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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
YELLOW CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
YELLOW CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 (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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[YELLOW CORPORATION LOGO]
YELLOW CORPORATION
10777 Barkley
Overland Park, Kansas 66211
------------------------------
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Yellow
Corporation (the "Company") will be held at the Radisson Hotel Overland Park,
8787 Reeder Road, Overland Park, Kansas, on April 25, 1996 at 9:30 a.m., Central
Daylight Time, to consider the following matters:
I. The election of three directors;
II. the approval of an amendment to the Certificate of Incorporation eliminating the
classification of the Board of Directors and reducing the minimum number of
directors from 9 to 5;
III. the approval of a plan to pay fifty (50) percent of the Board and Committee
retainers of non-employee directors in Company common stock restricted for three
(3) years;
IV. the approval of the appointment of Arthur Andersen LLP as independent public
accountants of the Company for 1996; and
V. the transaction of such other business as may properly come before such meeting or
any adjournment thereof.
Information regarding the matters to be acted upon at the Annual Meeting is
contained in the accompanying Proxy Statement.
The close of business on February 23, 1996 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof.
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE COMPLETE, SIGN AND
RETURN THE ACCOMPANYING PROXY SO THAT YOUR SHARES WILL BE REPRESENTED AT THE
MEETING. Return it as promptly as possible in the enclosed envelope. No postage
is required if mailed in the United States.
If you attend the meeting in person, you may revoke your proxy and cast
your vote in person. If you receive more than one proxy because your shares are
held in various names or accounts, each proxy should be completed and returned.
By Order of the Board of Directors:
WILLIAM F. MARTIN, JR.
Overland Park, Kansas WILLIAM F. MARTIN, JR.
March 12, 1996 Secretary
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
YELLOW CORPORATION
10777 Barkley
Overland Park, Kansas 66211
INTRODUCTION
This statement is furnished in connection with the solicitation by the
Board of Directors of Yellow Corporation (the "Company"), a Delaware
corporation, of proxies for use at the 1996 Annual Meeting of Stockholders of
the Company, to be held at the Radisson Hotel Overland Park, 8787 Reeder Road,
Overland Park, Kansas (the Company's telephone is 913/967-4300; mailing address
P.O. Box 7563, Overland Park, Kansas 66207), at 9:30 a.m., Central Daylight
Time, on April 25, 1996, and at any and all adjournments thereof. The Company's
Annual Report (including audited financial statements) for the year ended
December 31, 1995 accompanies this Proxy Statement, Notice of Annual Meeting of
Stockholders and form of proxy, which will be mailed to stockholders on or about
March 15, 1996. The Annual Report is not part of this proxy soliciting material
except to the extent specifically incorporated herein by reference. A copy of
the Company's annual report to the Securities and Exchange Commission on Form
10-K and the quarterly reports on Form 10-Q may be obtained without charge by
writing the Treasurer of the Company at the above mailing address.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING OF THE COMPANY
At the annual meeting, the Company's stockholders will consider and vote
upon (1) the election of three directors; (2) the approval of an amendment to
the Certificate of Incorporation eliminating the classification of the Board of
Directors and reducing the minimum number of directors from 9 to 5; (3) the
approval of a plan to pay fifty (50) percent of the Board and Committee
retainers of non-employee directors in Company common stock restricted for three
(3) years; and (4) the approval of the appointment of Arthur Andersen LLP as
independent public accountants of the Company for 1996.
VOTING AND PROXIES
RECORD DATE; VOTING RIGHTS
Stockholders of record as of the close of business on February 23, 1996
will be entitled to notice of and to vote at the Annual Meeting of Stockholders
of the Company or any adjournment thereof. On such date the Company had
outstanding 28,105,797 shares of common stock, par value $1.00 per share
("Common Stock"), which constitute the Company's only outstanding voting
securities. Each share of Common Stock has one vote. Unless marked to the
contrary, proxies received will be voted (1) for the election to the Board of
all nominees to the Board of Directors; (2) for the approval of an amendment to
the Certificate of Incorporation eliminating the classification of the Board of
Directors; (3) for the approval of a plan to pay fifty (50) percent of the Board
and Committee retainers of non-employee directors in Company common stock
restricted for three (3) years; (4) for the approval of the appointment of
Arthur Andersen LLP as independent public accountants of the Company for 1996;
and (5) in the discretion of the Proxy Committee on such other business as may
properly come before the meeting.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the meeting by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date, or by
attending the meeting and voting. Attendance at the meeting does not by itself
constitute revocation of the proxy. Approval of the elimination of the
classified Board of Directors and the Director Stock Plan requires the
affirmative vote of a majority of the outstanding shares as of the record date.
The election of directors shall be determined by a plurality of the votes cast.
Determination of the appointment of Arthur Andersen LLP as independent public
accountants shall be by a majority of the votes cast.
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Proxies marked as abstaining (including proxies containing broker
non-votes) on any matter to be acted upon by stockholders will be treated as
present at the meeting for purposes of determining a quorum but will not be
counted as votes cast.
SOLICITATION OF PROXIES
The cost of the solicitation will be borne by the Company. In addition to
the use of the mails, proxies may be solicited by the directors, officers and
employees of the Company without additional compensation, by personal interview,
telephone, telegram or otherwise. Arrangements may also be made with brokerage
firms and other custodians, nominees and fiduciaries for the forwarding of
soliciting material to the beneficial owners of Common Stock held of record by
such persons. The Company will reimburse such respective brokers, custodians,
nominees and fiduciaries for the reasonable out-of-pocket expenses incurred by
them in connection therewith.
SUBMISSION OF PROPOSALS BY STOCKHOLDERS
Stockholders' proposals intended to be presented at the 1997 annual meeting
must be received by November 11, 1996 to be eligible for inclusion in the proxy
materials.
PRINCIPAL STOCKHOLDERS
As of December 31, 1995, the persons known to the Company to be beneficial
owners of more than five percent of the Company's outstanding shares of Common
Stock, the number of shares beneficially owned by them and by all executive
officers and directors as a group, and the percent of such shares so owned were:
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
----------------------------------------------------------- ----------------- --------
George E. Powell, Jr. ..................................... 2,152,502(1)(3) 7.7%
10777 Barkley
Overland Park, Kansas
George E. Powell III....................................... 1,587,957(2)(3) 5.6%
10777 Barkley
Overland Park, Kansas
Boatmen's Bancshares, Inc. ................................ 2,647,466(4) 9.4%
One Boatmen's Plaza
St. Louis, Missouri
Norwest Corporation........................................ 2,196,050(5) 7.8%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota
Pioneer Management Corporation............................. 1,830,000(6) 6.5%
60 State Street
Boston, Massachusetts
All executive officers and directors as a group............ 2,463,901(7) 8.8%
(15 persons)
(1) George E. Powell, Jr., Chairman of the Board, had the following voting
and investment powers with respect to such shares: (a) sole voting power,
660,102 shares; (b) shared voting power, 1,458,600 shares; (c) sole investment
power, 660,102 shares; and (d) shared investment power, 1,458,600 shares. Mr.
Powell, Jr. disclaims beneficial ownership of 1,553,428 of such shares, 33,800
of which are owned by his wife, and 1,519,628 of which he holds solely in a
fiduciary capacity.
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(2) George E. Powell III, President and Chief Executive Officer, had the
following voting and investment powers with respect to such shares: (a) sole
voting power, 250,483 shares; (b) shared voting power, 1,333,174 shares; (c)
sole investment power, 248,534 shares; and (d) shared investment power,
1,333,174 shares. Mr. Powell III disclaims beneficial ownership of 1,337,474 of
such shares, 1,303,000 of which are owned by a charitable foundation of which he
is one of five directors, 30,174 of which he holds solely in a fiduciary
capacity under the Missouri Transfer to Minors Law and 4,300 of which are owned
by his wife.
(3) Beneficial ownership of 1,303,000 of such shares is attributed to both
Mr. Powell, Jr. and Mr. Powell III, because they are two of five directors of
The Powell Family Foundation, a private charitable foundation, which owns the
shares. The other directors of the Foundation are Barbara P. Allen, Marilyn P.
Rinker and Nicholas K. Powell.
(4) According to information provided to the Company, Boatmen's Bancshares,
Inc. had the following voting and investment powers with respect to such shares:
(a) sole voting power, 492,326 shares; (b) shared voting power, 600 shares; (c)
sole investment power, none; and (d) shared investment power, 2,603,667 shares.
