<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ROADWAY EXPRESS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------
(5) Total fee paid:
------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------
(3) Filing Party:
--------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
================================================================================
<PAGE> 2
[ROADWAY EXPRESS LOGO]
1077 Gorge Boulevard
Akron, Ohio 44310
P.O.Box 471
Akron, Ohio 44309-0471
February 21, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Roadway
Express, Inc., which will be held on Wednesday, March 26, 1997, at 9:00 a.m. at
the Sheraton Suites Hotel, located at 1989 Front Street, Cuyahoga Falls, Ohio.
At the Annual Meeting, you will be asked to elect seven Directors to the
Board of Directors and to approve the appointment of the independent auditors of
the Company for the current fiscal year.
The Company has enclosed a copy of its 1996 Annual Report for the fiscal
year ended December 31, 1996 with this notice of annual meeting of shareholders
and proxy statement. If you would like another copy of the 1996 Annual Report,
please write to the Secretary of the Company at the above address, and you will
be sent one.
Please read the enclosed information carefully before completing and
returning the enclosed proxy card. Returning your proxy card as soon as possible
will assure your representation at the meeting, whether or not you plan to
attend. If you do attend the annual meeting, you may, of course, withdraw your
proxy should you wish to vote in person.
Sincerely,
/s/ MICHAEL W. WICKHAM
MICHAEL W. WICKHAM
President and Chief Executive
Officer
<PAGE> 3
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<PAGE> 4
[ROADWAY EXPRESS LOGO]
1077 Gorge Boulevard
Akron, Ohio 44310
P.O.Box 471
Akron, Ohio 44309-0471
------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 26, 1997
------------------------------------------------------------------
To The Shareholders:
You are hereby notified that the Annual Meeting of Shareholders of Roadway
Express, Inc., a Delaware corporation (the "Company"), will be held Wednesday,
March 26, 1997, at 9:00 a.m. at the Sheraton Suites Hotel, located at 1989 Front
Street, Cuyahoga Falls, Ohio, for the purpose of:
1. Electing seven directors to the Board of Directors consisting of Frank
P. Doyle, Phillip J. Meek, Robert E. Mercer, Carl W. Schafer, William
Sword, Sarah Roush Werner and Michael W. Wickham;
2. Approving the designation of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1997;
and
3. Transacting such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The record of shareholders entitled to notice and to vote at the meeting
was taken as of the close of business on February 11, 1997.
You are invited to attend the meeting, but whether or not you expect to
attend in person, please mark, sign, date and return the enclosed proxy in the
accompanying postage-paid envelope so that your shares will be represented at
the meeting or adjournment thereof.
If you wish to have your vote treated in a confidential manner, please mark
the box "Confidential Vote Requested" on your proxy card.
JOHN M. GLENN
Secretary
February 21, 1997
<PAGE> 5
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 6
ROADWAY EXPRESS, INC.
1077 GORGE BOULEVARD
AKRON, OHIO 44310
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 26, 1997
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Roadway Express, Inc., a Delaware corporation (the
"Company"), of proxies to be used at the annual meeting of shareholders of the
Company to be held on March 26, 1997 (the "Annual Meeting"). The Notice of
Annual Meeting of Shareholders, this Proxy Statement and related proxy card are
being mailed to shareholders on or about February 21, 1997.
Until January 2, 1996 (the "Distribution Date"), the Company was a
wholly-owned subsidiary of Roadway Services, Inc. ("RSI"). Prior to that date,
RSI, through its subsidiaries, engaged in the present business of the Company
(the "Company's Business") as well as in certain other businesses. On the
Distribution Date, RSI separated the Company's Business from its other
businesses through a distribution (the "Distribution") to the shareholders of
RSI, of approximately 95% of the outstanding shares of common stock of the
Company, par value $.01 per share ("Common Stock"), on the basis of one share of
Common Stock for every two shares of common stock of RSI held as of the close of
business on December 29, 1995. Upon the consummation of the Distribution on
January 2, 1996, the Company became a separate, publicly-held company.
Contemporaneously with the Distribution, RSI changed its name to Caliber System,
Inc.
Shareholders of record of the Company at the close of business on February
11, 1997, will be entitled to vote at the Annual Meeting. On that date, the
Company had outstanding and entitled to vote 20,535,304 shares of Common Stock.
Each share of Common Stock entitles the holder to one vote on all matters
properly brought before the meeting, including the election of directors.
