SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
File 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 (S)240.14a-11(c) or (S)240.14a-12
OLD DOMINION FREIGHT LINE, INC.
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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)(4) 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.
[_] 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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4) Date Filed:
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OLD DOMINION FREIGHT LINE, INC.
Executive Offices: 500 Old Dominion Way
Thomasville, North Carolina 27360
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 10, 2002
The Annual Meeting of Stockholders of Old Dominion Freight Line, Inc.,
will be held Monday, May 20, 2002, at 10:00 a.m., in the Company's executive
offices, 500 Old Dominion Way, Thomasville, North Carolina, for the following
purposes:
1. To elect a board of seven directors of the Company.
2. To transact such other business as may be brought before the
meeting.
Stockholders of record at the close of business on March 25, 2002, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
/s/ Joel B. McCarty, Jr.
Joel B. McCarty, Jr.
Secretary
Thomasville, North Carolina
April 10, 2002
If you do not intend to be present at the meeting, please
sign, date and return the accompanying proxy promptly so
that your shares of Common Stock may be represented and
voted at the meeting. A return envelope is enclosed for your
convenience.
OLD DOMINION FREIGHT LINE, INC.
Executive Offices: 500 Old Dominion Way
Thomasville, North Carolina 27360
_______________
PROXY STATEMENT
_______________
This Proxy Statement is being sent to stockholders on or about April 12,
2002, in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders of Old Dominion Freight Line, Inc. (the "Company"), to
be held on Monday, May 20, 2002, and at any adjournment thereof.
ELECTION OF DIRECTORS
The Bylaws provide that the number of directors shall be not less than five
nor more than nine. The Board of Directors has determined that the number of
directors should be seven in 2002. The number of directors, within the maximum
and minimum, is to be determined at each Annual Meeting by resolution adopted by
the shareholders or, in the absence of such resolution, the number of directors
elected at the meeting shall constitute the number of directors of the Company.
The Board has nominated the following seven individuals to serve as directors
until the next Annual Meeting and until their successors shall have been elected
and shall qualify. Unless authority is withheld, it is intended that Proxies
received in response to this solicitation will be voted in favor of the
following seven nominees:
Amount and Nature of Beneficial
Ownership of the Company's Common
Stock as of March 25, 2002
--------------------------------------------------------------
Voting and
Investment Power (1) In all Capacities
-------------------- -------------------------
Name, Age, Principal Percent of
Occupation and Other Positions Director Total Common
and Offices with the Company Since Sole Shared Shares Stock
------------------------------- -------- ---- ------ ------ ----------
Earl E. Congdon, 71 (2)(3)(4) 1952 See "Principal Stockholders"
Chairman of the Board of
Directors and Chief Executive
Officer of the Company
John R. Congdon, 69 (2)(3)(4)
Vice Chairman of the Board of 1955 See "Principal Stockholders"
Directors of the Company;
Chairman of Old Dominion
Truck Leasing, Inc.
Amount and Nature of Beneficial
Ownership of the Company's Common
Stock as of March 25, 2002
-------------------------------------------------------------------
Voting and
Investment Power (1) In all Capacities
--------------------- -----------------------------
Name, Age, Principal Percent of
Occupation and Other Positions Director Total Common
and Offices with the Company Since Sole Shared Shares Stock
----------------------------- -------- ---- ------ ------ -----
John A. Ebeling, 64 (5) 1985 5,000 - 5,000 Less than 1%
Retired (former Vice Chairman of
the Board of Directors,
President and Chief Operating
Officer of the Company)
Harold G. Hoak, 72 (4)(5) 1991 1,000 - 1,000 Less than 1%
Retired (former Regional Vice
President of Wachovia Bank of North
Carolina, N.A.)
Franz F. Holscher, 80 (3)(4)(5) 1991 1,000 - 1,000 Less than 1%
Retired (former Chairman of
Thurston Motor Lines, Inc.)
David S. Congdon, 45 (2) 1998 See "Principal Stockholders"
President and Chief Operating
Officer of the Company
John R. Congdon, Jr., 45 1998 See "Principal Stockholders"
Vice Chairman of Old Dominion Truck
Leasing, Inc.
_____________________
(1) Except as otherwise indicated, each director has sole voting and sole
investment power with respect to the shares beneficially owned by such
director.
(2) Member of Executive Committee.
(3) Member of Compensation Committee.
(4) Member of Stock Option Plan Committee.
(5) Member of Audit Committee.
Earl E. Congdon has been employed by the Company since 1950 and has served
as Chairman of the Board and Chief Executive Officer since 1985 and as a
director since 1952. He is a son of E. E. Congdon, one of the founders of Old
Dominion, the brother of John R. Congdon and the father of David S. Congdon.
-2-
John R. Congdon has been employed by the Company since 1953 and has served
as Vice Chairman of the Board since 1985 and as a director since 1955. He is
also the Chairman of Old Dominion Truck Leasing, Inc., a North Carolina
corporation that is engaged in full service leasing of tractors, trailers and
other equipment, to which he devotes more than half of his time. He is a son of
E. E. Congdon, one of the founders of Old Dominion, the brother of Earl E.
Congdon and the father of John R. Congdon, Jr.
