<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 [ ]
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-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
USFREIGHTWAYS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
USFREIGHTWAYS CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] 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:
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<PAGE> 2
USFREIGHTWAYS CORPORATION LOGO
USFREIGHTWAYS CORPORATION
9700 HIGGINS ROAD, SUITE 570
ROSEMONT, ILLINOIS 60018
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 30, 1999
To the Stockholders of USFreightways Corporation:
The 1999 Annual Meeting of Stockholders of USFreightways Corporation, a
Delaware corporation (the "Company"), will be held in the Regency Ballroom at
The Rosewood Restaurant, 9421 W. Higgins Road, Rosemont, Illinois 60018, on
April 30, 1999 at 10:00 A.M. for the following purposes, as more fully described
in the accompanying Proxy Statement:
1. To elect three directors to serve a term of 3 years or until their
respective successors are elected and qualified;
2. To approve amendments to the USFreightways Corporation Long-Term
Incentive Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record of the Company's Common Stock, par value $0.01 per
share, at the close of business on March 9, 1999, the record date fixed by the
Board of Directors, are entitled to notice of, and to vote at, the meeting, as
more fully described in the Proxy Statement.
The Company's Annual Report to Stockholders is being mailed concurrently
with this Notice and Proxy Statement to all stockholders of record. The
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, as filed with the Securities and Exchange Commission, may be obtained by
any stockholder upon written request to the Secretary of the Company at the
address set forth above.
All stockholders are cordially invited to attend the meeting. Those who
cannot attend are urged to sign, date and otherwise complete the enclosed proxy
and return it promptly in the envelope provided. Any stockholder giving a proxy
has the right to revoke it at any time before it is voted.
By order of the Board of Directors
RICHARD C. PAGANO
Secretary
Rosemont, Illinois
March 22, 1999
<PAGE> 3
USFREIGHTWAYS CORPORATION
9700 HIGGINS ROAD, SUITE 570
ROSEMONT, ILLINOIS 60018
PROXY STATEMENT
-------------------------
Approximate date proxy material
first sent to stockholders:
March 22, 1999
-------------------------
The following information is provided in connection with the solicitation
of proxies for the Annual Meeting of Stockholders of USFreightways Corporation,
a Delaware corporation (the "Company"), to be held on April 30, 1999, and
adjournments thereof (the "Meeting"), for the purposes stated in the Notice of
Annual Meeting of Stockholders preceding this Proxy Statement.
GENERAL INFORMATION
SOLICITATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
stockholder and, in each case, such proxy is solicited on behalf of the Board of
Directors of the Company for use at the Meeting. The entire cost of soliciting
these proxies will be borne by the Company. Solicitation will be made by mail,
and may also be made by telephone, telegraph or facsimile transmission by
directors, officers and regular employees of the Company, but these persons will
not be separately compensated for such solicitation services. The Company may
pay persons holding shares in their names or the names of their nominees for the
benefit of others, such as brokerage firms, banks, depositories and other
fiduciaries, for costs incurred in forwarding proxy solicitation material to
their principals.
AUTHORITY CONFERRED BY PROXIES
Each proxy duly executed and returned by stockholders and received by the
Company before the Meeting will be voted (1) FOR the election of each of the
three nominee directors specified herein and (2) FOR approval of the First
Amendment to the USFreightways Corporation Long-Term Incentive Plan, unless a
contrary choice is specified in the proxy. Where a contrary specification is
indicated as provided in the proxy, the shares represented by the proxy will be
voted in accordance with the specification made. As to other matters, if any, to
be voted upon at the Meeting, the persons designated as proxies in the
accompanying form of proxy will take such action as they, in their discretion,
may deem advisable. The persons named as proxies were selected by the Board of
Directors and each of them is a director or an officer of the Company.
REVOCABILITY OF PROXIES
Execution of the enclosed proxy will not affect your right as a stockholder
to attend the Meeting and to vote in person. Any stockholder giving a proxy has
the right to revoke it at any time by: (i) a later dated proxy, duly executed
and delivered or presented at the Meeting; (ii) a written revocation sent to and
received by the Secretary of the Company prior to the Meeting; or (iii)
attendance at the Meeting and voting in person.
VOTING SECURITIES AND RECORD DATE
The Company's voting securities currently issued and outstanding consist of
one class of Common Stock, par value $0.01 per share (the "Common Stock"). The
Company has outstanding 26,316,659 shares of Common Stock as of the close of
business on March 9, 1999 (the "Record Date"). Only stockholders of record on
the books of the Company at the close of business on the Record Date will be
entitled to vote at the Meeting. Each share of Common Stock is entitled to one
vote. Representation at the Meeting by the holders
1
<PAGE> 4
of a majority of the shares of Common Stock outstanding on the Record Date,
either by personal attendance or by proxy, will constitute a quorum. Abstentions
and broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information as of December 31, 1998, with
respect to the beneficial ownership of the Company's outstanding Common Stock by
each stockholder known to the best of the Company's knowledge and belief to be
the beneficial owner of more than 5% of its Common Stock, each director, nominee
and named executive officer and all the directors and named executive officers
as a group. Except as otherwise indicated, the persons named in the table below
have sole voting and investment power with respect to shares beneficially owned
by them.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------- ------------ ----------
<S> <C> <C>
Fidelity Management & Research Company
82 Devonshire Street
Boston, MA 02109.......................................... 2,461,500 9.37
The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, CA 90071..................................... 1,767,500 6.7
William Blair & Company, L. L. C
222 West Adams Street
Chicago, IL 60606......................................... 1,526,000 5.8
J. Campbell Carruth......................................... 176,027(2,3,4) *
Robert V. Delaney........................................... 14,600 *
Morley Koffman.............................................. 38,750 *
Robert P. Neuschel.......................................... 28,000(5) *
John W. Puth................................................ 24,000 *
Neil A. Springer............................................ 25,000 *
William N. Weaver, Jr....................................... 20,500 *
Anthony J. Paoni............................................ 8,750 *
Christopher L. Ellis........................................ 67,739(2,3,4, *
5)
Robert V. Fasso............................................. 48,906(3,4) *
All directors and executive officers as a group (10
persons).................................................. 452,272 1.7%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes options to acquire the following shares which could be exercisable
within 60 days of December 31, 1998 as follows: Mr. Carruth, 90,000 shares;
Mr. Delaney, 14,100 shares; Mr. Koffman, 22,500 shares; Mr. Neuschel, 22,500
shares; Mr. Puth, 22,500 shares; Mr. Springer, 22,500 shares; Mr. Weaver,
18,500 shares; Mr. Paoni, 8,750 shares; Mr. Fasso, 45,000 shares and Mr.
