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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to _______________________ Commission file number 0-12255 ------- YELLOW CORPORATION ------------------ (Exact name of registrant as specified in its charter) Delaware 48-0948788 - ------------------------------------ ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10990 Roe Avenue, P.O. Box 7563, Overland Park, Kansas 66207 ------------------------------------------------------ --------- (Address of principal executive offices) (Zip Code) (913) 696-6100 -------------- (Registrant's telephone number, including area code) No Changes ------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 30, 2002 ----- ----------------------------- Common Stock, $1 Par Value 28,995,587 shares

YELLOW CORPORATION INDEX Item Page - ---- ---- PART I 1. Financial Statements Consolidated Balance Sheets - March 31, 2002 and December 31, 2001 3 Statements of Consolidated Operations - Three Months Ended March 31, 2002 and 2001 4 Statements of Consolidated Cash Flows - Three Months Ended March 31, 2002 and 2001 5 Notes to Consolidated Financial Statements 6 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 3. Quantitative and Qualitative Disclosures About Market Risk 14 PART II 4. Submission of Matters to a Vote of Security Holders 16 6. Exhibits and Reports on Form 8-K 17 Signatures 21

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS Yellow Corporation and Subsidiaries (Amounts in thousands except share data) (Unaudited) March 31, December 31, 2002 2001 ----------- ----------- ASSETS CURRENT ASSETS: Cash $ 18,817 $ 20,694 Accounts receivable 203,286 208,267 Prepaid expenses and other 67,811 83,449 ----------- ----------- Total current assets 289,914 312,410 ----------- ----------- PROPERTY AND EQUIPMENT: Cost 2,133,528 2,133,406 Less - Accumulated depreciation 1,272,729 1,267,834 ----------- ----------- Net property and equipment 860,799 865,572 ----------- ----------- GOODWILL AND OTHER ASSETS 32,449 107,795 ----------- ----------- $ 1,183,162 $ 1,285,777 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and checks outstanding $ 98,455 $ 128,343 Wages and employees' benefits 138,310 130,806 Other current liabilities 117,006 103,778 Current maturities of long-term debt 5,929 6,281 ----------- ----------- Total current liabilities 359,700 369,208 ----------- ----------- OTHER LIABILITIES: Long-term debt 188,679 213,745 Deferred income taxes 91,606 92,817 Claims, insurance and other 121,516 119,018 ----------- ----------- Total other liabilities 401,801 425,580 ----------- ----------- SHAREHOLDERS' EQUITY: Common stock, $1 par value 31,144 31,028 Capital surplus 43,867 41,689 Retained earnings 464,460 537,496 Accumulated other comprehensive income (loss) (4,838) (6,252) Treasury stock (112,972) (112,972) ----------- ----------- Total shareholders' equity 421,661 490,989 ----------- ----------- $ 1,183,162 $ 1,285,777 =========== =========== The accompanying notes are an integral part of these statements. 3

STATEMENTS OF CONSOLIDATED OPERATIONS Yellow Corporation and Subsidiaries For the Three Months Ended March 31, 2002 and 2001 (Amounts in thousands except per share data) (Unaudited) 2002 2001 --------- --------- OPERATING REVENUE $ 762,340 $ 831,978 --------- --------- OPERATING EXPENSES: Salaries, wages and benefits 496,341 523,344 Operating expenses and supplies 110,895 143,930 Operating taxes and licenses 26,047 28,237 Claims and insurance 18,885 18,491 Depreciation and amortization 30,181 31,865 Purchased transportation 70,919 67,677 Unusual items 968 5,991 --------- --------- Total operating expenses 754,236 819,535 --------- --------- INCOME FROM OPERATIONS 8,104 12,443 --------- --------- NONOPERATING (INCOME) EXPENSES: Interest expense 3,903 4,065 Loss in Transportation.com - 2,536 Other, net 581 2,725 --------- --------- Nonoperating expenses, net 4,484 9,326 --------- --------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 3,620 3,117 INCOME TAX PROVISION 1,481 1,371 --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 2,139 1,746 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR GOODWILL (75,175) - --------- --------- NET INCOME (LOSS) $ (73,036) $ 1,746 ========= ========= AVERAGE SHARES OUTSTANDING-BASIC 24,934 24,036 ========= ========= AVERAGE SHARES OUTSTANDING-DILUTED 25,259 24,399 ========= ========= BASIC EARNINGS (LOSS) PER SHARE: Income before cumulative effect of accounting change $ 0.09 $ 0.07 Cumulative effect of change in accounting for goodwill (3.02) - --------- --------- Net income $ (2.93) $ 0.07 --------- --------- DILUTED EARNINGS (LOSS) PER SHARE: Income before cumulative effect of accounting change $ 0.08 $ 0.07 Cumulative effect of change in accounting for goodwill (2.97) - --------- --------- Net income $ (2.89) $ 0.07 --------- --------- The accompanying notes are an integral part of these statements. 4

STATEMENTS OF CONSOLIDATED CASH FLOWS Yellow Corporation and Subsidiaries For the Three Months Ended March 31, 2002 and 2001 (Amounts in thousands) (Unaudited) 2002 2001 -------- -------- OPERATING ACTIVITIES: Net cash from operating activities $ 48,737 $ 46,873 -------- -------- INVESTING ACTIVITIES: Acquisition of property and equipment (28,419) (48,263) Proceeds from disposal of property and equipment 1,184 975 Other - (2,500) -------- -------- Net cash used in investing activities (27,235) (49,788) -------- -------- FINANCING ACTIVITIES: Proceeds from stock options and other, net 2,039 5,168 Increase (decrease) in long-term debt (25,418) 13,574 -------- -------- Net cash provided by (used in) financing activities (23,379) 18,742 -------- -------- NET INCREASE (DECREASE) IN CASH (1,877) 15,827 CASH, BEGINNING OF PERIOD 20,694 25,799 -------- -------- CASH, END OF PERIOD $ 18,817 $ 41,626 ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (refunds), net $ (5,348) $ 2,491 ======== ======== Interest paid $ 2,216 $ 2,591 ======== ======== The accompanying notes are an integral part of these statements. 5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Yellow Corporation and Subsidiaries (unaudited) 1. The accompanying consolidated financial statements include the accounts of Yellow Corporation and its wholly owned subsidiaries (the company). The consolidated financial statements have been prepared by the company, without audit by independent public accountants, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all normal recurring adjustments necessary for a fair statement of the results of operations for the interim periods included herein have been made. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations. Accordingly, the accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements included in the company's 2001 Annual Report to Shareholders. 2. The company provides national, regional and international less-than-truckload(LTL), truckload (TL), and non-asset based transportation services through its three principal operating units and captive technology company. Yellow Transportation, Inc. (Yellow Transportation) is the largest subsidiary and provides LTL national, regional and international transportation services for industrial, commercial, retail and government markets. SCS Transportation, Inc. (SCS Transportation) (formed as a holding company on January 1, 2002) provides regional overnight and second-day LTL and selected TL transportation services through two subsidiaries, Saia Motor Freight Line, Inc. (Saia) and Jevic Transportation, Inc. (Jevic). Meridian IQ, LLC (Meridian IQ) provides domestic and international forwarding, multi-modal brokerage and transportation management services. Yellow Technologies, Inc. is a subsidiary that provides information technology and other services to the company and its subsidiaries. For the quarter ended March 31, 2002 Yellow Transportation comprised approximately 74 percent of total revenue while Saia comprised approximately 15 percent and Jevic approximately 9 percent of total revenue. 6