John A. Ebeling has been a director since August 1985. He formerly served
as Vice Chairman from May 1997 to May 1999 and as President and Chief Operating
Officer from August 1985 to May 1997. Mr. Ebeling was previously employed by ANR
Freight Systems from 1978 to 1985, holding the positions of Chairman and Chief
Executive Officer.
Harold G. Hoak was elected a director in August 1991. Now retired, he
serves on the Board of Directors of the Charlotte Merchants Foundation, Inc. He
was President and General Manager of the Charlotte Merchants Association, Inc.,
from 1989 to 1994. Mr. Hoak was formerly employed by Wachovia Bank of North
Carolina, N.A., from 1956 to 1989 and served as Regional Vice President for the
Southern Region from 1976 to 1989.
Franz F. Holscher was elected a director in August 1991. He served in a
number of executive positions from 1970 to 1987 with Thurston Motor Lines and
was Chairman of the Board of Directors from July 1984 through December 1987,
when he retired. Mr. Holscher has been active in a number of organizations and
associations within the trucking industry.
David S. Congdon was elected a director in 1998. He has been employed by
the Company since 1978 and, since May 1997, has served as President and Chief
Operating Officer. He has held various senior management positions in the
Company including Vice President - Quality and Field Services and Vice President
- Transportation, as well as other positions in operations and engineering. He
is the son of Earl E. Congdon.
John R. Congdon, Jr. was elected a director in 1998. He currently serves as
the Vice Chairman of the Board of Directors of Old Dominion Truck Leasing, Inc.
(a company owned by Earl E. Congdon, John R. Congdon and members of the Congdon
family), where he has been employed since May 1979. He is the son of John R.
Congdon.
-3-
PRINCIPAL STOCKHOLDERS
As of March 25, 2002, or such other date as indicated in the footnotes to
the table, to the knowledge of management, the only persons beneficially owning
more than five percent (5%) of the Company's Common Stock, its only class of
voting security, are as follows:
Name and Address of
Beneficial Owner Number of Shares (1) Percent
------------------------------ -------------------- ---------
David S. Congdon 1,371,099 (2)(6) 16.5%
500 Old Dominion Way
Thomasville, NC 27360
Old Dominion Truck Leasing, Inc. 1,095,876 (3) 13.2%
7511 Whitepine Road
Richmond, VA 23237
Earl E. Congdon 922,300 (4)(6) 11.1%
20 Harborage Isle
Fort Lauderdale, FL 33316
John R. Congdon 881,646 (5)(6) 10.6%
7511 Whitepine Road
Richmond, VA 23237
Fidelity Management & Research 831,300 (7) 9.9%
Company
82 Devonshire Street
Boston, MA 02109
Dimensional Fund Advisors Inc. 603,600 (8) 7.3%
1299 Ocean Avenue, 11/th/ Floor
Santa Monica, CA 90401
Audrey L. Congdon 514,117 (9) 6.2%
500 Old Dominion Way
Thomasville, NC 27360
John R. Congdon, Jr 480,749 (10) 5.8%
7511 Whitepine Road
Richmond, VA 23237
Karen C. Vanstory 480,216 (11) 5.8%
5412 Horse Trail Road
Summerfield, NC 27358
-4-
Name and Address of
Beneficial Owner Number of Shares (1) Percent
------------------------------ -------------------- -------
Susan C. Terry 435,866 (12) 5.2%
10801 North Bank Road
Richmond, VA 23233
Jeffrey W. Congdon 431,121 (13) 5.2%
7511 Whitepine Road
Richmond, VA 23237
As of March 25, 2002, to the knowledge of management, the employees listed
in the "Summary Compensation Table" and all Executive Officers and Directors of
the Company as a group beneficially owned the following shares of the Company's
Common Stock:
Name of
Beneficial Owner Number of Shares (1) Percent
-------------------------------- -------------------- -------
Earl E. Congdon 922,300 (4)(6) 11.1%
David S. Congdon 1,371,099 (2)(6) 16.5%
John B. Yowell 514,117 (9) 6.2%
J. Wes Frye 13,358 (14) Less than 1%
Joel B. McCarty, Jr. 12,800 (15) Less than 1%
All Executive Officers and 4,376,645 (16) 52.4%
Directors of the Company as
a group (10 persons)
_______________
(1) Except as described below, each person or group identified possesses sole
voting and investment power with respect to the shares shown opposite the
name of such person or group.
(2) Includes 1,764 shares owned of record by the named stockholder, 10,000
shares obtainable upon exercise of stock options exercisable within 60
days, 273,832 shares held as trustee of a revocable trust, 117,366 shares
held as trustee or custodian for minor children of the stockholder, 777,633
shares through shared voting and investment rights as trustee under the
Earl E. Congdon Intangible Trust, 103,000 shares through shared voting and
investment rights as trustee under the Kathryn W. Congdon Intangible Trust,
78,504 shares through shared voting and investment rights by David S.
Congdon's wife as trustee of an irrevocable trust and 9,000 shares owned by
Mr. Congdon's wife.
-5-
(3) The voting stock of Old Dominion Truck Leasing, Inc. ("Leasing"), is owned
by the Earl E. Congdon Intangibles Trust, David S. Congdon, Trustee
(38.2%), John R. Congdon Revocable Trust (38.2%) and members of Earl E.
Congdon's and John R. Congdon's respective families (23.6%). John R.
