<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(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 Rule 14a-11(c) or Rule 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)(1) 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]
February 19, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of Roadway Express, Inc., which will be held on Wednesday, March 24, 1999, 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 1998 Annual Report for the year
ended December 31, 1998 with this notice of annual meeting of shareholders and
proxy statement.
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
Chairman and Chief Executive Officer
<PAGE> 3
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 4
[ROADWAY EXPRESS LETTERHEAD]
------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 24, 1999
------------------------------------------------------------------
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 24, 1999, 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, John F. Fiedler, Dale F. Frey, Phillip J. Meek, Carl W.
Schafer, Sarah Roush Werner, and Michael W. Wickham;
2. Approving the designation of Ernst & Young LLP as the independent
auditors of the Company for the year ending December 31, 1999; 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 9, 1999.
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 19, 1999
<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 24, 1999
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 24, 1999 (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 19, 1999.
Shareholders of record of the Company at the close of business on February
9, 1999 will be entitled to vote at the Annual Meeting (the "Record Date"). On
that date, the Company had outstanding and entitled to vote 19,371,315 shares of
common stock, par value $0.01 per share ("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 that 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 Michael W. Wickham, Chairman and
Chief Executive Officer; James D. Staley, President and Chief Operating Officer;
and J. Dawson Cunningham, Executive Vice President, Chief Financial Officer 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. Effective as of the date of
the Annual Meeting, Robert E. Mercer is retiring from the Board of Directors and
therefore will not stand for re-election. 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: Compaq Computer Corporation, U.S. Office
Products Company and PaineWebber, Inc. Age 67.
John F. Fiedler Chairman of Borg-Warner Automotive, Inc., a supplier of
highly engineered systems and components primarily for
automotive powertrain applications, since March 1996, Chief
Executive Officer since January 1995, President from June
1994 through March 1996, and Chief Operating Officer from
June 1994 through December 1994. Executive Vice
President-North America Tire Division of The Goodyear Tire &
Rubber Company, a manufacturer of tire and rubber products,
from 1991 through 1994. Director: Dal-Tile International
Inc. Age 60.
Dale F. Frey Director of the Company since January 1998. Retired.
Chairman and Chief Executive Officer of General Electric
Investment Corporation from 1984 through early 1997, and
Vice President and Treasurer of General Electric Company, a
manufacturing, services and technology company, from 1980
through January 1994. Director: Aftermarket Technology
Corp., First American Financial Corporation, Praxair, Inc.,
Promus Hotel Corporation and Community Health Systems, Inc.
Age 66.
Phillip J. Meek Director of the Company since January 1996. Retired. Senior
Vice President, Capital Cities/ABC, Inc., a broadcasting,
cable and publishing company, and President of its
publishing group from 1986 through 1997. Trustee: Ohio
Wesleyan University and vice-chair of its Board of Trustees.
Director: Calyx & Carolla and Guideposts, a Christian
organization. Age 61.
Carl W. Schafer Director of the Company since January 1996. President of the
Atlantic Foundation, supporting oceanographic research,
since 1990. Director: Frontier Oil Corporation, Evans
Systems, Inc., Electronic Clearing House, Inc., Nutraceutix,
Inc., Base Ten Systems, Inc. and The PaineWebber and
Guardian Groups of Mutual Funds. Age 63.
Sarah Roush Werner Director of the Company since January 1996. Director of
Roadway Services, Inc. from 1970 through 1995. Private
investor, Marysville, Washington. Age 68.
Michael W. Wickham Chairman of the Board of the Company since March 1998, and
Chief Executive Officer since January 1996. President of the
Company from July 1990 through March 1998. Director of the
Company since 1989. Executive Vice President-Administration
and Finance from January 1990 through June 1990. Age 52.
- ---------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 8
COMMITTEES AND DIRECTORS MEETINGS
The Board of Directors has two standing committees: the Audit Committee and
the Compensation Committee.
The members of the Audit Committee are Carl W. Schafer (Chairman), Phillip.
