EXHIBIT 99
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and General Release ("Agreement") is between Con-
way Freight Inc. ("Company") and Xxxxx X. XxXxxxxx ("Executive"). The
parties agree that the effective date of this Agreement ("Effective Date")
shall be as provided in Section 8, below.
1. Employment. As of July 25, 2007 through February 1, 2008, Company
agrees that it will employ Executive, and Executive accepts employment, as an
Advisor to Company, performing such services as Company may require.
2. Compensation and Benefits to Executive.
a. For the period of July 25, 2007 through February 1, 2008,
Company shall pay Executive as salary the total gross sum of $8,215
per week, less withholdings required by law or as required to
participate in Company benefit plans. Said payments will be made
at the times and in the manner provided by Company's standard
payroll practices.
b. Within fourteen (14) days after the Effective Date of this
Agreement, Company shall make a special separation payment to
Executive in the total gross amount of $1,485,050.41, less
withholdings required by law.
c. On February 1, 2008, Executive will be paid out the value of
his unused vacation and/or "paid time off" ("PTO") benefits accrued
through that date, less withholdings required by law. Executive's
total accrued and unused vacation and PTO balance as of February 1,
2008, prior to required withholdings, will be $98,859.
d. For the period July 25, 2007 through February 1, 2008,
Executive shall continue to have the use of the Company-provided
automobile available to him for his use immediately preceding the
Effective Date of this Agreement. On February 2, 2008, Company
will transfer title to the automobile to Executive. Executive
understands and agrees that during the remainder of his employment
with Company he remains bound by all provisions of the Company's
Automobile Policy Manual.
e. The parties agree that, for the period July 25, 2007 through
December 31, 2007, Executive's rights to participate in and receive
benefits under Company's retirement, supplemental excess
retirement, health insurance, life insurance, and long term care
insurance plans will not diminish due to his change of status as of
July 25, 2007. Executive understands and agrees that he will not
be eligible to participate in any of these plans following December
31, 2007, except to the extent allowed or required under COBRA, as
a former employee under the retirement and supplemental excess
retirement plans, or if converted to individual coverage at
Employee's expense as allowed by an applicable plan. If done
timely in accordance with the applicable plans, Executive may
transition his and his family's coverage under the current long
term care and life insurance policies sponsored by Company to
individual coverage at the same premium rates he would have
received as a covered employee under these plans; however,
Executive understands and agrees that he is only eligible to
transition up to $750,000 in coverage under the life insurance
policy at these rates.
f. Nothing in this Agreement shall limit, diminish, enlarge, or
otherwise modify any rights and benefits Executive had as of July
24, 2007 under Company's compensation plans, including
participation in Company's: Value Management Plan for the three-
year cycle ending December 31, 2007; Deferred Compensation Plan,
although Executive understands and agrees that he will not be
eligible to defer 2008 income under the terms of that Plan; the
1997 Equity and Incentive Plan, including equity grants thereunder;
and the 2006 Equity and Incentive Plan, and equity grants
thereunder, although Executive understands and agrees that he will
not receive dividends on unvested restricted stock granted in
January 2007 under that Plan. Executive understands and agrees
that for the remainder of his employment with Company he remains
bound by any and all trading restrictions placed on him by Company.
Company agrees that Executive's relevant Stock Option Agreements
shall be amended to allow Executive to vest the options that he
would otherwise have vested as an active employee in January, 2008,
and to extend his right exercise all vested options through August
1, 2008.
g. The parties agree that nothing in this Agreement shall limit,
diminish, enlarge, or otherwise modify Executive's rights and
benefits, if any, as a participant in Company's standard annual
Incentive Compensation Plan for 2007. Executive's payout, if any,
for 2007 shall be made at his participation factor for 2007 of
seventy-five (75) percent of his annual base salary, calculated as
required under the terms of the Incentive Compensation Plan for
2007 based on Company's performance against the goals stated in
that Plan.
h. Executive agrees that this Agreement shall supersede and
extinguish any current or prior agreements with Company and/or its
parent, subsidiaries or affiliates for compensation or benefits
that might otherwise be payable to Executive in the event of a
change in control, including his Severance Agreement with Con-way
Transportation Services Inc. (now known as Con-way Freight).
Executive expressly waives any rights he may have under such
agreements, including but not limited to any claim that any stock
options or restricted stock awards are or were subject to
accelerated vesting as a result of any change in control.