Ellis, 54,500 shares.
(2) Includes shares held by the trustee of the USF Employees' 401K Retirement
Plan for the benefit of each individual as follows: Mr. Carruth, 708 shares
and Mr. Ellis, 653 shares.
(3) Includes shares held by the agent of the USF Employees' Stock Purchase Plan
as follows: Mr. Carruth, 6,606 shares, Mr. Fasso, 906 shares and Mr. Ellis,
3,136 shares.
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<PAGE> 5
(4) Includes 59,480 restricted shares for Mr. Carruth and 1,500 restricted
shares each for Messrs. Fasso and Ellis.
(5) Includes 150 and 2,500 shares owned by the spouses of Mr. Ellis and Mr.
Neuschel, respectively.
ELECTION OF DIRECTORS
The Company has adopted By-Laws that provide that the Board of Directors
shall consist of not less than three and not more than twenty-one directors,
with the exact number to be determined from time to time by the Board of
Directors, and that the Board of Directors shall be divided into three classes,
equal in number to the extent possible, and, if not all classes can be equal in
number, that the Board of Directors shall decide which class is to have the
unequal number.
The Board of Directors has set the current number of directors at eight,
and, as required by the By-Laws, divided into three classes with each class
serving a three year term.
Unless authority to do so is withheld as provided in the proxy, the proxies
solicited by and on behalf of the Board of Directors will be voted FOR the
election of Messrs. Morley Koffman, Anthony J. Paoni and John W. Puth to serve a
three year term, all of whom have been nominated by the Board of Directors to
fill the position of those directors whose term expires as of the seventh annual
meeting of the Company. If for any reason one or all of the nominees should be
unable to serve or refuse to serve as a director (an event which is not
anticipated), the persons named as proxies will vote for another candidate or
candidates nominated by the Board of Directors, and discretionary authority to
cast such votes is included in the proxy. The nominees receiving the highest
number of votes of shares of Common Stock, up to the number of directors to be
elected, shall be elected.
NOMINEES AND OTHER MEMBERS OF THE BOARD
The Board of Directors has nominated for election the following three
individuals to serve a three year term:
MORLEY KOFFMAN, age 69, has been a director of the Company since December
1991 and was Chairman of the Board until January 1998. Since April 1, 1993, Mr.
Koffman has been a member of Koffman Kalef. Mr. Koffman is a director of
Ainsworth Lumber Co. Ltd., Lions Gate Entertainment Corporation and Anthem
Properties Corporation.
ANTHONY J. PAONI, age 54, has been a director of the Company since July
1997. Mr. Paoni has been a professor at the J. L. Kellogg Graduate School of
Management since September 1996. Prior to that he was an officer of several
private software development companies.
JOHN W. PUTH, age 70, has been a director of the Company since January
1992. Mr. Puth has been President of J. W. Puth Associates since December 1987,
and Chairman of VJ Growers since 1996. Mr. Puth is a director of A. M. Castle &
Co., Allied Products Co., Brockway Standard Holdings Corporation, L. B. Foster
Inc., Lindberg Corporation and several private manufacturing companies.
The Company's other directors, each of whom the Company expects to continue
to serve as a director following the Meeting, are as follows:
Class of 2000
ROBERT V. DELANEY, age 63, has been a director of the Company since
December 1991. Mr. Delaney has been an Executive Vice President of Cass
Information Systems since January 1990.
ROBERT P. NEUSCHEL, age 80, has been a director of the Company since
December 1991. Since 1978, Professor Neuschel has been Professor of Management
at the J. L. Kellogg Graduate School of Management, where he is currently
Professor of Corporate Governance and was Associate Dean from 1992 until 1996
for Advisory Board Relations.
3
<PAGE> 6
Class of 2001
J. CAMPBELL CARRUTH, age 68, was appointed as the Company's Chief Executive
Officer and President in June 1991 and has been a director of the Company since
December 1991. He was elected Chairman of the Board in January 1998.
NEIL A. SPRINGER, age 60, has been a director of the Company since December
1991. He has been Managing Director of Springer & Associates since June 1994. He
was Senior Vice President of Slayton International Inc. from September 1992 to
May 1994. Mr. Springer is a director of Idex Corporation and Dorsey Trailers,
Inc.
WILLIAM N. WEAVER, JR., age 64, is a member of the law firm of Sachnoff &
Weaver, Ltd., an Illinois professional corporation, which is outside counsel to
the Company. Mr. Weaver has practiced law in the State of Illinois since 1964
and serves as a director of System Software Associates, Inc. as well as several
privately-held corporations. He holds an A. B. degree from Oberlin College and a
J. D. from John Marshall Law School. He has been the Company's Assistant
Secretary since March 1992.