Congdon is Chairman of the Board of Leasing and Earl E. Congdon is Vice
Chairman of the Board. The Company's Common Stock owned by Leasing will be
voted as directed by Earl E. Congdon and John R. Congdon or, in the event
of disagreement, one-half of the shares will be voted as directed by Earl
E. Congdon or his personal representative, attorney-in-fact or executor and
one-half will be voted as directed by John R. Congdon or his personal
representative, attorney-in-fact or executor. Any future sales or other
disposition of such shares and the disposition of the proceeds of any sales
will be determined by the Board of Directors of Leasing.
(4) Includes 777,633 shares through shared voting and investment rights as
grantor of the Earl E. Congdon Intangible Trust, 41,667 shares through
shared voting and investment rights as grantor of the Earl E. Congdon
Family Trust and 103,000 shares owned beneficially by Earl E. Congdon's
wife's through shared voting and investment rights under the Kathryn W.
Congdon Intangible Trust with respect to which Earl E. Congdon disclaims
beneficial ownership.
(5) Includes 838,247 shares held as trustee of a revocable trust, 41,667 shares
through shared voting and investment rights as trustee of the Earl E.
Congdon Family Trust and 1,732 shares owned by John R. Congdon's wife as
trustee of a revocable trust for which John R. Congdon disclaims beneficial
ownership.
(6) Does not include any of the shares owned by Old Dominion Truck Leasing,
Inc.
(7) Based on information obtained from a Schedule 13G, dated February 14, 2002,
filed with the Securities and Exchange Commission (the "SEC"), Fidelity
Management & Research Company ("Fidelity"), a wholly-owned subsidiary of
FMR Corp. and an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, is the beneficial owner of 831,300 shares
of the Company's common stock outstanding as a result of acting as
investment adviser to various investment companies registered under Section
8 of the Investment Company Act of 1940. The ownership of one investment
company, Fidelity Low Priced Stock Fund, amounted to 831,300 shares, or
9.9%, of the common stock outstanding.
(8) Based on information obtained from a Schedule 13G dated January 30, 2002,
filed with the SEC, Dimensional Fund Advisors Inc. ("Dimensional"), an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940, is deemed to have beneficial ownership of 603,600 shares of
the Company's common stock as of December 31, 2001. Dimensional furnishes
investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to certain
other commingled group trusts and separate accounts. These investment
companies, trusts and accounts are the "Funds". In its role as investment
adviser or manager, Dimensional possesses voting and/or investment power
over the securities of the Old Dominion shares owned by the Funds. All
securities reported in the 13G are owned by the Funds. Dimensional
disclaims beneficial ownership of such securities.
-6-
(9) Includes 1,764 shares owned of record by the named stockholder, 298,499
shares held as trustee of a revocable trust, 78,244 shares held as trustee
or custodian for minor children of the stockholder, 68,223 shares through
shared voting rights as trustee under the Karen C. Vanstory Irrevocable
Trust, 47,467 shares held by Mrs. Congdon's husband, John B. Yowell, as
trustee of an irrevocable trust, 10,500 shares obtainable upon exercise of
John B. Yowell's stock options exercisable within 60 days and 9,420 shares
owned by John B. Yowell.
(10) Includes 295,148 shares held as trustee of a revocable trust and 185,601
shares held as trustee or custodian for the benefit of the stockholder's
minor children.
(11) Includes 2,714 shares owned of record by the named stockholder, 291,913
shares held as trustee of a revocable trust, 68,223 shares through shared
voting and investment rights as grantor of an irrevocable trust and 117,366
shares held as trustee or custodian for minor children of the stockholder.
(12) Includes 244,958 shares held as trustee of a revocable trust and 190,908
shares held as trustee or custodian for the benefit of the stockholder's
minor children.
(13) Includes 300,601 shares held as trustee of a revocable trust and 130,520
shares held as trustee or custodian for the benefit of the stockholder's
minor children.
(14) Includes 974 shares owned of record by the named stockholder, 284 shares
owned in the Company's 401(k) plan, 12,000 shares obtainable upon exercise
of stock options exercisable within 60 days and 100 shares owned by the
stockholder's wife.
(15) Includes 800 shares owned of record by the named stockholder and 12,000
shares obtainable upon exercise of stock options exercisable within 60
days.
(16) Includes shares owned by Old Dominion Truck Leasing, Inc.
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires certain of
the Company's officers and its directors and persons who own more than 10% of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the SEC. Such officers, directors and stockholders
are required by the SEC regulations to furnish the Company with copies of all
such reports that they file.
Based solely on a review of copies of reports filed with the SEC since
January 1, 2001, and of representations by certain officers and directors, all
persons subject to the reporting requirements of Section 16(a) filed the reports
required to be filed in 2001 on a timely basis.
