<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the period ended June 15, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ___________ to ___________
Commission file number 0-10716
CALIBER SYSTEM, INC.
- -------------------------------------------------------------------------------
(Exact name of company as specified in its charter)
Ohio 34-1365496
- ------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3560 West Market Street, P.O. Box 5459, Akron, Ohio 44334-0459
- --------------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code is (330) 665-5646
Indicate by check mark whether the company (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of shares of common stock without par value outstanding as of June
30, 1996 was 39,178,792.
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INDEX
CALIBER SYSTEM, INC.
FORM 10-Q
PERIOD ENDED JUNE 15, 1996
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -- June 15, 1996 and
December 31, 1995
Condensed Statements of Consolidated Income -- Twelve weeks and
twenty-four weeks ended June 15, 1996 and June 17, 1995
Condensed Statements of Consolidated Cash Flows -- Twenty-four
weeks ended June 15, 1996 and June 17, 1995
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II -- OTHER INFORMATION
Item 4. Results of Votes of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
CALIBER SYSTEM, INC.
<TABLE>
<CAPTION>
June 15, December 31,
1996 1995
-------- ------------
(dollars in thousands)
<S> <C> <C>
ASSETS
Cash and cash equivalents............................................ $ 8,122 $ 34,908
Accounts receivable.................................................. 319,632 273,124
Prepaid expenses and supplies........................................ 78,156 66,630
Deferred income taxes................................................ 35,842 27,562
---------- ----------
TOTAL CURRENT ASSETS................................................. 441,752 402,224
Property and equipment............................................... 1,560,267 1,474,934
Less allowances for depreciation..................................... 646,343 617,587
---------- ----------
TOTAL PROPERTY AND EQUIPMENT................................. 913,924 857,347
---------- ----------
Cost in excess of net assets of businesses acquired.................. 88,531 89,761
Other assets......................................................... 36,656 39,938
---------- ----------
TOTAL OTHER ASSETS........................................... 125,187 129,699
---------- ----------
TOTAL ASSETS................................................. $1,480,863 $1,389,270
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable..................................................... $ 237,572 $ 219,406
Salaries and wages................................................... 70,310 74,790
Short-term debt...................................................... 284,700 197,500
Other current liabilities............................................ 55,106 63,663
---------- ----------
TOTAL CURRENT LIABILITIES.................................... 647,688 555,359
Self-insurance accruals.............................................. 37,707 39,832
Deferred income taxes................................................ 63,764 57,778
---------- ----------
TOTAL LONG-TERM LIABILITIES.................................. 101,471 97,610
Common stock -- 40,896,414 shares issued............................. 39,898 39,898
Additional capital................................................... 50,538 51,322
Earnings reinvested in the business.................................. 692,537 696,803
---------- ----------
782,973 788,023
Less cost of common stock in treasury -- 1,379,000
shares in 1996 and 1,394,000 shares in 1995.......................... 51,269 51,722
--------- ----------
TOTAL SHAREHOLDERS' EQUITY.................................... 731,704 736,301
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................... $1,480,863 $1,389,270
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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CALIBER SYSTEM, INC.
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (Unaudited)
<TABLE>
<CAPTION>
Twelve Weeks Ended Twenty-Four Weeks Ended
(Second Quarter) (First Half)
----------------------- ---------------------------
June 15, June 17, June 15, June 17,
1996 1995 1996 1995
-------- ------- ---------- ----------
(amounts in thousands, except per share data)
<S> <C> <C> <C> <C>
REVENUE.................................................... $615,901 $550,779 $1,197,975 $1,094,248
OPERATING EXPENSES
Salaries, wages and benefits............................. 241,010 211,890 471,033 422,842
Purchased transportation................................. 181,332 151,973 347,823 306,993
Operating supplies and expenses.......................... 131,535 101,683 242,330 194,192
Operating taxes and licenses............................. 13,426 11,371 25,469 22,554
Insurance and claims..................................... 13,848 12,477 25,042 24,526
Provision for depreciation............................... 33,336 29,646 66,683 57,930
-------- -------- ---------- ----------
TOTAL OPERATING EXPENSES............................... 614,487 519,040 1,178,380 1,029,037
-------- -------- ---------- ----------
OPERATING INCOME..................................... 1,414 31,739 19,595 65,211
Other (expense) income, net................................ (1,370) 2,449 (2,602) 4,158
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES.................................. 44 34,188 16,993 69,369
Income tax (benefit) provision............................. (176) 11,831 7,152 25,482
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS.................... 220 22,357 9,841 43,887
LOSS FROM DISCONTINUED OPERATIONS, NET
OF INCOME TAXES...................................... -- (24,359) -- (40,038)
-------- -------- ---------- ----------
NET INCOME (LOSS).................................... $ 220 $ (2,002) $ 9,841 $ 3,849
======== ======== ========== ==========
EARNINGS (LOSS) PER SHARE
Income from continuing operations........................ $ 0.01 $ 0.57 $ 0.25 $ 1.11
Loss from discontinued operations........................ -- (0.62) -- (1.01)
======== ======== ========== ==========
NET INCOME (LOSS).................................... $ 0.01 $ (0.05) $ 0.25 $ 0.10
======== ======== ========== ==========
DIVIDENDS DECLARED PER SHARE........................... $ 0.18 $ 0.35 $ 0.36 $ 0.70
======== ======== ========== ==========
AVERAGE SHARES OUTSTANDING............................. 39,525 39,467 39,515 39,451
======== ======== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)
CALIBER SYSTEM, INC.
<TABLE>
<CAPTION>
Twenty-Four Weeks Ended
(First Half)
-----------------------
June 15, June 17,
1996 1995
-------- --------
(dollars in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations............................ $ 9,841 $ 43,887
Adjustments.................................................. 32,651 30,838
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................. 42,492 74,725
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment.......................... (126,769) (143,110)
Sales of property and equipment.............................. 4,345 1,423
Net advances to discontinued operations...................... (10,227) (56,100)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES...................... (132,651) (197,787)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid............................................... (20,725) (27,331)
Dividends received from discontinued operations.............. -- 7,500
Increase in short-term debt, net............................. 87,200 141,600
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES.................. 66,475 121,769
--------- ---------
CASH FLOWS USED IN CONTINUING OPERATIONS................... (23,684) (1,293)
CASH FLOWS USED IN DISCONTINUED OPERATIONS................. (3,102) (1,941)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS.................. (26,786) (3,234)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............. 34,908 14,780
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF SECOND QUARTER......... $ 8,122 $ 11,546
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
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CALIBER SYSTEM, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the twenty-four weeks
ended June 15, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
Second quarter amounts for 1995 have been restated to reflect the spin-off of
Roadway Express, Inc. and the exit from the air freight business served by
Roadway Global Air, Inc. during 1995 which are reflected as discontinued
operations. During 1995, certain costs were recognized in connection with the
discontinuance of these businesses. Although actual results could differ from
these estimates, it is management's opinion that significant adjustments to
these estimates are not currently required.
For further information, refer to consolidated financial statements and
footnotes thereto included in the company's annual report on Form 10-K for the
year ended December 31, 1995.
Note B - Accounting Period
The registrant operates on a 13 four-week period calendar with 12 weeks in each
of the first three quarters and 16 weeks in the fourth quarter.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Consolidated revenue for the second quarter ended June 15, 1996 amounted to
$615.9 million, an increase of $65.1 million or 11.8% over second quarter 1995
revenue of $550.8 million. For the twenty-four weeks constituting the company's
first half, revenue was $1,198 million, an increase of $103.8 million or 9.5%
from $1,094.2 million for the first half of 1995.
All operating units experienced revenue improvements over second quarter 1995
levels. Revenue for the second quarter at RPS, the company's small package
carrier, increased to $302.5 million or 3.7% over the second quarter last year.
The increase was primarily attributable to higher package volume from the growth
of its Overnight Ground(SM) product. However, revenues at RPS continue to be
adversely affected by economic pressures in the retail segment. Revenue at
Viking Freight (Viking), the company's emerging superregional carrier, amounted
to $226.3 million for the second quarter, an increase of 17.8% over 1995 levels.
Revenues increased at Viking due to volume growth but were impacted by continued
aggressive discounting in the industry. Second quarter revenues for Caliber
Logistics were up approximately 50% with revenues from Roberts Express
(Roberts), the company's expedited carrier, up 9.2% over second quarter 1995.
Operating expenses for the second quarter 1996 increased $95.4 million or 18.4%
over comparable 1995 levels, while first half operating expenses were up $149.3
million or 14.5% over the same period in 1995. The increase for the quarter
was, in largest part, due to operating expense increases at Viking of $59.9
million. Besides the expected increases in costs related to revenue growth,
Viking experienced significantly greater expenses associated with operating
inefficiencies and the consolidation of the company's regional carriers, and to
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a lesser extent, higher fuel costs. Viking's rapid revenue growth resulted in
additional expenses for training of new hires, purchased transportation,
equipment rentals and overtime. At the same time, Viking experienced
substantial nonrecurring consolidation costs from the integration of multiple
information systems, re-identification of equipment, merging of administrative
operating systems and the closing of three regional corporate headquarters.
These consolidation costs will continue throughout the second half with the
integration of the company's former regional carriers into the "new" Viking
expected to be completed by year end.
Operating expenses increased at RPS due primarily to higher business volumes
and fixed costs resulting from the company's continuing expansion. Higher
business volumes resulted in increased operating expenses at Caliber Logistics
and Roberts.
Operating income for the second quarter and first half declined $30.3 million
and $45.6 million, respectively, from comparable 1995 levels. Operating income
at RPS amounted to $24.5 million for the second quarter compared to $33.8
million for 1995. This decline in operating income at RPS was due to lower
than expected volume growth, an aggressive pricing environment and higher fixed
costs associated with its continuing expansion and investments in equipment and
technology. Viking's operating loss for the quarter was $31.2 million compared
to an operating loss of $5.5 million in second quarter 1995. For the first
half, Viking's operating loss amounted to $43.1 million compared to $10.3
million last year. Roberts continues to maintain excellent margins while
Caliber Logistics met its profit objective for the quarter.
The change in other expense, net for the quarter and first half from comparable
1995 periods, reflects additional net interest expense of $1.9 million and $3.4
million, respectively and the loss of interest income from discontinued
operations, amounting to $2.3 million and $4.1 million, respectively.
Income taxes were 42.1% of pre-tax income for the first half 1996 which
approximated the effective tax rate for the year ended December 31, 1995. This
rate exceeded the U.S. federal statutory rate due primarily to state income
taxes and non-deductible operating costs.
Discounting and the effects of overcapacity in the industry are expected to
continue throughout the remainder of 1996 causing industry margins to remain
under pressure. As a result of the impact of continuing economic pressure in
the retail segment and an aggressive pricing environment, RPS will not realize
targeted goals for double digit growth in revenue or improved year-over-year
operating income during 1996. At Viking, while tactical plans for managing the
rapid growth and associated expenses are being implemented, and consolidation
costs are being incurred for the remainder of year, it is expected that
operating losses will significantly exceed the company's earlier estimate for
1996. As a result of the company's first half operating results and
expectations for the rest of the year, it is anticipated that earnings from
continuing operations for 1996 will be significantly below those of 1995.
RPS reached its goal of opening 32 new terminals by the end of June, allowing
it to effectively serve 100% of the U.S. population. In addition, RPS will
continue to invest in state-of-the-art package handling equipment and
technology and plans to increase its penetration of the overnight ground
delivery market. The company will direct significant resources to meet
customer requirements for blended transportation, logistics and related
information services, even at the expense of short-term profits. The company
will continue to strengthen the respective operating units for customers who
want special services and products.
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For the first half, net cash provided by operating activities of $42.5 million
was not sufficient to fund net property additions of $122.4 million and
dividends of $20.7 million, requiring the company to incur additional outside
borrowings of $87.2 million. Borrowings under financing agreements amounted to
$284.7 million at the end of the second quarter. The company believes it will
be able to arrange short and long term financing through public or private
sources or both that, together with cash flows from operations and its existing
credit facilities, will be sufficient to fund its projected capital
expenditures and provide adequate levels of working capital and funds for
payments of dividends and interest. Total capital expenditures in 1996 are
currently projected at approximately $335 million.
The foregoing contains forward-looking statements that are based on current
expectations and are subject to a number of risks and uncertainties. Actual
results could differ materially from current expectations due to a number of
factors, including general economic conditions; competitive initiatives and
pricing pressures; availability and cost of capital; shifts in market demand;
weather conditions; the performance and needs of industries served by the
company's businesses; actual future costs of operating expenses such as fuel
and related taxes; self-insurance claims and employee wages and benefits;
actual costs of continuing investments in technology; the timing and amount of
capital expenditures; and the actual costs and effects of the continuing
consolidation of the regional carriers.
PART II -- OTHER INFORMATION
Item 4. Results of Votes of Security Holders
On May 8, 1996, the registrant held its Annual Meeting of Shareholders at which
the following directors were elected, receiving the number of votes set forth
beside their names.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
George B. Beitzel 33,622,559 Charles R. Longsworth 33,627,612
R. A. Chenoweth 33,625,521 G. James Roush 33,637,247
Norman C. Harbert 33,638,720 Daniel J. Sullivan 33,610,955
Harry L. Kavetas 33,539,416 H. Mitchell Watson, Jr. 33,631,244
</TABLE>
With respect to a motion to approve the adoption of the 1996 Equity Incentive
Compensation Plan, 31,979,947 votes were cast in favor of the proposal;
1,740,537 votes were cast against such proposal; and 137,694 votes abstained.
With respect to a motion to approve the amendment to the 1989 Nonemployee
Directors' Stock Plan, 32,611,695 votes were cast in favor of the proposal;
958,205 votes were cast against such proposal; and 288,278 votes abstained.
With respect to a motion to approve the adoption of the Nonemployee Directors'
Stock Retainer Plan, 32,613,213 votes were cast in favor of the proposal,
1,097,305 votes were cast against such proposal; and 147,660 votes abstained.
With respect to a shareholder proposal in favor of cumulative voting, no vote
was taken as neither the proponent of the proposal nor her representative was
in attendance to present the proposal.
With respect to a shareholder proposal for amendment of the Company Code of
Regulations to require that an independent director serve as Chairman of the
Board of Directors, no vote was taken as neither the proponent of the proposal
nor his representative was in attendance to present the proposal.
With respect to the ratification of Ernst & Young LLP as independent auditors,
33,495,190 votes were cast in favor of the proposal; 132,369 votes were cast
against such proposal; and 230,619 votes abstained.
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Item 5. Other Information
On July 3, 1996, the registrant filed with the Securities and Exchange
Commission a Registration Statement on Form S-3 for a shelf registration of up
to $400 million in debt securities.
On July 3, 1996, the registrant announced that Randolph C. Bangham, Chairman
and Chief Executive Officer of Viking Freight, Inc., the company's emerging
superregional carrier, plans to retire at the end of this year. Mr. Bangham
will continue as Chairman through December. Ronald G. Pelzel, Viking's
President, immediately assumed the chief executive responsibilities. Mr.
Pelzel has been President since 1993 and has held executive officer positions
since 1983 when he joined the company as Vice President-Finance.
On July 8, 1936, the registrant announced that John E. Lynch had been elected
Vice President, General Counsel and Secretary of Caliber System, Inc. Mr.
Lynch had previously been a Trial Partner with Squire, Sanders & Dempsey,
Cleveland, Ohio, where he engaged in civil trial and appellate practice as well
as administrative proceedings. Mr. Lynch graduated from Hamilton College in
Clinton, New York with a B.A. in economics and received his Juris Doctor from
Case Western Reserve University School of Law.
On July 9, 1996, the registrant announced that Douglas A. Wilson, Senior Vice
President-Finance and Planning and Chief Financial Officer of Caliber System,
Inc. had left the company to pursue other interests. A successor was not
announced. On an interim basis, Mr. Wilson's financial responsibilities will
be divided between Kathryn W. Dindo, Vice President and Controller, and John P.
Chandler, Vice President and Treasurer.
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
10.1 Caliber System, Inc. Directors' Deferred Compensation Plan as
Amended and Restated as of May 8, 1996.
10.2 Caliber System, Inc. Nonemployee Directors' Stock Retainer Plan
as approved by the Company's shareholders on May 8, 1996.
10.3 Caliber System, Inc. Nonemployee Directors' Stock Plan (1989)
as Amended as of May 8, 1996.
10.4 Caliber System, Inc. 1994 Nonemployee Directors' Stock Plan as
Amended as of May 8, 1996.
10.5 Caliber System, Inc. Retirement Plan for Employee Directors as
Amended as of May 8, 1996.
10.6 Caliber System, Inc. 1996 Equity Incentive Compensation Plan as
approved by the Company's shareholders on May 8, 1996.
10.7(a) Caliber System, Inc. Excess Plan effective January 2, 1996.
10.7(b) Caliber System, Inc. 401(a)(17) Benefit Plan effective January
2, 1996.
10.7(c) Caliber System, Inc. Administrative Document for Excess Plan
and 401(a)(17) Benefit Plan effective January 2, 1996.
10.8 Credit Agreement entered into between Caliber System, Inc. and
Morgan Guaranty Trust Company of New York on July 8, 1996.
27 Financial Data Schedule
(b) Reports on Form 8-K Filed During the Second Quarter of 1996
-----------------------------------------------------------
On July 1, 1996, a Current Report on Form 8-K was filed by the
registrant with the Securities and Exchange Commission to report Second
Quarter results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CALIBER SYSTEM, INC.
