Exhibit 10.4
SEVERANCE AGREEMENT
THIS AGREEMENT is made as of June 3, 2005 by and between Con-Way
Transportation Services, Inc. (the "Company"), a wholly owned subsidiary of
CNF Inc., a Delaware corporation ("CNF"), and Xxxxx X. XxXxxxxx (the
"Executive").
WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.
2. Term of Agreement. The Term of this Agreement shall commence on June 3,
2005 and shall continue in effect through December 31, 2006; provided,
however, that commencing on January 1, 2006, and each January 1
thereafter, the Term shall automatically be extended for one additional
year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend the Term;
and further provided, however, that if a Change in Control of the
Company shall have occurred during the Term, the Term shall expire no
earlier than twenty-four (24) months beyond the month in which such
Change in Control of the Company occurred.
Notwithstanding anything in this Agreement to the contrary, unless a
Change in Control of the Company has previously occurred, this Agreement
shall terminate, and be of no further force or effect, upon the
occurrence of a "Change in Control" of CNF (within the meaning of
Section 15 of the severance agreement between the Executive and CNF
dated as of June 3, 2005 (the "CNF Severance Agreement")), provided that
the CNF Severance Agreement remains in effect at the time of such Change
in Control of CNF.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 4 hereof, the Company agrees,
under the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits described herein.
Except as provided in Section 9.1 hereof, no Severance Payments shall be
payable under this Agreement unless there shall have been (or, under the
terms of the second paragraph of Section 6.1 hereof, there shall be
deemed to have been) a termination of the Executive's employment with
the Company following a Change in Control of the Company and during the
Term. This Agreement shall not be construed as creating an express or
implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Company, the Executive (i) shall
not have any right to be retained in the employ of the Company, and (ii)
shall remain subject to discharge to the same extent as if this
Agreement had not been entered into by the Company and the Executive.
4. Executive's Covenants. The Executive agrees that, subject to the terms
and conditions of this Agreement, in the event of a Potential Change in
Control of the Company during the Term, the Executive will remain in the
employ of the Company until the earliest of (i) a date which is six (6)
months from the date of such Potential Change in Control of the Company,
(ii) the date of a Change in Control of the Company, (iii) the date of
termination by the Executive of the Executive's employment for Good
Reason or by reason of death, Disability or Retirement or (iv) the
termination by the Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control of the Company and during the Term,
during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of
incapacity due to disability, including physical or mental illness,
the Company shall pay the Executive's full salary to the Executive
at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the
Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period
(other than any disability plan), until the Executive's employment
is terminated by the Company for Disability.
5.2 If the Executive's employment shall be terminated for any reason
following a Change in Control of the Company and during the Term,
the Company shall pay the Executive's full salary to the Executive
through the Date of Termination at the rate in effect immediately
prior to the Date of Termination or, if higher, the rate in effect
immediately prior to the Change in Control of the Company, together
with all compensation and benefits payable to the Executive through
the Date of Termination under the terms of CNF's or the Company's
compensation and benefit plans, programs or arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
Change in Control of the Company.
5.3 If the Executive's employment shall be terminated for any reason
following a Change in Control of the Company and during the Term,
the Company shall pay, or shall make satisfactory arrangements with
CNF to pay, to the Executive the Executive's normal post-
termination compensation and benefits as such payments become due
(other than severance payments under any severance plan as in
effect immediately prior to the Date of Termination). Such post-
termination compensation and benefits shall be determined under,
and paid in accordance with, the CNF's or Company's retirement,
insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect
immediately prior to the Change in Control of the Company.
6. Severance Payments.
6.1 If the Executive's employment is terminated following a Change in
Control of the Company and during the Term, other than (A) by the
Company for Cause, (B) by reason of death or Disability, or (C) by
the Executive without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits,
described in this Section 6.1 ("Severance Payments") and Section
6.2, in addition to any payments and benefits to which the
Executive is entitled under Section 5 hereof; provided, however,
that the Executive shall not be entitled to the Severance Payments
unless and until the Executive (or, in the event of the Executive's
death, the executor, personal representative or administrator of
the Executive's estate) has signed a written waiver and release
substantially in the form set forth on Exhibit A hereto.
For purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated following a Change in Control of the
Company by the Company without Cause or by the Executive with Good
Reason, if (i) during the Term the Executive's employment is
terminated by the Company without Cause following a Potential
Change in Control of the Company but prior to a Change in Control
of the Company (whether or not a Change in Control of the Company
ever occurs) and such termination was at the request or direction
of a Person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control of the
Company, (ii) during the Term the Executive terminates his
employment for Good Reason following a Potential Change in Control
of the Company but prior to a Change in Control of the Company
(whether or not a Change in Control of the Company ever occurs) and
the circumstance or event which constitutes Good Reason occurs at
the request or direction of such Person or (iii) during the Term
the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in
Control of the Company (whether or not a Change in Control of the
Company ever occurs).