Boatmen's Trust Company, a subsidiary of Boatmen's Bancshares, Inc., held
2,205,076 of such shares as trustee under the Company's Retirement Savings Plan.
Participants in the Retirement Savings Plan have the right to instruct the
trustee as to the voting of shares held by the plan and as to whether such
shares should be tendered in the event of a tender offer.
(5) According to information provided to the Company, Norwest Corporation,
Inc., had, through certain of its subsidiaries, the following voting and
investment powers with respect to such shares: (a) sole voting power, 1,793,950
shares; (b) shared voting power, 200 shares; (c) sole investment power,
2,195,250 shares; and (d) shared investment power, 300 shares. Norwest
Corporation disclaims beneficial ownership of all shares for the purposes of
Sections 13, 14, or 16 of the Securities Exchange Act of 1934.
(6) According to information provided to the Company, Pioneer Management
Corporation had the following voting and investment powers with respect to such
shares: (a) sole voting power, 1,830,000 shares; (b) shared voting power, none;
(c) sole investment power, 83,000 shares; and (d) shared investment power,
1,747,000 shares.
(7) This total avoids duplication due to the attribution of beneficial
ownership of 1,303,000 shares to both Mr. Powell, Jr. and Mr. Powell III
referred to in note (3) above. Executive officers' and directors' share
ownership includes: 9,667 shares held in employee stock plans; 3,670 shares
which officers had the right to acquire within 60 days of such date through the
exercise of stock options pursuant to the Company's 1983 Stock Option Incentive
Plan; 2,152,502 shares attributed to George E. Powell, Jr., to which notes (1)
and (3), above, apply; 1,587,957 shares attributed to George E. Powell III, to
which notes (2) and (3), above, apply; 200 shares owned by relatives of other
executive officers or directors as to which such executive officers or directors
disclaim beneficial ownership; and 1,303,000 shares owned by a charitable
foundation which duplicate shares referred to in notes (1), (2) and (3), above,
and with respect to which beneficial ownership is disclaimed.
I. ELECTION OF DIRECTORS
At the meeting, three directors are to be elected to hold office until the
1999 Annual Meeting and until their successors are elected and have qualified.
The remaining directors will continue to serve as set forth below. If the
proposal relating to the elimination of the classified Board of Directors is
approved, the Board of Directors will no longer be divided into three classes,
the term of office of each director will end at the 1997 Annual Meeting of
stockholders and all directors will be elected for one-year terms commencing
with the 1997 Annual Meeting of Stockholders. If any nominee should be unable to
stand for election as a director, it is intended that the shares represented by
proxies will be voted for the election of such substitute as management may
nominate.
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The following tables set forth information with respect to each director
and each nominee for election as a director of the Company. George E. Powell III
is the son of George E. Powell, Jr. No other director or nominee has any family
relationship with any other director or executive officer of the Company.
SHARES OF STOCK OWNED
BENEFICIALLY (1)(2),
NAME; PAST SERVICE PRINCIPAL OCCUPATION; DIRECTLY OR INDIRECTLY,
TERM OF OFFICE DIRECTORSHIPS; AGE AS OF DECEMBER 31, 1995
- --------------------------- --------------------------------------------- -----------------------
NOMINEES FOR ELECTION AS DIRECTORS
Klaus E. Agthe............. Director and North American Liaison for the 1,000
Director since 1984 VIAG Group, Munich, Germany (an international
holding company) (Since January 1993);
formerly chief executive officer in charge of
operations in eastern Germany for Asea Brown
Boveri A.G., Berlin, Germany, (January 1991
-- December 1992); Executive Vice President
of Asea Brown Boveri Inc., Stamford, CT
(January 1990 -- December 1991); and
President and Chief Executive Officer of Asea
Brown Boveri Inc., Purchase, NY (January 1988
-- January 1990); 65
Howard M. Dean............. Chairman and Chief Executive Officer 500
Director since 1987 (formerly President and Chief Executive
Officer) of Dean Foods Company, Franklin
Park, IL (processor and distributor of food
products); Director of Nalco Chemical Company
and Ball Corporation; 58
George E. Powell III....... Chief Executive Officer of the Company (since 1,587,957
Director since 1984 July 1990); President of the Company (since
October 1987); formerly President of Yellow
(October 1987 -- May 1992); 47
DIRECTORS CONTINUING IN OFFICE
Ronald T. LeMay............ Director, President and Chief Operating 0
Director since 1994 Officer of Sprint Corporation, Kansas City,
Term expires 1997 MO (Telecommunications) (since February
1996), and Chief Executive Officer of the
Sprint Telecommunications Venture; Vice
Chairman of Sprint Corporation (March 1995 --
February 1996); Director, President, and
Chief Operating Officer, Long Distance
Division, Sprint Corporation (October 1989 --
March 1995); 50
John C. McKelvey........... President and Chief Executive Officer of 390
Director since 1977 Midwest Research Institute, Kansas City, MO
Term expires 1997 (scientific and technical research); 62
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SHARES OF STOCK OWNED
BENEFICIALLY (1)(2),
NAME; PAST SERVICE PRINCIPAL OCCUPATION; DIRECTLY OR INDIRECTLY,
TERM OF OFFICE DIRECTORSHIPS; AGE AS OF DECEMBER 31, 1995
- --------------------------- --------------------------------------------- -----------------------
William L. Trubeck......... Senior Vice President-Finance and Chief 300
Director since 1994 Financial Officer of SPX Corporation,
Term expires 1997 Muskegon, MI (equipment manufacturer for
motor vehicle industry) (since November
1994); formerly Senior Vice President and
Chief Financial Officer of Honeywell, Inc.,
Minneapolis, MN (April 1993- October 1994);
Chief Financial Officer, White & Case, New
York, NY (1991-1993); Executive Vice
President, Finance & Chief Financial Officer,
NWA, Inc., St. Paul, MN (1989-1990); Director
of Bush Bros. and Great Lakes Aviation; 49
M. Reid Armstrong.......... President of Yellow Freight System, Inc. 7,101
Director since 1992 ("Yellow"), the Company's principal operating
Term expires 1998* subsidiary (since May 1992); Executive Vice
President of the Company and of Yellow
(December 1991 -- May 1992); Senior Vice
President (prior to December 1991); 58
David H. Hughes............ Formerly Director (Vice Chairman 1986-1990), 4,500
Director since 1973 President and Chief Operating Officer of
Term expires 1998* Hallmark Cards, Inc., Kansas City, MO
(greeting cards); Director of Western
Resources, Inc.; 67
George E. Powell, Jr....... Chairman of the Board (formerly also Chief 2,152,502
Director since 1952 Executive Officer) of the Company; Director
Term expires 1998* of Butler Manufacturing Co., Inc.; 69
* Subject to the proposed amendment to the Certificate of Incorporation to
eliminate the classified Board of Directors.
(1) These figures include shares beneficially owned by certain members of
the families of the following directors or nominees for director, as to which
shares the director or nominee disclaims beneficial ownership: Mr. Powell, Jr.,
33,800 shares; Mr. McKelvey, 200 shares; and Mr. Powell III, 34,474 shares. Also
included are 155,600 shares owned by a charitable foundation with respect to
which Mr. Powell, Jr. shares voting and investment powers, and 61,028 shares
owned by a trust with respect to which Mr. Powell, Jr. has sole voting and
investment powers. Mr. Powell, Jr. has no other beneficial interest with respect
to such shares and disclaims beneficial ownership thereof. Included in the
totals for both Mr. Powell, Jr. and Mr. Powell III are 1,303,000 shares owned by
a private charitable foundation with respect to which each shares voting and
investment powers with others and as to which each disclaims beneficial
ownership.
(2) The percentage of the Company's outstanding stock owned by each
director and nominee for director is less than one percent, except for Mr.
Powell, Jr. and Mr. Powell III, whose respective percentages of beneficial
ownership are reflected in the section titled "Principal Stockholders," above.
STRUCTURE AND FUNCTIONING OF THE BOARD OF DIRECTORS
The Board of Directors held five regularly scheduled meetings and two
special telephonic meetings during 1995.
Audit Committee. The Audit Committee consisted of John C. McKelvey, David
H. Hughes and William L. Trubeck for the April meeting. The Audit Committee
consisted of William L. Trubeck, David H. Hughes and Howard M. Dean for the
October and December meetings. The Committee's functions include
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consulting with the Company's independent public accountants concerning the
scope and results of the audit, reviewing the evaluation of internal accounting
controls and inquiring into special accounting-related matters.