---------------------------------
(Registrant)
Date: July 12, 1996 By /s/ Daniel J. Sullivan
------------- ------------------------------
Daniel J. Sullivan
Chairman, President and
Chief Executive Officer
Date: July 12, 1996 By /s/ Kathryn W. Dindo
------------- ------------------------------
Kathryn W. Dindo
Vice President and Controller
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Exhibit 10.1
CALIBER SYSTEM, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
(As Amended and Restated as of May 8, 1996)
This Directors' Deferred Compensation Plan amends and restates
the Roadway Services, Inc. Directors' Deferred Compensation Plan, as previously
amended and restated as of May 10, 1995.
ARTICLE I
PURPOSE
The purpose of the Caliber System, Inc. Directors' Deferred
Compensation Plan (the "Plan") is to provide funds and/or shares of common stock
without par value of Caliber System, Inc. (formerly Roadway Services, Inc.),
upon termination of service or death for nonemployee directors of Caliber
System, Inc. or their beneficiaries. It is intended that the Plan will assist in
attracting and retaining qualified individuals to serve as Directors.
ARTICLE II
DEFINITIONS
For the purposes of the Plan, the following words and phrases
shall have the meanings indicated:
2.1 Beneficiary. Beneficiary means the person or persons designated or
deemed to be designated by the Participant pursuant to Article VIII to receive
benefits payable under the Plan in the event of the Participant's death.
2.2 Board. Board means the Board of Directors of the Company.
2.3 Committee. Committee has the meaning set forth in Section 9.1.
2.4 Company. Company means Caliber System, Inc. (formerly Roadway
Services, Inc.), an Ohio corporation, and any successor thereto.
<PAGE> 2
2.5 Declared Rate. Declared Rate means the interest rate payable on
26-week U.S. Treasury bills issued on the specified date or, if not then issued,
on the next date of issue.
2.6 Deferral Benefit. Deferral Benefit means the benefit payable to a
Participant or his or her Beneficiary pursuant to Article VII and based on such
Participant's Deferred Benefit Account.
2.7 Deferred Benefit Account. Deferred Benefit Account means the
account maintained on the books of the Company for each Participant pursuant to
Article V.
2.8 Deferred Share Award Account. Deferred Share Award Account means
the account maintained on the books of the Company for each Participant pursuant
to Article VI.
2.9 Deferred Share Award Benefit. Deferred Share Award Benefit means
the benefit payable to a Participant or his or her Beneficiary pursuant to
Article VII and based on such Participant's Deferred Share Award Account.
2.10 Determination Date. Determination Date means each January 1 and
July 1.
2.11 Director. Director means a member of the Board.
2.12 Emergency Benefit. Emergency Benefit has the meaning set forth in
Section 7.2.
2.13 Fair Market Value. Fair Market Value means the average of the
highest and lowest sales prices of a Share on the New York Stock Exchange on the
specified date (or, if no Share was traded on such date, on the next preceding
date on which it was traded) as reported in The Wall Street Journal.
2.14 Fee. Fee or Fees means any compensation payable in cash to a
Director for his or her services as a member of the Board or any committee
thereof.
2.15 Participant. Participant means any eligible Director who elects to
participate by filing a Participation Agreement as provided in Section 3.2.
2.16 Participation Agreement. Participation Agreement means the
agreement filed by a Participant, in the form prescribed by the Committee,
pursuant to Section 3.2.
2.17 Plan Year. Plan Year means a twelve month period commencing
January 1 and ending the following December 31.
2.18 Share. Share means a share of common stock without par value of
the Company.
2
<PAGE> 3
2.19 Share Award. Share Award means any compensation payable in Shares
to a Director for his or her services as a member of the Board or any committee
thereof.
2.20 Unit. Unit means an accounting unit equal in value to one Share.
The number of Units included in any Deferred Benefit Account or Deferred Share
Award Account shall be adjusted as appropriate to reflect any stock dividend,
stock split, recapitalization, merger or other similar event affecting Shares.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Eligibility to participate in the Plan is limited to
those Directors who are not employees of the Company or any of its subsidiaries.
3.2 Participation. Participation in the Plan shall be limited to
eligible Directors who elect to participate in the Plan by filing a
Participation Agreement with the Committee. A properly completed and executed
Participation Agreement must be filed on or prior to the December 31 immediately
preceding the Plan Year in which the Participant's participation in the Plan
will commence, and the election to participate shall be effective on the first
day of the Plan Year following receipt by the Company of the Participation
Agreement. In the event that a Director first becomes eligible to participate
during the course of a Plan Year, such Participation Agreement must be filed no
later than thirty days following election or appointment to the Board, and such
Participation Agreement shall be effective only with regard to Fees and Share
Awards earned or payable following the filing of the Participation Agreement
with the Committee. Notwithstanding the foregoing provisions of this Section
3.2, a Participation Agreement may be filed or modified with respect to the 1996
deferral of Share Awards granted as the retainer under the Company's
Non-Employee Directors' Stock Retainer Plan, provided, however, that such
Participation Agreement must be filed on or prior to April 30, 1996, and the
election to participate or to modify such participation shall be effective only
with regard to Share Awards earned or payable following the filing of the
Participation Agreement with the Committee.
3.3 Termination of Participation. A Participant may elect to terminate
his or her participation in the Plan by filing a written notice thereof with the
Committee, which termination shall be effective at any time specified by the
Participant in the notice but not earlier than the first day of the Plan Year
immediately succeeding the Plan Year in which such notice is filed with the
Committee. Amounts credited to such Participant's Deferred Benefit Account and
Deferred Share Award Account with respect to periods prior to the effective date
of such
3
<PAGE> 4
termination shall continue to be payable pursuant to, and otherwise governed by,
the terms of the Plan.
ARTICLE IV
DEFERRAL OF FEES AND SHARE AWARDS
4.1 Deferral of Fees. A Participant may elect to defer all or a
specified percentage of his or her Fees, and a Participant may elect to have
that portion of his or her deferred Fees credited to his Deferred Benefit
Account either in dollar amounts or Units. A Participant may change the
percentage of his or her Fees to be deferred, or the form in which Fees are to
be credited, by filing a written notice thereof with the Committee, which shall
be effective as of the first day of the Plan Year immediately succeeding the
Plan Year in which such notice is filed with the Committee.
4.2 Crediting of Deferred Fees. Deferred Fees that a Participant elects
to have credited in dollar amounts shall be credited to the Participant's
Deferred Benefit Account as they become payable to the Director. Deferred Fees
otherwise payable to a Director during a Plan Year that a Participant elects to
have credited in Units shall be credited to the Participant's Deferred Benefit
Account annually after the end of such Plan Year on the basis of the average
price of Shares acquired by the Caliber System, Inc. Stock Bonus Plan or any
successor thereto during such Plan Year (and such annual credits shall take into
account the amount of cash dividends paid by the Company on equivalent amounts
of Shares during periods after the dates on which such Fees otherwise would have
been payable to the Director).
4.3 Deferral of Share Awards. A Participant may elect to defer all or a
specified percentage of his or her Share Awards, and a Participant will have
that portion of each deferred Share Award credited to his or her Deferred Share
Award Account in Units. A Participant may change the percentage of his or her
Share Award to be deferred by filing a written notice thereof with the
Committee, which shall be effective as of the first day of the Plan Year
immediately succeeding the Plan Year in which such notice is filed with the
Committee. No fractional Shares shall be deferred, but the number of Shares
deferred shall be rounded down to the nearest whole Share.
4.4 Crediting of Deferred Share Awards. The percentage of Share Awards
that a Participant elects to defer shall be credited to the Participant's
Deferred Share Award Account as each Share Award becomes payable to the
Director. The number of Units credited to the Participant's Deferred Share Award
Account shall be equal to the number of Shares of a Participant's Share Award
which the Participant has elected to defer.
4
<PAGE> 5
4.5 Withholding Taxes. If the Company is required to withhold any taxes
or other awards from a Director's Fees or deferred Share Award pursuant to any
state, federal or local law, such amounts shall, to the extent possible, be
deducted from the Participant's Fees or Share Award before such amounts are
credited as described in Sections 4.3 and 4.4 above. Any additional withholding
amount required shall be paid by the Director to the Company as a condition to
crediting of such amounts or Units.
ARTICLE V
DEFERRED BENEFIT ACCOUNT
5.1 Determination of Deferred Benefit Account. On any particular date,
a Participant's Deferred Benefit Account shall consist of the aggregate amount
of dollars and Units credited thereto pursuant to Section 4.2, plus any interest
credited pursuant to Section 5.2, plus any dividend equivalents credited
pursuant to Section 5.3, minus the aggregate amount of distributions, if any,
made from such Deferred Benefit Account.
5.2 Crediting of Interest. As of each Determination Date, each Deferred
Benefit Account to which Fees have been credited in dollar amounts shall be
increased by the amount of interest earned since the immediately preceding
Determination Date. Interest shall be credited at the Declared Rate as of such
Determination Date based on the average daily balance of the dollar credited
portion of the Participant's Deferred Benefit Account since the immediately
preceding Determination Date, but after the Deferred Benefit Account has been
adjusted for any contributions or distributions to be credited or deducted for
such period. Interest for the period prior to the first Determination Date
applicable to a Deferred Benefit Account shall be prorated. Until a Participant
or his or her Beneficiary receives his or her entire Deferred Benefit Account,
the unpaid balance thereof credited in dollar amounts shall bear interest as
provided in this Section 5.2.
5.3 Crediting of Dividend Equivalents. Each Deferred Benefit Account to
which Fees have been credited in Units shall be credited annually after the end
of each Plan Year with additional Units equal in value to the amount of cash
dividends paid by the Company during such Plan Year on the number of Shares
equivalent to the average daily balance of Units in such Deferred Benefit
Account during such Plan Year. Such dividend equivalents shall be valued on the
basis of the average price of Shares acquired by the Caliber System, Inc. Stock
Bonus Plan or any successor thereto during such Plan Year. Until a Participant
or his or her Beneficiary receives his or her entire Deferred Benefit Account,
the unpaid balance thereof credited in Units shall earn dividend equivalents as
provided in this Section 5.3.
5
<PAGE> 6
5.4 Statement of Accounts. The Committee shall provide to each
Participant, within 120 days after the close of each Plan Year, a statement
setting forth the balance of such Participant's Deferred Benefit Account as of
the last day of the preceding Plan Year and showing all adjustments made thereto
during such Plan Year.
5.5 Vesting of Deferred Benefit Account. A Participant shall be 100%
vested in his or her Deferred Benefit Account at all times.
ARTICLE VI
DEFERRED SHARE AWARD ACCOUNT
6.1 Determination of Deferred Share Award Account. On any particular
date, a Participant's Deferred Share Award Account shall consist of the
aggregate number of Units credited thereto pursuant to Section 4.4, plus any
dividend equivalents credited pursuant to Section 6.2, minus the aggregate
amount of distributions, if any, made from such Deferred Share Award Account.
6.2 Crediting of Dividend Equivalents. Each Deferred Share Award
Account shall be credited annually after the end of each Plan Year with
additional Units equal in value to the amount of cash dividends paid by the
Company during such Plan Year on that number of Shares equivalent to the average
daily balance of Units in such Deferred Share Award Account during such Plan
Year. Such dividend equivalents shall be valued on the basis of the average
price of Shares acquired by the Caliber System, Inc. Stock Bonus Plan or any
successor thereto during such Plan Year. Until a Participant or his or her
Beneficiary receives his or her entire Deferred Share Award Account, the unpaid
balance thereof credited in Units shall earn dividend equivalents as provided in
this Section 6.2.
6.3 Statement of Accounts. The Committee shall provide to each
Participant, within 120 days after the close of each Plan Year, a statement
setting forth the balance of such Participant's Deferred Share Award Account as
of the last day of the preceding Plan Year and showing all adjustments made
thereto during such Plan Year.
6.4 Vesting of Deferred Benefit Account. A Participant shall be 100%
vested in his or her Deferred Share Award Account at all times.
6
<PAGE> 7
ARTICLE VII
PAYMENT OF BENEFITS
7.1 Termination of Service as a Director or Death. Upon the earliest of
(i) termination of service of the Participant as a Director of the Company, for
reasons other than his or her death, or (ii) the death of a Participant, the
Company shall pay to the Participant or his Beneficiary, as the case may be, in
cash a Deferral Benefit equal to the balance of his or her Deferred Benefit
Account, plus, in Shares, a Deferred Share Award Benefit equal to the balance of
his or her Deferred Share Award Account.
7.2 Emergency Benefit. In the event that the Committee, upon written
petition of a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant, as soon as practicable following such determination, an
amount in cash necessary to meet the emergency (the "Emergency Benefit"), but
not exceeding the aggregate balance of such Participant's Deferred Benefit
Account and Deferred Share Award Account as of the date of such payment. For
purposes of this Section 7.2, an "unforeseeable financial emergency" shall mean
an unexpected need for cash arising from an illness, disability, casualty loss,
sudden financial reversal or other such unforeseeable occurrence. Cash needs
arising from foreseeable events such as the purchase of a house or education
expenses for children shall not be considered to be the result of an
unforeseeable financial emergency. The amount of the Deferral Benefit and
Deferred Share Award Benefit otherwise payable under the Plan to such
Participant shall be adjusted to reflect the early payment of the Emergency
Benefit. For purposes of this Section 7.2, Deferred Benefit Accounts and
Deferred Share Award Accounts including Units shall be valued on the basis of
the Fair Market Value of the Shares on the date of payment of an Emergency
Benefit.
7.3 Interim Distribution. A Participant may elect by notice in writing
filed with the Committee, to receive an interim distribution of all or any
specified percentage of his or her deferred Fees or deferred Share Awards
beginning at any time at least three years after the date such Fees and Share
Awards otherwise would have been payable had the Participant not elected to
participate in the Plan. Such a notice may be filed at any time or times, but
may only apply to Fees and Share Awards not yet earned or credited at the time
such notice is filed. The Participant may elect to receive an interim
distribution in either a lump sum payment or in a series of annual installments
over a period not to exceed ten years. Any benefits paid to the Participant as
an interim distribution shall reduce the amounts otherwise payable to the
Participant under the Plan. For purposes of this Section 7.3, Deferred Benefit
Accounts and Deferred Share Award Accounts including Units shall be valued on
7
<PAGE> 8
the basis of the Fair Market Value of the Shares on the date payment of an
interim distribution commences.
7.4 Form of Payment -- Deferral Benefits. The Deferral
Benefit payable pursuant to Section 7.1 shall be paid in one of
the following forms, as elected by the Participant in his or her
Participation Agreement:
(a) Equal quarterly installments over a period of ten
years (together, in the case of deferred compensation credited in
dollar amounts, with interest thereon credited after the payment
commencement date pursuant to Section 5.2).
(b) A lump sum.
(c) A combination of (a) and (b) above. The
Participant shall designate the percentage payable under each
option.
For the purposes of this Section 7.4, each distribution from Deferred Benefit
Accounts including Units shall be valued on the basis of the Fair Market Value
of the Shares on the date payment of such distribution is made.
7.5 Form of Payment -- Deferred Share Award Benefits. The Deferred
Share Award Benefit payable pursuant to Section 7.1 shall be paid in a single
distribution in whole Shares plus cash equal in value to any fractional Share.
For the purposes of this Section 7.5, each distribution from a
Deferred Share Award Account shall be valued on the basis of the Fair Market
Value of the Shares on the date payment of such distribution is made.
7.6 Commencement of Payments. Commencement of payments under Section
7.1 of the Plan shall begin within sixty days following receipt of notice by the
Committee of an event which entitles a Participant (or a Beneficiary) to
payments under the Plan, or at such earlier date as may be determined by the
Committee.
ARTICLE VIII
BENEFICIARY DESIGNATION
8.1 Beneficiary Designation. Each Participant shall have the right, at
any time, to designate any person or persons as his Beneficiary to whom payment
under the Plan shall be made in the event of his or her death prior to complete
distribution to the Participant of his or her Deferral Benefit and/or Deferred
Share Award Benefit. Any Beneficiary designation shall be made in a
8
<PAGE> 9
written instrument filed with the Committee and shall be effective only when
received in writing by the Committee.
8.2 Amendments. Any Beneficiary designation may be changed by a
Participant by the filing of a new Beneficiary designation, which will cancel
all Beneficiary designations previously filed.
8.3 No Designation. If a Participant fails to designate a Beneficiary
as provided above, or if all designated Beneficiaries predecease the
Participant, then the Participant's designated Beneficiary shall be deemed to be
the Participant's estate.
8.4 Effect of Payment. Payment to a Participant's Beneficiary (or, upon
the death of a Beneficiary, to his or her estate) shall completely discharge the
Company's obligations under the Plan.
ARTICLE IX
ADMINISTRATION
9.1 Committee; Duties. The Committee shall consist of the Chairman of
the Board (provided 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.
9.2 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.
9.3 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 and application of the Plan shall be final and
binding upon all persons having any interest in the Plan.
9.4 Indemnity of Committee. The Company shall indemnify the members of
the Committee against claims, loss, damage, expense and liability arising from
any action or failure to act with respect to the Plan to the extent provided in
the Regulations of the Company and any applicable indemnification agreement
between the Company and such member.
9
<PAGE> 10
ARTICLE X
AMENDMENT AND TERMINATION OF PLAN
The Board may at any time amend, suspend, terminate or reinstate any or
all of the provisions of the Plan, except that no such amendment, suspension or
termination may adversely affect any Participant's Deferred Benefit Account
and/or Deferred Share Award Account as it existed as of the effective date of
such amendment, suspension or termination without such Participant's consent.