J. Meek, and Robert E. Mercer. Mr. Mercer will serve as a member of the Audit
Committee until the date of the Annual Meeting. During 1998, 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 Compensation Committee are Frank P. Doyle (Chairman),
Dale F. Frey, and Phillip J. Meek. William Sword, a former director of the
Company, served as a member on the Compensation Committee until his retirement
in March 1998. Mr. Frey was appointed as a member of the Compensation Committee
in February 1998. The Compensation Committee recommends compensation for
executive officers of the Company.
Although the Company does not have a standing nominating committee, written
recommendations for nominees to the Board of Directors to be elected at the 2000
annual meeting of shareholders (the "2000 Annual Meeting") will be considered by
the Board of Directors 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 2000 Annual Meeting or, if the Company does not
make a public announcement of the date of the 2000 Annual Meeting, at least 80
days prior to such meeting, not later than ten days after the actual public
announcement of the 2000 Annual Meeting.
The Board of Directors held nine meetings in 1998. The Compensation
Committee met four times and the Audit Committee met two times. All of the
Directors, except Mr. Frey, 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 1998. Mr. Frey attended nine out of a total of thirteen meetings held
by the Board of Directors and the Compensation Committee on which he served.
DIRECTOR COMPENSATION
During 1998 each nonemployee Director of the Company received an annual
retainer of $18,000 plus (a) $4,000 for each committee membership and (b) $2,000
for each committee chairmanship. Each nonemployee director of the Company,
except for Robert E. Mercer, former Chairman of the Board of Directors, also
received as part of his or her annual retainer, 100 shares of Common Stock.
Robert E. Mercer, former Chairman of the Board of Directors, received, as part
of his annual retainer, 1,000 shares of Common Stock. In addition to his or her
annual retainer, each nonemployee Director received $1,500 for each meeting of
the Board of Directors or a committee that such Director attended.
Nonemployee Directors may elect to take all or a portion of their annual
retainer in stock options under the Roadway Express Nonemployee Directors' Stock
Option Plan (the "Option Plan") or in deferred compensation under the Roadway
Express Nonemployee Directors' Equity and Deferred Compensation Plan. In 1998,
each of Frank P. Doyle, Dale F. Frey, and Phillip J. Meek elected to take stock
options under the Option Plan in lieu of their annual retainers.
3
<PAGE> 9
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of January 29, 1999 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 Director, Director nominee, and executive officer named in the Summary
Compensation Table, and all Directors, Director nominees, and executive officers
as a group. Except as otherwise noted, the information with respect to
beneficial ownership has been furnished by the respective Director, 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
Marysville, Washington 98270 1,695,801(a) 8.8%
Private Capital Management, Inc.
3003 Tamiami Trail North
Naples, Florida 34103 1,373,548(b) 7.1%
Roadway Express, Inc. 401(k) Stock
Savings Plan
Key Trust Company of Ohio, National
Association, Trustee 4,677,956(c) 24.1%
Frank P. Doyle 4,400(d) *
John F. Fiedler -0- *
Dale F. Frey 2,033(d) *
Phillip J. Meek 8,566(d) *
Robert E. Mercer 4,809 *
Carl W. Schafer 700(e) *
Michael W. Wickham 75,839(e)(f)(g)(h) *
James D. Staley 47,926(f)(g) *
J. Dawson Cunningham 47,222(e)(f)(g)(h) *
Louis J. Esposito 28,318(f)(g) *
John M. Glenn 17,102(e)(f)(g)(h)(i) *
All Directors and executive officers as a 1,988,195(d)(e)(f)(g)(h)(i) 10.3%
group (14 persons)
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Less than one percent.
(a) Includes 43,340 shares as to which Mrs. Werner has investment and voting
power although she disclaims any beneficial ownership.
(b) According to a Schedule 13G filed with the Securities and Exchange
Commission, dated February 16, 1999, by Private Capital Management, Inc.
("PCM"), an investment advisor registered under the Investment Advisers Act
of 1940, and Bruce S. Sherman, president of PCM, PCM is deemed to be the
beneficial owner of 1,338,648 shares of Common Stock because of its shared
power to dispose or to direct the disposition of these securities. Bruce S.
Sherman, as president of PCM, is deemed to be the beneficial owner of
1,373,548 shares of Common Stock, including the shares beneficially owned by
PCM as well as 34,900 shares of Common Stock, which Mr. Sherman has sole
power.
4
<PAGE> 10
(c) 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.