(A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of
any severance benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum severance
payment, in cash, equal to three times the sum of (i) the
Executive's annual base salary as in effect immediately prior
to the Date of Termination or, if higher, in effect
immediately prior to the Change in Control and (ii) the
average annual bonus earned by the Executive pursuant to any
annual bonus or incentive plan maintained by the Company in
respect of the three fiscal years ending immediately prior to
the fiscal year in which occurs the Change in Control.
(B) For the thirty-six (36) month period immediately following the
Date of Termination, the Company shall arrange to provide the
Executive and his dependents life, disability and accident
benefits substantially similar to those provided to the
Executive and his dependents immediately prior to the Date of
Termination or, if more favorable to the Executive, those
provided to the Executive and his dependents immediately prior
to the Change in Control, at no greater cost to the Executive
than the cost to the Executive immediately prior to such Date
of Termination or Change in Control; provided, however, that
any across the board changes to life, disability or accident
benefits similarly affecting all or substantially all
employees of the Company and any entity in control of the
Company shall not be deemed a breach of this Section 6.1(B).
Benefits otherwise receivable by the Executive pursuant to
this Section 6.1(B) shall be reduced to the extent benefits of
the same type are received by or made available to the
Executive during the thirty-six (36) month period following
the Executive's termination of employment (and any such
benefits received by or made available to the Executive shall
be reported to the Company by the Executive); provided,
however, that the Company shall reimburse the Executive for
the excess, if any, of the cost of such benefits to the
Executive over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive,
immediately prior to the Change in Control. If the Executive
dies during the thirty-six (36) month period following the
Date of Termination, life, disability and accident benefit
coverage of the Executive's dependents shall continue for the
remainder of the thirty-six (36) month period.
(C) For the thirty-six (36) month period immediately following the
Date of Termination, the Company shall provide health and
dental benefits to the Executive and his dependents under the
terms of the Company's health and dental plan as in effect
immediately prior to the Date of Termination or, if more
favorable to the Executive, immediately prior to the Change in
Control. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1(C) shall be reduced to the extent
benefits of the same type are received by or made available to
the Executive following the Executive's termination of
employment (and any such benefits received by or made
available to the Executive shall be reported to the Company by
the Executive); provided, however, that the Company shall
reimburse the Executive for the excess, if any, of the cost of
such benefits to the Executive over such cost immediately
prior to the Date of Termination or, if more favorable to the
Executive, immediately prior to the Change in Control. If the
Executive dies at a time when health and dental benefits are
being provided under this Section 6.1(C) to the Executive's
dependents, the Company shall continue to provide the
dependents with health and dental benefits for the remainder
of the thirty-six (36) month period on the same basis as if
the Executive had survived throughout that period.
6.2 (A) Whether or not the Executive becomes entitled to the Severance
Payments, if any of the payments or benefits received or to be
received by the Executive in connection with a Change in
Control of the Company or the Executive's termination of
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control of the
Company or any Person affiliated with the Company or such
Person) (such payments or benefits, excluding the Gross-Up
Payment, being hereinafter referred to as the "Total
Payments") will be subject to the Excise Tax, the Company
shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Total Payments and
any federal, state and local income and employment taxes and
Excise Tax upon the Gross-Up Payment, shall be equal to the
Total Payments.
(B) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such
Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of Section 280G(b)(2)
of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected
by the accounting firm which was, immediately prior to the
Change in Control of the Company, the Company's independent
auditor (the "Auditor"), such payments or benefits (in whole
or in part) should not constitute parachute payments,
including by reason of Section 280G(b)(4)(A) of the Code, (ii)
all "excess parachute payments" within the meaning of Section
280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in excess of the
Base Amount allocable to such reasonable compensation, or
should otherwise not be subject to the Excise Tax and (iii)
the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income
tax at the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate
of taxation in the state and locality of the Executive's
residence on the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 6.2), net of the
maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally determined to be
less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the Executive shall repay to
the Company, within five (5) business days following the time
that the amount of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable
to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local
income and employment taxes imposed on the Gross-Up Payment
being repaid by the Executive, to the extent that such
repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive's taxable income
and wages for purposes of federal, state and local income and
employment taxes). In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder
in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such
excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within five (5)
business days following the time that the amount of such
excess is finally determined. The Executive and the Company
shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect
to the Total Payments.
