SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[x] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
Yellow Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[YELLOW CORPORATION LOGO]
YELLOW CORPORATION
10990 Roe Avenue
Overland Park, Kansas 66211
------------------------------
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 18, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Yellow
Corporation (the "Company") will be held at the Company's General Office, 10990
Roe Avenue, Overland Park, Kansas, on Thursday, April 18, 2002 at 9:30 a.m.,
Central Daylight Time, to consider the following matters:
I. The election of eight directors;
II. The approval of the adoption of the 2002 Stock Option and
Share Award Plan;
III. The approval of the Company's Annual Cash Incentive
Compensation, or Bonus, Program;
IV. The approval of the Executive Performance Plan;
V. The approval of the appointment of Arthur Andersen LLP as
independent public accountants of the Company for 2002; and
VI. 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 18, 2002 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:
/s/ WILLIAM F. MARTIN, JR.
Overland Park, Kansas
March 1, 2002 WILLIAM F. MARTIN, JR., Secretary
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
YELLOW CORPORATION
10990 Roe Avenue
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 2002 Annual Meeting of Stockholders of
the Company, to be held at the Company's General Office, 10990 Roe Avenue,
Overland Park, Kansas (the Company's telephone is 913/696-6100; mailing address
10990 Roe Avenue, Overland Park, Kansas 66211), at 9:30 a.m., Central Daylight
Time, on April 18, 2002, and at any and all adjournments thereof. The Company's
Annual Report (including audited financial statements) for the year ended
December 31, 2001 accompanies this Proxy Statement, Notice of Annual Meeting of
Stockholders and form of proxy, which will be mailed to stockholders on or about
March 4, 2002. 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 eight directors; (2) the approval of the adoption of
the 2002 Stock Option and Share Award Plan; (3) the approval of the Company's
Annual Incentive Compensation, or Bonus, Program; (4) the approval of the
Executive Performance Plan; and (5) the approval of the appointment of Arthur
Andersen LLP as independent public accountants of the Company for 2002.
VOTING AND PROXIES
RECORD DATE; VOTING RIGHTS
Stockholders of record as of the close of business on February 18, 2002
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 24,936,787 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 the adoption of
the 2002 Stock Option and Share Award Plan; (3) for the approval of the Annual
Cash Incentive Compensation, or Bonus Program; (4) for the approval of the
Executive Performance Plan; (5) for the approval of the appointment of Arthur
Andersen LLP as independent public accountants of the Company for 2002; and (6)
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 adoption of the 2002 Stock
Option and Share Award Plan; the Annual Cash Incentive Compensation, or Bonus
Program; and the Executive Performance 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.
-1-
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 2003 Annual Meeting
must be received by November 8, 2002 to be eligible for inclusion in the proxy
materials. Stockholder proposals received after January 17, 2003 shall be
considered untimely and the Company shall be free to use its discretionary
authority to preclude any stockholder proposal received after that date from
presentment at the 2003 Annual Meeting.
SECURITY OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(2)
---- ----------------- ----------
Cassandra C. Carr...................................... 15,766(3) *
Howard M. Dean......................................... 14,099(4) *
Dennis E. Foster....................................... 4,676(5) *
Richard C. Green, Jr................................... 1,289 *
John C. McKelvey....................................... 12,725(6) *
William L. Trubeck..................................... 15,729(7) *
Carl W. Vogt........................................... 16,022(8) *
William D. Zollars..................................... 196,000(9) *
William F. Martin, Jr.................................. 26,678.6(10) *
Stephen L. Bruffett.................................... 1,125(11) *
Donald G. Barger, Jr................................... 8,750(12) *
Gregory A. Reid........................................ 15,000(13) *
All Directors and Executive Officers as a Group (12
persons)............................................. 327,859.6(14) 1.3
(1) Direct ownership unless indicated otherwise.
(2) * indicates less than 1% ownership.
(3) Includes 10,000 shares subject to option. Also includes 5,179 shares
upon which Mrs. Carr has deferred receipt until her departure from the Board.
(4) Includes 8,000 shares subject to option.
(5) Includes 2,000 shares subject to option.
(6) Includes 8,000 shares subject to option and 100 shares upon which Mr.
McKelvey disclaims beneficial ownership.
(7) Includes 10,000 shares subject to option.
(8) Includes 10,000 shares subject to option.
-2-
(9) Includes 196,000 shares subject to option.
(10) Includes 25,000 shares subject to option and 1,278.6 shares credited
to Mr. Martin's account in the Stock Sharing Plan.
(11) Includes 1,125 shares subject to option.
(12) Includes 6,250 shares subject to option .
(13) Includes 15,000 shares subject to option.
(14) Includes 291,375 shares subject to option and 1278.6 shares credited
to Executive Officers' accounts in the Stock Sharing Plan.
Share ownership of Directors and Executive Officers is as of January 31,
2002, and includes (i) shares in which they may be deemed to have a beneficial
interest, (ii) shares credited to individual accounts in the Stock Sharing Plan,
a qualified savings and defined contribution plan; (iii) shares subject to
options that are exercisable on or prior to March 31, 2002, pursuant to the
1992, 1996, 1997 and 1999 Stock Option Plans; and (iv) in the case of outside
Directors, options that are exercisable on or prior to March 31, 2002, pursuant
to the Directors' Stock Compensation Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AS OF JANUARY 31, 2002
As of January 31, 2002, 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 the percent of such
shares so owned were:
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ----------------- --------
Dimensional Fund Advisors, Inc............................ 1,824,100(1) 7.3
1299 Ocean Avenue
Santa Monica, CA 90401
Barclays Global Fund Advisors............................. 1,602,861(2) 6.4
45 Fremont St.
San Francisco, CA 94105
(1) According to information provided to the Company, Dimensional Fund
Advisors, Inc. had the following voting and dispositive powers with respect to
such shares: (a) sole voting power, 1,824,100 shares; (b) shared voting power, 0
shares; (c) sole dispositive power, 1,824,100 shares; and (d) shared dispositive
power, 0 shares.
(2) According to information provided to the Company, Barclays Global Fund
Advisors had the following voting and dispositive powers with respect to such
shares: (a) sole voting power, 1,534,171 shares; (b) shared voting power, 0
shares; (c) sale dispositive power, 1,602,861 and (d) shared dispositive power,
0 shares.
I. ELECTION OF DIRECTORS
At the meeting, eight directors are to be elected to hold office until the
2003 Annual Meeting and until their successors are elected and have qualified.
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.
-3-
The following table sets forth information with respect to each nominee for
election as a director of the Company. No nominee has any family relationship
with any other director or executive officer of the Company.
PRINCIPAL OCCUPATION;
NAME; PAST SERVICE DIRECTORSHIPS; AGE
------------------------------------- -----------------------------------------------------------
NOMINEES FOR ELECTION AS DIRECTORS
Cassandra C. Carr.................... Senior Executive Vice President, External Affairs, SBC
Director since 1997 Communications, Inc., San Antonio, TX (telecommunications)
(Since 1998). Formerly Senior Vice President, Human
Resources (1994-1998); 57
Howard M. Dean....................... Chairman of the Board of Dean Foods Company, Franklin Park,
Director since 1987 IL (processor and distributor of food products); Director
of Ball Corporation; 64
Dennis E. Foster..................... Formerly Vice Chairman of Alltel Corporation, Little Rock,
Director since 2000 AR (telecommunications) (1998-2000); Chief Executive
Officer of 360 Communications, Inc., (1993-1998); Director
of Alltel Corporation, NiSource Corporation and Salient 3
Corporation; 61
Richard C. Green, Jr................. Chairman of the Board of UtiliCorp United, Inc., Kansas
Director since 2001 City, MO (energy utility) (Since 1989). Director of BHA
Group, Inc. and Inergy; 47
John C. McKelvey..................... President and Chief Executive Officer, Menninger Foundation
Director since 1977 and Menninger Psychiatric Clinic, Topeka, KS (psychiatric
treatment and research) since November, 2001, and President
Emeritus of Midwest Research Institute, Kansas City, MO
(scientific and technical research) since January 2000.
Formerly President and Chief Executive Officer of Midwest
Research Institute, Kansas City, MO (1975-1999); 67
William L. Trubeck................... Senior Vice President and Chief Financial Officer of Waste
Director since 1994 Management, Inc., Houston, TX (waste disposal and
environmental services) (Since 2000); Formerly Senior Vice
President-Finance and Chief Financial Officer, President,
Latin American Operations, International MultiFoods, Inc.,
Minneapolis, MN (1997-2000); 55
Carl W. Vogt......................... Of Counsel (formerly a Partner and Senior Partner since
Director since 1996 1974) to Fulbright & Jaworski LLP, Washington, DC (since
2002). President Emeritus of Williams College,
Williamstown, MA (President, interim, 1999-2000); Chairman,
National Transportation Safety Board, Washington, DC
(1992-1994); Director of Deutsche Bank Alex Brown Flag
Funds (mutual funds), International Strategy and Investment
(mutual funds), American Science & Engineering and Waste
Management, Inc.; 65
William D. Zollars................... Chairman, President and Chief Executive Officer of the
Director since 1999 Company (since November 1999). Formerly President of Yellow
Transportation, Inc., the Company's principal operating
subsidiary (1996-2000); Director of Butler Manufacturing
Co. and ProLogis Trust; 54
-4-
STRUCTURE AND FUNCTIONING OF THE BOARD OF DIRECTORS
The Board of Directors held five regularly scheduled meetings and one
special meeting during 2001.
Audit Committee. The Audit Committee met four times during 2001. The Audit
Committee consisted of John C. McKelvey, Carl W. Vogt and Dennis E. Foster. The
Committee's functions are described in detail in the Audit Committee Charter,
which was attached to the Company's 2001 proxy and which can be reviewed under
the "SEC Filings" section of the Company's web site, "www.yellowcorp.com."
Compensation Committee. The Compensation Committee met three times during
2001. The Compensation Committee consisted of Cassandra C. Carr, William L.
Trubeck and Howard M. Dean for the April meeting, and William L. Trubeck, Howard
M. Dean, and Richard C. Green, Jr. 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.
Governance Committee. The Governance Committee met once during 2001. The
Governance Committee consisted of Dennis E. Foster, Cassandra C. Carr and Carl
W. Vogt. The Committee's functions include: (1) the organization, structure and
responsibility of the Board and its Committees; (b) evaluation of the
effectiveness of the Board and each Committee in the Company's corporate
governance process; (c) review of the qualifications of prospective directors
and the nomination of director candidates; (d) review of the appropriate level
of outside directors' fees and retainers; and (e) determination of the
appropriate ratio of inside and outside directors.
DIRECTORS' COMPENSATION
Directors who are not full time employees of the Company 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; 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 or expenses of any kind incurred
by them relating to Board or Committee meetings. Committee chairmen receive an
attendance fee of $2,100 for each committee meeting attended. Directors may
elect to defer receipt of the retainer and attendance fees. Pursuant to the
terms of the Directors Stock Compensation Plan, a minimum of 50% of the Board
and Committee retainers is to be paid in the form of Company common stock, with
the stock award 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. The
directors annually have the option of taking up to 100% of the Board and
Committee retainers in Company common stock rather than cash. Also pursuant to
the Directors Stock Compensation Plan, commencing on April 24, 1997 and annually
on the first business day of each calendar year thereafter, the Directors
receive option grants of 2,000 shares of the Company's common stock, with the
options vesting after six months and exercisable for five years. A total of
200,000 shares are reserved for award under the Directors Stock Compensation
Plan. Directors who are full time employees of the Company or any subsidiary are
not paid any retainer or attendance fees for services as members of the Board or
any Committee thereof.