Compensation Committee. The Compensation Committee consisted of Howard M.
Dean, Klaus E. Agthe and Ronald T. LeMay for the February and April meetings.
The Compensation Committee consisted of Klaus E. Agthe, Ronald T. LeMay and John
C. McKelvey for the October and December meetings. The Committee's functions
include making recommendations to the Board of Directors regarding compensation
of officers and approving compensation strategies for executive officers;
reviewing actions relating to officer compensation; and setting policy for the
Company's pension and profit sharing plans.
Nominating Committee. The Nominating Committee consists of the Chairman of
the Board and the Chairmen of the Audit and Compensation committees. It met once
during the last fiscal year. The Committee's functions include considering
nominees for the Board of Directors and submitting to the whole Board for its
consideration nominees approved by the Committee.
DIRECTORS' COMPENSATION
Directors who are not full-time employees of the Company or any of its
subsidiaries are paid an annual retainer for Board service of $23,000; an annual
retainer for committee service of $1,200 for each committee on which a director
serves (excepting directors on the Nominating Committee, who receive a committee
attendance fee but not a separate committee retainer); an attendance fee of
$1,300 for each Board meeting and $1,100 for each committee meeting attended;
and are reimbursed or made whole for all costs and expenses of any kind incurred
by them related to Board or committee meetings. Directors may elect to defer
receipt of the retainer and attendance fees. If the proposal to pay non-employee
directors fifty (50) percent of the Board and Committee retainers in Company
common stock is approved, the stock award will be determined annually on the
date of the Company's Annual Meeting of Stockholders, based on the closing price
of the Company's common stock on that date and the then-applicable level of
Board and Committee retainers. All such stock awards would be restricted for a
period of three (3) years or the date of any non-employee director's retirement,
disability, death, or not being renominated or re-elected to the Board,
whichever occurs first. Directors who are full-time employees of the Company or
any of its subsidiaries are not paid any retainer or attendance fees for service
as members of the Board or any committee thereof.
Mr. Powell, Jr. receives the annual retainer and meeting fees paid to other
non-employee directors and receives an additional retainer from the Company with
the result that his total annual payments from the Company equal $80,000. The
Board of Directors has determined that the compensation of Mr. Powell, Jr., and
any future ex-employee directors, should not mandatorily be subject to the stock
plan. Mr. Powell, Jr. is an ex-employee who already has voting and investment
powers in over two million shares of the Company's common stock.
During the last fiscal year, no incumbent director attended fewer than 75
percent of the aggregate of the total number of meetings of the Board held
during the period he was a director and of committees of the Board on which he
served during the period that he was a director.
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company or certain of its
subsidiaries for the fiscal years ended December 31, 1995, 1994 and 1993 of
those persons who were, at December 31, 1995, (i) the President and Chief
Executive Officer of the Company and (ii) the other four most highly compensated
executive officers of the Company or certain of its subsidiaries. The
compensation of Robert W. Burdick, former Senior Vice President of Corporate
Development and Public Affairs of the Company, who resigned on November 30,
1995, is included since he would otherwise have qualified as one of the four
most highly compensated executive officers.
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SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------- ---------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
(2)OTHER RESTRICTED OPTIONS/ LTIP (3)ALL
NAME AND PRINCIPAL BONUS ANNUAL STOCK SARS PAYOUTS OTHER
POSITION YEAR SALARY ($) ($)(1) COMP.($) AWARDS(S)($) (#) ($) COMP.($)
- --------------------------------- ---- ---------- --------- -------- ------------ -------- ------- --------
George E. Powell III 1995 416,668 0 0 0 0 0 11,436
President, Chief Executive 1994 387,333 32,776 0 0 0 0 0
Officer, Yellow Corporation 1993 360,000 0 0 0 0 0 9,062
M. Reid Armstrong 1995 340,560 0 0 0 0 0 9,410
President, Yellow Freight System, 1994 314,750 28,889 0 0 0 0 0
Inc. 1993 290,000 0 0 0 0 0 8,264
Leo H. Suggs 1995 263,107 0 0 0 0 0 2,250
President, Preston Corporation 1994 252,850 0 0 0 0 0 2,250(4)
1993 240,726 0 0 0 0 0 6,983
Robert L. Bostick 1995 207,022 0 0 0 0 0 6,564
Senior Vice President -- 1994 201,703 34,548 0 0 0 0 0
Operations Administration, 1993 190,800 0 0 0 0 0 6,983
Yellow Freight System, Inc.
Herbert A. Trucksess, III 1995 200,688 0 0 0 0 0 3,323
Senior Vice President of Finance 1994 176,250 0 0 0 0 0 974(4)
and Treasurer, Yellow 1993 150,000 0 0 0 0 0 1,161(4)
Corporation
Robert W. Burdick 1995 216,918 0 0 0 0 0 7,235
Former Senior Vice President -- 1994 236,062 25,503 0 0 0 0 0
Corporate Development/Public 1993 226,400 0 0 0 0 0 8,005
Affairs, Yellow Corporation
(1) No executive officer bonuses were paid for 1994. The amounts paid in
1994 represent the payment of deferred bonuses for 1993, as described in the
Compensation Committee Report on Executive Compensation.
(2) While the named executive officers receive certain perquisites from the
Company or the involved subsidiary, such perquisites do not reach the threshold
for reporting of $50,000 or ten percent of salary and bonus set forth in the
applicable rule of the Securities and Exchange Commission.
(3) The compensation reported for 1993 and 1995 includes (a) shares
allocated to the accounts of certain of the named executive officers under the
Company's Stock Sharing Plan and (b) with respect to Mr. Powell III, Mr.
Armstrong and Mr. Burdick, the cash replacement of the stock sharing
contributions to which Mr. Powell III, Mr. Armstrong and Mr. Burdick would have
been entitled before application of legislative limitations. During 1994, there
were no shares allocated under the Stock Sharing Plan.
(4) The compensation reported for Mr. Suggs for 1995 represents Preston
Corporation's matching contribution under Preston Corporation's 401(k) Plan.
During 1995, Mr. Suggs contributed $9,240 to the Preston Corporation 401(k) Plan
and such amount is included in the amount shown under salary. The compensation
reported for Mr. Trucksess for 1994 and 1993 represents Preston Corporation's
matching contribution under Preston Corporation's 401(k) Plan. Mr. Trucksess was
an officer of Preston Corporation during 1993 and a portion of 1994.
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OPTIONS AND STOCK APPRECIATION RIGHTS
The following table summarizes the value of the options and SARs held by
the executive officers named in the Summary Compensation Table above. None of
these officers exercised options or SARs in 1995. No options or SARs were
granted during 1995.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR
VALUE(1)
VALUE OF VALUE OF
NUMBER OF NUMBER OF UNEXERCISED UNEXERCISED
UNEXERCISED UNEXERCISED IN-THE-MONEY IN-THE-MONEY
OPTIONS AT SARS AT OPTIONS AT SARS AT
FY-END (#) FY-END (#) FY-END ($) FY-END (#)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/ EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE UNEXERCISABLE UNEXERCISABLE
- ---------------------- --------------- ------------ ------------- ------------- ------------- -------------
George E. Powell III -- -- -0-/-0- -0-/-0- -0-/-0- -0-/-0-
M. Reid Armstrong -- -- -0-/-0- -0-/-0- -0-/-0- -0-/-0-
Leo H. Suggs -- -- -0-/-0- -0-/-0- -0-/-0- -0-/-0-
Robert L. Bostick -- -- -0-/-0- 920/-0- -0-/-0- -0-/-0-
Herbert A. Trucksess,
III -- -- -0-/-0- -0-/-0- -0-/-0- -0-/-0-
Robert W. Burdick -- -- -0-/-0- -0-/-0- -0-/-0- -0-/-0-
(1) The value of the Company's common stock on 12/31/95 was $12.375.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation program for the Company's executive officers is
established to allow the organization to attract and retain the caliber of
executive whose leadership skills will enable the Company and its subsidiaries
to effectively compete in their market segments. Additionally, the programs are
intended to act as an incentive for the executive to attain the highest level of
organizational performance and profitability by rewarding the executive for
increasing levels of profit and stockholder value.
