<PAGE> 1
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1996
-------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
----------- ----------
Commission file number 0-10716
-------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive offices:
CALIBER SYSTEM, INC.
3925 Embassy Parkway
P.O. Box 5459
Akron, Ohio 44334-0459
<PAGE> 2
Financial Statements and
Supplemental Schedules
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Years ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE> 3
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Financial Statements and Supplemental Schedules
Years ended December 31, 1996 and 1995
<TABLE>
CONTENTS
<S> <C>
Report of Independent Auditors.........................................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits, With Fund Information.................................2
Statements of Changes in Net Assets Available for Benefits,
With Fund Information...............................................................................5
Notes to Financial Statements..........................................................................8
Supplemental Schedules
Schedule of Assets Held for Investment Purposes.......................................................15
Schedule of Reportable Transactions...................................................................16
</TABLE>
<PAGE> 4
Report of Independent Auditors
To the Administrative Committee
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
We have audited the accompanying statements of net assets available for benefits
of the Caliber System, Inc. 401(k) Savings Plan (Amended and Restated) as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Fund Information in the
statements of net assets available for benefits and the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, are
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ Ernst & Young LLP
June 13, 1997
1
<PAGE> 5
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Net Assets Available for
Benefits, With Fund Information
December 31, 1996
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------------------------------
ROADWAY
COMPANY EXPRESS MUTUAL BOND ASSET INCOME
STOCK STOCK GROWTH BENEFIT LIFE INDEX ALLOCATION ACCUMULATION
FUND FUND FUND GIC FUND FUND FUND
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and temporary cash investments $ 456,688 $ 64,927 $ 518,187
Investments, at fair value:
Caliber System, Inc. common stock 31,260,345 26,103
Roadway Express, Inc. common stock 7,380,373
Registered investment companies--
collective investment funds 5,668,255 $65,944,175 $26,925,397 $31,180,843
Guaranteed investment contracts
(restricted) $4,510,921
Participant notes receivable
--------------------------------------------------------------------------------------------
Total investments 31,260,345 7,406,476 5,668,255 4,510,921 65,944,175 26,925,397 31,180,843
Receivables:
Employers' contributions 52,406 983 3,519
Participants' contributions 29,969 17,060 2,960 11,869 27,431
--------------------------------------------------------------------------------------------
Total receivables 82,375 17,060 2,960 12,852 30,950
--------------------------------------------------------------------------------------------
Total assets 31,799,408 7,471,403 6,203,502 4,510,921 65,947,135 26,938,249 31,211,793
LIABILITIES
Accrued expenses and other 106,754
--------------------------------------------------------------------------------------------
Net assets available for benefits $31,799,408 $7,471,403 $6,203,502 $4,404,167 $65,947,135 $26,938,249 $31,211,793
============================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 6
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Net Assets Available for
Benefits, With Fund Information (Continued)
December 31, 1996 (Continued)
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------
S&P 500 AIM TEMPLETON VANGUARD
STOCK CONSTELLATION FOREIGN LIFEPATH PRIMECAP LOAN
FUND FUND FUND FUNDS FUND FUND OTHER TOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and temporary cash
investments $ 46,276 $ 62,241 $ 1,148,319
Investments, at fair
value:
Caliber System, Inc.
common stock 31,286,448
Roadway Express, Inc.
