Exhibit 99.1
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release ("Agreement") is between CNF Inc.
("Company") and Eberhard ▇. ▇. ▇▇▇▇▇▇▇▇▇ ("Executive"). The parties agree
that the effective date of this Agreement ("Effective Date") shall be as
provided in Section 7, below.
WHEREAS Executive informed Company during the early part of 2004 that he was
planning to retire;
WHEREAS Company requested that Executive delay his retirement to a date
agreeable to Company to assist Company in achieving certain objectives, with
a general understanding that upon completion of Company's assignments,
Company would negotiate with Executive to reach agreement on an acceptable
severance arrangement;
WHEREAS Executive delayed his retirement at Company's request and performed
to Company's full satisfaction;
WHEREAS, following Executive's performance to Company's full satisfaction,
Company and Executive engaged in negotiations and concluded an agreement for
severance benefits to be provided by Company in consideration of Executive's
performance and delayed retirement; and
WHEREAS Executive has now decided to retire before the end of 2004;
NOW THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Compensation to Executive. Company shall provide to Executive:
a. A special severance payment in the total gross amount of Eight
Hundred Fifty Thousand dollars ($850,000), less withholdings
required by law, payable in a lump sum through Company's payroll
system, through direct deposit to Executive's designated bank
account, on or before December 27, 2004;
b. Transfer of title of the automobile provided by Company for
Executive's use, as soon as practicable following the Effective
Date; provided, however, that Executive shall be responsible for
all licensing, registration and other such fees and costs
associated with such transfer, as well as any income tax
attributable to Executive as a result of the transfer of such
title; and
c. COBRA notice within the time required by law following Executive's
last day on Company's payroll.
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The parties agree that, except as expressly provided herein, nothing in
this Agreement shall be construed to limit, diminish, enlarge, or
otherwise modify any rights Executive has under Company's vacation/PTO
policies as well as Company's retirement plans, supplemental excess
retirement plan, health plan, life insurance plans, long term care
insurance plan, existing compensation plans, or discontinued plans in
which Executive was a participant, but as to which Executive retains
rights, including Company's: Value Management Plan for the three-year
cycles ending December 31, 2004, December 31, 2005, and December 31,
2006; Deferred Compensation Plan for the years 1993 through 2004,
inclusive; Stock Appreciation Rights Plan; Long Term Incentive Plan of
1988; and 1997 Equity and Incentive Plan, and equity grants thereunder.
2. Commitments by Executive. Executive agrees that:
a. He will not at any time, without the prior written consent of
Company, either directly or indirectly use, divulge or communicate
to any person or entity, in any manner, any privileged,
confidential, or proprietary information of any kind concerning any
matters affecting or relating to Company's or its subsidiaries' or
affiliates' business, except if the disclosure (i) is required by
law or (ii) disclosure involves information which had been lawfully
revealed to Executive by a third party having no attorney-client or
other confidentiality obligation to Company. This prohibition
against disclosure includes, but is not limited to, Company's, and
its affiliates' legal matters, technical data, systems and
programs, financial and planning data, business development or
strategic plans or data, marketing strategies, software
development, product development, pricing, customer information,
trade secrets, personnel information, and other privileged or
confidential business information. Executive agrees to take every
reasonable step to protect such privileged, confidential, or
proprietary information from being disclosed to third parties. If
Executive is required, or believes he may be required to disclose
such privileged, confidential, or proprietary information pursuant
to subpoena or other legal process, he will give Company prompt
notice so that Company may object or take steps to prevent such
disclosure; and
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b. He will, for so long as Company may require, fully cooperate with
Company in handling its legal and other matters in which he was
involved or about which he has knowledge, such as answering
inquiries from Company or its counsel, testifying in depositions
and trials, and engaging in other efforts on behalf of Company and
its subsidiaries and affiliated companies. Executive will make
himself available upon reasonable notice at reasonable times and
places in order to prepare for giving testimony, and to testify at
deposition, trial or other legal proceedings, without Company
having to serve him with a subpoena. Executive expressly agrees
that he will not be entitled to compensation, of any type or in any
amount, for any of his time expended in such proceedings; provided,
however, that Company agrees to reimburse Executive for reasonable
out-of-pocket costs and expenses he incurs as a result of his
obligation to cooperate with Company as provided herein.