COMMITTEES AND ATTENDANCE
The Board of Directors met five times during fiscal year 1998. The Audit
Committee, currently consisting of directors Neil A. Springer (Chairman), Morley
Koffman, Robert V. Delaney, and Robert P. Neuschel met twice during fiscal 1998.
The Audit Committee oversees the activities of the Company's independent
auditors. The Compensation Committee, currently consisting of directors John W.
Puth (Chairman), Morley Koffman, William N. Weaver, Jr. and Robert P. Neuschel
met twice during fiscal year 1998. The Compensation Committee reviews and makes
recommendations to the Board of Directors with regard to the salaries, incentive
compensation and related benefits of corporate officers and other employees.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is paid for his
services as a director $20,000 per annum, plus $1,000 for each meeting of the
Board of Directors he attends. The chairman of the Audit Committee and the
chairman of the Compensation Committee receive an additional annual payment of
$3,500 and $2,500, respectively. Members of the Audit Committee are paid $1,000
for each meeting they attend if the meeting is not held on the same day as a
meeting of the Board of Directors. Members of the Compensation Committee are
paid $750 for each meeting they attend if the meeting is not held on the same
day as a meeting of the Board of Directors. Members of the committees who attend
committee meetings that are held on the same day as meetings of the Board of
Directors receive a $250 payment for each such meeting they attend. Directors
who are employees of the Company are not separately compensated for their
services as a director. For his services as Chairman of the Board of Directors
through January 1998, Mr. Koffman was paid (in addition to the $20,000 annual
payment set forth above) $2,500 in 1998.
4
<PAGE> 7
MANAGEMENT COMPENSATION
The following table discloses the compensation awarded by the Company for
services rendered during the Company's last three fiscal years to the chief
executive officer and to the other named executive officers as of December 31,
1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------- -----------------------
SECURITIES
RESTRICTED UNDERLYING
NAME AND PRINCIPAL STOCK OPTIONS ALL OTHER
POSITION YEAR SALARY ($)(1) BONUS ($)(1) AWARDS ($) (#) COMPENSATION ($)
------------------ ---- ------------- ------------ ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
J. Campbell Carruth................ 1998 600,000 482,400 2,000,015(2) 250,000 18,000(3)
Chairman of the Board & 1997 600,000 500,000 0 100,000 5,575(3)
Chief Executive Officer 1996 600,000 300,000 0 100,000 5,250(3)
Robert V. Fasso(6)................. 1998 280,000 280,000 0 150,000 28,655(4)
President-Regional Carrier Group 1997 239,520 274,520 0 25,000 6,293(4)
Christopher L. Ellis............... 1998 280,000 124,500 0 150,000 49,015(5)
Senior Vice President, 1997 270,000 108,000 0 35,000 40,295(5)
Finance & Chief Financial Officer 1996 260,000 62,400 48,000(2) 12,500 39,953(5)
James G. Connelly III(7)........... 1998 416,667 302,500 0 0 1,000,000(7)
President and Chief(7) 1997 12,944 0 0 200,000 0
Operating Officer
</TABLE>
- ---------------
(1) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(2) The shares represented by the restricted stock award are subject to a
forfeiture restriction if Messrs. Carruth and Ellis terminate employment
with the Company. This restriction lapses with respect to 25% of the shares
on each of the first four anniversary dates of the award. Dividends are paid
on all restricted shares to the same extent as any other shares of the
Company's common stock. The number of restricted shares for Mr. Carruth held
at the end of fiscal year 1998 was 59,480 and the value of such shares at
the end of the last fiscal year was $1,732,355. The number of restricted
shares for Mr. Ellis held at the end of fiscal year 1998 was 1,500 and the
value of such shares at the end of the last fiscal year was $43,688.
(3) Consists in 1996 and 1997 of an employer contribution to Mr. Carruth's
401(k) plan maintained by the Company. Consists in 1998 of an employer
contribution of $5,600 to Mr. Carruth's 401(k) plan maintained by the
Company and an employer contribution of $12,400 to Mr. Carruth's
non-qualified deferred compensation plan maintained by the Company.
(4) Consists in 1997 an employer contribution of $2,375 to Mr. Fasso's 401(k)
plan maintained by the Company and the payment by a subsidiary of the
Company of $3,918 in whole life insurance premiums on Mr. Fasso's behalf.
Consists in 1998 of an employer contribution of $4,789 to Mr. Fasso's 401(k)
plan maintained by the Company, the Company's payment of $6,170 in term life
insurance premiums, the payment by a subsidiary of the Company of $3,918 in
whole life insurance premiums and $1,778 in term life insurance premiums on
Mr. Fasso's behalf, and an employer contribution of $12,000 to Mr. Fasso's
non-qualified deferred compensation plan maintained by the Company.
(5) Consists of an employer contribution of $5,575 in 1996 and $5,233 in 1997 to
Mr. Ellis' 401(k) plan maintained by the Company and in all three years of
the Company's payment of $34,720 each year in split-dollar life insurance
premiums on Mr. Ellis' behalf. Consists in 1998 of an employer contribution
of $5,600 to Mr. Ellis' 401(k) plan maintained by the Company, the Company's
payment of $2,160 in term life insurance premiums on Mr. Ellis' behalf and
an employer contribution of $6,535 to Mr. Ellis' non-qualified deferred
compensation plan maintained by the Company.