common stock 7,380,373
Registered investment
companies--collective
investment funds $49,184,824 $9,629,196 $2,841,258 $8,367,862 16,548,976 216,290,786
Guaranteed investment
contracts 4,510,921
(restricted)
Participant notes receivable $18,651,019 18,651,019
---------------------------------------------------------------------------------------------------
Total investments 49,184,824 9,629,196 2,841,258 8,367,862 16,548,976 18,651,019 278,119,547
Receivables:
Employers' contributions 3,069 3,151 1,034 3,007 5,091,000 5,158,169
Participants' contributions 22,161 21,511 7,130 20,201 4,067 164,359
---------------------------------------------------------------------------------------------------
Total receivables 25,230 24,662 8,164 23,208 4,067 5,091,000 5,322,528
---------------------------------------------------------------------------------------------------
Total assets 49,210,054 9,653,858 2,849,422 8,391,070 16,599,319 18,651,019 5,153,241 284,590,394
LIABILITIES
Accrued expenses and other 106,754
---------------------------------------------------------------------------------------------------
Net assets available for
benefits $49,210,054 $9,653,858 $2,849,422 $8,391,070 $16,599,319 $18,651,019 $5,153,241 $284,483,640
===================================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 7
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Net Assets Available for
Benefits, With Fund Information (Continued)
December 31, 1995
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
COMPANY FIXED MONEY
STOCK INCOME MARKET BALANCED GROWTH
FUND FUND FUND FUND FUND TOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and temporary cash investments $ 575,866 $ 32,344 $ 23,420 $ 47,439 $ 76,489 $ 755,558
Investments, at fair value:
Caliber System, Inc. common stock 132,979,931 132,979,931
Registered investment companies:
Merrill Lynch:
Corporate Bond Fund, Inc. 11,924,179 11,924,179
Ready Asset Trust 7,268,611 7,268,611
Phoenix Balanced Fund Series 7,154,352 7,154,352
Mutual Beacon Fund Series 5,073,685 5,073,685
----------------------------------------------------------------------------------------------
Total investments 132,979,931 11,924,179 7,268,611 7,154,352 5,073,685 164,400,758
Receivables:
Accrued dividends 955,308 955,308
Accrued interest 652 212,116 65,899 394 98 279,159
Employers' contributions 224,895 224,895
Participants' contributions 306,139 25,383 17,496 32,944 60,969 442,931
----------------------------------------------------------------------------------------------
Total receivables 1,486,994 237,499 83,395 33,338 61,067 1,902,293
----------------------------------------------------------------------------------------------
Total assets 135,042,791 12,194,022 7,375,426 7,235,129 5,211,241 167,058,609
LIABILITIES
Payable for investments
purchased and other 569,742 31,983 21,227 44,549 76,177 743,678
----------------------------------------------------------------------------------------------
Net assets available for benefits $134,473,049 $12,162,039 $7,354,199 $7,190,580 $5,135,064 $166,314,931
==============================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 8
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Changes in Net Assets Available
for Benefits, With Fund Information
Year ended December 31, 1996
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------
ROADWAY
COMPANY EXPRESS FIXED MONEY
STOCK STOCK INCOME MARKET BALANCED GROWTH
FUND FUND FUND FUND FUND FUND
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $(21,504,380) $ (871,092) $ (469,063) $ 13,663 $ 890,959
Interest 7,759 262,303 $ 131,844 3,816 710
Dividends 671,725 39,396 78,794 161,398
--------------------------------------------------------------------------------------
(20,824,896) (831,696) (206,760) 131,844 96,273 1,053,067
Contributions:
Participants 5,984,820 242,848 163,305 353,681 2,167,151
Employers 4,973,366 49
--------------------------------------------------------------------------------------
10,958,186 242,848 163,305 353,681 2,167,200
--------------------------------------------------------------------------------------
Total additions (9,866,710) (831,696) 36,088 295,149 449,954 3,220,267
Deductions from net assets
attributed to:
Benefits paid to participants 8,456,072 1,586,991 641,412 545,456 374,678 683,235
Expenses 714 58 210
--------------------------------------------------------------------------------------
Total deductions 8,456,786 1,587,049 641,412 545,456 374,678 683,445
--------------------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers (18,323,496) (2,418,745) (605,324) (250,307) 75,276 2,536,822
