<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> <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-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]
1077 GORGE BOULEVARD
P.O. BOX 471
AKRON, OHIO 44309-0471
February 18, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Roadway Express, Inc., which will be held on Wednesday, March 22, 2000, at
9:00 a.m. at the Sheraton Four Points Hotel, located at 3150 West Market Street,
Fairlawn, 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 1999 Annual Report for the year
ended December 31, 1999 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 22, 2000
------------------------------------------------------------------
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 22, 2000, at 9:00 a.m. at the Sheraton Four Points Hotel, located at 3150
West Market Street, Fairlawn, 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, 2000; 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 8, 2000.
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 18, 2000
<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 22, 2000
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 22, 2000 (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 18, 2000.
Shareholders of record of the Company at the close of business on February
8, 2000 will be entitled to vote at the Annual Meeting (the "Record Date"). On
that date, the Company had outstanding and entitled to vote 19,374,160 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 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. 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>
- ---------------------------------------------------------------------------------------------
<S> <C>
PRESENT POSITIONS, RECENT
NAME BUSINESS EXPERIENCE AND AGE
<CAPTION>
- ---------------------------------------------------------------------------------------------
<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 68.
John F. Fiedler Director of the Company since March 1999. 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 61.
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., Praxair, Inc., and Community Health Systems, Inc. Age
67.
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: Guideposts, a church organization. Age 62.
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., Labor Ready, Inc., and The PaineWebber and Guardian
Groups of Mutual Funds. Age 64.
Sarah Roush Werner Director of the Company since January 1996. Director of
Roadway Services, Inc. from 1970 through 1995. Private
investor, Bellevue, Washington. Age 69.
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 53.
- ---------------------------------------------------------------------------------------------
</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), John F.
Fiedler, and Phillip. J. Meek. During 1999, 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. 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 2001
annual meeting of shareholders (the "2001 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 2001 Annual Meeting or, if the Company does not
make a public announcement of the date of the 2001 Annual Meeting at least 80
days prior to such meeting, not later than ten days after the actual public
announcement of the 2001 Annual Meeting.
The Board of Directors held 6 meetings in 1999. The Compensation Committee
met 5 times and the Audit Committee met 2 times. All of the Directors attended
one-hundred percent of the total meetings held by the Board of Directors and by
the committees on which they served in 1999.
DIRECTOR COMPENSATION
Except as set forth below, during 1999 each nonemployee Director of the
Company received an annual retainer of $18,000 plus (a) $4,000 for each
committee membership, (b) $2,000 for each committee chairmanship and (c) 100
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 1999,
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 31, 2000 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; the beneficial ownership of Common Stock by
each Director nominee and executive officer named in the Summary Compensation
Table; and all 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 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>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE OF SHARES OF COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP STOCK BENEFICIALLY OWNED
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sarah Roush Werner
P. O. Box 503
Bellevue, Washington 98009-0503 1,695,901(a) 8.8%
Private Capital Management, Inc.
3003 Tamiami Trail North
Naples, Florida 34103 1,595,543(b) 8.2%
Roadway Express, Inc.
401(k) Stock Savings Plan
Key Trust Company of Ohio, National
Association, Trustee 4,917,322(c) 25.4%
Frank P. Doyle 7,843(d) *
John F. Fiedler 1,100 *
Dale F. Frey 5,205(d) *
Phillip J. Meek 12,280(d) *
Carl W. Schafer 900(e) *
Michael W. Wickham 90,415(e)(f)(g)(h) *
James D. Staley 58,745(f)(g) *
J. Dawson Cunningham 57,670(e)(f)(g)(h) *
John D. Bronneck 43,272(f)(g) *
Louis J. Esposito 34,718(f)(g) *
All Directors and executive officers as a 2,023,061(a)(d)(e)(f)(g)(h) 10.4%
group (12 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 information provided by Private Capital Management, Inc.
("PCM"), an investment advisor registered under the Investment Advisers Act
of 1940, and Bruce S. Sherman, Chairman of PCM, PCM is deemed to be the
beneficial owner of 1,560,943 shares of Common Stock because of its shared
power to dispose or to direct the disposition of these securities. Bruce S.
