SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
(Name of Registrant as Specified In Its Charter)
Old Dominion Freight Line, Inc.
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) 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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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>
OLD DOMINION FREIGHT LINE, INC.
EXECUTIVE OFFICES: 1730 WESTCHESTER DRIVE
HIGH POINT, NORTH CAROLINA 27262
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1996
The Annual Meeting of Stockholders of Old Dominion Freight Line, Inc.,
will be held Monday, May 6, 1996, at 10:00 A.M., in the Fourth Floor Conference
Room of the Company's Executive Offices, 1730 Westchester Drive, High Point,
North Carolina, for the following purposes:
1. To elect a board of five Directors of the Company.
2. To transact such other business as may be brought before the
meeting.
Stockholders of record at the close of business on March 11, 1996, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Joel B. McCarty, Jr.
SECRETARY
High Point, North Carolina
April 9, 1996
IF YOU DO NOT INTEND TO BE PRESENT AT THE MEETING, PLEASE
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY, SO
THAT YOUR SHARES OF COMMON STOCK MAY BE REPRESENTED AND
VOTED AT THE MEETING. A RETURN ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE.
<PAGE>
OLD DOMINION FREIGHT LINE, INC.
EXECUTIVE OFFICES: 1730 WESTCHESTER DRIVE
HIGH POINT, NORTH CAROLINA 27262
---------------
PROXY STATEMENT
---------------
This Proxy Statement is first being sent to stockholders on April 9,
1996, in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders of Old Dominion Freight Line, Inc. (the "Company"), to
be held on Monday, May 6, 1996, and at any adjournment thereof.
ELECTION OF DIRECTORS
The Bylaws provide that the number of Directors shall be not less than
five nor more than nine. The Board of Directors has determined that the Board
should be comprised of five members and has nominated the following five
individuals to serve as Directors until the next Annual Meeting and until their
successors shall have been elected and shall qualify. Unless authority is
withheld, it is intended that Proxies received in response to this solicitation
will be voted in favor of the following five nominees, all of whom are currently
Directors:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF THE COMPANY'S COMMON
STOCK AS OF MARCH 11, 1996
VOTING AND
INVESTMENT
POWER (1) IN ALL CAPACITIES
PERCENT
NAME, AGE, PRINCIPAL OCCUPATION AND OF
OTHER POSITIONS AND OFFICES WITH THE DIRECTOR TOTAL COMMON
COMPANY SINCE SOLE SHARED SHARES STOCK
<S> <C> <C> <C> <C> <C>
Earl E. Congdon, 65 (2)(3)(4) 1952 See "Principal Stockholders".
Chairman of the Board and
Chief Executive Officer of
the Company
High Point, North Carolina
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF THE COMPANY'S COMMON
STOCK AS OF MARCH 11, 1996
VOTING AND
INVESTMENT
POWER (1) IN ALL CAPACITIES
PERCENT
NAME, AGE, PRINCIPAL OCCUPATION AND OF
OTHER POSITIONS AND OFFICES WITH THE DIRECTOR TOTAL COMMON
COMPANY SINCE SOLE SHARED SHARES STOCK
<S> <C> <C> <C> <C> <C>
John R. Congdon, 63 (2)(3)(4) 1955 See "Principal Stockholders".
Vice Chairman of the Board
of Directors of the Company;
President of Old Dominion
Truck Leasing, Inc.
Richmond, Virginia
John A. Ebeling, 58 (2) 1985 128,280 (5) -- 128,280 (5) 1.5 %
President and Chief Operating
Officer of the Company
High Point, North Carolina
Harold G. Hoak, 66 (4)(6) 1991 1,000 -- 1,000 Less than 1%
Retired (former Regional
Vice President of Wachovia
Bank of North Carolina,
N.A.)
Charlotte, North Carolina
Franz F. Holscher, 74 (3)(4)(6) 1991 1,000 -- 1,000 Less than 1%
Retired [former Chairman of
Thurston Motor Lines
(acquired by Brown Transport
Co. in 1988)]
Gastonia, North Carolina
- ---------------
</TABLE>
(1) Except as otherwise indicated, each Director has sole voting and sole
investment power with respect to the shares beneficially owned by such
Director.
(2) Member of Executive Committee.
(3) Member of Compensation Committee.
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<PAGE>
(4) Member of Stock Option Plan Committee.
(5) Includes 76,668 shares awarded, but not released, under a restricted
stock agreement. See "Executive Compensation".
(6) Member of Audit Committee.
Earl E. Congdon has been with the Company since 1950 and has served as
Chairman of the Board and Chief Executive Officer since 1985 and as a Director
since 1952. He is a son of E. E. Congdon, one of the founders of Old Dominion.