3. In the third quarter of 2001, the company completed its acquisition of the 35 percent ownership in Meridian IQ (formerly Transportation.com) that it did not previously own, from its venture capital partners. The cash purchase price of approximately $14.3 million was allocated primarily to goodwill ($10.3 million) and tax benefit receivable ($4.0 million). The results of Meridian IQ have been consolidated in the company's financial statements since September 2001. Prior to the acquisition date, the company accounted for its 65 percent ownership interest under the equity method of accounting in accordance with EITF 96-16 due to substantive participating rights of the minority investors. Losses on the company's investment were recorded in nonoperating expenses, until the acquisition date. 4. Unusual items include integration and business reorganization costs and property gains and losses. 5. The company reports financial and descriptive information about its reportable operating segments on a basis consistent with that used internally for evaluating segment operating performance and allocating resources to segments. The company has four reportable segments, which are strategic business units that offer different products and services. Yellow Transportation is a unionized carrier that provides comprehensive national, regional and international transportation services. Saia is a regional LTL carrier that provides overnight and second-day service in twenty-one states and Puerto Rico. On March 4, 2001, WestEx and Action Express were integrated into the Saia segment. Comparative prior year segment data has been restated to reflect the integration. Jevic is a hybrid regional heavy LTL and TL carrier that provides overnight and second-day service primarily in the Northeastern states. Meridian IQ is a segment that provides domestic and international forwarding, multi-modal brokerage and transportation management services. The segments are managed separately because each requires different operating, technology and marketing strategies. The company evaluates performance primarily on operating income and return on capital. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the company's 2001 Annual Report to Shareholders. Management fees and other corporate services are charged to segments based on direct benefit received or allocated based on revenues. The following table summarizes the company's operations by business segment (in thousands): 7

Yellow Corporate Con- Transportation Saia Jevic Meridian IQ and Other solidated -------------- ---- ----- ----------- --------- --------- As of Mar. 31, 2002 Identifiable assets $ 724,229 $ 278,778 $ 158,141 $ 23,006 $ (992) $1,183,162 As of December 31, 2001 Identifiable assets $ 757,484 $ 275,852 $ 231,520 $ 17,641 $ 3,280 $1,285,777 Three months ended Mar. 31, 2002 Operating revenue $ 564,643 $ 115,028 $ 68,510 $ 15,402 $ (1,243) $ 762,340 Income from operations 6,661 3,641 968 $ (1,516) (1,650) 8,104 Three months ended Mar. 31, 2001 Operating revenue $ 635,965 $ 119,118 76,858 $ 452 $ (415) $ 831,978 Income from operations 13,602 (2,302) 2,305 $ (296) (866) 12,443 The first quarter 2001 segment data presented for Meridian IQ represents the results of operations of other non-asset based services. As previously discussed in note 3, Transportation.com was accounted for under the equity method of accounting during the first quarter of 2001. Accordingly, nonoperating expenses include losses from Transportation.com of $2.5 million in the first quarter of 2001. If Meridian IQ had been consolidated in the first quarter 2001 revenue would have been $6.7 million and operating losses would have been $5.0 million. 6. The difference between average common shares outstanding used in the computation of basic earnings per share and fully diluted earnings per share is attributable to outstanding common stock options. 7. The company's comprehensive income includes net income, changes in the fair value of interest rate swaps and foreign currency translation adjustments. Comprehensive income for the first quarter ended March 31, 2002 and 2001 was $(71.6) million and $.03 million, respectively. 8. Net cash from operating activities includes increases to cash of $30.5 million in 2002 and $9.0 million in 2001 of net accounts receivable securitization activity. 9. On June 30, 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 142, Goodwill and Other Intangible Assets, that was adopted by the company on January 1, 2002. Statement No. 142 requires that upon adoption and at least annually thereafter, the company assess goodwill impairment by applying a fair value based test. With the adoption of Statement No. 142, goodwill will no longer be subject to amortization resulting in an increase in annualized operating income and net income of $3.3 million. 8

At December 31, 2001 the Company had $100.6 million of goodwill on its consolidated balance sheet, consisting primarily of $75.2 million remaining from the acquisition of Jevic. In valuing the goodwill of Jevic the company used an estimate of business unit's discounted cash flows in measuring whether goodwill was recoverable. Based on this estimate, the company has determined that 100 percent of the Jevic goodwill was impaired due to lower business volumes, compounded by a weak economy, and an increasingly competitive business environment. As a result, the company recorded a non-cash charge of $75.2 million in the first quarter 2002, which was reflected as a cumulative change in accounting principle. The carrying amount of goodwill attributed to each reportable operating segment with goodwill balances and changes follows (in thousands): December 31,2001 Impairment March 31, 2002 Adjustment ------------------------------------------------- Saia $ 14,796 $ - $ 14,796 Jevic 75,175 (75,175) - Meridian IQ 10,600 - 10,600 ------------------------------------------------- $ 100,571 $(75,175) $ 25,396 In connection with adopting Statement No. 142, the company also reassessed the useful lives and the classification of its identifiable intangible assets and determined that they continue to be appropriate. The components of amortized intangible assets follow (in thousands): March 31, 2002 December 31, 2001 Gross Carrying Accumulated Gross Carrying Accumulated Amount Amortization Amount Amortization ------------------------------------------------------------------------ Contract Based $2,238 $866 $2,238 $843 Technology Based 231 33 231 19 Other 42 6 42 3 ------------------------------------------------------------------------ $2,511 $905 $2,511 $865 Amortization expense for intangible assets during the first quarter ended March 31,2002 was $39,755 and is estimated to be $422,505 for the full year 2002. Estimated amortization expense for the next five fiscal years follows (in thousands): Estimated Amortization Expense ---------------- 2003 $ 423 2004 392 2005 297 2006 111 2007 - 9

Actual results of operations before cumulative effect of accounting change for the first quarter 2002 and proforma results of operations for the first quarter of 2001 had the company applied the nonamortization provisions of Statement No. 142 in those periods follow (in thousands, except per share amounts): Three Months Ended March 31, 2002 2001 -------------------------- Reported income before cumulative effect of accounting change $2,139 $ 1,746 Add: Goodwill amortization - 740 -------------------------- Adjusted income before cumulative effect of accounting change $2,139 $ 2,486 Basic earnings per share: Reported income before cumulative effect of accounting change $ .09 $ .07 Goodwill amortization - .03 -------------------------- Adjusted income before cumulative effect of accounting change $ .09 $ .10 Diluted earnings per share: Reported income before cumulative effect of accounting change $ .08 $ .07 Goodwill amortization - .03 -------------------------- Adjusted income before cumulative effect of accounting change $ .08 $ .10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION March 31, 2002 Compared to December 31, 2001 The company's liquidity needs arise primarily from capital investment in new equipment, land and structures and information technology, as well as funding working capital requirements. To ensure short-term and longer-term liquidity, the company maintains capacity under a bank credit agreement and an asset backed securitization (ABS) agreement involving Yellow Transportation accounts receivables. These facilities provide adequate capacity to fund working capital and capital expenditure requirements. 10

