8-KMaterial AgreementsExhibits & Filings

OLD DOMINION FREIGHT LINE, INC. 8-K Report, Material Agreement (May 20, 2005)

Filed May 20, 2005For Securities:ODFL

Summary

Old Dominion Freight Line, Inc. (ODFL) filed an 8-K on May 20, 2005, to report the adoption of two new executive compensation plans: the Old Dominion Freight Line, Inc. Phantom Stock Plan and the Old Dominion Freight Line, Inc. Change of Control Severance Plan for Key Executives. Both plans became effective on May 16, 2005. The Phantom Stock Plan allows for awards of up to 250,000 shares of phantom stock, with each share representing a right to receive cash equivalent to the fair market value of ODFL's common stock at the settlement date. Vesting and payment terms are tied to events like change of control, anniversaries of grant, death, disability, or reaching age 65, with provisions for forfeiture under specific circumstances such as termination for cause or competitive activity. Payments are generally made in cash installments. The Severance Plan is designed for key executives and provides benefits upon termination following a change in control. Such terminations must be initiated by the company without cause, death, or disability, or by the executive for good reason. Benefits include continued base salary, a monthly severance payment for a defined period (based on service), and continued welfare benefits. The plan aims to provide a consistent framework for executive retention and compensation security in the event of significant corporate transitions.

Key Highlights

  • 1ODFL adopted a new Phantom Stock Plan effective May 16, 2005, allowing for awards of up to 250,000 phantom stock units.
  • 2Each phantom stock unit entitles participants to cash equal to the fair market value of ODFL's common stock on the settlement date; no actual shares are issued.
  • 3The Phantom Stock Plan features vesting triggers including change of control, fifth anniversary of grant, death, disability, or attainment of age 65.
  • 4Specific termination conditions, such as termination for cause or engaging in competitive activities, can lead to forfeiture of phantom stock awards.
  • 5ODFL also implemented a Change of Control Severance Plan for Key Executives, effective May 16, 2005.
  • 6The Severance Plan provides benefits to eligible executives whose employment is terminated without cause or for good reason within 36 months following a change of control.
  • 7Severance benefits may include continued base salary, monthly payments based on service, and continued welfare benefits, subject to certain conditions and potential reductions.

Frequently Asked Questions

The Phantom Stock Plan is designed to provide incentives to key employees by granting them phantom stock awards. These awards represent a contractual right to receive cash equal to the fair market value of ODFL's common stock on the settlement date, serving as a performance and retention tool without diluting existing shareholders through share issuance.

Benefits under the Phantom Stock Plan are typically triggered by events such as a change of control of the company, the fifth anniversary of the grant date, the participant's death, total disability, or attainment of age 65, provided the participant is employed at the time. Payment is made in cash, usually in monthly installments.

In the event of a 'compensation continuance termination event' (e.g., termination without cause or by the executive for good reason) within 36 months after a change in control, eligible key executives are entitled to receive their base salary through the termination date, a monthly severance benefit for a defined period based on their years of service (up to 36 months), and continued participation in company welfare benefit plans.

Yes, severance benefits under the plan will not be paid if the executive's employment is terminated by the company for cause, due to death or total disability, by the executive for reasons other than good reason, or if the termination event occurs more than 36 months after a change in control. Executives must also execute a release of claims, and benefits may be reduced to comply with IRS regulations regarding parachute payments.