John R. Congdon has been with the Company since 1953 and has served as
Vice Chairman of the Board since 1985 and as a Director since 1955. He is also
the President of Old Dominion Truck Leasing, Inc., a North Carolina corporation
that is engaged in full service leasing of tractors, to which company he devotes
more than half of his time. It is anticipated that Mr. Congdon devotes
significantly less than half of his time to the Company. He is a son of E. E.
Congdon, one of the founders of Old Dominion, and the brother of Earl E.
Congdon.
John A. Ebeling has been President and Chief Operating Officer since
joining the Company in August of 1985 and was first elected a Director in August
of 1985. Mr. Ebeling was previously employed by ANR Freight Systems from 1978 to
1985, holding the positions of Chairman and Chief Executive Officer.
Harold G. Hoak was elected a Director in August of 1991. Now retired,
he serves on the Board of Directors of the Charlotte Merchants Foundation, Inc.
He was President and General Manager of the Charlotte Merchants Association,
Inc., from 1989 to 1994. Mr. Hoak was formerly employed by Wachovia Bank of
North Carolina, N.A., from 1956 to 1989 and served as Regional Vice President
for the Southern Region from 1976 to 1989.
Franz F. Holscher was elected a Director in August of 1991. He served
in a number of executive positions from 1970 to 1987 with Thurston Motor Lines
(acquired by Brown Transport Co., Inc., in 1988) and was the Chairman from July
of 1984 through December 31, 1987, when he retired. Mr. Holscher has been active
in a number of organizations and associations in the trucking industry.
-3-
<PAGE>
PRINCIPAL STOCKHOLDERS
As of March 11, 1996, or such other date as indicated in the footnotes
to the table, to the knowledge of management, the only persons owning
beneficially more than five percent (5%) of the Company's Common Stock, its only
class of voting security, are as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER NUMBER OF SHARES (1) PERCENT
<S> <C> <C>
Earl E. Congdon 1,029,913 (2)(3) 12.1%
1730 Westchester Drive
High Point, NC 27262
John R. Congdon 1,013,630 (3)(4) 12.0%
1730 Westchester Drive
High Point, NC 27262
Old Dominion Truck Leasing, Inc. 1,095,876 (5) 13.0%
7511 Whitepine Road
Richmond, VA 23237
David S. Congdon 440,334 (6) 5.2%
1730 Westchester Drive
High Point, NC 27262
Karen C. Vanstory 433,084 (7) 5.1%
3007 Pleasant Ridge Road
Summerfield, NC 27358
Susan C. Terry 435,076 (8) 5.2%
10801 North Bank Road
Richmond, VA 23233
John R. Congdon, Jr. 435,076 (9) 5.2%
9800 Drouin Drive
Richmond, VA 23233
Dimensional Fund Advisors Inc. 427,400 (10) 5.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
All Executive Officers and 4,174,930 (11) 49.4%
Directors of the Company as
a Group (19 persons)
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<PAGE>
(1) Except as described below, each person or group identified possesses
sole voting and investment power with respect to the shares shown
opposite the name of such person or group.
(2) Includes 968,913 shares held as trustee of a revocable trust, 15,000
shares owned by Mr. Congdon's wife and 40,000 shares owned by Mr.
Congdon's wife as trustee of a revocable trust.
(3) Does not include any of the shares owned by Old Dominion Truck Leasing,
Inc.
(4) Includes 1,011,898 shares held as trustee of a revocable trust and
1,732 shares owned by Mr. Congdon's wife as trustee of a revocable
trust.
(5) The voting stock of Old Dominion Truck Leasing, Inc. ("Leasing") is
owned by Earl Congdon as trustee of a revocable trust (38.2%), John R.
Congdon Revocable Trust (38.2%) and members of Earl Congdon's and John
Congdon's respective families (23.6%). Earl Congdon is Chairman of the
Board of Leasing, and John Congdon is President and Chief Executive
Officer. The Company's Common Stock owned by Leasing will be voted as
directed by Earl Congdon and John Congdon or, in the event of
disagreement, one-half of the shares will be voted as directed by Earl
Congdon or his personal representative, attorney-in-fact or executor
and one-half will be voted as directed by John Congdon or his personal
representative, attorney-in-fact or executor. Any future sales or other
disposition of such shares and the disposition of the proceeds of any
sales will be determined by the Board of Directors of Leasing.
(6) Includes 1,764 shares owned of record by the named stockholder, 8,000
shares obtainable upon exercise of stock options, 290,081 shares held
as trustee of a revocable trust, 29,372 shares held as trustee of an
irrevocable trust and 108,117 shares held as custodian for minor
children of the stockholder and 3,000 shares owned by his wife.
(7) Includes 2,714 shares owned of record by the named stockholder, 305,726
shares held as trustee of a revocable trust, 16,527 shares held as
trustee of an irrevocable trust and 108,117 shares held as custodian
for minor children of the stockholder.
(8) Includes 309,730 shares held as trustee of a revocable trust, 15,596
shares held as custodian for minor children and 109,750 shares held as
trustee for the benefit of minor children of the stockholder.