Transfer of assets from merged plans
and former trustee 4,819,002 1,078,070 (3,312,622) (2,228,049) (3,138,865)
Transfer of assets to plan of former
subsidiary (68,493,203) (11,813,479) (7,360,025) (4,325,809) (4,289,644) (2,980,114)
Interfund transfers, net (20,675,944) 20,625,557 (884,068) (550,034) 162,653 1,511,730
--------------------------------------------------------------------------------------
Net increase (decrease) in net assets (102,673,641) 7,471,403 (12,162,039) (7,354,199) (7,190,580) 1,068,438
Net assets available for benefits:
Beginning of year 134,473,049 12,162,039 7,354,199 7,190,580 5,135,064
--------------------------------------------------------------------------------------
End of year $ 31,799,408 $ 7,471,403 $ - $ - $ - $6,203,502
======================================================================================
<CAPTION>
FUND INFORMATION
--------------------------------------------
MUTUAL BOND ASSET
BENEFIT LIFE INDEX ALLOCATION
GIC FUND FUND
--------------------------------------------
<S> <C> <C> <C>
Additions to net assets
attributed to:
Investment income (loss):
Net appreciation (depreciation)
in fair value of investments $ 58,664 $ 503,576 $ (702,864)
Interest 1,220,505 1,827,692
Dividends
-----------------------------------------
58,664 1,724,081 1,124,828
Contributions:
Participants 818,596 1,064,766
Employers 10 7,735
-----------------------------------------
818,606 1,072,501
-----------------------------------------
Total additions 58,664 2,542,687 2,197,329
Deductions from net assets
attributed to:
Benefits paid to participants 1,152,901 588,835
Expenses 2,235 324
-----------------------------------------
Total deductions 1,155,136 589,159
-----------------------------------------
Net increase (decrease) prior to
interfund transfers 58,664 1,387,551 1,608,170
Transfer of assets from merged plans
and former trustee 4,384,474 75,434,104 26,105,081
Transfer of assets to plan of former
subsidiary
Interfund transfers, net (38,971) (10,874,520) (775,002)
-----------------------------------------
Net increase (decrease) in net assets 4,404,167 65,947,135 26,938,249
Net assets available for benefits:
Beginning of year
-----------------------------------------
End of year $4,404,167 $ 65,947,135 $26,938,249
=========================================
</TABLE>
See accompanying notes.
5
<PAGE> 9
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Changes in Net Assets Available
for Benefits, With Fund Information (Continued)
Year ended December 31, 1996 (Continued)
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------------
INCOME S&P 500 AIM TEMPLETON
ACCUMULATION STOCK CONSTELLATION FOREIGN LIFEPATH
FUND FUND FUND FUND FUNDS
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments $ 2,053,594 $ (387,255) $ 51,376 $ 177,126
Interest $ 490,478 901,897 309,869 103,420 60,180
Dividends
---------------------------------------------------------------------------
490,478 2,955,491 (77,386) 154,796 237,306
Contributions:
Participants 1,375,844 1,225,017 675,655 228,528 547,571
Employers 30,151 22,880 23,900 8,578 22,120
---------------------------------------------------------------------------
1,405,995 1,247,897 699,555 237,106 569,691
---------------------------------------------------------------------------
Total additions 1,896,473 4,203,388 622,169 391,902 806,997
Deductions from net assets attributed to:
Benefits paid to participants 923,021 337,426 127,751 7,106 192,653
Expenses 423 710 183 41 173
---------------------------------------------------------------------------
Total deductions 923,444 338,136 127,934 7,147 192,826
---------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 973,029 3,865,252 494,235 384,755 614,171
Transfer of assets from merged plans
and former trustee 31,509,083 44,817,245 7,943,255 2,286,290 5,825,680
Transfer of assets to plan of former
subsidiary
Interfund transfers, net (1,270,319) 527,557 1,216,368 178,377 1,951,219
---------------------------------------------------------------------------
Net increase (decrease) in net assets 31,211,793 49,210,054 9,653,858 2,849,422 8,391,070
Net assets available for benefits:
Beginning of year
---------------------------------------------------------------------------
End of year $ 31,211,793 $ 49,210,054 $ 9,653,858 $ 2,849,422 $ 8,391,070
===========================================================================
<CAPTION>
FUND INFORMATION
---------------------------------------------
VANGUARD
PRIMECAP LOAN
FUND FUND OTHER TOTAL