3. Release. In consideration of the foregoing benefits, and for other
valuable consideration, Executive and his representatives, heirs,
successors, and assigns do hereby completely release and forever
discharge Company and any present or past subsidiaries and affiliates,
and its and their present and former shareholders, officers, directors,
agents, employees, attorneys, insurers, successors, and assigns
(collectively, "Released Parties") from all claims, rights, demands,
actions, obligations, liabilities, and causes of action of every kind and
character, known or unknown, mature or unmatured, which Executive may now
have or has ever had, whether based on tort, contract (express or
implied), or any federal, state, or local law, statute, public policy, or
regulation (collectively, "Released Claims"). By way of example and not
in limitation of the foregoing, Released Claims shall include any claims
arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act and
any and all similar claims arising under any statute, law or regulation
of the State of California, any claims for benefits or payments under his
executive Severance Agreement with CNF Inc., or any prior such agreement,
as well as any claims asserting breach of contract, breach of the
covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract or
prospective economic advantage, defamation, invasion of privacy, claims
of retaliation, wrongful discharge, or wrongful termination, and claims
related to disability. Executive likewise releases the Released Parties
from any and all obligations for attorneys' fees incurred in regard to
the above claims, or otherwise. Notwithstanding the foregoing, Released
Claims shall not include (i) any claims based on obligations created by
or reaffirmed in this Agreement; (ii) any obligation Company may have for
any compensation earned by and due Executive for work performed on or
prior to the Effective Date; and (iii) any claims for indemnification
under Company's Certificate of Incorporation or By-laws attributable to
his serving as an executive officer of Company on or prior to the
Effective Date, including without limitation claims against Company or
its insurers for attorney's fees.
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4. Waiver of Unknown Claims. The parties understand and agree that
Released Claims include not only claims presently known to Executive,
but also include all unknown or unanticipated claims, rights, demands,
actions, obligations, liabilities, and causes of action of every kind
and character that would otherwise come within the scope of Released
Claims as described in Section 3, above. Executive understands that he
may hereafter discover facts different from what he now believes to be
true, which if known, could have materially affected this Agreement, but
he nevertheless waives any claims or rights based on different or
additional facts. Therefore, Executive waives any and all rights or
benefits which he may now have, or in the future may have, under the
terms of Section 1542 of the California Civil Code which provides as
follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with the
debtor.
5. Covenant Not to ▇▇▇. Executive shall not ▇▇▇ or initiate against any
Released Party any compliance review, action, or proceeding, or
participate in the same, individually or as a member of a class, under
any contract (express or implied), or any federal, state, or local law,
statute, or regulation pertaining in any manner to Released Claims.
6. Nonadmission. The parties understand that this is a compromise
settlement of disputed claims and that the furnishing of the
consideration for this Agreement shall not be deemed or construed at any
time or for any purpose as an admission of liability by Company. The
liability for any and all claims is expressly denied by Company.
7. Age Discrimination Claims. Executive understands and agrees that, by
entering into this Agreement, (i) he is waiving any rights or claims he
might have under the Age Discrimination in Employment Act, as amended by
the Older Workers Benefit Protection Act (29 U.S.C. * 621 et. seq.);
(ii) he has received consideration beyond that to which he was
previously entitled; (iii) he has been advised to consult with an
attorney before signing this Agreement; and (iv) he has been offered the
opportunity to evaluate the terms of this Agreement for not less than
twenty-one (21) days prior to his execution of the Agreement. Executive
may revoke this Agreement (by written notice to Company) for a period of
seven (7) days after his execution of the Agreement, and it shall become
enforceable only upon the expiration of this revocation period without
prior revocation by Executive. The Effective Date of this Agreement
shall be the first calendar day after the expiration of the revocation
period, unless revoked in writing by Executive prior to that date.