6.3 The payments provided in subsection (A) of Section 6.1 hereof and
in subsections (A) and (B) of Section 6.2 hereof shall be made not
later than the fifth day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to
the Executive on such day an estimate, as determined in good faith
by the Company or, in the case of payments under Section 6.2
hereof, in accordance with Section 6.2 hereof, of the minimum
amount of such payments to which the Executive is clearly entitled
and shall pay the remainder of such payments (together with
interest on the unpaid remainder (or on all such payments to the
extent the Company fails to make such payments when due) at 120% of
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In the event
that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall be paid
by the Executive to the Company not later than the fifth (5th)
business day after demand by the Company. At the time that
payments are made under this Agreement, the Company shall provide
the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other
advice the Company has received from Tax Counsel, the Auditor or
other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).
6.4 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement
or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery of the Executive's
written requests for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.1 Notice of Termination. After a Change in Control of the Company
and during the Term, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other
party hereto in accordance with Section 10 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further,
a Notice of Termination for Cause is required to include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change
in Control of the Company and during the Term, shall mean (i) if
the Executive's employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall not be
less than fifteen (15) days nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given).
8. No Mitigation. The Company agrees that, if the Executive's employment
with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to Section 6
hereof. Further, the amount of any payment or benefit provided for in
this Agreement (other than to the extent provided in Section 6.1(B) and
6.1(C) hereof) shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the
Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by law upon any successor to
the Company, CNF and the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of CNF and the Company to obtain such
assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control of the
Company, except that, for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be
deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts which, by
their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or
administrators of the Executive's estate.
10. Notices. All notices and other communications provided for in this
Agreement (i) shall be in writing, (ii) shall be hand delivered, sent by
overnight courier or by United States registered mail, return receipt
requested and postage prepaid, addressed, in the case of the Executive,
to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the other in
writing in accordance herewith, and (iii) shall be effective only upon
actual receipt.
To the Company:
Con-Way Transportation Services, Inc.
000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Vice President - Controller
11. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or of any lack
of compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to
the subject matter hereof which have been made by either party;
provided, however, that this Agreement shall supersede any written
agreement setting forth the terms and conditions of the Executive's
employment with the Company only in the event that the Executive's
employment with the Company is terminated on or following a Change in
Control of the Company, by the Company other than for Cause or by the
Executive for Good Reason. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of Michigan. All references to sections of the Exchange Act or
the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law
and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under this Agreement which
by their nature may require either partial or total performance after
the expiration of the Term (including, without limitation, those under
Sections 6 and 7 hereof) shall survive such expiration.
12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Settlement of Disputes; Arbitration.
14.1 All claims by the Executive for benefits under this Agreement shall
be directed to and determined by the Board and shall be in writing.
Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a
reasonable opportunity to the Executive for a review of the
decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days
after notification by the Board that the Executive's claim has been
denied.
14.2 Any further dispute or controversy arising under or in connection
with this Agreement shall be finally settled exclusively by
arbitration in Ann Arbor, Michigan, in accordance with the rules of
the American Arbitration Association then in effect; provided,
however, that the evidentiary standards set forth in this Agreement
shall apply. Judgment may be entered on the arbitrator's award in
any court having jurisdiction.
15. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(A) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
(B) "Auditor" shall have the meaning set forth in Section 6.2 hereof.
(C) "Base Amount" shall have the meaning set forth in Section
280G(b)(3) of the Code.
(D) "Board" shall mean the Board of Directors of the Company.
(E) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the
Company (other than any such failure resulting from the Executive's
incapacity due to disability, including physical or mental illness
or any such actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive pursuant to
Section 7.1 hereof) after a written demand for substantial
performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to the
Company or its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, no act, or failure to
act, on the Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company. In the event of a
dispute concerning the application of this provision, no claim by
the Company that Cause exists shall be given effect unless the
Company establishes to the Board and, in the event of an
arbitration as contemplated by Section 14.2, to the arbitrator, by
clear and convincing evidence that Cause exists.
(F) A "Change in Control of the Company" means the occurrence of any
one of the following events:
(I) a sale by CNF of the then outstanding shares of capital stock
of the Company having more than 50% of the then existing
voting power of all outstanding securities of the Company,
whether by merger, consolidation or otherwise;
(II) the sale of all or substantially all of the assets of the
Company; or
(III)any other transaction or course of action engaged in, directly
or indirectly, by the Company or CNF that has a substantially
similar effect as the transactions of the type referred to in
clause (I) or (II) above.