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments $ 1,110,483 $ (19,075,213)
Interest $ 265,863 $ 34,245 5,620,581
Dividends 951,313
--------------------------------------------------------------
1,110,483 265,863 34,245 (12,503,319)
Contributions:
Participants 322,314 459 15,170,555
Employers 130 1,447,506 6,536,425
--------------------------------------------------------------
322,444 1,447,965 21,706,980
--------------------------------------------------------------
Total additions 1,432,927 265,863 1,482,210 9,203,661
Deductions from net assets attributed to
Benefits paid to participants 72,463 94,765 8,074 15,792,839
Expenses 457 17,356 22,884
--------------------------------------------------------------
Total deductions 72,920 94,765 25,430 15,815,723
--------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 1,360,007 171,098 1,456,780 (6,612,062)
Transfer of assets from merged plans
and former trustee 15,443,387 9,433,416 3,643,494 224,043,045
Transfer of assets to plan of former
subsidiary (99,262,274)
Interfund transfers, net (204,075) 9,046,505 52,967 -
--------------------------------------------------------------
Net increase (decrease) in net assets 16,599,319 18,651,019 5,153,241 118,168,709
Net assets available for benefits:
Beginning of year 166,314,931
--------------------------------------------------------------
End of year $ 16,599,319 $ 18,651,019 $ 5,153,241 $ 284,483,640
==============================================================
</TABLE>
See accompanying notes.
6
<PAGE> 10
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Statements of Changes in Net Assets Available
for Benefits, With Fund Information (continued)
Year ended December 31, 1995
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------
COMPANY FIXED MONEY
STOCK INCOME MARKET BALANCED GROWTH
FUND FUND FUND FUND FUND TOTAL
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in fair
value of investments $ (19,345,256) $ 1,080,335 $ 702,101 $ 176,631 $ (17,386,189)
Interest 26,875 776,307 $ 376,845 2,278 1,062 1,183,367
Dividends 4,531,262 550,526 370,496 5,452,284
----------------------------------------------------------------------------------------
(14,787,119) 1,856,642 376,845 1,254,905 548,189 (10,750,538)
Contributions (net of transfers between
funds) from:
Participants 15,909,842 629,354 784,980 1,314,845 4,652,430 23,291,451
Employers 12,107,722 12,107,722
----------------------------------------------------------------------------------------
28,017,564 629,354 784,980 1,314,845 4,652,430 35,399,173
----------------------------------------------------------------------------------------
Total additions 13,230,445 2,485,996 1,161,825 2,569,750 5,200,619 24,648,635
Deductions from net assets attributed to:
Benefits paid to participants 13,992,351 814,845 561,432 385,899 65,555 15,820,082
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (761,906) 1,671,151 600,393 2,183,851 5,135,064 8,828,553
Net assets available for benefits:
Beginning of year 135,234,955 10,490,888 6,753,806 5,006,729 157,486,378
----------------------------------------------------------------------------------------
End of year $134,473,049 $12,162,039 $7,354,199 $7,190,580 $5,135,064 $166,314,931
========================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 11
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements
December 31, 1996
NOTE A--DESCRIPTION OF THE PLAN
The following description of the Caliber System, Inc. 401(k) Savings Plan
(Amended and Restated) (the "Plan"), formerly the Roadway Services, Inc. Stock
Savings and Retirement Income Plan and Trust (Amended and Restated), provides
only general information. The Plan consists of five subplans (the "Subplans")
each of which contains different provisions, principally related to
contributions. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering eligible employees of Caliber
System, Inc. (the "Company") and participating domestic subsidiaries (the
"Employers") not covered by a collective bargaining agreement. The Plan was
established to encourage eligible employees to save on a regular basis through
payroll deductions. Participation is available to eligible employees who have
completed twelve months of employment and have attained the age of 21 years. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
PLAN MERGERS
Effective October 1, 1996, the Viking Financial Security Plan and Trust and the
Central Freight Lines, Inc. Employee Profit Sharing Plan and Trust, defined
contribution plans of a subsidiary of the Company, were merged into the Plan.