(d) Includes shares subject to stock options granted pursuant to the Roadway
Express Nonemployee Directors' Stock Option Plan exercisable on or after
April 1, 1999, as follows: Mr. Doyle, 2,200 shares; Mr. Frey, 2,033 shares;
and Mr. Meek, 2,366 shares.
(e) Includes shares held in an individual retirement account, as follows: Mr.
Schafer, 500 shares; Mr. Wickham, 2,344 shares; Mr. Cunningham, 735 shares;
and Mr. Glenn, 500 shares.
(f) Includes shares held pursuant to the Roadway Express, Inc. 401(k) Stock
Savings Plan, as of December 31, 1998, as follows: Mr. Wickham, 11,361
shares; Mr. Staley, 8,021 shares; Mr. Cunningham, 4,792 shares; Mr.
Esposito, 8,959 shares; Mr. Glenn, 3,202 shares; and all executive officers
as a group, 47,241 shares.
(g) Includes shares of restricted incentive stock granted under the Roadway
Express, Inc. Management Incentive Stock Plan, as follows: Mr. Wickham,
51,584 shares; Mr. Staley, 37,138 shares; Mr. Cunningham, 35,723 shares; Mr.
Esposito, 6,000 shares; Mr. Glenn, 4,600 shares; and all executive officers
as a group, 179,460 shares.
(h) Includes shares held by family members as to which beneficial ownership is
disclaimed, as follows: Mr. Wickham, 10,350 shares; Mr. Cunningham, 1,125
shares; Mr. Glenn, 500 shares; and all executive officers as a group, 11,975
shares.
(i) Includes 5,400 shares held under a defined contribution plan maintained by
Mr. Glenn's previous employer.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Directors and executive officers
of the Company to report holdings of, and transactions in, Common Stock. Based
on Company records and other information, the Company believes that all such
reports required of its Directors and executive officers with respect to the
fiscal year ended December 31, 1998 were timely filed, except for the initial
statement of beneficial ownership on Form 3 by John D. Bronneck, which was
inadvertently filed late because he did not receive timely information about his
Section 16 responsibilities upon his promotion to Vice President -- Operations
in March 1998.
5
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning annual compensation
for services rendered to the Company for 1996, 1997 and 1998 by those persons
who were the chief executive officer and the other four most highly compensated
executive officers of the Company during 1998 (collectively, the "Named
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ---------------------------
OTHER ANNUAL RESTRICTED LTIP ALL OTHER
NAMES AND PRINCIPAL COMPENSATION STOCK AWARDS Payouts COMPENSATION
POSITION YEAR SALARY BONUS (a) (b) (c) (d)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael W. Wickham 1998 $383,845 $124,939 $7,366 $307,415 -- $14,830
Director, Chairman and 1997 300,000 179,000 4,720 -- -- 16,054
Chief Executive Officer 1996 270,000 45,264 3,540 -- -- 19,470
James D. Staley 1998 $234,234 $ 71,954 $5,271 $223,243 -- $ 9,980
President and Chief 1997 200,000 103,000 3,360 -- -- 9,064
Operating Officer 1996 186,000 25,952 2,520 -- -- 10,882
J. Dawson Cunningham 1998 $226,537 $ 67,338 $5,178 $208,290 -- $11,535
Executive Vice 1997 200,000 103,000 3,360 -- -- 12,105
President,
Chief Financial Officer 1996 186,000 22,934 2,520 -- -- 13,891
and Treasurer
Louis J. Esposito 1998 $183,000 $ 54,600 $1,200 $132,750 -- $ 8,870
Vice President-Sales 1997 173,000 91,000 2,400 -- $265,500 8,255
1996 163,000 22,934 1,800 -- -- 73,634
John M. Glenn 1998 $195,000 $ 49,800 $ 920 $101,775 -- $11,565
Vice President-General 1997 180,000 83,000 1,840 -- $203,550 11,524
Counsel and Secretary 1996 170,000 21,003 1,380 -- -- 6,181
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects cash dividends paid on restricted incentive stock awarded under the
Roadway Express, Inc. Management Incentive Stock Plan (the "Management
Incentive Stock Plan").