At March 31, 2002, the company had outstanding borrowings of $60 million against the $300 million bank credit agreement, which expires in April 2004. This facility is also used to provide letters of credit ($116 million outstanding at March 31, 2002) that reduce available capacity under the credit agreement. The available unused capacity under the bank credit agreement was $124 million at March 31, 2002. The company intends to refinance under this facility all other debt maturing within one year and classified these amounts as long term on the March 31, 2002 balance sheet. In mid April 2002, the company completed the equity offering of 3.4 million shares and a fifteen percent over-allotment of .5 million shares. The company received $93.7 million of net proceeds from the offering and the funds will be used to repay debt and invest in the company's growth strategy. Working capital is impacted by changes in outstanding borrowings under the $200 million Yellow Transportation ABS agreement. Accounts receivable at March 31, 2002 and December 31, 2001 are reduced by $172.0 million and $141.5 million, respectively, due to the sale of receivables under the ABS agreement. Working capital decreased $13.0 million during the first three months of 2002. This resulted in a working capital deficit of $69.8 million at March 31, 2002 compared to an $56.8 million working capital deficit at December 31, 2001. Decreases in accounts receivable, excluding the effects of ABS transactions and decreases in prepaids were largely offset by decreases in accounts payable and checks outstanding. The company can operate with a deficit working capital position because of rapid turnover of accounts receivable, effective cash management and ready access to funding. The pricing and availability of most forms of insurance, including surety bonds, have recently been impacted by the events of September 11 and by several well-publicized bankruptcies of large companies. The company expects continued access to appropriate insurance coverage; however, the premiums paid for this coverage have increase significantly. In 2001, insurance premiums represented less than one-half percent of consolidated revenue. Given the size and financial strength of the company, the additional premium expenses are not expected to have a material adverse impact on financial position or results of operations. The lack of availability of surety bonds has required the company to issue additional letters of credit, which reduce available capacity under the revolving credit facility. Net capital expenditures for property and equipment during the first three months of 2002 were $27.2 million. 11

RESULTS OF OPERATIONS Comparison of Three Months Ended March 31, 2002 and 2001 Net income for the first quarter ended March 31, 2002 was $(73.0) million, or $(2.89) per share, compared with net income of $1.7 million, or $.07 per share in the 2001 first quarter. The first quarter of 2002 included a non-cash charge of $75.2 million for the impairment of goodwill associated with the Jevic, which was recorded as a cumulative effect of change in accounting for goodwill. Consolidated operating revenue was $762 million, down 8.4 percent from $832 million in the 2001 first quarter. Consolidated operating income was $8.1 million, compared to $12.4 million in the prior year period. First quarter 2001 results included $6.0 million of unusual item costs, primarily related to the integration of WestEx, Inc. and Action Express into Saia. Yellow Transportation, the company's largest subsidiary, reported first quarter operating income of $6.7 million down from $13.6 million in the 2001 first quarter. Yellow Transportation revenue for the first quarter was $565 million, down 9.8 percent on a per-day basis from $636 million in the prior year period. First quarter revenue trends were negatively impacted primarily by lower volumes. The 2002 first quarter operating ratio was 98.8, compared with 97.9 a year earlier. The lower revenue trends were partially offset by lower fuel product costs and effective cost management. Yellow Transportation first quarter LTL tonnage decreased by 7.2 percent on a per-day basis and the number of LTL shipments decreased 7.8 percent on a per-day basis. LTL revenue per hundred weight, excluding fuel surcharge, was up .1 percent over the 2001 first quarter. Yellow Transportation is focused on a portfolio of services and in particular the penetration of its customer base with premium services. Yellow Transportation continues to have growth with premium services such as Exact Express (time definite, guaranteed service offering) and Definite Delivery (guarantee on Standard Ground service standards). Meridian IQ was formed earlier this year, and formally launched in March, as the Yellow platform for non-asset-based transportation services. These capabilities include international and domestic freight forwarding services, multi-modal brokerage services and transportation management solutions. 12

Meridian IQ operating revenue for the first quarter of 2002 was $15 million and operating losses were $1.5 million, consistent with company expectations for this newly formed entity. Consolidated operating revenue for SCS Transportation was $184 million for the first quarter of 2002, down 4.3 percent on a per-day basis from $196 million a year ago. Operating income was $4.9 million compared to breakeven operating income in the previous year. First quarter of 2001 operating income included $5.4 million of unusual item costs related to the March 2001 integration of WestEx, Inc. and Action Express into Saia. All prior period amounts for Saia have been restated to reflect this merger. At Saia, first quarter 2002 revenue was $115 million and operating income was $3.6 million, compared with revenue of $119 million and operating loss of $2.3 million in the 2001 first quarter, which included $5.4 million of integration costs. The 2002 first quarter operating ratio was 96.8, compared with 97.4 (exluding integration costs) in the year-earlier quarter. Saia LTL tonnage was up 1.1 percent and LTL shipments were up 2.3 percent on a per-day basis over the 2001 first quarter. However, Saia revenue per hundred weight, excluding fuel surcharge was down .9 percent over the prior period quarter due to changes in customer mix and competitive factors. Jevic reported first quarter 2002 revenue of $69 million and operating income of $1.0 million. On a comparative basis, Jevic had first quarter 2001 revenue of $77 million and operating income of $2.3 million. The 2002 first quarter operating ratio for Jevic was 98.6, compared with 97.0 in the 2001 first quarter. A combination of the slowing economy, mix changes and competitive conditions continue to impact top line revenue and pricing continues to be unfavorable though the percentage declines are narrowing from the prior year. Jevic LTL tonnage was down 2.1 percent on a per-day basis over the 2001 first quarter. Jevic LTL shipments decreased .9 percent on a per-day basis over the 2001 first quarter. Both Saia and Jevic had effective cost controls in place to mitigate the weakness in the economy and both maintained high levels of customer service. Corporate and other business development expenses were $1.9 million in the 2002 first quarter, compared to $1.2 million in the first quarter of 2001. 13