(9) Includes 309,730 shares held as trustee of a revocable trust, 11,004
shares held as custodian for minor children and 114,342 shares held as
trustee for the benefit of minor children of the stockholder.
(10) Based on information provided by Dimensional Fund Advisors Inc.
("Dimensional") and as reflected in a Schedule 13G dated February 7,
1996, filed with the Securities and Exchange Commission, Dimensional, a
registered investment advisor, is deemed to have beneficial ownership
of 427,400 shares of Old Dominion Freight Line, Inc. stock as of
December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a
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<PAGE>
registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(11) Includes shares owned by Old Dominion Truck Leasing, Inc.
COMPLIANCE WITH BENEFICIAL OWNERSHIP REPORTING RULES
Section 16(a) of the Securities Exchange Act of 1934 requires certain
of the Company's officers and its directors and persons who own more than 10% of
a registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Such officers, directors and stockholders are required by the SEC
regulations to furnish the Company with copies of all such reports that they
file.
Based solely on a review of copies of reports filed with the SEC since
January 1, 1995, and of written representations by certain officers and
directors, all persons subject to the reporting requirements of Section 16(a)
filed the required reports on a timely basis except as follows: Earl Congdon
(one filing - one gift to family members), Earl E. Congdon Trust (one filing -
one gift to family members), John A. Ebeling (four filings two grants of stock
options, one release of 19,628 shares under a restricted stock agreement with a
related transfer of 18,706 shares to the Company for payment of witholding
obligations and the purchase of 800 shares in the open market), J. Wes Frye
(four filings - two grants of stock options, acquisitions of shares in a 401(k)
plan and the purchase of 500 shares in the open market), Joel B. McCarty, Jr.
(three filings - two grants of stock options and the purchase of 500 shares on
the open market) and John P. Booker, III (two filings - two grants of stock
options). All reports known to the Company required to be filed as of the date
of this Proxy Statement have been filed.
-6-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides a three-year overview of the
cash compensation paid to the named officers of the Company:
</TABLE>
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
(a) (b) (c) (d) (f) (g) (i)
Restricted
Salary Bonus(1) Stock Options/SARs All Other Compensation
Name and Principal Position Year ($) ($) Award(s) (#) ($)(2)
($)
<S> <C> <C> <C> <C> <C> <C>
Earl E. Congdon 1995 $ 270,400 $ 191,443 0 0 $ 12,260 (3)
Chairman of the Board and Chief Executive
Officer
1994 $ 268,000 $ 305,041 0 0 $ 12,211
1993 $ 265,200 $ 265,221 0 0 $ 13,379
John R. Congdon 1995 $ 140,400 0 0 0 $ 16,091 (3)
Vice Chairman of the Board
1994 $ 138,000 0 0 0 $ 18,592
1993 $ 135,200 0 0 0 $ 16,276
John A. Ebeling(4) 1995 $ 185,380 $ 111,789 $ 421,674(5) 2,000 $ 7,875(3)
President and Chief Operating Officer
1994 $ 182,989 $ 192,907 0 3,000 $ 3,174
1993 $ 180,200 $ 163,207 $ 728,346(5) 4,000 $ 4,972
J. Wes Frye 1995 $ 108,620 $ 35,772 0 1,500 $ 4,008 (3)
Treasurer, Chief Financial Officer and
Assistant Secretary
1994 $ 104,148 $ 61,730 0 2,500 $ 2,898
1993 $ 100,278 $ 52,322 0 3,500 $ 3,095
Joel B. McCarty, Jr. 1995 $ 98,400 $ 29,893 0 1,500 $ 3,614 (3)
General Counsel and Secretary
1994 $ 98,280 $ 61,730 0 2,500 $ 3,174
1993 $ 91,920 $ 52,322 0 3,500 $ 3,209
</TABLE>
-7-
<PAGE>
(1) Pursuant to an executive profit-sharing bonus program, the Company pays
incentive cash bonuses to certain executive officers based upon the
Company's income before taxes during the preceding fiscal year. Under
the terms of his employment agreement, John Ebeling was paid a cash
bonus of $111,789 for services rendered during 1995, which is included
in the bonuses paid under the executive bonus program.
(2) Includes pretax contributions to the Company's 401(k) plan, excess
premiums paid on group life insurance and the compensation element of
premiums paid on split-dollar life insurance policies. The Company is a
party to certain split-dollar life insurance agreements with certain
members of the families of Earl Congdon and John Congdon pursuant to
which the Company pays a portion of the premiums on life insurance
policies insuring their lives in the aggregate face amounts of
$16,068,600 and $17,126,782, respectively. The total benefits currently
payable to the Company under the policies upon the death of Earl
Congdon and John Congdon are $896,841 and $2,094,140, respectively. The
Company's interest in the death benefit and cash surrender value of
each policy is determined by reference to the amount of gross premiums
paid by the Company, which in 1995, 1994 and 1993 were $495,791,
$208,598 and $202,955, respectively.