Sherman, as Chairman of PCM, is deemed to be the beneficial owner of
1,595,543 shares of Common Stock, including the shares beneficially owned by
PCM as well as 34,600 shares of Common Stock, which Mr. Sherman has sole
power.
(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.
4
<PAGE> 10
(d) Includes shares subject to stock options, which are currently exercisable,
granted pursuant to the Roadway Express Nonemployee Directors' Stock Option
Plan, as follows: Mr. Doyle, 5,643 shares; Mr. Frey, 5,205 shares; and Mr.
Meek, 6,080 shares.
(e) Includes shares held in an individual retirement account, as follows: Mr.
Schafer, 500 shares; Mr. Wickham, 2,344 shares; and Mr. Cunningham, 735
shares.
(f) Includes shares held pursuant to the Roadway Express, Inc. 401(k) Stock
Savings Plan, as of December 31, 1999, as follows: Mr. Wickham, 11,659
shares; Mr. Staley, 8,440 shares; Mr. Cunningham, 5,640 shares; Mr. Bronneck
8,857 shares; Mr. Esposito, 9,359 shares; and all executive officers as a
group, 47,967 shares.
(g) Includes shares of restricted incentive stock granted under the Roadway
Express, Inc. Management Incentive Stock Plan, as follows: Mr. Wickham,
65,862 shares; Mr. Staley, 47,538 shares; Mr. Cunningham, 45,323 shares; Mr.
Bronneck 34,415 shares; Mr. Esposito, 6,000 shares; and all executive
officers as a group, 203,738 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; and all executive officers as a group, 11,975 shares.
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, 1999 were timely filed, except for a statement of
changes in beneficial ownership on Form 4 by John F. Fiedler. A Form 4,
reflecting the purchase of 1,000 shares of Common Stock by Mr. Fiedler on April
5, 1999, was inadvertently filed late in June 1999 due to an administrative
oversight by the Company.
5
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning annual compensation
for services rendered to the Company for 1997, 1998, and 1999 by those persons
who were the chief executive officer and the other four most highly compensated
executive officers of the Company during 1999 (collectively, the "Named
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- -----------------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND COMPENSATION AWARDS OPTIONS(#) PAYMENTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY Bonus (a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael W. Wickham 1999 $450,000 $330,000 $10,317 $206,146 150,000 $ -- $103,600
Director, Chairman and 1998 383,845 124,939 7,366 307,145 -- -- 14,830
Chief Executive Officer 1997 300,000 179,000 4,720 -- -- -- 16,054
James D. Staley 1999 $264,000 $206,000 $ 7,428 $150,155 60,000 $ -- $ 59,477
President and Chief 1998 234,234 71,954 5,271 223,243 -- -- 9,980
Operating Officer 1997 200,000 103,000 3,360 -- -- -- 9,064
J. Dawson Cunningham 1999 $236,900 $183,750 $ 7,145 $138,605 55,500 $ -- $ 61,911
Executive Vice 1998 226,537 67,338 5,178 208,290 -- -- 11,535
President,
Chief Financial 1997 200,000 103,000 3,360 -- -- -- 12,105
Officer,
and Treasurer
John D. Bronneck 1999 $195,700 $153,450 $ 5,203 $121,279 26,000 $ -- $ 50,380
Vice 1998 183,546 59,031 3,392 174,202 -- -- 44,146
President-Operations
1997 155,200 83,000 2,000 -- -- -- 7,570
Louis J. Esposito 1999 $188,000 $134,000 $ 1,200 $ 86,628 18,000 $ -- $ 49,240
Vice President-Sales 1998 183,000 54,600 1,200 132,750 -- -- 8,870
1997 173,000 91,000 2,400 -- -- 265,500 8,255
- -------------------------------------------------------------------------------------------------------------------------
</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, 1999, valued on the dates of grant, for
which certain management objectives were reached on December 31, 1999.
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 grants of stock options awarded under the Roadway Express, Inc.
Equity Ownership Plan (the "Equity Ownership Plan").
(d) 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.
(e) Reflects for 1999 (i) dividend equivalents earned on stock credits held
under the Roadway Express, Inc. Long-Term Stock Award Incentive Plan (Mr.
