Exhibit 10.3
EMPLOYEE BENEFIT MATTERS AGREEMENT
This EMPLOYEE BENEFIT MATTERS AGREEMENT (the
"Agreement") is made as of this 2nd of December, 1996 by
and between CONSOLIDATED FREIGHTWAYS, INC., a Delaware
corporation ("CFI") and CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, CFI is the holder of all of the issued
and outstanding shares of common stock of the Company;
WHEREAS, the employees of the Company and its
Subsidiaries are covered by various employee benefit
plans sponsored by CFI which are limited to employees of
CFI and its Subsidiaries; and
WHEREAS, CFI has determined that it will
distribute all of the shares of the Company's common
stock to the holders of the common stock of CFI, which
will cause the Company and its Subsidiaries to no longer
be Subsidiaries of CFI;
NOW, THEREFORE, CFI and the Company agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms
shall have the following meanings, such meanings to be
equally applicable to both the singular and plural forms
of the terms defined:
ADR Agreement. The Alternative Dispute
Resolution Agreement entered into between CFI and the
Company dated the same date as this Agreement, the form
of which is attached as Annex 1 to the Distribution
Agreement.
Company Employee. A person described in 2.3.
Distribution. The distribution of Company
common stock pursuant to the Distribution Agreement.
Distribution Agreement. The Distribution
Agreement entered into between CFI and the Company dated
November 25, 1996 and governing the distribution of
Company common stock to the holders of CFI common stock.
Page 1
Distribution Date. The date on which all the
shares of Company common stock are delivered to the
distribution agent pursuant to the Distribution
Agreement.
Subsidiary. A corporation that is a member of
a controlled group of corporations, within the meaning of
Internal Revenue Code Section 1563, with CFI or with the
Company, except that the Company and its Subsidiaries
shall not be treated as Subsidiaries of CFI.
ARTICLE II
SEPARATION OF BENEFIT PLANS
2.1 Adoption of Company Plans. The Company and its
Subsidiaries shall, as of the Distribution Date, cease
participating in the employee benefit plans sponsored by
CFI. As of the Distribution Date, the Company shall
adopt employee benefit plans covering Company Employees
that are substantially the same as the employee benefit
plans sponsored by CFI covering Company Employees prior
to the Distribution Date except as follows. The Company
shall not be obligated to duplicate or replace the CFI
employee benefit plans that are limited to executive
employees and may adopt such new executive employee
benefit plans as it shall decide in its absolute
discretion.
2.2 Separate Responsibilities. CFI and the Company
agree that CFI shall have sole responsibility for its
employee benefit plans, arrangements and policies for
employees of CFI and its Subsidiaries and that the
Company shall have sole responsibility for its employee
benefit plans, arrangements and policies for Company
Employees. CFI and the Company intend that, to the
extent possible, Company Employees shall look solely to
the Company and its plans, arrangements and policies for
the provision of employee benefits, except certain
executive benefits discussed in this Agreement, and that
employees of CFI and its Subsidiaries shall look solely
to CFI and its plans, arrangements and policies for the
provision of employee benefits.
2.3 Identification of Company Employees. "Company
Employees" shall be determined as follows:
(a) All persons actively employed by the
Company or a Subsidiary of the Company on the
Distribution Date shall be Company Employees,
unless described in (b).
(b) Persons who accept employment with
CNF Service Company, Inc. as of the
Distribution Date shall not be Company
Employees.
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(c) The persons formerly employed by the
Company or a Subsidiary of the Company who are
listed on a schedule attached hereto shall be
Company Employees.
ARTICLE III
TAX QUALIFIED RETIREMENT PLANS
3.1 Adoption of Company SASP. The Company shall
adopt a Stock and Savings Plan (the "Company SASP") as
follows:
(a) The Company SASP shall be
effective as of the Distribution Date.
(b) Subject to Section 2.1, and to
(c), (d) and (e) below, the Company SASP
shall be in a form satisfactory to the Company
in its sole discretion.
(c) The Company SASP shall be
qualified under Sections 401(a) and 401(k) of
the Code and shall have a related trust
qualified under Section 501(a) of the Code.
The Company shall file, or cause the
administrator of the Company SASP to file, with
the Internal Revenue Service an Application for
Determination with respect to the Company SASP
within the remedial amendment period prescribed
by applicable law and regulations. The Company
shall amend the Company SASP as may be required
by the Internal Revenue Service as a condition
for receipt of a favorable determination letter
within the time required by the Internal
Revenue Service for adoption of such amendment.