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<PAGE> 8
(6) Mr. Fasso was named an executive officer of the Company on September 12,
1997.
(7) For 1997, consists only of Mr. Connelly's compensation from December 19,
1997, the date on which he was hired by the Company. For 1998, consists only
of Mr. Connelly's compensation until October 30, 1998, the date on which he
left the Company at which time he received a one-time payment equal to two
years of his base salary pursuant to the terms of his agreement entered into
when he was hired by the Company.
EMPLOYMENT CONTRACTS
The Company has entered into employment agreements with Messrs. Ellis and
Fasso. Under his employment agreement, Mr. Ellis is entitled to receive at a
minimum, a base salary of $200,000 as well as a discretionary annual bonus that
is not guaranteed. Under his employment agreement, Mr. Fasso is entitled to
receive at a minimum, a base salary of $235,000 as well as a discretionary
annual bonus that is not guaranteed. Under the terms of each agreement, in the
event that the individual's employment is terminated by the Company for any
reason other than death, disability, retirement or cause, that individual is
entitled to either two years notice or, if the Company wishes to terminate his
employment without such notice, to be paid his then prevailing salary for a two
year period following the termination of his employment.
OPTION GRANTS FOR FISCAL 1998
The following table provides further information on individual stock option
grants made for fiscal 1998 to the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SHARES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(1)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME (#) FISCAL 1998 ($/SH.) DATE 5% ($) 10% ($)
---- ---------- ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
J. Campbell Carruth............... 250,000(2) 16.67 24.938 10/29/08 3,920,844 9,936,187
Christopher L. Ellis.............. 150,000(3) 10.00 24.938 10/29/08 2,352,506 5,961,712
Robert V. Fasso................... 150,000(3) 10.00 24.938 10/29/08 2,352,506 5,961,712
</TABLE>
- ---------------
(1) The potential realizable value columns of the table illustrate values that
might be realized upon exercise of the options immediately prior to their
expiration, assuming the Company's Common Stock appreciates at the
compounded rates specified over the term of the options. These numbers do
not take into account provisions of certain options providing for
termination of the option following termination of employment or
nontransferability of the options and do not make any provision for taxes
associated with exercise. Because actual gains will depend, among other
things, on future performance of the Common Stock, the amount reflected in
this table may not necessarily be achieved.
(2) Options are at the market price on the grant date and vest 33 1/3% per year
over 3 years.
(3) Options are at the market price on the grant date and vest 100% after 5
years.
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<PAGE> 9
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND DECEMBER 31, 1998 OPTION VALUES
The following table provides information on the value of the named
executive officers' unexercised stock options as of December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SHARES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON VALUE DECEMBER 31, 1998 (#) DECEMBER 31, 1998 ($)(1)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Campbell Carruth............ 0 0 80,000 370,000 595,000 1,251,750
Christopher L. Ellis........... 0 0 54,500 185,500 702,813 699,300
Robert V. Fasso................ 0 0 45,000 205,000 322,500 946,175
</TABLE>
- ---------------
(1) Based on the fair market value of $29.125 per share as of December 31, 1998
(the last trading day before fiscal year close), the closing sale price of
the Company's common stock on that date as reported by the NASDAQ Stock
Market.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company monitors salaries paid to comparably situated senior management
at its competitors and sets salaries for its executive officers accordingly.
These competitors include the seven publicly traded transportation services
companies included in the "Peer Group" used for the stock performance graph
below (see page 9) as well as others. Base salaries are set to ensure that the
Company is competitively positioned to retain and attract outstanding senior
management. Based on available information, the Company believes that total
executive compensation is near or slightly above the median of these
competitors' total compensation.
Compensation of Executive Officers Generally
In general, the Company sets initial base salaries for its executive
officers in light of this competitive analysis to ensure that the Company is
competitively positioned to retain and attract outstanding senior management.
Subsequent raises in base salary are determined in light of experience,
individual job performance and the Company's overall performance.
Senior managers, including the executive officers, also are eligible for an
annual bonus. Executive officers of the Company are eligible for a bonus based
on a formula plan using the Company's consolidated operating ratio. The Company
operates through a number of distinct operating subsidiaries. The bonus plan for
the chief executive officer of each subsidiary is based on a formula plan using
that subsidiary's operating ratio. The bonus for executive officers of the
Company and for the chief executive officer of each subsidiary is capped at 50%
or 100% of base salary.
To encourage management to maximize stockholder value over the long term,
the Company grants to selected senior managers an equity interest in the Company
in the form of restricted stock awards or stock options granted pursuant to its
stock option plan. The options are granted with an exercise price equal to the
market price at the time of grant, and become exercisable in stages over a five
year period or at the end of a five year period. The restricted stock awards
vest as to 25% of the shares on each anniversary date of the award. Both the
stock options and restricted stock awards provide senior managers with an
incentive to remain with the Company over a substantial period of time and
closely ally the long term interests of management with those of the
stockholders.
Compensation of the Chief Executive Officer
Mr. Carruth's salary for 1998 included in the Summary Compensation Table
was set by the Compensation Committee and memorialized in a summary memo. The
Compensation Committee recommended that Mr. Carruth, as Chief Executive Officer,
be awarded a bonus of $482,400 for 1998 under a formula plan based
7
<PAGE> 10
on the Company's consolidated operating ratio and capped at 100% of base salary.
The Committee's principal reason for doing so was the Company's strong financial
performance in 1998, a year in which the Company had record earnings and
expanded its service offerings with several key acquisitions. Additionally, a
restricted stock award of 59,480 shares was awarded to Mr. Carruth in April 1998
for his past service to the Company.