The Committee may, in its sole discretion, from time to time increase the
Declared Rate, but in no event shall the Declared Rate be decreased.
ARTICLE XI
MISCELLANEOUS
11.1 Funding. Neither Participants, nor their Beneficiaries, nor their
heirs, successors or assigns, shall have any secured interest or claim in any
property or assets of the Company. The Company's obligation under the Plan shall
be merely that of an unfunded and unsecured promise of the Company to pay money
in the future. The Company may create a trust to hold funds to be used in
payment of its obligations under the Plan, and may fund such trust, provided
that any funds contained therein shall remain liable for the claims of the
Company's general creditors.
11.2 Non-assignability. No right or interest under the Plan of a
Participant or his or her Beneficiary (or any person claiming through or under
any of them), other than the surviving spouse of any deceased Participant, shall
be assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner
be liable for or subject to the debts or liabilities of any such Participant or
Beneficiary. If any Participant or Beneficiary (other than the surviving spouse
of any deceased Participant) shall attempt to or shall transfer, assign,
alienate, anticipate, sell, pledge or otherwise encumber his or her benefits
hereunder or any part thereof, or if by reason of his or her bankruptcy or other
event happening at any time such benefits would devolve upon anyone else or
would not be enjoyed by him or her, then the Committee, in its discretion, may
terminate his or her interest in any such benefit to the extent the Committee
considers necessary or advisable to prevent or limit the effects of such
occurrence. Termination shall be effected by filing a written "termination
declarations" with the Secretary of the Company and making reasonable efforts to
deliver a copy to the Participant or Beneficiary whose interest is adversely
affected (the Terminated Participant).
10
<PAGE> 11
As long as the Terminated Participant is alive, any benefits affected
by the termination shall be retained by the Company and, in the Committee's sole
and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of the Terminated Participant, all
benefits withheld from him or her and not paid to others in accordance with the
preceding sentence shall be disposed of according to the provisions of the Plan
that would apply if he or she died prior to the time that all benefits to which
he or she was entitled were paid to him or her.
11.3 Captions. The captions contained herein are for convenience only
and shall not control or affect the meaning or construction hereof.
11.4 Governing Law. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of Ohio.
11.5 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.
11.6 Effective Date. The effective date of this amended and restated
Director's Deferred Compensation Plan shall be May 8, 1996.
11.7 No 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.
11
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
PURPOSE
ARTICLE II
DEFINITIONS
<S> <C> <C>
2.1 Beneficiary............................................................................... 1
-----------
2.2 Board..................................................................................... 1
-----
2.3 Committee................................................................................. 1
---------
2.4 Company................................................................................... 1
-------
2.5 Declared Rate............................................................................. 2
-------------
2.6 Deferral Benefit.......................................................................... 2
----------------
2.7 Deferred Benefit Account.................................................................. 2
------------------------
2.8 Deferred Share Award Account.............................................................. 2
----------------------------
2.9 Deferred Share Award Benefit.............................................................. 2
----------------------------
2.10 Determination Date........................................................................ 2
------------------
2.11 Director.................................................................................. 2
--------
2.12 Emergency Benefit......................................................................... 2
-----------------
2.13 Fair Market Value......................................................................... 2
-----------------
2.14 Fee....................................................................................... 2
---
2.15 Participant............................................................................... 2
-----------
2.16 Participation Agreement................................................................... 2
-----------------------
2.17 Plan Year................................................................................. 2
---------
2.18 Share..................................................................................... 2
-----
2.19 Share Award............................................................................... 3
-----------
2.20 Unit...................................................................................... 3
----
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility............................................................................... 3
-----------
3.2 Participation............................................................................. 3
-------------
3.3 Termination of Participation.............................................................. 3
----------------------------
ARTICLE IV
DEFERRAL OF FEES AND SHARE AWARDS
4.1 Deferral of Fees.......................................................................... 4
----------------
4.2 Crediting of Deferred Fees................................................................ 4
--------------------------
4.3 Deferral of Share Awards.................................................................. 4
------------------------
4.4 Crediting of Deferred Share Awards........................................................ 4
----------------------------------
4.5 Withholding Taxes......................................................................... 5
-----------------
</TABLE>
i
<PAGE> 13
<TABLE>
<CAPTION>
Page
----
ARTICLE V
DEFERRED BENEFIT ACCOUNT
<S> <C> <C>
5.1 Determination of Deferred Benefit Account................................................. 5
-----------------------------------------
5.2 Crediting of Interest..................................................................... 5
---------------------
5.3 Crediting of Dividend Equivalents......................................................... 5
---------------------------------
5.4 Statement of Accounts..................................................................... 6
---------------------
5.5 Vesting of Deferred Benefit Account....................................................... 6
-----------------------------------
ARTICLE VI
DEFERRED SHARE AWARD ACCOUNT
6.1 Determination of Deferred Share Award Account............................................. 6
---------------------------------------------
6.2 Crediting of Dividend Equivalents......................................................... 6
---------------------------------
6.3 Statement of Accounts..................................................................... 6
---------------------
6.4 Vesting of Deferred Benefit Account....................................................... 6
-----------------------------------
ARTICLE VII
PAYMENT OF BENEFITS
7.1 Termination of Service as a Director or Death............................................. 7
---------------------------------------------
7.2 Emergency Benefit......................................................................... 7
-----------------
7.3 Interim Distribution...................................................................... 7
--------------------
7.4 Form of Payment -- Deferral Benefits...................................................... 8
------------------------------------
7.5 Form of Payment -- Deferred Share Award
---------------------------------------
Benefits.................................................................................. 8
--------
7.6 Commencement of Payments.................................................................. 8
------------------------
ARTICLE VIII
BENEFICIARY DESIGNATION
8.1 Beneficiary Designation................................................................... 8
-----------------------
8.2 Amendments................................................................................ 9
----------
8.3 No Designation............................................................................ 9
--------------
8.4 Effect of Payment......................................................................... 9
-----------------
ARTICLE IX
ADMINISTRATION
9.1 Committee; Duties......................................................................... 9
-----------------
9.2 Agents.................................................................................... 9
------
9.3 Binding Effect of Decisions............................................................... 9
---------------------------
9.4 Indemnity of Committee.................................................................... 9
----------------------
</TABLE>
ii
<PAGE> 14
<TABLE>
<CAPTION>
Page
----
ARTICLE X
AMENDMENT AND TERMINATION OF PLAN
ARTICLE XI
MISCELLANEOUS
<S> <C> <C>
11.1 Funding................................................................................... 10
-------
11.2 Non-assignability......................................................................... 10
-----------------
11.3 Captions.................................................................................. 11
--------
11.4 Governing Law............................................................................. 11
-------------
11.5 Successors................................................................................ 11
----------
11.6 Effective Date............................................................................ 11
--------------
11.7 No Right to Continued Service............................................................. 11
-----------------------------
</TABLE>
iii
<PAGE> 1
EXHIBIT 10.2
CALIBER SYSTEM, INC.
NONEMPLOYEE DIRECTORS' STOCK RETAINER PLAN
ARTICLE I
PURPOSE
The purpose of the Caliber System, Inc. Nonemployee Directors' Stock
Retainer Plan is to promote the interests of Caliber System, Inc. and its
shareholders by attracting and retaining nonemployee Directors capable of
furthering the future success of the Company and by aligning their economic
interests more closely with those of the Company's shareholders.
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 Board means the Board of Directors of the Company.
2.3 Company means Caliber System, Inc., an Ohio corporation,
and any successor thereto.
2.4 Nonemployee Director means a member of the Board who is
not employed by the Company or any of its subsidiaries.
2.5 Retainer means the portion of a Nonemployee Director's annual
compensation that is payable without regard to the number of Board or committee
meetings attended or committee positions.
2.6 Shares means shares of common stock, without par value,
of the Company.
ARTICLE III
EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective only if it is approved by the
affirmative vote of the holders of a majority of the Shares present or
represented and entitled to vote at the Annual Meeting of the Company's
shareholders to be held on May 8,1996 or at any adjournment thereof and, if so
approved, shall be effective from the date approved. The term during which
Shares shall be granted under the Plan shall expire on December 31, 2006.
<PAGE> 2
ARTICLE IV
SHARES AVAILABLE FOR GRANTS
The Shares which may be granted to Nonemployee Directors shall not
exceed in the aggregate 50,000 shares.
ARTICLE V
RETAINER PAID IN SHARES
5.1 Each Nonemployee Director elected or re-elected to the Board at the
1996 Annual Meeting and each Annual Meeting thereafter shall be granted, in
consideration of such election or re-election, a Retainer of 900 Shares.
5.2 Each Nonemployee Director elected to the Board after the 1996
Annual Meeting, at other than an Annual Meeting, shall be granted, in
consideration of such election, effective as of the date of such election, a pro
rata portion of a retainer of 900 shares, based on the portion of the year
(expressed in days based on a 365 day year) such Nonemployee Director will serve
prior to the next Annual Meeting, rounded down to the nearest whole Share.
5.3 None of the Shares granted under this Plan shall be subject to
forfeiture upon the termination of a Nonemployee Director's service prior to
completion of his or her term.
5.4 The Shares granted under the Plan may be treasury shares or
newly-issued shares. The obligation of the Company to deliver Shares shall be
subject to all applicable laws, rules and regulations, and to such approvals by
governmental agencies as may be deemed necessary or appropriate by the Company,
including, among others, such steps as counsel for the Company shall deem
necessary or appropriate to comply with requirements of relevant securities
laws. This obligation shall also be subject to the condition that any Shares
reserved for issuance under the Plan shall have been duly listed on the New York
Stock Exchange.
ARTICLE VI
ADJUSTMENTS
6.1 The number and kind of Shares which shall be automatically granted
to each Nonemployee Director under Article V of the Plan shall be automatically
adjusted to prevent dilution or enlargement of the rights of Nonemployee
Directors in the event of any changes in the number or kind of outstanding
Shares resulting from a merger, recapitalization, stock exchange, stock split,
stock dividend, other extraordinary dividend or distribution, corporate
2
<PAGE> 3
division or other change in the Company's corporate or capital
structure.
ARTICLE VII
MISCELLANEOUS
7.1 Amendment. The Board may at any time amend, suspend or terminate
any or all of the provisions of the Plan at any time.
7.2 Retention of Powers. Nothing contained herein shall prevent the
directors of the Company from exercising those powers granted to them by law,
the Company's Articles of Incorporation, or Restated Amended Code of
Regulations, or otherwise to set the compensation of directors from time to
time.
7.3 Governing Law. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of Ohio and applicable Federal
law.
3
<PAGE> 1
EXHIBIT 10.3
CALIBER SYSTEM, INC.
NONEMPLOYEE DIRECTORS' STOCK PLAN
(As Amended as of May 8, 1996)
ARTICLE I
PURPOSE
The purpose of the Caliber System, 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 Board means the Board of Directors of the Company.
2.3 Company means Caliber System, Inc., an Ohio corporation,
and any successor thereto.
2.4 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.
2.5 Nonemployee Director means a member of the Board who is
not employed by the Company or any of its subsidiaries.
2.6 Option Right means the right to purchase Shares granted
pursuant to Article IV.
2.7 Restricted Stock means Shares awarded pursuant to Article
IV which are neither non-forfeitable nor transferrable pursuant to
Articles V and VI.
2.8 Shares means shares of common stock, without par
value, of the Company.
<PAGE> 2
ARTICLE III
SHARES AVAILABLE FOR GRANTS
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 transferrable, shall not exceed in the aggregate 60,000
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.
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 1989 Annual Meeting shall be awarded, effective as of the
date of such meeting, Restricted Stock having a Fair Market Value on such date
of Forty Thousand Dollars ($40,000), 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 1989 Annual Meeting
shall be awarded, effective as of the date of such meeting, Restricted Stock
having a Fair Market Value on such date of Forty Thousand Dollars ($40,000), 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.
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:
2
<PAGE> 3
(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
date of such award, 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 date of such award, 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 date of such award, 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 date of such award, 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 date of such award, 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 date of such award, 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 (i) the death or disability of a
Nonemployee Director while he or she remains a director, (ii) the
retirement of a Nonemployee Director pursuant to the Company's director
tenure policy or (iii) other termination of service of a Nonemployee
Director 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, in
each case prior to the date of the fifth Annual Meeting following the
date of an award in his or her name hereunder, 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
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than or equal to one hundred thirty-three and one-third percent
(133 1/3%) of its Fair Market Value on the date of such award, 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 date of such award,
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 clause (i), 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. For purposes of clauses (ii) and
(iii), Determination Date shall mean the date service as a director
terminates.
(d) Except as otherwise provided in paragraph (c) above,
should any Nonemployee Director cease to serve as such for any reason
prior to the date of the fifth Annual Meeting following the date of an
award in his or her name hereunder, 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 an immediate 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 or
transferred (including without limitation, transfer by gift or donation) prior
to the date, if any, on which they become non-forfeitabIe 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
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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
effective date of such grant. 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 date of grant and (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 to
serve on the Committee. 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 have any authority or discretion as to the selection of
persons eligible to participate in 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.
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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 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) any amendment to the Plan
that would have the effect of changing the persons eligible to participate in
the Plan or 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.
9.2 Effective Date. The Plan shall be effective upon its
approval by the shareholders of the Company.
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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.
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EXHIBIT 10.4
CALIBER SYSTEM, INC.
1994 NONEMPLOYEE DIRECTORS' STOCK PLAN
(As Amended as of May 8, 1996)
ARTICLE I
PURPOSE
The purpose of the Caliber System, 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 Caliber System, 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 nonforfeitable nor transferable pursuant to Articles V and
VI.
<PAGE> 2
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 nonforfeitable 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
reelected to the Board at the 1994 Annual Meeting 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 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.
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
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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 nonforfeitability 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
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and thereupon shall 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
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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.
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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 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
7
<PAGE> 8
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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EXHIBIT 10.5
CALIBER SYSTEM, INC.
RETIREMENT PLAN FOR NONEMPLOYEE DIRECTORS
(As Amended as of May 8, 1996)
ARTICLE I
PURPOSE
The purpose of the Caliber System, Inc. Retirement Plan for
Nonemployee Directors (the Plan) is to provide a retirement benefit to
nonemployee Directors of Caliber System, Inc. (formerly Roadway Services, Inc.)
for service prior to July 1, 1996.
ARTICLE II
DEFINITIONS
For the purposes of the Plan, the following words and phrases
shall have the meanings indicated:
2.1 Board. Board means the Board of Directors of the Company.
2.2 Company. Company means Caliber System, Inc., an
Ohio corporation, and any successor thereto.
2.3 Credited Service. Credited Service means all service prior
to July 1, 1996 as a Director of the Company or of its predecessor, Roadway
Express, including service as a Director prior to the Effective Date.
2.4 Director. Director means a member or former
member of the Board who is not and has never been an employee of
the Company or any of its subsidiaries.
2.5 Effective Date. Effective Date of the Plan means January
1, 1989.
2.6 Plan Administrator. Plan Administrator means the Treasurer
of the Company or any other officer designated by the chief executive officer of
the Company to serve as administrator of the Plan.
2.7 Retainer. Retainer means the annual fees payable in cash
for service as a Director, but excluding meeting fees, fees paid for service on
Committees of the Board and expense reimbursement; provided, however, that for
all years after 1995, Retainer shall mean $18,000.
<PAGE> 2
2.8 Stock Equivalent Benefit. An annual benefit payable in
cash equal to the fair market value of 300 shares of the Company's common stock,
as determined and redetermined annually by the Plan Administrator, as of
December 31 of the year preceding each year in which payment of a Stock
Equivalent Benefit is to be made. Notwithstanding the foregoing, in 1996 up to
one-third of the Stock Equivalent Benefit may be paid in shares of the Company's
common stock.
ARTICLE III
PARTICIPATION
All persons who are Directors on or after the Effective Date
shall be eligible to participate in the Plan; provided, however, that no person
who first becomes a Director after June 30, 1996 shall be eligible to
participate in the Plan. Each such person shall be deemed a participant in the
Plan unless he or she delivers written notice to the Company that he or she does
not wish to participate.
ARTICLE IV
PLAN BENEFITS
The annual amount of the benefit payable under the Plan shall
be the sum of (a) $18,000, plus (b) in the case of a former Director with 5 or
more years of Credited Service, a Stock Equivalent Benefit. Such annual benefit
shall be paid to the former Director, or his or her surviving spouse, if
applicable, in quarterly installments on the last day of each calendar quarter
commencing with the first full calendar quarter following his or her termination
of service as a Director for any reason, including death, provided that a
Director may elect, by notice in writing delivered to the Company within 30 days
after his or her election to the Board, to defer the commencement of payment of
benefits hereunder until he or she reaches a specified age (if later than the
date of termination of service as Director).
ARTICLE V
DURATION OF BENEFITS
Subject to Article VI, quarterly benefit payments under the
Plan shall continue during the joint lives of the former Director and his or her
surviving spouse until the aggregate number of such payments equals the total
number of quarters of Credited Service by the individual as a Director, except
that the Stock Equivalent Benefit shall continue for at least 32 quarters so
long as the former Director or his or her spouse shall survive.