(d) The Company SASP shall credit
service performed before the Distribution Date
for CFI and its Subsidiaries under applicable
service crediting rules as if such service were
performed for the Company.
(e) The Company SASP shall provide
for matching contributions invested in Company
common stock, but need not include an employee
stock ownership plan with Company stock
purchased by borrowing.
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3.2 TASP Spinoff. The Consolidated Freightways,
Inc. Thrift and Stock Plan (the "TASP" consists of two
plans: a 401(k) plan (the "TASP 401(k)") and an employee
stock ownership plan (the "TASP ESOP"). Accounts under
the TASP 401(k) are invested at the direction of
participants in several funds, including a fund for
common stock of CFI (the "CFI Stock Fund"). The TASP
ESOP is invested primarily in a special class of
convertible preferred stock of CFI (the "Preferred
Stock") and in common stock of CFI. The TASP ESOP holds
shares of Preferred Stock in a suspense account that
secures loans to the TASP ESOP. Preferred Stock is
converted to common stock of CFI before distribution to
participants or upon transfer to a person other than the
trustee of the TASP. On the Distribution Date, the TASP
will receive common stock of the Company with respect to
its shares of CFI common stock. As soon as practicable
after the Distribution Date, and in any event within 180
days after such date, CFI and the Company shall cause the
portion of the TASP that covers Company Employees to be
spun off from the TASP and to be merged into the Company
SASP. In connection with the spinoff and merger, the
following shall apply:
(a) CFI shall direct the trustee of
the TASP to transfer assets held for the
benefit of Company Employees under the TASP to
the trustee of the Company SASP. The trustee
of the TASP shall make such transfer even
though the Company SASP has not yet received a
favorable determination letter from the
Internal Revenue Service with respect to the
qualification of the Company SASP under Section
401(a) of the Code if the Company demonstrates
to CFI's reasonable satisfaction that the
Company has preserved its right to make
remedial amendments required by the Internal
Revenue Service as a condition of a favorable
determination.
(b) CFI shall cause the fiduciaries
of the TASP to provide an accounting to the
fiduciaries of the Company SASP with respect
to all assets and accounts transferred to the
Company SASP. The accounting shall be
reasonably satisfactory to the Company for
purposes of proper allocation of assets,
earnings, gains and losses to the accounts of
participants under the Company SASP.
(c) CFI shall cause IRS Form 5310A
to be filed with the Internal Revenue Service,
giving notice of the spinoff and merger, at
least 30 days before the date of the spinoff
and merger.
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(d) The Company SASP shall include a
CFI Stock Fund and an investment fund for
common stock of the Company (the "Company Stock
Fund") for participant-directed investment of
accounts. Common stock of CFI held in accounts
of Company Employees in the TASP 401(k) and the
TASP ESOP shall be transferred in kind in the
spinoff and merger and shall be placed
initially in the CFI Stock Fund of the Company
SASP, credited to the participant-directed
accounts of such Company Employees. Common
stock of the Company held in accounts of
Company Employees in the TASP 401(k) as a
result of the Distribution shall be transferred
in kind in the spinoff and merger and shall be
placed initially in the Company Stock Fund of
the Company SASP, credited to the participant-
directed accounts of such Company Employees.
Common stock of the Company held in accounts of
Company Employees in the TASP ESOP as a result
of the Distribution shall be transferred in
kind in the spinoff and merger and shall be
placed in the matching accounts of such Company
Employees in the Company SASP and shall not be
subject to participant-directed investment. The
Company SASP shall provide that participants
may direct the sale of shares out of the CFI
Stock Fund but may not direct investment of any
additional amounts into it. As of the next
calendar quarter end following the third
anniversary of the Distribution Date, the CFI
Stock Fund shall be closed and its assets moved
into another investment fund selected by each
participant or, for participants who fail to
make a selection, by the Administrative
Committee for the Company SASP.
(e) The TASP 401(k) shall include a
Company Stock Fund, in addition to the existing
CFI Stock Fund, for participant-directed
investment of accounts. The Company common
stock distributed on shares of CFI common stock
held for TASP participants who are not Company
Employees in the CFI Stock Fund and in the TASP
ESOP shall become the assets of the Company
Stock Fund. The TASP shall provide that
participants may direct the sale of shares out
of the Company Stock Fund but may not direct
investment of any additional amounts into it.