The Compensation Committee endorses the position that stock ownership by
management and stock-based performance compensation arrangements are beneficial
in aligning management's and shareholders' interest in enhancing shareholder
value. In determining the size of Mr. Carruth's stock option grant in October
1998, the Committee considered the Company's financial performance in 1998 which
was very strong compared to the Company's peer group and Mr. Carruth's
outstanding leadership. It is the Committee's view that Mr. Carruth's total 1998
compensation package was based on an appropriate balance of (1) the Company's
performance in 1998 and (2) his own performance level.
Changes made to the Internal Revenue Code in 1993 limit the Company's
ability to deduct, for federal income tax purposes, certain compensation in
excess of $1 million per year paid to individuals named in the Summary
Compensation Table. This limitation was effective beginning in 1994. Based on
its review of the facts and circumstances, the Committee believes that the
limitation will have no material effect on the Company in 1998. Although the
Committee will periodically review the advisability of making changes in
compensation plans to reflect government mandated policies, it will not do so
unless it feels that such changes are in the best interests of the Company or
its stockholders.
COMPENSATION COMMITTEE
John W. Puth, Chairman
Morley Koffman
Robert P. Neuschel
William N. Weaver, Jr.
8
<PAGE> 11
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURNS
The following graph compares the cumulative total stockholder return on the
Company's Common Stock for the last five years with the cumulative total return
of The NASDAQ Stock Market and an index prepared for the Company of the stock
price performance on a cumulative total return basis of 7 transportation
services companies whose stock is currently publicly traded (the "Peer Group
Index"). The graph assumes that $100 was invested on January 1, 1994 in the
Company's common stock, the stock of the companies comprising The NASDAQ Stock
Market and the Peer Group companies (allocated among the Peer Group companies
pro rata according to their relative market capitalizations). Note: The
Company's stock price performance shown below is not necessarily indicative of
future price performance.
COMPARISON FOR THE PERIOD JANUARY 1, 1994 THROUGH DECEMBER 31, 1998 OF THE
CUMULATIVE TOTAL RETURNS OF USFREIGHTWAYS CORPORATION COMMON STOCK, THE
NASDAQ STOCK MARKET, AND THE "PEER GROUP" INDEX.
<TABLE>
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USFREIGHTWAYS CORP. NASDAQ STOCK MARKET (US SELF-DETERMINED PEER
(USFC) COMPANIES) GROUP
------------------- ----------------------- --------------------
<S> <C> <C> <C>
1/1/1994 100.00 100.00 100.00
12/30/1994 96.40 97.80 93.90
12/29/1995 77.10 138.30 85.00
12/31/1996 106.90 170.00 93.20
12/31/1997 128.30 208.60 124.80
12/31/1998 116.50 293.20 117.60
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(1) The "Peer Group" Index consists of the following seven publicly traded
transportation services companies: Arkansas Best Corporation; American
Freightways Corporation; Arnold Industries Inc.; Circle International Group,
Inc.; CNF Transportation, Inc.; Eagle USA Airfreight, Inc.; and Old Dominion
Freight Line, Inc.
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PROPOSAL TO APPROVE THE FIRST AMENDMENT TO THE
USFREIGHTWAYS CORPORATION LONG-TERM INCENTIVE PLAN
PROPOSAL
The Board of Directors will adopt, subject to stockholder approval, the
First Amendment to the USFreightways Corporation Long-Term Incentive Stock Plan
(the "Incentive Plan"). In the event that stockholder approval is received, the
Incentive Plan would be amended as set forth in Appendix A.
REASONS FOR THE AMENDMENT
The Incentive Plan is being amended to (i) increase by 2,000,000 the number
of shares available for grant thereunder and (ii) to make certain technical
changes that will ensure continued compliance with Section 162(m) of the Code.
The Incentive Plan was adopted on January 24, 1997. At that time, a total of
2,000,000 shares (adjusted for subsequent stock splits) was reserved for future
issuance under the Incentive Plan. Since the Incentive Plan was adopted, no
other stock compensation plans have been adopted, and no additional shares have
been added to any of the Company's existing employee stock compensation plans.
As of March 4, 1999, options to acquire another 1,997,980 shares are currently
outstanding. Thus, as of that date, only 2,020 shares remain eligible for future
grant. As indicated in the Board Compensation Committee Report on Executive
Compensation, the Company employs restricted stock and stock options to provide
long-term incentives and awards. As a result, restricted stock and stock options
constitute a significant component of the Company's total compensation to a
select group of senior managers. The Company believes that the ability to offer
restricted stock and stock options is of critical importance in attracting,
motivating and retaining employees. Accordingly, the Company believes that a
significant quantity of available shares for future grants must be provided at
this time.
As of March 4, 1999, the market value of the 2,000,000 additional shares
made available for issuance under the Incentive Plan was $61,500,000. Cash
payments received by the Company under the Incentive Plan will be used for
general corporate purposes.
The Amendment also is being proposed to ensure that the Incentive Plan
continues to meet the statutory requirements of Code Section 162(m). In general,
Section 162(m) of the Code denies a publicly-held corporation a deduction for
federal income tax purposes for compensation in excess of $1 million per year
paid to its chief executive officer and the four other officers whose
compensation is disclosed in its annual proxy statement, subject to certain
exceptions. The Amendment is intended to permit the Incentive Plan to qualify
under one of those exceptions by limiting the number of shares subject to an
option that may be granted to any one employee in any one year to 300,000
shares.
PURPOSE
The purpose of the Incentive Plan is to assist the Company in attracting
and retaining key employees, and to give such employees a greater proprietary
interest in, and closer identity with, the Company and its financial success.
