Schedule to Form of Menlo Worldwide Forwarding, Inc. Severance Agreement
As of the date hereof, each of the following officers of Menlo Worldwide
Forwarding, Inc. ("MWFI"), a subsidiary of CNF Inc., is a party to a
Severance Agreement with MWFI in the form attached:
Date of Agreement Name of Officer
November 3, 2000 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
October 9, 2000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SEVERANCE AGREEMENT
THIS AGREEMENT, dated as of DATE, is made by and between ▇▇▇▇▇
Air Freight Corporation (the "Company"), a wholly owned
subsidiary of CNF Transportation Inc., a Delaware corporation
("CNF"), and NAME (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 the date hereof and shall continue in effect
through December 31, 200X; provided, however, that
commencing on January 1, 200X, 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 DATE (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, CNF's or the 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 two 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 of the Company and
(ii) the highest of (1) the average annual bonus
earned by the Executive pursuant to any annual
bonus or incentive plan maintained by CNF or the
Company in respect of the three fiscal years
ending immediately prior to the fiscal year in
which occurs the Date of Termination, (2) the
average annual bonus earned by the Executive
pursuant to any such plan in respect of the three
fiscal years ending immediately prior to the
fiscal year in which occurs the Change in Control
of the Company or (3) the target annual bonus in
effect for the Executive for the fiscal year in
which occurs the Date of Termination.
(B) For the twenty-four (24) 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 of the Company, at no
greater cost to the Executive than the cost to the
Executive immediately prior to such Date of
Termination or Change in Control of the Company;
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 twenty-four
(24) 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 of the Company. If the Executive dies
during the twenty-four (24) 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
twenty-four (24) month period.
(C) For the twenty-four (24) 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 CNF's or 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 of the Company. 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 of the Company. 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 twenty-four (24)
month period on the same basis as if the Executive
had survived throughout that period.
(D) The Company shall provide outplacement
services determined by the Company to be suitable
to the Executive's position for a period of one
(1) year following the Executive's Date of
Termination.
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), plus interest on the amount of such
repayment at 120% of the rate provided in Section
1274(b)(2)(B) of the Code. 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 subsections (A) and (C)
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
constitute a loan by the Company to the Executive,
payable on the fifth (5th) business day after demand by
the Company (together with interest at 120% of the rate
provided in Section 1274(b)(2)(B) of the Code). 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 or 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:
▇▇▇▇▇ Air Freight Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Corporate Counsel
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 California. 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 Redwood City,
California, 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 Transportation 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 ▇▇▇▇▇ Air Freight Corporation
and, except in determining under Section 15(G) 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.
(V) "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.
(W) "Severance Payments" shall have the meaning set
forth in Section 6.1 hereof.
(X) "Tax Counsel" shall have the meaning set forth in
Section 6.2 hereof.
(Y) "Term" shall mean the period of time described in
Section 2 hereof (including any extension, continuation
or termination described therein).
(Z) "Total Payments" shall mean those payments so
described in Section 6.2 hereof.
17chw3189r
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In consideration of, and subject to, the payment to be made to me
by ▇▇▇▇▇ Air Freight Corporation (the "Company") of the
"Severance Payments" (as defined in the Severance Agreement,
dated as of DATE, 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.