Assets with a fair value totaling $224 million were transferred into the Plan in
connection with these mergers.
SPIN-OFF OF FORMER SUBSIDIARY
On April 4, 1996, assets with a fair value of approximately $99 million,
representing account balances at December 31, 1995 for participants who are
employees of Roadway Express, Inc. ("REX"), were transferred from the Plan to
the Roadway Express, Inc. 401(k) Stock Savings Plan. This transfer was pursuant
to the spin-off of Roadway Express, Inc. from Caliber System, Inc. effective
January 2, 1996. All benefits to participants who are employees of Roadway
Express, Inc. on or after January 1, 1996 will be paid from the Roadway Express
401(k) Stock Savings Plan.
8
<PAGE> 12
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
NOTE A--DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS
The Plan is funded by combined contributions from the Plan's participants and
their employers to a trust fund maintained by the Plan's trustee, Barclays
Global Investors, N.A. (the "Trustee"). Prior to July 1, 1996, all of the Plan
assets were held by National City Bank, the Plan's former trustee.
The Subplans provide for participants to make before and after tax contributions
in amounts ranging up to 15% of their annual compensation subject to Internal
Revenue Service limitations.
Employer matching contributions vary by Subplan with matching percentages
ranging from 25% to 100% of the participant's contributions and annual limits
ranging from 3.5% to 6% of a participant's annual compensation. Certain Subplans
require the employer's match to be contributed only to the Company Stock Fund.
Other Subplans allow participants to direct matching contributions to any of the
investment options, with the exception of the Roadway Express Stock Fund.
Certain Subplans also provide for additional contributions at the discretion of
the participants' employer.
VESTING
Participants are immediately vested in their contributions and generally in the
employers' contributions, plus actual earnings thereon. Vesting for employer
contributions of certain Subplans ranges from five to seven years.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution,
their employer's contribution, an allocation of Plan earnings and forfeitures of
terminated participants' nonvested accounts for those Subplans with a vesting
schedule. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's account.
9
<PAGE> 13
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
NOTE A--DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS
The assets of the Plan are invested primarily in the following investment funds
(unless otherwise indicated, the fair value of the shares/units owned by the
Plan are based upon quoted redemption values on the last business day of the
plan year):
COMPANY STOCK FUND The assets of this fund are invested primarily in common
stock of the Company. The fund keeps approximately 1% of its assets in
short-term investments to allow participants to transfer money out of the
fund at any time.
ROADWAY EXPRESS STOCK FUND In connection with the spin-off of REX, 1,360,861
common shares of REX were distributed to the Plan during January 1996. The
fund keeps approximately 1% of its assets in short-term investments to allow
participants to transfer money out of the fund at any time. This fund is not
available for additional participant contributions; participants may only
transfer their investments out of this fund. All dividend income earned by
the fund is used to purchase Company common stock which is held in the fund.
FIXED INCOME FUND The assets of this fund are invested primarily in the
Intermediate Term Portfolio of the Merrill Lynch Corporate Bond Fund, Inc.
which includes corporate bonds and other debt instruments with medium-term
maturities.
MONEY MARKET FUND The assets of this fund are invested primarily in the
Merrill Lynch Ready Asset Trust. The fund includes certificates of deposit
and debt securities with short-term maturities, including commercial paper
and U.S. Government obligations.
BALANCED FUND The assets of this fund are invested primarily in the Phoenix
Balanced Fund Series which invests primarily in common stocks and fixed
income securities.
GROWTH FUND The assets of this fund are invested primarily in the Mutual
Beacon Fund Series which invests primarily in common stock, preferred stock
and corporate debt securities, which may be convertible. The fund also
maintains a small investment in money market securities in order to provide
liquidity for participant trades.
NOTE A--DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
MUTUAL BENEFIT LIFE GIC The assets of this fund are invested in a guaranteed
investment contract with Mutual Benefit Life. The reported value of the
units owned
10
<PAGE> 14
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
by the Plan is based upon the issue price of the investment contract
adjusted for interest earned and any actual proceeds received by the Plan
with respect to the guaranteed investment contract. Since July 16, 1991,
assets invested in the Mutual Benefit Life GIC have been restricted (see
Note F).