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<PAGE> 3
ARTICLE VI
SUSPENSION OF BENEFITS
If a former Director who is receiving benefits under the Plan
returns to service as a Director, payment of benefits under the Plan shall be
suspended during such service and shall commence again on the last day of the
first full calendar quarter following the date on which such subsequent service
terminates. Other provisions of the Plan notwithstanding, the total number of
quarterly benefit payments hereunder to a former Director and his or her
surviving spouse, including payments both before and after a period of
subsequent service, shall not exceed the applicable maximum number specified in
Article V.
ARTICLE VII
EMPLOYMENT BY THE COMPANY
If a Director or former Director becomes an employee of the
Company or any of its subsidiaries, benefit payments under the Plan shall cease,
and such individual shall have no right to any further benefits under the Plan.
ARTICLE VIII
FUNDING
Neither participants, nor their surviving spouses, nor their
heirs, successors or assigns, shall have any secured interest or claim in any
property or assets of the Company. The Company's obligation under the Plan shall
be merely that of an unfunded and unsecured promise of the Company to pay money
in the future. The Company may create a trust to hold funds to be used in
payment of its obligations under the Plan, and may fund such trust, provided
that any funds contained therein shall remain liable for the claims of the
Company's general creditors.
ARTICLE IX
ADMINISTRATION
The Plan Administrator shall have full power and authority to
administer the Plan, including the power to promulgate rules of Plan
administration, the power to settle any disputes as to rights or benefits
arising from the Plan, the power to appoint agents and delegate duties, and the
power to make such decisions or take such action as the Plan Administrator, in
his or her sole discretion, deems necessary or advisable to aid in the proper
administration of the Plan.
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ARTICLE X
ALIENATION OF BENEFITS
No right or interest under the Plan of a participant (or any
person claiming through or under him or her), other than the surviving spouse of
any deceased participant, shall be assignable or transferable in any manner or
be subject to alienation, anticipation, sale, pledge, encumbrance or other legal
process or in any manner be liable for or subject to the debts or liabilities of
any such participant. If any participant or such other person (other than the
surviving spouse of any deceased participant) shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his
or her benefits hereunder or any part thereof, or if by reason of his or her
bankruptcy or other event happening at any time such benefits would devolve upon
anyone else or would not be enjoyed by him or her, then the Plan Administrator,
in his or her discretion, may terminate his or her interest in any such benefit
to the extent the Plan Administrator considers necessary or advisable to prevent
or limit the effects of such occurrence. Termination shall be effected by filing
a written "termination declaration" with the Secretary of the Company and making
reasonable efforts to deliver a copy to the participant whose interest is
adversely affected (the Terminated Participant).
As long as the Terminated Participant is alive, any benefits
affected by the termination shall be retained by the Company and, in the Plan
Administrator's sole and absolute judgment, may be paid to or expended for the
benefit of the Terminated Participant, his or her spouse, his or her children or
any other person or persons in fact dependent upon him or her in such a manner
as the Committee shall deem proper. Upon the death of the Terminated
Participant, all benefits withheld from him or her and not paid to others in
accordance with the preceding sentence shall be disposed of according to the
provisions of the Plan that would apply if he or she died prior to the time that
all benefits to which he or she was entitled were paid to him or her.
ARTICLE XI
MISCELLANEOUS
11.1 Withholding. The Company shall deduct from the amount of
any payments hereunder all taxes and other amounts required to be withheld by
applicable laws.
11.2 Governing Law. The provisions of the Plan shall be
construed and interpreted according to the laws of the State of Ohio.
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11.3 Amendment; Termination. The Board at any time may amend
or modify in any respect or terminate the Plan, provided that no such amendment,
modification or termination shall adversely affect any rights to benefits under
the Plan relating to Credited Service prior to the effective date of such
amendment, modification or termination without the consent of the Director
affected thereby.
11.4 Captions. The captions contained herein are for
convenience only and shall not control or affect the meaning or construction
hereof.
11.5 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.
11.6 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.
11.7 Adjustment of Stock Equivalent Benefit. The Plan
Administrator shall make or provide for such adjustments in the number and kind
of shares of stock specified in Section 2.8 hereof as may be equitably required
to prevent dilution or enlargement of the benefits payable under the Plan that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
or issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Plan Administrator,
with the approval of the Board, in his or her discretion, may provide in
substitution for the Stock Equivalent Benefit such alternative consideration as
he or she, in good faith, may determine to be equitable in the circumstances.
Notwithstanding the foregoing, no adjustment in the number or kind of shares
shall be made hereunder as a result of the spin-off on January 2, 1996 of
Roadway Express, Inc.
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EXHIBIT 10.6
CALIBER SYSTEM, INC.
1996 EQUITY INCENTIVE COMPENSATION PLAN
1. Purpose. The purposes of the Caliber System, Inc. 1996
Equity Incentive Compensation Plan are to attract, retain and
motivate key employees of the Company and its Subsidiaries, to
compensate them for their contributions to the growth and profits
of the Company and its Subsidiaries and to encourage ownership by
them of Stock of the Company.
2. Definitions. As used in the Plan, the following
capitalized words shall have the meanings indicated below:
"Administrator" means the individual or individuals to whom
the Committee delegates authority under the Plan in accordance with
Section 5(b).
"Award" means an award made pursuant to the terms of the
Plan.
"Award Agreement" means a written agreement between the
Company or one of its Subsidiaries which is approved in accordance with
Section 12(e), which is executed by the Participant and by an officer
on behalf of the Company and which sets forth the terms and conditions
of the Award to the Participant.
"Award Certificate" means a written certificate issued by the
Company which is approved in accordance with Section 12(e), which is
executed by an officer on behalf of the Company and which sets forth
the terms and conditions of an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Committee" means the Compensation Committee of the Board, any
successor committee thereto or any other committee appointed by the
Board to administer the Plan. The Committee shall consist of at least
two individuals, each of whom is both a "disinterested person" within
the meaning of Rule 16b-3 under the Exchange Act and an "outside
director" within the meaning of Treasury Regulation Section 1.162-27
(e) (3) promulgated under the Code and who shall serve at the pleasure
of the Board.
"Company" means Caliber System, Inc.
"Date of the Award" means the effective date of an Award
(whether a mandatory Award or an elected Award pursuant to Section
12(a)) as specified by the Committee and set forth in the applicable
Award Agreement or Award Certificate.
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"Eligible Individuals" means the individuals described in
Section 6 who are eligible for Awards under the Plan.
"Employee Trust" means any trust established by the Company in
connection with an employee benefit plan (including the Plan) under
which current and former employees of the Company constitute the
principal beneficiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the applicable rulings and regulations thereunder.
"Fair Market Value" means, with respect to a share of Stock,
the fair market value thereof as of the relevant date of determination,
as determined in accordance with a valuation methodology approved by
the Committee.
"Option" means an option to purchase Stock, the terms of which
are described in Section 9.
"Option Award" means an Award of Options pursuant to Section
9. An option Award may consist of options, the receipt of which was
elected pursuant to Section 12(a).
"Other Award" means any other form of award authorized under
Section 11 of the Plan. An Other Award may consist of Awards, the
receipt of which was elected pursuant to Section 12(a).
"Participant" means an individual to whom an Award has
been made.
"Performance Criteria" means one or more criteria that the
Committee shall select for purposes of establishing Performance
Goal(s). The Performance Criteria that will be used to establish such
Performance Goal(s) shall be limited to the following: stock price,
market share, sales, earnings per share, net earnings, operating
earnings, profit margins, return on capital, assets, net assets or
equity, costs, cash flow and any combination thereof.
"Performance Goals" means one or more goals established by the
Committee for a performance period or performance cycle based upon
Performance Criteria.
"Plan" means the Caliber System, Inc. 1996 Equity
Incentive Compensation Plan, as the same may be amended from
time to time in accordance with Section 15(f) below.
"SAR" means a stock appreciation right, as described in
Section 10.
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"SAR Award" means an Award of SARs pursuant to Section 10. An
SAR Award may be freestanding or granted in tandem with another type of
Award. An SAR Award may consist of SARs, the receipt of which was
elected pursuant to Section 12(a).
"Section 162(m) Participant" means, for a given fiscal year of
the Company, a Participant designated by the Compensation Committee by
not later than 90 days following the start of such year as a
Participant (or such other time as may be required or permitted by
Section 162(m) of the Code) whose compensation for such fiscal year may
be subject to the limit on deductible compensation imposed by Section
162(m) of the Code.
"Shares" means the shares of Stock underlying,
constituting, subject to, or corresponding to an Award.
"Stock" means the common stock, without par value, of the
Company.
"Stock Award" means an Award of Shares pursuant to Section 7.
A Stock Award may consist of Stock, the receipt of which was elected
pursuant to Section 12(a).
"Stock Unit" means a restricted stock unit, as described
in Section 8.
"Stock Unit Award" means an Award of Stock Units, pursuant to
Section 8. A Stock Unit Award may consist of Stock Units, the receipt
of which was elected pursuant to Section 12(a).
"Subsidiary" means (i) a corporation or other entity with
respect to which the Company, directly or indirectly, has the power,
whether through the ownership of voting securities, by contract or
otherwise, to elect at least a majority of the members of such
corporation's board of directors or analogous governing body, or (ii)
any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest and which the Committee
designates as a Subsidiary for purposes of the Plan.
"Substitute Awards" means Awards granted upon assumption of,
or in substitution for, outstanding awards previously granted by a
corporation or other entity acquired by the Company or with which the
Company combines.
"Term of the Plan" means the period beginning on the date that
the Plan is adopted by the Board and ending on the date that the Plan
terminates in accordance with Section 3 or 15(f) below.
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<PAGE> 4
3. Effective Date and Term. The Plan shall become effective upon its
adoption by the Board subject to its approval by the stockholders of the
Company. Prior to such stockholder approval, the Committee may grant Awards
conditioned on stockholder approval. If such stockholder approval is not
obtained at or before the first annual meeting of stockholders to occur after
the adoption of the Plan by the Board, the Plan and any Awards made thereafter
shall terminate ab initio and be of no further force and effect. In no event
shall any Awards be made under the Plan after the tenth anniversary of the date
of stockholder approval; provided however, that no incentive stock option,
within the meaning of Section 422 of the Code may be granted under the Plan
after the tenth anniversary of the adoption of the Plan by the Board.
4. Stock Subject to Plan.
(a) One million, nine hundred thousand shares of Stock (whether issued
or unissued) shall be authorized for issuance under the Plan (the "Section 4
Limit").
(b) The number and kind of shares authorized for issuance hereunder,
including the maximum number of Shares subject to Options or SARs as provided in
Section 4(d) below, may be equitably adjusted in the discretion of the Committee
in the event of a stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, extraordinary dividend, split-up, spinoff, combination,
exchange of shares, warrants or rights offering to purchase Stock at a price
substantially below Fair Market Value or other similar corporate event affecting
the Stock in order to preserve the benefits or potential benefits intended to be
made available to Participants granted Awards. In the event of any of the
foregoing events, the number of outstanding Awards and the number and kind of
shares subject to any outstanding Award and the purchase price per share, if
any, under any outstanding Award may be equitably adjusted (including by payment
of cash to a Participant) in the discretion of the Committee in order to
preserve the benefits or potential benefits intended to be made available to
Participants granted Awards. Such adjustments shall be made by the Committee,
whose determination as to what adjustments shall be made, and the extent
thereof, shall be final. Unless otherwise determined by the Committee, such
adjusted Awards shall be subject to the same vesting schedule and restrictions
to which the underlying Award is subject. No fractional shares of Stock shall be
reserved or authorized by any such adjustment.
(c) In calculating the number of shares of Stock remaining for issuance
under the Plan, the following rules shall apply:
1. The Section 4 Limit shall be reduced by the number of
Shares subject to outstanding Awards and, for Awards
which are not denominated in Shares, by the number of
Shares delivered upon payment or settlement of the
Award.
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<PAGE> 5
2. The Section 4 Limit shall be increased by the number
of, shares of Stock tendered to pay the exercise
price of any Option or Other Award and by the number
of Shares withheld from any Award to satisfy a
Participant's tax withholding obligation or, if
applicable, withheld to pay the exercise price of an
Option or Other Award.
3. The Section 4 Limit shall be increased by the
number of Shares subject to an Award (or portion
thereof) granted hereunder that is forfeited, is
settled through the issuance of consideration other
than Shares or otherwise terminates without the
issuance of such Shares. With respect to SAR
Awards that are settled in whole or in part in
Stock, this Section 4(c)(3) shall be applied by
increasing the Section 4 Limit by the excess, if
any, of the number of Shares subject to the SAR
Award over the number of Shares delivered to the
Participant upon exercise of such Award.
4. Any Shares underlying Substitute Awards shall not be
counted against the Section 4 Limit and shall not be
subject to Section 4(d), except in the case of Shares
with respect to which Substitute Awards are granted
to officers or directors of the Company subject to
the reporting obligations of Section 16(a) of the
Exchange Act.
In no event may the operation of the foregoing result in the
issuance under the Plan of a number of Shares in excess of the
Section 4 Limit.
(d) The maximum number of Shares that may be subject to Awards granted
to or elected by a Participant (i) in the fiscal year in which the Plan is
approved by the stockholders of the Company shall equal 150,000 Shares, and (ii)
in each subsequent fiscal year shall equal 110% of such maximum number for the
preceding fiscal year.
5. Administration.
(a) The Plan shall be administered by the Committee, which shall have
full power and authority, subject to the express provisions hereof, (i) to
select Participants from among the Eligible Individuals, (ii) to make Awards in
accordance with the Plan, (iii) to determine the number of Shares subject to
each Award or the cash amount payable in connection with an Award, (iv) to
determine the terms and conditions of each Award, including, without limitation,
those related to vesting, forfeiture, payment, exercisibility, and the effect,
if any, of a Participant's termination of employment with the Company or a
change in control of the Company on the outstanding Awards granted to such
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<PAGE> 6
Participant, and including the authority to amend the terms and conditions of an
Award after the granting thereof to a Participant in a manner that is not
prejudicial to the rights of such Participant in such Award, (v) to determine
whether the terms and conditions of each Award will be set forth in an Award
Agreement or Award Certificate and to specify and approve the provisions of the
Award Agreements and Award Certificates delivered to Participants in connection
with their Awards, (vi) to construe and interpret any Award Agreement or Award
Certificate delivered under the Plan, (vii) to prescribe, amend and rescind
rules and procedures relating to the Plan, (viii) to vary the terms of Awards to
take account of tax, securities law and other regulatory requirements of foreign
jurisdictions and (ix) to make all other determinations and to formulate such
procedures as may be necessary or advisable for the administration of the Plan.
(b) The Committee may, but need not, from time to time delegate some or
all of its authority under the Plan to an Administrator consisting of one or
more members of the Committee or of one or more officers of the Company;
provided, however, that the Committee may not delegate its authority (i) to make
Awards to Eligible Individuals (A) who are subject on the Date of the Award to
the reporting rules under Section 16(a) of the Exchange Act, (B) who are Section
162(m) Participants or (C) who are officers of the Company and are delegated
authority by the Committee hereunder, or (ii) under Sections 5(c) and 15(f) of
the Plan. Any delegation hereunder shall be subject to the restrictions and
limits that the Committee specifies at the time of such delegation or
thereafter. Nothing in the Plan shall be construed as obligating the Committee
to delegate authority to an Administrator, and the Committee may at any time
rescind the authority delegated to an Administrator appointed hereunder or
appoint a new Administrator. At all times, the Administrator appointed under
this Section 5(b) shall serve in such capacity at the pleasure of the Committee.
Any action undertaken by the Administrator in accordance with the Committee's
delegation of authority shall have the same force and effect as if undertaken
directly by the Committee, and any reference in the Plan to the Committee shall,
to the extent consistent with the terms and limitations of such delegation, be
deemed to include a reference to the Administrator.
(c) The Committee shall have full power and authority, subject to the
express provisions hereof, to construe and interpret the Plan.
(d) All determinations by the Committee in carrying out and
administering the Plan and in construing and interpreting the Plan shall be
final, binding and conclusive for all purposes and upon all persons interested
herein. In the event of any disagreement between the Committee and the
Administrator, the Committee's determination on such matter shall be final and
binding on all interested persons, including the Administrator.
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<PAGE> 7
(e) No member of the Committee or the Administrator shall be liable for
anything whatsoever in connection with the administration of the Plan except as
a result of such person's own willful misconduct. Under no circumstances shall
any member of the Committee or the Administrator be liable for any act or
omission of any other member of the Committee or, in the case of members of the
Committee, the Administrator. In the performance of its functions with respect
to the Plan, the Committee and the Administrator shall be entitled to rely upon
information and advice furnished by the Company's officers, the Company's
accountants, the Company's counsel and any other party the Committee or the
Administrator deems necessary or appropriate, and no member of the Committee or
the Administrator shall be liable for any action taken or not taken in reliance
upon any such advice.
6. Eligibility. Eligible Individuals shall include all officers, other
key employees and consultants of the Company and its Subsidiaries, nonemployee
directors of Subsidiaries and employees and consultants of joint ventures,
partnerships or similar business organizations in which the Company or a
Subsidiary has an equity or similar interest, other than those individuals who
may be designated by the Committee from time to time as ineligible for such
period of time as the Committee shall determine. In accordance with rules
specified by the Committee, Eligible Individuals may include former employees or
former consultants of the Company and such joint ventures, partnerships or
similar business organizations. Members of the Committee will not be eligible to
participate in the Plan. An individual's status as an Administrator will not
affect his or her eligibility to participate in the Plan.