Shares can be voted only if the shareholder is present in person or by
proxy. The Company has adopted a policy relating to proxy voting and independent
tabulation and inspection of elections. The policy provides that the Company
will furnish shareholders the opportunity to request confidential treatment of
their votes. There is a place on the enclosed proxy card for shareholders to
make such an election. If a shareholder so requests confidential treatment, an
independent vote tabulator and the independent inspectors of election will keep
the shareholder's vote permanently confidential and not disclose the vote to
anyone. This policy will be in effect at the Annual Meeting. Confidential
treatment will not apply when disclosure is required by law or under certain
other limited circumstances.
You may revoke your proxy at any time prior to the exercise of the powers
it confers. The shares represented by properly executed proxies will, unless
such proxies have previously been revoked, be voted in the manner specified on
the proxies. If specific choices are not indicated on a properly executed proxy,
the shares represented by such proxies received will be voted: (i) for the
nominees for Director named in this Proxy Statement; (ii) for approval of the
appointment of Ernst & Young LLP, as independent auditors; and (iii) in
accordance with the best judgment of the persons named in the enclosed proxy, or
their substitutes, for any other matters which properly come before the Annual
Meeting. The Board of Directors is not aware of any matter to be presented for
action at the meeting other than those set forth herein.
The presence, in person or by proxy, of the holders of a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum for any business to be transacted at the Annual Meeting.
Abstentions and broker "non-votes" are counted as present and entitled to vote
for purposes of determining a quorum. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner. Directors
are elected by a plurality of the affirmative votes cast. Abstentions and broker
"non-votes" are not counted for purposes of the election of Directors. The
affirmative vote by the holders of a majority of the total number of shares of
Common Stock present in person or represented by proxy and entitled to vote on
the matter is required to approve any other matter to be acted upon at the
Annual Meeting. An abstention is counted as a vote against and a broker "non-
vote" is not counted for purposes of approving other matters to be acted upon at
the Annual Meeting.
The Board of Directors has designated R. E. Mercer, Director and Chairman;
M. W. Wickham, Director, President and Chief Executive Officer; and J. D.
Cunningham, Vice President-Finance and Administration, and Treasurer as Proxies
for appointment by shareholders to represent and vote their shares in accordance
with their directions.
<PAGE> 7
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The By-Laws of the Company provide that the Board of Directors shall
consist of not less than three members, as fixed by the Board of Directors from
time to time. The Board of Directors has fixed the number at seven. At the
Annual Meeting, seven Directors are to be elected to hold office until the
Company's next annual meeting. The Board of Directors recommends that its seven
nominees for Director be elected at the Annual Meeting. All nominees have
consented to being named and to serve if elected. If any nominee becomes
unavailable for any reason, the proxies will be voted for the election of such
other person as a Director as the Board of Directors may recommend.
DIRECTOR NOMINEES
Information regarding the nominees to the Board of Directors of the Company
is set forth below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRESENT POSITIONS, RECENT
NAME BUSINESS EXPERIENCE AND AGE
- ---------------------------------------------------------------------------------------------
<S> <C>
Frank P. Doyle Director of the Company since January 1996. Retired.
Executive Vice President of General Electric Company, a
manufacturing, services and technology company, from 1992
through 1995, and Senior Vice President from 1981 through
1992. Director: Digital Equipment Corporation, The
PaineWebber Group of Mutual Funds and Educational Testing
Services. Age 65.
Phillip J. Meek Director of the Company since January 1996. Senior Vice
President, Capital Cities/ABC, Inc., a broadcasting, cable
and publishing company, and President of its publishing
group since 1986. Trustee: Ohio Wesleyan University and
chair of its Endowment Committee. Director: Calyx &
Carolla, American Press Institute and United Way of New
York City. Age 59.
Robert E. Mercer Chairman of the Board and Director of the Company since
January 1996. Director of RSI from 1989 through the
Distribution Date. Retired Chairman and Chief Executive
Officer of The Goodyear Tire & Rubber Company, a
manufacturer of tires and related products, from 1983
through 1988, and Chairman to March 1989. Director: General
Electric Corporation. Age 72.
Carl W. Schafer Director of the Company since January 1996. President of
the Atlantic Foundation, supporting oceanographic research,
since 1990. Director: Wainoco Oil Corporation, Evans
Systems, Inc., Electronic Clearing House, Inc.,
Nutraceutix, Inc. and The PaineWebber Group of Mutual
Funds. Financial Vice President and Treasurer of Princeton
University from 1976 through 1987. Age 61.