BOND INDEX FUND The assets of this fund are invested in the Masterworks Bond
Index Fund which invests in U.S. Government and Corporate bonds with
medium-term maturities.
ASSET ALLOCATION FUND The assets of this fund are invested in the
Masterworks Asset Allocation Fund, of which investments are allocated among
common stock, U.S. Treasury bonds and money market instruments.
INCOME ACCUMULATION FUND The assets of this fund are invested in the
Barclays Global Investors (BGI) Income Accumulation Fund which invests in
investment contracts, U.S. government securities and short-term money market
instruments.
S&P 500 STOCK FUND The assets of this fund are invested in the Masterworks
S&P 500 Stock Fund which invests daily in the same stocks and substantially
the same percentages as the S&P 500 Index.
AIM CONSTELLATION FUND The assets of this fund are invested in the AIM
Constellation Fund which seeks capital appreciation by investing in the
common stock of principally medium sized and smaller emerging growth
companies.
TEMPLETON FOREIGN FUND The assets of this fund are invested in the Templeton
Foreign Fund which seeks long-term capital growth by investing in stock and
debt obligations of companies and governments outside the United States.
LIFEPATH FUNDS The assets of this fund are invested in the LifePath Funds
offered by Masterworks which invest their assets in a separate series of
MasterInvestment Portfolio, an open-end management investment company
including: LifePath 2000, LifePath 2010, LifePath 2020, LifePath 2030 and
LifePath 2040. Each LifePath fund invests in a combination of domestic and
foreign equity, fixed income and other securities to provide a risk-managed
rate of return to maximize assets based on planned retirement in the decade
indicated in the fund name.
NOTE A--DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
VANGUARD PRIMECAP FUND The assets of this fund are invested primarily in the
Vanguard/Primecap Fund which seeks long-term growth by investing in the
common stock of principally large and medium-sized U.S. companies. The fund
also maintains a
11
<PAGE> 15
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
small investment in money market securities in order to provide liquidity
for participant trades.
PARTICIPANT NOTES RECEIVABLE
Effective in 1996, participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum of $50,000 or 50% of their account balance. Loan terms
range from 1 to 5 years up to a maximum of 10 years for the purchase of a
primary residence. The loans are secured by the balance in the participant's
account and bear interest at a rate 1% above the prime rate as determined by the
Trustee at the time a loan is processed.
NOTE B--SUMMARY OF ACCOUNTING POLICIES
INVESTMENT VALUATION AND ADMINISTRATIVE FEES
The Plan's investments are stated at fair value with the exception of the Loan
Fund and the Mutual Benefit Life GIC which are valued at cost which does not
differ materially from fair value.
Substantially all administrative fees are paid by the Company.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Administrative Committee to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE C--INVESTMENTS
The net asset value per share/unit at December 31 for the primary investments of
the respective investment funds was as follows:
<TABLE>
<CAPTION>
1996 1995
----------------------
<S> <C> <C>
Caliber System, Inc. common stock $19.25 $48.875
Roadway Express, Inc. common stock 19.375 -
Merril Lynch Corporate Bond Fund, Inc. - 11.80
Merril Lynch Ready Asset Trust - 1.00
Phoenix Balanced Fund Series - 16.80
</TABLE>
12
<PAGE> 16
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
<TABLE>
<S> <C> <C>
Mutual Beacon Fund Series 38.95 35.94
Mutual Benefit Life guaranteed investment contract 1.00 1.00
Masterworks Bond Index Fund 9.49 9.93
Masterworks Asset Allocation Fund 11.92 11.75
BGI Income Accumulation Fund 13.14 12.42
Masterworks S&P 500 Stock Fund 15.91 13.44
AIM Constellation Fund 25.26 22.51
Templeton Foreign Fund 10.36 9.18
Masterworks LifePath Funds:
LifePath 2000 Fund 10.85 10.62
LifePath 2010 Fund 12.14 11.30
LifePath 2020 Fund 12.95 11.73
LifePath 2030 Fund 13.62 12.07
LifePath 2040 Fund 14.48 12.43
Vanguard Primecap Fund 30.08 26.23
</TABLE>
NOTE D--PLAN TERMINATION
Although it has not expressed any intent to do so, the Employers have the right
under the Plan to discontinue their contributions at any time and the Company
has the right to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, the Plan shall pay all expenses chargeable against
the Plan and shall then distribute all assets to the participants in proportion
to the amounts credited to their accounts at the date of such termination.