In conformance with the above compensation philosophy, the total annual
compensation for all executive officers of the Company is determined by one base
element -- salary -- and a potential annual incentive bonus. In addition, for
those executive officers at the level of senior vice president or above at the
Company or its Yellow Freight subsidiary, total annual compensation includes
potential awards under the Company's Long-Term Incentive Plan.
Salary for the Company's executive officers is determined by analysis of
three factors consisting of (1) salary levels at service industries with gross
revenues comparable to the Company; (2) evaluation of the individual executive
officer's performance; and (3) the Company's ability to pay. While the three
factors are not formally weighted, the Company's ability to pay is a threshold
consideration. Individual executive performance is not evaluated by reference to
specific performance targets or goals but rather is an overall, general
evaluation process. While the Company has targeted the median of the range
established by the competitive survey group, actual 1995 salaries for executive
officers are generally below the median.
Annual incentive bonuses are based on a performance formula derived from
competitive survey data of service companies with gross revenues comparable to
the Company's developed by Towers Perrin, a nationally recognized executive
compensation consulting firm. This performance formula provides for increasing
levels of payment once a minimum performance threshold is attained. Prior to
1995, the minimum performance threshold was measured by pre-tax operation ratio.
In 1995, the Committee recommended, and the Company's Board approved, a change
in the measurement of performance from pre-tax operating ratio to annual return
on equity for the Company's executive officers, and annual interest adjusted
return on capital for executive officers employed at its Yellow Freight
subsidiary. The purpose of this change in measurement of performance was to
align executive officer annual incentive awards more directly with the creation
of stockholder value. The performance formula utilized thus is not based on
performance targets but only on
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actual company results. No annual incentive bonuses were awarded to the
Company's executive officers for 1995 since the minimum performance threshold
was not attained for the year.
The Compensation Committee has the authority to waive or readjust the
performance formula that has been utilized for determining executive officers'
annual incentive bonuses and did so for the first and only time in 1993. This
waiver was occasioned by the anticipated negative impact in 1993 of completion
of the Preston Corporation acquisition. The 1993 awards were deferred until 1994
and made contingent upon the Company or the involved subsidiary meeting or
exceeding the performance threshold for any quarter in 1994. This contingency
was satisfied in the third quarter of 1994 with respect to the Company and its
Yellow Freight subsidiary, and accordingly executive officers employed by the
Company or its Yellow Freight subsidiary received the deferred 1993 annual
incentive bonuses in the fourth quarter of 1994. No separate incentive bonus was
awarded to executive officers for 1994 since the performance threshold, while
attained for individual quarters, was not attained for the entire year.
Prior to 1995, the Company's Long Term Incentive Plan involved the award of
either stock options, share appreciation rights, or restricted stock (all
authorized by the Company's 1992 Stock Option Plan), with awards based on the
criteria of pre-tax operating ratio that was also utilized prior to 1995 for
computation of annual incentive bonuses. In 1995 the Compensation Committee
recommended, and the Company's Board approved, a change in both the measurement
of performance and the method of payout of any long-term incentive awards.
The measurement of performance has been changed from annual pre-tax
operating ratio to annual interest adjusted return on capital, contingent upon
this return meeting or exceeding a predetermined threshold level of return
designated in the award. In line with the similar change that was adopted with
respect to awards of annual incentive bonuses, the purpose of this change in
measurement of performance was to align executive officer long-term incentive
awards more directly with the creation of stockholder value and to focus
executive officer performance on long-term improvement in the Company's or the
involved subsidiary's return on investment.
With respect to the method of payout of any long-term incentive awards,
while the awards still utilize the pre-1995 practice of basing awards on a
three-year term of measurement, the Plan now utilizes deemed (or phantom) common
stock awards. At the end of each year during the three-year term of the award, a
positive or negative adjustment will be made to the account of each award
recipient representing, for the number of shares awarded to each recipient, the
Interest Adjusted Return on Capital, on a per-share basis, above or below the
grant's threshold level. Per share return is determined by dividing Interest
Adjusted Return by the total number of deemed common stock shares (28,500,000).
It has been the Compensation Committee's practice to restrict awards to
executive officers at the level of senior vice president or above at the Company
or its Yellow Freight subsidiary. Since the performance formula is based
entirely on actual Company results, the Compensation Committee in its
deliberations does not consider the amount of any long-term incentive awards
previously granted, or the aggregate size of current awards. Awards under the
Company's Long Term Incentive Plan were granted in 1995 to all executive
officers at the level of senior vice president or above at the Company and its
Yellow Freight subsidiary. Given the three-year term of the awards, the value,
if any, of these awards cannot be finally determined until December 31, 1997
(see separate discussion below of the circumstances pertaining to the award to
CEO George E. Powell III). If an award ultimately results in a payout being due
the recipient, the payout can be in the form of cash or shares of the Company's
common stock (as authorized by the Company's 1992 Stock Option Plan), at the
Compensation Committee's option.
The Compensation Committee has the same authority to waive or readjust the
threshold and method of computation utilized for determining awards under the
Company's Long Term Incentive Plan that it has with respect to awards of annual
incentive bonuses. No such waiver or readjustment of the threshold or method of
computation has occurred with respect to the current award under the Company's
Long Term Incentive Plan instituted in 1995 or any prior awards under the
Company's 1992 Stock Option Plan.
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CEO COMPENSATION
The base salary of George E. Powell III is set at a level commensurate with
competitive salaries for CEO positions of service industry companies with gross
revenues comparable to the Company, using survey data developed by Towers
Perrin, a nationally recognized executive compensation consulting firm. While
Mr. Powell's base annual salary was increased by $40,000 in 1995 in order to
bring his base salary more in line with the involved survey group, his base
salary remains below the range midpoint of this group.
No annual incentive bonus was granted Mr. Powell in 1995 for the same
reasons documented above in the Compensation Committee's general discussion of
executive officer compensation. Mr. Powell received a deferred 1993 annual
incentive bonus in the fourth quarter of 1994, again for the reasons set forth
in the Compensation Committee's above discussion of executive officer
compensation. The deferred 1993 annual incentive bonus was the only bonus
received by Mr. Powell in 1994.
Mr. Powell received in 1995 an award under the Long Term Incentive Plan
instituted in 1995. On January 17, 1996, Mr. Powell announced his intention to
resign as CEO. Pursuant to the terms of the 1995 Long Term Incentive Plan, his
resignation will result in the forfeiture of any account balance under the Plan.
No award under the Company's previous long-term incentive plan was granted Mr.
Powell in 1993 or 1994.
Klaus E. Agthe, Chairman
John C. McKelvey
Ronald T. LeMay
Members of the Compensation Committee
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EMPLOYMENT CONTRACTS, CHANGE OF CONTROL AGREEMENTS
AND TERMINATION OF EMPLOYMENT AGREEMENTS
The Company has entered into Executive Severance Agreements (the
"Agreements") with all the executive officers named in the Summary Compensation
Table, as designated by the Board of Directors.
In the event of a "Change in Control" of the Company followed within two
years by (1) the termination of the executive's employment for any reason other
than death, disability, retirement or "cause" or (2) the resignation of the
executive due to an adverse change in title, authority or duties, a transfer to
a new location, a reduction in salary, or a reduction in fringe benefits or
annual bonus below a level consistent with the Company's practice prior to the
Change of Control, the Agreements provide that the executive shall be paid a
lump sum cash amount equal to the sum of (a) two times the executive's highest
compensation (salary plus bonus) for any consecutive 12-month period within the
previous three years and (b) a cash amount equal to the unvested portion (if
any) of any profit sharing account of the executive under any profit sharing
plan of the Company or its subsidiaries. If the executive is within 10 years of
his normal retirement age (65), then the executive would be paid three times
such highest compensation. A termination is for "cause" if it is the result of a
conviction of a felony by a court of competent jurisdiction, which is no longer
subject to direct appeal, or an adjudication by a court of competent
jurisdiction, which is no longer subject to direct appeal, that the executive is
mentally incompetent or that he is liable for negligence or misconduct in the
performance of his duty to the Company.
"Change of Control" for the purpose of the Agreements shall be deemed to
have taken place if: (i) A third person, including a "group" as defined in
Section 13(D)(3) of the Securities Exchange Act of 1934, purchases or otherwise
acquires shares of the Company and as a result thereof becomes the beneficial
owner of shares of the Company having 20% or more of the total number of votes
that may be cast for the election of directors of the Company; or (ii) as the
result of, or in connection with any cash tender or exchange offer, merger or
other business combination, or contested election, or any combination of the
foregoing transactions, the continuing directors shall cease to constitute a
majority of the Board of Directors of the Company or any successor to the
Company.