-7-
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides a three-year overview of the
cash compensation paid to the five most highly compensated
executive officers of the Company:
========================================================================== ============================== ======================
Long-Term Compensation
-------------------------------------------------------------------------- ------------------------------ ----------------------
Annual Compensation Awards
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
(a) (b) (c) (d) (f) (g) (i)
Restricted Securities
Stock Underlying All Other Compensation
Salary Bonus/(1)/ Award(s) Options (#) ($)/(2)/
Name and Principal Position Year ($) ($) ($)
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
Earl E. Congdon 2001 $ 315,260 $ 367,856 0 0 $ 9,948/(3)/
Chairman of the Board and Chief
Executive Officer
-------- ------------- ----------- -------------- --------------- ----------------------
2000 $ 300,800 $ 439,326 0 0 $ 15,373
-------- ------------- ----------- -------------- --------------- ----------------------
1999 $ 289,200 $ 466,707 0 0 $ 14,117
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
David S. Congdon 2001 $ 210,585 $ 222,650 0 0 $ 6,092/(3)/
President and Chief Operating Officer
-------- ------------- ----------- -------------- --------------- ----------------------
2000 $ 198,100 $ 267,981 0 0 $ 6,020
-------- ------------- ----------- -------------- --------------- ----------------------
1999 $ 186,000 $ 291,691 0 0 $ 2,749
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
John B. Yowell 2001 $ 166,380 $ 96,804 0 0 $ 6,351/(3)/
Executive Vice President
-------- ------------- ----------- -------------- --------------- ----------------------
2000 $ 154,200 $ 142,230 0 0 $ 5,731
-------- ------------- ----------- -------------- --------------- ----------------------
1999 $ 140,000 $ 116,677 0 0 $ 2,872
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
J. Wes Frye 2001 $ 160,125 $ 67,763 0 0 $ 2,010/(3)/
Treasurer, Chief Financial Officer and
Assistant Secretary
-------- ------------- ----------- -------------- --------------- ----------------------
2000 $ 148,620 $ 82,587 0 0 $ 2,319
-------- ------------- ----------- -------------- --------------- ----------------------
1999 $ 136,060 $ 93,341 0 0 $ 1,921
--------------------------------------- -------- ------------- ----------- -------------- --------------- ----------------------
Joel B. McCarty, Jr. 2001 $ 138,235 $ 67,673 0 0 $ 6,373/(3)/
Senior Vice President, Secretary,
General Counsel
-------- ------------- ----------- -------------- --------------- ----------------------
2000 $ 127,500 $ 82,587 0 0 $ 6,118
-------- ------------- ----------- -------------- --------------- ----------------------
1999 $ 115,460 $ 93,341 0 0 $ 4,549
========================================================================== ============================== ======================
-8-
(1) Pursuant to an executive profit-sharing bonus program, the Company pays
incentive cash bonuses to certain executive officers based upon the
Company's income before taxes during the fiscal year.
(2) Includes pre-tax contributions by the Company to the Old Dominion
401(k) retirement plan, personal use of Company cars, excess premiums
paid on group life insurance and the compensation element of premiums
paid on split-dollar life insurance policies. The Company is a party to
certain split-dollar life insurance agreements with certain members of
the families of Earl E. Congdon and John R. Congdon pursuant to which
the Company pays a portion of the premiums on life insurance policies
insuring their lives in the aggregate face amounts of $16,922,378 and
$16,858,399, respectively. The total benefits currently payable to the
Company under the policies upon the death of Earl E. Congdon and John
R. Congdon are $2,118,328 and $3,622,949, respectively. The Company's
interest in the death benefit and cash surrender value of each policy
is determined by reference to the amount of gross premiums paid by the
Company, which in 2001, 2000 and 1999 were $400,466, $423,934 and
$390,648, respectively.
(3) Allocation of 2001 All Other Compensation:
Company
Contribution Split-Dollar Personal Use of Excess Life
Name to 401k Plan Life Insurance Company Car Insurance Premiums
------------------- ------------ -------------- --------------- ------------------
Earl E. Congdon $ 1,175 $ 7,537 $ - $ 1,236
David S. Congdon 1,940 - 4,062 90
John B. Yowell 2,210 - 4,003 138
J. Wes Frye 1,872 - - 138
Joel B. McCarty, Jr 1,835 - 4,142 396
Stock Options
The Company's Board of Directors and stockholders have approved and
adopted the 1991 Employee Stock Option Plan of Old Dominion Freight Line, Inc.
(the "Option Plan"), for the benefit of key employees. The Option Plan covers
250,000 shares of the Company's Common Stock. The Option Plan provides for the
granting of stock options that qualify as incentive stock options pursuant to
Section 422 of the Internal Revenue Code as well as nonqualified options. The
exercise of a nonqualified stock option will result in compensation income equal
to the difference between the option price and the fair market value of the
stock acquired upon the exercise. Earl E. Congdon and John R. Congdon are not
eligible to participate in the Option Plan.
There were no options granted in 2001 and no additional options can be
granted under the Option Plan after August 31, 2001.
Options to purchase 224,000 shares under the Option Plan have been
granted. As of March 25, 2002, there are options outstanding covering 38,000
shares of Common Stock at the exercise price of $17.87 per share, 31,500 shares
at the exercise price of $19.25 per share, 23,500 shares at the exercise price
of $19.00 per share and 18,500 shares at the exercise price of $10.00 per share.
All of the options
-9-
have been granted as incentive options. The sale of shares issuable under the
Option Plan have been registered with the SEC.