NOTE E--INCOME TAX STATUS
The Internal Revenue Service ruled on April 15, 1996, that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC); therefore, the related
trust is not subject to tax under present income tax law. The Plan is required
to operate in conformity with the IRC to maintain its qualification. The
Administrative Committee is not aware of any course of action or series of
events that have occurred that might adversely affect the Plan's qualified
status.
NOTE F--MUTUAL BENEFIT LIFE GUARANTEED INVESTMENT CONTRACT
During 1991, the State of New Jersey insurance regulators took control of Mutual
Benefit Life and froze all existing assets of the company. As a result of these
events, the future
13
<PAGE> 17
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Notes to Financial Statements (Continued)
recoverability of the Plan's assets held by Mutual Benefit Life is uncertain.
Only employees of the Company's subsidiary, Viking Freight, Inc., hold assets in
this fund. Due to the restricted status of the Mutual Benefit Life Guaranteed
Investment Contract, Viking Freight, Inc. has committed to protect the Plan's
participants from any loss of principal (participant contributions and the
Employers' match) as well as any credited interest upon maturity of the
contract.
NOTE G--SUBSEQUENT EVENT
Subsequent to December 31, 1996, the Company entered into an agreement to sell
the assets of one of the companies which sponsored a plan that was merged into
the Plan in 1996. Accordingly, assets with a fair value of approximately $119
million at December 31, 1996 will be transferred out of the Plan to a plan
sponsored by the new owners of this entity.
14
<PAGE> 18
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Schedule of Assets Held for Investment Purposes
December 31, 1996
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT
LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Caliber System, Inc.* 1,625,270 shares of common stock $ 56,837,877 $ 31,286,448
Roadway Express, Inc. 380,922 shares of common stock 7,824,868 7,380,373
Mutual Beacon Fund Series 145,526 units of collective investment 5,478,993 5,668,255
fund
Mutual Benefit Life Insurance Company** 4,510,921 units of restricted guaranteed 4,510,921 4,510,921
investment contracts
Masterworks* 6,948,807 units of collective investment 65,655,739 65,944,175
Bond Index Fund fund
Masterworks* 2,258,842 units of collective investment 27,668,585 26,925,397
Asset Allocation Fund fund
Barclays Global Investors* Income 2,372,863 units of collective investment 31,180,843 31,180,843
Accumulation Fund fund
Masterworks* 3,091,441 units of collective equity 47,201,272 49,184,824
S&P 500 Stock Fund investment fund
AIM Constellation Fund 381,203 units of collective investment 10,016,581 9,629,196
fund
Templeton Foreign Fund 274,253 units of collective investment 2,788,788 2,841,258
fund
Masterworks* LifePath Funds: Collective investment funds:
LifePath 2000 Fund 118,444 units 1,289,992 1,285,115
LifePath 2010 Fund 163,844 units 1,955,673 1,989,062
LifePath 2020 Fund 189,079 units 2,398,098 2,448,568
LifePath 2030 Fund 92,195 units 1,220,879 1,255,699
LifePath 2040 Fund 95,954 units 1,340,461 1,389,418
----------------- -----------------
8,205,103 8,367,862
Vanguard Primecap Fund 550,165 units of collective investment 14,957,915 16,548,976
fund
Loan Fund Maturing at various dates through 2006 18,651,019 18,651,019
at interest rates ranging from 5.56%
to 11.86%
----------------- -----------------
$ 300,978,504 $ 278,119,547
================= =================
* Indicates party-in-interest to the Plan.