William Sword Director of the Company since January 1996. Director of RSI
from 1977 through the Distribution Date. Chairman of the
Board of Wm. Sword & Co. Incorporated, investment bankers,
since 1976. General Partner, Morgan Stanley & Co. from 1962
through 1975. Trustee: The Center of Theological Inquiry,
Princeton, NJ. Age 72.
Sarah Roush Werner Director of the Company since January 1996. Director of RSI
from 1970 through the Distribution Date. Private investor,
Marysville, Washington. Age 66.
Michael W. Wickham Chief Executive Officer of the Company since January 1996.
President of the Company since July 1990. Director of the
Company since 1989. Executive Vice President-Administration
and Finance from January 1990 through June 1990. Age 50.
- ---------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 8
COMMITTEES AND DIRECTORS MEETINGS
The Board of Directors has four standing committees: the Audit Committee,
the Nominating Committee, the Compensation Committee and the Executive and
Finance Committee. These committees were established in January 1996 in
connection with the Distribution.
The members of the Audit Committee are C. W. Schafer, P. J. Meek, and W.
Sword. During 1996, the Audit Committee reviewed the audit plan developed by the
Company's independent auditors and the professional services provided by them to
assure their independence. Additionally, the Audit Committee reviewed the annual
financial statements prepared by management prior to their issuance and met with
the independent auditors to review their opinion on the annual financial
statements and the results of their audit procedures. The Audit Committee also
reviewed, in consultation with the independent auditors and the Company's
Director of Internal Audit, the adequacy of the Company's internal controls.
The members of the Nominating Committee are P. J. Meek, R. E. Mercer, F. P.
Doyle, C. W. Schafer, W. Sword and S. R. Werner. Prior to the Distribution, the
Board of Directors of RSI selected nominees to be elected Directors of the
Company. Written recommendations for nominees to the Board of Directors to be
elected at the 1998 annual meeting of shareholders (the "1998 Meeting") will be
considered by the Nominating Committee if such recommendations are received in
accordance with the Company's By-Laws by the Secretary of the Company at its
principal offices at least 70 days prior to the 1998 Meeting or, if the Company
does not make a public announcement of the date of the 1998 Meeting at least 80
days prior to such meeting, not later than ten days after the actual public
announcement of the 1998 Meeting.
The members of the Compensation Committee are F. P. Doyle, C. W. Schafer
and P. J. Meek. The Compensation Committee recommends compensation for executive
officers of the Company.
The members of the Executive and Finance Committee are W. Sword, R. E.
Mercer, F. P. Doyle and M. W. Wickham. The Executive and Finance Committee
approves the capital budget and other financial matters and may act for the
Board of Directors in the interim period between its regular meetings.
The Board of Directors held thirteen meetings in fiscal 1996. Four meetings
of the Board of Directors held in May and June, however, were treated as a
single meeting for purposes of payment of attendance fees. The Compensation
Committee and the Audit Committee each met twice, and the Executive and Finance
Committee met four times. All of the Directors attended at least seventy-five
percent of the total meetings held by the Board of Directors and by the
committees on which they served in 1996.
DIRECTOR COMPENSATION
During 1996, each nonemployee Director of the Company, except the chairman,
was paid an annual retainer of $18,000 plus (a) an annual retainer of $4,000 for
each committee membership and (b) an additional sum of $1,500 for each meeting
of the Board of Directors or a committee. The chairmen of the Audit,
Compensation, Executive and Finance and Nominating Committees were each paid an
additional annual retainer of $2,000. Each Director of the Company, except for
the chairman, received an annual retainer of 100 shares of Common Stock.
Chairman Mercer received an annual retainer of 1,000 shares of Common Stock
together with the same attendance fees for committee and Board of Directors
meetings that were paid to other members.
3
<PAGE> 9
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of February 14, 1997 as to the security ownership of those
persons owning of record or known to the Company to be the beneficial owner of
more than five percent of the Common Stock and the beneficial ownership of
Common Stock by each of the Director nominees and each of the executive officers
named in the Summary Compensation Table, and all Directors and executive
officers as a group. Except as otherwise noted, the information with respect to
beneficial ownership has been furnished by the respective Director nominee,
executive officer or five percent beneficial owner, as the case may be. Unless
otherwise indicated, the persons named below have sole voting and investment
power with respect to the number of shares set forth opposite their names.
Beneficial ownership of the Common Stock has been determined for this purpose in
accordance with the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act").