(3) Allocation of 1995 All Other Compensation:
<TABLE>
<CAPTION>
401(k) Split-Dollar Personal Use of Excess Life
Name Contribution Life Insurance Company Car Insurance Premiums
<S> <C> <C> <C> <C>
Earl E. Congdon $ 1,997 $ 9,003 -- $ 1,260
John R. Congdon 1,200 14,189 -- 702
John A. Ebeling 1,042 -- $ 6,383 450
J. Wes Frye 1,551 -- 2,283 174
Joel B. McCarty, Jr. 1,289 -- 1,875 450
</TABLE>
(4) Pursuant to an Employment Agreement between the Company and John
Ebeling, dated August 27, 1985, as last amended on April 7, 1988, Mr.
Ebeling, as President and Chief Operating Officer of the Company, is
entitled to a yearly salary of $150,000, which may be adjusted upward
by the Board of Directors, plus a performance bonus equal to 1.25% of
the Company's pretax profits. The agreement provides that, upon the
termination of Mr. Ebeling's employment without cause or upon a sale of
substantially all the business operations of the Company, Mr. Ebeling
would receive his salary for a period of 18 months thereafter. The
agreement prohibits Mr. Ebeling from acquiring, holding an interest in,
or associating with any other entity engaged in business as a motor
carrier in any state in which the Company operates. Amounts paid to Mr.
Ebeling for 1994 are included in the table above.
(5) Pursuant to a Restricted Stock Agreement, dated August 19, 1991, the
Board of Directors awarded John Ebeling 153,336 shares of the Company's
Common Stock. Under the Restricted Stock Agreement, 153,336 shares of
the Company's Common Stock have been issued in Mr. Ebeling's name. The
Company holds the certificates for the shares, which were originally
-8-
<PAGE>
scheduled to be released to Mr. Ebeling in four installments, each
consisting of 25% of the shares issued under the agreement, on January
1 of 1994, 1996, 1998 and 2000. The shares not released are subject to
forfeiture in the event Mr. Ebeling voluntarily ceases his continuous
employment with the Company or the Company terminates his employment
for cause. Should Mr. Ebeling retire at or after attaining age 60 in
1997, all shares not previously released will be released to him on
January 1, 2000. Involuntary termination of employment without cause,
termination due to disability or death will result in the prompt
release of all shares not previously released at the date of
termination. Notwithstanding the scheduled release of shares and the
forfeiture provisions, the Board of Directors may, in its discretion,
release any and all shares held by the Company at any time. Pending
release or forfeiture of the restricted shares, Mr. Ebeling may
exercise all rights of a stockholder with respect to the restricted
shares, except the right to pledge or convey ownership, and he would
receive any dividends that may be paid to holders of the Company's
Common Stock. In December of 1993, the Board of Directors authorized
the release of 38,334 shares, which had originally been scheduled for
release on January 1, 1994, and in June of 1995, the Board of Directors
authorized the release of 38,334 shares, which had originally been
scheduled for release on January 1, 1996. Mr. Ebeling turned over
18,150 shares and 18,706 shares, respectively, to the Company for tax
witholding purposes and received certificates for the balance of the
shares. At December 31, 1995, the dollar value of the unreleased shares
was $613,344.
STOCK OPTIONS
The Company's Board of Directors and stockholders have approved and
adopted the 1991 Employee Stock Option Plan of Old Dominion Freight Line, Inc.
(the "Option Plan"), for the benefit of key employees. The Option Plan covers
250,000 shares of the Company's Common Stock. The Option Plan provides for the
granting of stock options that qualify as incentive stock options pursuant to
Section 422 of the Internal Revenue Code as well as so-called nonqualified
options. The granting of an incentive stock option or, in general, its exercise,
will not result at the time of grant or exercise in taxable income to the
optionee, with certain exceptions. The grant of a nonqualified stock option will
not result in taxable income to the optionee. The exercise of a nonqualified
stock option will result in compensation income equal to the difference between
the option price and the fair market value of the stock acquired upon the
exercise. All officers except Earl Congdon and John Congdon are eligible to
participate in the Option Plan.
The following table reports stock options granted to the named officers
during 1995:
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<PAGE>
<TABLE>
<CAPTION>
Option/SAR Grants Table
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option
Term(1)
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/SARs Exercise or
Options/SARs Granted to Base Price Expiration 5% 10%
Name Granted (#) Employees in ($/Sh) Date ($) ($)
Fiscal Year
<S> <C> <C> <C> <C> <C> <C>
Earl E. Congdon * * * * * *
John R. Congdon * * * * * *
John A. Ebeling 2,000 7.3% $ 10.00 10/22/05 $ 12,580 $ 31,880
J. Wes Frye 1,500 5.5% $ 10.00 10/22/05 $ 9,435 $ 23,910
Joel B. McCarty, Jr. 1,500 5.5% $ 10.00 10/22/05 $ 9,435 $ 23,910
</TABLE>
- ----------------
* Not eligible to participate in the Option Plan.
