is to continue to attract and retain nonemployee directors of
exceptional ability and to solidify the common interest of directors and
shareholders in enhancing the value of the Company's common stock.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following words and phrases shall have the
meanings indicated:
2.1 Annual Meeting means an annual meeting of shareholders of the
Company.
2.2 Award Date means the date of the Annual Meeting as of which an award
and grant under the Plan is effective.
2.3 Board means the Board of Directors of the Company.
2.4 Company means Roadway Services, Inc., an Ohio corporation, and any
successor thereto.
2.5 Fair Market Value means the average of the highest and lowest sales
prices of the Shares on a specified date (or, if Shares were not traded on
such day, the next preceding day on which Shares were traded) as reported in
The Wall Street Journal under the heading "NASDAQ National Market Issues" or
any similar or successor heading.
2.6 Nonemployee Director means a member of the Board who is not employed
by the Company or any of its subsidiaries.
2.7 Option Right means the right to purchase Shares granted pursuant to
Article IV.
2.8 Restricted Stock means Shares awarded pursuant to Article IV which
are neither non-forfeitable nor transferable pursuant to Articles V and VI.
2.9 Shares means shares of common stock, without par value, of the
Company.
ARTICLE III
SHARES AVAILABLE FOR GRANTS
Subject to adjustment as provided in Section 8.4, the Shares which may be
sold upon the exercise of Option Rights, or awarded as Restricted Stock and
released from restrictions upon becoming non-forfeitable and transferable, shall
not exceed in the aggregate 80,000 Shares. Shares which are subject to the
unexercised portions of any Option Rights that expire, terminate or are
cancelled, and Shares of Restricted Stock that are forfeited or otherwise
reacquired by the Company pursuant to the restrictions thereon, shall again
become available for the award of Restricted Stock and grant of Option Rights
under the Plan, provided that Shares of Restricted Stock shall not become so
available if any dividends have been paid thereon prior to such reacquisition.
ARTICLE IV
AWARDS OF RESTRICTED STOCK
IN TANDEM WITH GRANTS OF OPTION RIGHTS
4.1 Awards and Grants. Each Nonemployee Director elected or re-elected to
the Board at the 1994 Annual Meeting other than Robert E. Mercer shall be
awarded, effective as of the date of such meeting, Restricted Stock having a
Fair Market Value on the Award Date of One Hundred Twenty-Five Thousand Dollars
($125,000), in tandem with a grant of Option Rights to purchase that number of
Shares as shall be equal to four (4) times the number of Shares included in such
award of Restricted Stock. Each Nonemployee Director first elected to the Board
at an Annual Meeting after the 1994 Annual Meeting and Mr. Mercer, if he is
re-elected to the Board at an Annual Meeting after the 1994 Annual Meeting shall
be awarded, effective as of the date of the meeting at which he or she is so
elected, Restricted Stock having a Fair Market Value on the Award Date of One
Hundred Twenty-Five Thousand Dollars ($125,000), in tandem with a grant of
Option Rights to purchase that number of Shares as shall be equal to four (4)
times the number of Shares included in such award of Restricted Stock.
4.2 Execution of Agreement. Each award and grant hereunder shall be
contingent upon execution by the Nonemployee Director of a document agreeing to
the terms and conditions set forth in the Plan, and any other terms and
conditions required by the Company.
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ARTICLE V
LAPSE OF RESTRICTIONS ON RESTRICTED STOCK; EXERCISABILITY OF OPTION RIGHTS
Shares of Restricted Stock awarded under the Plan shall be forfeited or
become non-forfeitable, and Option Rights granted under the Plan shall be
cancelled or become exercisable, on the following basis:
(a) Forty percent (40%) of the total number of Shares of Restricted
Stock awarded to any Nonemployee Director shall become non-forfeitable on
the date of the second Annual Meeting following the Award Date, provided
that on the date of such second Annual Meeting the Fair Market Value of one
Share shall be less than or equal to one hundred thirty-three and one-third
percent (133 1/3%) of its Fair Market Value on the Award Date, and in such
event the Option Rights granted in tandem with such Shares of Restricted
Stock thereupon shall be cancelled. If on the date of such second Annual
Meeting the Fair Market Value of one Share is greater than one hundred
thirty-three and one-third percent (133 1/3%) of its Fair Market Value on
the Award Date, such Shares of Restricted Stock instead shall be forfeited
and shall revert to the Company, and the Option Rights granted in tandem
therewith shall continue to be held by such Nonemployee Director pursuant to
the terms hereof and thereupon shall become exercisable.