The Incentive Plan authorizes the Company to make grants ("Awards") of Incentive
Stock Options (within the meaning of Section 422 of the Code), Non-Qualified (or
non-statutory) Stock Options (the Incentive and Non-Qualified Stock Options
issued under the Incentive Plan are referred to collectively as "Options"),
Restricted Stock, Stock Appreciation Rights ("SARs"), Performance Awards, or
Cash Awards.
ADMINISTRATION OF THE INCENTIVE PLAN
The Incentive Plan is administered by a committee of the Board of Directors
consisting of two or more non-employee Board members (the "Committee"). The
Committee has complete discretion to determine which employees will be
recipients of Awards under the Incentive Plan (the "Participants") and to
establish the terms, conditions and limitations of each Award (subject to the
terms of the Incentive Plan and the applicable provisions of the Code),
including the type and amount of the Award, the number of shares of Common Stock
to be subject to Options or Restricted Stock, or the amount of cash to be
included in the Award, the exercise price of any Options and the date or dates
upon which the Options become exercisable or
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upon which any restrictions applicable to any Common Stock included in the Award
lapse. The Committee also has full power to construe and interpret the Plan and
the Awards granted under the Plan, and to establish rules and regulations
necessary or advisable for its administration. The determination of the
Committee with respect to any matter under the Plan to be acted upon by the
Committee is final and binding.
The Board may amend the Plan in any respect, except that the following
changes may not be made without stockholder approval: (i) the maximum number of
shares available for Awards may not be increased (except upon stock splits and
dividends, combinations and similar events), (ii) the requirements as to
eligibility may not be materially modified, (iii) the benefits to Participants
may not be materially increased, (iv) the period during which Incentive Options
may be granted or exercised may not be extended, and (v) the class of employees
eligible to receive Incentive Options may not be modified.
ELIGIBILITY FOR AWARDS
Awards under the Incentive Plan may be granted only to employees of the
Company and its subsidiaries. The Committee shall determine which employees are
to be granted Awards under the Incentive Plan. Awards may be granted to a
prospective employee, conditioned upon such person becoming an employee.
TERMS AND CONDITIONS OF AWARDS UNDER THE INCENTIVE PLAN
Generally
Awards under the Incentive Plan may consist of any combination of one or
more Incentive or Non-Qualified Options, Restricted Stock, SARs, Performance
Awards, or Cash Awards, on a stand alone, combination or tandem basis. The
Committee may specify that Awards other than Options will be paid in cash,
shares of Common Stock, or a combination of cash and stock.
The Committee is permitted to cancel any unexpired, unpaid, unexercised or
deferred Awards at any time if a Participant (a) provides services for a
competitor, (b) discloses confidential Company information, or (c) fails to
disclose and convey to the Company any invention or idea developed by the
Participant during employment by the Company and relating to the business of the
Company. Unless otherwise described below for Options, or as may be provided in
the Award Agreement, all unexpired, unpaid, unexercised or deferred Awards will
be canceled if a Participant ceases his or her employment with the Company and
its subsidiaries, except for (a) retirement under a Company retirement plan, (b)
retirement in the best interest of the Company (as determined by the Company's
chief executive or other designated senior officer), or (c) termination of the
Participant's employment upon his or her death or disability. Upon retirement
under a Company retirement plan or termination in the best interests of the
Company, the Committee may permit Awards to continue, and may accelerate
exercisability and vesting. Upon the death or disability of a Participant, his
or her estate or beneficiaries (or the Participant in the case of disability)
may exercise or receive benefits under the Award until the original expiration
date as provided in the Award (or within one year in the case of Options) and
the Committee may in its discretion accelerate the vesting or terminate the
restrictions to which the Award is subject.
Upon any change in the nature or number of outstanding shares of Common
Stock due to stock split, stock dividend, merger, reorganization or similar
event, adjustments will be made to the numbers of shares and the applicable
exercise and base prices under outstanding Awards to prevent dilution or
enlargement of the Awards previously granted.
Stock Options
Both Incentive and Non-Qualified Options may be granted pursuant to the
Incentive Plan. Incentive Options must have an exercise price per share equal to
at least the fair market value of a share at the time the Award is granted. As
required by the Code, if an Incentive Option is granted to a Participant who
owns more than ten percent of the voting power of the Company (a "Significant
Stockholder"), then the exercise price per share will be not less than one
hundred ten percent (110%) of fair market value on the date of grant. Fair
market value equals the closing sales price of the Common Stock on the date of
grant. The exercise price for
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Non-Qualified Options will be determined by the Committee in its sole discretion
on the date of grant and, except as may be determined to be appropriate by the
Committee pursuant to Section 162(m) of the Code, may be less than fair market
value. The maximum term of all Incentive Options granted under the Incentive
Plan is ten years. (Incentive Options granted to Significant Stockholders have a
maximum term of five years.) The term of Non-Qualified Options may be set by the
Committee in its discretion. No Options may be granted more than ten years from
the date the Incentive Plan was adopted. Except as otherwise determined by the
Committee, all Options are non-transferable and may be exercised during a
Participant's lifetime only by the Participant.
At the time an Option is awarded, the Committee shall specify the date or
dates upon which the Option, or portions of the Option, becomes exercisable. The
permissible manner of payment for the purchase price upon exercise of the Option
(such as cash, check, the transfer of previously owned, fully paid shares, or
through a "cash-less" exercise) will be set by the Committee in the particular
Award Agreement or by general rules.