(1) The assumed annual rates of appreciation of five and 10 percent would
result in the price of the Company's stock increasing to $16.29 and
$25.94, respectively. From October 24, 1991, the effective date of the
Company's public offering of its stock, to December 31, 1995, the
market price of the Company's stock decreased at an annual rate of
approximately 10.1%.
Options to purchase 224,000 shares under the Option Plan have been
granted. As of March 11, 1996, there are options outstanding covering 48,000
shares of Common Stock at the exercise price of $13.875 per share, 47,000 shares
at the exercise price of $17.87 per share, 42,500 shares at the exercise price
of $19.25 per share, 31,500 shares at the exercise price of $19.00 per share and
27,500 shares at the exercise price of $10.00 per share. All of the options have
been granted as incentive options. The Option Plan has been registered with the
Securities and Exchange Commission.
The following table reflects cumulative information regarding grants
under the Option Plan:
<TABLE>
<CAPTION>
Options/SARs Exercises and Year-End Value Table
Aggregate Option/SAR Exercises in Last Fiscal Year, and Fiscal Year-End Option/SAR Value
(a) (b) (c) (d) (e)
Number of Unexercised Value of Unexercised
Shares Value Options/SARs at FY-End In-The-Money Options/SARs
Name Acquired on Realized Exercisable/Unexercisable at FY-End
Exercise (#) ($) (#) Exercisable/Unexercisable
($)
<S> <C> <C> <C> <C>
Earl E. Congdon * * * *
John R. Congdon * * * *
John A. Ebeling 0 0 10,000 Exercisable $ 0 Exercisable
10,000 Unexercisable $ 0 Unexercisable
J. Wes Frye 0 0 9,000 Exercisable $ 0 Exercisable
8,500 Unexercisable $ 0 Unexercisable
Joel B. McCarty, Jr. 0 0 9,000 Exercisable $ 0 Exercisable
8,500 Unexercisable $ 0 Unexercisable
</TABLE>
- --------------
* Not eligible to participate in the Option Plan.
-10-
<PAGE>
COMPENSATION OF DIRECTORS
Each of the Company's outside Directors receives an annual retainer of
$8,000, plus $500 for each meeting attended, including Board meetings and
meetings of committees of the Board of Directors not held in conjunction with a
meeting of the Board. Such directors also receive reimbursement of expenses
incurred as a Director.
Directors who are also officers of the Company receive no such fees.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is responsible for
conducting an annual review of the Company's compensation plan for its executive
officers including the evaluation of the components of the plan, the standards
of performance measurement and the relationship between performance and
compensation. The Committee reviews the compensation of each executive officer
and makes specific recommendations to the Board of Directors based on factors
that include the individual officer's performance, the ability of the Company to
attract and retain qualified, experienced personnel and whether the plan
provides appropriate motivation to achieve goals outlined by the Board of
Directors.
In determining the compensation of the Chief Executive Officer, the
Committee began its evaluation prior to the time of the public offering in
October, 1991. The base salary was determined, in part, by comparison with the
compensation of chief executive officers of other companies of comparable size
and levels of profitability. The Chief Executive Officer does not participate in
the deliberations of the Committee regarding his own compensation. Since that
time, increases of less than 4% per year have been based on increases in cost of
living. After receiving no increase in salary in 1993, the Chief Executive
Officer received a 2% increase in 1994 and did not receive an increase in 1995.
The incentive bonus for the Chief Executive Officer is based upon performance of
the Company's profits, a program that has been in place for many years. The
bonus amounts for 1995, 1994 and 1993 are reflected in the Summary Compensation
Table. The Compensation Committee believed that this was a fair measure of
executive bonus compensation. The base salary is reviewed each year and compared
to that of other chief executive officers as reported in various publications,
such as FORBES MAGAZINE. The Chief Executive Officer is not eligible to receive
options under the Company's stock option plan.
The base salary for all other officers is based upon the experience and
qualifications of each officer, while remaining competitive in the industry in
recruiting and retaining a well-qualified and effective management team. The
incentive bonus for the officers is based upon the same criteria as the Chief
Executive Officer, the performance of the Company as measured by profits.
During 1993, Section 162(m) was added to the Internal Revenue Code (the
"Code") that generally limits amounts that can be deducted for compensation paid
to executives to $1 million, unless certain requirements are met. No executive
receives compensation in excess of $1 million; and, therefore, there are no
compensation amounts that are nondeductible at present. The Committee will
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<PAGE>
monitor the applicability of this section of the Code to the Company's
compensation program.