Wickham, $9,095; Mr. Staley, $2,954; Mr. Cunningham, $4,587; Mr. Bronneck,
$910; and Mr. Esposito, $1,690); (ii) Company matching contributions under
the Roadway Express, Inc. 401(k) Stock Savings Plan, a voluntary
contributory defined contribution employee benefit plan (Mr. Wickham,
$4,855; Mr. Staley, $7,200; Mr. Cunningham, $7,195; Mr. Bronneck, $7,200;
and Mr. Esposito, $7,094); and (iii) the value of premiums paid by the
Company for split-dollar life insurance coverage under the Roadway Express,
Inc. Split Dollar Life Insurance Plan (Mr. Wickham, $89,650; Mr. Staley,
$49,323; Mr. Cunningham, $50,129; Mr. Bronneck, $42,270; and Mr. Esposito,
$40,456). Compensation attributable to split-dollar insurance represents the
present value of the interest projected to accrue on the portion of the
current year's insurance premium paid by the Company. The portion of the
premium payments paid by the Company are recovered by the Company from the
cash value of the policy upon the later of the fifteenth anniversary of the
employee's participation in the insurance plan or age 65. In the event that
the employee's employment is terminated prior to early or normal retirement
or disability, or the occurrence of certain other events enumerated in the
split-dollar agreement between the Company and the employee, the Company
would recover its portion of the premium payments at that time.
6
<PAGE> 12
ROADWAY EXPRESS, INC. EQUITY OWNERSHIP PLAN
The following table sets forth information with respect to the Named
Officers concerning grants of stock options made during its last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(a)
------------------------------------------------------------------------------
NUMBER PERCENT OF
OF TOTAL
SHARES OPTIONS GRANT
UNDERLYING GRANTED TO DATE
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE VALUE(b)($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Michael W. Wickham 150,000 21.3% $20.50 11/10/09 $1,332,000
James D. Staley 60,000 8.5 20.50 11/10/09 532,800
J. Dawson Cunningham 55,500 7.9 20.50 11/10/09 492,840
John D. Bronneck 26,000 3.7 20.50 11/10/09 230,880
Louis J. Esposito 18,000 2.6 20.50 11/10/09 159,840
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Options become exercisable to the extent of one-fourth of the grant each
year beginning November 10, 2000, one year following the grant date. Vested
options may be exercised for up to three years following death or disability
and up to five years following retirement.
(b) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was used to estimate the grant date
present value of the options set forth in this table. The Company's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option valuation models, including the
Black-Scholes model, require a prediction about the future movement of the
stock price. The real value of the options in this table depends upon the
actual changes in the market price of the Common Stock during the applicable
period. The following assumptions were made when calculating the grant date
present value: the option will be exercised after 5 years, volatility of
44.6%, annual dividend yield of 1% and an interest rate of 5.9%.
The following table sets forth information with respect to the Named
Officers concerning unexercised stock options held as of the end of 1999. No
outstanding options held by the Named Officers were exercised or exercisable
during the last fiscal year.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR END(#) YEAR END ($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michael W. Wickham 0 / 150,000 $0 / 168,750
James D. Staley 0 / 60,000 0 / 67,500
J. Dawson Cunningham 0 / 55,500 0 / 62,438
John D. Bronneck 0 / 26,000 0 / 29,250
Louis J. Esposito 0 / 18,000 0 / 20,250
- ----------------------------------------------------------------------------------------------------------
</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 1999 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,
31 1/2 years and $564,544; Mr. Staley, 28 1/2 years and $345,417; Mr.
Cunningham, 14 1/2 years and $313,571; Mr. Bronneck, 30 1/2 years and $255,991;
and Mr. Esposito, 28 1/2 years and $226,456.
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.
1999 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 1999, the Compensation Committee retained the strategic objectives for
executive compensation that it had established for previous years. The
Compensation Committee's objectives were to assure that compensation for
executive officers would support the Company's mission and vision statement and
attract and retain experienced professionals in their respective fields.
Comparisons were made for both the executive officer group as a whole and
individual positions.
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
8
<PAGE> 14
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 rewarding superior performance through annual cash
incentives, and long-term incentives. Salary levels, annual cash incentives, and
long-term incentives were adjusted in 1999 as part of this philosophy.
Cash Incentive Compensation. As in 1997 and 1998, 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. Bonuses were scaled proportionately to match
increased attainment beyond the originally projected profit target.