7. Stock Awards. Stock Awards shall consist of one or more Shares of
Stock granted or offered for sale to an Eligible Individual, and shall be
subject to the terms and conditions established by the Committee in connection
with the Award and specified in the applicable Award Agreement or Award
Certificate. The Shares subject to a Stock Award may, among other things, be
subject to Performance Goals, vesting requirements or restrictions on
transferability.
8. Stock Unit Awards. Stock Unit Awards shall consist of a grant of one
or more Stock Units, and shall be subject to the terms and conditions
established by the Committee, including Performance Goals, in connection with
the Award and specified in the applicable Award Agreement or Award Certificate.
Each Stock Unit awarded to a Participant shall correspond to one Share. Upon
satisfaction of the conditions to vesting and payment specified in the
applicable Award Agreement or Award Certificate, a Stock Unit will be payable,
at the discretion of the Committee, in Stock or in cash equal to Fair Market
Value on the payment date of one Share.
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<PAGE> 8
9. Option Awards.
(a) An Option Award shall consist of the grant of an Option to purchase
such number of Shares as determined by the Committee, and shall be subject to
the terms and conditions established by the Committee in connection with the
Award and specified in the applicable Award Agreement or Award Certificate. Upon
satisfaction of the conditions to exercisability specified in the applicable
Award Agreement or Award Certificate, a Participant shall be entitled to
exercise the Option in whole or in part and to receive, upon satisfaction or
payment of the exercise price or an irrevocable notice of exercise in the manner
contemplated by Section 9(b) below, the number of Shares in respect of which the
Option shall have been exercised. Such Options may be either nonqualified stock
options or incentive stock options within the meaning of Section 422 of the
Code.
(b) Subject to the provisions of the applicable Award Agreement or
Award Certificate, the exercise price of the Option may be paid in cash or
previously owned shares of Stock or a combination thereof and, if the applicable
Award Agreement or Award Certificate so provides, in whole or in part through
the withholding of Shares subject to the Option with a value equal to the
exercise price. In accordance with the rules and procedures established by the
Committee for this purpose, the Option may also be exercised through a "cash
less exercise" procedure approved by the Committee that affords Participants the
opportunity to sell immediately some or all of the Shares underlying the
exercised portion of the Option in order to generate sufficient cash to pay the
Option exercise price and/or to satisfy withholding tax obligations related to
the Option.
(c) Options which are intended to qualify as incentive stock options
under Section 422 of the Code shall expire no later than the tenth anniversary
of the date of the grant thereof.
10. SAR Awards. An SAR Award shall consist of the grant of one or more
SARs, and shall be subject to the terms and conditions established by the
Committee in connection with the Award and specified in the applicable Award
Agreement or Award Certificate. Upon satisfaction of the conditions to the
payment specified in the applicable Award Agreement or Award Certificate, each
SAR shall entitle a Participant to an amount, if any, equal to the Fair Market
Value of a Share on the date of exercise over the SAR exercise price specified
in the applicable Award Agreement or Award Certificate. At the discretion of the
Committee, payments to a Participant upon exercise of an SAR may be made in
Shares, cash or a combination thereof.
11. Other Awards. The Committee shall have the authority to
specify the terms and provisions, including Performance Goals, of
other forms of equity-based or equity-related Awards not described
above which the Committee determines to be consistent with the
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<PAGE> 9
purpose of the Plan and the interests of the Company, which Awards may provide
for cash payments based n whole or in part on the value or future value of
Stock, for the acquisition or future acquisition of Stock, or any combination
thereof. Other Awards shall also include cash payments (including the cash
payment of dividend equivalents) under the Plan which may be based on one or
more criteria determined by the Committee which are unrelated to the value of
Stock and which may be granted in tandem with, or independent of, other Awards
under the Plan.
12. Awards in General.
(a) Awards under the Plan may, in the discretion of the Committee, be
made in substitution in whole or in part for cash or other compensation payable
to an Eligible Individual. In accordance with rules and procedures established
by the Committee, an Eligible Individual may elect to receive one form of Award
permitted under the Plan in lieu of any other form of Award, or may elect to
receive an Award under the Plan in lieu of all or part of any compensation which
otherwise might have been paid to such Eligible Individual; provided, however,
that any such election shall not require the Committee to make any Award to such
Eligible Individual. Any such substitute or elective Awards shall have terms and
conditions consistent with the provisions of the Plan applicable to such Award.
At the discretion of the Committee, Stock Units may at any time be substituted
for the portion of a Stock Award that has not vested in accordance with the
provisions of the applicable Award Agreement or Award Certificate. The
substitution contemplated by the previous sentence may be made at any time prior
to the applicable vesting date of the Stock Award.
(b) For purposes of determining the number of Shares subject to an
Award, the Committee may value the shares at a discount to Fair Market Value to
reflect the various restrictions, conditions and limitations set forth in the
Plan and the applicable Award Agreement or Award Certificate or otherwise
applicable to the Shares.
(c) With respect to any dividend or distribution on the Shares
corresponding to an Award, the Committee may in its discretion authorize current
or deferred payments (payable in cash or Stock or a combination thereof) or
appropriate adjustments to the outstanding Award to reflect such dividend or
distribution.
(d) In accordance with the procedures specified by, and subject to the
approval of, the Committee, Participants may be given the opportunity to defer
the payment or settlement of an Award to one or more dates selected by the
Participant. In connection with such deferral, the Committee may provide that
Awards so deferred may be credited with a notional return during the period of
deferral based upon the corresponding return on one or more investments
designated by the Committee or elected by the Participant in accordance with the
procedures established by the
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<PAGE> 10
Committee for this purpose. The Committee shall have the right at any time to
accelerate the payment or settlement of any Award granted under the Plan,
including, without limitation, any Award subject to a prior deferral election.
(e) The terms and provisions of an Award shall be set forth in a
written Award Agreement or Award Certificate approved by the Committee and
delivered or made available to the Participant as soon as practicable following
the Date of the Award.
(f) The vesting, exercisability, payment and other restrictions
applicable to an Award (which may include, without limitation, restrictions on
transferability or provision for mandatory resale to the Company) shall be
determined by the Committee and set forth in the applicable Award Agreement or
Award Certificate. Notwithstanding the foregoing, the Committee may accelerate
(i) the vesting or payment of any Award, (ii) the lapse of restrictions on any
Award (including a Stock Award) or (iii) the date on which any Option or SAR
first becomes exercisable. The date of a Participant's termination of employment
for any reason shall be determined in the sole discretion of the Committee. The
Committee shall also have full authority to determine and specify in the
applicable Award Agreement or Award Certificate the effect, if any, that a
Participant's termination of employment for any reason will have on the vesting,
exercisability, payment or lapse of restrictions applicable to an outstanding
Award.
(g) If the Committee conditions the vesting of any Awards under the
Plan, other than Option Awards and SAR Awards, upon service alone, such vesting
may not occur before three years from the Date of the Award. Notwithstanding
anything in this Plan to the contrary, not more than 95,000 shares of Stock in
the aggregate available under this Plan may be subject to Awards, other than
Option Awards and SAR Awards, which do not meet the requirements of the first
sentence of this subsection (g) or to which the Committee may accelerate or
waive any restrictions imposed by the Committee or, in the case of grants of
Option Awards, which the Committee may subsequently determine, with the
Participant's consent but without any approval or consent of the Company's
stockholders, are not to be subject to the limitations of Section 15(f).
13. Certain Restrictions.
(a) Except as otherwise provided by the terms of any applicable
Employee Trust, prior to the exercise of any Option or SAR Award or payment of
Stock pursuant to any Stock Unit Award or Other Award, the Participant shall not
have any rights as a stockholder with respect to any Shares subject to such
Option or SAR or corresponding to such Stock Unit or Other Award. Subject to the
terms of any applicable Employee Trust, each Participant shall be the beneficial
owner of any Shares actually issued by the Company in connection with an Award.
Except for the risk of forfeiture and the restrictions on transfer which may
apply to
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certain Shares (including restrictions relating to any dividends or other
rights), the Participant shall be entitled to all rights of ownership,
including, without limitation, the right (i) to vote such Shares and (ii) to
receive cash or stock dividends thereon.
(b) Unless the Committee determines otherwise, no Award granted under
the Plan shall be transferable other than by will or by the laws of descent and
distribution; provided, however, that the Committee may, subject to such terms
and conditions as the Committee shall specify, permit the transfer of an Award
to a Participant's family members or to one or more trusts established in whole
or in part for the benefit of one or more of such family members; provided,
further, that the restrictions in this sentence shall not apply to the Shares
received in connection with an Award after the date that the restrictions on
transferability of such Shares set forth in the applicable Award Agreement or
Award Certificate have lapsed. During the lifetime of the Participant, an
Option, SAR or similar-type Other Award shall be exercisable only by him or by
the family member or trust to whom such Option, SAR or Other Award has been
transferred in accordance with the previous sentence.
14. Investment Representation. Each Award shall be conditioned on the
Participant making any representations required in the applicable Award
Agreement or Award Certificate. Each Award shall also be conditioned upon the
making of any filings and the receipt of any consents or authorizations required
to comply with or required to be obtained under, applicable local law.
15. Miscellaneous Provisions.
(a) As a condition to the making of any Award, the vesting or payment
of any Award or the lapse of the restrictions pertaining thereto (including
those related to the exercise of an Option or SAR),the Company may require the
Participant to pay such sum to the Company as may be necessary to discharge the
Company's obligations with respect to any taxes, assessments or other
governmental charges imposed on property or income received by a Participant
pursuant to the Plan. In accordance with rules and procedures established by the
Committee and, in the discretion of the Committee, such payment may be in the
form of cash or other property. In accordance with rules and procedures
established by the Committee, in satisfaction of such taxes, assessments or
other governmental charges the Company may, in the discretion of the Committee,
make available for delivery a lesser number of Shares in payment or settlement
of an Award or permit a Participant to tender previously owned Shares to satisfy
such withholding obligation. At the discretion of the Committee, the Company may
deduct or withhold the amount of taxes, assessments or other charges from any
payment or distribution to a Participant whether or not pursuant to the Plan. In
accordance with rules and procedures established by the Committee, the Company
may offer loans to Participants to satisfy withholding requirements and to
satisfy the exercise price when
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exercising Options which are not designated or qualified hereunder or by the
Code as "incentive stock options," on such terms as the Committee may determine,
which terms may, in the discretion of the Committee, be non-interest bearing.
The Company and the Participant may also make similar arrangements with respect
to the payment of any taxes with respect to which withholding is not required.
(b) The Plan shall not give rise to any right on the part of any
Participant to continue in the employ of the Company or its Subsidiaries.
(c) All expenses and costs in connection with the administration of the
Plan or issuance of Shares, Options, SARs, Stock Units or Other Awards hereunder
shall be borne by the Company.
(d) The headings of sections herein are included solely for convenience
of reference and shall not affect the meaning of any of the provisions of the
Plan.
(e) The Plan and all rights hereunder shall be construed in accordance
with and governed by the internal laws of the State of Ohio.
(f) The Board or Committee may modify, amend, suspend or terminate the
Plan in whole or in part at any time; provided, however, that such modification,
amendment, suspension or termination shall not, without a Participant's consent,
affect adversely the rights of such Participant with respect to any Award
previously made; and provided, further, that such modification, amendment,
suspension or termination shall not, without the approval of the Company's
shareholders:
(i) except as expressly provided in this Plan, increase
the total number of shares of Stock reserved for the purpose
of the Plan;
(ii) extend the maximum period for exercise of Share
Awards or SAR Awards applicable under the Plan;
(iii) decrease the price of an Option Award, whether
directly or indirectly; or
(iv) otherwise materially increase the benefits accruing
to Participants under the Plan.
(g) The Plan is intended to comply with and be subject to Rule 16b-3 as
in effect prior to May 1, 1991. The Committee may at any time elect that the
Plan shall be subject to Rule 16b-3 as in effect on and after May 1, 1991.
12
<PAGE> 1
Exhibit 10.7(a)
CALIBER SYSTEM, INC.
EXCESS PLAN
(Amended and Restated Effective January 2, 1996)
<PAGE> 2
CALIBER SYSTEM, INC. EXCESS PLAN
(Amended and Restated Effective January 2, 1996)
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS 1
1.1 Generally................................. 1
1.2 Account................................... 2
1.3 Accrued Benefit........................... 2
1.4 Employer.................................. 2
1.5 Excess Retirement Benefit................. 3
1.6 Participant............................... 3
1.7 Pension Plan.............................. 3
1.8 Spouse.................................... 3
1.9 Valuation Date............................ 3
ARTICLE II EXCESS RETIREMENT BENEFITS 4
2.1 Amount of Benefit......................... 4
2.2 Manner and Time of Payment................ 5
2.3 Liability for Payment..................... 7
2.4 Eligibility for Benefit................... 7
2.5 Payment to Guardian....................... 7
2.6 Effect on other Benefits.................. 7
2.7 Effect of Termination of Excess Plan...... 8
ARTICLE III PARTICIPANT'S ACCOUNT 8
3.1 Generally................................. 8
3.2 Limitation on Rights of Participants
and Spouses............................. 9
ARTICLE IV VESTING 9
ARTICLE V METHOD OF FUNDING 10
<PAGE> 3
CALIBER SYSTEM, INC.
EXCESS PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 2, 1996)
Caliber System, Inc. (the "Company"), the successor to Roadway Services,
Inc., hereby amends and restates the Roadway Services, Inc. Excess Plan to
reflect the change of the Company's name. The purpose of this Excess Plan is to
provide to certain of the employees of the Company and of certain other
Employers benefits they would receive under the terms of certain defined benefit
pension plans of the Controlled Group but for the limit on the benefits payable
under such Pension Plans due to the application of Section 415 of the Code. This
Excess Plan includes the Caliber System, Inc. Administrative Document for Excess
Plan and 401(a)(17) Benefit Plan (the "Administrative Document), which is
incorporated herein by reference.
ARTICLE I
DEFINITIONS
-----------
1.1. Generally
---------
The following words and phrases shall have the same meanings as specified
in the applicable Pension Plan, as it may be amended from time to time, unless
the context clearly requires otherwise:
"Actuarial (or Actuarially) Equivalent"
"Actuary"
"Code"
"Employee"
"Pension Commencement Date"
"Plan Year"
<PAGE> 4
The following words and phrases shall have the same meaning as
specified in the Administrative Document, as it may be amended from time to
time, unless the context clearly requires otherwise:
"Board"
"Committee"
"Controlled Group" or "Controlled Group Members"
"Effective Date"
"Excess Plan"
"401(a)(17) Benefit Plan"
"Plans"
In addition, for purposes of this Excess Plan, the following
words and phrases shall have the meanings hereinafter indicated unless the
context clearly indicates otherwise:
1.2. Account
-------
"Account" means the record maintained in accordance with
Article III by the Company for each Participant.
1.3. Accrued Benefit
---------------
"Accrued Benefit" of a Participant as of any date, hereinafter
called an "accrual date," equals the amount of Excess Retirement Benefit to
which the Participant would be entitled under Section 2.1 if he terminated his
employment with the Controlled Group on the accrual date.
1.4. Employer
--------
"Employer" means the Company and any other Controlled Group
Member that adopts this Excess Plan in accordance with Section 7.7 of the
Administrative Document.
<PAGE> 5
1.5. Excess Retirement Benefit
-------------------------
"Excess Retirement Benefit" means the monthly benefit payable
to or with respect to a Participant and/or his Spouse under Article II.
1.6. Participant
-----------
"Participant" means an Employee who (i) is participating in
one or more Pension Plans whose benefits thereunder are limited by Section 415
of the Code and (ii) who retires from an Employer on or after the Effective
Date.
1.7. Pension Plan
------------
"Pension Plan" means, with respect to any Participant, the
defined benefit pension plan(s) specified on Exhibit A hereto (which is
incorporated herein by reference) in which he participates.
1.8. Spouse
------
Spouse shall mean the deceased Participant's surviving spouse
if such person married such Participant at least one (1) year prior to his
death.
1.9. Valuation Date
--------------
"Valuation Date" shall mean the last day of each calendar year
or such other dates as may be established by the Company.
<PAGE> 6
ARTICLE II
EXCESS RETIREMENT BENEFITS
--------------------------
2.1. Amount of Benefit
-----------------
(a) PARTICIPANTS IN A SINGLE PENSION PLAN. The Excess
Retirement Benefit payable to or with respect to a Participant for any month of
any Plan Year shall be an amount equal to the excess, if any, of (i) the amount
of the monthly benefit, expressed as a single life annuity commencing as of the
Participant's Pension Commencement Date, or, if the Participant is married on
his Pension Commencement Date, expressed as a 100% joint and survivor annuity in
an Actuarially Equivalent amount commencing as of the Participant's Pension
Commencement Date, that would be payable to or with respect to the Participant
under the Pension Plan if the Pension Plan did not contain limitations pursuant
to Section 415 of the Code, over (ii) the amount of the monthly benefit payable
on the same basis to or with respect to the Participant under such Pension Plan
for such month. Such Excess Retirement Benefit (1) shall be reduced to reflect
any post-retirement increases in monthly benefits payable to the Participant
under such Pension Plan by reason of increases in the limits under Section 415
of the Code, and (2) shall reflect any adjustments under such Pension Plan
because of the Participant's determination not to elect to waive any qualified
pre-retirement survivor annuity.