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PERCENTAGE OF SHARES OF
AMOUNT AND NATURE OF COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP STOCK BENEFICIALLY OWNED
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Sarah Roush Werner
P. O. Box 611 1,709,101(a) 8.32%
Marysville, Washington 98270
The GAR Foundation
Robert W. Briggs and National City 1,149,228 5.60%
Bank, Northeast, Trustees
One Cascade Plaza
Akron, Ohio 44308
G. James Roush
P. O. Box 3123 1,048,672(b) 5.11%
Bellevue, Washington 98009
FMR Corp.
82 Devonshire Street 1,746,590(c) 8.51%
Boston, Massachusetts 02109
Roadway Express, Inc. 401(k) Stock
Savings Plan 3,910,902(d) 19.04%
Key Trust Company of Ohio,
National
Association, Trustee
Frank P. Doyle 100 *
Phillip J. Meek 6,100 *
Robert E. Mercer 2,809 *
Carl W. Schafer 600 *
William Sword 1,093 *
Michael W. Wickham 45,371(e)(f)(g) *
J. Dawson Cunningham 26,714(e)(f)(g) *
Louis J. Esposito 22,155(e)(f) *
John M. Glenn 14,532(e)(f)(g)(h) *
James D. Staley 26,243(e)(f) *
All Directors and executive officers
as a group (11 persons) 1,844,116(a)(e)(f)(g)(h) 8.98%
- ----------------------------------------------------------------------------------------------
<fn.
* Less than one percent.
(a) Includes 56,840 shares as to which Mrs. Werner has investment and voting
power although she disclaims any beneficial ownership.
(b) Includes 8,511 shares for William Roush, a minor; 8,511 shares for Molly
Roush, a minor; and 31,650 for Cynthia Roush, as to all of which Mr. Roush
disclaims beneficial ownership.
</TABLE>
4
<PAGE> 10
(c) According to the Schedule 13G filed with the Securities and Exchange
Commission, dated February 14, 1997, jointly filed by FMR Corp., Edward C.
Johnson 3d and Abigail P. Johnson, Mr. Johnson and Ms. Johnson are
respectively the Chairman and a Director of FMR Corp., a parent holding
company, and may be deemed to be members of a controlling group with respect
to FMR Corp. The Schedule 13G indicates that the 1,746,590 shares of Common
Stock shown as beneficially owned by FMR Corp., Mr. Johnson and Ms. Johnson
as of December 31, 1996 consist of (i) 1,730,090 shares which are
beneficially owned by Fidelity Management & Research Company ("Fidelity"), a
registered investment adviser and wholly-owned subsidiary of FMR corp., as a
result of acting as investment adviser to various registered investment
companies that own such shares (the "Fidelity Funds"); and (ii) 16,500
shares which are beneficially owned by Fidelity Management Trust Company
("Fidelity Trust"), a bank and a wholly-owned subsidiary of FMR Corp., as a
result of serving as investment manager for certain institutional accounts.
According to the Schedule 13G, (a) each of FMR Corp., Mr. Johnson and the
Fidelity Funds has sole investment power, but neither FMR Corp. nor Mr.
Johnson has sole voting power, over the shares owned by the Fidelity Funds;
and (b) each of FMR Corp. and Mr. Johnson has sole voting and investment
power over all 16,500 shares of Common Stock owned by the institutional
accounts managed by Fidelity Trust.
(d) Pursuant to the terms of the Roadway Express, Inc. 401(k) Stock Savings
Plan, participants are entitled to instruct the trustee as to the voting of
any shares allocated to their account(s), and shares for which no direction
is received by the trustee. The trustee must vote the shares as directed.
(e) Includes shares held pursuant to the Roadway Express, Inc. 401(k) Stock
Savings Plan, as of December 31, 1996, as follows: Mr. Wickham, 11,321
shares; Mr. Cunningham, 3,832 shares; Mr. Esposito, 7,296 shares; Mr. Glenn,
2,060 shares; Mr. Staley, 6,676 ; and all executive officers as a group,
31,185 shares.
(f) Includes shares of incentive stock granted under the Roadway Express, Inc.
Management Incentive Stock Plan, as of December 31, 1996, as follows: Mr.
Wickham, 23,600 shares; Mr. Cunningham, 16,800 shares; Mr. Esposito, 12,000
shares; Mr. Glenn, 9,200 shares; Mr. Staley, 16,800 shares; and all
executive officers as a group, 78,400 shares.