During 2001, no incumbent Director attended fewer than 75% of the aggregate
of the total number of meetings of the Board held during the period the
incumbent was a Director and of Committees of the Board on which the incumbent
served during the period that the incumbent was a Director.
-5-
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management the
Company's audited financial statements as of and for the year ended December 31,
2001.
The Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
The Committee has received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, by the Independence
Standards Board, and has discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the financial statements referred to
above be included in the Company's Annual Report on Form 10-K (or KSB) for the
year ended December 31, 2001.
The Board of Directors has determined that the members of the Audit
Committee are independent. The Audit Committee has adopted a written charter,
which was attached to the Company's 2001 Proxy and which can be reviewed under
the "SEC Filings" section of the Company's web site, "www.yellowcorp.com"
The Committee presents the following summary of all fees paid to Arthur
Andersen LLP, the Company's auditors, during calendar year 2001:
FINANCIAL INFORMATION SYSTEMS
AUDIT FEES AUDIT RELATED FEES DESIGN AND IMPLEMENTATION ALL OTHER FEES
---------- ------------------ ----------------------------- --------------
$589,800 $227,219 $330,661 $691,815
The Audit Committee has considered and determined that the level of Arthur
Andersen LLP's fees for provision of services other than the audit and the
quarterly review services is compatible with maintaining the auditor's
independence.
John C. McKelvey, Chairman
Carl W. Vogt
Dennis E. Foster
-6-
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 2001, 2000 and 1999 of those persons who were, as of December
31, 2001, the executive officers of the Company.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------- ------------------------ -----------
(B) (C) (D) (E) (F) (I)
(A) (2)OTHER RESTRICTED (G) (H) (3)ALL
NAME AND PRINCIPAL ANNUAL STOCK OPTIONS/ LTIP OTHER
POSITION YEAR SALARY ($) BONUS ($) COMP. ($) AWARD(S) ($) SARS (#) PAYOUTS ($) COMP ($)
------------------ ---- ---------- --------- --------- ------------ -------- ----------- --------
William D. Zollars(1) 2001 $700,000 $ 0 0 0/0 0 $2,125
President and Chief 2000 $550,000 $377,603 0 200,000/0 0 $2,125
Executive Officer 1999 $375,937 $281,353 0 250,000/0 0 $2,000
William F. Martin, Jr. 2001 $267,750 $ 0 0 0/0 0 $2,550
Senior Vice President 2000 $242,500 $110,992 0 20,000/0 0 $2,550
and Secretary 1999 $228,500 $126,794 0 25,000/0 0 $2,400
Gregory A. Reid(4) 2001 $226,375 $ 0 0 0/0 0 $ 0
Senior Vice President 2000 $205,322 $150,006 0 20,000/0 0 $ 0
and Chief Communications 1999 $199,397 $110,172 0 2,000/0 0 $ 0
Officer
Donald G. Barger, Jr. 2001 $335,000 $ 0 0 0/0 0 $1,725
Senior Vice President 2000 $138,541 $ 6,818 0 25,000/0 0 $ 0
and Chief Financial Officer
Stephen L. Bruffett, 2001 $155,000 $ 0 0 0/0 0 $2,550
Vice President and 2000 $128,864 $ 49,497 0 15,000/0 0 $2,550
Treasurer 1999 $109,695 $ 41,332 0 2,000/0 0 $ 847
-------------------------
(1) Amounts indicated include compensation received by Mr. Zollars in his
former capacity of President of Yellow Transportation, Inc., the Company's
principal operating subsidiary, for January 1 through November 8, 1999.
(2) While the five named executive officers receive certain perquisites
from the Company, such perquisites did not reach in any of the reported years
the threshold for reporting of $50,000 or ten percent of salary and bonus set
forth in the applicable rules of the Securities and Exchange Commission.
(3) The compensation reported for 2001 includes the Company's matching
contribution under the 401(k) portions of its defined contribution plan.
(4) Amounts indicated include compensation received by Mr. Reid in his
former capacity of Senior Vice President of Yellow Transportation, Inc. for 1999
and through October 26, 2000.
-7-
OPTIONS AND STOCK APPRECIATION RIGHTS
The following tables summarize the option exercises by the executive
officers named in the Summary Compensation Table above during 2001; and the
year-end value of their options. No executive officers received option grants
during 2001.
OPTION AND SAR EXERCISES AND YEAR END VALUE TABLE(1)
VALUE OF VALUE OF
NUMBER OF NUMBER OF UNEXERCISED UNEXERCISED
UNEXERCISED UNEXERCISED IN-THE-MONEY IN-THE-MONEY
OPTIONS AT SARS AT OPTIONS AT SARS AT
SHARES FY-END (#) FY-END(#) FY-END($) FY-END(#)
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/ EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE UNEXERCISABLE UNEXERCISABLE
----------------------- -------------- ----------- ------------- ------------- ------------- -------------
William D. Zollars 158,000 $1,325,735 212,500/287,500 0 $1,389,453/$2,287,734 0
William F. Martin, Jr. 88,750 $ 747,031 25,000/32,500 0 $26,250/$291,531 0
Gregory A. Reid 13,500 $ 79,016 15,000/18,500 0 $15,750/$166,522 0
Donald G. Barger, Jr. 0 N/A 6,250/18,750 0 $57,656/$172,969 0
Stephen L. Bruffett 4,250 $ 28,928 1,125/12,875 0 $13,112/$125,584 0
(1) All options become exercisable in four equal annual installments. All
options were granted with an exercise price equal to the Closing Price of the
Company's common stock as reported by NASDAQ on the date of each grant. The time
at which options become exercisable is accelerated upon the occurrence of
certain events, including total permanent disability or death of the executive
officer while in the employ of the Company, if the Company is wholly or
partially 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. Options
exercised may be paid for in cash or by delivery of shares owned by the Grantee.
EMPLOYMENT CONTRACTS, CHANGE OF CONTROL AGREEMENTS AND
TERMINATION OF EMPLOYMENT AGREEMENTS
The Company entered into an Employment Agreement on December 15, 1999 with
its Chairman, President and Chief Executive Officer William D. Zollars that
contains the following essential terms and conditions: (a) a base salary of
$550,000 per year, retroactive to November 8, 1999, to be reviewed annually in
accordance with the Company's normal salary policy for executive officers; (b)
an annual bonus pursuant to which a threshold award in the amount of 18.75% of
Mr. Zollars' base salary, a target award in the amount of 75% of Mr. Zollars'
base salary, and a maximum award of 150% of base salary, (with these percentages
having been increased for 2002 to 20%, 80%, and 160%, respectively) shall be
established for each year, with the criteria for establishment of the target and
parameters for payment to be determined annually by the Compensation Committee,
at least 80% of the criteria established by the Committee being based on
specific measurements of financial performance of the Company during the
applicable year and the remaining percentage being based on non-financial
criteria; (c) a stock option award on December 15, 1999 based on the closing
price of the Company's common stock on the NASDAQ exchange on that date in the
amount of 200,000 shares, with the award vesting 25% on each anniversary of the
award; (d) a supplemental retirement benefit providing Mr. Zollars with the
difference between the benefits that he would have received under the Company's
pension plan if the service credited for benefit accrual purposes under the plan
were 20 years plus his actual such service, if any, after his normal retirement
date and the benefits actually payable to Mr. Zollars under the pension plan,
said supplemental retirement benefit vesting at the rate of 20% per year
measured from September 6, 1996, the commencement date of Mr. Zollars' prior
employment as President of Yellow Transportation, Inc., the Company's principal
operating subsidiary, with Mr. Zollars becoming 100% vested on September 6,
2001; (e) payments in the event of Mr. Zollars' termination "without cause," or
resignation for "good reason" or following a "change of control", as those terms
are defined in the Agreement ("Change of Control" having the same definition as
set forth in the Company's Executive Severance Agreements, described below) in
the amount of twice Mr. Zollars' annual rate of compensation, including target
bonus, at the time of termination or resignation, plus target bonus for the year
of termination, and immediate vesting in
-8-
all outstanding stock options and any incentive and benefit plans applicable at
the time of termination or resignation.
The Company has entered into Executive Severance Agreements (the
"Agreements") with all the executive officers named in the Summary Compensation
Table, with the exception of Stephen L. Bruffett, as designated by the Board of
Directors. (In the case of William D. Zollars, payments are only to the extent
that they would exceed payments under the "change of control" provisions of his
Employment Agreement).
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. If the executive is within 10 years of his normal
retirement age (65), then the executive would be paid three times such highest
compensation. The above-described payments are also subject to a gross-up
provision in the event that it is determined that the benefits provided by the
Agreements are subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986.
The executive would further be entitled to receive in exchange for his
non-qualified stock options granted by the Company which are outstanding on the
date of the Change of Control, common stock of the Company (or, if the Company
or its successor becomes a subsidiary of another company, common stock of such
other company) having a fair market value equal to the fair market value of such
stock options on the Effective Date of the Change of Control.
A termination is for "cause" if it is the result of a conviction of a
felony involving moral turpitude 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 willful misconduct in the
performance of his duty to the Company which is demonstrably and materially
injurious 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.
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
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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 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
------------------------ ------- ------- ------- ------- -------
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
700,000 175,000 233,350 291,650 350,000 408,350
750,000 187,500 250,000 312,500 375,000 437,500
800,000 200,000 266,650 333,350 400,000 466,650
850,000 212,500 283,350 354,150 425,000 495,850
(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 $170,000 in 2001 and imposes maximum annual benefit
limitations, which may cause a reduction in the pension payable under the
pension plan. The Company enters 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. Zollars, 5 years; Mr. Martin, 21 years; Mr. Reid 4 years; Mr.
Barger, 0 years; and Mr. Bruffett, 2 years.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation program for the Company's executive officers was
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 executives 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 prior to 2001 was
determined by three elements, namely, (1) salary; (2) a potential annual cash
incentive compensation award or bonus; and (3) participation in the Company's
stock option plan. While the Committee continued with the first two elements of
this total annual compensation package during 2001, the Committee elected in
2001 to re-examine its practice of using stock options as the exclusive vehicle
for the delivery of long-term incentive potential to the Company's executive
officers, primarily because of the Committee's belief that the Company's
financial performance over the last several years has not been
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adequately reflected in the value of its stock. With the assistance of Towers
Perrin, a nationally recognized executive compensation consulting firm, a new
Executive Performance Plan that provides for cash or stock based awards or a
combination thereof over performance periods that will be designated by the
Committee will be implemented in 2002. The Committee's intention is to adopt 3
year performance cycles for annual awards under this Plan, however for
transition purposes in the first year there will be three awards for each
participant based on 1, 2, and 3 year cycles, with the potential payments under
the 1 and 2 year cycles representing 1/3 and 2/3, respectively, of the potential
payments under the 3 year cycle. Initial awards will be split 50% cash and 50%
performance share units which will vest over three years measured from the date
of determination that performance criteria have been achieved and be delivered
to the executive upon his or her termination of employment or retirement.