In addition, as described previously (see discussion of the "1992 Stock
Option Plan"), the Compensation Committee has provided a "Limited Right" in
connection with certain stock options held by the executive officer who is a
party to an Agreement. In the event of the purchase of Company stock pursuant to
a tender or exchange offer by a party other than the Company for 20% or more of
the Company's then outstanding shares, the "Limited Right" allows the executive
to receive from the Company, upon surrender of outstanding options, an amount in
cash equal to the then fair market value of the shares for which the "Limited
Right" is exercised, less the exercise price and applicable withholding taxes.
The "Limited Right" may be exercised within 30 days after the first purchase of
Company stock pursuant to the tender or exchange offer.
On January 17, 1996, Director, President and Chief Executive Officer George
E. Powell III announced his intention to resign as President and Chief Executive
Officer, pending the identification and hiring of his successor. Mr. Powell will
remain as a director and is among the slate of nominees for director at the 1996
Annual Meeting of Stockholders. The Board of Directors has reached an
understanding with Mr. Powell that he shall receive severance payments at his
current salary level for a period of one and one-half years from the effective
date of his resignation. During this one and one-half year period, Mr. Powell
will continue to be eligible for certain fringe benefits, such as medical and
insurance coverages, and will continue vesting under the Company's Defined
Benefit Pension Plan. Pursuant to the terms of the 1995 Long Term Incentive
Plan, Mr. Powell's resignation will result in the forfeiture of any account
balance in the 1995 award granted Mr. Powell.
The Company has entered into a Separation Agreement with Robert W. Burdick,
former Senior Vice President, Corporate Development/Public Affairs of the
Company, who resigned effective November 30, 1995. Pursuant to this Agreement,
Mr. Burdick is to receive severance payments equal to two times his annual
salary as of the effective date of his resignation paid out over a period of two
years, two months, to be potentially reduced both in terms of amount and length
of severance dependent upon Mr. Burdick engaging in other employment prior to
completion of the severance payout period. During the severance payout period,
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Mr. Burdick will continue to be eligible for certain fringe benefits, such as
medical and insurance coverages, and will continue vesting under the Company's
Defined Benefit Pension Plan. Pursuant to the terms of the 1995 Long Term
Incentive Plan, Mr. Burdick's resignation will result in the forfeiture of any
account balance in the 1995 award granted Mr. Burdick.
COMMON STOCK PERFORMANCE
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return of the Company's common stock against
the cumulative total return of the S&P Composite-500 Stock Index and the S&P
Transportation Composite Index for the period of five years commencing December
31, 1990 and ending December 31, 1995.
Measurement Period Yellow Cor- S&P 500 In- S&P Trans-
(Fiscal Year Covered) poration dex portation
DEC 90 100 100 100
118.83 114.53 113.87
115.93 114.27 121.82
115.85 120.38 130.55
DEC 91 103.58 130.47 148.80
113.17 127.17 149.99
107.63 129.58 148.82
98.11 133.66 143.67
DEC 92 110.02 140.39 161.68
96.81 146.52 169.55
76.85 147.24 170.04
100.99 151.04 180.42
DEC 93 104.11 154.54 192.45
100.74 148.69 180.27
74.14 149.31 175.92
80.46 156.61 165.00
DEC 94 104.38 156.58 161.33
70.73 171.83 185.88
81.17 188.24 193.35
61.57 203.21 217.71
DEC 95 55.24 215.44 224.79
1992 STOCK OPTION PLAN
On April 24, 1992, the stockholders approved the adoption of the 1992 Stock
Option Plan (the "1992 Plan"). 800,000 shares of common stock are available for
grant under the 1992 Plan. The 1992 Plan expires on April 25, 2002, in that no
awards may be made after that date.
The Company's 1992 Plan is administered by the Compensation Committee of
the Board of Directors, none of whose members are eligible to receive an award
under the 1992 Plan. The 1992 Plan covers executive, managerial, supervisory and
professional employees of the Company and certain of its subsidiaries (including
employee-directors and officers) and permits three types of awards: Grants of
stock options, which are either Incentive Stock Options ("ISOs") or non-ISOs
("non-qualified options"); grants of stock options coupled with a grant of stock
appreciation rights ("SARs"); and grants of restricted stock awards. The 1992
Plan also provides for share delivery to employees otherwise eligible for an
award under the Plan in lieu of cash incentive awards under any management
incentive plan. As detailed in the Report of the Compensation Committee on
Executive Officer Compensation, the Long Term Incentive Plan adopted by the
Company in 1995 will result in only the last of the enumerated powers granted
the Compensation Committee being potentially utilized for current and future
long-term incentive awards.
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In determining the grant of awards to eligible employees, the Compensation
Committee may consider the nature of the services rendered or that the Committee
expects may be rendered by the employee, the employee's present and potential
contributions to the success of the business, the number of years of effective
service the employee is expected to have and such other factors as the Committee
may deem relevant.
The option exercise price (or initial value in the case of an SAR) is 100%
of the fair market value of the stock on the date of the grant, and may be paid
in cash or by delivery of shares owned by the optionee. Options and SARs coupled
with options become exercisable on the first anniversary of the date of the
grant. Restrictions on the sale or transfer of restricted stock awarded under
the 1992 Plan will be lifted on a specified percentage of the total award each
year, beginning one year after the date of grant. The time at which SARs and
certain options become exercisable or restrictions lapse on restricted stock
award shares is accelerated upon the occurrence of certain events, such as total
and permanent disability or death of an employee while in the employ of the
Company or a subsidiary, if the Company is wholly or partly liquidated, or is a
party to a merger, consolidation or reorganization in which it or an entity
controlled by it is not the surviving entity, or upon the occurrence of certain
events which may lead to a change of control of the Company. If not previously
exercised, options or rights granted under the 1992 Plan expire either ten years
or five years after the grant date. No options or SARs have yet been awarded
under the 1992 Plan. Any options or SARs presently held by the executive
officers named in the Summary Compensation Table were granted under the
substantially similar predecessor 1983 Stock Option Incentive Plan ("the 1983
Plan"). No executive officer exercised options or SARs under the 1983 Plan in
1995. No executive officers were granted restricted stock awards in 1995.
DEFINED CONTRIBUTION PLANS
Prior to January 1, 1995, the Company and certain of its subsidiaries'
executive officers participated in two defined contribution plans -- the Yellow
Freight Profit Sharing Trust and the Yellow Freight Stock Sharing Plan.
Effective January 1, 1995, these plans were merged to create the Yellow
Corporation Retirement Savings Plan. The Plan covers all the regular full-time
and part-time office, clerical, sales, supervisory and executive personnel of
the Company and participating subsidiaries (excluding directors who are not
salaried employees) employed in the United States and not covered by a
collective bargaining agreement. A total of 5,397 employees were participants in
1995.
Each year the Board of Directors determines the amount of contributions to
the trust based primarily upon the Company's profitability and/or the Plan's
debt obligation. A contribution equal to the last scheduled principal and
interest payment due, less dividend income, was made to the trust in 1995
equaling $4,435,524.
The Employee Retirement Income Security Act of 1974 ("ERISA"), as amended
by subsequent legislation, may prevent the contribution to or allocation under
the defined contribution plans of the amount to which a participant would
otherwise be entitled. The Company has a policy of replacing contributions to
which a participant would have been entitled before application of the
legislative limitations by means of an annual cash payment to affected
participants. The policy allows a participant to defer any annual cash payment
through a non-qualified, unfunded, deferred compensation arrangement, though no
executive officer receiving such payment has elected deferral. Amounts paid to
certain of the named executive officers in 1993 and 1995 under the Company's
policy of cash replacement of Stock Sharing contributions subject to legislative
limitations are set forth in Foot Note (3) of the Summary Compensation Table. No
other executive officer qualified for such cash payments.
Plan Provision. Two accounts are maintained for each participant, a Company
Managed Account and an Employee Managed Account. Company contributions and
forfeitures are allocated to the Company managed account, which vests at the
rate of 20% per year of service. Vested benefits are paid upon termination of
employment, but an active participant may withdraw a portion of his prior Profit
Sharing Account, subject to certain limitations.