The following table reflects cumulative information regarding grants
under the Option Plan:
===========================================================================================================================
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
---------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Shares Value Underlying Unexercised In-The-Money Options at
Name Acquired Realized Options at FY-End FY-End
on Exercise(#) ($) Exercisable/Unexercisable(#) Exercisable/Unexercisable($)
---------------------------------------------------------------------------------------------------------------------------
Earl E. Congdon * * * *
---------------------------------------------------------------------------------------------------------------------------
David S. Congdon 0 0 10,000 Exercisable $ 2,680 Exercisable
0 Unexercisable $ 0 Unexercisable
---------------------------------------------------------------------------------------------------------------------------
John B. Yowell 0 0 10,500 Exercisable $ 2,680 Exercisable
0 Unexercisable $ 0 Unexercisable
---------------------------------------------------------------------------------------------------------------------------
J. Wes Frye 0 0 12,000 Exercisable $ 4,020 Exercisable
0 Unexercisable $ 0 Unexercisable
---------------------------------------------------------------------------------------------------------------------------
Joel B. McCarty, Jr. 0 0 12,000 Exercisable $ 4,020 Exercisable
0 Unexercisable $ 0 Unexercisable
===========================================================================================================================
______________
* Not eligible to participate in the Option Plan.
Compensation of Directors
Each of the Company's outside directors receives an annual retainer of
$10,000 plus $1,200 for each meeting attended, including Board meetings and
meetings of committees of the Board of Directors not held in conjunction with a
meeting of the Board. Such directors also receive reimbursement of expenses
incurred as a director. Directors who are also officers of the Company receive
no such fees or expense reimbursement.
Report of Compensation Committee
The Compensation Committee (the "Committee") is responsible for
conducting an annual review of the Company's compensation plan for its executive
officers including the evaluation of the components of the plan, the standards
of performance measurement and the relationship between performance and
compensation. The Committee reviews the compensation of each executive officer
and makes specific recommendations to the Board of Directors based on factors
that include the individual officer's performance, the ability of the Company to
attract and retain qualified, experienced personnel and whether the plan
provides appropriate motivation to achieve goals outlined by the Board of
Directors.
In determining the compensation of the Chief Executive Officer, the
Committee began its evaluation prior to the time of the public offering in
October 1991. The base salary was determined, in part, by comparison with the
compensation of chief executive officers of other companies of comparable size
and levels of profitability. The base salary is reviewed each year and compared
to that of other chief executive officers as reported in various publications,
such as Forbes magazine. The Chief Executive Officer received a 1.4% increase in
the weekly base salary rate in 2001, which was
-10-
primarily an inflationary adjustment factor. Since 1991, the average increase in
the base salary rate has been 1.8%.
The incentive bonus for the Chief Executive Officer is based upon the
Company's profitability, a program that has been in place for many years, and
the Compensation Committee believes that this is a fair measure of executive
bonus compensation. The bonus is based upon a percentage, determined by the
Committee, of pre-tax profits. In 2000, the Compensation Committee reduced the
percentage of pre-tax profits used in determining the incentive bonus for many
of the participants in the plan, including the Chief Executive Officer. The
decision to revise and reduce the incentive bonus plan was based upon the
Committee's projections of future profitability and its objective of
compensating its senior employees with a balance of competitive salaries and
bonus incentives. The salary and bonus amounts for 2001, 2000 and 1999 are
reflected in the Summary Compensation Table. Both the base salary and the
incentive bonus are evaluated in determining overall compensation. The Chief
Executive Officer is not eligible to receive options under the Company's stock
option plan.
The base salary for all other officers is based upon the experience and
qualifications of each officer, with the additional objective of remaining
competitive in the industry in recruiting and retaining a well-qualified and
effective management team. The incentive bonus for officers is determined by the
Compensation Committee and is based upon the same criteria as the Chief
Executive Officer, the performance of the Company as measured by its
profitability. No stock options were granted to any individual in 2001.
During 1993, Section 162(m) was added to the Internal Revenue Code (the
"Code") that generally limits amounts that can be deducted for compensation paid
to executives to $1 million, unless certain requirements are met. No executive
received compensation in excess of $1 million in 2001; therefore, there were no
compensation amounts that would be deemed nondeductible for the Company under
Section 162(m) of the Code. The Committee will continue to monitor the
applicability of this section of the Code to the Company's compensation program
each year.
The Compensation Committee,
Franz F. Holscher, Chairman
Earl E. Congdon
John R. Congdon
Compensation Committee Interlocks and Insider Participation
Earl E. Congdon, Chairman of the Board of the Company and its Chief
Executive Officer, and John R. Congdon, Vice Chairman of the Board, are members
of the Compensation Committee. Mr. Holscher is not an employee of the Company
and receives no compensation other than directors' fees from the Company.
Earl E. Congdon and John R. Congdon are each 50% owners of E & J
Enterprises ("E & J"), a Virginia general partnership that leases trailers to
the Company. Pursuant to an agreement dated August 1, 1991, the Company leased
163 trailers from E & J at a monthly rental of $44,010. This lease expired on
July 31, 1996, but was extended for an additional term of three years, which
expired on July 31, 1999. The first extension of the lease required declining
monthly payments ranging from $35,045
-11-
in the first year to $33,415 in the third year. On July 26, 1999, the Company's
Board of Directors approved a second extension of the trailer lease agreement
for a period of one year at the monthly rental rate of $33,415. At the end of
the one-year term, the lease converted to a month-to-month lease with a monthly
lease payment of $33,415, which requires a six-month notice of cancellation.