Payments under the Plan depend upon the Company attaining specific and/or
relative financial performance as compared to a peer group of companies and/or a
broad market index or indexes. The measures and weighting by which such
financial performance shall initially be judged shall be 70% return on capital
and 30% NOPAT (net operating profit after taxes). The Committee shall retain
discretion to reduce all or any awards to executive officers in consideration of
a number of factors, including performance versus a key group of competitors and
an individual executive's attainment of the annual performance goals described
below. The new Executive Performance Plan targets varying levels of long-term
incentive potential as expressed as a percent of annual base compensation with
the percentage increasing the higher the executive officer's position within the
Company. Because of the anticipated introduction of this new Plan, no stock
options were granted to the Company's executive officers during 2001. This Plan
is item IV described in this proxy that is being submitted for stockholder
approval.
Salary for the Company's executive officers is determined by analysis of
three factors: (1) salary levels at service industries with gross revenues
comparable to the Company, based upon survey data produced by Towers Perrin; (2)
evaluation of the individual executive officer's performance; and (3) the
Company's ability to pay. The three factors are considered collectively but not
pursuant to a precise formula. The Company's ability to pay is a threshold
consideration. Individual executive performance is to be evaluated by reference
to specific performance targets or goals that are to be established each year
for each executive. While the Company has targeted the median of the range
established by the survey group of service industries with gross revenues
comparable to the Company, the actual 2001 salaries of executive officers are
generally below the median.
In July of 1996, an annual cash incentive compensation, or bonus, program
was implemented for the Company's executive officers that provides for the
payment of varying levels of incentive award as expressed as a percent of annual
base compensation, with the percentage increasing the higher an executive
officer's position within the Company. This Annual Incentive Compensation Plan
is item III described in this proxy that is being submitted for stockholder
approval. The purpose of this submission is to prospectively enable payments
under the annual incentive compensation program to qualify for the performance
based compensation exemption with respect to the $1 million deduction cap to the
Company for annual executive compensation that is set forth in Section 162(m) of
the Internal Revenue Code enacted in 1993. The million dollar deduction cap of
Section 162(m) was not reached by any executive officer in 2001.
Each year a threshold, target, and maximum overall Company financial
measurement is to be established that ties each executive's annual incentive
compensation potential to the Company's annual business goals. For 2001 50% of
the award is based on operating income and 50% on return on capital compared to
plan. The Committee annually may deduct up to 20% of the calculated award for
any executive officer based on the Committee's judgment on the degree to which
each executive has achieved the individual performance targets referred to
above. During 2001, the Company did not attain threshold level performance,
therefore no incentive compensation, or bonus, was earned by the named executive
officers.
PRESIDENT AND CEO COMPENSATION
The compensation of President and Chief Executive Officer William D.
Zollars is the subject of an employment agreement dated December 15, 1999, the
essential elements of which are detailed in the section of this proxy statement
devoted to employment contracts, which discussion is hereby incorporated by
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reference. The Committee believes that the compensation package awarded to Mr.
Zollars was necessary to properly compensate Mr. Zollars for his promotion from
his prior position as President of Yellow Transportation, Inc., the Company's
principal operating subsidiary, where he had demonstrated a superior performance
record. The Committee notes that Mr. Zollars' base annual salary as originally
agreed to on December 15, 1999 and as subsequently increased is consistent with
the Company's goal of targeting the median of the Towers Perrin survey group of
companies.
For the reasons outlined above in the general discussion of executive
compensation, Mr. Zollars did not receive an annual cash incentive compensation
or stock option award in 2001.
William L. Trubeck, Chairman
Richard C. Green, Jr.
Howard M. Dean
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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, 1996 and ending December 31, 2001.
[PERFORMANCE GRAPH]
YELLOW CORPORATION S&P 500 INDEX S&P TRANSPORTATION
------------------ ------------- ------------------
Dec 96 100.00 100.00 100.00
129.57 102.68 101.35
155.65 120.61 118.09
226.52 129.64 128.54
Dec 97 174.78 133.36 129.62
133.04 151.97 142.25
129.13 156.98 131.70
93.91 141.37 111.92
Dec 98 133.04 171.48 127.11
120.87 180.02 133.54
123.48 192.71 141.57
115.22 180.67 113.79
Dec 99 116.96 207.56 114.81
128.26 212.32 111.56
102.61 206.68 109.11
105.22 204.68 115.45
Dec 00 141.63 188.66 136.07
119.13 166.29 136.35
132.03 176.03 139.86
141.50 150.19 112.56
Dec 01 174.61 166.24 135.74
II. PROPOSED 2002 STOCK OPTION AND SHARE AWARD PLAN
The Board of Directors recommends stockholder approval of the adoption of
the 2002 Stock Option and Share Award Plan. The Board of Directors believes this
Plan will be of significant benefit to the Company in attracting and retaining
key executive employees of the Company and its operating subsidiaries, and
providing a long range incentive for such employees to work for the continued
success of the Company. Awards may be made under the Plan only to employees of
the Company or a subsidiary who have executive, managerial, supervisory or
professional responsibilities. At present 276 employees of the Company and its
subsidiaries qualify for Awards under the Plan.
The 2002 Stock Option and Share Award Plan is required in addition to the
existing 1996, 1997 and 1999 Stock Option Plans because of the Company's
continued desire to extend a stock incentive to a significant number of
management and supervisory personnel in the Company and its operating
subsidiaries. 1,000,000 shares are reserved for award under the Plan. The
maximum number of shares with respect to which any form of award may be granted
during any calendar year to any one employee under the Plan is 500,000 shares.
The maximum total amount of shares which can be awarded in any form other than
Options or Share Appreciation Rights (SARs) is 200,000 shares.
The Board recommends its stockholders vote for the approval and adoption of
the Plan so that the Company can continue to attract, motivate, and retain those
key employees who are largely responsible for the Company's future performance.
-13-
The previous 1996, 1997 and 1999 Plans confined awards to stock option
grants or SARs. The 2002 Stock Option and Share Award Plan is an omnibus plan
which permits, in addition to stock options and SARs, the awarding of restricted
stock, restricted stock units, performance stock, performance stock units,
dividend equivalents, and other Share-based awards. The measures by which
performance under performance stock and performance stock units shall be judged
may include any of the same performance measures that apply under the Executive
Performance Plan (set out in item IV of this proxy). The reasons for the Board
of Director's recommendation to adopt a stock plan which allows for awards other
than Options and SARs are detailed in the Compensation Committee Report on
Executive Compensation, which is hereby incorporated by reference.
When Options are utilized, the price of the Option is set at not less than
100% of the closing price of the Shares as reported by NASDAQ on the date of
each award, and the Company's practice has been to vest each award over 4 years
in equal installments, with the Option having a maximum term of 10 years. The
time at which Options become exercisable is accelerated upon the occurrence of
certain events, including total permanent disability or death of the employee
while in the employ of the Company or an involved subsidiary, if the Company is
wholly or partially 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. Options exercised may be paid for in cash or by delivery of shares owned
by the Grantee.
The Plan only allows for the award of Non-Qualified Stock Options, so
accordingly no tax event accrues to either the employee or the Company upon the
grant of any option award and upon the exercise of any award the involved
employee will have a gain subject to ordinary income tax rates measured by the
difference between the exercise and grant price of the number of options
exercised. The Company will have a contemporaneous ordinary tax deduction equal
to the taxable gain recognized by the employee. The closing price of the
Company's common stock on January 31, 2002 was $25.06.
The Board of Directors may at any time terminate, suspend, modify, or amend
the Plan, except that the original per share option price of each option grant;
the maximum number of Shares with respect to which any form of award may be
granted during any calendar year to any one Grantee of 500,000 shares; and the
maximum total amount of Shares which can be awarded in any form other than
Options and SARs of 200,000 shares may not be modified or amended without
stockholder approval.
The full text of the proposed Plan is attached to this proxy statement as
Exhibit A. The description of the proposed Plan is qualified in its entirety by
reference to Exhibit A.
Adoption of the Plan requires the affirmative vote of the majority of the
outstanding shares as of the record date. As a result of such voting
requirements, abstentions and broker non-votes will have the effect of votes
"against" this proposal.
III. PROPOSED APPROVAL OF ANNUAL CASH INCENTIVE COMPENSATION,
OR BONUS PROGRAM
The Yellow Corporation Annual Cash Incentive Compensation, or Bonus Program
is a pay for performance program designed to (1) provide an annual incentive
plan that is performance driven; (2) offer cash compensation opportunities for
employees that are market competitive; (3) provide motivation to accomplish
those objectives that are critical for the Company's success; (4) reward
outstanding achievement among employees and (5) assist in attracting and
retaining quality talent. The Plan provides for the payment of varying levels of
cash awards based on an annual target that is a percent of annual base salary,
with the percentage increasing the higher an individual's position with the
Company or an involved subsidiary. Target level awards are set at the median
amount of annual incentive compensation for comparable positions in companies of
similar size to the Company, based on survey information provided by Towers
Perrin, a nationally recognized executive compensation consulting firm.
Threshold level awards are 25% of target and the maximum award is 200% of
target. The Program applies to all employees of the Company and certain of its
subsidiaries whose compensation is not covered by a collective bargaining
agreement, and accordingly applies to several thousand employees. The maximum
cash amount that any employee may receive under this Program in any calendar
year is $3,000,000.
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Each year, utilizing the Company's annual business plan, the Company's
Compensation Committee establishes a threshold, target and maximum level of
operating income and return on capital, which are equally weighted and used to
determine the overall annual incentive compensation pool. Individual incentive
compensation awards are based upon the attainment of the operating income and
return on capital criteria. Annual awards may be reduced by up to 20% dependent
upon employees' attainment of individual performance criteria that are
determined each year.
Set forth below is a table demonstrating potential payments under the
Company's Annual Cash Incentive Compensation, or Bonus, Program for 2002:
ANNUAL CASH INCENTIVE COMPENSATION PROGRAM
DOLLAR VALUE
-----------------------------------------------
NAME THRESHOLD TARGET MAXIMUM
---- ---------- ------------ -----------
William D. Zollars...................... $ 144,200 $ 576,800 $ 1,153,600
William F. Martin, Jr................... $ 35,635 $ 142,500 $ 285,000
Gregory A. Reid......................... $ 30,000 $ 120,000 $ 240,000
Donald G. Barger, Jr.................... $ 49,500 $ 198,000 $ 396,000
Stephen L. Bruffett..................... $ 15,750 $ 63,000 $ 126,000
Exec. Off. Group (total of 5 above)..... $ 275,075 $ 1,100,300 $ 2,200,600
Non-Exec. Off. Employee Group........... $7,440,900 $29,824,717 $59,649,434
Approval of the Program requires the affirmative vote of the majority of
the outstanding shares as of the record date. As a result of such voting
requirements, abstentions and broker non-votes will have the effect of votes
"against" this proposal
IV. PROPOSED APPROVAL OF THE EXECUTIVE PERFORMANCE PLAN
The Company's Compensation Committee has elected to implement, in 2002, a
new long-term incentive plan titled the Executive Performance Plan. This Plan
will replace the use of stock options as the exclusive vehicle for delivering
long-term incentive compensation potential to the Company's executive officers.