The Plan trustee may borrow funds to finance purchases of Company stock (a
"purchase loan"). Each year, the Company may make a contribution to the Plan
from Company earnings. The amount of Company
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contributions can vary from year to year, according to Company profits. This
contribution (and any dividends on shares of stock in the Plan purchased with an
outstanding loan) may be used to repay any purchase loan. As the loan is repaid,
stock will be allocated to each participant's account. If there is no loan
outstanding, or if a contribution in excess of the amount needed to service debt
on any outstanding loan is made, cash or stock purchased by the contribution
will be allocated directly to each participant's Company Managed Account.
Participants vote allocated shares; the Plan trustee votes unallocated shares in
the same proportion as the allocated shares are voted.
The numbers of shares allocated to a participant in any year is based on a
formula that compares the participant's earnings with those of all other
eligible employees. The shares allocated to the accounts of certain of the named
executive officers in 1993 and 1995 are detailed in Footnote (3) to the Summary
Compensation Table. No shares were allocated under the former Stock Sharing Plan
in 1994.
The Plan also contains provisions for a cash or deferred arrangement under
Section 401(k) of the Internal Revenue Code. This arrangement allows a
participant to contribute up to 15% of his annual earnings before, or after,
federal income taxes to his Employee Managed Account. For 1995, the maximum
annual participant contribution was $9,240. There is no company matching
contribution.
A participant may choose to invest his Employee Managed Account among four
investment alternatives. In addition, after reaching age 55 a participant may
transfer 50% or 100% of his Company Managed Account's value into one or more of
the four investment funds.
Accounts become payable upon cessation of employment, retirement at or
after age 65, and in the event of total and permanent disability or death.
Participants have various options as to the time and method of payment. An
active participant may withdraw a portion of his before-tax deposits, subject to
certain limitations. After-tax deposits may be withdrawn for any reason.
The amounts which the named executive officers chose to have deposited in
the Section 401(k) portion of the Plan, subject to the 15% and maximum annual
participant limitation, are included in the salary column of the Summary
Compensation Table.
DEFINED BENEFIT PENSION PLAN
The Company and certain of its subsidiaries' officers participate in a
noncontributory, defined benefit pension plan. Such plan covers all regular
full-time and regular part-time office, clerical, sales, supervisory and
executive personnel of the Company and participating subsidiaries (excluding
directors who are not salaried employees) who are at least age 21, are employed
in the United States and are not otherwise covered by a pension plan under a
collective bargaining agreement. Pension plan benefits are calculated solely on
salaries and cash bonuses. Compensation reported in the Summary Compensation
Table includes amounts which are not covered compensation under the pension
plan. Participants are vested after five years of service.
A participant retiring at age 65 will receive an annual pension benefit
(single life basis) amounting to 1 2/3% of his final average annual compensation
paid in the five highest consecutive years of the participant's last ten
consecutive years of participation, multiplied by his total years of
participation, the sum of which is reduced by 50% of the amount of his primary
Social Security entitlement at retirement (prorated if participation is less
than 30 years). The pension of the highest-paid executive officers will probably
be reduced from the above formula because of ERISA limitations.
The following table sets forth the gross annual benefits (single life at
age 65), before deduction of the applicable primary Social Security offset
amount (a maximum of 50% of the participant's primary Social Security benefits
at 30 years of participation), payable upon retirement under the defined benefit
pension plan
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for specified remuneration and years of service classifications, part of which
may be paid pursuant to the supplemental retirement income agreements discussed
below:
PENSION VALUE TABLE
YEARS OF SERVICE
------------------------------------------------
ELIGIBLE REMUNERATION(1) 15 20 25 30 35
- ------------------------ -------- -------- -------- -------- --------
125,000 31,250 41,650 52,100 62,500 73,000
150,000 37,500 50,000 62,500 75,000 87,500
175,000 43,750 58,350 73,000 87,500 102,100
200,000 50,000 66,650 83,350 100,000 116,650
225,000 56,250 75,000 93,750 112,500 131,250
250,000 62,500 83,350 104,150 125,000 145,850
300,000 75,000 100,000 125,000 150,000 175,000
350,000 87,500 116,650 145,850 175,000 204,150
400,000 100,000 133,350 166,650 200,000 233,350
450,000 112,500 150,000 187,500 225,000 262,500
500,000 125,000 166,650 208,350 250,000 291,650
550,000 137,500 183,350 229,150 275,000 320,850
600,000 150,000 200,000 250,000 300,000 350,000
650,000 162,500 216,650 270,850 325,000 379,150
(1) Eligible Remuneration as used in this table is defined as final
average covered compensation (salary and annual bonus) for the five highest
consecutive years of the participant's last ten consecutive years of
participation preceding termination of employment under the plan.
ERISA, as amended by subsequent legislation, limits covered compensation
under the pension plan to $150,000 in 1995 and imposes maximum annual benefit
limitations, which may cause a reduction in the pension payable under the
pension plan. The Company has entered into nonqualified, unfunded supplemental
retirement income agreements with affected participants which are designed to
provide those benefits intended by the pension plan before application of the
legislative limitations.
The named executive officers have credited years of service in the plan as
follows: Mr. Powell III, 22 years; Mr. Armstrong, 22 years; Mr. Suggs, 7 years;
Mr. Bostick, 30 years; and Mr. Trucksess, 1 year.
RELOCATION POLICY
The Company and certain of its subsidiaries' officers, as well as other
salaried employees, are covered by the Company's relocation policy. The policy
reimburses employees for certain moving expenses when the employee is
transferred to a new location and is required by the Company or its subsidiary
to move his residence. Items covered by the policy include the expense of a trip
to the new location to select a new home, car mileage expenses, certain expenses
associated with terminating any lease at the old location, temporary living
expenses at the new location, travel expenses for trips home during the
transition period, cost of transporting certain household goods and
reimbursement for en route travel expenses or airfare for transporting the
employee's family to the new location. In addition, except for certain
newly-hired employees moving to their initial assignment, transferred employees
are paid a predetermined lump sum to cover miscellaneous moving costs and
expenses.
The policy pays closing costs on a home purchased by a transferred
executive officer or other key employee. The policy also gives such an employee
the option of either (1) selling his home at the old location for its estimated
value to an employee relocation assistance firm or (2) selling his home himself
or through a real estate agent. If the first option is chosen and the home sells
for less than the amount paid to the employee, the relocation assistance firm is
reimbursed by the Company for the difference between what it pays the employee
and the selling price, plus its expenses, costs and fees. If the second option
is chosen, the employee is reimbursed for normal selling expenses and receives a
cash incentive for selling the home to a third party rather than selling it to a
relocation assistance firm.
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In 1993, Preston Corporation made to Leo H. Suggs, President of that
subsidiary, a $480,000 interest-free relocation loan effective May 3, 1993.
II. PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
ELIMINATE THE CLASSIFICATION OF THE BOARD OF DIRECTORS AND
REDUCE THE MINIMUM NUMBER OF DIRECTORS FROM 9 TO 5
Article Fifth of the Corporation's Certificate of Incorporation provides
for the classification of the Board of Directors into three classes, with each
class being elected every three years, and contains other provisions relating to
such classification concerning the filling of director vacancies. The Board of
Directors has unanimously determined that the Certificate of Incorporation
should be amended to eliminate the classification of the Board of Directors and
has unanimously voted to recommend such amendment to the stockholders. A revised
form of Article Fifth of the Certificate of Incorporation to accomplish this
amendment is attached to this proxy statement as Exhibit A. If the proposed
amendment is approved, the classified Board will be eliminated, the current
terms of office of each director will end at the 1997 Annual Meeting of
Stockholders, and directors will thereafter be elected for one-year terms at
each Annual Meeting of Stockholders. In view of the proposed elimination of the
three classes of directors, the Board of Directors further believes it is
appropriate to reduce the minimum number of directors from 9 to 5.
A classified Board of Directors has the effect of making it more difficult
for a substantial stockholder to gain control of a Board of Directors without
the approval or cooperation of incumbent directors and thus may deter unfriendly
and unsolicited takeover proposals and proxy contests. On the other hand, a
classified Board of Directors makes it more difficult for stockholders to change
a majority of directors even where a majority of stockholders is dissatisfied
with the performance of incumbent directors. In weighing the competing arguments
for and against a classified Board, the Board was particularly mindful of the
opinions expressed by a number of the Company's large institutional holders in
opposition to a classified Board, and the Board also recognized that the
environment for unsolicited takeover proposals and proxy contests has changed
considerably over the last several years. Accordingly, the Board of Directors
has determined that the classified Board should be eliminated and that the
minimum number of directors should be reduced from 9 to 5. Under the terms of
Article Eighth of the Company's Certificate of Incorporation, since the proposed
amendment has been unanimously approved by the Board of Directors, adoption of
the proposed amendment requires the affirmative vote of a majority of the
outstanding shares as of the record date. As a result of such voting
requirement, abstentions and broker non-votes will have the effect of votes
"Against" this proposal.