(b) Reflects shares of restricted incentive stock awarded under the Management
Incentive Stock Plan on January 1, 1998 and March 29, 1998, valued on the
dates of grant, for which certain management objectives were reached on
December 31, 1998. Although these shares of restricted incentive stock have
partially vested with respect to the attainment of certain management
objectives based upon stock appreciation, such shares of restricted
incentive stock remain subject to a substantial risk of forfeiture, which
will lapse upon the executive officers' attainment of age 55, if applicable,
provided that the executive officer has remained in the continuous employ of
the Company or one of its subsidiaries or in the event that certain change
in control events occur. Such shares of restricted incentive stock that
remain subject to forfeiture entitle the executive officer 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.
(c) Reflects payouts of shares of restricted incentive stock under the
Management Incentive Stock Plan awarded on January 1, 1996 for which certain
management objectives were reached on December 31, 1997 and to which all
restrictions have lapsed due to the executive officer's attainment of age
55.
(d) Reflects for 1998 (i) dividend equivalents earned on stock credits awarded
under the Roadway Services, Inc. Long-Term Stock Award Incentive Plan and
predecessor plans (Mr. Wickham, $8,984; Mr. Staley, $2,918; Mr. Cunningham,
$4,531; Mr. Esposito, $1,670; and Mr. Glenn, $4,365); and (ii) Company
matching contributions under the Roadway Express, Inc. 401(k) Stock Savings
Plan, a voluntary contributory defined contribution employee benefit plan
(Mr. Wickham, $5,846; Mr. Staley, $7,062; Mr. Cunningham, $7,004; Mr.
Esposito, $7,200; and Mr. Glenn, $7,200).
6
<PAGE> 12
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 1998 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,
30 1/2 years and $512,244; Mr. Staley, 27 1/2 years and $312,238; Mr.
Cunningham, 13 1/2 years and $297,936; Mr. Esposito, 27 1/2 years and $219,337;
and Mr. Glenn, 11 1/2 years and $244,138.
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 nonqualified
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 that would be lost by plan participants as a result of present
or future Internal Revenue Code of 1986 (the "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.
1998 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.
In 1998, the Compensation Committee retained the strategic objectives for
executive compensation that it had established for the previous year. The
Compensation Committee's objectives were to assure that compensation for
executive officers would comport fully with the Company's mission and vision
statement while being attractive to recruit, retain and motivate highly
experienced and capable individuals. The same independent compensation
consulting firm that has been used since 1996 was retained to re-survey the
industry and a number of other service companies of comparable size. Comparisons
were made for both the management group as a whole and for individual positions.
7
<PAGE> 13
Base Salaries. Salaries for executive officers, including the chief
executive officer, were determined by three factors: (i) salary levels among
service companies with revenues of comparable magnitude and specifically those
of the Company's nearest competitors, (ii) performance of the Company,
considering profitability of the industry as a whole and (iii) individual
performance as evaluated by the chief executive officer and through the
Compensation Committee's own observations, and in the case of the chief
executive officer, by the Compensation Committee itself after consulting with
other members of the Board of Directors. The Compensation Committee continues
its long-standing philosophy that base compensation should be below market,
while permitting management to achieve superior total compensation through cash
and long-term incentives. Salary levels had been raised in 1998 as part of this
philosophy.
Cash Incentive Compensation. As in 1997, the Compensation Committee set
individualized cash incentives for the top management group, which includes all
executive officers. Factors considered in setting the amounts for executive
officers included the relative importance of the position with the Company and
the degree of talent required to obtain high performance at such position.
Pre-determined levels of targeted profitability were set for all executive
officers. Percentages of pay-outs were to have declined by steps of 5% to the
extent that the Company's profitability did not meet the predetermined level,
provided that there would be no pay-outs if after-tax profits did not exceed
certain minimum levels.
Management Incentive Stock Plan. Under the Management Incentive Stock
Plan, awards of restricted incentive stock are targeted over a five year period.
Pursuant to the Management Incentive Stock Plan, grants of an aggregate of
485,553 shares of restricted incentive stock were made to 65 key employees.
Awards of stock, although effective as of the first day of the respective 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 1998 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 Compensation Committee.
