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Exhibit 10
EMPLOYMENT AGREEMENT
AGREEMENT, made this 15th day of December, 1999, by and between Yellow
Corporation, a Delaware corporation ("Yellow"), and Xxxxxxx X. Xxxxxxx (the
"Executive").
WITNESSETH
WHEREAS, the Board of Directors of Yellow has approved the employment
of the Executive on the terms and conditions set forth in this Agreement; and
WHEREAS, the Executive is willing, for the consideration provided, to
enter into employment with Yellow on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Employment. Yellow hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, upon the terms and conditions
set forth in this Agreement.
2. Term. The term of this Agreement shall be for two (2) years from the
date hereof (the "Effective Date"), with said term renewing daily, and
ending on the date of termination of the Executive's employment
determined pursuant to Section 5, 6 or 7, whichever shall be
applicable.
3. Position and Duties. The Executive shall serve as Chairman, President
and CEO of Yellow, and shall have such responsibilities and authority
as commensurate with such offices and as may from time to time be
prescribed by or pursuant to Yellow's bylaws. The Executive shall
devote
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substantially all of his working time and efforts to the business and
affairs of Yellow.
4. Compensation. During the period of the Executive's employment, Yellow
shall provide the Executive with the following compensation and other
benefits:
(a) Base Salary. Yellow shall pay to the Executive base salary at the
initial rate of $550,000 per annum, retroactive to November 8,
1999, which shall be payable in accordance with the standard
payroll practices of Yellow. Such base salary rate shall be
reviewed annually in accordance with Yellow's normal policies
beginning in calendar year 2000; provided, however, that at no
time during the term of this Agreement shall the Executive's base
salary be decreased from the rate then in effect except (i) in
connection with across-the-board reductions similarly affecting
substantially all senior executives of Yellow or (ii) with the
written consent of the Executive.
(b) Annual Bonus.
(1) For Calendar Year 1999. Executive shall receive a Bonus for
calendar year 1999, calculated as follows:
(i) For the period January 1, 1999 through November 7, 1999,
Executive's Bonus shall be calculated utilizing the
formula adopted for Senior Management Executive Bonuses
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at Yellow's subsidiary, Yellow Freight System, Inc.,
based upon the salary received by Executive in his
position as President of that subsidiary for this
period.
(ii) For the period November 8, 1999 through December 31,
1999, Executive's Bonus shall be calculated utilizing
the formula previously adopted by the Compensation
Committee for the position of Chairman, President and
CEO of Yellow based upon the salary received by
Executive for these positions under this Agreement and
for this period.
(2) For Calendar Year 2000 and Beyond. The Executive shall
participate in a bonus program established and maintained by
Yellow pursuant to which a threshold award for each fiscal
year is 18.75% of the Executive's base salary; a target award
is 75% of base salary; and a maximum award is 150% of base
salary in respect of each fiscal year of Yellow commencing
with 2000, provided that any payment under such award shall
be conditioned upon satisfaction of the threshold. The
criteria for establishment of the threshold and target and
the parameters for payments
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at, above or below the target shall be determined annually by
the Compensation Committee of the Board of Directors of
Yellow. At least 80% of the criteria established by the
Compensation Committee which would result in a payment of 75%
of base salary to the Executive shall be based on specific
measurements of financial performance of Yellow during the
applicable fiscal year and the remaining percentage may be
based on non-financial criteria.
(c) Stock Options. Yellow has granted to the Executive, effective
as of the Effective Date, an option to purchase 200,000
shares of Common Stock of Yellow, with an option term of ten
years and an option price per share equal to the closing
price of a share of Common Stock of Yellow as reported on the
NASDAQ National Market System on the Effective Date;
provided, however, that such option shall vest and become
exercisable at the rate of (i) 25% on the first anniversary
of the Effective Date; (ii) 25% on the second anniversary of
the Effective Date; (iii) 25% on the third anniversary of the
Effective Date; and (iv) 25% on the fourth anniversary of the
Effective Date. With respect to succeeding years, the
Compensation Committee of the Board of Directors of Yellow
shall determine the number of stock options, if any, to be
granted to the Executive and the terms and conditions of any
such options.