Nonoperating expenses were $4.5 million in the first quarter of 2002 compared to $9.3 million in the first quarter of 2001. The first quarter of 2001 had $2.5 million of Transportation.com business development costs and $2.1 million higher ABS borrowing costs due to higher interest rates. The effective tax rate was 40.9 percent in the 2002 first quarter compared to 44.0 percent in the 2001 first quarter. Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to a variety of market risks, including the effects of interest rates, fuel prices and foreign currency exchange rates. To ensure adequate funding through seasonal business cycles and minimize overall borrowing costs, the company utilizes a variety of both fixed rate and variable rate financial instruments with varying maturities. At March 31, 2002 approximately 66 percent of the company's debt and off balance sheet financing is at variable rates with the balance at fixed rates. The company uses interest rate swaps to hedge a portion of its exposure to variable interest rates. The company has hedged approximately 25 percent of its variable debt. The company's revenues and operating expenses, assets and liabilities of its Canadian and Mexican subsidiaries are denominated in foreign currencies, thereby creating exposures to changes in exchange rates, however the risks related to foreign currency exchange rates are not material to the company's consolidated financial position or results of operations. The following table provides information about the company's financial instruments as of March 31, 2002. The table presents principal cash flows (in millions) and related weighted average interest rates by contractual maturity dates. For interest rate swaps the table presents notional amounts (in millions) and weighted average interest rates by contractual maturity. Weighted average variable rates are based on the 30-day LIBOR rate. Debt Instrument Information There- Fair 2002 2003 2004 2005 2006 After Total Value ---------- ----------- ----------- ---------- --------- --------- -------- --------- Fixed Rate Debt $ 22.1 $ 24.5 $ 16.3 $ 17.9 $ 8.7 $ 34.5 $ 124.0 $ 129.4 Average interest rate 7.34% 6.02% 6.78% 6.62% 6.79% 6.85% Variable Rate Debt $ 5.7 $ 0.1 $ 60.2 $ 4.6 - - $ 70.6 $ 70.6 Average interest rate 2.52% 4.17% 4.10% 4.17% - - Off Balance Sheet ABS $ 172.0 $ 172.0 $ 172.0 Average interest rate 1.95% Interest Rate Swaps Notional amount $ 5.7 $ 50.1 $ .2 $ 4.6 - - $ 60.6 $ 62.9 Ave. pay rate (fixed) 5.70% 6.06% 7.65% 7.65% N/A N/A Ave. receive rate (variable) 2.52% 1.99% 4.17% 4.17% N/A N/A The company also maintained fuel inventories for use in normal operations at March 31, 2002, which were not material to the company's financial position and represented no significant market exposure. Statements contained in, and preceding management's discussion and analysis that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to inflation, labor relations, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, changes in and customer acceptance of new technology, changes in equity and debt markets and a downturn in general or regional economic activity. 14

PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) Annual Meeting of Stockholders on April 18, 2002 (b) The following directors were elected with the indicated number of votes set forth below. For Withheld --- -------- Cassandra C. Carr 21,283,634 20,848 Howard M. Dean 20,972,115 332,367 Dennis E. Foster 21,096,728 207,754 Richard C. Green, Jr. 21,227,794 76,688 John C. McKelvey 21,096,287 208,195 William L. Trubeck 21,281,922 22,560 Carl W. Vogt 21,096,269 208,213 William D. Zollars 21,283,560 20,922 (c) The proposal for the adoption of the 2002 Stock Option and Share Award Plan was voted on and approved at the meeting by the following vote. For: 16,961,184, Against: 1,859,196 (d) The proposal for the Company's annual Cash Incentive Compensation, or Bonus, Program was voted on and approved at the meeting by the following vote. For: 18,226,018, Against: 580,675 (e) The proposal for the Company's Executive Performance Plan was voted on and approved at the meeting by the following vote. For: 17,539,142, Against: 1,258,476 15

Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (10) Restricted Stock Agreements (1) Donald G. Barger (2) William F. Martin, Jr. (3) Greg Reid (4) William D. Zollars (b) Reports on Form 8-K January 29, 2002 - Yellow Corporation announced its adoption of a Rule 10B5-1 Trading Plan Option and potential impairment of Jevic goodwill under FASB Statement of Financial Accounting Standards No. 142. February 25, 2002 - Yellow Corporation announced adoption of FASB Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", effective January 1, 2002. The Company has determined that 100 percent of the Jevic goodwill is impaired and will record a non-cash charge of $75.2 million in the first quarter of 2002, which will be reflected as a cumulative change in accounting principle. April 8, 2002 - The Company issued a supplement to its proxy statement to stockholders entitled to vote at the annual meeting scheduled for April 18, 2002, to indicate that, because of recent events involving Arthur Andersen, the Company's independent public accountants, the Audit Committee of the Board of Directors is reconsidering whether to appoint Arthur Andersen as the Company's independent public accountants for 2002. This supplement to the proxy statement accordingly indicates that the Board of Directors has removed item 5, the proposal to approve appointment of independent public accountants, from the agenda for the annual meeting of stockholders and that no stockholder votes are required or requested with respect to the approval of Arthur Andersen as the Company's independent public accountants for the 2002 fiscal year. 16

Yellow Transportation, Inc. Financial Information For the Three Months Ended March 31, 2002 and 2001 (Amounts in thousands) First Quarter ------------- 2002 2001 % -------------------------------------- Operating revenue 564,643 635,965 (11.2) Operating income - Before unusual items 7,231 14,228 Operating income - as reported 6,661 13,601 Operating ratio - Before unusual items 98.7 97.8 Operating ratio - as reported 98.8 97.9 Total assets at March 31 724,229 708,448 First Quarter --------------------- First Quarter Amount/Workday -------------------- --------------------- 2002 2001 % 2002 2001 % ----------------------------------------------------------------------------------- Workdays 63 64 Financial statement LTL 526,659 589,056 (10.6) 8,359.7 9,204.0 (9.2) Revenue TL 40,469 47,120 (14.1) 642.4 736.3 (12.8) Other (2,485) (211) NM (39.4) (3.3) NM Total 564,643 635,965 (11.2) 8,962.7 9,937.0 (9.8) Revenue excluding LTL 526,659 589,056 (10.6) 8,359.7 9,204.0 (9.2) Revenue recognition TL 40,469 47,120 (14.1) 642.4 736.2 (12.8) Adjustment Other (5) 414 NM (0.1) 6.5 NM Total 567,123 636,590 (10.9) 9,002.0 9,946.7 (9.5) Tonnage LTL 1,401 1,533 (8.6) 22.23 23.96 (7.2) TL 267 297 (9.9) 4.24 4.63 (8.5) Total 1,668 1,830 (8.9) 26.47 28.59 (7.4) Shipments LTL 2,814 3,099 (9.2) 44.66 48.43 (7.8) TL 37 41 (9.5) 0.59 0.64 (8.0) Total 2,851 3,140 (9.2) 45.25 49.07 (7.8) Revenue/cwt. LTL 18.80 19.21 (2.1) TL 7.57 7.94 (4.7) Total 17.00 17.38 (2.2) Revenue/cwt. (excl fuel surcharge) LTL 18.66 18.64 0.1 Revenue/shipment LTL 187.18 190.07 (1.5) TL 1,098.85 1,158.20 (5.1) Total 198.96 202.61 (1.8) 17

