Exhibit 10.25

 

YELLOW ROADWAY

2004 LONG-TERM INCENTIVE PLAN

 

    Plan Provision

Performance Focus

  Consolidated Yellow Roadway Corporation (“Company”) performance

Performance Period

  Overlapping three-year performance periods

Performance Criteria

  Company performance measured against the S&P Mid Cap Index (400 companies)
with target at the 50th percentile, threshold at the 25th percentile and maximum
at the 75th percentile. In addition, the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”) may reduce any potential
payment, under the Plan, based upon peer company performance relative to the
Company or other performance factors that the Compensation Committee deems
relevant.

Performance Measures and Weights

 

70% return on committed capital

30% net operating profit after taxes (“NOPAT”) growth

Threshold and Maximum Payment

  Threshold 25% of target and maximum 200% of target.

Plan Formula

   

Form of Payment

  50% cash and 50% Performance Share Units, awarded at the end of performance
period. Performance Share Units are determined by dividing the cash value by the
average daily share price through the performance period. Performance Share
Units are converted to shares of stock and delivered to the participant upon
becoming fully vested and all holding periods are fully satisfied. The
Compensation Committee may, based upon an estimated calculation, pay out a
percentage of any earned award (on both cash and equity portions) in the first
quarter of the year following the performance period with the balance to be paid
by the end of the 3rd quarter in that year once the final calculations can be
made. The Compensation Committee, in its sole discretion, may determine the
sample size of the comparison companies in the applicable S&P index.

Vesting of Performance Share Units

  50% of the Performance Share Units vest after three years and the remaining
50% of the Performance Share Units vest after six years, in each case, from the
date of grant. The participant will not receive any stock on the vesting of the
first 50% until the holding period is satisfied on the 6th anniversary of the
date of grant or termination of employment after vesting, whichever occurs
earlier.

Termination of Employment

  Vested Performance Share Units are converted to stock and delivered to the
participant. Non-vested units are forfeited, and no payment is made for
incomplete performance periods. The Compensation Committee, at its sole
discretion, may determine to deliver unvested units to the terminating
participant based on the circumstances of his or her separation from the
Company.

 

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Retirement and Disability

  If the participant is age 65 upon termination of employment or is deemed to be
totally or permanently disabled, both vested and non-vested Performance Share
Units are converted to stock and delivered to the participant. If the
participant terminates employment prior to age 65 and the participant is at
least 55 years of age with the participant’s age plus years of service equal to
at least 75, the Performance Share Units shall continue to vest on the same
schedule as if the participant remained employed until age 65, and upon age 65
after such retirement all remaining Performance Share Units shall become fully
vested and convert to shares of stock; provided, that the participant does not
breach the non-competition covenant contained in the Performance Share Award
agreement. For incomplete performance cycles upon such retirement, the
participant will be paid both cash and stock at the end of the performance
period on a pro rata basis based on the length of time he or she was actively
employed during the performance period.

Death

  Vested and non-vested Performance Share Units are converted to stock and
delivered to the person’s estate. For incomplete performance cycles, the
participant’s estate will be paid both cash and stock at the end of the
performance period on a pro rata basis based on the length of time he or she was
employed during the performance period.

Change of Control of Yellow Roadway

  Vested and non-vested Performance Share Units are converted to shares of stock
and delivered to the participant in the event of a “Change of Control”. For
incomplete performance cycles, the participant will be paid both cash and stock
on the date of the “Change of Control” on a pro rata basis based on the length
of time he or she was actively employed during the performance period, assuming
that the Company would meet a Target performance for each period. For the
purposes of this Plan, “Change of Control” shall have the meaning that term is
given in the Executive Severance Agreement between the participant and the
Company, as it may be amended from time to time; or, if no such agreement
exists, the meaning that term is given in the latest Executive Severance
Agreement between the Company and its Chief Executive Officer.

New Participants

  New participants in the plan will enter the plan at the effective date
determined by the Compensation Committee and will have their target payment
adjusted for partially completed performance periods.

 

Implementation of the revised Plan

 

Because of the impact of the Company’s acquisition of Roadway Corporation
(“Roadway”) on the 2002-2004 and 2003-2005 performance cycles, Yellow
Corporation (“Yellow”) only performance, compared to the S&P Small Cap Index,
will be used for 2002 and 2003 for Yellow participants and Roadway only
performance, compared to the S&P Small Cap Index, will be used for 2002 and 2003
for Roadway participants. Yellow Roadway Corporation performance as compared to
the S&P Mid Cap Index for 2004 and 2005 will be used for those years for all
participants. This 2004 Long Term Incentive Plan amends and restates the Long
Term Incentive Plan adopted in 2002 in its entirety.

 

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