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(d) Supplemental Retirement Benefits. Yellow shall provide
Executive with supplemental retirement benefits in accordance
with this subsection (d) and Appendix A pursuant to which the
Executive shall receive from Yellow upon his termination of
employment with Yellow (and subject to the vesting provision
hereinafter set forth), the difference between (i) the
monthly benefit that he would have received under Section 4.4
of the Yellow Freight Office, Clerical, Sales and Supervisory
Personnel Pension Plan (the "Pension Plan") (calculated as a
single life annuity payable commencing at his Normal
Retirement Date as defined under the Pension Plan with an
actuarial reduction if payment commences prior to his Normal
Retirement Date) using 20 years of Credit Service as defined
under the Pension Plan plus his actual Credited Service
credited under the Pension Plan after five (5) years from
September 6, 1996, the date of Executive's commencement of
employment with Yellow's subsidiary, Yellow Freight System,
Inc., and using Compensation as defined in Section 2.1(h) (2)
of the Pension Plan, including Compensation previously earned
during his employment with Yellow Freight System, Inc. from
September 6, 1996 through November 7, 1999, but without any
reduction under Section 401(a) (17) of the Internal Revenue
Code of 1986, as amended )the "Code") and (ii) the monthly
benefit actually payable to the Executive under Section
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4.4 of the Pension Plan, calculated at the time the Executive
commences payment of a Vested Pension under the Pension Plan, if
any. The Executive shall vest in the supplemental retirement
benefit described in this subsection (d) at the rate of 20% per
year commencing on September 6, 1997 (so that he would become 100%
vested on September 6, 2001), provided, however, that the
Executive shall forfeit any unvested portion in the event of the
termination of his employment prior to becoming 100% vested.
Notwithstanding the foregoing, the Executive shall immediately
become 100% vested in the event of the termination of his
employment under circumstances entitling the Executive to benefits
pursuant to Section 8. The supplemental retirement benefit
described in this subsection (d) and Appendix A shall be payable
monthly commencing as of the last day of the month following the
month of termination of the Executive's employment or, if
Executive has not yet qualified for payment of a retirement
benefit under the Pension Plan as of his date of termination, the
supplemental retirement benefit shall be payable monthly
commencing as of the earliest date of Executive's eligibility to
retire under the Pension Plan subject to actuarial reduction for
payments commencing prior to Executive's normal retirement date,
and shall continue until the Executive's death. Upon the
Executive's death, if at the time of his death he had already
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qualified for payment of a retirement benefit under the Pension
Plan and if he is survived by and still married to the person who
was his spouse on September 6, 1996, the monthly supplemental
retirement benefit payable to the Executive during his life shall
continue to said surviving spouse until her death. If at the time
of his death, the Executive had not yet qualified for payment of a
retirement benefit under the Pension Plan, if he is survived by
and still married to the person who was his spouse on September 6,
1996, said spouse shall qualify to receive the same monthly
supplemental retirement benefit commencing on the last day of the
month in which Executive would have reached his Normal Retirement
Date. If the Executive at the time of his death is neither
survived by or not married to the person who was his spouse on
September 6, 1996, no further supplemental retirement benefits
shall be payable under this subsection (d) following his death.
The Executive acknowledges that these supplemental retirement
benefits are an element of the compensation to be paid for his
services and not an unfunded plan of deferred compensation within
the meaning of Section 201 of the Employee Retirement Income
Security Act, as amended.
(e) Other Benefits. In addition to the compensation and benefits
otherwise specified in this Agreement, the Executive (and, if
provided for under the applicable plan or program, his spouse)
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shall be entitled to participate in, and to receive benefits
under, Yellow's employee benefit plans and programs that are or
may be available to senior executives generally and on terms and
conditions that are no less favorable than those generally
applicable to other senior executives of Yellow. At no time during
the term of this Agreement shall the Executive's participation in
or benefits received under such plans and programs be decreased
except (i) in connection with across-the-board reductions
similarly affecting substantially all senior executives of Yellow
or (ii) with the written consent of the Executive. The Executive
shall be treated as having satisfied any otherwise applicable
waiting period requirement for coverage under Yellow's disability
insurance plan, effective as of the Effective Date.
(f) Expenses. The Executive shall be entitled to prompt reimbursement
of all reasonable expenses incurred by him in performing services
hereunder, provided he properly accounts therefore in accordance
with Yellow's policies.
(g) Office and Services Furnished. Yellow shall furnish the Executive
with office space, secretarial assistance and such other
facilities and services as shall be suitable to the Executive's
position and adequate for the performance of his duties hereunder.