As of the next calendar quarter end following
the third anniversary of the Distribution Date,
the Company Stock Fund shall be closed and its
remaining assets moved into another investment
fund selected by each participant or, for
participants who fail to make a selection, by
the Administrative Committee for the TASP.
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(f) The accounts to be
transferred from the TASP ESOP to the Company
SASP will include accounts holding Preferred
Stock. Such Preferred Stock will be
automatically converted to Common Stock of CFI
upon transfer to the trustee of the Company
SASP and shall be placed in the CFI Stock Fund
of the Company SASP as provided in (d).
(g) After the spinoff and
merger, the TASP will allocate to Company
Employees dividends and distributions on CFI
capital stock that are paid after the spinoff
to holders as of a date before the spinoff and
matching contributions on their elective
deferrals for the partial quarter before the
Distribution. For purposes of determining the
right to such matching contributions, Company
Employees shall be credited with service for
CFC and its Subsidiaries after the Distribution
as though it were performed for CFI and its
Subsidiaries. Post-spinoff allocations of such
dividends, distributions and matching
contributions shall be transferred to the
trustee of the Company SASP as soon as
practicable after they are made.
3.3 Adoption of Company Pension Plan. The Company
shall adopt a defined benefit pension plan (the "Company
Pension Plan") to cover Company Employees as follows:
(a) The Company Pension Plan shall
be effective as of the Distribution Date.
Company Employees shall start to accrue
benefits under the Company Pension Plan and
shall cease to accrue benefits under the
Consolidated Freightways, Inc. Retirement Plan
(the "CFI Retirement Plan") as of the
Distribution Date.
(b) Subject to Section 2.1, and to
(c), (d) and (e) below, the Company Pension
Plan shall be in a form satisfactory to the
Company in its sole discretion.
(c) The Company Pension Plan shall
be qualified under Section 401(a) of the Code
and have a related trust qualified under
Section 501(a) of the Code. The Company shall
file, or cause the administrator of the Company
Pension Plan to file with the Internal Revenue
Service an Application for Determination with
respect to the Company Pension Plan within the
remedial amendment period prescribed by
applicable law and regulations. The Company
shall amend the Company Pension Plan as may be
required by the Internal Revenue Service as a
condition for receipt of a favorable
determination letter within the time required
by the Internal Revenue Service for adoption of
any such amendment.
Page 6
(d) Benefits with respect to the
transfer described in Section 3.4 below shall
be preserved in accordance with applicable law,
including but not limited to the requirements
of Section 411(d)(6) of the Internal Revenue
Code.
(e) Subject to the transfer of
assets and liabilities provided for under
Section 3.4, the Company Pension Plan shall
credit service performed before the
Distribution Date for CFI and its Subsidiaries
under applicable service crediting rules as if
such service were performed for the Company.
(f) After the transfer described in
Section 3.4, the CFI Retirement Plan shall have
no obligation to Company Employees. The
Company Pension Plan shall be a continuation
of the CFI Retirement Plan with respect to
benefits accrued by Company Employees under the
CFI Retirement Plan. The transfer described in
Section 3.4 shall not be a plan termination.
3.4 Retirement Plan Spinoff. On the Distribution
Date, CFI and the Company shall cause the portion of the
CFI Retirement Plan consisting of the liability for
benefits of Company Employees accrued through the
Distribution Date to be spun off from the CFI Retirement
Plan along with related assets, to become the initial
liabilities and assets of the Company Pension Plan. In
connection with the spinoff and merger, the following
shall apply:
(a) The assets of the CFI Retirement
Plan to be transferred to the Company Pension
Plan will be equal to the lump sum present
value of such liability as of the date of the
spinoff and merger. Present value shall be
based on the accumulated benefit obligation for
benefits already accrued and on an interest
rate selected by CFI with the approval of the
actuary who performed the most recent annual
valuation of the CFI Retirement Plan. CFI
shall direct the trustee of the CFI Retirement
Plan to transfer such assets to the trustee of
the Company Pension Plan.