Saia Motor Freight Line, Inc. Financial Information For the Three Months Ended March 31, 2002 and 2001 (Amounts in thousands) First Quarter ------------------------- 2002 2001 % ------------------------------------- Operating revenue 115,028 119,118 (3.4) Operating income - Before unusual items 3,840 3,050 Operating income - as reported 3,641 (2,302) * Operating ratio - Before unusual items 96.7 97.4 Operating ratio - as reported 96.8 101.9 Total assets at March 31 278,778 296,866 First Quarter --------------------------- First Quarter Amount/Workday ----------------------- --------------------------- 2002 2001 % 2002 2001 % ------------------------------------------------------------------------------------- Workdays 63 64 Financial statement LTL 105,230 108,895 (3.4) 1,670.3 1,701.5 (1.8) Revenue TL 9,798 10,223 (4.2) 155.5 159.7 (2.6) Total 115,028 119,118 (3.4) 1,825.8 1,861.2 (1.9) Revenue excluding LTL 105,378 109,190 (3.5) 1,672.7 1,706.1 (2.0) Revenue recognition TL 9,812 10,251 (4.3) 155.7 160.2 (2.8) Adjustment Total 115,190 119,441 (3.6) 1,828.4 1,866.3 (2.0) Tonnage LTL 545 548 (0.5) 8.65 8.56 1.1 TL 134 154 (12.5) 2.13 2.40 (11.1) Total 679 702 (3.1) 10.78 10.96 (1.6) Shipments LTL 1,027 1,020 0.7 16.31 15.94 2.3 TL 16 17 (5.6) 0.26 0.27 (4.1) Total 1,043 1,037 0.6 16.57 16.21 2.2 Revenue/cwt. LTL 9.67 9.97 (3.0) TL 3.65 3.33 9.4 Total 8.48 8.52 (0.4) Revenue/cwt. (excl fuel surcharge) LTL 9.56 9.64 (0.9) Revenue/shipment LTL 102.58 107.04 (4.2) TL 609.90 601.80 1.3 Total 110.40 115.17 (4.1) * - Includes $5,385,000 in one-time integration costs associated with the merger of WestEx and Action into Saia. 18

Jevic Transportation, Inc. Financial Information For the Three Months Ended March 31, 2002 and 2001 (Amounts in thousands) First Quarter --------------------------- 2002 2001 % ---------------------------------------- Operating revenue 68,510 76,858 (10.9) Operating income - Before unusual items 1,033 2,318 Operating income - as reported 968 2,305 Operating ratio - Before unusual items 98.5 97.0 Operating ratio - as reported 98.6 97.0 Total assets at March 31 158,141 252,589 First Quarter First Quarter Amount/Workday ---------------------------- --------------------------- 2002 2001 % 2002 2001 % ---------------------------------------------------------------------------------------- Workdays 62 64 Financial statement LTL 45,002 49,082 (8.3) 725.8 766.9 (5.4) Revenue TL 22,495 26,268 (14.4) 362.8 410.4 (11.6) Other 1,013 1,508 (32.8) 16.3 23.6 (30.7) Total 68,510 76,858 (10.9) 1,104.9 1,200.9 (8.0) Revenue excluding LTL 45,049 49,245 (8.5) 726.6 769.5 (5.6) Revenue recognition TL 22,521 26,356 (14.6) 363.2 411.8 (11.8) Adjustment Other 1,013 1,508 (32.8) 16.3 23.6 (30.7) Total 68,583 77,109 (11.1) 1,106.1 1,204.9 (8.2) Tonnage LTL 249 262 (5.2) 4.02 4.10 (2.1) TL 295 330 (10.7) 4.76 5.16 (7.8) Total 544 592 (8.2) 8.78 9.26 (5.3) Shipments LTL 209 217 (4.0) 3.36 3.39 (0.9) TL 33 36 (8.4) 0.54 0.57 (5.4) Total 242 253 (4.6) 3.90 3.96 (1.5) Revenue/cwt. LTL 9.05 9.38 (3.6) TL 3.81 3.99 (4.3) Total 6.21 6.37 (2.6) Revenue/cwt. LTL 8.98 9.08 (1.1) (excl fuel surcharge) TL 3.79 3.86 (1.9) Revenue/shipment LTL 216.03 226.72 (4.7) TL 673.07 721.79 (6.7) Total 279.23 297.97 (6.3) 19

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. YELLOW CORPORATION -------------------------------- Registrant Date: May 14, 2002 /s/ William D. Zollars ----------------- -------------------------------- William D. Zollars Chairman of the Board of Directors, President & Chief Executive Officer Date: May 14, 2002 /s/ Donald G. Barger, Jr. ----------------- -------------------------------- Donald G. Barger, Jr. Senior Vice President & Chief Financial Officer 20

EXHIBIT 10.1 YELLOW CORPORATION RESTRICTED STOCK AWARD AGREEMENT PURSUANT TO 1992 STOCK OPTION PLAN WITH NON-COMPETE COVENANT This Restricted Stock Award Agreement (the "Agreement"), made this 4th day of March, 2002, by and between Yellow Corporation, formerly Yellow Freight System, Inc. of Delaware, (the "Company") and Donald G. Barger, Jr. (the "Grantee") evidences the grant, by Company, of a Restricted Stock Award (the "Award") to the Grantee on March 4, 2002 ("Date of Grant") and the Grantee's acceptance of the Award in accordance with the provisions of the Company's 1992 Stock Option Plan (the "Plan"). Company and Grantee agree as follows: 1. Shares Awarded and Restriction on Shares. The Grantee shall be awarded 5,300 shares of Company common stock ("Restricted Shares") subject to the restrictions on the rights of ownership set forth in this Agreement and further subject to the terms and conditions of the Plan and the applicable rules (the "Rules") of the Compensation Committee (the "Committee"), the provisions of which are hereby incorporated in this Agreement by reference. 2. Sale or Transfer Restrictions. Except as set forth in Paragraph 6 below, Grantee shall have no right to sell or transfer the Restricted Shares until the restrictions on sale or transfer lapse. The restrictions on sale or transfer on all shares shall lapse on the third anniversary of the date of this award. However, should the Company adopt a future stock option plan, after stockholder approval, providing for Restricted Stock Units, Grantee may convert one Restricted Share awarded under this Agreement for one Restricted Stock Unit, pursuant to such rules as the future plan and the Committee may prescribe, and so long as Grantee chooses to convert to Restricted Stock Units prior to the date the restrictions lapse on the Restricted Shares. The Committee may provide that a Grantee, after attaining age 60, shall have the option to have the value of the Restricted Stock Units transferred to a diversified investment such as a mutual fund. 3. Employment Requirement. Except as provided in Paragraphs 6 and 7, in the event the Grantee's employment with Company (including all Subsidiaries, as defined in the Plan) terminates prior to the date specified in Paragraph 2 above, the Restricted Shares shall be forfeited and returned to Company. For this purpose authorized leaves of absence from Company or a Subsidiary (as defined in the Plan) or the transfer of the Grantee between Company and a Subsidiary or between such Subsidiaries shall not constitute a termination of employment. For purposes of this Agreement, an authorized leave of absence shall be an absence while the Grantee is on military leave, sick leave, family leave, or other bona fide leave of absence so long as the Grantee's right to employment or re-employment with Company or a Subsidiary is provided for by statute, written contract or Company policy. 4. Deposit of Stock Certificates. Concurrently with signing this Agreement (i) Company shall direct its transfer agent to issue one stock certificate for the Restricted Shares, representing 5,300 shares of common stock of the Company, $1.00 par value, registered in the name of the Grantee, and (ii) Grantee shall execute and deliver to Company to be held by Company, with the stock certificate for the Restricted Shares, a stock power for the Restricted Shares.