5. Termination of Employment by Yellow.
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(a) Cause. Yellow may terminate the Executive's employment for Cause
if the Executive willfully engages in conduct which is materially
and demonstrably injurious to Yellow or if the Executive willfully
engages in an act or acts of dishonesty resulting in material
personal gain to the Executive at the expense of Yellow. Yellow
shall exercise its right to terminate the Executive's employment
for Cause by (i) giving him written notice of termination at least
30 days before the date of such termination specifying in
reasonable detail the circumstances constituting such Cause; and
(ii) delivering to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board of Directors (except the
Executive), after reasonable notice to the Executive and an
opportunity for the Executive and his counsel to be heard before
the Board of Directors, finding that the Executive has engaged in
the conduct set forth in this subsection (a). In the event of such
termination of the Executive's employment for Cause, the Executive
shall be entitled to receive (i) his base salary pursuant to
Section 4(a) and any other compensation and benefits to the extent
actually earned pursuant to this Agreement or any benefit plan or
program of Yellow as of the date of such termination at the normal
time for payment of such salary, compensation or benefits and (ii)
any amounts owing under Section 4 (f). In addition, in the event
of
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such termination of the Executive's employment for Cause, all
outstanding options held by the Executive at the effective date of
such termination which had not already been exercised shall be
forfeited. Except as provided in Section 9, the Executive shall
receive no other compensation or benefits from Yellow.
(b) Disability. If the Executive incurs a Permanent and Total
Disability, as defined below, Yellow may terminate the Executive's
employment by giving him written notice of termination at least 30
days before the date of such termination. In the event of such
termination of the Executive's employment because of Permanent and
Total Disability, (i) the Executive shall be entitled to receive
his base salary pursuant to Section 4(a) and any other
compensation and benefits to the extent actually earned by the
Executive pursuant to this Agreement or any benefit plan or
program of Yellow as of the date of such termination of employment
at the normal time for payment of such salary, compensation or
benefits, and any amounts owing under Section 4(f), and (ii) all
outstanding stock options held by the Executive at the time of his
termination of employment shall become immediately exercisable at
that time, and the Executive shall have one year from the date of
such termination of employment to exercise any or all of such
outstanding options (but not beyond the term of such option). For
purposes of this Agreement, the
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Executive shall be considered to have incurred a Permanent and
Total Disability if he is unable to engage in any substantial
gainful employment by reason of any materially determinable
physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The existence of
such Permanent and Total Disability shall be evidenced by such
medical certification as the Secretary of Yellow shall require and
shall be subject to the approval of the Compensation Committee of
the Board of Directors of Yellow.
(c) Without Cause. Yellow may terminate the Executive's employment at
any time and for any reason, other than for Cause or because of
Permanent and Total Disability, by giving him a written notice of
termination to that effect at least 30 days before the date of
termination. In the event of such termination of the Executive's
employment without Cause, the Executive shall be entitled to the
benefits described in Section 8.
6. Termination of Employment by the Executive.
a. Good Reason. The Executive may terminate his employment for Good
Reason by giving Yellow a written notice of termination at least
30 days before the date of such termination specifying in
reasonable detail the circumstances constituting such Good Reason.
In the event of the Executive's termination of his
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employment for Good Reason, the Executive shall be entitled to the
benefits described in Section 8. For purposes of this Agreement,
Good Reason shall mean the failure of Yellow in any material way
either (i) to pay or provide to the Executive the compensation and
benefits that he is entitled to receive pursuant to this Agreement
by the later of (A) 60 days after the applicable due date or (B)
30 days after the Executive's written demand for payment, or (ii)
to maintain the titles, positions and duties of the Executive
commensurate with those titles and positions and as required by
this Agreement except with the Executive's written consent, or
(iii) Executive's receipt of notice from Yellow of the cut-off of
the automatic renewal of the term of this Agreement as described
in Section 2 above.
b. Following A Change of Control. The Executive may terminate his
employment at any time within the three-month period which begins
six months after a Change of Control of Yellow by giving Yellow a
written notice of such termination at least 30 days before the
date of termination. In the event of the Executive's termination
of employment within such three-month period, the Executive shall
be entitled to the benefits described in Section 8. For purposes
of this Agreement, a Change of Control of Yellow shall be deemed
to have taken place if: (i) a third person, including a "group" as
defined in Section 13(d) (3) of the Securities Exchange
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Act of 1934, purchases or otherwise acquires shares of Yellow
after the date hereof and as a result thereof becomes the
beneficial owner of shares of Yellow having 20% or more of the
total number of votes that may be cast for the election of
directors of Yellow; or (ii) as the result of, or in connection
with any cash tender or exchange offer, merger or other Business
Combination, or contested election, or any combination of the
foregoing transactions, the Continuing Directors shall cease to
constitute a majority of the Board of Directors of Yellow or any
successor to Yellow. For this purpose, (i) Business Combination
means any transaction which is referred to in any one or more of
clauses (a) through (e) of Section 1 of Subparagraph A of Article
Seventh of the Certificate of Incorporation of Yellow, and (ii)
Continuing Director means a director of Yellow who meets the
definition of Continuing Director contained in Section 7 of
Subparagraph C of Article Seventh of the Certificate of
Incorporation of Yellow.