(g) Includes shares held by family members as to which beneficial ownership is
disclaimed, as follows: Mr. Wickham, 10,350 shares; Mr. Cunningham, 1,000
shares; Mr. Glenn, 500 shares; and all executive officers as a group, 11,850
shares.
(h) Includes 500 shares held by Mr. Glenn in an individual retirement account.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Phillip J. Meek purchased 1,000 shares of Common Stock on January 10, 1996,
a transaction reportable to the Securities and Exchange Commission under Section
16(a) of the Exchange Act. Although a Form 4 was filed, it did not reflect the
purchase due to an administrative oversight by the Company. An amended Form 4
was filed in March 1996 to reflect the purchase.
5
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning annual compensation
for services rendered to the Company for 1994, 1995 and 1996 by those persons
who were the chief executive officer and the other four most highly compensated
executive officers of the Company during 1996 (collectively, the "Named
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
-------------------------------------
OTHER ANNUAL ALL OTHER
NAMES AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(B) COMPENSATION(C)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
M.W. Wickham 1996 $270,000 $ 45,264 $ 3,540 $19,970
Director, President and 1995 267,923 -- 50,633
Chief Executive Officer 1994 253,038 364,479 46,970
J.D. Cunningham 1996 $186,000 $ 22,934 $ 2,520 $14,391
Vice President-Finance and 1995 184,569 -- 28,661
Administration, and Treasurer 1994 178,615 182,239 27,320
L.J. Esposito 1996 $163,000 $ 22,934 $ 1,800 $73,980
Vice President-Sales 1995 161,746 -- 12,785
1994 156,785 168,065 12,465
J.M. Glenn(a) 1996 $170,000 $ 21,003 $ 1,380 $ 6,181
Vice President-General Counsel 1995 170,000 46,878 21,511
and Secretary 1994 170,000 134,467 21,369
J.D. Staley 1996 $186,000 $ 25,952 $ 2,520 $12,796
Vice President-Operations 1995 184,569 -- 25,076
1994 178,615 207,550 23,453
- -------------------------------------------------------------------------------------------------------
<FN>
(a) Mr. Glenn served as Vice President and General Counsel of RSI during 1994
and 1995, and the compensation shown for such period was paid by RSI.
(b) Reflects cash dividends paid on incentive stock awarded under the Roadway
Express, Inc. Management Incentive Stock Plan.
(c) Reflects for 1996 (i) dividend equivalents earned on stock credits awarded
under the Roadway Services, Inc. Long-Term Stock Award Incentive Plan and
predecessor plans (Mr. Wickham, $12,720; Mr. Cunningham, $7,141; Mr.
Esposito, $2,364; Mr. Glenn, $6,181; and Mr. Staley, $4,132); (ii) Company
matching contributions under the Roadway Express, Inc. 401(k) Stock Savings
Plan, a voluntary contributory defined contribution employee benefit plan
($6,750 for each of the Named Officers except Mr. Glenn, who had no
contributions for 1996); (iii) insurance premiums paid by the Company (Mr.
Wickham, $500; Mr. Cunningham, $500; Mr. Esposito, $346; and Mr. Staley,
$414); (iv)tax preparation and estate planning services provided (Mr.
Staley, $1,500); and (v) moving and relocation expenses paid by the Company
(Mr. Esposito, $64,520).
</TABLE>
6
<PAGE> 12
LONG-TERM INCENTIVE PLANS
The following table sets forth information concerning long-term incentive
plans pursuant to which the Named Officers received awards for 1996. The table
reflects incentive shares awarded under the Roadway Express, Inc. Management
Incentive Stock Plan (the "Management Incentive Stock Plan").
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
NUMBER OF SHARES,
UNITS OR
OTHER RIGHTS MINIMUM PERIOD
NAME YEAR (INCENTIVE STOCK AWARDS)(A) UNTIL MATURATION(B)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
M.W. Wickham 1996 23,600 December 31, 1997
Director, President and Chief Executive
Officer
J.D. Cunningham 1996 16,800 December 31, 1997
Vice President-Finance and Administration,
and Treasurer
L.J. Esposito 1996 12,000 December 31, 1997
Vice President-Sales
J.M. Glenn 1996 9,200 December 31, 1997
Vice President-General Counsel and Secretary
J.D. Staley 1996 16,800 December 31, 1997
Vice President-Operations
- --------------------------------------------------------------------------------------------------------
<FN>
(a) The shares of incentive stock granted under the Management Incentive Stock
Plan entitle the executive to all of the rights of a shareholder generally,
including the right to vote such shares and receive any dividends that may
be paid thereon. Such shares, however, are subject to a substantial risk of
forfeiture. The restrictions will lapse after the occurrence of all of the
following: (i) the attainment of certain management objectives based upon
stock appreciation, including a minimum share price corresponding to a
particular grant of incentive stock below which all shares of incentive
stock corresponding to such grant shall be forfeited; (ii) the executive
officer's attainment of the age of 55 provided the executive officer has
remained in the continuous employ of the Company or one of its subsidiaries;
and (iii) such other terms and conditions as the Compensation Committee may
determine. Such restrictions will also lapse in the event certain change in
control events occur.