<PAGE> 7
(b) PARTICIPANTS IN MULTIPLE PENSION PLANS. If a person has
been a Participant in more than one Pension Plan, his Excess Retirement Benefit
for any month of any Plan Year shall be an amount equal to the excess, if any,
of (i) the largest amount of monthly benefits to which he or his Beneficiary
would be entitled under any of the Pension Plans for such Plan Year if the
Pension Plans did not contain limitations pursuant to Section 415 of the Code,
over (ii) the amount of monthly benefits in fact payable to the Participant or
his Beneficiary under all of the Pension Plans for such month, and computed and
adjusted as provided in Section 2.1(a).
(c) PRE-RETIREMENT SURVIVOR ANNUITY. If a married Participant
dies before his Pension Commencement Date, and has a Spouse entitled to a
qualified pre-retirement survivor annuity under any Pension Plan, such Spouse
shall receive a pre-retirement survivor annuity based on the Excess Retirement
Benefit computed and adjusted as provided in Section 2.1(a) and (b) to which
the Participant would be entitled. Such pre-retirement and survivor annuity
will be payable at the same time and in the same manner as the qualified
pre-retirement survivor annuity.
2.2. Manner and Time of Payment
--------------------------
(a) MANNER OF PAYMENT. The Excess Retirement Benefit
in the amount determined from time to time under Section 2.1 shall be payable
monthly to a Participant for the life of the Participant, commencing as of the
Participant's Pension
<PAGE> 8
Commencement Date; provided, however, for a married Participant, the Excess
Retirement Benefit, in an Actuarially Equivalent amount, shall be payable
monthly to the Participant as an annuity for the life of the Participant, with a
survivor annuity for the life of the Spouse, which is one hundred percent (100%)
of the amount of the annuity payable during the joint lives of the Participant
and the Spouse.
(b) Time of Payment.
---------------
(i) The first monthly payment of an Excess Retirement Benefit
to a retired Participant entitled to such benefit shall be payable as of the
first day of the first calendar month after such Participant shall have become
entitled thereto pursuant to the provisions of the Pension Plan and this Excess
Plan, and each subsequent monthly payment of such benefit shall be payable as of
the first day of each calendar month thereafter during his lifetime, ceasing
with the payment made as of the first day of the calendar month in which the
death of such Participant occurs. Any survivorship benefit shall be paid in the
same manner, beginning the month following the month during which the death of
such retired Participant occurs and continuing until such Spouse dies.
(ii) The Excess Retirement Benefit of any retired Participant
receiving a retirement benefit shall terminate as of the date of his
re-employment if such retired Participant is re-employed by an Employer and,
upon his subsequent retirement pursuant to the provisions of the Pension Plan
after any period
<PAGE> 9
of such re-employment, such Participant shall thereupon be eligible for the
Excess Retirement Benefit then in effect, pursuant to the provisions of this
Excess Plan, with such adjustments in the amount of such benefit as may be
necessary to reflect actuarially the value of any Excess Retirement Benefit
previously paid such Participant under this Excess Plan.
2.3. Liability for Payment
---------------------
The Company shall pay the Excess Retirement Benefit to the
Participant and/or his Beneficiary.
2.4. Eligibility for Benefit
-----------------------
Each Participant shall be eligible for an Excess
Retirement Benefit.
2.5. Payment to Guardian
-------------------
If a benefit payable hereunder is payable to a minor, to a
person declared incompetent or to a person incapable of handling the disposition
of his property, the Company may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor,
incompetent or person. The Company may require such proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
2.6. Effect on other Benefits
------------------------
Benefits payable to or with respect to a Participant under the
Pension Plans, the 401(a)(17) Benefit Plan or any other
<PAGE> 10
Company-sponsored (qualified or nonqualified) plan, if any, are in addition to
those provided under this Excess Plan.
2.7. Effect of Termination of Excess Plan
------------------------------------
Notwithstanding anything in this Excess Plan to the
contrary, in the event of a termination of the Excess Plan, the Company, in its
sole and absolute discretion, shall have the right to change the time and/or
manner of distribution of Participants' Excess Retirement Benefits, including,
without limitation, by providing for the satisfaction of the Company's
obligation to pay Excess Retirement Benefits by payment of a single lump sum
payment to each Participant or Spouse then entitled to an Excess Retirement
Benefit in an amount equal to the Actuarially Equivalent present value of such
Excess Retirement Benefit, provided that the Company may not diminish the value
of the Excess Retirement Benefit payable to any Participant or Spouse hereunder.
ARTICLE III
PARTICIPANT'S ACCOUNT
---------------------
3.1. Generally
---------
The Company, through its accounting records, shall establish
an Account for each Participant to reflect the value of the Participant's Excess
Retirement Benefit under this Excess Plan. The Accounts established hereunder
shall be segregated from other accounts on the books and records of the Company
as a contingent liability of the Company to Participants. As of each Valuation
Date, the Company shall credit each Participant's
<PAGE> 11
Account with the increase in the Actuarially Equivalent present value of the
Participant's Accrued Benefit since the preceding Valuation Date and shall debit
from the Participant's Account any decrease in such Actuarially Equivalent
present value and the amount of any payments of an Excess Retirement Benefit
since the preceding Valuation Date. The amount of such credits and/or debits
shall be determined by the Company.
3.2. Limitation on Rights of Participants and Spouses
------------------------------------------------
The establishment of each Participant's Account hereunder is
solely for the Company's convenience in administering the Excess Plan. Amounts
"credited" to the Account shall continue for all purposes to be part of the
general funds of the Company. Each Participant's Account is merely a record of
the value of the Company's unsecured contractual obligation to the Participant
and his Spouse under the Excess Plan.
ARTICLE IV
VESTING
-------
Anything herein to the contrary notwithstanding, except as
otherwise provided in Section 5.3(b) of the Administrative Document or Article
VI of the Administrative Document, Excess Retirement Benefits of Participants
who are vested under the Pension Plan shall at all times be fully vested.
<PAGE> 12
ARTICLE V
METHOD OF FUNDING
-----------------
The obligation of the Company hereunder shall be a general
unfunded and unsecured obligation of the Company only. It is not intended hereby
to establish a fund to provide for the payment of Excess Retirement Benefits or
to create a trust or lien (equitable or otherwise) for the benefit of any
Participant, Spouse or any other person.
IN WITNESS WHEREOF, the Caliber System, Inc. Excess Plan, as
amended and restated effective as of January 2, 1996, is executed on behalf of
the Company by its authorized officer this ___st day of _____________, 1996,
effective as of the Effective Date.
CALIBER SYSTEM, INC.
By:
----------------
Its:
<PAGE> 1
Exhibit 10.7(b)
CALIBER SYSTEM, INC.
401(a)(17) BENEFIT PLAN
(Amended and Restated Effective January 2, 1996)
<PAGE> 2
CALIBER SYSTEM, INC. 401(a)(17) BENEFIT PLAN
(Amended and Restated Effective January 2, 1996)
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS 1
1.1 Generally.................................. 1
1.2 Account.................................... 2
1.3 Accrued Benefit............................ 2
1.4 Employer................................... 2
1.5 401(a)(17) Benefit......................... 3
1.6 Participant................................ 3
1.7 Pension Plan............................... 3
1.8 Spouse..................................... 3
1.9 Valuation Date............................. 3
ARTICLE II 401(a)(17) BENEFITS 4
2.1 Amount of Benefit.......................... 4
2.2 Manner and Time of Payment................. 5
2.3 Liability for Payment...................... 7
2.4 Eligibility for Benefit.................... 7
2.5 Payment to Guardian........................ 7
2.6 Effect on other Benefits................... 7
2.7 Effect of Termination of 401(a)(17)
Benefit Plan............................. 7
ARTICLE III PARTICIPANT'S ACCOUNT 8
3.1 Generally.................................. 8
3.2 Limitation on Rights of Participants
and Spouses.............................. 9
ARTICLE IV VESTING 9
ARTICLE V METHOD OF FUNDING 9
<PAGE> 3
CALIBER SYSTEM, INC.
401(a)(17) BENEFIT PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 2, 1996)
Caliber System, Inc. (the "Company"), the successor to Roadway Services,
Inc., hereby amends and restates the Roadway Services, Inc. 401(a)(17) Benefit
Plan to reflect the change of the Company's name. The purpose of this 401(a)(17)
Benefit Plan is to provide to certain of the highly compensated employees of the
Company and of certain other Employers benefits they would receive under the
terms of certain defined benefit pension plans of the Controlled Group but for
the limit on the amount of compensation that may be taken into account under
such Pension Plans due to the application of Section 401(a)(17) of the Code.
This 401(a)(17) Benefit Plan includes the Caliber System, Inc. Administrative
Document for Excess Plan and 401(a)(17) Benefit Plan (the "Administrative
Document"), which is incorporated herein by reference.
ARTICLE I
DEFINITIONS
-----------
1.1. Generally
---------
The following words and phrases shall have the same meanings
as specified in the applicable Pension Plan, as it may be amended from time to
time, unless the context clearly requires otherwise:
"Actuarial (or Actuarially) Equivalent"
"Actuary"
"Code"
<PAGE> 4
2
"Employee"
"Pension Commencement Date"
"Plan Year"
The following words and phrases shall have the same meaning as
specified in the Administrative Document, as it may be amended from time to
time, unless the context clearly requires otherwise:
"Board"
"Committee"
"Controlled Group" or "Controlled Group Members"
"Effective Date"
"Excess Plan"
"401(a)(17) Benefit Plan"
"Plans"
In addition, for purposes of this 401(a)(17) Benefit Plan, the
following words and phrases shall have the meanings hereinafter indicated unless
the context clearly indicates otherwise:
1.2. Account
-------
"Account" means the record maintained in accordance with
Article III by the Company for each Participant.
1.3. Accrued Benefit
---------------
"Accrued Benefit" of a Participant as of any date, hereinafter
called an "accrual date," equals the amount of 401(a)(17) Benefit to which the
Participant would be entitled under Section 2.1 if he terminated his employment
with the Controlled Group on the accrual date.
1.4. Employer
--------
"Employer" means the Company and any other Controlled Group
Member that adopts this 401(a)(17) Benefit Plan in accordance with Section 7.7
of the Administrative Document.
<PAGE> 5
3
1.5. 401(a)(17) Benefit
------------------
"401(a)(17) Benefit" means the monthly benefit payable to or
with respect to a Participant and/or his Spouse under Article II.
1.6. Participant
-----------
"Participant" means an Employee who (i) is participating in
one or more Pension Plans whose benefits thereunder are limited by Section
401(a)(17) of the Code, (ii) is selected by the Company for participation in
this 401(a)(17) Benefit Plan, and (iii) retires from an Employer on or after the
Effective Date.
1.7. Pension Plan
------------
"Pension Plan" means, with respect to any Participant, the
defined benefit pension plan(s) specified on Exhibit A hereto (which is
incorporated herein by reference) in which he participates.
1.8. Spouse
------
"Spouse" shall mean the deceased Participant's surviving
spouse if such person married such Participant at least one (1) year prior to
his death.
1.9. Valuation Date
--------------
"Valuation Date" shall mean the last day of each calendar year
or such other dates as may be established by the Company.
<PAGE> 6
4
ARTICLE II
401(a)(17) BENEFITS
-------------------
2.1. Amount of Benefit
-----------------
(a) PARTICIPANTS IN A SINGLE PENSION PLAN. The 401(a)(17)
Benefit payable to or with respect to a Participant for any month of any Plan
Year shall be an amount equal to the excess, if any, of (i) the amount of the
monthly benefit, expressed as a single life annuity commencing as of the
Participant's Pension Commencement Date, or, if the Participant is married on
his Pension Commencement Date, expressed as a 100% joint and survivor annuity
in an Actuarially Equivalent amount commencing on the Participant's Pension
Commencement Date, that would be payable to or with respect to the Participant
under the Pension Plan if the Pension Plan did not contain limitations pursuant
to Sections 415 and 401(a)(17) of the Code, over (ii) the sum of (A) the amount
of the monthly benefit payable on the same basis to or with respect to the
Participant under such Pension Plan for such month and (B) the amount payable
to or with respect to the Participant under the Excess Plan for such month.
Such 401(a)(17) Benefit shall reflect any adjustments under such Pension Plan
because of the Participant's determination not to elect to waive any qualified
pre-retirement survivor annuity.
(b) PARTICIPANTS IN MULTIPLE PENSION PLANS. If a person has
been a Participant in more than one Pension Plan, his 401(a)(17) Benefit for
any month of any Plan Year shall be an amount equal to the excess, if any, of
(i) the largest amount of monthly benefits to which he or his Beneficiary would
be entitled
<PAGE> 7
5
under any of the Pension Plans for such Plan Year if the Pension Plans did not
contain limitations pursuant to Sections 401(a)(17) and 415 of the Code, over
(ii) the amount of benefits in fact payable to the Participant or his
Beneficiary under all of the Pension Plans and the Excess Plan for such month,
and computed and adjusted as provided in Section 2.1(a).
(c) PRE-RETIREMENT SURVIVOR ANNUITY. If a married participant
dies before his Pension Commencement Date, and has a Spouse entitled to a
qualified pre-retirement survivor annuity under any Pension Plan, such Spouse
shall receive a pre-retirement survivor annuity based on the 401(a)(17) Benefit
computed and adjusted as provided in Section 2.1(a) and (b) to which the
Participant would be entitled. Such pre-retirement survivor annuity shall be
payable at the same time and in the same manner as the qualified pre-retirement
survivor annuity.
2.2. Manner and Time of Payment
--------------------------
(a) MANNER OF PAYMENT. The 401(a)(17) Benefit in the amount
determined from time to time under Section 2.1 shall be payable monthly to a
Participant for the life of the Participant, commencing as of the Participant's
Pension Commencement Date; provided, however, for a married Participant, the
401(a)(17) Benefit, in an Actuarially Equivalent amount, shall be payable
monthly to the Participant as an annuity for the life of the Participant, with
a survivor annuity for the life of the Spouse, which is one hundred percent
(100%) of the amount of the annuity payable during the joint lives of the
Participant and the Spouse.
<PAGE> 8
6
(b) Time of Payment.
---------------
(i) The first monthly payment of a 401(a)(17) Benefit
to a retired Participant entitled to such benefit shall be payable as of the
first day of the first calendar month after such Participant shall have become
entitled thereto pursuant to the provisions of the Pension Plan and this
401(a)(17) Benefit Plan, and each subsequent monthly payment of such benefit
shall be payable as of the first day of each calendar month thereafter during
his lifetime, ceasing with the payment made as of the first day of the calendar
month in which the death of such Participant occurs. Any survivorship benefit
shall be paid in the same manner, beginning the month following the month during
which the death of such retired Participant occurs and continuing until such
Spouse dies.
(ii) The 401(a)(17) Benefit of any retired Participant receiving a
retirement benefit shall terminate as of the date of his re-employment if such
retired Participant is re-employed by an Employer and, upon his subsequent
retirement pursuant to the provisions of the Pension Plan after any period of
such re-employment, such Participant shall thereupon be eligible for the
401(a)(17) Benefit then in effect, pursuant to the provisions of this 401(a)(17)
Benefit Plan, with such adjustments in the amount of such benefit as may be
necessary to reflect actuarially the value of any 401(a)(17) Benefit previously
paid such Participant under this 401(a)(17) Benefit Plan.
<PAGE> 9
7
2.3. Liability for Payment
---------------------
The Company shall pay the 401(a)(17) Benefit to the
Participant and/or his Beneficiary.
2.4. Eligibility for Benefit
-----------------------
Each Participant shall be eligible for a 401(a)(17)
Benefit.
2.5. Payment to Guardian
-------------------
If a benefit payable hereunder is payable to a minor, to a
person declared incompetent or to a person incapable of handling the disposition
of his property, the Company may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor,
incompetent or person. The Company may require such proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.
2.6. Effect on other Benefits
------------------------
Benefits payable to or with respect to a Participant under the
Pension Plans, the Excess Plan or any other Company-sponsored (qualified or
nonqualified) plan, if any, are in addition to those provided under this
401(a)(17) Benefit Plan.
2.7. Effect of Termination of 401(a)(17) Benefit Plan
------------------------------------------------
Notwithstanding anything in this 401(a)(17) Benefit Plan to
the contrary, in the event of a termination of the 401(a)(17) Benefit Plan, the
Company, in its sole and absolute discretion, shall have the right to change the
time and/or manner
<PAGE> 10
8
of distribution of Participants' 401(a)(17) Benefits, including, without
limitation, by providing for the satisfaction of the Company's obligation to pay
401(a)(17) Benefits by payment of a single lump sum payment to each Participant
or Spouse then entitled to a 401(a)(17) Benefit in an amount equal to the
Actuarially Equivalent present value of such 401(a)(17) Benefit, provided that
the Company may not diminish the value of the 401(a)(17) Benefit payable to any
Participant or Spouse hereunder.
ARTICLE III
PARTICIPANT'S ACCOUNT
---------------------
3.1. Generally
---------
The Company, through its accounting records, shall establish
an Account for each Participant to reflect the value of the Participant's
401(a)(17) Benefit under this 401(a)(17) Benefit Plan. The Accounts established
hereunder shall be segregated from other accounts on the books and records of
the Company as a contingent liability of the Company to Participants. As of each
Valuation Date, the Company shall credit each Participant's Account with the
increase in the Actuarially Equivalent present value of the Participant's
Accrued Benefit since the preceding Valuation Date and shall debit from the
Participant's Account any decrease in such Actuarially Equivalent present value
and the amount of any payments of a 401(a)(17) Benefit since the preceding
Valuation Date. The amount of such credits and/or debits shall be determined by
the Company.