Page 7
(b) If the Pension Benefit Guaranty
Corporation ("PBGC") asserts that the interest
rate selected pursuant to (a) is not acceptable
for calculating the amount of assets to be
transferred from the CFI Retirement Plan to the
Company Pension Plan, the parties shall make
commercially reasonable efforts to reach an
agreement with the PBGC on the interest rate to
be used. In the event that a lower interest
rate than the rate selected pursuant to (a) is
used in response to such an agreement or to
other actions of the PBGC, the Company shall
pay CFI an amount equal to the increase in the
amount of assets transferred resulting from use
of such lower interest rate. The Company shall
pay such amount in cash in five equal annual
installments including interest at the
prevailing commercial prime lending rate of the
bank with which CFI has its principal banking
relationship on the date of the transfer of CFI
Retirement Plan assets. Such installments
shall commence with the first anniversary of
the date of such transfer.
(c) CFI shall file IRS Form 5310A
with the Internal Revenue Service, giving
notice of the spinoff and merger, at least 30
days before the date of the spinoff and merger.
(d) The trustee of the CFI
Retirement Plan shall make the transfer of
assets under (a) even though the Company
Pension Plan has not yet received a favorable
determination letter with respect to
qualification under Section 401(a) of the
Internal Revenue Code if the Company
demonstrates to CFI's reasonable satisfaction
that the Company has preserved its right to
make remedial amendments required by the
Internal Revenue Service as a condition of a
favorable determination.
(e) The trustee of the CFI
Retirement Plan and any other fiduciary under
the CFI Retirement Plan with applicable
responsibility shall determine and identify the
assets of the CFI Retirement Plan that shall be
transferred to the Company Pension Plan. After
the transfer, the fiduciaries of the Company
Pension Plan shall be responsible for the
custody and investment of Company Pension Plan
assets.
Page 8
(f) If any employees of CNF Service
Company, Inc. (or an affiliate) become employed
by Xxxxxx Xxxxx Xxxxxxx Corporation within
three years after the Distribution Date immedi
ately following termination of employment with
CNF Service Company, Inc. (or such affiliate),
with no intervening period, as a result of
termination of any services under the
Transition Services Agreement between CNF
Service Company, Inc. and the Company dated the
same date as this Agreement, an additional
transfer of assets and liabilities shall be
made from the CFI Retirement Plan to the
Company Retirement Plan. Such transfer shall
consist of the liability for benefits accrued
for such employees under the CFI Retirement
Plan through the date of the employment
termination together with assets equal to the
present value of such liability determined on
the basis described in (a) above. Such
transfer of assets and liabilities shall be
completed within 90 days after the end of such
three year period.
(g) On the date of the transfer of
assets and liabilities, the trustee of the CFI
Retirement Plan shall transfer to the trustee
of the CFC Pension Plan assets equal to a
conservative estimate by the actuary for the
CFI Retirement Plan of the amount provided in
(a) above. When a final determination of the
amount of the transfer is made, the amount
necessary to adjust from the estimate to the
final amount shall be transferred between the
trustees of the plans. The investment risk
with respect to the estimated assets shall pass
from the CFI Retirement Plan to the CFC Pension
Plan on the date they are transferred. The
amount to be transferred in an adjustment to
the final amount shall be credited with
interest for the period from the date of the
transfer of assets and liabilities to the date
of the adjustment transfer at the rate of inter
est selected under (a) above.
3.5 Adoption of Company Common Stock Fund. The
Company shall adopt a frozen defined contribution plan
(the "Company Common Stock Fund") as follows:
(a) The Company Common Stock Fund
shall be effective as of the Distribution Date.
(b) Subject to Section 2.1, and to
(c) below, the Company Common Stock Fund shall
be in a form satisfactory to the Company in its
sole discretion.
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(c) The Company Common Stock Fund
shall be qualified under Section 401(a) of the
Code and have a related trust qualified under
section 501(a) of the Code. The Company shall
file, or cause the administrator of the Company
Common Stock Fund to file, with the Internal
Revenue Service an Application for
Determination with respect to the Company
Common Stock Fund within the remedial amendment
period prescribed by applicable law and
regulations. The Company shall amend the
Company Common Stock Fund as may be required by
the Internal Revenue Service as a condition for
receipt of a favorable determination letter
within the time required by the Internal
Service for the adoption of any such amendment.
(d) Assets of the Company Common Stock
Fund shall be invested in accordance with provisions
of the plan document and the related trust.