(b) Subject to the attainment of a target stock price established by the
Compensation Committee, these awards may vest at an earlier period, but not
before one year from the date of grant. Such vested awards are still subject
to the restrictions of forfeiture in (a)(ii) and (iii) above.
</TABLE>
7
<PAGE> 13
ROADWAY EXPRESS, INC. PENSION PLAN
The following table shows estimated annual pension benefits payable as
retirement benefits to the Named Officers.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS
----------------------------------------------------------------
<S> <C> <C> <C> <C>
$200,000 $ 46,688 $ 62,250 $ 77,813 $ 93,375
300,000 69,188 92,250 115,313 138,375
400,000 91,688 122,250 152,813 183,375
500,000 114,188 152,250 190,313 228,375
600,000 136,688 182,250 227,813 273,375
----------------------------------------------------------------
</TABLE>
The Roadway Express, Inc. Pension Plan (the "Pension Plan") is a
noncontributory qualified defined benefit plan. The Pension Plan provides annual
retirement benefits after normal retirement at age 65 equal to the greater of
(a) 2% of the final 240 consecutive months average compensation at or below
$45,000 times total years of service not to exceed 30, or (b) 1 3/4% of the
final 240 consecutive months average compensation up to $45,000 and 1 1/2% of
the final 240 consecutive months average compensation in excess of $45,000 times
total years of service not to exceed 30. Benefits under the Pension Plan are not
subject to reductions for Social Security benefits or other offset amounts.
Benefits are payable as a straight life annuity under various assumptions
based on final 20 year average compensation and years of service. Annual
compensation for computing annual pension benefits includes base salary and
incentive compensation. For the Named Officers, annual compensation represents
the sum of the amounts shown for 1996 in the Salary, Bonus and Other Annual
Compensation columns of the Summary Compensation Table.
The credited years of service and the estimated final 20 year average
compensation under the Pension Plan for the Named Officers are: Mr. Wickham,
28 1/2 years and $306,507; Mr. Cunningham, 11 1/2 years and $205,284; Mr.
Esposito, 25 1/2 years and $169,240; Mr. Glenn, 9 1/2 years and $241,428; and
Mr. Staley, 25 1/2 years and $191,712.
Federal law places certain limitations on the amount of compensation that
may be taken into account in calculating pension benefits and on the amount of
pensions that may be paid under federal income tax qualified plans. Since the
Company believes the retirement income objectives of the Company's pension plans
are appropriate for all eligible participants, it has adopted a non-qualified
Section 415 Excess Plan and a nonqualified Section 401(a)(17) Benefit Plan
(collectively, the "Excess Plans") providing for the payment from general funds
of the benefits which would be lost by plan participants as a result of present
or future Internal Revenue Code provisions limiting the benefits payable or the
compensation taken into account. Upon the retirement or death of a participant
under either of the Excess Plans, the supplemental retirement benefit payable
with respect to such participant will be determined under the pension formula
set forth above, but without the limitations set forth in the Internal Revenue
Code described above.
8
<PAGE> 14
1996 EXECUTIVE COMPENSATION REPORT
The Compensation Committee is composed of three nonemployee members of the
Board of Directors. The Compensation Committee is responsible for establishing
basic principles related to the compensation programs of the Company and for
providing oversight for compensation programs for executive officers. The
Compensation Committee met twice during the period between the Distribution and
the end of the fiscal year. Actions regarding compensation for 1996 were
approved by the Compensation Committee of RSI prior to Distribution and were
consistent with principles established by the Compensation Committee of RSI
applicable to RSI. Such actions were also approved by the Board of Directors of
the Company prior to the Distribution.
Base Salaries: The Company's compensation philosophy was to set base
compensation for officers (including the chief executive officer) below market,
but to provide potentially rewarding incentives tied to financial performance.