The Compensation Committee
Franz Holscher, Chairman
Earl Congdon
John Congdon
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Earl Congdon, Chairman of the Board of the Company and its Chief
Executive Officer, and John Congdon, Vice Chairman of the Board, are members of
the Compensation Committee. Mr. Holscher is not an employee of the Company and
receives no compensation other than Director's fees from the Company.
Earl E. Congdon and John R. Congdon are each 50% owners of E & J
Enterprises, a Virginia general partnership ("E & J"), that leases trailers to
the Company. Pursuant to an agreement dated August 1, 1991, the Company leases
163 trailers from E & J at a monthly rental of $44,010. The lease term is five
years. Under the lease, the Company is responsible for insurance of, and
maintenance and repairs to, the trailers. The Company has no purchase rights at
the end of the lease term. Upon termination of the lease prior to August 1,
1996, for specified reasons, E & J may require the Company to purchase the
trailers for cash at their fair market value, and failure to purchase may result
in a liability to E & J for the difference between the fair market value and the
net amount realized by E & J upon a sale to third parties. The Company paid
$528,120 in 1995 for trailers leased from E&J under this lease.
In December of 1988, the Company sold to E & J certain tracts of
unimproved land and a vacant terminal facility in exchange for a
noninterest-bearing receivable in the amount of $579,798. E & J has repaid the
amount outstanding under the receivable as parcels of the property have been
sold. As of December 31, 1995, the amount outstanding on the receivable was
$198,578.
Old Dominion Truck Leasing, Inc. ("Leasing"), a North Carolina
corporation owned by Earl Congdon, John Congdon and members of the Congdon
family, is engaged in the business of purchasing and leasing tractors, trailers
and other vehicles. Since 1986, the Company and Leasing have combined their
requirements for the purchase of trucks, trailers, equipment, parts, tires and
fuels. In addition, the Company provides vehicle repair, maintenance and service
to Leasing at the Company's cost and has granted to Leasing a right of first
refusal for the Company's future truck and trailer leases, exercisable on the
same terms offered to the Company by third parties. In 1995, the Company
purchased seven used tractors for $231,500 and charged Leasing $835,346 for
vehicle repair, maintenance and fuel services. The Company intends to continue
to combine its purchases of trucks, trailers, equipment, parts, tires and fuel
with those of Leasing. The Company believes that, by so doing, it is often able
to obtain pricing discounts because of the increased level of purchasing. While
this is beneficial to the Company, management believes that the termination of
this relationship would not have a material adverse impact upon the Company's
results of operations.
-12-
<PAGE>
Leasing owns and operates a vehicle maintenance and service facility in
Richmond, Virginia, and operates similar facilities owned by the Company in
Chesapeake, Virginia, and Baltimore, Maryland. The Company purchases maintenance
from Leasing on an as needed basis. Amounts paid to Leasing for such services in
1995 were $333,387. Old Dominion believes that the prices it pays for such
services are lower than would be charged by unaffiliated third parties for the
same quality work and intends to continue to purchase maintenance and service
from Leasing, provided that its prices continue to be favorable to the Company.
Leasing paid the Company $30,000 in 1995 for use of the facilities in Chesapeake
and Baltimore.
On December 1, 1990, the Company entered into a five-year lease of a
1981 Beechcraft F90 King Air airplane from Kongaire, Inc. ("Kongaire"), a
corporation of which Earl Congdon is the sole stockholder. The lease was
terminated on June 9, 1995. The Company was obligated to pay monthly rental of
$12,000, adjustable annually in proportion to changes in Kongaire's costs of
owning and maintaining the airplane. In addition, the Company was required to
pay additional rental for engine overhauls and certain other maintenance. For
Company flights, the Company was required to pay $150 per hour plus the cost of
pilots and fuel. Payments by the Company under the lease were $92,946 for 1995.
The Company leases a terminal facility in Greensboro, North Carolina,
from an irrevocable trust created by Earl E. Congdon and John R. Congdon, for
the benefit of their families. The lease was treated as a capital lease until
its termination on July 14, 1995, and required monthly payments of $25,041. The
lease was subsequently renewed for five years, expiring on July 14, 2000, and
requires a monthly payment of $29,000 in addition to insurance, maintenance and
repairs to the facility. Lease payments under these two leases for 1995 were
$324,246. The Company accounts for the new lease as an operating lease.
The Company is a party to certain split dollar life insurance policies,
of which certain members of the families of Earl E. Congdon and John R. Congdon
are designated beneficiaries. See "Executive Compensation".
The E & J lease and the equipment purchasing and servicing arrangement
with Leasing permit the Company to obtain certain equipment and services at
prices comparable to, or more favorable than, prices charged by unaffiliated
third parties. The equipment purchase from Leasing was at, or more favorable
than, fair market value. The Kongaire lease provided the Company with access to
transportation to certain remote areas that it serves, to which commercial
airlines are not as readily available or as convenient. The Company believes
that the rent paid under the lease for the Greensboro terminal is comparable to,
or more favorable than, prices charged by unaffiliated third parties.