(b) Twenty percent (20%) of the total number of Shares of Restricted
Stock awarded to any Nonemployee Director shall become non-forfeitable on
the dates of each of the third, fourth and fifth Annual Meetings following
the Award Date, provided that on the date of such third, fourth or fifth
Annual Meeting the Fair Market Value of one Share shall be less than or
equal to one hundred thirty-three and one-third percent (133 1/3%) of its
Fair Market Value on the Award Date, and in such event the Option Rights
granted in tandem with such Shares of Restricted Stock thereupon shall be
cancelled. If on the date of such third, fourth or fifth Annual Meeting the
Fair Market Value of one Share is greater than one hundred thirty-three and
one-third percent (133 1/3%) of its Fair Market Value on the Award Date,
such Shares of Restricted Stock instead shall be forfeited and shall revert
to the Company, and the Option Rights granted in tandem therewith shall
continue to be held by such Nonemployee Director pursuant to the terms
hereof and thereupon shall become exercisable.
(c) In the event of the death or disability of a Nonemployee Director
while he or she remains a director prior to the date of the fifth Annual
Meeting following his or her Award Date, notwithstanding anything to the
contrary contained herein, all outstanding Shares of Restricted Stock
theretofore awarded to him or her that have not yet become non-forfeitable
shall thereupon become non-forfeitable, provided that on the Determination
Date (as hereinafter defined) the Fair Market Value of one Share shall be
less than or equal to one hundred thirty-three and one-third percent
(133 1/3%) of its Fair Market Value on the Award Date, and in such event all
Option Rights granted in tandem therewith thereupon shall be cancelled. If
on such Determination Date the Fair Market Value of one Share is greater
than one hundred thirty-three and one-third percent (133 1/3%) of its Fair
Market Value on the Award Date, all such Shares of Restricted Stock instead
shall be forfeited and shall revert to the Company, and all Option Rights
granted in tandem therewith shall continue to be held by such Nonemployee
Director or his estate pursuant to the terms hereof and thereupon shall
become exercisable. For purposes of this paragraph (c), Determination Date
shall mean, as applicable, the date of the Nonemployee Director's death or
the date on which the Nonemployee Director ceases to serve as a director of
the Company as a result of disability.
(d) In the event of the retirement of a Nonemployee Director pursuant to
the Company's director tenure policy prior to the date of the fifth Annual
Meeting following his or her Award Date, notwithstanding anything to the
contrary contained herein, the schedule of non-forfeitability set forth in
paragraph (a) and paragraph (b) of this Article V shall be modified so that
outstanding Shares of Restricted Stock theretofore awarded to him or her
that have not yet become non-forfeitable shall thereupon become
non-forfeitable on a schedule that is one year earlier than provided in such
paragraphs (a) and (b) so that forty percent (40%) of the total number of
Shares of Restricted Stock shall become non-forfeitable on the date of the
first Annual Meeting following the Award Date as provided in paragraph (a)
if such First Annual Meeting has not yet occurred, and twenty percent (20%)
of the total number of Shares of Restricted Stock shall become
non-forfeitable on the dates of each of the second, third and fourth Annual
Meetings following the Award Date as provided in such paragraph (b),
provided that on the Determination Date (as hereinafter defined) the Fair
Market Value of one Share shall be less than or equal to one hundred
thirty-three and one-third percent (133 1/3%) of its Fair Market Value on
the Award Date, and in such event all Option Rights granted in tandem with
such Shares of Restricted Stock thereupon shall be cancelled. If on such
Determination Date the Fair Market Value of one Share is greater than one
hundred thirty-three and one-third (133 1/3%) of its Fair Market Value on
the Award Date, all such Shares of Restricted Stock instead shall be
forfeited and shall revert to the Company, and all Option Rights granted in
tandem therewith shall continue to be held by such Non-Employee Director
pursuant to the terms hereof and thereupon shall
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become exercisable. For purposes of this paragraph (d), Determination Date
shall mean the date service as a Director terminates.
(e) Except as otherwise provided in paragraph (c) or paragraph (d)
above, should any Nonemployee Director cease to serve as such for any reason
prior to the date of the fifth Annual Meeting following his or her Award
Date, all outstanding Shares of Restricted Stock awarded to such Nonemployee
Director that have not yet become non-forfeitable shall be forfeited and
shall revert to the Company, and all Option Rights granted in tandem
therewith shall be cancelled, on the day following the date on which such
service ceases.
ARTICLE VI
TERMS AND CONDITIONS OF AWARDS OF RESTRICTED STOCK
6.1 Rights as Shareholder. Each award of Restricted Stock under the Plan
shall constitute a transfer of the ownership of Shares to the Nonemployee
Director in consideration of the performance of services, entitling such
Nonemployee Director to voting, dividend and other ownership rights, but subject
to the forfeiture and transfer restrictions provided herein. No additional
consideration shall be due in connection with any such award.
6.2 Transfer Restrictions. Shares of Restricted Stock awarded pursuant to
the Plan which have not yet become non-forfeitable may not be sold, transferred
(including, without limitation, transfer by gift or donation), pledged or
encumbered prior to the date, if any, on which they become non-forfeitable and
shall bear appropriate legends.