Using compensation data obtained from Towers Perrin, a well-known compensation
consultant, that drew upon both industry comparisons and corporations of
comparable size in other industries, salaries were set for each position based
on the range of data provided.
Within the ranges of data provided, evaluations of all officers, except for
Messrs. Wickham and Glenn, were made by the Company's chief executive officer
and the Board of Directors, which were approved by RSI. In Mr. Wickham's case,
however, a separate evaluation was also made by the chief executive officer of
RSI. In reviewing Mr. Wickham's total compensation, RSI took into account the
same compensation survey data for comparable companies as well as the Company's
financial performance. In the case of Mr. Glenn, RSI set his compensation
package as its then Vice President and General Counsel using the same
considerations, data and methodology as described, which was then adopted by the
Company after some adjustment for purposes of pay equity.
Cash Incentive Compensation: A cash incentive plan for the year was
established for officers (including the chief executive officer) through the use
of an incentive pool. The pool was derived through a formula that applied 3.35%
of an internal operating income figure after making allowance for a reserve for
dividends and/or increase in shareholders' equity. The pool could be decreased
or increased, as the case may be, if goals for on-time service, revenue quota
attainment and customer satisfaction were missed or exceeded for the year.
Points were assigned in proportion to salaries to determine participation of
those eligible.
Management Incentive Stock Plan: A restricted stock plan was adopted and
approved by shareholders of RSI in 1995 for upper management participants.
Pursuant to the Management Incentive Stock Plan, grants of an aggregate of
128,000 shares of Common Stock were made to 63 key employees for a two-year
period commencing in 1996. A complete description of the Management Incentive
Stock Plan was provided to shareholders of RSI in a proxy statement distributed
to such shareholders in connection with the Distribution. Awards of stock,
although effective as of the first of the year, are subject to lapse and
forfeiture if a number of conditions are not satisfied. The conditions include
attainment of certain objectives for appreciation in market price of the Common
Stock, vesting requirements, and such others as the Compensation Committee may
determine.
This report on 1996 executive compensation shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to Regulation 14A promulgated by the Securities and
Exchange Commission or Section 18 of the Exchange Act.
This report is submitted on behalf of the Board of Directors.
R. E. MERCER; F. P. DOYLE; J. P. MEEK; C. W. SCHAFER; W. SWORD, S. R. WERNER;
M. W. WICKHAM
9
<PAGE> 15
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total
shareholder return on the Common Stock with the S&P Composite 500 Stock Index
and the S&P Trucking Index, respectively, for the period commencing January 2,
1996 (the initial trading date for the Common Stock) through December 31, 1996.
The graph assumes that the value of the investment in the Common Stock and each
index was $100 at January 2, 1996, and all dividends were reinvested. The
comparisons in this table are required by the Securities and Exchange Commission
and, therefore, are not intended to forecast or be necessarily indicative of the
actual future return on the Common Stock.
<TABLE>
<CAPTION>
COMPARISON OF SHAREHOLDER RETURN
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) ROADWAY EXPRESS S&P 500 S&P TRUCKING
<S> <C> <C> <C>
JANUARY 2, 1996 100 100 100
DECEMBER 31, 1996 115 123 75
</TABLE>
<TABLE>
<CAPTION>
ROADWAY EXPRESS S&P 500 S&P TRUCKING
--------------- ------- ------------
<S> <C> <C> <C>
January 2, 1996 $ 100 $ 100 $100
December 31, 1996 $ 115 $ 123 $ 75
</TABLE>
10
<PAGE> 16
DESIGNATION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
A proposal will be presented at the meeting to ratify the designation of
Ernst & Young LLP as the independent auditors of the Company for 1997. Ernst &
Young LLP has been the independent auditors of the Company since 1951, including
the period from 1982 to the Distribution Date when the Company was a wholly-
owned subsidiary of RSI. It is expected that representatives of Ernst & Young
LLP will attend the Annual Meeting, with the opportunity to make a statement if
they so desire, and will be available to respond to appropriate questions.
Your Board of Directors recommends a vote FOR this Proposal.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 1998 Annual Meeting must be
received in writing by the Company at its principal offices by October 24, 1997,
in order to be included in the Company's Proxy Statement and form of proxy
relating to that meeting. Proposals must comply with federal securities
regulations and Delaware law.
COST OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular employees
of the Company by telephone. The Company does not expect to pay any compensation
for the solicitation of proxies, but it may reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their expenses in
sending proxy material to principals and obtaining their proxies.