III. PROPOSAL TO ADOPT A PLAN TO PAY FIFTY PERCENT (50%) OF THE
BOARD AND COMMITTEE RETAINERS OF NON-EMPLOYEE
DIRECTORS IN COMPANY COMMON STOCK RESTRICTED FOR THREE YEARS
The Board of Directors has unanimously voted to recommend to the
stockholders for their approval a plan to pay non-employee directors fifty
percent (50%) of the annual Board and committee retainers in Company common
stock.
Under the terms of the plan, if approved by the stockholders, effective
April 1996 the amount of the award would be determined annually on the date of
the Annual Stockholders Meeting, based upon the closing price of the stock on
that date and the then-applicable level of Board and committee retainers. The
stock awards would be restricted against sale or other disposition for a period
of three (3) years from the date of each award or the date of any non-employee
director's retirement, death, disability, or not being renominated or re-elected
to the Board, whichever occurs first. The Plan will be administered by the
Compensation Committee of the Board of Directors. The full text of the proposed
Plan is attached to this proxy statement as Exhibit B. This description of the
proposed Plan is qualified in its entirety by reference to Exhibit B.
The directors Plan is intended to promote an increased proprietary interest
in the Company by non-employee directors, thereby aligning such directors'
interest more closely with the interests of stockholders generally. The Board of
Directors contemporaneously determined that the compensation of the present
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Chairman of the Board, George E. Powell, Jr., and any future ex-employee
directors, should not mandatorily be subject to the stock plan. Mr. Powell, Jr.
is an ex-employee who already has voting and investment powers in over two
million shares of the Company's common stock.
Adoption of the proposed amendment requires the affirmative vote of a
majority of the outstanding shares as of the record date. As a result of such
voting requirement, abstentions and broker non-votes will have the effect of
votes "Against" this proposal.
IV. PROPOSAL TO APPROVE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as independent
public accountants of the Company for 1996. The appointment of independent
public accountants by the Board of Directors is submitted annually for approval
by the stockholders. Although stockholder approval is not required, if the
stockholders do not ratify the appointment, the Board of Directors will
reconsider the matter. A representative of Arthur Andersen LLP will be present
at the Annual Meeting of Stockholders to respond to appropriate questions, and
he will have an opportunity to make a statement if he desires to do so.
V. OTHER MATTERS
The Board of Directors does not intend to bring any other business before
the meeting and it is not aware that anyone else intends to do so. If any other
business comes before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote as proxies in accordance with their best
judgment.
PLEASE EXERCISE YOUR RIGHT TO VOTE BY PROMPTLY COMPLETING, SIGNING AND
RETURNING THE ENCLOSED PROXY FORM. You may later revoke the proxy, and if you
are able to attend the meeting, you may vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS:
WILLIAM F. MARTIN, JR.
WILLIAM F. MARTIN, JR.
Secretary
Overland Park, Kansas
March 12, 1996
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EXHIBIT A
FIFTH: The business and affairs of the Corporation shall be managed by the
Board of directors consisting of not less than 5 9 nor more than 15 persons. The
exact number of directors within the limitations specified in the preceding
sentence shall be fixed from time to time by the Board of Directors pursuant to
a resolution adopted by a majority of the entire Board of Directors. The
directors need not be elected by ballot unless required by the Bylaws of the
Corporation.
The Board of Directors shall be divided into three classes as nearly equal
in number as may be. The initial term of office of each director in the first
class ("Class I") shall expire at the annual meeting of stockholders in 1984;
the initial term of office of each director in the second class ("Class II")
shall expire at the annual meeting of the stockholder in 1985; and the initial
term of office of each director in the third class ("Class III") shall expire at
the annual meeting of stockholders in 1986. At each annual election commencing
at the annual meeting of stockholders of 1984, the successors to the class of
directors whose term expires at that time shall be elected to hold office for a
term of three years to succeed those whose term expires, so that the term of one
class of directors shall expire each year.
The Board of Directors shall be elected annually at the annual meeting of
stockholders and the members of the Board so elected shall serve one-year terms
to expire at the following annual meeting of stockholders. Each director shall
hold office for the term for which he is elected or appointed and until his
successor shall be elected and qualified or until his death, or until he shall
resign.
Subject to the rights of the holders of any series of Preferred Stock then
outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a majority vote of the directors then
in office, and directors so chosen shall hold office for a term expiring at the
next annual meeting of stockholders at which the term of the class to which they
have been elected expires. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
No director of the corporation shall be removed from his office as a
director by vote or other action of shareholders or otherwise unless the
director to be removed has been convicted of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal or unless
the director to be removed has been adjudged by a court of competent
jurisdiction to be mentally incompetent or to be liable for negligence or
misconduct in the performance of his duty to the corporation and such
adjudication is no longer subject to direct appeal.
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EXHIBIT B
YELLOW CORPORATION
DIRECTORS' STOCK COMPENSATION PLAN
1. PLAN ADMINISTRATION AND ELIGIBILITY.
1.1 Purpose. The purpose of the Yellow Corporation Directors' Stock
Compensation Plan (the "Plan") is to promote an increased proprietary interest
in the Company and to encourage ownership of the Company's common stock by
directors of the Company who are not employees of the Company or any of its
subsidiaries ("Non-Employee Directors").
1.2 Administration. This Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors of the Company. Since this
Plan is designed to be (to the maximum extent possible) self-effectuating, this
function will be limited to matters of interpretation, implementation, and
general administration oversight. The Committee may adopt such rules for
administration of this Plan as may be deemed necessary or appropriate. Decisions
of the Committee shall be final and binding on all persons who have an interest
in this Plan.
1.3 Participation in the Plan. Individuals who are Non-Employee Directors
immediately following the election of directors at the Company's Annual Meeting
of Stockholders in April of each calendar year (other than individuals who are
former employees of the Company or any of its subsidiaries) are mandatory
participants in this Plan for that calendar year. Non-Employee Directors (other
than individuals who are former employees of the Company or any of its
subsidiaries) who first join the Company's Board other than by election by the
stockholders at the Annual Meeting shall receive their board compensation all in
cash until their election at the first Annual Meeting following their
appointment to the Board and shall be mandatory participants in this Plan
thereafter. Non-Employee Directors who are ex-employees of the Company or any of
its subsidiaries may participate in this Plan on an optional basis by filing a
written election to participate with the Committee. Such written election to
participate shall be effective with respect to an award to be made pursuant to
Section 3.1 of this Plan only if filed with the Committee by June 30 of the
calendar year next preceding the calendar year in which the award is to be made,
and such an election to participate shall remain in effect until revoked by
filing a written revocation with the Committee by June 30 of the calendar year
next preceding the calendar year for which the revocation is to be effective.
Non-Employee Directors who participate in this Plan for a calendar year on a
mandatory or optional basis are hereinafter referred to as "Participants."
2. STOCK SUBJECT TO THE PLAN
2.1 Number of Shares. The maximum number of shares of the Company's One
Dollar ($1.00) par value stock ("common stock" or "shares") which may be issued
pursuant to this Plan shall be one hundred thousand (100,000) shares, subject to
adjustment as provided in Section 4.4 below. If any shares of restricted stock
are forfeited, the forfeited shares shall again become available for award under
the Plan.
2.2 Share Issuance. In order to fulfill its obligations under this Plan,
the Company may utilize authorized but previously unissued shares, Treasury
shares, or shares previously repurchased by or on behalf of the Company.
3. AWARDS OF RESTRICTED STOCK
3.1 Awards. At the Board of Directors meeting immediately following the
Company's Annual Meeting of Stockholders in April of each calendar year, each
Participant shall be granted an award of restricted stock equal in value to
fifty percent (50%) of the then applicable level of annual Board and Committee
retainers, with the value of the Company's stock to be computed for the purposes
of determining the number of restricted shares awarded by reference to the
closing price of the Company's common stock on the National Association of
Security Dealers Daily Average Quotation (NASDAQ) exchange on the date of the
Company's applicable Annual Meeting of Stockholders. Such award shall be in lieu
of fifty percent (50%) of
B-1
22
the annual Board and Committee retainers otherwise payable to the Participant in
cash. To the extent that there are insufficient shares available for awards, the
awards to all Participants for that year shall be proportionately reduced.