After the prohibited sale and transfer restrictions lapse under Paragraph 2 above with respect to the Restricted Shares and provided the Restricted Shares have not been forfeited under Paragraph 3 above, Company shall deliver to the Grantee, or such person or persons as the Grantee may direct in writing, the stock certificate, and the stock power representing the Restricted Shares as to which the prohibited sale or transfer restrictions have lapsed less any shares withheld, pursuant to Grantee's election and the Committee's approval, to satisfy applicable income tax withholding requirements. The shares represented by such stock certificate after delivery shall cease to be Restricted shares. 5. Voting and Other Rights of Restricted Shares. Subject to the provisions of this Agreement restricting sale or transfer and providing for forfeiture of Restricted Shares, Grantee shall have all the rights of a shareholder with respect to the Restricted Shares, including dividend and voting rights. However, any dividends payable to Grantee shall be subject to any taxes due with respect to such dividends, including FICA tax (if applicable) and local state and federal income tax. 6. Acceleration of Lapse of Restrictions. Notwithstanding the foregoing provisions of this Agreement, the Grantee or the Grantee's legal representative or guardian shall be immediately entitled to receive the certificates for all Restricted shares and the prohibited sale and transfer restrictions of Paragraph 2 above shall immediately lapse on the earliest of the following occurrences: (a) The Grantee's date of death; (b) The permanent and total disability of the Grantee. For purposes of this Agreement, total disability shall mean the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months. The existence of such permanent and total disability shall be evidenced by such medical certification as the Secretary of the Company may require and determined by the Company's Compensation Committee. (c) In the event of a "Change of Control" of the Company, with "Change of Control" having the same definition as set forth in the Company's standard Executive Severance Agreement, which definition is hereby incorporated by reference. 7. Continued Lapse of Restrictions in Retirement. Notwithstanding the provisions of Paragraph 3, should the Grantee's termination result from the Grantee's retirement after attaining age 55 with at least 11 years of service under the terms of a retirement plan of the Company or a Subsidiary (as defined in the Plan), prior to the lapsing of the restrictions on sale or transfer as defined in Paragraph 2, the Grantee or the Grantee's legal representative shall be entitled to receive on the date the restrictions lapse the certificates for the Restricted Shares less applicable withholding, provided Grantee has otherwise complied with this Agreement, including, but not limited to the non-compete provisions of Paragraph 9. 2

8. Tax Withholding Requirements. Grantee's Restricted Shares are subject to certain tax withholding requirements, which may include but are not limited to the withholding of tax on dividends paid on Restricted Shares and the withholding of tax on the amount includable in income of Grantee coincident with the lapse of the sale and transfer restrictions on the Restricted Shares. Grantee understands that the certificate for Restricted Shares will not be delivered to him following the lapse of restrictions unless and until he has paid to the Company any tax due or has authorized the Company, pursuant to the Rules of the committee, and provided the Committee does not disapprove, to retain a sufficient number of the Restricted Shares upon which the restrictions have lapsed to pay such tax. The Committee shall have the right in its discretion to satisfy withholding tax liability by retaining Restricted Shares. 9. Covenant Not to Compete. In consideration of this grant of a Restricted Stock Award, Grantee agrees that should Grantee voluntarily resign or quit the employ of the Company or its parent, subsidiary or affiliated companies, Grantee shall not, for a period of two years (the "Restriction Period") measured from the effective date of such resignation or quitting, seek or accept employment with any person, firm or entity in the U.S. that is significantly engaged in the business of providing services in the areas of interstate trucking, third party logistics or domestic/international freight forwarding. It is specifically agreed that the employment prohibition set forth in this Agreement includes employment in any capacity, directly or indirectly, with any entity described above, including but not limited to investment in any such entity (other than owning less than 2% of the stock of a publicly traded company) or employment as an officer, director, employee, consultant, or independent contractor. It is specifically understood that the Covenant Not to Compete of this paragraph shall not apply if the Grantee resigns or quits the employ of the Company, or its parent, subsidiary or affiliated company following a reduction in the Grantee's title or responsibilities from Grantee's title or responsibilities existing as of the date of this Agreement or following a reduction in Grantee's base salary or benefits from the level of such base salary and benefits existing as of the date of this Agreement, other than a reduction in such base salary or benefits occurring as a result of across the board reductions applying to all officers of the Company, or the involved parent, subsidiary or affiliated company. 10. Confidential Information. Confidential and proprietary information and knowledge in Grantee's possession about the business, customers, finances, business practices, marketing and sales strategies and personnel of the Company, its parents, subsidiaries and affiliates ("Company Information") shall remain confidential for the Restriction Period and Grantee shall not disclose or communicate such Company Information during that time to any individual or entity not a party to this Agreement, including family members, and Grantee will not make use of Company Information on Grantee's own behalf or on behalf of a family member or aid or encourage any family member to do so, including, but not limited to, soliciting or recommending that anyone else solicit any then-current Company employee for hire. Grantee specifically agrees any disclosure 3

of any Company Information during the Restriction Period by a family member, or by an individual or entity who has obtained such information from Grantee or a family member, shall be regarded as a breach of this Agreement by Grantee. 11. Remedies for Breach. In the event that Grantee breaches or threatens to breach the non-compete or confidentiality provisions of this Agreement, Grantee acknowledges that the Company shall be entitled, in addition to any other remedies which may be available to it, to institute and maintain proceedings at law or in equity to recover damages, to obtain specific performance or a temporary or permanent injunction against Grantee's employment by the competitive entities described above, or for breach of the promise not to disclose Company Information, and that the Company shall be entitled to recover from Grantee all costs, including attorney's fees, incurred in prosecuting the above remedies. 12. Severability. In the event that any of the restrictions described above shall be held contrary to law or invalid or unenforceable in any respect in any jurisdiction, the remaining provisions shall not be affected, but shall remain in full force and effect. Any such invalid or enforceable provisions shall be deemed, without further action on the part of any persons, modified, amended and limited to the extent necessary to render the same valid and enforceable in such jurisdiction. 13. Binding Nature of Agreement. This Agreement shall be binding upon and inure to the benefit of the Company, its parent, subsidiaries, successors and assigns, including, without limitation, any corporation, person or entity which may acquire all or substantially all of the Company's assets and business or to which the Company is consolidated or merged. Grantee's rights and benefits hereunder are personal to Grantee and no such rights or benefits shall be subject to voluntary or involuntary assignment or transfer, except as specifically provided in this Agreement. 14. Confidentiality of Agreement. This Agreement shall be kept in strict confidence by Grantee and shall be revealed only to Grantee's spouse and attorney or other professional adviser. The Company shall keep this Agreement in strict confidence except to the extent that disclosure is required by government law or regulation. 15. Choice of Law. This Agreement, its interpretation, performance and enforcement and the rights and remedies of Grantee and the Company, shall be governed and construed by the laws of the state of Kansas applicable to contracts to be performed wholly within Kansas, without regard to principles of conflicts of laws. 16. Complete Agreement. This Agreement contains the entire agreement between Grantee and the Company and supersedes all prior agreements and understandings, both written and oral, between Grantee and the Company with respect to the subject matter hereof. 17. No Employment Contract. Grantee and the Company agree that this Agreement is not intended or understood to create any contract of employment for a definite term or an expectation of continued employment. 4