<PAGE> 11
9
3.2. Limitation on Rights of Participants and Spouses
------------------------------------------------
The establishment of each Participant's Account hereunder is
solely for the Company's convenience in administering the 401(a)(17) Benefit
Plan. Amounts "credited" to the Account shall continue for all purposes to be
part of the general funds of the Company. Each Participant's Account is merely a
record of the value of the Company's unsecured contractual obligation to the
Participant and his Spouse under the 401(a)(17) Benefit Plan.
ARTICLE IV
VESTING
-------
Anything herein to the contrary notwithstanding, except as
otherwise provided in Section 5.3(b) of the Administrative Document or Article
VI of the Administrative Document, 401(a)(17) Benefits of Participants who are
vested under the Pension Plan shall at all times be fully vested.
ARTICLE V
METHOD OF FUNDING
-----------------
The obligation of the Company hereunder shall be a general
unfunded and unsecured obligation of the Company only. It is not intended hereby
to establish a fund to provide for the payment of 401(a)(17) Benefits or to
create a trust or lien (equitable or otherwise) for the benefit of any
Participant, Spouse or any other person.
<PAGE> 12
10
IN WITNESS WHEREOF, the Caliber System, Inc. 401(a)(17)
Benefit Plan, as amended and restated effective as of January 2, 1996, is
executed on behalf of the Company by its authorized officer this ___st day of
______________, 1996, effective as of the Effective Date.
CALIBER SYSTEM, INC.
By:
----------------
Its:
<PAGE> 13
EXHIBIT A
---------
1. CALIBER SYSTEM, INC.
PENSION PLAN AND TRUST (AMENDED AND RESTATED)
<PAGE> 1
Exhibit 10.7(c)
CALIBER SYSTEM, INC.
ADMINISTRATIVE DOCUMENT FOR EXCESS PLAN
AND 401(a)(17) BENEFIT PLAN
(Amended and Restated Effective January 2, 1996)
<PAGE> 2
CALIBER SYSTEM, INC. ADMINISTRATIVE DOCUMENT FOR
EXCESS PLAN AND 401(a)(17) BENEFIT PLAN
(Amended and Restated Effective January 2, 1996)
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DISCRETIONARY POWERS 1
ARTICLE II DEFINITIONS 2
2.1 Generally......................................... 2
2.2 Accrued Benefit....................................2
2.3 Board..............................................2
2.4 Controlled Group or Controlled
Group Members.............................3
2.5 Committee..........................................3
2.6 Effective Date.....................................3
2.7 Employers..........................................3
2.8 Excess Plan........................................3
2.9 Excess Retirement Benefit..........................3
2.10 401(a)(17) Benefit.................................3
2.11 401(a)(17) Benefit Plan............................4
2.12 Participant........................................4
2.13 Pension Plan.......................................4
2.14 Plans..............................................4
2.15 Terminated Participant.............................4
ARTICLE III ADMINISTRATION OF THE PLANS 4
3.1 Authority and Responsibility.......................4
3.2 Reliance on Tables, Etc............................5
3.3 Indemnification....................................6
3.4 Expenses...........................................6
3.5 Limitation of Actions..............................6
ARTICLE IV CLAIMS RESPONSIBILITY AND PROCEDURES
UNDER THE PLANS 6
4.1 Committee - Organization...........................6
4.2 Administration of Claims...........................7
4.3 Claims Procedure...................................7
4.4 Review Procedure.................................. 8
ARTICLE V AMENDMENT AND TERMINATION 9
5.1 Amendment......................................... 9
5.2 Termination...................................... 10
5.3 Procedure for Amendment or Termination........... 10
5.4 Withdrawal by Participating Employers............ 11
<PAGE> 3
2
Page
----
ARTICLE VI INALIENABILITY 11
ARTICLE VII MISCELLANEOUS 12
7.1 Correction of Errors.................................. 12
7.2 Interpretation........................................ 13
7.3 Integration........................................... 13
7.4 No Fiduciary Relationship Created..................... 13
7.5 No Guarantee of Employment............................ 13
7.6 Severability.......................................... 14
7.7 Adoption by Other Employers........................... 14
<PAGE> 4
CALIBER SYSTEM, INC.
ADMINISTRATIVE DOCUMENT FOR EXCESS PLAN
AND 401(a)(17) BENEFIT PLAN
---------------------------
Caliber System, Inc. (the "Company"), the successor to Roadway
Services, Inc., hereby amends and restates, to reflect the change of the
Company's name, the Caliber System, Inc. Administrative Document (the
"Administrative Document") to provide for the administration of the Caliber
System, Inc. Excess Plan and the Caliber System, Inc. 401(a)(17) Benefit Plan.
The Plans provide to certain of the employees of the Company and of certain
other Employers benefits they would not otherwise receive under the terms of
certain defined benefit pension plans of the Controlled Group (as identified in
the Excess Plan and the 401(a)(17) Benefit Plan). The 401(a)(17) Benefit Plan
and the Excess Plan provide participants with benefits equal to the difference
between the benefit amounts calculated under the Pension Plans without regard to
the limits imposed by Sections 401(a)(17) and 415 of the Code, respectively, and
the actual benefit amounts that the Code permits to be paid under the Pension
Plans. This Administrative Document is a part of each of the Excess Plan and the
401(a)(17) Benefit Plan.
ARTICLE I
DISCRETIONARY POWERS
--------------------
All discretionary powers granted hereunder and under the
Plans shall be exercised in a uniform nondiscriminatory manner.
<PAGE> 5
2
ARTICLE II
DEFINITIONS
-----------
2.1. Generally
---------
Unless the context or intent of the Plans (including this
Administrative Document) requires otherwise, the singular includes the plural,
the plural includes the singular, and the masculine gender includes the
feminine.
The following words and phrases shall have the same meanings as
specified in the applicable Pension Plan, as it may be amended from time to
time, unless the context clearly requires otherwise:
"Code"
"Employee"
For purposes of the Plans (including this Administrative Document),
the following words and phrases shall have the meanings hereinafter indicated
unless either the context clearly requires otherwise or a Plan provides
differently with respect to its own provisions:
2.2. Accrued Benefit
---------------
"Accrued Benefit" shall have the meanings specified in Section 1.3 of
the Excess Plan and Section 1.3 of the 401(a)(17) Benefit Plan, as applicable.
2.3. Board
-----
"Board" means the board of directors of the Company, or as
appropriate in the context of a provision of either of the Plans (including this
Administrative Document), such other body as designated by the Board.
<PAGE> 6
3
2.4. Controlled Group or Controlled Group Members
--------------------------------------------
"Controlled Group" or "Controlled Group Members" means the Company
and any and all other corporations, trades and/or businesses the employees of
which, together with the employees of the Company, are required by any of the
subsections of Section 414 of the Code to be treated as though they were
employed by a single employer.
2.5. Committee
---------
"Committee" means the committee appointed by the Company in
accordance with Article IV.
2.6. Effective Date
--------------
"Effective Date" means January 2, 1996.
2.7. Employers
---------
"Employers" means the Company and any other Controlled Group Member
that adopts or has adopted one or more of the Plans (including this
Administrative Document) in accordance with Section 7.7.
2.8. Excess Plan
-----------
"Excess Plan" means the Caliber System, Inc. Excess Plan, of
which this Administrative Document is a part.
2.9. Excess Retirement Benefit
-------------------------
"Excess Retirement Benefit" shall have the meaning specified in
Section 1.5 of the Excess Plan.
2.10. 401(a)(17) Benefit
------------------
"401(a)(17) Benefit" shall have the meaning specified in Section 1.5
of the 401(a)(17) Benefit Plan.
<PAGE> 7
4
2.11. 401(a)(17) Benefit Plan
-----------------------
"401(a)(17) Benefit Plan" means the Caliber System, Inc.
401(a)(17) Benefit Plan, of which this Administrative Document is a
part.
2.12. Participant
-----------
"Participant" means an Employee who is participating in one or both
of the Plans and whose participation therein has not been terminated.
2.13. Pension Plan
------------
"Pension Plan" means, with respect to any Participant, the defined
benefit pension plan(s) specified in a Plan in which he participates.
2.14. Plans
-----
"Plan" or "Plans" means either or both of the 401(a)(17) Benefit Plan
and the Excess Plan, as the context requires.
2.15. Terminated Participant
----------------------
"Terminated Participant" shall have the meaning described in
Article VI.
ARTICLE III
ADMINISTRATION OF THE PLANS
---------------------------
3.1. Authority and Responsibility
----------------------------
To the extent not otherwise provided in Article IV or the Plans, the
administration of the Plans shall be under the supervision of the Company.
Except as provided in Article IV, the Company shall have the sole and absolute
authority and responsibility for construing and interpreting the provisions of
the Plans unless otherwise specifically provided in a Plan and subject to any
applicable requirements of law.
<PAGE> 8
5
For this purpose, except as provided in Article IV or a Plan, the
Company's powers will include, but will not be limited to, the following
authority in addition to any and all other powers provided in a Plan:
(a) To establish such rules and regulations, if any, as the Company
deems necessary or proper for the efficient administration of a Plan and for the
payment of benefits under a Plan.
(b) To interpret a Plan, decide all questions concerning the
eligibility of persons to participate in a Plan, and construe any ambiguous
provision of a Plan, correct any defect, supply any omission, or reconcile any
inconsistency, in such manner and to such extent as the Company in its
discretion may determine; and any such action of the Company will be binding and
conclusive upon all Participants and Spouses.
(c) To appoint such agents, counsel, accountants, consultants and
other persons as may be required to assist in administering the Plans,
including, without limitation, employees of an Employer.
(d) To allocate and delegate its responsibilities under the Plans and
to designate committees, entities or persons, including, without limitation, a
third party administrator, to carry out any of its responsibilities under a
Plan. Any such allocation, delegation or designation will be in writing, will be
reviewed periodically by the Company, and will be terminable upon such notice as
the Company in its discretion deems reasonable and proper under the
circumstances.
3.2. Reliance on Tables, Etc.
-----------------------
In administering a Plan, the Company may, in its discretion, adopt
such actuarial tables, factors and valuation methods as it
<PAGE> 9
6
deems necessary and may rely conclusively on all tables, valuations,
certificates, opinions and reports that are furnished by accountants, counsel or
other experts employed or engaged by the Company. In addition, the Company may
rely upon information furnished to it by any other Employer.
3.3. Indemnification
---------------
The Company shall indemnify and defend to the fullest extent
permitted by law any individual acting on behalf of the Company pursuant to this
Article against all liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims, in each case
approved by the Company) occasioned by any act or omission to act in connection
with a Plan, if such act or omission is in good faith.
3.4. Expenses
--------
The Company shall pay all expenses of administering the Plans,
including, without limitation, the expenses of the Committee properly incurred
in the performance of its duties under the Plans.
3.5. Limitation of Actions
---------------------
No individual acting on behalf of the Company pursuant to this
Article shall have any right to vote upon or decide any matters relating solely
to his own rights under a Plan.
ARTICLE IV
CLAIMS RESPONSIBILITY AND PROCEDURES UNDER THE PLANS
----------------------------------------------------
4.1. Committee - Organization
------------------------
The Company shall appoint a Committee to perform the duties set forth
in this Article. The Committee shall consist of two (2) or more individuals who
have accepted appointment thereto. The members of the Committee shall serve at
the discretion of the
<PAGE> 10
7
Company and may resign by delivering a written resignation to the Company.
Vacancies in the Committee arising for any reason shall be filled by the
Company, provided that any vacancy unfilled for thirty (30) days may be filled
by a majority vote of the remaining members of the Committee. The members of the
Committee shall serve without compensation.
4.2. Administration of Claims
------------------------
Notwithstanding the provisions of Article III, the resolution of
claims (including reviews of claim determinations) under the Plans shall be the
sole responsibility of the Committee and shall be resolved in accordance with
the procedures set forth in this Article. With respect to the claims and review
procedures provided in this Article, the Committee is hereby delegated the same
authority and responsibility given to the Company pursuant to Section 3.1. In
addition, in determining claims under the Plans, the Committee shall be entitled
to rely on documents furnished to them to the same extent given to the Company
in Section 3.2, and shall be indemnified for actions taken in performing the
review procedures to the same extent individuals are indemnified in Section 3.3;
and the individual members of the Committee shall be limited in their actions
when deciding their rights under the Plans to the same extent individuals are
limited under Section 3.5.
4.3. Claims Procedure
----------------
(a) Any Participant or Beneficiary who believes that he is entitled
to receive a benefit under a Plan may file a written claim with the Committee
(or its delegate) on appropriate forms furnished by the Committee (or its
delegate) stating those benefits to which the Participant or Spouse believes he
is entitled.
<PAGE> 11
8
(b) Within ninety (90) days after such claim was filed (plus an
additional period of ninety (90) days if required for processing, provided that
notice of the extension of time is given to the claimant within the first 90-day
period), the Committee (or its delegate) shall furnish or cause to be furnished
to the claimant either an approval or a detailed written denial of his claim. If
a claim is denied, such written denial shall be written in a manner calculated
to be understood by the claimant and will contain:
(1) The specific reason(s) for the denial of the claim;
(2) Specific reference to the provisions of the Plan on which
the denial of the claim is based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(4) An explanation of the review procedure specified in
Section 4.4.
(c) If a claimant does not receive any such notice of denial within
such 90-day or 180-day period, as the case may be, after the date of filing the
claim, the claim shall be deemed to have been denied in full.
4.4. Review Procedure
----------------
(a) Within sixty (60) days of the denial, either in whole or in part,
the claimant (or his duly authorized representative) may appeal such denial by
filing a written request to review his claim with the Committee on appropriate
forms furnished by the Committee. If such an appeal is so filed within such
60-day period, the
<PAGE> 12
9
Committee will conduct a full and fair review of such claim and will mail or
deliver to the claimant a written decision of the matter based on the facts and
the pertinent provisions of the Plan within sixty (60) days after the receipt of
the request for review (unless special circumstances require an additional sixty
(60) days, in which case written notice of such extension will be given to the
claimant prior to the commencement of such extension). Such decision will be
written in a manner calculated to be understood by the claimant, will state the
specific reason(s) for the decision and the specific provisions of the Plan on
which the decision was based and will, to the extent permitted by law, be final
and binding on all interested persons. During such review the claimant (or his
authorized agent) will be given the opportunity to review the Plan under which
he is claiming benefits and any other documents pertinent thereto and to submit
issues and comments in writing.
(b) If a decision on the review is not furnished within such 60-day
or 120-day period, as the case may be, the claim shall be deemed to have been
denied on review.
ARTICLE V
AMENDMENT AND TERMINATION
-------------------------
5.1 Amendment
---------
Except as limited herein, the Board has reserved, and does hereby
reserve, the right to amend any or all of the provisions of either or both of
the Plans (including this Administrative Document) at any time, either
prospectively or retroactively, without the consent of any other Employer or of
any Participant,
<PAGE> 13
10
Spouse or other person. Notwithstanding the foregoing, amendments to a Pension
Plan that affect the benefits provided under the Plans will automatically amend
either or both of the Plans (including this Administrative Document), to the
extent applicable.
5.2 Termination
-----------
The Board has reserved, and does hereby reserve, the right to
terminate either or both of the Plans (including this Administrative Document)
at any time without the consent of any other Employer or of any Participant,
Spouse or other person.
5.3. Procedure for Amendment or Termination
--------------------------------------
(a) Any such amendment or termination shall be expressed in
an instrument executed in the name of the Company by any two officers thereof
upon the order of its Board and shall become effective as of the date designated
in such instrument or, if no such date is specified, on the date of its
execution. Written notice of any amendment shall be given to the Participants as
soon as practicable after its execution. In the event of termination of either
Plan, each Participant's Accrued Benefit in such terminated Plan as of the date
of the termination shall be 100% vested as of the date of termination.
(b) Notwithstanding the foregoing provisions, no amendment or
termination of either or both of the Plans shall, without written consent of the
Participant (or, if the Participant has died, the Spouse), adversely affect the
vested rights of any Participant (or, if the Participant has died, the Spouse)
then eligible for a vested benefit under either or both of the Plans, nor shall
any amendment increase the obligations under the Plans (including this
Administrative Document), without its consent, of any corporation
<PAGE> 14
11
or other business organization that is or at any time has been an Employer under
the Plans (including this Administrative Document).
5.4. Withdrawal by Participating Employers
-------------------------------------
Any Employer (other than the Company) that adopts either or
both of the Plans may elect to withdraw separately from either or both of the
Plans, and such withdrawal shall constitute a termination of either or both of
the Plans, as the case may be, as to the withdrawing Employer; provided,
however, that such terminating Employer shall continue to be an Employer for the
purposes of the Plans (including this Administrative Document) as to
Participants or Spouses to whom such Employer owes obligations under the Plans
(including this Administrative Document). Such withdrawal and termination shall
be expressed in an instrument executed by the terminating Employer on authority
of its board of directors and shall become effective as of the date designated
in such instrument or, if no such date is specified, on the date of its
execution.
ARTICLE VI
INALIENABILITY
--------------
No right or interest of any Participant or Spouse under the Plans
shall, without the written consent of the Company, be assignable or transferable
in any manner or be subject to alienation, anticipation, sale, pledge,
encumbrance or other legal process or in any manner be liable for or subject to
the debts or liabilities of such Participant or Spouse. If the Participant or
Spouse shall attempt to or shall transfer, assign, alienate, anticipate, sell,
pledge or otherwise encumber his benefits hereunder or any part thereof, or if
by reason of his bankruptcy or
<PAGE> 15
12
other event happening at any time such benefits would devolve upon anyone else
or would not be enjoyed by him, then the Company, in its discretion, may
terminate his interest in any such benefit to the extent the Company considers
necessary or advisable to prevent or limit the effects of such occurrence.