Under the original lease and all extensions, the Company is responsible for
insurance coverage, maintenance and repairs to the trailers. The Company has no
purchase rights at the end of the lease term. Upon termination of the lease, for
specified reasons, E & J may require the Company to purchase the trailers for
cash at fair market value. The Company paid $400,980 in 2001 for trailers leased
from E & J under the lease agreement, which was treated as an operating lease.
In December 1988, the Company sold to E & J certain tracts of
unimproved land and a vacant service center facility in exchange for a
non-interest-bearing receivable in the amount of $579,798. E & J has repaid the
amount outstanding under the receivable as parcels of the property have been
sold. As of December 31, 2001, the amount outstanding on the receivable was
$195,677.
Old Dominion Truck Leasing, Inc., a North Carolina corporation whose
voting stock is owned by the Earl E. Congdon Intangibles Trust, David S.
Congdon, Trustee (38.2%), John R. Congdon Revocable Trust (38.2%) and members of
Earl E. Congdon's and John R. Congdon's families (23.6%), is engaged in the
business of purchasing and leasing tractors, trailers and other vehicles. John
R. Congdon is Chairman of the Board and Earl E. Congdon is the Vice Chairman of
the Board of Leasing. Both individuals also serve on the Board of Directors and
Compensation Committee of Old Dominion Freight Line. Since 1986, the Company and
Leasing have combined their requirements for the purchase of tractors, trailers,
equipment, parts, tires and fuel. The Company believes that, by so doing, it is
often able to obtain pricing discounts because of the increased level of
purchasing. While this is beneficial to the Company, management believes that
the termination of this relationship would not have a material adverse impact
upon the Company's financial results.
In 2001, the Company charged Leasing $10,586 for vehicle repair,
maintenance and other services, which it provides to Leasing at cost. In
addition, the Company charged Leasing $12,000 in 2001 for rental of a vehicle
maintenance and service facility located in Chesapeake, Virginia.
The Company purchased $286,838 of maintenance and other services from
Leasing in 2001. Old Dominion believes that the prices it pays for such services
are lower than would be charged by unaffiliated third parties for the same
quality of work and intends to continue to purchase maintenance and other
services from Leasing, provided that its prices continue to be favorable to the
Company. In addition, Leasing has a right of first refusal for the Company's
future tractor and trailer leases, exercisable on the same terms offered to the
Company by third parties. In 2001, the Company paid Leasing $8,363 for
short-term tractor rentals. Currently, the Company has no long-term equipment
leases in effect with Leasing.
The Company leases a service center facility in Greensboro, North
Carolina, from an irrevocable trust created by Earl E. Congdon and John R.
Congdon, for the benefit of their families. On July 14, 2000, the Company's
five-year lease of the property expired and the lease converted to a
month-to-month lease. The five-year lease required escalating annual payments
ranging from $29,000 per month in the first year to $31,391 in the fifth year
and was accounted for as an operating lease. Under the month-to-month lease,
initial payments of $31,391 were increased to $31,705 on December 15, 2000. The
current agreement requires the Company to maintain insurance, maintenance and
repairs
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to the facility. The Company made payments totaling $380,460 in 2001 under this
lease. The Company has purchased an additional 20 acres of land adjacent to the
property. The land will be sold to the Trust so that the entire combined acreage
can be used for the expansion of the existing service center. The Company's
Board of Directors, after review by the Audit Committee, has authorized the
Company to lend the trust the sum of $380,000 to purchase the land at 7.5%
interest to be repaid and amortized in monthly installments over ten years. The
Company plans to construct and extend an additional 106 doors to the existing
dock structure and make other improvements at a cost of approximately
$9,700,000, which will be treated as a leasehold improvement and will be
amortized over the life of a long-term lease. It is anticipated that the
existing lease will be renegotiated for a longer term upon completion of the
improvements; however, the final details of the structure of this transaction
have not been determined. The expansion of the Greensboro facility will allow it
to serve as a major breakbulk facility and will accommodate the need for
additional capacity that has resulted from growth in business levels, which has
required the Company to lease a 60 door service center facility in nearby High
Point, NC in January, 1998. The Greensboro expansion will allow the Company to
terminate the lease for the High Point service center and consolidate those
operations at the enlarged Greensboro facility. It is anticipated that this will
result in an increase in productivity and efficiency. The expansion project is
expected to be completed by fall 2002.
The Company is a party to certain split dollar life insurance policies,
of which certain members of the families of Earl E. Congdon and John R. Congdon
are designated beneficiaries. See Note (2) under the Summary Compensation Table
in this proxy statement.
The E & J lease and the equipment purchasing and servicing arrangement
with Leasing permit the Company to obtain certain equipment and services at
prices comparable to, or more favorable than, prices charged by unaffiliated
third parties. The Company believes that the rent paid under the lease for the
Greensboro service center is comparable to, or more favorable than, prices
charged by unaffiliated third parties.
Each of the foregoing transactions has been reviewed by the Audit
Committee of the Company's Board of Directors, which consists of three
nonemployee directors. The Audit Committee has approved the transactions that
continue to be in effect as being fair to the Company. The Audit Committee
believes that the terms and conditions of the foregoing transactions are
substantially the same as, or more favorable to the Company than, would be
available from nonaffiliates. The Company intends to enter into a re-negotiation
and extension of the Greensboro, North Carolina lease as described above. Any
extensions, modifications or renewals of existing transactions with such persons
must be approved, in advance, by the Audit Committee as being on terms no less
favorable to the Company than the terms that could be obtained in a similar
transaction with an unaffiliated party.