FRANK P. DOYLE; DALE F. FREY; PHILLIP J. MEEK
8
<PAGE> 14
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total
shareholder return on the Common Stock with the S&P 500 Index and the S&P
Trucking Super Composite, respectively, for the period commencing January 2,
1996 (the initial trading date for the Common Stock) through December 31, 1998.
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
Company is no longer using the S&P Truckers Group for comparison purposes, as it
has done in prior years, because the S&P Truckers Group was discontinued in
January 1998. In addition, the Company believes that the S&P Trucking Super
Composite is a superior index because it includes a broad cross section of
carriers, as opposed to the S&P Truckers Group, which, as of last year, was
composed of only two carriers. 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.
COMPARISON OF SHAREHOLDER RETURN
<TABLE>
<CAPTION>
S&P TRUCKERS
ROADWAY S&P 500 SUPER
EXPRESS, INC. INDEX COMPOSITE
------------- ------- ------------
<S> <C> <C> <C>
January 2, 1996 $100 $100 $100
December 31, 1996 $115 $119 $114
December 31, 1997 $133 $159 $138
December 31, 1998 $ 88 $198 $127
</TABLE>
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 1999. Ernst &
Young LLP has been the independent auditors of the Company since 1951. 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.
9
<PAGE> 15
SHAREHOLDER PROPOSALS
The Company must receive by October 22, 1999 any proposal of a shareholder
intended to be presented at the 2000 Annual Meeting and to be included in the
Company's proxy materials related to the 2000 Annual Meeting pursuant to Rule
14a-8 under the Exchange Act. Proposals of shareholders submitted outside the
processes of Rule 14a-8 under the Exchange Act in connection with the 2000
Annual Meeting ("Non-Rule 14a-8 Proposals") must be received by the Company by
January 20, 2000 or such proposals will be considered untimely under the advance
notice provisions of the Company's By-Laws. Non-Rule 14a-8 Proposals must comply
with certain provisions of the Company's By-Laws. The Company's proxy related to
the 2000 Annual Meeting will give discretionary authority to the proxy holders
to vote with respect to all Non-Rule 14a-8 Proposals received by the Company
after January 20, 2000. Notices of shareholder proposals should be delivered
personally or mailed to, and any request for a copy of the Company's By-Laws
(which will be provided at no charge to any holder of the Common Stock), should
be directed to the Secretary of the Company at its principal offices.
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 19, 1999
10
<PAGE> 16
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT YES
<S> <C> <C> <C> <C>
1. Election of Directors [ ] [ ] [ ] CONFIDENTIAL VOTE REQUESTED [ ]
Director Nominees:
------------------
Frank P. Doyle, John F. Fiedler, Dale F. Frey,
Phillip J. Meek, Carl W. Schafer, Sarah Roush Werner
and Michael W. Wickham
Nominee Exception
-----------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Ernst & Young LLP as independent [ ] [ ] [ ]
auditors. DIRECTORS RECOMMEND
A VOTE FOR PROPOSAL 2.
Date: , 1999
-----------------------------
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.
</TABLE>
................................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 17
PROXY PROXY
ROADWAY EXPRESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MARCH 24, 1999.
The undersigned hereby appoints Michael W. Wickham, James D. Staley and J.
Dawson 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 9, 1999, at the Annual
Meeting of Shareholders to be held at the Sheraton Suites Hotel, located at 1989
Front Street, Cuyahoga Falls, Ohio, on Wednesday, March 24, 1999, 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 shareholder. If no direction is made, this proxy will be
voted FOR the election as directors of the nominees listed; and FOR the
ratification of the independent auditors of the Company for 1999.
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
<PAGE> 18
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT YES
<S> <C> <C> <C> <C>
1. Election of Directors [ ] [ ] [ ] CONFIDENTIAL VOTE REQUESTED [ ]
Director Nominees:
------------------
Frank P. Doyle, John F. Fiedler, Dale F. Frey,
Phillip J. Meek, Carl W. Schafer, Sarah Roush Werner
and Michael W. Wickham
Nominee Exception
-----------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Ernst & Young LLP as independent [ ] [ ] [ ]
auditors. DIRECTORS RECOMMEND
A VOTE FOR PROPOSAL 2.
Date: , 1999
---------------------
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.
</TABLE>
................................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 19
PROXY PROXY
ROADWAY EXPRESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MARCH 24, 1999.
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