The reasons for the Committee's decision to adopt this Executive Performance
Plan are detailed in the Compensation Committee report on Executive
Compensation, which is hereby incorporated by reference. The Executive
Performance Plan is designed to provide long-term incentive awards which are
cash or stock based or a combination thereof once specific financial performance
is attained over performance periods to be designated by the Compensation
Committee. The division of the awards between stock and cash; the type of stock
award; and the range of number of shares and dollar value of cash awards shall
be as determined by the Compensation Committee, and the Committee shall have
discretion to reduce all or any awards in consideration of factors that may
apply to the company in general or individual participants under the Plan. The
Plan is limited to certain of the Company's executive officers, and to employees
at the President and Senior Vice President level of its subsidiaries, presently
a total of 10 employees.
The maximum number of Shares with respect to which any form of Stock Award
may be granted during any calendar year to any one participant under the Plan is
500,000 shares. The maximum dollar amount that may be paid in respect of any
participant during any calendar year under any cash-based awards shall in the
aggregate not exceed $5,000,000.
Payments under the Plan will be dependent upon the Company attaining
specific or relative financial performance as compared to a peer group of
companies and/or a broad market index or indexes. The measures by which such
financial performance shall be judged may include any of the following: return
on capital, total stockholder return, earnings, earnings per share, operating
income, net income, pro forma net income, return on stockholders' equity, return
on designated assets, net asset value, economic value added, revenues, expenses,
operating profit margin, operating cash flow, cash flow per share, and net
operating profit after taxes.
-15-
The Board of Directors may at any time terminate, suspend, modify or amend
the Plan, except that the maximum number of Shares with respect to Stock-Based
Awards that may be granted during any calendar year to any Participant of
500,000 Shares and the maximum dollar amount that may be paid in respect of any
Participant during any calendar year under any Cash-Based Awards in the
aggregate of $5,000,000 may not be modified or amended without stockholder
approval. The Compensation Committee also may not increase the amount of
compensation payable under an Award to the extent such an increase would cause
the Award to lose its qualification as performance-based compensation for
purposes of Internal Revenue Code '86 Section 162(m)(4)(c) and the regulations
thereunder.
Set forth below is a table demonstrating potential payments under the
Executive Performance Plan for 2002, utilizing the initial criteria for awards
under the Plan that are discussed in the Compensation Committee Report on
Executive Compensation, which is hereby incorporated by reference:
EXECUTIVE PERFORMANCE PLAN
POTENTIAL PAYOUT IN 2002
NUMBER OF PERFORMANCE STOCK
DOLLAR VALUE UNITS(1)
------------------------------------- ----------------------------------
NAME THRESHOLD TARGET MAXIMUM THRESHOLD TARGET MAXIMUM
---------------------------- --------- ------ ------- --------- ------ -------
William D. Zollars $141,196 $282,391 $564,782 5,634 11,269 22,537
William F. Martin, Jr. $ 27,313 $ 54,625 $109,250 1,090 2,180 4,360
Gregory A. Reid $ 23,000 $ 46,000 $ 92,000 918 1,836 3,671
Donald G. Barger, Jr. $ 36,000 $ 72,000 $144,000 1,437 2,873 5,746
Exec. Off. Group $227,508 $455,016 $910,032 9,079 18,157 36,314
(total of 4 above)
Non-Exec. Off. Group $167,065 $334,130 $668,260 6,667 13,333 26,666
(1) Calculation based on closing price of Company's stock on 1/31/02 of
$25.06.
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.
Approval of the plan requires the affirmative vote of the majority of the
outstanding shares as of the record date. As a result of such voting
requirements, abstentions and broker non-votes will have the effect of votes
"against" this proposal
V. 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 2002. 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.
VI. 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.
-16-
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:
/s/ WILLIAM F. MARTIN, JR.
WILLIAM F. MARTIN, JR.,
Secretary
-17-
EXHIBIT A
YELLOW CORPORATION
2002 STOCK OPTION AND SHARE AWARD PLAN
1. PURPOSE
The Yellow Corporation 2002 Stock Option and Share Award Plan is designed
to enable qualified executive, managerial, supervisory and professional
personnel of Yellow Corporation and its subsidiaries to acquire or increase
their ownership of common stock of the Company on reasonable terms and to
provide additional compensation to such personnel tied to the common stock of
the Company. The opportunity so provided is intended to foster in participants a
strong incentive to put forth maximum effort for the continued success and
growth of the Company and its subsidiaries, to aid in retaining individuals who
put forth such efforts, and to assist in attracting the best available
individuals in the future.
2. DEFINITIONS
When used herein, the following terms shall have the meaning set forth
below:
2.1. "Award" shall mean an Option, SAR, Restricted Stock Award, Restricted
Stock Unit Award, Performance Stock Award, Performance Stock Unit
Award, Dividend Equivalent or Other Share-Based Award.
2.2. "Board" means the Board of Directors of Yellow Corporation.
2.3. "Committee" means the members of the Board's Compensation Committee
who are non-employee directors as defined in Rule 16b-3 of the
Securities and Exchange Commission as it exists on the effective date
of the Plan or as subsequently amended or interpreted and are
"outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986 and the regulations thereunder.
2.4. "Company" means Yellow Corporation.
2.5. "Director" means a member of the Board.
2.6. "Dividend Equivalent" means a right, granted pursuant to Section 11
of the Plan, to receive cash, Shares or other property equal in value
to dividends paid with respect to a specified number of Shares.
Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award, and may be paid currently or on a
deferred basis.
2.7. "Fair Market Value" means with respect to the Company's Shares the
closing price of the Shares as reported by NASDAQ or if the closing
price is not reported, the bid price of the Shares as reported by
NASDAQ on the date on which the value is to be determined or, if the
stock did not trade on that date, the next preceding date on which
such stock traded.
2.8. "Grantee" means a person to whom an Award is made.
2.9. "IRC '86" means the Internal Revenue Code of 1986, as in effect as of
the effective date of the Plan or as thereafter amended, and
applicable regulations.
2.10. "Option" means the right, granted pursuant to Section 6 of the Plan,
to purchase, at a price, for a term, under conditions, and for cash
or other considerations fixed by the Committee, and subject to such
other limitations and restrictions as the Plan and the Committee
impose, a number of shares specified by the Committee. All such
Options shall be Non-Qualified Stock Options and are not or intended
to be Incentive Stock Options as defined by IRC '86.
2.11. "Other Share-Based Award" means a right, granted pursuant to Section
12 of the Plan, that relates to or is valued by reference to Shares.
A-1
2.12. "Performance Stock Award" means the grant pursuant to Section 10 of
the Plan of the right to receive the number of Shares specified by
the Committee, at a time or times fixed by the Committee, and subject
to such performance objectives and other limitations and restrictions
as the Plan and the Committee impose.
2.13. "Performance Stock Unit Award" means the grant pursuant to Section 10
of the Plan, of units representing a right to receive Shares or cash
at a time or times fixed by the Committee, and subject to such
performance objectives and other limitations and restrictions as the
Plan and the Committee impose.
2.14. "Plan" means the Company's 2002 Stock Option and Share Award Plan.
2.15. "QDRO" means a qualified domestic relations order as defined by IRC
'86 or Title I of the Employee Retirement Income Security Act, or the
rules thereunder.
2.16. "Restricted Stock Award" means the grant pursuant to Section 8 of the
Plan of the right to receive the number of Shares specified by the
Committee, at a time or times fixed by the Committee in accordance
with the Plan, and subject to such other limitations and restrictions
as the Plan and the Committee impose.
2.17. "Restricted Stock Unit Award" means the grant pursuant to Section 9
of the Plan of units representing a right to receive Shares or cash,
at the time or times fixed by the Committee in accordance with the
Plan, and subject to such other limitations and restrictions as the
Plan and the Committee impose.
2.18. "SAR" means a right granted pursuant to Section 7 of the Plan to
surrender to the Company all or a portion of an Option and to be paid
therefor an amount, as determined by the Committee, no greater than
the excess, if any, of (i) the Fair Market Value, on the date such
right is exercised, of the Shares to which the Option or portion
thereof relates, over (ii) the aggregate option price of those
Shares.
2.19. "Shares" means shares of the Company's common stock or, if by reason
of the adjustment provisions hereof any rights under an Award under
the Plan pertain to any other security, such other security.
2.20. "Subsidiary" means any business, whether or not incorporated, in
which the Company, at the time an Award is granted to an employee
thereof, or in other cases, at the time of reference, owns directly
or indirectly not less than 50% of the equity interest.
2.21. "Successor" means the legal representative of the estate of a
deceased Grantee or the person or persons who shall acquire the right
to exercise an Option or an SAR or to receive cash, Shares or other
property issuable upon satisfaction of a Restricted Stock Award,
Restricted Stock Unit Award, Performance Stock Award, Performance
Stock Unit Award, Dividend Equivalent or Other Share-Based Award, by
bequest or inheritance or by reason of the death of the Grantee, as
provided in accordance with Section 14 hereof.
2.22. "Term" means the period during which a particular Option or SAR may
be exercised or the restricted or performance period or other term
specified in any other Award.
3. ADMINISTRATION OF THE PLAN
3.1. The Plan shall be administered by the Committee.
3.2. The Committee shall have plenary authority, subject to the provisions
of the Plan, to determine when and to whom Awards shall be granted,
the Term of each Award, the number of Shares covered by it, the
participation by Grantee in other plans, and any other terms or
conditions of each such Award. The Committee may grant such additional
benefits in connection with any Award as it deems appropriate. The
number of Shares, the Term, the other terms and conditions of a
particular kind of Award and any additional benefits granted in
connection with any Award need not be the
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same, even as to Awards made at the same time. The Committee's actions
in making Awards and fixing their size, Term and other terms and
conditions and in granting any additional benefits in connection with
any Award shall be conclusive on all persons.
3.3. The Committee shall have the sole responsibility for construing and
interpreting the Plan, for establishing and amending such rules and
regulations as it deems necessary or desirable for the proper
administration of the Plan, and for resolving all questions arising
under the Plan. Any decision or action taken by the Committee arising
out of or in connection with the construction, administration,
interpretation and effect of the Plan and of its rules and regulations
shall, to the extent permitted by law, be within its absolute
discretion, except as otherwise specifically provided herein, and
shall be conclusive and binding upon all Grantees, all Successors, and
any other persons, whether that person is claiming under or through
any Grantee or otherwise.
3.4. The Committee shall regularly inform the Board as to its actions with
respect to all Awards under the Plan and the Terms and conditions of
such Awards in a manner, at such times, and in such form as the Board
may reasonably request.
4. ELIGIBILITY
Awards may be made under the Plan only to employees of the Company or a
Subsidiary who have executive, managerial, supervisory or professional
responsibilities. Officers shall be employees for this purpose, whether or not
they are also Directors, but a Director who is not such an employee shall not be
eligible to receive an Award. Awards may be made to eligible employees whether
or not they have received prior Awards, under the Plan or under any previously
adopted plan, and whether or not they are participants in other benefit plans of
the Company. In making a determination concerning the granting of Awards to
eligible employees, the Committee may take into account the nature of the
services they have rendered or that the Committee expects they will render,
their present and potential contributions to the success of the business, the
number of years of effective service they are expected to have and such other
factors as the Committee in its sole discretion shall deem relevant.