Each of the foregoing transactions has been reviewed by the Audit
Committee of the Company's Board of Directors, which consists of the two
nonemployee directors. The Audit Committee has approved the transactions that
continue to be in effect as being fair to the Company. The Audit Committee
believes that the terms and conditions of the foregoing transactions are
substantially the same as, or more favorable to the Company than, would be
available from
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<PAGE>
nonaffiliates. The Company does not intend to enter into any new
transactions with any officers, directors or their affiliates. Any extensions,
modifications or renewals of existing transactions with such persons must be
approved, in advance, by the Audit Committee as being on terms no less favorable
to the Company than the terms that could be obtained in a similar transaction
with an unaffiliated party.
PERFORMANCE GRAPH
The following graph compares the total stockholder cumulative returns,
assuming the reinvestment of all dividends, of $100 invested on October 24,
1991, in the Company's Common Stock, The Nasdaq Stock Market (US) and Nasdaq
Trucking & Transportation Stocks for 1992, 1993, 1994 and 1995. The Company was
privately held prior to October 24, 1991.
COMPARISON OF CUMULATIVE TOTAL RETURN
(Assumes $100 invested on October 24, 1991)
(Comparison chart appears here. Plot points are below.)
<TABLE>
<CAPTION>
Index
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C>
Old Dominion Freight Line, Inc. 12.500 21.750 19.625 16.25 8
Nasdaq Trucking & Transportation Stock 132.342 170.619 207.288 187.968 213.984
The Nasdaq Stock Market (US) 166.885 214.026 244.196 238.775 345.484
</TABLE>
<TABLE>
<CAPTION>
% Chg
10/24/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C>
Old Dominion Freight Line, Inc. 74% 57% 30% -36%
Nasdaq Trucking & Transportation Stock 29% 57% 42% 62%
The Nasdaq Stock Market (US) 28% 46% 43% 107%
</TABLE>
<TABLE>
<CAPTION>
$100 invested
10/24/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C>
Old Dominion Freight Line, Inc. $100 $174 $157 $130 $64
Nasdaq Trucking & Transportation Stock $100 $129 $157 $142 $162
The Nasdaq Stock Market (US) $100 $128 $146 $143 $207
</TABLE>
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<PAGE>
CORPORATE GOVERNANCE
The Company's Board of Directors held four meetings during 1995. All
Directors attended all the meetings of the Board of Directors and committees on
which they serve.
The Board of Directors has four standing committees: Executive
Committee, Audit Committee, Compensation Committee and Stock Option Plan
Committee.
The Executive Committee consists of Messrs. Earl Congdon (Chairman),
John Congdon and John Ebeling. The Executive Committee is empowered to act
between meetings of the Board of Directors with powers of the full Board, except
with respect to certain matters. This committee did not meet in 1995.
The Audit Committee consists of Franz Holscher and Harold Hoak, the
Company's nonemployee directors. The Audit Committee's responsibilities are to
recommend to the Board of Directors the firm to be engaged to audit the
Company's financial statements and to review with the independent auditors the
plan for, and results of, the auditing engagement and Old Dominion's internal
accounting controls. The Audit Committee reviews the activities and
recommendations of the internal audit function. The Audit Committee has reviewed
transactions between the Company and entities in which officers or directors of
the Company or their affiliates have material interests and has determined that
such existing transactions are fair to the Company. The Company does not intend
to enter into any new transactions with officers, directors or their affiliates,
and any extensions, modifications or renewals of existing transactions with such
persons must be approved in advance by the Audit Committee as being on terms no
less favorable to the Company than the terms that could be obtained in a similar
transaction with an unaffiliated party. The Audit Committee met three times in
1995.
The Compensation Committee consists of Franz Holscher (Chairman), Earl
Congdon and John Congdon. The Compensation Committee meets periodically to
review and approve the salaries and classifications of the Company's executive
officers and other significant employees and its personnel policies. The
Compensation Committee met once in 1995.
The Stock Option Plan Committee consists of Earl Congdon (Chairman),
John Congdon, Harold Hoak and Franz Holscher. The Committee has authority to
administer the Company's 1991 Employee Stock Option Plan, including authority to
determine persons eligible to receive options and the terms upon which options
are granted. The Stock Option Plan Committee met once in 1995.
INDEPENDENT AUDITORS
Ernst & Young LLP has served the Company as independent auditors since
1994. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting of Stockholders with the opportunity to make a statement if he
desires to do so and to answer any questions that concern that firm's work for
the Company.
-15-
<PAGE>
The Audit Committee and the Board of Directors have approved all of the
nonaudit services by Ernst & Young LLP and believe they have no effect on audit
independence. The Audit Committee has authorized management to engage the
Company's independent accountants in nonaudit services relating to preparation
of tax returns and working with state and federal agents on audits, but other
matters require prior approval from the Audit Committee.