A Participant who ceases to be an employee of the Company or its
subsidiaries for any reason other than death, disability, normal retirement or
termination for "cause" will be permitted to exercise any Option, to the extent
it was exercisable on the date of such cessation, but only within three months
of such cessation. A Participant who is terminated for "cause," as defined in
the Incentive Plan, shall immediately lose all rights to exercise any Options.
If a Participant terminates his or her employment after attaining age 65, all
Options shall immediately vest, and the Participant may exercise all Options
granted to him or her during the prescribed term of the Option. If a Participant
dies, his or her estate or personal representative may exercise the Option, to
the extent it was exercisable on the date of death. If a Participant becomes
permanently disabled, he or she may exercise an Option to the extent it was
exercisable at the time of the onset of the disability or, if the Option vests
periodically, to the extent it would have been exercisable as of the next
vesting date. In the case of either death or disability, the Option must be
exercised within twelve (12) months after the date of death or onset of
disability, and prior to the original expiration date of the Option.
Restricted Stock
The Committee may award shares of Common Stock (or grant an award
denominated in units of Common Stock) on a restricted basis. The terms of a
restricted stock Award, including the consideration, if any, to be paid by the
Participant to acquire the stock and the restrictions placed upon such shares
and the time or times or event or events upon which such restrictions will
lapse, will be determined by the Committee at the time the Award is made and
will be described in the Award Agreement. After the Restricted Stock is awarded,
the Participant will be a stockholder with respect to such stock, and will have
rights to vote and receive dividends with respect to such stock. Shares of
Restricted Stock may not be transferred, assigned or pledged prior to the lapse
of the applicable restrictions. The Committee, in its discretion, may accelerate
the date on which the restrictions lapse.
Stock Appreciation Rights
The Committee may award SARs either alone, in tandem or in combination with
an Option or other Award. An SAR will permit the Participant to receive, upon
exercise, cash or shares of Common Stock equal in value to the excess of the
fair market value of a share of Common Stock as of the exercise date over the
base price set by the Committee at the time the SAR is granted, multiplied by
the number of shares of Common Stock then being exercised under the SAR. The
base price will be at least the fair market value of a share of Common Stock on
the date of grant, unless a lower base price is approved by the Board of
Directors. SARs will become exercisable upon the date or dates, or the
occurrence of the events, set by the Committee at the time of grant. An SAR may
only be exercised by the Participant or, if applicable, by the Participant's
personal representative.
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Performance Awards
The Committee may grant to Participants Performance Awards that are subject
to conditions specified by the Committee. The Committee may use business
criteria and other measures of performance it deems appropriate in establishing
any performance conditions, and may exercise its discretion to increase or
decrease the amounts payable under any Awards subject to performance conditions,
except as otherwise may be limited in the case of a Performance Award intended
to qualify under Code sec. 162(m). If the Committee determines that a
Performance Award should qualify as "performance-based compensation" for
purposes of Code sec. 162(m), the Performance Award will be contingent upon the
achievement of objective pre-established performance goals and other terms set
by the Committee.
Cash Awards
The Committee may award cash payments under the Incentive Plan, subject to
restrictions and conditions and other terms as determined by the Committee at
the time of the Award. A cash Award will be subject to cancellation or
forfeiture upon the terms set forth under "Generally," above.
FEDERAL INCOME TAX EFFECTS
Under the Code, as presently in effect, the grant of an Option or SAR or
the award of Restricted Stock under the Incentive Plan will not generate income
to a Participant or a deduction to the Company.
Upon exercise of a Non-Qualified Option or an SAR, the Participant will
normally be deemed to have received ordinary income in an amount equal to the
difference between the exercise price for the Option and the fair market value
of the Company's Common Stock on the exercise date or, in the case of an SAR,
equal to the amount of payment received from the Company (less any exercise
price, if applicable). The Company will be entitled to a tax deduction in the
same amount as is recognized by the Participant and at the same time, provided
the Company includes and reports such amounts on a timely filed Form W-2 or Form
1099-MISC (or similar such IRS form filing). Upon a disposition of shares
acquired upon exercise of a Non-Qualified Option, any amount received in excess
of the fair market value of the shares at the time of exercise of the Option
generally will be treated as long-term or short-term capital gain, depending on
the holding period of the shares. The Company will not be entitled to any tax
deduction upon such subsequent disposition.
In the case of Incentive Options, the Participant recognizes no ordinary
income on the date of grant or exercise. If the Participant holds the stock
acquired through exercise of an Incentive Option for one year from the date of
exercise and two years from the date of grant, the Participant will thereafter
recognize long-term capital gain or loss upon a subsequent sale of the stock,
based on the difference between the Incentive Option's exercise price and the
sale price. If the stock is sold before the requisite holding period, the
Participant will recognize ordinary income based upon the difference between the
exercise price and the lesser of the sales price or the fair market value upon
the date of exercise. The Company generally will be allowed a business expense
deduction only if, and to the extent, the Participant recognizes ordinary
income.
For Awards of Restricted Stock, the fair market value of the stock is not
taxable to the Participant as ordinary income until the year the Participant's
interest is freely transferable or no longer subject to a substantial risk of
forfeiture. Section 83 of the Code, however, permits a Participant to elect to
have the fair market value of the stock taxed as ordinary income in the year the
Award is received. The Company generally will be entitled to a deduction equal
to the amount of ordinary income recognized by the Participant.
Upon the grant of a Performance or Cash Award, the Participant will
recognize ordinary income equal to the amount of the award, which amount will be
includable in the Participant's taxable income in the year such Performance or
Cash Award is paid. The Company will be entitled to a deduction in the same year
equal to the amount of the Award.