5. SHARES SUBJECT TO PLAN
Subject to adjustment as provided in Section 23 below, 1,000,000 Shares are
hereby reserved for issuance in connection with Awards under the Plan. The
Shares so issued may be unreserved Shares held in the treasury however acquired
or Shares which are authorized but unissued. Any Shares subject to issuance upon
exercise of Options or otherwise issuable under any Awards shall once again be
available for issuance in satisfaction of Awards to the extent that (i) cash is
issued in satisfaction of the exercise of the Option or SAR or upon settlement
of the Award or (ii) the Option or SAR expires or terminates unexercised as to
any Shares covered thereby or (iii) the Award is forfeited, cancelled or
otherwise terminated. Subject to adjustment as provided in Section 23 below, the
maximum number of Shares with respect to which any form of award may be granted
during any calendar year to any one Grantee under the Plan shall be 500,000
Shares. Subject to adjustment as provided in Section 23 below, the maximum total
amount of Shares which can be awarded in any form other than Options or SARs is
200,000 Shares.
6. GRANTING OF OPTIONS
6.1. Subject to the terms of the Plan, the Committee may from time to time
grant Options to eligible employees.
6.2. The purchase price of each Share subject to Option shall be fixed by
the Committee, but shall not be less than 100% of the Fair Market
Value of the Share on the date the Option is granted.
6.3. Each Option shall expire and all right to purchase Shares thereunder
shall cease on the date fixed by the Committee, which subject to the
terms of the Plan, shall not be later than the tenth anniversary of
the grant date of the Option.
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6.4. Each Option shall become exercisable at the time, and for the number
of Shares, fixed by the Committee. Except to the extent otherwise
provided in or pursuant to Sections 14 and 15, no Option shall become
exercisable as to any Shares prior to the first anniversary of the
date on which the Option was granted.
7. STOCK APPRECIATION RIGHTS
7.1. The Committee may, in its discretion, grant an SAR to the holder of an
Option, either at the time the Option is granted or by amending the
instrument evidencing the grant of the Option at any time after the
Option is granted and more than six months before the end of the Term
of the Options, so long as the grant is made during the period in
which grants of SARs may be made under the Plan.
7.2. Each SAR shall be for such Term, and shall be subject to such other
terms and conditions, as the Committee shall impose. The terms and
conditions may include Committee approval of the exercise of the SAR,
limitations on the time within which and the extent to which such SAR
shall be exercisable, limitations on the amount of appreciation which
may be recognized with regard to such SAR, and specification of what
portion, if any, of the amount payable to the Grantee upon his
exercise of an SAR shall be paid in cash and what portion, if any,
shall be payable in Shares. If and to the extent that Shares are
issued in satisfaction of amounts payable on exercise of an SAR, the
Shares shall be valued at their Fair Market Value on the date of
exercise.
7.3. Except to the extent otherwise provided in or pursuant to Sections 14
and 15, no SAR shall be exercisable prior to the first anniversary of
the date of grant.
7.4. Upon exercise of an SAR the Option, or portion thereof, with respect
to which such right is exercised shall be surrendered and shall not
thereafter be exercisable.
8. RESTRICTED STOCK AWARDS
8.1. Subject to the terms of the Plan, the Committee may grant eligible
employees Restricted Stock Awards.
8.2. The terms and conditions of any such Award, including restrictions on
transfer or on the ability of the Grantee to make elections with
respect to the taxation of the Award without the consent of the
Committee, shall be determined by the Committee. Except as provided in
or pursuant to Sections 14 and 15, no such restrictions shall lapse
earlier than the first, or later than the tenth, anniversary of the
date of the Awards.
8.3. The Committee may establish terms and conditions under which the
Grantee of a Restricted Stock Award shall be entitled to receive a
credit equivalent to any dividend payable with respect to the number
of Shares which, as of the record date for such dividend, had been
awarded but not delivered to him. Any such Dividend Equivalent shall
be paid to the Grantee of the Restricted Stock Award at such time or
times during the period when the Shares are being held by the Company
pursuant to the terms of the Restricted Stock Award, or at the time
the Shares to which the Dividend Equivalents apply are delivered to
the Grantee, as the Committee shall determine. Any arrangement for the
payment of Dividend Equivalents shall be terminated if, under the
terms and conditions established by the Committee, the right to
receive Shares being held pursuant to the terms of the Restricted
Stock Award shall lapse.
9. RESTRICTED STOCK UNIT AWARDS
9.1. Subject to the terms of the Plan, the Committee may grant eligible
employees Restricted Stock Unit Awards.
9.2. Each Restricted Stock Unit Award shall represent the right to receive
Shares (or cash equivalent to the Fair Market Value of such Shares) at
the end of a specified deferral period as specified by the Committee,
subject to such limitations and restrictions as the Committee may
prescribe. The terms
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and conditions of any such Award, including the forfeiture provisions referred
to in Section 9.3 below, shall be determined by the Committee.
9.3. Except as otherwise determined by the Committee at the date of grant
or thereafter, upon termination of employment during the deferral
period (as determined under criteria established by the Committee), or
upon failure to satisfy any other conditions precedent to the delivery
of Shares or cash to which Restricted Stock Unit Awards relate, all
Restricted Stock Unit Awards that are at that time subject to deferral
or restriction shall be forfeited; provided, however, that the
Committee may provide in any Award agreement, or may determine in an
individual case, that restrictions or forfeiture conditions relating
to Restricted Stock Unit Awards shall be waived in whole or in part in
the event of termination resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture
of Restricted Stock Unit Awards.
9.4. The Committee may establish terms and conditions under which the
Grantee of a Restricted Stock Unit Award shall be entitled to receive
a credit equivalent to any dividend payable with respect to the number
of Shares which correspond, as of the record date for such dividend,
to the number of units represented by such Award. Any such Dividend
Equivalent shall be paid to the Grantee of the Restricted Stock Unit
Award at such time or times during the deferral period, or at the time
the Grantee vests in the Restricted Stock Unit Award, as the Committee
shall determine. Any arrangement for the payment of Dividend
Equivalents shall be terminated if, under the terms and conditions
established by the Committee, the Restricted Stock Unit Award is
forfeited.
10. PERFORMANCE STOCK AWARDS AND PERFORMANCE STOCK UNIT AWARDS
10.1. Subject to the terms of the Plan, the Committee may grant eligible
employees Performance Stock Awards and/or Performance Stock Unit
Awards.
10.2. Each Performance Stock Award shall represent a right to receive
Shares subject to such performance objectives and other limitations
and restrictions as the Committee may prescribe. Each Performance
Stock Unit Award shall represent a grant of units corresponding to a
right to receive Shares (or cash equivalent to the Fair Market Value
of such Shares) subject to such performance measures and other
limitations and conditions as the Committee may prescribe. The terms
and conditions of any such Award, including the performance period,
performance measures and forfeiture provisions shall be determined by
the Committee.
10.3. The Committee shall determine a performance period ("Performance
Period") and shall determine the performance objectives for grants of
Performance Stock Awards and Performance Stock Unit Awards.
Performance objectives may vary from eligible employee to eligible
employee, and shall be based on such one or more of the following
performance criteria as the Committee may deem appropriate: return on
capital, total stockholder return, earnings, earnings per share,
operating income, net income, pro forma net income, return on
stockholders' equity, return on designated assets, net asset value,
economic value added, revenues, expenses, operating profit margin,
operating cash flow, cash flow per share, and net operating profit
after taxes. The performance objectives may be determined by
reference to the performance of the Company, or of a Subsidiary, or
of a division or unit of any of the foregoing. Such performance
objectives shall involve specific or relative performance measures in
relation to a peer group of companies and/or broad-based market
index. Performance periods may overlap, and eligible employees may
participate simultaneously with respect to Performance Stock Units
and Performance Stock Unit Awards for which different Performance
Periods are prescribed.
10.4. At the beginning of a Performance Period, the Committee shall
determine for each eligible employee or group of eligible employees
with respect to that Performance Period the range of number of
Shares, if any, which may be fixed or may vary in accordance with
such performance or other criteria specified by the Committee, which
shall be paid to an eligible employee as an Award if the relevant
measure of performance for the Performance Period is met.
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10.5. If, during the course of a Performance Period, there shall occur
significant events as determined by the Committee which the Committee
expects to have a substantial effect on the performance objective
during the Performance Period, the Committee, may revise such
objective; provided, however, that the Committee shall not have any
discretion to increase the amount of compensation payable under the
Award to the extent such an increase would cause the Award to lose
its qualification as performance-based compensation for purposes of
IRC '86 Section 162(m)(4)(C) and the regulations thereunder.
10.6. Except as otherwise determined by the Committee at the date of grant
or thereafter, upon termination of employment during the applicable
Performance Period, Performance Stock Awards and Performance Stock
Unit Awards for that Performance Period shall be forfeited; provided,
however, that the Committee may provide in any Award agreement, or
may determine in an individual case, that restrictions or forfeiture
conditions relating to Performance Stock Awards and Performance Stock
Unit Awards shall be waived in whole or in part in the event of
termination resulting from specified causes or in the event of a
change of control as defined by the Committee, and the Committee may
in other cases waive in whole or in part the forfeiture of
Performance Stock Awards and Performance Stock Unit Awards.
10.7. Each Performance Stock Award or Performance Stock Unit Award that is
earned may be paid in whole Shares, or cash, or a combination of
Shares and cash, as the Committee may determine at the time of grant
or otherwise, as soon as practicable after the end of the relevant
Performance Period. The Committee must certify in writing prior to
payment of any Performance Stock Award or Performance Stock Unit that
the performance objectives and any other material terms were in fact
satisfied.
10.8. The Committee may establish terms and conditions upon which the
Grantee of a Performance Stock Award or Performance Stock Unit Award
shall be entitled to receive a credit equivalent to any dividend
payable with respect to the number of Shares which correspond, as of
the record date for such dividend, to the number of Shares or units
represented by such Award. Any such Dividend Equivalent shall be paid
to the Grantee of the Performance Stock Award or Performance Stock
Unit Award at such time or times during the Performance Period, or
after the end of the Performance Period, as the Committee shall
determine. Any arrangement for the payment of Dividend Equivalents
shall be terminated if, under the terms and conditions established by
the Committee, the Performance Stock Award or Performance Stock Unit
Award is forfeited.
11. DIVIDEND EQUIVALENTS
The Committee is authorized to grant Dividend Equivalents to eligible
employees. The Committee may provide, at the date of grant or thereafter, that
Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Shares or other investment vehicles
as the Committee may specify; provided, however, that Dividend Equivalents
(other than free-standing Dividend Equivalents) shall be subject to all
conditions and restrictions of the underlying Awards to which they relate.
12. OTHER SHARE-BASED AWARDS
The Committee is authorized, subject to limitations under applicable law,
to grant to eligible employees such other Awards that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Shares, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, unrestricted Shares awarded
purely as a "bonus" and not subject to any restrictions or conditions, other
rights convertible or exchangeable into Shares, purchase rights for Shares,
Awards with value and payment contingent upon performance of the Company or any
of its Subsidiaries or affiliates or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 12 shall be purchased for such consideration, paid at such times, by
such
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methods, and in such forms, including, without limitation, cash, Shares, notes
or other property, as the Committee shall determine. Cash awards, as an element
of or supplement to any other Award under the Plan, shall also be authorized
pursuant to this Section 12.