c. Other. The Executive may terminate his employment at any time and
for any reason, other than pursuant to subsection (a) or (b)
above, by giving Yellow a written notice of termination to that
effect at least 30 days before the date of termination. In the
event of the Executive's termination of his employment pursuant to
this subsection (c), the Executive shall be entitled to receive
(i) his base salary pursuant to Section 4(a) and any other
compensation and
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benefits to the extent actually earned by the Executive pursuant
to this Agreement or any benefit plan or program of Yellow as of
the date of such termination at the normal time for payment of
such salary, compensation or benefits, and (ii) any amounts owing
under Section 4(f). In addition, in the event of the Executive's
termination of his employment pursuant to this subsection (c), (i)
all outstanding options held by the Executive at the time of such
termination which had not already become exercisable shall be
forfeited, and (ii) all outstanding options held by the Executive
at the time of such termination which had already become
exercisable shall expire 90 days after the date of such
termination (or, if earlier, upon the expiration of the term of
the option). Except as provided in Section 9, the Executive shall
receive no other compensation or benefits from Yellow.
7. Termination of Employment By Death. In the event of the death of the
Executive during the course of his employment hereunder, (i) the
Executive's estate shall be entitled to receive his base salary
pursuant to Section 4(a) and any other compensation and benefits to the
extent actually earned by the Executive pursuant to this Agreement or
any other benefit plan or program of Yellow as of the date of such
termination at the normal time for payment of such salary, compensation
or benefits, and any amounts owing under Section 4(f), (ii) any death
benefit due under the Pension Plan and any death benefit due under
Section 4(d) shall be paid to
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the Executive's spouse as provided under Section 4(d) and (iii) all
outstanding stock options held by the Executive at the time of his
death shall become immediately exercisable upon his death, and the
Executive's spouse or, if predeceased, the Executive's estate, shall
have one year from the date of his death to exercise any or all of such
outstanding options (but not beyond the term of such option).
8. Benefits Upon Termination Without Cause, For Good Reason, or Following
Change of Control. If the Executive's employment with Yellow shall
terminate (i) because of termination by Yellow pursuant to Section 5(c)
and not for Cause or because of Permanent and Total Disability, (ii)
because of termination by the Executive for Good Reason pursuant to
Section 6(a), or (iii) because of termination by the Executive within
the three-month period which begins six months after a Change of
Control of Yellow pursuant to Section 6(b), the Executive shall be
entitled to the following:
(a) Yellow shall pay to the Executive his base salary pursuant to
Section 4 (a) and, subject to the further provisions of this
Section 8, any other compensation and benefits to the extent
actually earned by the Executive under this Agreement or any
benefit plan or program of Yellow as of the date of such
termination at the normal time for payment of such salary,
compensation or benefits.
(b) Yellow shall pay the Executive any amounts owing under Section
4(f).
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(c) Yellow shall pay to the Executive as a severance benefit an amount
equal to twice the sum of (i) his annual rate of base salary
immediately preceding his termination of employment, and (ii) the
target bonus payable pursuant to subsection (d) below. Such
severance benefit shall be paid in a lump sum within 30 days after
the date of such termination of employment.
(d) Yellow shall pay to the Executive his target bonus under Yellow's
target bonus plan for the fiscal year in which his termination of
employment occurs as if the target had been exactly met. Such
payment shall be made in a lump sum within 30 days after the date
of such termination of employment, and the Executive shall have no
right to any further bonuses under said program.
(e) The Executive shall become 100% vested in all benefits accrued to
the date of termination of his employment but not previously paid
under the supplemental retirement benefits pursuant to Section
4(d), and Yellow's nonqualified defined contribution plans.
Payment of benefits under such plans, and under the Pension Plan
and Yellow's qualified defined contribution plans, shall be made
at the time and in the manner determined under the applicable
plan.