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VOTE REQUIRED
The First Amendment to the Incentive Plan becomes effective on April 30,
1999, subject to its approval by the Company's stockholders. Accordingly,
approval of the First Amendment to the Incentive Plan requires the affirmative
vote of the holders of a majority of the shares of Common Stock outstanding as
of the record date and present in person or by proxy at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE FIRST
AMENDMENT TO THE USFREIGHTWAYS CORPORATION LONG-TERM INCENTIVE PLAN. THE PROXIES
SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS WILL BE VOTED FOR APPROVAL
OF THE FIRST AMENDMENT TO THE INCENTIVE PLAN, UNLESS A CONTRARY CHOICE IS
SPECIFIED IN THE PROXY.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William N. Weaver, Jr., a director, is a member of the law firm of Sachnoff
& Weaver, Ltd., an Illinois professional corporation. Sachnoff & Weaver, Ltd.
has acted and continues to act as outside counsel to the Company with regard to
certain matters and has received legal fees for services rendered in connection
therewith.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John W. Puth, Morley Koffman, Robert P. Neuschel and William N. Weaver,
Jr., none of whom are employees of the Company served on the Compensation
Committee. Mr. Weaver served as Assistant Secretary of the Company in a
non-employee capacity. There are no committee interlocks or insider (employee)
participation.
INDEPENDENT PUBLIC ACCOUNTANTS
By the selection of the Company's management and its Board of Directors,
the accounting firm of Arthur Andersen LLP, certified public accountants, serves
the Company as its independent public accountants. One or more representatives
of Arthur Andersen LLP are expected to be present at the Meeting, with the
opportunity to make a statement if they desire to do so, and to be available to
respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent 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
and NASDAQ. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that, during fiscal year 1998, all filing requirements
applicable to its officers, directors, and greater than ten-percent beneficial
owners were complied with.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders accompanies this
Proxy Statement. The Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended December 31, 1998, as filed
with the Commission, is available without charge to any stockholder upon written
request to Christopher L. Ellis, Senior Vice President, Finance and Chief
Financial Officer, USFreightways Corporation, 9700 Higgins Road, Suite 570,
Rosemont, Illinois 60018. The exhibits filed with the Form 10-K are not
included; however, copies of such exhibits will be furnished, if requested, upon
payment of the Company's reasonable expenses in furnishing those materials.
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STOCKHOLDER PROPOSALS
Stockholder proposals submitted for evaluation as to inclusion in the proxy
materials for the Company's next annual meeting of stockholders must be received
by the Company no later than November 17, 1999, at the Company's principal
executive office at 9700 Higgins Road, Suite 570, Rosemont, Illinois 60018.
OTHER MATTERS
Management is not aware of any other matters to be presented for action at
the Meeting. If any other matters are properly brought before the Meeting, it is
the intention of the persons named as proxies in the accompanying form of proxy
to vote the shares represented thereby in accordance with their best judgment.
For the Board of Directors
RICHARD C. PAGANO
Secretary
Rosemont, Illinois
March 22, 1999
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APPENDIX A
FIRST AMENDMENT TO THE
USFREIGHTWAYS CORPORATION LONG-TERM INCENTIVE PLAN
RESOLVED, that the USFreightways Corporation Long-Term Incentive Plan shall
be amended, as follows:
1. The first two paragraphs of Article III ("Shares Subject to the Plan")
shall be amended to read as follows:
The aggregate number of Shares as to which Awards may be granted from time
to time shall be four million (4,000,000) Shares (subject to adjustments
for stock splits, stock dividends, and other adjustments described in
Section 17 hereof).
In accordance with Code Section 162(m), if applicable, the aggregate number
of Shares as to which Awards may be granted in any one calendar year to any
one employee shall not exceed three hundred thousand (300,000) Shares
(subject to adjustment for stock splits, stock dividends, and other
adjustments described in Section 17 hereof).
<PAGE> 19
PROXY / VOTING INSTRUCTION CARD
USFREIGHTWAYS CORPORATION
9700 W. HIGGINS, SUITE 570 - ROSEMONT, ILLINOIS 60018
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON APRIL 30, 1999.
The undersigned hereby appoints J. Campbell Carruth and Christopher L. Ellis as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of USFreightways Corporation held of record by the undersigned on March
9, 1999, at the Annual Meeting of Stockholders to be held on April 30, 1999 or
any adjournment thereof, and in their discretion, the proxies are authorized
to vote upon such other business as may properly come before the meeting.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY ITEM.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED AND FOR APPROVAL OF THE
FIRST AMENDMENT TO THE USFREIGHTWAYS CORPORATION LONG-TERM INCENTIVE PLAN.
<PAGE> 20
USFREIGHTWAYS CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR WITHHOLD FOR ALL
FOR THE ELECTION OF DIRECTORS. ALL ALL EXCEPT FOR WITHHOLD ABSTAIN
1. Election of Directors 2. First Amendment to the
NOMINEES: Morley Koffman, Anthony J. / / / / / / USFreightways Corporation / / / / / /
Paoni and John W. Puth Long-Term Incentive Plan
- ----------------------------------------- NOTE: Please sign exactly as name appears hereon. Joint
(Except nominee(s) written above.) owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such. The signer hereby revokes all
proxies heretofore given by the signer to vote at said
meeting or any adjournment thereof. This proxy when
properly executed will be voted in the manner directed
herein by the undersigned stockholders(s).
---------------------------------------------------------
SIGNATURE DATE
---------------------------------------------------------
SIGNATURE DATE
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/\ FOLD AND DETACH HERE /\
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
[USFREIGHTWAYS LOGO]
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