3.6 Common Stock Fund Spinoff. On the
Distribution Date, CFI and the Company shall cause the
accounts in the Consolidated Freightways, Inc. Common
Stock Fund (the "CFI Common Stock Fund") to be spun off
from the CFI Common Stock Fund, to become the accounts of
the Company Common Stock Fund. In connection with the
spinoff and merger, the following shall apply:
(a) CFI shall direct the trustee of
the CFI Common Stock Fund to transfer assets
equal in value on the transfer date to the
balance of the accounts for the Company
Employees to the trustee for the Company Common
Stock Fund. The trustee shall transfer a
combination of CFI common stock and the Company
common stock received on the plan's shares of
CFI common stock on the Distribution Date. The
CFI Common Stock Fund shall sell the stock of
the Company held after the spinoff and merger
at a time selected by the appropriate fiduciary
for such plan in its absolute discretion and
use the proceeds of sale to acquire stock of
CFI.
(b) CFI shall cause the fiduciaries
of the CFI Common Stock Fund to provide an
accounting to the fiduciaries of the Company
Common Stock Fund with respect to all assets
and accounts transferred to the Company Common
Stock Fund. The accounting shall be reasonably
satisfactory to the Company for purposes of
proper allocation of assets, earnings, gains
and losses to the accounts of participants
under the Company Common Stock Fund.
Page 10
(c) CFI shall file IRS Form 5310A
with the Internal Revenue Service, giving
notice of the spinoff and merger, at least 30
days before the date of the spinoff and merger.
ARTICLE IV
EXECUTIVE BENEFIT PLANS
4.1 Top-Hat Plans. CFI shall retain the obligation
to pay Company Employees the accounts in the Consolidated
Freightways, Inc. Executive Deferred Compensation Plan
(the "CFI Deferral Plan") accumulated from compensation
deferred up to the Distribution Date. CFI shall retain
the obligation to pay Company Employees benefits accrued
under the Consolidated Freightways, Inc. Supplemental
Retirement and Excess Benefit Plan (the "CFI SERP") as of
the Distribution Date based on service and compensation
up to that date and the offsetting CFI Retirement Plan
benefits accrued as of that date. Assets in the trust
related to the CFI Deferral Plan and the CFI SERP shall
remain in such trust. CFI shall amend the CFI Deferral
Plan and the CFI SERP to provide that events, such as
termination of employment or retirement, triggering
distribution of benefits from the CFI Deferral Plan and
the CFI SERP shall be determined for Company Employees on
the basis of employment with and retirement from the
Company and its Subsidiaries. The Company shall provide
CFI with information about such events after the
Distribution Date to assist CFI in the administration of
the CFI Deferral Plan and the CFI SERP.
4.2 Stock Option Plans. The existing stock
options on CFI common stock shall be handled as follows:
(a) Each outstanding option ("CFI
Option") as of the Distribution Date shall be
adjusted with respect to both the number of shares
subject to such option and the exercise price per
share so that (i) the ratio of exercise price to
stock price remains constant and (ii) the aggregate
"spread" (i.e., the excess of the fair market value
of a share of CFI common stock subject to such
option and the per share exercise price) inherent in
such option after giving effect to the Distribution,
is equal to the aggregate "spread" inherent in such
option prior to giving effect to the Distribution
("CFI Spread").
Page 11
(b) Each outstanding option held by
Company Employees ("CFI-CFC Option") provides
generally that following a termination of employment
from CFI or any of its affiliates, an optionee will
have 90 days to exercise his or her options before
they expire. Prior to the Distribution Date, the
stock option agreements under the Consolidated
Freightways, Inc. Stock Option Plan of 1988 (the
"CFI Stock Plan") that are held by Company Employees
shall be amended to provide that all options shall
become fully vested and exercisable 30 days prior to
the Distribution. Accordingly, effective as of the
Distribution Date, each Company Employee who will be
considered a terminated employee under the CFI Stock
Plan shall have 90 days after such termination of
employment (the "90 Day Period") to exercise his or
her CFI-CFC Options to purchase CFI stock. After
the 90 Day Period such options shall expire.