Termination shall be effected by filing a "termination declaration" with the
Company and making reasonable efforts to deliver a copy to the Participant or
Spouse (the "Terminated Participant") whose interest is adversely affected.
As long as the Terminated Participant is alive, any benefits affected
by the termination shall be retained by the Company and, in the Company's sole
and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his spouse, his children or any other person or persons
in fact dependent upon him in such a manner as the Company shall deem proper.
Upon the death of the Terminated Participant, all benefits withheld from him and
not paid to others in accordance with the preceding sentence shall be paid to
the Terminated Participant's surviving spouse or, if none, to the Terminated
Participant's then living descendants, including adopted children, PER STIRPES.
ARTICLE VII
MISCELLANEOUS
-------------
7.1. Correction of Errors
--------------------
Any mistake in any direction, certificate, notice or other document
furnished or issued by an Employer or the Company in connection herewith may be
corrected when the mistake becomes known, and an Employer or the Company may
direct any adjustment or
<PAGE> 16
13
action that it deems practicable under the circumstances to remedy
the mistake.
7.2. Interpretation
--------------
(a) The Plans (including this Administrative Document) shall be
construed and enforced according to the laws of the State of Ohio, and all
provisions hereof shall be administered according to those laws, except to the
extent pre-empted by applicable federal law.
(b) Paragraph headings have been inserted in the Plans (including
this Administrative Document) for purposes of convenience only and shall not be
used as an aid to interpretation.
7.3. Integration
-----------
The Plans (including this Administrative Document) constitute the
entire agreement of the parties, and no change, amendment or modification hereof
shall be valid and binding unless made in writing in accordance with the
provisions hereinabove set forth.
7.4. No Fiduciary Relationship Created
---------------------------------
Nothing in the Plans (including this Administrative Document) shall
constitute the creation of a trust or other fiduciary relationship between an
Employer and any Participant, Spouse or other person.
7.5. No Guarantee of Employment
--------------------------
Nothing contained in the Plans (including this Administrative
Document) shall be construed as guaranteeing future employment to Participants.
A Participant continues to be an employee of the Company, an Employer or a
Controlled Group Member solely at the will of the Company, the Employer or the
Controlled Group Member and is subject to discharge at any time, with or without
cause.
<PAGE> 17
14
7.6. Severability
------------
If any provision of the Plans (including this Administrative
Document) or the application thereof to any circumstance(s) or person(s) is held
to be invalid by a court of competent jurisdiction, the remainder of the Plans
(including this Administrative Document) and the application of such provision
to any other circumstance(s) or person(s) shall not be affected thereby.
7.7. Adoption by Other Employers
---------------------------
Any Controlled Group Member may adopt either or both of the Plans
(including this Administrative Document) with the consent of the Board, if the
Controlled Group Member adopts or has adopted a Pension Plan and executes an
instrument evidencing its adoption of either or both of the Plans on order of
its board of directors and files a copy thereof with the Company. Such
instrument of adoption may be subject to such terms and conditions as the
Company's Board requires or approves.
IN WITNESS WHEREOF, this Administrative Document, as amended and
restated effective as of January 2, 1996, is executed on behalf of the Company
by its authorized officer this ___st day of ____________, 1996, effective as of
the Effective Date.
CALIBER SYSTEM, INC.
By:
----------------
<PAGE> 1
EXHIBIT 10.8
$30,000,000 July 8, 1996
FOR VALUE RECEIVED, CALIBER SYSTEM, INC., an Ohio corporation (the
"Borrower"), promises to pay to the order to MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (the "Bank") at its office at 60 Wall Street, New York, New York
10260, U.S.A., for the account of its Nassau (Bahamas) Office or such other
office of the Bank outside the United States as the Bank may designate by
notice to the Borrower (such office being hereinafter referred to as the
"Eurodollar Lending Office"), in lawful money of the United States of America
in same day funds (or in such funds as may from time to time become customary
for the settlement of international transactions in U.S. Dollars), the unpaid
principal amount of each loan (the "Loan" or "Loans") made by the Bank
hereunder and subject to the provisions hereof on the last day of the Interest
Period (as hereinafter defined) therefor; provided, that the aggregate
principal amount of any Loan or Loans hereunder may not exceed $30,000,000 at
any time, and provided further that in no event may the last day of the
Interest Period of the Initial Loan (as defined below) be a date after August
30, 1996 and in no event may the last day of the Interest Period of the
Refunding Loan (as defined below) be a date after September 30, 1996.
Each Loan made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding shall be endorsed
by the Bank on the schedule attached hereto and made a part hereof; PROVIDED
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder.
The Borrower shall pay interest as hereinafter set forth (computed on
the basis of a 360 day year and paid for actual days elapsed) on the unpaid
principal amount of each Loan until maturity on the Maturity Date for such
Loan and at a rate per annum for the Interest Period (as hereinafter defined)
applicable thereto.
<PAGE> 2
- 2 -
As used herein, the term "Interest Period" means the period beginning on the
date of each such Loan and ending on the numerically corresponding day in the
calendar month one month after such date; PROVIDED that if the Interest Period
would otherwise end on a day which is not a Business Day (as hereinafter
defined) it shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case the Interest Period
shall end on the next preceding Business Day. As used herein, the term
"Business Day" means any day on which dealings in U.S. dollar deposits are
carried on in the London interbank market and on which commercial banks are
open for domestic and foreign exchange business in London, New York City and
the location of the Bank's Eurodollar Lending Office. The Borrower shall pay
interest on the unpaid principal amount of each Loan after the maturity thereof
until paid at a rate per annum equal to the sum of 2% plus the Eurodollar Rate
then in effect for the unpaid Loan. Notice by the Bank to the Borrower of the
rate of interest so determined shall be binding and conclusive upon the
Borrower in the absence of manifest error.
Each Loan shall bear interest at a rate per annum (the "Eurodollar Rate")
equal to the applicable Adjusted London Interbank Offered Rate (as hereinafter
defined plus .20 of 1%. The "Adjusted London Interbank Offered Rate" applicable
to any Interest Period means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00 MINUS the
Euro-Dollar Reserve Percentage. The "London Interbank Offered Rate" applicable
to any Interest Period means the rate per annum at which deposits in Dollars
are offered to the Bank in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period in an amount approximately equal to the principal amount of the Loan to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period. The "Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with deposits exceeding five
billion
<PAGE> 3
-3-
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on the Loan is determined or any category of extensions of credit
or other assets which includes loans by a non-United States office of the Bank
to United States residents). The Adjusted London Interbank Offered Rate shall
be adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
The Borrower shall pay to the Bank a facility fee at the rate of .10 of
1% per annum on the $30,000,000 principal amount which is, subject to the terms
and conditions hereof, available under this Note (regardless of usage). Such
fee shall accrue from the date hereof for so long as any Loan is outstanding
hereunder and shall be payable on the last day of each Interest Period.
The Borrower may, on or before July 30, 1996, request one Loan, (the
"Initial Loan") from the Bank for an Interest Period of one month's duration in
an aggregate amount of $30,000,000. Upon the maturity of the Initial Loan
hereunder, the Borrower may request one refunding Loan (the "Refunding Loan")
hereunder of one month's duration subject to the terms and conditions of this
Note. The obligation of the Bank to make each Loan hereunder shall be subject
to the following conditions precedent: (a) in the case of each Loan hereunder,
(i) the Borrower shall give the Bank prior notice of the request for such Loan
not later than three Business Days prior to the proposed borrowing date which
shall be a Business Day, (ii) the fact that, immediately before and after such
Loan is borrowed, no Event of Default or event which with notice or lapse of
time or both would constitute an Event of Default shall have occurred and be
continuing, (iii) the fact that the representations and warranties of the
Borrower contained in this Note shall be true on and as of the date of such
Loan, and (b) in the case of a request for the Refunding Loan to be made upon
the maturity of the Initial Loan, the principal amount of the Refunding Loan
may not exceed the principal amount of the Initial Loan made hereunder.
If after the date of this Note the adoption of any applicable rule,
executive order, decree, regulation or interpretation, or any change therein or
in the interpretation or
<PAGE> 4
- 4 -
administration thereof, by any government or governmental authority (i) changes
the basis of taxation of payments to the Bank or the Eurodollar Lending Office
of the Bank in respect to the principal of and interest on any Loan (except for
changes in the rate of taxation on the overall net income of the Bank by the
United States of America or the Eurodollar Lending Office of the Bank by the
jurisdiction in which such Eurodollar Lending Office is located), or (ii)
imposes, modifies or deems applicable any reserve, special deposit or similar
requirement against any of the assets of, deposits with or for the account of,
or credit extended by the Bank's Eurodollar Lending Office, or (iii) imposes on
the Bank (or its Eurodollar Lending Office) or the London interbank market any
other conditions affecting any Loan, the Loans or this Note, and the result of
any of the foregoing is to increase the cost to the Bank (or its Eurodollar
Lending Office) of agreeing to make or making, funding or maintaining any Loan
evidenced by this Note or would have the effect of reducing the amount of any
sum received or receivable as a consequence of agreeing to make any Loan, or to
reduce the amount of any sum receivable by the Bank (or its Eurodollar Lending
Office) on this Note, then the Borrower shall pay to the Bank upon demand such
amount as will compensate the Bank for such additional cost or reduction in
return. A certificate of the Bank setting forth the basis for the determination
of any amount necessary to compensate the Bank as aforesaid shall be conclusive
as to the determination of such amount in the absence of manifest error.
If the Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of the Bank (or its
parent corporation) as a consequence of the Bank's obligations hereunder to a
level below that which the Bank (or its parent corporation) could have
achieved but for such adoption, change or compliance (taking into
consideration the Bank's policies with respect to capital adequacy) by an
amount deemed by the Bank to be material,
<PAGE> 5
- 5 -
then from time to time, within 15 days after demand by the Bank, the Borrower
shall pay to the Bank (or its parent corporation) such additional amount or
amounts as will compensate the Bank for such reduction.
If, after the date of this Note, the adoption of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof or compliance by the Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for the Bank (or its
Eurodollar Lending Office) to make, maintain or fund its Loans, the Bank
forthwith shall so notify the Borrower. Upon receipt of such notice, the
Borrower shall prepay in full the then outstanding principal amount of each
Loan, together with accrued interest thereon, either (a) on the last day of the
Interest Period applicable thereto if the Bank may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if the Bank may not
lawfully continue to fund and maintain such Loan to such day.
The Borrower may not prepay any Loan evidenced by this Note.
Notwithstanding the foregoing, if the Borrower makes any payment of principal
on any day other than the last day of the Interest Period for any reason,
including without limitation as a result of an acceleration of the Loans
hereunder, or if the Borrower shall fail to borrow a Loan hereunder after
requesting such Loan, the Borrower shall reimburse the Bank on demand for any
loss incurred by it as a result of the timing of such payment, including
(without limitation) any loss incurred in liquidating or employing deposits
from third parties, but excluding loss of profit for the period after such
payment, PROVIDED that the Bank shall have delivered to the Borrower a
certificate as to the amount of such loss, which certificate shall be
conclusive in the absence of manifest error.
The Borrower hereby represents and warrants to the Bank that (a) the
Borrower is a duly organized and existing Ohio corporation and is duly
authorized to enter into, perform, borrow hereunder and deliver this Note,
which will constitute a valid and enforceable obligation of the Borrower, (b)
none of the
<PAGE> 6
- 6 -
execution and delivery of this Note or the performance by the Borrower of its
obligations hereunder will violate any provision of law or any agreement,
indenture, note or other instrument binding upon the Borrower or its
Certificate of Incorporation or By-Laws or give cause for acceleration of any
indebtedness of the Borrower, (c) no authority from or approval by any
governmental body, commission or agency is required in connection with the
execution, delivery or validity of this Note or borrowings under this Note, (d)
the balance sheet of the Borrower as of March 23, 1996, heretofore furnished to
the Bank, is complete and correct and fairly presents the financial condition
of the Borrower as at such date and since such date there has been no material
adverse change in the financial condition, business, operations or prospects of
the Borrower and its subsidiaries, taken as a whole, from that reflected in
said balance sheet, except for the effects upon its operations of aggressive
discounting in the transportation industry, increased expenses, higher fuel
prices and a consolidation of the Borrower's regional carriers, which matters
were publicly announced by the Borrower on or about July 1, 1996 in a press
release disclosing that the Borrower had consolidated net income for its fiscal
quarter ended March 23, 1996 of $220,000, one cent a share, and that the
Borrower expected earnings from continuing operations for 1996 will be
"significantly below those of 1995", (a) there are no actions, suits or
proceedings pending against or, to the knowledge of the Borrower, threatened
against or affecting, the Borrower or any of its subsidiaries, in any court or
before or by any governmental department, agency or instrumentality, an adverse
decision in which could reasonably be expected to materially and adversely
affect the financial condition, business, operations or prospects of the
Borrower and its subsidiaries taken as a whole, or the ability of the Borrower
to perform its obligations under this Note, and (f) the Borrower and each
subsidiary is in compliance in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the rules and regulations thereunder and all
federal, state and local statutes, laws, regulations or other governmental
restrictions relating to environmental protection, hazardous substances or the
clean-up or other remediation thereof), except where the necessity of
compliance therewith is being contested in good faith by
<PAGE> 7
-7-
appropriate proceedings and with respect to which adequate reserves have been
established, or where such noncompliance would not be material to the financial
condition, business, operations, or prospects of the Borrower and its
subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under this Note.
In case any of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay any principal of or
interest on any Loan as evidenced by this Note when due or any fee due
hereunder; or
(b) any representation or warranty made by the Borrower in
this Note shall prove to have been incorrect in any material respect
when made;
(c) the Borrower shall fail to make any payment in respect of
any indebtedness for borrowed money (other than this Note) when due or
within any applicable grace period; or
(d) any event or condition shall occur which results in the
acceleration of the maturity of any indebtedness for borrowed money of
the Borrower or enables (or, with the giving of notice or lapse of
time or both, would enable) the holder of such indebtedness for
borrowed money of the Borrower or any person acting on such holder's
behalf to accelerate the maturity thereof; or
(e) the Borrower or any of its subsidiaries shall become
insolvent (however such insolvency may be evidenced) or proceedings
are instituted by or against the Borrower or any of its subsidiaries
under the United States Bankruptcy Code or under any bankruptcy,
reorganization or insolvency law or other Law for the relief of
debtors;
(f) the Borrower or any other member of a controlled group
(the "Controlled Group") of corporations and all trades or businesses
under common control which, together with the Borrower, are treated as
a single employer under
<PAGE> 8
-8-
Section 414 of the Internal Revenue Code of 1986, as amended and any
successor statute thereto shall fail to pay when due any amount or
amounts which it shall have become liable to pay to the Pension Benefit
Guaranty Corporation (or any successor thereto) (the "PBGC") or to an
employee pension benefit plan (a "Plan") covered by Title IV of ERISA,
or any notice of intent to terminate a Plan shall be filed by a member
of the Controlled Group and/or any plan administrator, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or to cause a trustee to be appointed to administer any
Plan, or a condition shall exist which would entitle the PBGC to obtain
a decree adjudicating that a Plan must be terminated, or
(g) judgments or orders for the payment of money in excess of
$25,000,000 (to the extent not fully covered by insurance) shall be
rendered against the Borrower and such judgments or orders shall
remain unstayed for a period of 30 days; or
than, and in any such event, (1) in the case of any of the Events of Default
specified in paragraph (a) above, the principal of and accrued interest on this
Note shall automatically become due and payable without presentment, demand,
protest or other notice or formality of any kind, all of which are hereby
expressly waived and the Bank shall make no further Loan hereunder and (2) in
the case of any other Event of Default specified above, the Bank may, by
notice in writing to the Borrower, declare the principal of and all interest
accured on all Loans evidenced by this Note immediately due and payable,
whereupon they shall forthwith become due and payable and the Bank shall make no
further Loan hereunder.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the Bank of its rights
hereunder in any particular instance shall not constitute a waiver of any right
in any subsequent instance.
<PAGE> 9
- 9 -
If this Note is not paid in full when due the Borrower agrees to pay
all costs and expenses of collection, including reasonable attorneys' fees.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
CALIBER SYSTEM, INC.
By: /s/ John P. Chandler
-----------------------------
Title: Vice President and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAR-24-1996
<PERIOD-END> JUN-15-1996
<CASH> 8,122
<SECURITIES> 0
<RECEIVABLES> 319,632
<ALLOWANCES> 13,973
<INVENTORY> 0
<CURRENT-ASSETS> 441,752
<PP&E> 1,560,267
<DEPRECIATION> 646,343
<TOTAL-ASSETS> 1,480,863
<CURRENT-LIABILITIES> 647,688
<BONDS> 0
<COMMON> 39,898
0
0
<OTHER-SE> 691,806
<TOTAL-LIABILITY-AND-EQUITY> 1,480,863
<SALES> 0
<TOTAL-REVENUES> 615,901
<CGS> 0
<TOTAL-COSTS> 614,487
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 44
<INCOME-TAX> (176)
<INCOME-CONTINUING> 220
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 220
<EPS-PRIMARY> .01
<EPS-DILUTED> 0
</TABLE>