18. Amendment. This Agreement may not be modified or amended except in writing signed by both Grantee and an officer of the Company. IN WITNESS WHEREOF, Company, by its duly authorized officer or representative, and the Grantee have signed this Agreement as of the day and year first above written. YELLOW CORPORATION By: ------------------------------------ Title: ------------------------------------ ------------------------------------ GRANTEE SIGNATURE 5

EXHIBIT 10.2 YELLOW CORPORATION RESTRICTED STOCK AWARD AGREEMENT PURSUANT TO 1992 STOCK OPTION PLAN WITH NON-COMPETE COVENANT This Restricted Stock Award Agreement (the "Agreement"), made this 4th day of March, 2002, by and between Yellow Corporation, formerly Yellow Freight System, Inc. of Delaware, (the "Company") and William F. Martin, Jr., (the "Grantee") evidences the grant, by Company, of a Restricted Stock Award (the "Award") to the Grantee on March 4, 2002 ("Date of Grant") and the Grantee's acceptance of the Award in accordance with the provisions of the Company's 1992 Stock Option Plan (the "Plan"). Company and Grantee agree as follows: 1. Shares Awarded and Restriction on Shares. The Grantee shall be awarded 4,000 shares of Company common stock ("Restricted Shares") subject to the restrictions on the rights of ownership set forth in this Agreement and further subject to the terms and conditions of the Plan and the applicable rules (the "Rules") of the Compensation Committee (the "Committee"), the provisions of which are hereby incorporated in this Agreement by reference. 2. Sale or Transfer Restrictions. Except as set forth in Paragraph 6 below, Grantee shall have no right to sell or transfer the Restricted Shares until the restrictions on sale or transfer lapse. The restrictions on sale or transfer on all shares shall lapse on the third anniversary of the date of this award. However, should the Company adopt a future stock option plan, after stockholder approval, providing for Restricted Stock Units, Grantee may convert one Restricted Share awarded under this Agreement for one Restricted Stock Unit, pursuant to such rules as the future plan and the Committee may prescribe, and so long as Grantee chooses to convert to Restricted Stock Units prior to the date the restrictions lapse on the Restricted Shares. The Committee may provide that a Grantee, after attaining age 60, shall have the option to have the value of the Restricted Stock Units transferred to a diversified investment such as a mutual fund. 3. Employment Requirement. Except as provided in Paragraphs 6 and 7, in the event the Grantee's employment with Company (including all Subsidiaries, as defined in the Plan) terminates prior to the date specified in Paragraph 2 above, the Restricted Shares shall be forfeited and returned to Company. For this purpose authorized leaves of absence from Company or a Subsidiary (as defined in the Plan) or the transfer of the Grantee between Company and a Subsidiary or between such Subsidiaries shall not constitute a termination of employment. For purposes of this Agreement, an authorized leave of absence shall be an absence while the Grantee is on military leave, sick leave, family leave, or other bona fide leave of absence so long as the Grantee's right to employment or re-employment with Company or a Subsidiary is provided for by statute, written contract or Company policy. 4. Deposit of Stock Certificates. Concurrently with signing this Agreement (i) Company shall direct its transfer agent to issue one stock certificate for the Restricted Shares, representing 4,000 shares of common stock of the Company, $1.00 par value, registered in the name of the Grantee, and (ii) Grantee shall execute and deliver to Company to be held by Company, with the stock certificate for the Restricted Shares, a stock power for the Restricted Shares. 2

8. Tax Withholding Requirements. Grantee's Restricted Shares are subject to certain tax withholding requirements, which may include but are not limited to the withholding of tax on dividends paid on Restricted Shares and the withholding of tax on the amount includable in income of Grantee coincident with the lapse of the sale and transfer restrictions on the Restricted Shares. Grantee understands that the certificate for Restricted Shares will not be delivered to him following the lapse of restrictions unless and until he has paid to the Company any tax due or has authorized the Company, pursuant to the Rules of the committee, and provided the Committee does not disapprove, to retain a sufficient number of the Restricted Shares upon which the restrictions have lapsed to pay such tax. The Committee shall have the right in its discretion to satisfy withholding tax liability by retaining Restricted Shares. 9. Covenant Not to Compete. In consideration of this grant of a Restricted Stock Award, Grantee agrees that should Grantee voluntarily resign or quit the employ of the Company or its parent, subsidiary or affiliated companies, Grantee shall not, for a period of two years (the "Restriction Period") measured from the effective date of such resignation or quitting, seek or accept employment with any person, firm or entity in the U.S. that is significantly engaged in the business of providing services in the areas of interstate trucking, third party logistics or domestic/international freight forwarding. It is specifically agreed that the employment prohibition set forth in this Agreement includes employment in any capacity, directly or indirectly, with any entity described above, including but not limited to investment in any such entity (other than owning less than 2% of the stock of a publicly traded company) or employment as an officer, director, employee, consultant, or independent contractor. It is specifically understood that the Covenant not to Compete of this paragraph shall not apply if the Grantee resigns or quits the employ of the Company, or its parent, subsidiary or affiliated company following a reduction in the Grantee's title or responsibilities from Grantee's title or responsibilities existing as of the date of this Agreement or following a reduction in Grantee's base salary or benefits from the level of such base salary and benefits existing as of the date of this Agreement, other than a reduction in such base salary or benefits occurring as a result of across the board reductions applying to all officers of the Company or the insured its parent, subsidiary or affiliated company. 10. Confidential Information. Confidential and proprietary information and knowledge in Grantee's possession about the business, customers, finances, business practices, marketing and sales strategies and personnel of the Company, its parents, subsidiaries and affiliates ("Company Information") shall remain confidential for the Restriction Period and Grantee shall not disclose or communicate such Company Information during that time to any individual or entity not a party to this Agreement, including family members, and Grantee will not make use of Company Information on Grantee's own behalf or on behalf of a family member or aid or encourage any family member to do so, including, but not limited to, soliciting or recommending that anyone else solicit any then-current Company employee for hire. Grantee specifically agrees any disclosure 4