(c) For purposes of determining the CFI
Spread: (1) the fair market value of a share of CFI
common stock prior to the Distribution (the "CFI Pre-
Distribution Value") shall be deemed to be equal to
the average of the daily closing prices for a share
of CFI common stock on the NYSE for the five trading
days immediately preceding (and including) the
Distribution Date; (2) the fair market value of a
share of CFI common stock following the Distribution
shall be equal to (A) the CFI Pre-Distribution
Value minus (B) the fair market value of a share of
Company common stock; and (3) the fair market value
of a share of Company common stock shall be deemed
to be equal to the average of the daily closing
prices for a share of Company common stock in "when
issued" trading on NASDAQ for the five trading days
immediately preceding (and including) the
Distribution Date.
ARTICLE V
Welfare Benefit Plans
5.1 Medical and Dependant Care Account Benefits.
As of the Distribution Date, the Company shall establish
a Welfare Benefits Plan (the "Company Welfare Plan")
qualified under Section 125 of the Code to provide
medical and dependent care account benefits to Company
Employees covered under the Consolidated Freightways,
Inc. Welfare Benefits Plan (the "CFI Welfare Plan") in
1996 before the Distribution Date, and the following
shall apply:
(a) Subject to 2.1, and to (b) and
(c) below, the Company Welfare Plan shall be in
a form satisfactory to the Company in its sole
discretion.
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(b) The Company Welfare Plan shall
have a first plan year that is a short plan
year beginning on the Distribution Date and
ending December 31, 1996. Compensation
reduction elections by participants under the
CFI Welfare Plan for the 1996 plan year shall
continue in effect as to the Company Welfare
Plan.
(c) For 1996, the Company Welfare
Plan shall provide for medical spending
accounts and dependent care spending accounts
under substantially the same terms as the CFI
Welfare Plan. CFI shall transfer to the
Company the unused account balances of Company
Employees under the CFI Welfare Plan. The
Company shall credit the amounts transferred
with respect to each participant and each
account to corresponding accounts under the
Company Welfare Plan. Claims for reimbursement
from medical and dependent care spending
accounts under the CFI Welfare Plan by Company
Employees that have not been paid as of the
Distribution Date shall be paid by the Company
under the Company Welfare Plan. The fiduciary
of the Company Welfare Plan shall have the
authority to determine whether or not claims
under the Company Welfare Plan are properly
submitted or are payable. Upon request, CFI or
the administrator of the CFI Welfare Plan
shall deliver or make available to the Company
and the administrator of the Company Welfare
Plan all records of participants that are
relevant to administration of the Company
Welfare Plan.
5.2 Health Plan Deductibles and Coverage Limits,
COBRA Coverage. The Company shall adopt health plans to
cover Company Employees effective as of the Distribution
Date and the following shall apply:
(a) On and after the Distribution
Date neither CFI nor any of the welfare benefit
plans sponsored by CFI shall provide coverage
to Company Employees.
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(b) For the period from the
Distribution Date to December 31, 1996, Company
Employees who were participants under the
Consolidated Freightways, Inc. Health Plan (the
"CFI Health Plan") as of the Distribution Date
shall be credited with amounts paid under the
CFI Health Plan for plan deductibles against
any corresponding deductibles under a Company
plan health or medical plan. Benefits provided
under the CFI Health Plan to a Company Employee
with respect to 1996 claims will be counted
toward any coverage limits applicable to a
Company Employee under any Company health or
medical plan for the coverage period ending
December 31, 1996. For purposes of this
paragraph (b), deductibles and benefits paid
for eligible dependants of Company Employees
shall be taken into account.
(c) The Company shall provide group
health plan continuation coverage as required
under Sections 601 through 607 of ERISA ("COBRA
coverage") for Company Employees and related
"qualified beneficiaries" for "qualifying
events" that occur before or after the
Distribution Date.
5.3 Retiree Health Benefits. The Company and its
Subsidiaries shall be obligated to provide health
benefits to retired Company Employees, with the
obligation applying to the entity that employed the
retiree at the time of retirement. To the extent
permitted by the Company's Health Plan and applicable
law, the Company may eliminate or change retiree health
benefits.
5.4 Long-Term Disability Benefits. The Company and
its Subsidiaries shall be obligated to provide long-term
disability benefits to disabled Company Employees, with
the obligation applying to the entity the disabled
individual was employed by at the time of disability.
