Exhibit 10.1

 

YELLOW ROADWAY

2004 LONG-TERM INCENTIVE PLAN

 

    

Plan Provision

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Performance Focus    Consolidated Yellow Roadway Corporation (“Company”)
performance Eligibility    The Compensation Committee of the Board of Directors
of the Company (the “Compensation Committee”) shall determine who may
participate in this plan. Generally, grades 120-126 may be eligible for the
Compensation Committee’s determination; however, the Compensation Committee may,
in its sole discretion, omit those in those grade levels or add participants
from outside of those grade levels. The Compensation Committee shall determine
the payout target percentages by grade level. The Compensation Committee may
remove any participant from further participation in this plan. For incomplete
performance cycles upon termination of participation, the Compensation Committee
may, in its sole discretion, determine to pay a terminating participant in both
cash and Performance Share Units at the end of one or more relevant performance
periods on a pro rata basis based on the length of time he or she was actively
participating prior to termination during the performance period. 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 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. For grants after April 21,
2005, Performance Share Units are determined by dividing the cash value by the
average daily closing share price for the 30-trading day period

 

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     ending on the day immediately prior to the date of grant. 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
non-vested Performance Share Units to the terminating participant based on the
circumstances of his or her separation from the Company. 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.

 

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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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