13. NON-TRANSFERABILITY OF RIGHTS
Except for certain transfers of Options, SARs, and Restricted Stock Awards
to family members (including, without limitation, to a trust for the benefit of
the Grantee's family members or to a partnership or limited liability company
owned by one or more members of the Grantee's family members), charities, or
pursuant to a QDRO, which the Committee in its sole discretion may permit, no
Option, SAR and no rights under any Restricted Stock Award shall be transferable
by the Grantee otherwise than by will or the laws of descent and distribution,
and, except for permitted transferees, each Option and SAR may be exercised
during the lifetime of the Grantee only by the Grantee.
14. DEATH OR TERMINATION OF EMPLOYMENT
14.1 Subject to the provisions of the Plan, the Committee may make such
provisions concerning exercise or lapse of Options or SARs on death or
termination of employment as it shall in its discretion determine. No
such provision shall extend the Term of an Option or SAR, nor shall
any such provision permit an Option or SAR to be exercised prior to
the first anniversary of the date on which it was granted, except in
the event of death or termination by reason of disability.
14.2 The effect of death or termination of employment on Shares or other
amounts payable pursuant to any Restricted Stock Award, Restricted
Stock Unit Award, Performance Stock Award, Performance Stock Unit
Award, Dividend Equivalent or Other Share-Based Award shall be stated
in the applicable Award.
14.2 Transfers of employment between the Company and a Subsidiary, or
between Subsidiaries, shall not constitute termination of employment
for purposes of any Award. The Committee may specify in the terms and
conditions of an Award whether any authorized leave of absence or
absence for military or government service or for any other reason
shall constitute a termination of employment for purposes of the Award
and the Plan.
15. PROVISIONS RELATING TO TERMINATION OF THE COMPANY'S SEPARATE EXISTENCE
The Committee may provide that in the event that the Company is to be
wholly or partly liquidated, or agrees to participate in a merger, consolidation
or reorganization in which it, or an entity controlled by it, is not the
surviving entity, any or all Options and SARs granted under the Plan shall be
immediately exercisable in full and any or all Restricted Stock Awards,
Restricted Stock Unit Awards, Performance Stock Awards, Performance Stock Unit
Awards, Dividend Equivalents and Other Share-Based Awards shall be payable
immediately in full.
16. WRITINGS EVIDENCING AWARDS
Each Award granted under the Plan shall be evidenced by a writing which
may, but need not, be in the form of an agreement to be signed by the Grantee.
The writing shall set forth the nature and size of the Award, its Term, the
other terms and conditions thereof, other than those set forth in the Plan, and
such other information as the Committee directs. Acceptance of any benefits of
an Award by the Grantee shall be conclusively presumed to be an assent to the
terms and conditions set forth therein, whether or not the writing is in the
form of an agreement to be signed by the Grantee.
17. EXERCISE OF RIGHTS UNDER AWARDS
17.1 A person entitled to exercise an Option or SAR may do so by delivery
of a written notice to that effect specifying the number of Shares
with respect to which the Option or SAR is being exercised and any
other information the Committee may prescribe.
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17.2 The notice shall be accompanied by payment in full for the purchase
price of any Shares to be purchased with such payment being made in
cash; shares of the Company's common stock having a Fair Market Value
equivalent to the purchase price of such Shares; a combination
thereof; or cashless exercise pursuant to the cashless exercise
program offered by the Company. No Shares shall be issued upon
exercise of an Option until full payment has been made therefor.
17.3 The notice of exercise of an SAR shall be accompanied by the Grantee's
copy of the writing or writings evidencing the grant of the SAR and
the related Option.
17.4 Upon exercise of an Option or SAR, or after grant of any other type of
Award but before a distribution in satisfaction thereof, the Grantee
may request in writing that the Shares to be issued in satisfaction of
the Award be issued in the name of the Grantee and another person as
joint tenants with right of survivorship or as tenants in common.
17.5 All notices or requests provided for herein shall be delivered to the
Secretary of the Company.
18. EFFECTIVE DATE OF THE PLAN AND DURATION.
18.1 The Plan shall become effective on March 1, 2002, subject to
stockholder approval at the 2002 Annual Meeting of Stockholders of the
Company.
18.2 No Awards may be granted under the Plan on or after March 1, 2012
although the terms of any Award may be amended at any time prior to
the end of its Term in accordance with the Plan.
19. DATE OF AWARD
The date of an Award shall be the date on which the Committee's
determination to grant the same is final, or such later date as shall be
specified by the Committee in connection with its determination.
20. STOCKHOLDER STATUS
No person shall have any rights as a stockholder by virtue of the grant of
an Award under the Plan except with respect to Shares actually issued to that
person.
21. POSTPONEMENT OF EXERCISE
The Committee may postpone any exercise of an Option or SAR or the
distribution of Shares under any other Award for such time as the Committee in
its discretion may deem necessary in order to permit the Company (i) to effect
or maintain registration of the Plan or the Shares issuable upon the exercise of
an Option or an SAR or distributable in satisfaction of any other type of Award
under the Securities Act of 1933, as amended, or the securities laws of any
applicable jurisdiction, (ii) to permit any action to be taken in order to
comply with restrictions or regulations incident to the maintenance of a public
market for its Shares, or (iii) to determine that such Shares and the Plan are
exempt from such registration or that no action of the kind referred to in (ii)
above needs to be taken; and the Company shall not be obligated by virtue of any
terms and conditions of any Award or any provision of the Plan to recognize the
exercise of an Award to sell or issue shares in violation of the Securities Act
of 1933 or the law of any government having jurisdiction thereof. Any such
postponement shall not extend the Term of any Award. Neither the Company nor its
directors or officers shall have any obligation or liability to the Grantee of
an Award, to the Grantee's Successor or to any other person with respect to any
Shares as to which the Option or SAR shall lapse because of such postponement or
as to which issuance under any other Award was delayed.
22. TERMINATION, SUSPENSION, MODIFICATION OR AMENDMENT OF PLAN
The Board may at any time terminate, suspend, modify or amend the Plan,
except that the original per share option price of each option grant; the
maximum number of Shares with respect to which any form of award may be granted
during any calendar year to any one Grantee of 500,000 Shares; and the maximum
total amount of Shares which can be awarded in any form other than Options and
SARs of 200,000 Shares may not
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be modified, except for modification under the circumstances outlined in
Paragraph 23 below, without stockholder approval. However, no termination,
suspension or modification of the Plan shall adversely affect any right acquired
by any Grantee or any Successor under an Award granted before the date of such
termination, suspension or modification, unless such Grantee or Successor shall
consent; but it shall be conclusively presumed that any adjustment for changes
in capitalization as provided for herein does not adversely affect any such
right. Any member of the Board who is an officer or employee of the Company or a
Subsidiary shall be without vote on any proposed amendment to the Plan, or on
any other matter which might affect that member's individual interest under the
Plan.
23. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
Any increase in the number of outstanding Shares of the Company occurring
through stock splits or stock dividends after the adoption of the Plan shall be
reflected proportionately in an increase in the aggregate number of Shares then
available for the grant of Awards under the Plan, or becoming available through
the termination, surrender or lapse of Awards previously granted but
unexercised, and in the number of Shares subject to Awards then outstanding; and
a proportionate reduction shall be made in the per share option price as to any
outstanding Options. Any fractional shares resulting from such adjustment shall
be eliminated. In the event that the Board shall determine that any
recapitalization, reorganization, merger, consolidation, spin-off, combination,
repurchase or share exchange, or other similar corporate transaction or event
affects the Shares (other than those considered above) such that an adjustment
is appropriate in order to prevent dilution or enlargement of rights of
participants, then the Board shall make such adjustment in the number and kind
of shares that may thereafter be issued under the Plan and in the number and
kind of shares remaining subject to Awards then outstanding and in the per share
option price as the Board in its discretion may consider appropriate to reflect
such transaction or event, and all such adjustments shall be conclusive upon all
persons.
24. DELIVERY OF SHARES IN LIEU OF CASH INCENTIVE AWARDS
24.1 Any employee otherwise eligible for an Award under the Plan who is
eligible to receive a cash incentive payment from the Company under
any management incentive plan may make application to the Committee in
such manner as may be prescribed from time to time by the Committee,
to receive Shares from the Plan in lieu of all or any portion of such
cash payment.
24.2 The Committee may in its discretion honor such application by
delivering Shares from the Plan to such employee equal in Fair Market
Value to that portion of the cash payment otherwise payable to the
employee under such incentive plan for which a Share delivery is to be
made in lieu of cash payment.
24.3 Any Shares delivered to employees under the Plan in lieu of cash
incentive payments shall come from the aggregate number of Shares
authorized for use by the Plan and shall not be available for any
other Awards under the Plan.
24.4 Such applications and such delivery of Shares shall not be permitted
on or after March 1, 2012.
25. LOANS
25.1 The Company may make loans to Grantees for the sole purpose of
exercising Option Awards under the Plan and meeting the Federal tax
consequences of such exercise. Such loans shall be subject to the
terms and conditions established by the Committee from time to time
which shall in all cases include those specific items contained in
this Section 25 as well as such other items as may be established by
the Committee.
25.2 No loan shall exceed the exercise price of the option to be exercised
plus the amount of Federal income taxes reasonably estimated to be due
at the exercise of the option or within the next following seven month
period.
25.3 No loan shall have a term exceeding five years subject to renewal at
the discretion of the Committee. Notwithstanding any other terms of
the loan, each loan shall be fully due and payable
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on the loan recipient's termination of employment, except that in the
case of termination due to disability, the Committee at its discretion
may extend the terms of the loan beyond termination.
25.4 Interest shall be charged on the loan with a rate established by the
Committee but in no case less than an amount equal to any dividends
payable during the term of the loan on the Shares being purchased by
the Grantee at the exercise of the Option. Such minimum interest rate
shall be determined by dividing the dividends paid on such Shares
during the preceding twelve months by the Option price for such
Shares.
25.5 If such a loan is made to a Grantee, the Company shall not deliver a
certificate or any shares purchased with the loan proceeds, until such
time as the loan is repaid.
26. NO-UNIFORM DETERMINATION
The Committee's determination under the Plan including, without limitation,
determination of the persons to receive Awards, the form, amount and type of
Awards, the terms and provisions of Awards and the written material evidencing
such Awards, the grant of additional benefits in connection with any Award, and
the granting or rejecting of loans or applications for delivery of stock in lieu
of cash bonus or incentive payments need not be uniform and may be made
selectively among otherwise eligible employees, whether or not such employees
are similarly situated.
27. TAXES
The Company is authorized to pay or withhold the amount of any tax
attributable to any amounts payable under any Awards, and the Company may defer
making payment of any Award if any such tax, charge or assessment may be pending
until indemnification to its satisfaction. This authority shall include
authority to withhold or receive Shares and to make cash payments in respect
thereof in satisfaction of an individual's tax obligations.