6.3 Additional Securities. Any new or additional Shares or other securities
to which a Nonemployee Director, by virtue of awards of Restricted Stock
hereunder, becomes entitled due to a stock dividend, stock split,
recapitalization, merger or other event shall be subject to all terms and
conditions of the Plan, including this Article VI.
ARTICLE VII
TERMS AND CONDITIONS OF GRANTS OF OPTION RIGHTS
7.1 Option Price. The option price per share of each Share included in a
grant of Option Rights shall be the Fair Market Value of such Share as of the
Award Date. Such Option price shall be payable by check, by transfer to the
Company of Shares (not subject to restrictions pursuant to Article VI) having a
Fair Market Value equal, at the time of exercise of the Option Right, to the
option price or by a combination of such methods of payment.
7.2 Expiration of Option Rights; Transfer Restrictions. Option Rights
granted to a Nonemployee Director under the Plan which become exercisable
pursuant to Article V shall expire upon the earlier of the following: (i) ten
(10) years after the Award Date or (ii) three (3) months after the director
ceases to serve as such for reasons other than death, disability, retirement as
a director pursuant to the Company's director tenure policy, or other
termination of service as a director of the Company with the consent of a
majority of the members of the Board who are not then participating in the Plan.
Option Rights granted to a Nonemployee Director pursuant to the Plan in no event
shall be sold or transferred other than by will or the laws of descent and
distribution. Option Rights are exercisable during the Nonemployee Director's
lifetime only by him or her or his or her legal representative.
ARTICLE VIII
ADMINISTRATION
8.1 Committee; Duties. The administrative committee for the Plan (the
Committee) shall consist of the Chairman of the Board (provided that he is not a
Nonemployee Director) and two Company officers or directors who are not
Nonemployee Directors, who shall be appointed by the Chairman of the Board. The
Committee shall supervise the administration of the Plan, may from time to time
adopt procedures governing the Plan and shall have authority to give
interpretive rulings with respect to the Plan, provided that the Committee shall
not, except as provided in Section 8.4, have any authority or discretion as to
the selection of persons eligible to participate in the Plan, the timing of
awards under the Plan, the number of Shares to be included in awards of
Restricted Stock or to be subject to Option Rights or the purchase price for any
such Shares.
8.2 Agents. The Committee may appoint an individual, who may be an employee
of the Company, to be the Committee's agent with respect to the day-to-day
administration of the Plan. In addition, the Committee may, from time to time,
employ other agents and delegate to them such administrative duties as it sees
fit, and may from time to time consult with counsel who may be counsel to the
Company.
8.3 Binding Effect of Decisions. Any decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation or application of the Plan shall be final and
binding upon all persons having any interest in the Plan.
8.4 Adjustments. In the event of (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, (b) any merger, consolidation, separation, reorganization,
partial or complete liquidation, issuance of rights or warrants to purchase
stock or (c) any other corporate transaction or event having an effect similar
to any of the foregoing, the Committee shall make or provide for such
adjustments in (i) the number or kind of Shares or other securities of the
Company available for grants under Article
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III, (ii) the kind of securities of the Company to be covered by awards of
Restricted Stock, (iii) the option price and the number or kind of Shares or
other securities of the Company covered by outstanding Option Rights and (iv)
such other matters as the Committee may determine is equitably required to
prevent dilution or enlargement of the rights of participants in the Plan.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment. The Board may at any time amend, suspend or terminate any or
all of the provisions of the Plan, except that (i) no such amendment, suspension
or termination shall adversely affect any Restricted Stock or Option Rights
theretofore awarded or granted under the Plan to any Nonemployee Director
without the written consent of such director and (ii) except as provided in
Section 8.4, any amendment to the Plan that would have the effect of changing
the persons eligible to participate in the Plan, the timing of awards under the
Plan, the number of Shares to be awarded or granted to participants under the
Plan or the purchase price thereof shall be approved by the shareholders of the
Company prior to effectiveness. In no event shall the provisions of the Plan
relating to the matters set forth in clause (ii) of this Section 9.1 be amended
more than once every six months, other than to comport with changes in the
Internal Revenue Code.
9.2 Effective Date. The Plan shall be effective upon the later of (i) its
approval by the shareholders of the Company or (ii) the receipt by the Company
of such rulings, interpretive letters, legal opinions and other professional
advice as to the tax, securities and other legal ramifications of the Plan as
the Company shall deem necessary.
9.3 Governing Law. The provisions of the Plan shall be construed and
interpreted according to the laws of the state of Ohio.
9.4 Successors. The provisions of the Plan shall bind and inure to the
benefit of the Company and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Company and successors of
any such corporation or other business entity.
9.5 Right to Continued Service. Nothing contained herein shall be construed
to confer upon any director the right to continue to serve as a director of the
Company or in any other capacity.
9.6 Rule 16b-3. This Plan is intended to comply with Rule 16b-3 under the
Securities Exchange of 1934 as in effect prior to May 1, 1991. The Board or the
Committee may elect at any time to make Rule 16b-3 as in effect on and after
such date applicable to the Plan.
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