** As described in the Notes to Financial Statements, the assets of Mutual
Benefit Life were frozen by state insurance regulators.
</TABLE>
15
<PAGE> 19
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Schedule of Reportable Transactions
Year ended December 31, 1996
<CAPTION>
CURRENT
EXPENSES VALUE OF NET
WITH ASSET ON GAIN
DESCRIPTION PURCHASE SELLING INCURRED COST OF TRANSACTION OR
IDENTITY OF PARTY INVOLVED OF ASSETS PRICE PRICE TRANSACTION ASSET DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CATEGORY (I)--INDIVIDUAL TRANSACTION
IN EXCESS OF 5% OF THE CURRENT VALUE
OF PLAN ASSETS
** Masterworks*
Bond Index Fund $72,121,482 $72,121,482 $72,121,482
** Masterworks*
S&P 500 Stock Fund 18,186,058 18,186,058 18,186,058
* Indicates party-in-interest to the Plan.
**Transactions made on the market.
</TABLE>
16
<PAGE> 20
<TABLE>
Caliber System, Inc. 401(k)
Savings Plan (Amended and Restated)
Schedule of Reportable Transactions (Continued)
Year ended December 31, 1996
<CAPTION>
EXPENSES
WITH
PURCHASE SELLING INCURRED
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSETS PRICE PRICE TRANSACTION
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT
VALUE OF PLAN ASSETS
** Caliber System, Inc. * $14,736,296
Common stock $ 1,932,745
** Phoenix 989,507
Balanced Fund Series 8,156,569
** Merrill Lynch 752,086
Corporate Bond Fund 12,207,202
** National City Bank* 22,082,689
Armada Money Market Fund 22,262,381
** Masterworks* 76,490,544
Bond Index Fund 11,049,950
** Barclays Global Investors* 12,792,684
Income Accumulation Fund 3,253,841
** Masterworks* 21,790,906
S&P 500 Stock Fund 1,289,581
<CAPTION>
CURRENT
VALUE OF NET
ASSET ON GAIN
COST OF TRANSACTION OR
ASSET DATE (LOSS)
- --------------------------------------------
<S> <C> <C>
$14,736,296 $14,736,296
2,645,857 1,932,745 $ (713,112)
989,507 989,507
7,745,419 8,156,569 411,150
752,086
12,295,454 12,207,202 (88,252)
22,082,689 22,082,689
22,262,381 22,262,381
76,490,544 76,490,544
10,834,805 11,049,950 215,145
12,792,684 12,792,684
3,253,841 3,253,841
21,790,906 21,790,906
1,219,541 1,289,581 70,040
* Indicates party-in-interest to the Plan.
**Transactions made on the market.
There were no category (ii) or (iv) reportable transactions during 1996.
</TABLE>
17
<PAGE> 21
REQUIRED INFORMATION
The following financial statements are furnished for the plan:
Audited Financial Statements and Supplemental Schedules of the Caliber System,
Inc. 401(k) Savings Plan (formerly named Roadway Services, Inc. Stock Savings
and Retirement Income Plan and Trust) for the years ended December 31, 1996 and
1995.
The foregoing plan financial statements and schedules were prepared in
accordance with the financial reporting requirements of ERISA and were audited
by independent auditors.
EXHIBITS
Consent of independent auditors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the below
member of the Administrative Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
Caliber System, Inc. 401(k) Savings Plan
----------------------------------------
(Name of Plan)
/s/ D. C. Brown
----------------------------------------
D. C. Brown, Vice President-Human
Resources and Member of the
Administrative Committee
June 30, 1997
<PAGE> 1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-28163) pertaining to the Caliber System, Inc. 401(k) Savings Plan
(Amended and Restated) of our report dated June 13, 1997, with respect to the
financial statements and supplemental schedules of the Caliber System, Inc.
401(k) Savings Plan (Amended and Restated) included in this Annual Report (Form
11-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Akron, Ohio
June 25, 1997