(f) During the period of 24 months beginning on the date of the
Executive's termination of employment, the Executive (and, if
applicable under the applicable program, his spouse) shall remain
covered by the employee benefit plans and programs that covered
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him immediately prior to his termination of employment as if he
had remained in employment for such period, provided, however,
that there shall be excluded for this purpose any plan or program
providing payment for time not worked (including without
limitation holiday, vacation, and long- and short-term
disability). In the event that the Executive's participation in
any such employee benefit plan or program is barred, Yellow shall
arrange to provide the Executive with substantially similar
benefits. Any medical insurance coverage for such two-year period
pursuant to this subsection (f) shall become secondary upon the
earlier of (i) the date on which the Executive begins to be
covered by comparable medical coverage provided by a new employer,
or (ii) the earliest date upon which the Executive becomes
eligible for Medicare or a comparable Government insurance
program.
(g) All outstanding stock options held by the Executive at the time of
termination of his employment shall become fully exercisable upon
such termination of employment and may be exercised for the
balance of the term of such option.
(h) If any payment or benefit received by or in respect of the
Executive under this Agreement or any other plan, arrangement or
agreement with Yellow (determined without regard to any additional
payments required under this subsection (h) and Appendix B of this
Agreement) (a "Payment") would be subject to
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the excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any similar tax that may hereafter be
imposed) or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any
such interest and penalties, being hereinafter collectively referred to
as the "Excise Tax"), Yellow shall pay to the Executive with respect to
such Payment at the time specified in Appendix B an additional amount
(the "Gross-up Payment") such that the net amount retained by the
Executive from the Payment and the Gross-up Payment, after reduction
for any Excise Tax upon the payment and any federal, state and local
income and employment tax and Excise Tax upon the Gross-up Payment,
shall be equal to the Payment. The calculation and payment of the
Gross-up Payment shall be subject to the provisions of Appendix B.
9. Entitlement To Other Benefits. Except as provided in this Agreement,
this Agreement shall not be construed as limiting in any way any rights
to benefits that the Executive may have pursuant to any other plan or
program of Yellow.
10. Arbitration.
(a) Arbitration of Disputes. Any dispute between the parties hereto
arising out of, in connection with, or relating to this Agreement
or the breach thereof shall be settled by arbitration in Overland
Park,
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Kansas, in accordance with the rules then in effect of the
American Arbitration Association ("AAA"). Arbitration shall be the
exclusive remedy for any such dispute except only as to failure to
abide by an arbitration award rendered hereunder. Regardless of
whether or not both parties hereto participate in the arbitration
proceeding, any arbitration award rendered hereunder shall be
final and binding on each party hereto and judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
The party seeking arbitration shall notify the other party in
writing and request the AAA to submit a list of 5 or 7 potential
arbitrators. In the event the parties do not agree upon an
arbitrator, each party shall, in turn, strike one arbitrator from
the list, Yellow having the first strike, until only one
arbitrator remains, who shall arbitrate the dispute. The parties
shall have the opportunity to conduct reasonable discovery as
determined by the arbitrator, and the arbitration hearing shall be
conducted within 30 to 60 days of the selection of an arbitrator
or at the earliest date thereafter that the arbitrator is
available or as otherwise set by the arbitrator.
b. Indemnification. If arbitration occurs as provided for herein and
the Executive is awarded more than Yellow has asserted is due him
or otherwise substantially prevails therein, Yellow shall
reimburse the Executive for his reasonable attorneys' fees, costs
and
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disbursements incurred in such arbitration and hereby agrees to
pay interest on any money award obtained by the Executive from the
date payment should have been made until the date payment is made,
calculated at the prime interest rate of Bank of America, Inc.,
Kansas City, Missouri in effect from time to time from the date
that payment(s) to him should have been made under this Agreement.
If the Executive enforces the arbitration award in court, Yellow
shall reimburse the Executive for his reasonable attorneys' fees,
costs and disbursements incurred in such enforcement.
11. Confidential Information. The Executive shall retain in confidence any
confidential information known to him concerning Yellow and its
subsidiaries, and their respective businesses until such information is
publicly disclosed. This provision shall survive the termination of the
Executive's employment for any reason under this Agreement.
12. Indemnification under Bylaws. Yellow shall provide the Executive with
rights to indemnification by Yellow that are no less favorable to the
Executive than those set forth in Yellow's by-laws as in effect as of
the Effective Date.