Management Incentive Stock Plan. Pursuant to the Management Incentive Stock
Plan, grants of an aggregate of 653,786 shares of restricted incentive stock
were made to 69 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.
Split Dollar Life Insurance Plan. After careful consideration, the
Compensation Committee proposed, and the Board approved, the creation of a Split
Dollar Life Insurance Plan for key and certain other employees. Compensation
attributable to split-dollar insurance represents the present value of the
interest projected to accrue on the portion of the current year's insurance
premium paid by the Company. The portion of the premium payments paid by the
Company are recovered by the Company from the cash value of the policy upon the
later of the fifteenth anniversary of the employee's participation in the
insurance plan or age 65. In the event that the employee's employment is
terminated prior to early or normal retirement or disability, or the occurrence
of certain other events enumerated in the split-dollar agreement between the
Company and the employee, the Company would recover its portion of the premium
payments at that time.
This report on 1999 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
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 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, 1999.
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.
COMPARISON OF SHAREHOLDER RETURN
[GRAPH]
<TABLE>
<CAPTION>
S&P
TRUCKING
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
December 31, 1999 133 237 134
</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 2000. Ernst &
Young LLP has been the independent auditors of the Company since 1951.
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.
10
<PAGE> 16
SHAREHOLDER PROPOSALS
The Company must receive by October 19, 2000 any proposal of a shareholder
intended to be presented at the 2001 Annual Meeting and to be included in the
Company's proxy materials related to the 2001 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 2001
Annual Meeting ("Non-Rule 14a-8 Proposals") must be received by the Company by
January 19, 2001 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 2001 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 19, 2001. Notices of shareholder proposals should be delivered
personally or mailed, and any request for a copy of the Company's By-Laws (which
will be provided at no charge to any holder of 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 18, 2000
11
<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 22, 2000.
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 8, 2000, at the Annual
Meeting of Shareholders to be held at the Sheraton Four Points Hotel, located at
3150 West Market Street, Fairlawn, Ohio, on Wednesday, March 22, 2000, 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 2000.
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 DIRECTORSO RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING
THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
4961 - Roadway Express, Inc.
<PAGE> 18
<TABLE>
<CAPTION>
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<S> <C> <C> <C>
[ ]
1. Election of Directors For Withhold For All
Director Nominees: All All Except 2. Ratification of Ernst & Young LLP as For Against Abstain
01-Frank P. Doyle, 02-John F. Fiedler, [ ] [ ] [ ] Independent auditors. Directors
03-Dale F. Frey, 04-Phillip J. Meek, recommend a vote FOR proposal 2. [ ] [ ] [ ]
05-Carl W. Schafer, 06-Sarah Roush Werner,
07-Michael W. Wickham.
Nominee Exception Yes
[ ]
- ---------------------------------------------
CONFIDENTIAL VOTE REQUESTED
Date:_____________________, 2000
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.
- -----------------------------------------------------------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
4961 - Roadway Express, Inc.
<PAGE> 19
ROADWAY EXPRESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MARCH 22, 2000.
To Key Trust Company of Ohio, N.A., Trustee of the Roadway Express, Inc.
401(k) Stock Savings Plan (the OPlanO): 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 undersignedOs account under the
Plan on the record date (Oallocated sharesO); 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 (Onon-directed sharesO) 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 DIRECTORSO RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM
PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
4962 - Roadway Express, Inc. 401K (Blue)
<PAGE> 20
<TABLE>
<CAPTION>
ROADWAY EXPRESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<S> <C> <C> <C>
[ ]
1. Election of Directors For Withhold For All
Director Nominees: All All Except 2. Ratification of Ernst & Young LLP as For Against Abstain
01-Frank P. Doyle, 02-John F. Fiedler, [ ] [ ] [ ] Independent auditors. Directors
03-Dale F. Frey, 04-Phillip J. Meek, recommend a vote FOR proposal 2. [ ] [ ] [ ]
05-Carl W. Schafer, 06-Sarah Roush Werner,
07-Michael W. Wickham.
Nominee Exception Yes
[ ]
- ---------------------------------------------
CONFIDENTIAL VOTE REQUESTED
Date:_____________________________ , 2000
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.
- -----------------------------------------------------------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
4962 - Roadway Express, Inc. 401K (Blue)