5.5 Severance Benefits. A termination of
employment with the Company, CFI, or any subsidiary of
the Company or CFI immediately followed by employment
with any other such entity shall not be deemed a
severance of employment for purposes of any policy, plan,
program or agreement that provides for the payment of
severance, salary continuation or similar benefits. If
any person employed by Xxxxxx Xxxxx Xxxxxxx Corporation
immediately prior to the Distribution Date loses such
employment simultaneously with the Distribution Date as a
direct result of the transaction provided for by the
Distribution Agreement and for no other reason and is not
employed by CNF Service Company, Inc. or another CFI
Subsidiary, CFI shall be responsible for any severance,
salary continuation or similar benefits payable upon such
loss of employment.
5.6 Other Welfare Benefits. Except as otherwise
provided in 2.1 and this Article V, welfare benefits
provided by CFI and its Subsidiaries and by the Company
and its Subsidiaries for their respective employees after
the Distribution Date shall not be affected by each other
and each company may provide or elect not to provide
benefits in its sole discretion.
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ARTICLE VI
Miscellaneous
6.1 Rights of Employees. This Agreement is not
intended to give any individual employee or former
employee of CFI or the Company or any of their
Subsidiaries any personal right or interest. No
employee, shall have any right under this Agreement to
maintain employment with CFI, the Company or any
Subsidiary, become employed by CFI, the Company or any
Subsidiary or accrue any benefit with respect to
employment. No employee, former employee, beneficiary or
dependent shall have any right to be designated as a
Company Employee or to be retained as the responsibility
of CFI.
6.2 Entire Agreement. This Agreement, together
with the Distribution Agreement, embodies the entire
Agreement and understanding of the parties with respect
to the matters provided for herein and shall supersede
any and all prior agreements, arrangements and
understanding relating to such matters. No amendment,
waiver of compliance with any provision or condition
hereof or consent pursuant to this Agreement shall be
effective unless evidenced by an instrument in writing
signed by the parties.
6.3 Governing Law. The interpretation and
performance of the Agreement shall be governed by the
laws of the state of California without regard to the
choice of law provisions thereof.
6.4 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in
writing and shall be delivered by hand, mailed by
registered or certified mail (return receipt requested),
or sent by cable, telegram, telecopy (confirmed by
regular, first-class mail), to the parties at the
following addresses (or at such other addresses for a
party as shall be specified by like notice) and shall be
deemed given on the date on which such notice is
received:
if to CFI:
Consolidated Freightways, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: General Counsel
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if to the Company:
Consolidated Freightways Corporation
000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: General Counsel
6.5 Counterparts. This Agreement may be executed
in one or more counterparts, each of which will be deemed
an original but all of which together will constitute one
and the same instrument.
6.6 Termination. This Agreement shall be
terminated if the Distribution Agreement is terminated or
if the distribution of Company stock fails to occur. If
the Agreement terminates under this Section 6.6, no party
shall have any liability to any person under the
Agreement.
6.7 Successors and Assigns. This Agreement and all
of the provisions hereof shall be binding upon and inure
to the benefit of the parties and their respective
successors and permitted assigns.
6.8 Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of
reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
6.9 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other
jurisdiction. Without prejudice to any rights or
remedies otherwise available to any party hereto, each
party hereto acknowledges that damages would be an
inadequate remedy for any breach of the provisions of
this Agreement and agrees that the obligations of the
parties hereunder shall be specifically enforceable.
6.10 Further Assurances. In addition to the actions
specifically provided for elsewhere in this Agreement,
each of the parties hereto will use its reasonable
efforts to:
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(a) Execute and deliver
such further documents and take such
other actions as any other party may
reasonably request in order to
effectuate the purposes of this
Agreement and to carry out the terms
hereof, and
(b) Take, or cause to be
taken, all actions, and to do, or
cause to be done, all things,
reasonably necessary, proper or
advisable under applicable laws,
regulations and agreements or
otherwise to consummate and make
effective the transactions
contemplated by this Agreement,
including, without limitation, using
its reasonable efforts to obtain any
consents and approvals and make any
filings and applications necessary or
desirable in order to consummate the
transactions contemplated by this
Agreement.
6.11 Dispute Resolution. Any dispute between the
parties concerning the performance of this Agreement
shall be resolved in accordance with the provisions of
the ADR Agreement.
CFI CONSOLIDATED FREIGHTWAYS, INC.
By /s/X.X. XXXXXXX
President and CEO
Executed: November 25, 1996
Company CONSOLIDATED FREIGHTWAYS CORPORATION
By /s/S.D. XXXXXXXX
Senior Vice President and
General Counsel
Executed: December 2, 1996
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