28. TENURE
An employee's right, if any, to continue in the employ of the Company or a
Subsidiary shall not be affected by the fact that he is a participant under this
Plan. At the sole discretion of the Committee, an employee terminated for cause
may be required to forfeit all of his rights under the Plan, except as to
Options or SARs already exercised and any other Awards in which the Grantee has
already vested.
29. APPLICATION OF PROCEEDS
The proceeds received by the Company from the sale of its Shares under the
Plan shall be used for general corporate purposes.
30. OTHER ACTIONS
Nothing in the Plan shall be construed to limit the authority of the
Company to exercise its corporate rights and powers, including, by way of
illustration and not by way of limitation, the right to grant options for proper
corporate purposes otherwise than under the Plan to any employee or any other
person, firm, corporation, association or other entity, or to grant options to,
or assume options of, any person in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of all or any part of the
business and assets of any person, firm, corporation, association or other
entity.
31. GOVERNING LAW
The 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.
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EXHIBIT B
YELLOW CORPORATION
EXECUTIVE PERFORMANCE PLAN
1. PURPOSE
The Yellow Corporation Executive Performance Plan is designed to foster in
qualified executive personnel of Yellow Corporation and its subsidiaries a
strong incentive to put forth maximum effort for the continued success and
growth of the Company and its subsidiaries, to aid in retaining individuals who
put forth such efforts, and to assist in attracting the best available
individuals in the future.
2. DEFINITIONS
When used herein, the following terms shall have the meaning set forth
below:
2.1. "Award" shall mean a Cash-Based or Stock-Based Award made pursuant to
Section 6 of the Plan.
2.2. "Board" means the Board of Directors of Yellow Corporation.
2.3. "Cash-Based Award" means the grant of a right to receive, at a time
or times fixed by the Committee in accordance with the Plan, and
subject to performance objectives and such other limitations and
restrictions as the Plan and the Committee impose, a range of cash
amounts specified by the Committee.
2.4. "Committee" means the members of the Board's Compensation Committee
who are non-employee directors as defined in Rule 16b-3 of the
Securities and Exchange Commission as it exists on the effective date
of the Plan or as subsequently amended or interpreted and are
"outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986 and the regulations thereunder.
2.5. "Company" means Yellow Corporation.
2.6. "Executive Officers" means such officers as the Board annually
designates as "officers" pursuant to Section 16(a) of the Securities
and Exchange Act of 1934.
2.7 "Fair Market Value" means with respect to the Company's Shares the
closing price of the Shares as reported by NASDAQ or if the closing
price is not reported, the bid price of the Shares as reported by
NASDAQ on the date on which the value is to be determined or, if the
stock did not trade on that date, the next preceding date on which
such stock traded.
2.8 "IRC '86" means the Internal Revenue Code of 1986, as in effect as of
the effective date of the Plan or as thereafter amended, and
applicable regulations.
2.9 "Participant" means a person to whom an Award is made.
2.10 "Performance Period" means the period established by the Committee in
connection with an Award pursuant to Section 6.2.
2.11 "Plan" means the Company's Executive Performance Plan.
2.12 "QDRO" means a qualified domestic relations order as defined by IRC
'86 or Title I of the Employee Retirement Income Security Act, or the
rules thereunder.
2.13 "Shares" means shares of the Company's common stock or, if by reason
of the adjustment provisions hereof any rights under an Award under
the Plan pertain to any other security, such other security.
2.14 "Stock-Based Award" means the award of an Option, SAR, Restricted
Stock, Restricted Stock Unit, Performance Stock, Performance Stock
Unit, Dividend Equivalent or Other Share-Based Award, as all such
terms are defined in the Company's 2002 Stock Option and Share Award
Plan.
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2.15 "Subsidiary" means any business, whether or not incorporated, in which
the Company, at the time an Award is granted to an employee thereof,
or in other cases, at the time of reference, owns directly or
indirectly not less than 50% of the equity interest.
2.16 "Successor" means the legal representative of the estate of a deceased
Participant or the person or persons who shall acquire the right to
receive distributions payable pursuant to the terms of an Award, by
bequest or inheritance or by reason of the death of the Participant,
as provided in accordance with Section 8 hereof.
3. ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the Committee.
3.2 The Committee shall have plenary authority, subject to the provisions
of the Plan, to determine when and to whom Awards shall be granted, and
the terms or conditions of each such Award. The Committee shall
determine whether an Award shall be a Cash-Based Award, a Stock-Based
Award, or a combination thereof. The Committee may grant such
additional benefits in connection with any Award as it deems
appropriate. The terms and conditions of a particular Award and any
additional benefits granted in connection with any Award need not be
the same, even as to Awards made at the same time. The Committee's
actions in making Awards and fixing their size and other terms and
conditions and in granting any additional benefits in connection with
any Award shall be conclusive on all persons.
3.3 The Committee shall have the sole responsibility for construing and
interpreting the Plan, for establishing and amending such rules and
regulations as it deems necessary or desirable for the proper
administration of the Plan, and for resolving all questions arising
under the Plan. Any decision or action taken by the Committee arising
out of or in connection with the construction, administration,
interpretation and effect of the Plan and of its rules and regulations
shall, to the extent permitted by law, be within its absolute
discretion, except as otherwise specifically provided herein, and shall
be conclusive and binding upon all Participants, all Successors, and
any other persons, whether that person is claiming under or through any
Participant or otherwise.
3.4 The Committee shall regularly inform the Board as to its actions with
respect to all Awards under the Plan and the terms and conditions of
such Awards in a manner, at such times, and in such form as the Board
may reasonably request.
4. ELIGIBILITY
Awards may be made under the Plan only to the Company's Executive Officers
and to employees at the President and Senior Vice President level of its
subsidiaries. Awards may be made to eligible employees whether or not they have
received prior Awards, under the Plan or under any previously adopted plan, and
whether or not they are participants in other benefit plans of the Company. In
making a determination concerning the granting of Awards to eligible employees,
the Committee may take into account the nature of the services they have
rendered or that the Committee expects they will render, their present and
potential contributions to the success of the business, the number of years of
effective service they are expected to have and such other factors as the
Committee in its sole discretion shall deem relevant.
5. GRANTS UNDER 2002 STOCK OPTION AND SHARE AWARD PLAN; PLAN MAXIMUMS
5.1 Stock-Based Awards shall be granted under the Company's 2002 Stock
Option and Share Award Plan and shall be subject to the terms,
conditions and limitations of such Plan as well as the applicable
provisions of this Plan.
5.2 Subject to adjustment as provided in Section 16 below, the maximum
number of Shares with respect to Stock-Based Awards may be granted
during any calendar year to any Participant under the Plan shall be
500,000 Shares.
B-2
5.3 The maximum dollar amount that may be paid in respect of any
Participant during any calendar year under any Cash-Based Awards shall
in the aggregate not exceed $5,000,000.
6. AWARDS
6.1 Awards may be granted to the Participants in such amounts and at such
times during the Performance Period as the Committee shall determine.
The Committee shall determine in its sole discretion whether Awards
made to a Participant under the Plan shall be Cash-Based Awards, Stock-
Based Awards or a combination thereof.
6.2 The Committee shall determine a Performance Period and shall determine
the performance objectives for each Award prior to the beginning of the
Performance Period. The performance objectives may vary from
Participant to Participant, and shall be based on such one or more of
the following performance criteria as the Committee may deem
appropriate: return on capital, total stockholder return, earnings,
earnings per share, operating income, net income, pro forma net income,
return on stockholders' equity, return on designated assets, net asset
value, economic value added, revenues, expenses, operating profit
margin, operating cash flow, cash flow per share, and net operating
profit after taxes. The performance objectives may be determined by
reference to the performance of the Company, or of a Subsidiary, or of
a division or unit of any of the foregoing. Such performance objectives
shall involve specific or relative performance measures in relation to
a peer group of companies and/or broad-based market index. Performance
Periods may overlap, and Participants may participate simultaneously
with respect to Awards for which different Performance Periods are
prescribed.
6.3 At the beginning of a Performance Period, the Committee shall determine
for each Participant or group of Participants with respect to that
Performance Period (i) the range of number of Shares and type of stock
awarded in the case of Stock-Based Awards and (ii) the range of dollar
values, if any, in the case of Cash-Based Awards, which shall be paid
to a Participant as an Award if the relevant measure of performance for
the Performance Period is met.
6.4 If, during the course of a Performance Period, there shall occur
significant events as determined by the Committee which the Committee
expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided,
however, that the Committee shall not have any discretion to increase
the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of IRC '86 Section
162(m)(4)(C) and the regulations thereunder. The Committee shall also
have discretion to reduce all or any Awards previously granted under
the Plan in consideration of factors that the Committee believes may
apply to the Company in general or individual Participants under the
Plan.
6.5 Except as otherwise determined by the Committee, at the date of grant
or thereafter, upon termination of employment during the applicable
Performance Period, Awards for that Performance Period shall be
forfeited; provided, however, that the Committee may provide, by rule
or regulation or in any Award agreement, or may determine in an
individual case, that restrictions or forfeiture conditions relating to
Awards will be waived in whole or in part in the event of terminations
resulting from specified causes or in the event of a change of control
as defined by the Committee, and the Committee may in other cases waive
in whole or in part the forfeiture of Awards.
6.6 At the end of the Performance Period, the Committee shall determine the
extent to which each outstanding Award granted for that Performance
Period (other than any Award that was previously forfeited) has been
earned on the basis of the performance objectives applicable to the
Award. In the case of a Cash-Based Award, the portion of the Award, if
any, that the Committee determines to have been earned shall be paid
out in a lump sum cash payment as soon as practicable after the
determination has been made by the Committee. In the case of a
Stock-Based Award, the portion of the Award, if any, that the Committee
determines to have been earned shall be paid out in a number of Shares,
or Options and SARs in the case of Options and SARs, respectively
covered by the Stock-
B-3
Based Award so earned as soon as practicable after the later of (i) the
determination of the portion earned has been made by the Committee or (ii) the
date on which the Participant's employment with the Company and its Subsidiaries
terminates for any reason. The Committee must certify in writing prior to
payment under any Award that the performance objectives and any other
material items were in fact satisfied.
6.7 The Committee may determine that a Participant who is awarded a
Stock-Based Award involving forms of stock other than Options and SARs
shall be entitled to receive any dividends payable with respect to the
Shares covered by such Stock-Based Award during the period that such
Award remains outstanding.
6.8 The Committee may establish terms and conditions under which a
Participant who is awarded a Performance Stock Unit or Restricted Stock
Unit Award shall be entitled to receive a credit equivalent to any
dividend payable with respect to the number of Shares corresponding in
number as of the record date for such dividend, to the number of
Performance Stock Units or Restricted Stock Units covered by such
Award. Any such dividend equivalent shall be paid to the Participant
holding such award at such time or times during such period as the
dividends would have been paid if he had owned the corresponding
Shares. Any arrangement for the payment of dividend equivalents shall
be terminated if, under the terms and conditions established by the
Committee, the Performance Stock Unit or Restricted Stock Unit Award is
forfeited.
6.9 After grant of a Stock-Based Award but before a distribution of Shares
in satisfaction thereof, the Participant may request in writing that
the Shares to be issued in satisfaction of the Award be issued in the
name of the Participant and another person as joint tenants with right
of survivorship or as tenants in common.