3. Covenants and Commitments by the Parties:
a. Executive agrees that he will resign, effective July 25,
2007, any and all officer and director positions with the Company
and its parent, subsidiary and affiliated entities and joint
ventures. Executive shall execute any formal documentation
required to document these resignations. Executive represents and
agrees that he will terminate his employment with Company,
effective February 1, 2008.
b. Executive 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
Company, or its parent's, subsidiaries' or other affiliates',
privileged [we don't agree to limit this language to attorney-
client privilege], confidential, or proprietary information 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 parent's,
subsidiaries' or other 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.
c. Executive 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 parent, 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 traveling for purposes of giving testimony, being
prepared for giving testimony, and/or testifying 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 as provided herein.
Moreover, except for time directly related to Executive's testimony
as specified in the preceding sentence, Company agrees to
compensate Executive at his normal hourly rate of $205.38 for time
expended as a result of his obligation to cooperate with Company as
provided herein
d. For the period July 25, 2007 through February 1, 2009,
Executive will: (i) refrain from encouraging any employee of
Company or any of its subsidiaries or affiliates to leave
employment with Company; (ii) refrain from soliciting any employee
of Company of any of its subsidiaries or affiliates to accept
employment with any other business enterprise. or (iii) refrain
from encouraging or assisting any other person or entity in
soliciting any employee of Company or any of its subsidiaries or
affiliates to accept employment with any other business enterprise;
and
e. He shall not make, participate in the making of, or encourage
any other person to make, any statements, written or oral, which
criticize or disparage the goodwill or reputation of Company, any
of its subsidiaries or affiliates or any of their respective past
or present directors, officers, executives or employees.
f. Company agrees that it shall not authorize, and shall use its
best reasonable efforts to assure, that none of its officers or
directors make or participate in the making of, or encourage any
other person to make, any statements, written or oral, which
criticize or disparage Executive.
4. 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, Con-way Inc., 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 States of California or Michigan, 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; (iii) any right to any retirement
benefit for which he is eligible under the terms of Company plans, or
any rights under COBRA to continue Executive's group health coverage at
his own expense after December 31, 2007 ; and (iv) any claims for
indemnification under Company's or Con-way Inc.'s Certificate of
Incorporation or By-laws due to his serving as an executive officer of
Company and/or Con-way Inc. on or prior to the Effective Date, including
without limitation claims against Company, Con-way Inc. or their
insurers for attorney's fees. The parties agree that nothing in this
paragraph is intended to eliminate or diminish Executive's rights to
indemnification, if any, pursuant to and subject to any restrictions set
forth in Company's of Con-way Inc.'s Certificate of Incorporation or By-
laws, for claims brought against him by reason of his service as an
officer, employee, or agent of the Corporation on or prior to the
Effective Date of the Agreement.
5. 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 6, 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.
In addition, but without limitation, this Agreement constitutes a waiver
and release of any and all claims which would otherwise be preserved by
operation of section 1542 of the California Civil Code. Civil Code section
1542 provides in pertinent part:
A general release does not extend to claims which the [Releasee]
does not know or suspect to exist in his or her favor at the time
of
executing the release, which if known by him or her must have
materially affected his or her settlement with the [Releasor.]
6. Covenant Not to Xxx. Executive shall not xxx 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.
7. 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.
8. 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 ("ADEA"); (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. Employee 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 effective and
enforceable only upon the expiration of this revocation period without
prior revocation by Employee.
The Effective Date of this Agreement shall be the first calendar day
after the expiration of the revocation period, unless revoked in writing
by Employee prior to that date.
9. Integration. The parties understand and agree that this Agreement
recites the sole consideration to be provided by Company or its
affiliates 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 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.
10. 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.
11. 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.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
13. 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 or 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.
14. Attorneys' Fees and Costs. The parties agree that in the event of a
material breach of this Agreement or any provision thereof, the party
who is found by a court or an arbitrator not to be in material breach
shall be entitled to recover costs and reasonable attorneys' fees.
15. 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 Ann Arbor, MI before a single neutral arbitrator selected
jointly by the parties. The parties agree that this Section 15
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 District of Michigan, or,
only if there is no basis for federal jurisdiction, in the Circuit Court
for the State of Michigan, in and for the County of Washtenaw. 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.
16. 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/ Xxxxx X. XxXxxxxx Dated: September 21, 2007
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Xxxxx X. XxXxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx Dated: September 25, 2007
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Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
Con-way Inc.