13. Successors. This Agreement shall be binding upon and insure to the
benefit of the Executive and his estate and Yellow and any successor of
Yellow, but neither this Agreement nor any rights arising hereunder may
be assigned or pledged by the Executive.
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14. Severability. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
15. Notices. All notices required or permitted to be given under this
Agreement shall be given in writing and shall be deemed sufficiently
given if delivered by hand or mailed by registered mail, return receipt
requested, to his residence in the case of the Executive and to its
principal executive offices in the case of Yellow. Either party may by
giving written notice to the other party in accordance with this
Section 15 change the address at which it is to receive notices
hereunder.
16. Controlling Law. This Agreement shall in all respects by governed by
and construed in accordance with the laws of the State of Kansas.
17. Changes to Agreement. This Agreement may not be changed orally but only
in a writing, signed by the party against whom enforcement is sought.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an
original but all of which together shall constitute one and the same
instrument.
19. Prior Agreement. Except as regards the commencement date for
Executive's Supplemental Retirement Benefits, as discussed in Section
4(d) above, this Agreement in all respects supercedes and replaces the
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Employment Agreement entered into between Executive and Yellow Freight
System, Inc. on September 6, 1996.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
21 of December, 1999.
EXECUTIVE: YELLOW CORPORATION
/s/ Xxxxxxx X. Xxxxxxx
---------------------------- By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
ATTEST
By: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------
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Appendix A
Supplemental Retirement Benefits
The following provisions shall be applicable with respect to the
supplemental retirement benefits described in Section 4(e) of this Agreement.
1. Benefit Calculation
For purposes of calculating the supplemental retirement benefits, the
following assumptions shall be utilized.
(a) "Credited Service", shall be assumed to be twenty (20) years
for periods of employment prior to five (5) years of employment
measured from September 6, 1996, plus actual Credited Service, if
any, for periods of employment after five (5) years of employment
measured from September 6, 1996 and Executive's Compensation for
the period September 6, 1996 through November 7, 1999 shall be the
Compensation earned by Executive during his employment with Yellow
Freight System, Inc.
(b) If the Executive is employed by Yellow for less than five (5)
years from September 6, 1996, "Average Final Compensation" shall
be calculated as the average "base wage" as so defined in Section
2.1(h)(2) of the Plan for actual number of years of employment,
with partial years annualized;
(c) Any vested accrued benefit which the Executive is paid under
the Pension Plan, shall reduce any supplement retirement benefits
payable under this Agreement; and
(d) The defined terms used in this Appendix A and in Section 4(e)
of this Agreement shall have the meanings provided in the Yellow
Freight Office, Clerical, Sales and Supervisory Personnel Pension
Plan as restated as of January 1, 1989 and as amended by Amendment
No. 1 dated July 15, 1992, by Amendment No. 2 dated December 28,
1994, all as in existence as of the Effective Date of this
Agreement (collectively the "Pension Plan") unless another meaning
is expressly provided in this Agreement and Appendix or unless the
Executive and Yellow agree in writing to apply any subsequent
amendments, revisions, interpretations or restatements of the
Pension Plan.
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2. Vesting
Notwithstanding the vesting provisions of Section 4(d), the Executive
shall become 100% vested in the supplemental retirement benefits
provided under that subsection and this Appendix upon the termination
of his employment for any of the following reasons:
(a) Termination by Yellow without "Cause",
(b) Termination by the Executive for "Good Reason", or
(c) The Executive's resignation within the three month period
which begins six months after a "Change of Control" of Yellow,
"Cause", "Good Reason", and "Change of Control" shall have the
respective meanings as defined in Section 5, 6(a) and 6(b) of this
Agreement.
3. Taxability of Benefit
The Executive and Yellow understand and agree that for federal tax
purposes, all supplemental retirement benefits paid under this
agreement to the Executive or his spouse shall be treated as ordinary
income under the applicable provisions of the Internal Revenue Code of
1986, as amended, and are subject to any taxes required to be withheld
by federal, state or local law; provided that the Executive shall have
the right to determine the timing of any withholding within the
parameters permitted under the Code and under any Regulations or
proposed Regulations under Code Section 3121(v) or any successor
thereto.
4. Nonassignability
The supplemental retirement benefits payable under this Agreement, and
any and all rights thereto, shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind,
either voluntarily or involuntarily. Any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge, or
otherwise dispose of any rights to benefits payable hereunder shall be
void.
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