The foregoing notwithstanding, a Change in Control of the Company
shall not be deemed to have occurred (A) by reason of the
occurrence of a "Change in Control" of CNF (within the meaning of
Section 15 of the CNF Severance Agreement), (B) except in the case
of a transaction described in clause (II) above, so long as CNF or
any of its Affiliates, individually or collectively, own the then
outstanding shares of capital stock of the Company having 50% or
more of the then existing voting power of all outstanding
securities of the Company, (C) in the event of the sale of shares
of capital stock of the Company to any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any other Affiliate of CNF, or (D) in the event of the sale or
distribution of shares of capital stock of the Company to
shareholders of CNF, or the sale of assets of the Company to any
corporation or other entity owned, directly or indirectly, by the
shareholders of CNF, in either case in substantially the same
proportions as their ownership of stock in CNF.
(G) "CNF" shall mean CNF Inc. and any successor to its business and/or
assets.
(H) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(I) "Company" shall mean Con-Way Transportation Services, Inc. and,
except in determining under Section 15(F) hereof whether or not any
Change in Control of the Company has occurred, shall include any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise. In
addition, when used in the context of the Executive's employment,
"Company" shall mean the Company or any of its subsidiaries.
(J) "Common Stock" shall mean the common stock, par value $1.00 per
share, of the Company.
(K) "Date of Termination" shall have the meaning set forth in Section
7.2 hereof.
(L) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the
Executive's incapacity due to disability, including physical or
mental illness, the Executive shall have been absent from the full-
time performance of the Executive's duties with the Company for a
period of six (6) consecutive months, the Company shall have given
the Executive a Notice of Termination for Disability, and, within
thirty (30) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of
the Executive's duties.
(M) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(N) "Excise Tax" shall mean any excise tax imposed under Section 4999
of the Code.
(O) "Executive" shall mean the individual named in the first paragraph
of this Agreement.
(P) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control of the Company
and during the Term of any one of the following acts by the
Company, or failures by the Company to act, unless such act or
failure to act is corrected within 30 days of receipt by the
Company of notice of the Executive's intent to terminate for Good
Reason hereunder:
(I) the failure of the successor company, following the Change in
Control of the Company, to assume this Agreement and all
obligations hereunder, as of the date of such Change in
Control of the Company;
(II) the assignment to the Executive of any duties inconsistent
with the Executive's status as an executive of the Company or
a substantial adverse alteration in the nature or status of
the Executive's responsibilities from those in effect
immediately prior to the Change in Control of the Company;
(III)a reduction by the Company in the Executive's annual base
salary (except for across-the-board salary reductions
similarly affecting all executives of the Company and all
executives of any Person in control of the Company) or
incentive compensation opportunity (both short-term and long-
term, valued in a manner consistent with the valuation
methodology used by the Company prior to the Change in Control
of the Company), each as in effect immediately prior to the
Change in Control of the Company or as the same may thereafter
be increased from time to time;
(IV) the relocation of the Executive's principal place of
employment to a location that results in an increase in the
Executive's one way commute of at least 50 miles more than the
Executive's one way commute immediately prior to the Change in
Control of the Company, except for required travel on the
Company's business to an extent substantially consistent with
the Executive's business travel obligations immediately prior
to the Change in Control of the Company;
(V) the failure by the Company to pay to the Executive when due
any portion of the Executive's current compensation;
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed
by the Executive under any of CNF's or the Company's pension,
savings, life insurance, medical, health and accident, or
disability plans in which the Executive was participating
immediately prior to the Change in Control of the Company
(except for across the board changes similarly affecting all
or substantially all employees of the Company and any entity
in control of the Company), the taking of any other action by
the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any
material fringe benefit enjoyed by the Executive immediately
prior to the Change in Control of the Company, or the failure
by the Company to provide the Executive with the number of
paid vacation days to which the Executive is entitled.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's
incapacity due to disability, including physical or mental
illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to,
any act or failure to act constituting Good Reason hereunder.
(Q) "Gross-Up Payment" shall have the meaning set forth in Section 6.2
hereof.
(R) "Notice of Termination" shall have the meaning set forth in Section
7.1 hereof.
(S) "Pension Plan" shall mean any tax-qualified, supplemental or excess
benefit pension plan maintained by CNF or the Company and any other
plan or agreement entered into between the Executive and the
Company which is designed to provide the Executive with
supplemental retirement benefits.
(T) "Person" shall mean any person, as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than (A) the Company or
its Affiliates, (B) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or its
Affiliates, and (C) any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of the Common Stock).