GENERAL
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of the Company, and the entire cost of such solicitation will be borne
by the Company. In addition to solicitation by mail, arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to send
proxy material to their principals, and the Company will reimburse them for
their reasonable expenses in so doing.
The Board of Directors has fixed March 11, 1996, as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. On March 11, 1996, there were 8,345,608 outstanding shares of
Common Stock of the Company, each entitled to one vote.
Stockholders do not have cumulative voting rights in the election of
directors. Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present. With
regard to the election of directors, votes may be cast in favor or withheld.
Votes that are withheld will be excluded entirely from the vote and will have no
effect, although they will be counted for purposes of establishing the presence
of a quorum. Under the rules of the New York Stock Exchange, Inc., brokers who
hold shares in street name for customers have authority to vote on certain items
when they have not received instructions from beneficial owners. Brokers that do
not receive instructions are entitled to vote on the election of directors.
Where a choice is specified on any Proxy as to the vote on any matter
to come before the meeting, the Proxy will be voted in accordance with such
specification. If no specification is made but the Proxy is properly signed, the
shares represented thereby will be voted in favor of each proposal. Such
proxies, whether submitted by stockholders of record or by brokers holding
shares in street name for their customers ("broker non-votes"), will be voted in
favor of nominees for directors. Broker non-votes will not be counted either way
in voting on other matters (where direction of beneficial owners is required)
and, therefore, will have the effect of negative votes.
Any stockholder submitting the accompanying Proxy has the right to
revoke it by notifying the Secretary of the Company in writing at any time prior
to the voting of the Proxy. A Proxy is suspended if the person giving the Proxy
attends the meeting and elects to vote in person.
Management is not aware that any matters, other than those specified
above, will be presented for action at the meeting, but, if any other matters do
properly come before the meeting, the persons named as agents in the Proxy will
vote upon such matters in accordance with their best judgment.
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<PAGE>
ANNUAL REPORT ON FORM 10-K
Stockholders may obtain a copy of the Company's Annual Report on Form
10-K as filed with the Securities and Exchange Commission for the year ended
December 31, 1995, without charge by writing to J. Wes Frye, Treasurer, Chief
Financial Officer and Assistant Secretary, Old Dominion Freight Line, Inc., Post
Office Box 2006, High Point, North Carolina 27261. Exhibits are not included,
but copies of them may be obtained from the Company upon payment of copying
charges.
DEADLINE FOR STOCKHOLDERS' PROPOSALS
Any stockholder desiring to present a proposal for action at the
Company's 1997 Annual Meeting must deliver the proposal to the Company at its
executive offices no later than December 31, 1996.
By Order of the Board of Directors
Joel B. McCarty, Jr.
SECRETARY
High Point, North Carolina
April 9, 1996
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<PAGE>
*******************************************************************************
APPENDIX
PROXY
OLD DOMINION FREIGHT LINE, INC.
The undersigned stockholder of Old Dominion Freight Line, Inc.,
designates Earl E. Congdon, John R. Congdon, and Joel B. McCarty, Jr., and
either of them, agents to vote the shares of the undersigned at the Annual
Meeting of Stockholders, Monday, May 6, 1996, at 10:00 A.M., and at any
adjournment thereof, as follows:
(1) ELECTION OF DIRECTORS
[ ] VOTE FOR all nominees [ ] WITHHOLD AUTHORITY TO
(except as marked to vote for all nominees
the contrary) listed below
Nominees: Earl E. Congdon, John R. Congdon, John A. Ebeling,
Harold G. Hoak and Franz F. Holscher
(Instruction: To withhold authority to vote for
an individual nominee, strike a line through the
nominee's name.)
(2) To transact such other business as may be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED AS SPECIFIED BY THE STOCKHOLDER.
IF NO SPECIFICATION IS MADE WITH RESPECT TO A MATTER WHERE
A BALLOT IS PROVIDED, THIS PROXY WILL BE VOTED FOR SUCH
MATTER.
Dated: _________________, 1996 __________________________________
(When signing as attorney, __________________________________
executor, administrator,
trustee, guardian, et __________________________________
cetera, give title as such. Please sign above as name(s)
For joint accounts, each appear(s) on the other side.
joint owner should sign.)
<PAGE>
OLD DOMINION FREIGHT LINE, INC.
PLEASE SIGN AND SEND IN YOUR PROXY
Your shares should be represented at the meeting by
your proxy. The meeting will be held Monday, May 6,
1996, at 10:00 A.M. in the Fourth Floor Conference
Room of the Executive Offices of Old Dominion Freight
Line, Inc., 1730 Westchester Drive, High Point, North
Carolina.
Please sign the proxy printed on the other side and
return it at once unless you expect to attend the
meeting in person.