18. Amendment. This Agreement may not be modified or amended except in writing signed by both Grantee and an officer of the Company. IN WITNESS WHEREOF, Company, by its duly authorized officer or representative, and the Grantee have signed this Agreement as of the day and year first above written. YELLOW CORPORATION By: --------------------------------- Title: --------------------------------- --------------------------------- GRANTEE SIGNATURE 5

EXHIBIT 10.3 YELLOW CORPORATION RESTRICTED STOCK AWARD AGREEMENT PURSUANT TO 1992 STOCK OPTION PLAN WITH NON-COMPETE COVENANT This Restricted Stock Award Agreement (the "Agreement"), made this 4th day of March, 2002, by and between Yellow Corporation, formerly Yellow Freight System, Inc. of Delaware, (the "Company") and Greg Reid (the "Grantee") evidences the grant, by Company, of a Restricted Stock Award (the "Award") to the Grantee on March 4, 2002 ("Date of Grant") and the Grantee's acceptance of the Award in accordance with the provisions of the Company's 1992 Stock Option Plan (the "Plan"). Company and Grantee agree as follows: 1. Shares Awarded and Restriction on Shares. The Grantee shall be awarded 4,000 shares of Company common stock ("Restricted Shares") subject to the restrictions on the rights of ownership set forth in this Agreement and further subject to the terms and conditions of the Plan and the applicable rules (the "Rules") of the Compensation Committee (the "Committee"), the provisions of which are hereby incorporated in this Agreement by reference. 2. Sale or Transfer Restrictions. Except as set forth in Paragraph 6 below, Grantee shall have no right to sell or transfer the Restricted Shares until the restrictions on sale or transfer lapse. The restrictions on sale or transfer on all shares shall lapse on the third anniversary of the date of this award. However, should the Company adopt a future stock option plan, after stockholder approval, providing for Restricted Stock Units, Grantee may convert one Restricted Share awarded under this Agreement for one Restricted Stock Unit, pursuant to such rules as the future plan and the Committee may prescribe, and so long as Grantee chooses to convert to Restricted Stock Units prior to the date the restrictions lapse on the Restricted Shares. The Committee may provide that a Grantee, after attaining age 60, shall have the option to have the value of the Restricted Stock Units transferred to a diversified investment such as a mutual fund. 3. Employment Requirement. Except as provided in Paragraphs 6 and 7, in the event the Grantee's employment with Company (including all Subsidiaries, as defined in the Plan) terminates prior to the date specified in Paragraph 2 above, the Restricted Shares shall be forfeited and returned to Company. For this purpose authorized leaves of absence from Company or a Subsidiary (as defined in the Plan) or the transfer of the Grantee between Company and a Subsidiary or between such Subsidiaries shall not constitute a termination of employment. For purposes of this Agreement, an authorized leave of absence shall be an absence while the Grantee is on military leave, sick leave, family leave, or other bona fide leave of absence so long as the Grantee's right to employment or re-employment with Company or a Subsidiary is provided for by statute, written contract or Company policy. 4. Deposit of Stock Certificates. Concurrently with signing this Agreement (i) Company shall direct its transfer agent to issue one stock certificate for the Restricted Shares, representing 4,000 shares of common stock of the Company, $1.00 par value, registered in the name of the Grantee, and (ii) Grantee shall execute and deliver to Company to be held by Company, with the stock certificate for the Restricted Shares, a stock power for the Restricted Shares.

18. Amendment. This Agreement may not be modified or amended except in writing signed by both Grantee and an officer of the Company. IN WITNESS WHEREOF, Company, by its duly authorized officer or representative, and the Grantee have signed this Agreement as of the day and year first above written. YELLOW CORPORATION By: ----------------------------------- Title: ----------------------------------- ----------------------------------- GRANTEE SIGNATURE 5

EXHIBIT 10.4 YELLOW CORPORATION RESTRICTED STOCK AWARD AGREEMENT PURSUANT TO 1992 STOCK OPTION PLAN WITH NON-COMPETE COVENANT This Restricted Stock Award Agreement (the "Agreement"), made this 4th day of March, 2002, by and between Yellow Corporation, formerly Yellow Freight System, Inc. of Delaware, (the "Company") and William D. Zollars (the "Grantee") evidences the grant, by Company, of a Restricted Stock Award (the "Award") to the Grantee on March 4, 2002 ("Date of Grant") and the Grantee's acceptance of the Award in accordance with the provisions of the Company's 1992 Stock Option Plan (the "Plan"). Company and Grantee agree as follows: 1. Shares Awarded and Restriction on Shares. The Grantee shall be awarded 26,000 shares of Company common stock ("Restricted Shares") subject to the restrictions on the rights of ownership set forth in this Agreement and further subject to the terms and conditions of the Plan and the applicable rules (the "Rules") of the Compensation Committee (the "Committee"), the provisions of which are hereby incorporated in this Agreement by reference. 2. Sale or Transfer Restrictions. Except as set forth in Paragraph 6 below, Grantee shall have no right to sell or transfer the Restricted Shares until the restrictions on sale or transfer lapse. The restrictions on sale or transfer on all shares shall lapse on the third anniversary of the date of this award. However, should the Company adopt a future stock option plan, after stockholder approval, providing for Restricted Stock Units, Grantee may convert one Restricted Share awarded under this Agreement for one Restricted Stock Unit, pursuant to such rules as the future plan and the Committee may prescribe, and so long as Grantee chooses to convert to Restricted Stock Units prior to the date the restrictions lapse on the Restricted Shares. The Committee may provide that a Grantee, after attaining age 60, shall have the option to have the value of the Restricted Stock Units transferred to a diversified investment such as a mutual fund. 3. Employment Requirement. Except as provided in Paragraphs 6 and 7, in the event the Grantee's employment with Company (including all Subsidiaries, as defined in the Plan) terminates prior to the date specified in Paragraph 2 above, the Restricted Shares shall be forfeited and returned to Company. For this purpose authorized leaves of absence from Company or a Subsidiary (as defined in the Plan) or the transfer of the Grantee between Company and a Subsidiary or between such Subsidiaries shall not constitute a termination of employment. For purposes of this Agreement, an authorized leave of absence shall be an absence while the Grantee is on military leave, sick leave, family leave, or other bona fide leave of absence so long as the Grantee's right to employment or re-employment with Company or a Subsidiary is provided for by statute, written contract or Company policy. 4. Deposit of Stock Certificates. Concurrently with signing this Agreement (i) Company shall direct its transfer agent to issue one stock certificate for the Restricted Shares, representing 26,000 shares of common stock of the Company, $1.00 par value, registered in the name of the Grantee, and (ii) Grantee shall execute and deliver to Company to be held by Company, with the stock certificate for the Restricted Shares, a stock power for the Restricted Shares.

18. Amendment. This Agreement may not be modified or amended except in writing signed by both Grantee and an officer of the Company. IN WITNESS WHEREOF, Company, by its duly authorized officer or representative, and the Grantee have signed this Agreement as of the day and year first above written. YELLOW CORPORATION By: ----------------------------------- Title: ----------------------------------- ----------------------------------- GRANTEE SIGNATURE 5