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8. Integration. The parties understand and agree that this Agreement
recites the sole consideration to be provided by Company to Executive
and Executive's commitments and obligations to Company; that no
representation or promise has been made to Executive by Company, by any
of its subsidiaries or affiliates, by the Board of Directors of Company
or any committee or member of the Board, or by any agent or
representative acting on its or their behalf, except as expressly set
forth in this Agreement; and that all agreements and understandings
between the parties concerning compensation, fees and benefits to be
provided to Executive are embodied and expressed in this Agreement.
This Agreement shall supersede all prior or contemporaneous agreements
and understandings among Executive and Company, whether written or oral,
express or implied, with respect to employment, compensation, fees or
benefits of any kind or type to be provided to Executive, except to the
extent that the provisions of any such agreement or plans have been
expressly referred to in this Agreement as having continued effect.
9. Assignment; Successors and Assigns. Executive agrees that he will not
assign, sell, transfer, delegate, or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or
obligations under this Agreement. Any such purported assignment,
transfer, or delegation shall be null and void. Executive represents
that he has not previously assigned or transferred any rights or
obligations under this Agreement. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors, attorneys, and permitted
assigns. This Agreement shall not benefit any other person or entity
except as specifically enumerated in this Agreement.
10. Severability. If any provision of this Agreement, or its application to
any person, place, or circumstance, is held by an arbitrator or a court
of competent jurisdiction to be invalid, unenforceable, or void, such
provision shall be enforced to the greatest extent permitted by law, and
the remainder of this Agreement and such provision as applied to other
persons, places, and circumstances shall remain in full force and
effect.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
12. Interpretation. This Agreement shall be construed as a whole, according
to its fair meaning, and not in favor of or against any party. By way
of example and not in limitation, this Agreement shall not be construed
in favor of the party receiving a benefit nor against the party
responsible for any particular language in this Agreement. Captions are
used for reference purposes only and should be ignored in the
interpretation of the Agreement.
13. Attorneys Fees and Costs. The parties agree that in the event of a
breach of this Agreement or any provision thereof, the party who is
found not to be in breach shall be entitled to recover costs and
reasonable attorneys fees.
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14. Arbitration of Disputes/Venue. In the event of any controversy arising
from or concerning the interpretation or application of this Agreement,
including the arbitrability of such controversy, whether such
controversy is grounded in common or statutory law, the parties agree
that such controversy shall be resolved exclusively through binding
arbitration in San Francisco, California before a single neutral
arbitrator selected jointly by the parties. The parties agree that this
Section 14 establishes a post-dispute arbitration agreement and
stipulate, with the advice of counsel or the opportunity to obtain such
advice, that the same is not an adhesive or unconscionable contract.
The parties to the arbitration shall have all rights, remedies, and
defenses available to them in a civil action for the issues in
controversy. The parties shall be jointly responsible for the fees and
expenses of the arbitrator. If, for any legal reason, a controversy
arising from or concerning the interpretation or application of this
Agreement cannot be arbitrated as provided above, the parties agree that
any civil action shall be brought in the United States District Court
for the Northern District of California, San ▇▇▇▇ Division, or, only if
there is no basis for federal jurisdiction, in the Superior Court of the
State of California in and for the County of Santa ▇▇▇▇▇. The parties
further agree that any such civil action shall be tried to the court,
sitting without a jury. The parties knowingly and voluntarily waive
trial by jury.
15. Representation by Counsel. The parties acknowledge that (i) they have
had the opportunity to consult counsel in regard to this Agreement, (ii)
they have read and understand the Agreement and they are fully aware of
its legal effect; and (iii) they are entering into this Agreement freely
and voluntarily, and based on each party's own judgment and not on any
representations or promises made by the other party, other than those
contained in this Agreement.
The parties have duly executed this Agreement as of the dates set forth
below.
/s/ Eberhard ▇. ▇. ▇▇▇▇▇▇▇▇▇
______________________________ Dated: December 14, 2004
Eberhard ▇. ▇. ▇▇▇▇▇▇▇▇▇
CNF Inc.
/s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
By:____________________________ Dated: December 14, 2004
W ▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Chief Executive Officer
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