(U) "Potential Change in Control of the Company" shall be deemed to
have occurred if:
(I) CNF or the Company enters into an agreement, the consummation
of which would result in the occurrence of a Change in Control
of the Company; or
(II) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control of the
Company has occurred.
(W) "Retirement" shall be deemed the reason for the termination by the
Executive of the Executive's employment if such employment is
terminated in accordance with the Company's retirement policy,
including early retirement, generally applicable to its salaried
employees.
(X) "Severance Payments" shall have the meaning set forth in Section
6.1 hereof.
(Y) "Tax Counsel" shall have the meaning set forth in Section 6.2
hereof.
(Z) "Term" shall mean the period of time described in Section 2 hereof
(including any extension, continuation or termination described
therein).
(AA) "Total Payments" shall mean those payments so described in Section
6.2 hereof.
CON-WAY TRANSPORTATION SERVICES, INC.
By:__________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
EXECUTIVE
_____________________________________
Name: Xxxxx X. XxXxxxxx
Address:
Severance Agreement XxXxxxxx CTS 2005
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In consideration of, and subject to, the payment to be made to me by Con-Way
Transportation Services, Inc. (the "Company") of the "Severance Payments" (as
defined in the Severance Agreement, dated as of June 3, 2005, entered into
between me and the Company (the "Agreement")), I hereby waive any claims I
may have for employment or re-employment by the Company or any subsidiary of
the Company after the date hereof, and I further agree to and do release and
forever discharge the Company or any subsidiary of the Company, and their
respective past and present officers, directors, shareholders, insurers,
employees and agents from any and all claims and causes of action, known or
unknown, arising out of or relating to my employment with the Company or any
subsidiary of the Company, or the termination thereof, including, but not
limited to, wrongful discharge, breach of contract, tort, fraud, the Civil
Rights Acts, Age Discrimination in Employment Act, Employee Retirement Income
Security Act of 1974, Americans with Disabilities Act, or any other federal,
state or local legislation or common law relating to employment or
discrimination in employment or otherwise.
Notwithstanding the foregoing or any other provision hereof, nothing in this
Waiver and Release of Claims shall adversely affect (i) my rights under the
Agreement; (ii) my rights to benefits other than severance benefits under
plans, programs and arrangements of the Company or any subsidiary or parent
of the Company which are accrued but unpaid as of the date of my termination;
or (iii) my rights to indemnification under any indemnification agreement,
applicable law and the certificates of incorporation and bylaws of the
Company and any subsidiary or parent of the Company, and my rights under any
director's and officers' liability insurance policy covering me.
I acknowledge that I have signed this Waiver and Release of Claims
voluntarily, knowingly, of my own free will and without reservation or
duress, and that no promises or representations have been made to me by any
person to induce me to do so other than the promise of payment set forth in
the first paragraph above and the Company's acknowledgment of my rights
reserved under the second paragraph above.
I understand that this release will be deemed to be an application for
benefits under the Agreement and that my entitlement thereto shall be
governed by the terms and conditions of the Agreement and any applicable
plan. I expressly hereby consent to such terms and conditions.
I acknowledge that I have been given not less than forty-five (45) days to
review and consider this Waiver and Release of Claims (unless I have signed a
written waiver of such review and consideration period), and that I have had
the opportunity to consult with an attorney or other advisor of my choice and
have been advised by the Company to do so if I choose. I may revoke this
Waiver and Release of Claims seven days or less after its execution by
providing written notice to the Company.
I acknowledge that it is my intention and the intention of the Company in
executing this Waiver and Release of Claims that the same shall be effective
as a bar to each and every claim, demand and cause of action hereinabove
specified. In furtherance of this intention, I hereby expressly waive any
and all rights and benefits conferred upon me by the provisions of SECTION
1542 OF THE CALIFORNIA CIVIL CODE, to the extent applicable to me, and
expressly I consent that this Waiver and Release of Claims shall be given
full force and effect according to each and all of its express terms and
provisions, including as well those related to unknown and unsuspected
claims, demands and causes of action, if any, as well as those relating to
any other claims, demands and causes of action hereinabove specified.
SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR."
I acknowledge that I may hereafter discover claims or facts in addition to or
different from those which I now know or believe to exist with respect to the
subject matter of this Waiver and Release of Claims and which, if known or
suspected at the time of executing this Waiver and Release of Claims, may
have materially affected this settlement.
Finally, I acknowledge that I have read this Waiver and Release of Claims and
understand all of its terms.
_________________________
Signature of Executive
_________________________
Print Name
_________________________
Date Signed