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Performance Graph
The following graph compares the total stockholder cumulative returns,
assuming the reinvestment of all dividends, of $100 invested on January 1, 1997,
in the Company's Common Stock, Nasdaq Trucking & Transportation Stocks and The
Nasdaq Stock Market (US) for the five-year period ended December 31, 2001:
COMPARISON OF CUMULATIVE TOTAL RETURNS
(Assumes $100 Invested on January 1, 1997)
[LINE GRAPH APPEARS HERE]
1/1/97 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
---------------------------------------------------------
Old Dominion Freight Line, Inc. $100 $144 $107 $101 $ 89 $119
Nasdaq Trucking & Transportation Stocks $100 $128 $116 $110 $100 $119
The Nasdaq Stock Market (US) $100 $122 $173 $321 $193 $153
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CORPORATE GOVERNANCE
The Company's Board of Directors held four regular meetings during
2001. All directors attended all meetings except for the January 2001 meeting,
at which John R. Congdon was not present. One special meeting was held by
conference call in 2001. All directors participated in this special meeting
except John R. Congdon and Franz F. Holscher.
The Board of Directors has four standing committees: Executive
Committee, Audit Committee, Compensation Committee and Stock Option Plan
Committee.
The Executive Committee consists of Messrs. Earl E. Congdon (Chairman),
John R. Congdon and David S. Congdon. The Executive Committee is empowered to
act between meetings of the Board of Directors with powers of the full Board,
except with respect to certain matters. This committee did not meet in 2001.
The Audit Committee currently consists of Harold G. Hoak (Chairman),
Franz F. Holscher and John A. Ebeling, three of the Company's nonemployee
directors. The Audit Committee is governed by a written charter approved by the
Board of Directors. Information regarding the functions performed by this
committee is set forth in the "Report of Audit Committee", which is included in
this annual proxy statement. The Audit Committee met four times in 2001, at
which all members were present.
The Compensation Committee consists of Franz F. Holscher (Chairman),
Earl E. Congdon and John R. Congdon. The Compensation Committee meets
periodically to review and approve the salaries and classifications of the
Company's executive officers and other significant employees and its personnel
policies. The Compensation Committee met once in 2001, at which all members were
present.
The Stock Option Plan Committee consists of Earl E. Congdon (Chairman),
John R. Congdon, Harold G. Hoak and Franz F. Holscher. The Committee has
authority to administer the Company's 1991 Employee Stock Option Plan, including
authority to determine persons eligible to receive options and the terms upon
which options are granted. The Stock Option Plan Committee did not meet in 2001.
INDEPENDENT AUDITORS
Ernst & Young LLP has served the Company as independent auditors since
1994. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting of Stockholders with the opportunity to make a statement if he
desires to do so and to answer any questions that concern that firm's work for
the Company.
The Audit Committee and the Board of Directors have approved all of the
nonaudit services performed by Ernst & Young LLP and believe they have no effect
on audit independence. The Audit Committee has authorized management to engage
the Company's independent accountants in nonaudit services relating to
preparation of tax returns and working with state and federal agents on audits,
but other matters require prior approval from the Audit Committee. For the last
fiscal year, audit fees were $105,500, financial information systems design and
implementation services fees were $0 and all other fees were $45,010.
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REPORT OF AUDIT COMMITTEE
The Audit Committee, which is comprised of three independent
nonemployee directors, oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability, of
the accounting principles, the reasonableness of significant judgments and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards and under
Statement on Auditing Standards No. 61, Communication with Audit Committees, as
currently in effect. In addition, the Audit Committee has discussed with the
independent auditors the auditors' independence from management and the Company,
including the written disclosures and the letter from the independent auditors
required by Independence Standards Board No. 1, Independence Discussions with
Audit Committees, as currently in effect, and has considered the compatibility
of nonaudit services with the auditors' independence.
The Audit Committee discussed with the Company's internal and
independent auditors the overall scope and plans for their respective audits.
The Audit Committee meets with the internal and independent auditors to discuss
the results of their examinations, their evaluations of the Company's internal
controls and the overall quality of the Company's financial reporting.
The Audit Committee has also reviewed transactions between the Company
and entities in which officers or directors of the Company or their affiliates
have material interests and has determined that such existing transactions are
fair to the Company. Any new transactions with officers, directors or their
affiliates, and any extensions, modifications or renewals of existing
transactions with such persons must be approved in advance by the Audit
Committee as being on terms no less favorable to the Company than the terms that
could be obtained in a similar transaction with an unaffiliated party.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2001, for filing with the Securities and
Exchange Commission.
The Audit Committee,
Harold G. Hoak, Chairman
Franz F. Holscher
John A. Ebeling
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GENERAL
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of the Company, and the entire cost of such solicitation will be borne
by the Company. In addition to solicitation by mail, arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to send
proxy material to their principals, and the Company will reimburse them for
their reasonable expenses in so doing.
The Board of Directors has fixed March 25, 2002, as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. On March 25, 2002, there were 8,315,240 outstanding shares of
Common Stock of the Company, each entitled to one vote.