3.2 Vesting Schedule. Restricted stock awarded to Participants each
calendar year under Section 3.1 shall vest and become non-forfeitable on the
third anniversary of each award, subject to earlier vesting as provided in
Sections 3.3. and 3.6 below.
3.3 Terms of Award. Each award of restricted stock to a Participant shall
be evidenced by an award document containing the following express terms and
conditions:
3.3.1 Escrow. During such time as the Company issues certificates as
evidence of its shares, each Participant receiving an award of restricted
stock shall execute an award document, an escrow agreement, and appropriate
blank stock powers with respect to his or her restricted stock. Stock
certificates for such restricted stock registered in the name of each
Participant and bearing a legend referring to the restrictions imposed by
this Plan shall be issued and deposited, together with the award document,
the escrow agreement and stock powers, with the Company acting as escrow
agent. A Participant shall be entitled to the delivery of such stock
certificate out of escrow only in accordance with the provisions herein. At
such time as the Company issues shares by book entry, the Board shall
ensure that appropriate steps are taken to ensure that forfeited shares are
returned to the account of the Company. All shares of common stock or other
securities or property issued with respect to or in substitution for common
stock held under the escrow agreement from time to time, whether such
common stock or securities or property is issued by the Company or by
another issuer, and all cash or property received by the Company, as escrow
agent, on account of the redemption of the restricted stock or the
liquidation of the Company, shall be treated as restricted stock and shall
be subject to all terms and conditions of the restricted stock award
document and escrow agreement and shall be delivered out of escrow to a
Participant or to the Company as if it were the portion of common stock
with respect to which they were issued.
3.3.2 Termination of a Director. A Participant whose membership on the
Board terminates by reason of retirement following attainment of age 70,
death, disability, or not being renominated or re-elected to the Board,
shall fully vest in all restricted stock notwithstanding any provision to
the contrary. A Participant whose membership terminates for any other
reason shall forfeit to the Company all restricted stock which, at the time
of such termination, is not then vested. For this purpose, "disability"
shall mean long-term disability as determined under rules and procedures
that apply under the Company's Long-Term Disability Plan for employees as
then in effect.
3.4 Stockholder Rights. Except as otherwise provided herein, each
Participant shall have all the rights and privileges of a stockholder of the
Company as to his or her restricted stock, including the right to receive any
cash dividends and, subject to Section 3.3.1, other dividends declared with
respect to such stock and the right to exercise voting rights.
3.5 Section 83b Elections. A Participant who files an election with the
Internal Revenue Service to include the fair market value of any shares of
restricted stock in gross income while such shares are subject to restriction
shall promptly furnish the Committee with a copy of such election. The
Participant shall be responsible for paying the amount of any federal, state,
local or other taxes required to be paid with respect to such election.
3.6 Acceleration of Vesting. Notwithstanding Section 3.2, in the event of a
dissolution or liquidation of the Company or a merger or consolidation in which
the Company is not the surviving corporation, any unvested awards granted prior
to the date of merger or consolidation shall vest on the last business day
immediately prior to the effective date of the merger or consolidation.
4. GENERAL PROVISIONS
4.1 Effective Date of this Plan. This Plan shall be effective April 25,
1996, subject to approval by the stockholders of the Company. Awards under this
Plan may be made only after such stockholder approval of the Plan.
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23
4.2 Duration of the Plan. This Plan shall remain in effect until all shares
reserved for awards under the Plan have been awarded.
4.3 Amendment of the Plan. The Board of Directors of the Company may
suspend or discontinue this Plan or revise or amend it in any respect, provided,
however, that without approval of a majority of the Company's stockholders, no
revision or amendment shall (i) change the number of shares subject to this Plan
(except as provided in Section 4.4), (ii) change the designation of the class of
directors eligible to participate in the Plan, (iii) change the method of
computation of awards under the Plan, or (iv) materially increase the benefits
accruing to participants under or the cost of this Plan to the Company.
Moreover, in no event may Plan provisions be amended more than once every six
months other than to comport with changes in the Internal Revenue Code or the
rules and regulations thereunder. No amendment, modification, or termination of
this Plan shall in any manner adversely affect the rights of any Participant
with unvested awards under this Plan without his or her consent.
4.4 Changes in Shares. In the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, or other change
in the corporate structure or capitalization affecting the shares, appropriate
adjustment shall be made in the number or other character of any unvested shares
in each Participant's account as of the effective date of change. Any such
adjustment shall be made by the Committee with a view toward preserving the
economic benefit of the shares to the Participant.
4.5 No Right to Continue as a Director. Neither this Plan, nor the granting
of any award under this Plan, nor any other action taken pursuant to this Plan
shall constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a director for any period of time, or at
any particular rate of compensation.
4.6 Assignments. The rights and benefits under this Plan may not be
assigned, except with respect to such assignments occurring by reason of the
death or disability of any Participant.
4.7 Notice. Any written notice to the Company required by any of the
provisions of this Plan shall be addressed to the Secretary of the Company and
shall become effective when it is received.
4.8 Stockholder Approval and Registration Statement. This Plan shall be
approved by the Board of Directors and submitted to the Company's stockholders
for approval. Any awards under this Plan prior to the effectiveness of a
registration statement filed with the Securities and Exchange Commission
covering the shares to be issued hereunder shall be expressly conditional upon
the effectiveness of a registration statement covering the shares.
4.9 Governing Law. This Plan and all determinations made and actions taken
pursuant hereto shall be governed by and construed in accordance with the laws
of the State of Delaware.
B-3
24
[FRONT SIDE]
YELLOW CORPORATION
PROXY
ANNUAL MEETING OF STOCKHOLDERS, APRIL 25, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints GEORGE E. POWELL, JR., DAVID H. HUGHES
AND GEORGE E. POWELL III, and each of them, with full power of substitution,
Proxies of the undersigned to vote all shares of Common Stock of Yellow
Corporation, standing in the name of the undersigned or with respect to which
the undersigned is entitled to vote, at the Annual Meeting of Stockholders of
Yellow Corporation, to be held at the Radisson Hotel Overland Park, 8787 Reeder
Road, Overland Park, Kansas, on Thursday, April 25, 1996 at 9:30 a.m., and at
any adjournments thereof.
If more than one of the above named Proxies shall be present in person
or by substitution at such meeting or at any adjournment thereof, the majority
of said Proxies so present and voting, either in person or by substitution,
shall exercise all of the powers hereby given. The undersigned hereby revokes
any proxy heretofore given to vote at such meeting.
(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
- --------------------------------------------------------------------------------
[REVERSE SIDE]
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. IF NO
DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR ALL PROPOSALS.
1. ELECTION OF DIRECTORS: Nominees - George E. Powell III, Klaus E. Agthe and Howard M. Dean
FOR all nominees WITHHOLD
listed (except as AUTHORITY (To withhold authority to vote for any individual nominee, write that nominee's
marked to the to vote for all name on the line provided below.)
contrary to the right). nominees
________________________________________________________________________________
[] [] The Board of Directors recommends a vote FOR all director nominees listed.
2. PROPOSAL TO APPROVE AN AMENDMENT 3. PROPOSAL TO APPROVE A PLAN 4. PROPOSAL TO APPROVE THE APPOINTMENT
to the Certificate of Incorporation to pay fifty (50) percent of the of Arthur Andersen LLP as independent public
eliminating the classification of the Board and Committee retainers of accountants of the Corporation for 1996.
Board of Directors and reducing the non-employee directors in Company
minimum number of directors from 9 to 5. common stock restricted for three(3)
years.
The Board of Directors recommends The Board of Directors recommends The Board of Directors recommends
a vote FOR Proposal 2. a vote FOR Proposal 3. a vote FOR Proposal 4.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[] [] [] [] [] [] [] [] []
5. OTHER BUSINESS: In their discretion
the Proxies are authorized to vote upon
such other matters as may properly come
before the meeting.
Please sign exactly as name appears to the left. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee,
or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
CONFIDENTIAL VOTE REQUESTED: ___________________________________________________________
[] Signature
__________________________________________________________
Signature if held jointly
Dated:______________________________________________, 1996
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