6.10 The Committee may give Participants who meet such conditions as may be
prescribed by the Committee the right to convert outstanding
Performance or Restricted Stock Awards and/or Performance Stock Unit
or Restricted Stock Unit Awards into a right to receive a cash payment
in an amount determined by calculating the Fair Market Value of the
Shares covered by such Award at the time of the conversion and then
adjusting for the equivalent of earnings and losses thereafter based
on such investment measures or measures as may be designated by the
Committee (but such cash payment shall be made only to the extent such
payment is earned on the basis of any performance objectives
applicable to the Award).
7. NON-TRANSFERABILITY OF RIGHTS
Except for certain transfers of Options, SARs and Restricted Stock Awards
to family members (including, without limitation, to a trust for the benefit of
the Participant's family members or to a partnership or limited liability
company owned by one or more members of the Participant's family members),
charities, or pursuant to a QDRO, which the Committee in its sole discretion may
permit, no Option, SAR and no rights under any Restricted Stock Award shall be
transferable by the Participant otherwise than by will or the laws of descent
and distribution, and, except for permitted transferees, each Option and SAR may
be exercised during the lifetime of the Participant only by the Participant.
8. DEATH OR TERMINATION OF EMPLOYMENT
8.1 The effect of death or termination of employment on any Award shall be
stated in the Award.
8.2 Transfers of employment between the Company and a Subsidiary, or
between Subsidiaries, shall not constitute termination of employment
for purposes of any Award. The Committee may specify in the terms and
conditions of an Award whether any authorized leave of absence or
absence for military or government service or for any other reason
shall constitute a termination of employment for purposes of the Award
and the Plan.
B-4
9. PROVISIONS RELATING TO TERMINATION OF THE COMPANY'S SEPARATE EXISTENCE
The Committee may provide that in the event that the Company is to be
wholly or partly liquidated, or agrees to participate in a merger, consolidation
or reorganization in which it, or an entity controlled by it, is not the
surviving entity, any or all Awards granted under the Plan shall be immediately
payable or exercisable in full.
10. WRITINGS EVIDENCING AWARDS
Each Award granted under the Plan shall be evidenced by a writing which
may, but need not, be in the form of an agreement to be signed by the
Participant. The writing shall set forth the nature and size of the Award, the
other terms and conditions thereof, other than those set forth in the Plan, and
such other information as the Committee directs. Acceptance of any benefits of
an Award by the Participant shall be conclusively presumed to be an assent to
the terms and conditions set forth therein, whether or not the writing is in the
form of an agreement to be signed by the Participant.
11. EFFECTIVE DATE OF THE PLAN AND DURATION.
The Plan shall become effective on March 2, 2002.
12. DATE OF AWARD
The date of an Award shall be the date on which the Committee's
determination to grant the same is final, or such later date as shall be
specified by the Committee in connection with its determination.
13. STOCKHOLDER STATUS
No person shall have any rights as a stockholder by virtue of the grant of
a Performance Stock Unit or Restricted Stock Unit Award under the Plan except
with respect to Shares actually issued to that person.
14. POSTPONEMENT OF EXERCISE
The Committee may postpone any exercise of an Option or SAR or the
distribution of Shares under any other Stock-Based Award for such time as the
Committee in its discretion may deem necessary in order to permit the Company
(i) to effect or maintain registration of the Plan or the Shares issuable
pursuant to such Award under the Securities Act of 1933, as amended, or the
securities laws of any applicable jurisdiction, (ii) to permit any action to be
taken in order to comply with restrictions or regulations incident to the
maintenance of a public market for its Shares, or (iii) to determine that such
Shares and the Plan are exempt from such registration or that no action of the
kind referred to in (ii) above needs to be taken; and the Company shall not be
obligated by virtue of any terms and conditions of any Award or any provision of
the Plan to issue shares in violation of the Securities Act of 1933 or the law
of any government having jurisdiction thereof. Any such postponement shall not
extend the term of an Award. Neither the Company nor its directors or officers
shall have any obligation or liability to the Participant, to the Participant's
Successor or to any other person with respect to any Shares as to which the
Award shall lapse because of such postponement.
15. TERMINATION, SUSPENSION, MODIFICATION OR AMENDMENT OF PLAN
The Board may at any time terminate, suspend, modify or amend the Plan
without stockholder approval, except that the maximum number of Shares with
respect to Stock-Based Awards that may be granted during any calendar year to
any Participant of 500,000 Shares and the maximum dollar amount that may be paid
in respect of any Participant during any calendar year under any Cash-Based
Awards in the aggregate of $5,000,000 may not be modified, except under the
circumstances outlined in Paragraph 16 below, without stockholder approval.
However, no termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Participant or any Successor under an Award
granted before the date of such termination, suspension or modification, unless
such Participant or Successor shall consent; but it shall be conclusively
presumed that any adjustment for changes in capitalization as provided for in
Section 16 below
B-5
does not adversely affect any such right. Any member of the Board who is an
officer or employee of the Company or a Subsidiary shall be without vote on any
proposed amendment to the Plan, or on any other matter which might affect that
member's individual interest under the Plan.
16. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
Any increase in the number of outstanding Shares of the Company occurring
through stock splits or stock dividends after the adoption of the Plan shall be
reflected proportionately in an increase in the aggregate number of Shares then
available for the grant of Stock-Based Awards under the Plan, or becoming
available through the termination, surrender or lapse of awards previously
granted but unexercised and in the number of Shares subject to Stock-Based
Awards then outstanding; and a proportionate reduction shall be made in the per
share option price as to any outstanding Options. Any fractional shares
resulting from such adjustment shall be eliminated. In the event that the Board
shall determine that any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event (other than those considered above)
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of a Participant under a Stock-Based
Award, the Board shall make such adjustment in the number and kind of shares
issuable under the Plan and in the number or kind of shares remaining subject to
Stock-Based Awards then outstanding as the Board in its discretion may consider
appropriate to reflect such change in capitalization, and all such adjustments
shall be conclusive upon all persons.
17. NO-UNIFORM DETERMINATION
The Committee's determination under the Plan including, without limitation,
determination of the persons to receive Awards, the form, amount and type of
Awards (i.e. Cash-Based Awards, Stock-Based Awards), the terms and provisions of
Awards and the written material evidencing such Awards, and the grant of
additional benefits in connection with any Award, need not be uniform and may be
made selectively among otherwise eligible employees, whether or not such
employees are similarly situated.
18. TAXES
The Company is authorized to pay or withhold the amount of any tax
attributable to any amounts payable under any Awards, and the Company may defer
making payment of any Award if any such tax, charge or assessment may be pending
until indemnification to its satisfaction. This authority shall include
authority to withhold or receive Shares and to make cash payments in respect
thereof in satisfaction of an individual's tax obligations.
19. TENURE
An employee's right, if any, to continue in the employ of the Company or a
Subsidiary shall not be affected by the fact that he or she is a Participant
under this Plan. At the sole discretion of the Committee, an employee terminated
for cause may be required to forfeit all of his or her rights under any Awards
for which the Performance Period has not yet ended.
20. AWARDS UNDER OTHER PLANS
Nothing in this Plan shall limit in any way the right of the Company or the
Committee to make awards under any other plan of the Company or any Subsidiary,
including without limitation, awards under the Yellow Corporation 2002 Stock
Option and Share Award Plan or any successor plan.
21. GOVERNING LAW
The 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-6
YELLOW CORPORATION
PROXY
ANNUAL MEETING OF STOCKHOLDERS, APRIL 18, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints WILLIAM D. ZOLLARS, HOWARD M. DEAN AND
WILLIAM L. TRUBECK, 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 Company's General Office, 10990 Roe Avenue,
Overland Park, Kansas on Thursday, April 18, 2002, 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.)
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YOU CAN NOW ACCESS YOUR YELLOW CORPORATION ACCOUNT ONLINE.
Access your Yellow Corporation shareholder account online via Investor
ServiceDirect(SM) (ISD).
Mellon Investor Services LLC, agent for Yellow Corporation, now makes it easy
and convenient to get current information on your shareholder account. After a
simple, and secure process of establishing a Personal Identification Number
(PIN), you are ready to log in and access your account to:
- View account status - View payment history for dividends
- View certificate history - Make address changes
- View book-entry information - Obtain a duplicate 1099 tax form
- Establish/change your PIN
VISIT US ON THE WEB AT HTTP://WWW.MELLONINVESTOR.COM
AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE.
STEP 1: FIRST TIME USERS - ESTABLISH A PIN | STEP 2: LOG IN FOR ACCOUNT ACCESS | STEP 3: ACCOUNT STATUS SCREEN
| |
You must first establish a Personal Identification | You are now ready to log in. To access | You are now ready to access your
Number (PIN) online by following the directions | your account please enter your: | account information. Click on the
provided in the upper right portion of the web | | appropriate button to view or
screen as follows. You will also need your Social | - SSN | initiate transactions.
Security Number (SSN) available to establish a PIN. | - PIN ------ |
| - Then click on the Submit button | - Certificate History
INVESTOR SERVICEDIRECT(SM) IS CURRENTLY ONLY | ------ | - Book-Entry Information
AVAILABLE FOR DOMESTIC INDIVIDUAL AND JOINT | If you have more than one account, | - Issue Certificate
ACCOUNTS. | you will now be asked to select the | - Payment History
| appropriate account. | - Address Change
- SSN | | - Duplicate 1099
- PIN ------------- | |
- Then click on the Establish PIN button | |
------------- | |
Please be sure to remember you PIN, or maintain | |
it in a secure place for future reference. | |
FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN
9AM-7PM MONDAY-FRIDAY EASTERN TIME
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. Please mark
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. your votes as
--- indicated in [X]
this example
1. ELECTION OF DIRECTORS Nominees -- 01 Cassandra C. Carr, 02 Howard M. Dean,
03 Dennis E. Foster, 04 Richard C. Green, Jr., 05 John C. McKelvey,
FOR all nominees WITHHOLD 06 William L. Trubeck, 07 Carl W. Vogt, 08 William D. Zollars
listed (except as AUTHORITY
marked to the to vote for all (To withhold authority to vote for any individual nominee, write that
contrary to the right). nominees. nominee's name on the line provided below.)
[ ] [ ] --------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL DIRECTOR NOMINEES LISTED.
2. PROPOSAL TO APPROVE THE ADOPTION
of the 2002 Stock Option and Share Award Plan.
The Board of Directors recommends a vote FOR 3. PROPOSAL TO APPROVE the Company's Annual
proposal 2. Cash Incentive Compensation, or Bonus, Program.
The Board of Directors recommends a vote FOR
FOR AGAINST ABSTAIN proposal 3.
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. PROPOSAL TO APPROVE the Company's Executive Performance
Plan.
The Board of Directors recommends a vote FOR proposal 4.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. PROPOSAL TO APPROVE THE APPOINTMENT of Arthur Andersen LLP
as independent public accountants of the Corporation for 2002.
The Board of Directors recommends a vote FOR proposal 5.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. OTHER BUSINESS: In their discretion the Proxies are authorized
to vote upon such other matters as may properly come before
the meeting.
CONFIDENTIAL VOTE [ ]
REQUESTED:
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
SIGNATURE SIGNATURE DATE
--------------------------------------- -------------------------------------- ----------------------------
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.
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