The presence in person or by proxy of a majority of the shares of
Common Stock outstanding on the record date constitutes a quorum for purposes of
conducting business at the meeting. Stockholders do not have cumulative voting
rights in the election of directors. Directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present. With regard to the election of directors, votes may be cast
in favor or withheld. Votes that are withheld will be excluded entirely from the
vote and will have no effect, although they will be counted for purposes of
establishing the presence of a quorum. Under the rules of the New York Stock
Exchange, Inc., brokers who hold shares in street name for customers have
authority to vote on certain items when they have not received instructions from
beneficial owners. Brokers that do not receive instructions are entitled to vote
on the election of directors.
Where a choice is specified on any Proxy as to the vote on any matter
to come before the meeting, the Proxy will be voted in accordance with such
specification. If no specification is made but the Proxy is properly signed, the
shares represented thereby will be voted in favor of each proposal. Such
proxies, whether submitted by stockholders of record or by brokers holding
shares in street name for their customers ("broker non-votes"), will be voted in
favor of nominees for directors. Broker non-votes will not be counted either way
in voting on other matters (where direction of beneficial owners is required)
and, therefore, will have the effect of negative votes.
Any stockholder submitting the accompanying Proxy has the right to
revoke it by notifying the Secretary of the Company in writing at any time prior
to the voting of the Proxy. A Proxy is suspended if the person giving the Proxy
attends the meeting and elects to vote in person.
Management is not aware that any matters, other than those specified
above, will be presented for action at the meeting, but, if any other matters do
properly come before the meeting, the persons named as agents in the Proxy will
vote upon such matters in accordance with their best judgment.
Annual Report on Form 10-K
Stockholders may obtain a copy of the Company's Annual Report on Form
10-K as filed with the Securities and Exchange Commission for the year ended
December 31, 2001, without charge by writing to J. Wes Frye, Treasurer, Chief
Financial Officer and Assistant Secretary, Old Dominion Freight Line, Inc., 500
Old Dominion Way, Thomasville, North Carolina 27360. Exhibits are not included,
but copies of them may be obtained from the Company upon payment of copying
charges.
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Deadline for Stockholders' Proposals
Any stockholder desiring to present a proposal for action at the
Company's 2003 Annual Meeting must deliver the proposal to the Company at its
executive offices no later than November 22, 2002.
In addition to any other applicable requirements, for business to be
properly brought before the annual meeting by a stockholder, even if the
proposal is not to be included in the Company's proxy statement, the Company's
bylaws provide that the stockholder must give timely notice of such business in
writing to the Secretary of the Company at least 60 days and not more than 90
days prior to the meeting, except that if public disclosure of the date of the
meeting is given less than 70 days prior to the meeting, notice by the
stockholder will be considered timely if received by the Secretary by the close
of business on the 10th day after public disclosure of the date of the meeting
was made. As to each item of business, the notice must contain (i) a brief
description of the business to be brought before the meeting and the reasons
therefore, (ii) the name and address of record of the stockholder and the number
of shares of the Company's stock owned of record or beneficially by the
stockholder and (iii) any material interest the stockholder has in the proposed
business.
By Order of the Board of Directors
/s/ Joel B. McCarty, Jr.
Joel B. McCarty, Jr.
Secretary
High Point, North Carolina
April 10, 2002
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PROXY
OLD DOMINION FREIGHT LINE, INC.
The undersigned stockholder of Old Dominion Freight Line, Inc. designates
Earl E. Congdon, John R. Congdon, and Joel B. McCarty, Jr., and any of them,
agents to vote the shares of the undersigned at the Annual Meeting of
Stockholders, Monday, May 20, 2002, at 10:00 a.m., and at any adjournment
thereof, as follows:
Please sign the proxy printed on the other
side and return it at once unless you
expect to attend the meeting in person.
(Continued on reverse side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
OLD DOMINION FREIGHT LINE, INC.
May 20, 2002
Please Detach and Mail in the Envelope Provided
Please mark your
A [X] votes as in this
example.
VOTE FOR WITHHOLD
all nominees AUTHORITY TO
(except as marked vote for all nominees
to the contrary) listed at right
(1) ELECTION OF [_] [_] Nominees: Earl E. Congdon (2) To transact such other business
DIRECTORS John R. Congdon as may be brought before the
John A. Eheling meeting.
(Instruction: To withhold authority to vote for an Harold G. Hoak
individual nominee strike a line through the Franz F. Holscher THIS PROXY IS SOLICITED ON BEHALF
nominee's name. David S. Congdon OF THE BOARD OF DIRECTORS AND WILL
John R. Congdon Jr. BE VOTED AS SPECIFIED BY THE
STOCKHOLDER.
IF NO SPECIFICATION IS MADE WITH
RESPECT TO A MATTER WHERE A BALLOT
IS PROVIDED, THIS PROXY WILL BE
VOTED FOR SUCH MATTER.
Your shares should be represented
at the meeting by your proxy. The
meeting will be held Monday, May
20, 2002, at 10:00a.m. in the
Executive Offices of Old Dominion
Freight Line, Inc.
500 Old Duminion Way, High Point,
North Carolina.
PLEASE SIGN AND SEND IN YOUR PROXY
SIGNATURE(S)__________________________________________________________ DATE: _______________________ 2002
NOTE: Please sign above as name(s) appear(s) on this card. (When signing as
attorney, executor, administrator, trustee, guardian, etcetera, give full
title as such. For joint accounts, each joint owner should sign.)