JOHN M. GLENN
Secretary
February 21, 1997
11
<PAGE> 17
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT
<S> <C> <C> <C>
[ ] [ ] [ ]
1. Election of Directors
Director Nominees:
--------------
Frank P. Doyle, Phillip J. Meek, Robert E. Mercer, Carl W. Schafer,
William Sword, Sarah Roush Werner and Michael W. Wickham ----------------------------------
Nominee Exception
FOR WITHHELD
ALL ALL ABSTAIN
[ ] [ ] [ ]
2. Ratification of Ernst & Young LLP as independent auditors
DIRECTORS RECOMMEND VOTES FOR PROPOSAL 2.
</TABLE>
CONFIDENTIAL VOTE REQUESTED YES
[ ]
Date , 1997
------------------------
-----------------------------------
Signature(s)
-----------------------------------
Signature(s)
Note: Please sign exactly as
name appears hereon. Joint
owners should each sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full
title as such. Please, mark,
sign, date and return the
proxy promptly in the enclosed
postage paid envelope.
................................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 18
PROXY PROXY
ROADWAY EXPRESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 26, 1997.
The undersigned hereby appoints R. E. Mercer, M. W. Wickham and J. D.
Cunningham, or any of them or their substitutes, as Proxies, each with the power
to appoint his substitutes, and hereby authorizes them to represent and vote all
the shares of common stock of Roadway Express, Inc. held of record by the
undersigned at the close of business on February 11, 1997, at the Annual Meeting
of Stockholders to be held at the Sheraton Suites Hotel, located at 1989 Front
Street, Cuyahoga Falls, Ohio, on Wednesday, March 26, 1997, at 9:00 a.m., and at
any adjournments or postponements thereof, in their discretion, the Proxies are
authorized to vote in accordance with their judgment upon such other business as
may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the election as directors of the nominees listed and FOR the
ratification of independent auditors for 1997.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
...............................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 19
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT
<S> <C> <C> <C>
[ ] [ ] [ ]
1. Election of Directors
Director Nominees:
--------------
Frank P. Doyle, Phillip J. Meek, Robert E. Mercer, Carl W. Schafer,
William Sword, Sarah Roush Werner and Michael W. Wickham --------------------------------------
Nominee Exception
FOR WITHHELD
ALL ALL ABSTAIN
[ ] [ ] [ ]
2. Ratification of Ernst & Young LLP as independent auditors
DIRECTORS RECOMMEND VOTES FOR PROPOSAL 2.
</TABLE>
CONFIDENTIAL VOTE REQUESTED YES
[ ]
Date: , 1997
------------------------------
------------------------------
Signature(s)
------------------------------
Signature(s)
Note: Please sign exactly as
name appears hereon. Joint
owners should each sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full
title as such. Please, mark,
sign, date and return the
proxy promptly in the enclosed
postage paid envelope.
................................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 20
PROXY PROXY
ROADWAY EXPRESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 26, 1997.
To Key Trust Company of Ohio, N.A., Trustee of the Roadway Express, Inc. 401(k)
Stock Savings Plan (the "Plan"): The undersigned, a participant in the Plan,
hereby directs the Trustee to vote in person or by proxy (a) all common shares
of Roadway Express, Inc. credited to the undersigned's account under the Plan on
the record date ("allocated shares"); and (b) the proportionate number of common
shares of Roadway Express, Inc. allocated to the accounts of other participants
in the Plan, but for which the Trustee does not receive valid voting
instructions ("non-directed shares") and as to which the undersigned is entitled
to direct the voting in accordance with the Plan provisions. Under the Plan,
shares allocated to the accounts of participants for which the Trustee does not
receive timely directions in the form of a signed voting instruction card are
voted by the Trustee as directed by the participants who timely tender a signed
voting instruction card. By completing this Confidential Voting Instruction Card
and returning it to the Trustee, you are authorizing the Trustee to vote
allocated shares and a proportionate amount of the non-directed shares held in
the Plan. The number of non-directed shares for which you may instruct the
Trustee to vote will depend on how many other participants exercise their right
to direct the voting of their allocated shares. Any participant wishing to vote
the non-directed shares differently from the allocated shares may do so by
requesting a separate voting instruction card from the Trustee at
1-800-991-8947.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
...............................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
YOU ARE ENCOURAGED TO HAVE YOUR VOTE SUBMITTED NO LATER THAN MARCH 24, 1997 TO
ALLOW SUFFICIENT TIME FOR TABULATION.
