Exhibit 99.1
EMPLOYMENT AGREEMENT
Xxxxxx X. Xxxxxx ("Executive") and CNF Inc. ("Company"), for and in
consideration of the mutual promises and covenants hereinafter set forth, do
hereby enter into this Employment Agreement ("Agreement") as of December 6,
2004.
1. Employment, Duties, and Responsibilities
1.1_ Employment
Company hereby employs Executive, and Executive accepts employment
and agrees to serve as Executive Advisor to the Chairman of the Board of
Company ("Chairman").
1.2 Duties and Responsibilities
Executive shall report directly to the Chairman and shall have such
duties and responsibilities as may be assigned to him from time to time by
the Chairman.
1.3 Term
This Agreement shall be effective from December 6, 2004 through
January 31, 2006.
1.4 Location of Employment
Company shall provide Executive with use of an office at Company's
headquarters when Executive's duties require travel to Company's
headquarters. At other times, Company agrees that Executive may discharge
his duties in a location of his choice.
1.5 Travel and Expense Reports
Executive shall be eligible to engage in business travel, as
requested by the Chairman, in accordance with Company's established travel
policies applicable to executive officers of Company, and shall submit
expense reports for approval by the Chairman.
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2. Compensation and Benefits
2.1 Base Salary
Executive's annual base salary shall be Five Hundred Forty Thousand
Six Hundred Ninety Six dollars, payable weekly through Company's payroll
system, less withholdings required by law or otherwise authorized by
Executive.
2.2 Incentive Compensation
For the period commencing on January 1, 2005 and ending on December
31, 2005, Executive shall be entitled to participate in Company's standard
annual Incentive Compensation Plan with a participation factor of 75% of his
annual base salary.
2.3 Benefits
Executive shall remain eligible to participate in each of Company's
qualified and non-qualified benefit plans in which he was an eligible
participant immediately preceding the effective date of this Agreement,
including Company's health plan, retirement plans, supplemental excess
retirement plans, life insurance plans, long term care insurance plan, and
deferred compensation plans; provided, however, that nothing in this
Agreement shall be construed to limit Company's right to modify, amend or
terminate any such plans according to their terms.
2.4 Other Benefit Provisions
The parties agree that, except as expressly provided herein,
nothing in this Agreement shall be construed to limit, diminish, enlarge, or
otherwise modify any vested or accrued rights Executive has, as of the date
immediately preceding the effective date of this Agreement, under Company's
vacation and/or PTO policies as well as Company's retirement plans,
supplemental excess retirement plans, health plan, life insurance plans, long
term care insurance plan (or discontinued plans in which Executive was a
participant, but as to which Executive retains rights), including Company's:
annual Incentive Compensation Plan and Operating Ratio Bonus Plan in which
Executive was a participant for the calendar year ending on December 31,
2004; 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.
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2.5 Company Automobile
During the Term of this Agreement, 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, or a comparable
replacement vehicle, and, upon expiration of the term of this Agreement,
Company shall transfer title to such automobile to Executive; 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 to him.
3. Covenants and Commitments by Executive
3.1 Resignations and Retirement
Executive agrees that he shall, as of the effective date of this
Agreement,, resign as an officer and/or director of CNF Inc. and each and
every CNF Inc. subsidiary and affiliate as to which he was an officer and/or
director as of the date immediately preceding the effective date of this
Agreement. Company understands and accepts that Executive has made an
irrevocable decision to retire, pursuant to the terms of Company's qualified
retirement plan, as of January 31, 2006.
3.2 Non-Disparagement
Executive agrees that 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 affiliates or any of their respective past or present directors,
officers, executives or employees.
3.3 Public Statements
Executive agrees that during the term of this Agreement, he shall,
only when and as requested in writing by the Chairman, make such public
statements or comments about Company, its performance, or its business
operations as may be requested by the Chairman, including but not limited to
written or oral communications with any of Company's current or potential
investors or any analysts of Company's publicly traded securities.
3.4 Trade Associations
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Executive agrees that during the term of this Agreement, he shall,
only when and as requested in writing by the Chairman, attend or participate
in meetings, seminars, symposia or other functions sponsored by business or
trade associations.
3.5 Sales Events
Executive agrees that during the term of this Agreement, he shall,
only when and as requested in writing by the Chairman, attend or participate
in sales events sponsored by Company or any of its subsidiaries.
3.6 Cooperation
Executive agrees that during the term of this Agreement, he will
comply fully with each and every reasonable request or instruction by the
Chairman pertaining directly or indirectly to Executive's assigned duties.
3.7 Protection of Confidential Information
Executive agrees that 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
3.8 Cooperation Following Termination
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Executive agrees that he will, during the term of this Agreement
and for so long thereafter 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 agrees that following the term of this Agreement, he 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 further expressly agrees that following the term of this Agreement,
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.
4. Termination
4.1 Termination By Executive
4.1.1 For Good Reason
Company agrees that any failure by Company to comply with its
obligations as specified in Section 2, above shall constitute good reason for
Executive to terminate this Agreement. The parties further agree that
termination for good reason by Executive shall entitle Executive to a lump
sum payment in an amount equal to the sum of any and all amounts to which he
would otherwise be entitled if this Agreement continued in full force and
effect through its term, including without limitation the value of any stock
options or restricted stock grants that otherwise would vest.
4.1.2 Without Good Reason
Executive agrees that should he retire or otherwise terminate this
Agreement prior to the end of its term for any reason other than good reason,
as specified above, Company shall have no obligation whatsoever to pay him
any further amount under this Agreement and further agrees that any stock
options or restricted stock grants that are not vested shall lapse according
to the terms of any such grants.
4.2 Termination By Company
4.2.1 For Cause
Executive agrees that any failure by him to comply with his
obligations as specified in Section 3, above, shall constitute cause for
Company to terminate this Agreement and shall relieve Company of each and
every of Company's obligations hereunder.
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4.2.2 Without Cause
Company agrees that in the event Company terminates this Agreement
other than for cause, as specified above, Executive shall be entitled to the
same payments and benefits as specified in Section 4.1.1, above.
4.3 Severance
Executive agrees that this Agreement shall supersede and extinguish
any current or prior agreements with Company and/or its affiliates for
compensation or benefits that might otherwise be payable to Executive in the
event of a change of control, including his Severance Agreement with Company
and his Severance Agreement with Con-Way Transportation Services, Inc.
Executive expressly waives any rights under such agreements.
1. General Release
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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 Americans
with Disabilities Act and any and all other federal, state and local equal
employment opportunity laws; any claims for benefits or payments under his
executive Severance Agreements with CNF Inc. and Con-Way Transportation
Services, Inc., or any prior such agreements; any statutory or common law
claims asserting breach of contract, breach of the covenant of good faith and
fair dealing, infliction of emotional distress, misrepresentation,
interference with contract or prospective economic advantage, defamation,
invasion of privacy, claims of retaliation, wrongful discharge, or wrongful
termination; and any claims for benefits arising under welfare plans
sponsored or adopted by Company and/or any affiliate. 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 of this Agreement; and (iii) any
claims for indemnification under Company's and/or its affiliates' By-laws or
insurance contracts attributable to Executive's service as a director,
officer or employee of Company and/or its affiliates (including
indemnification for attorney's fees); (iv) claims arising out of acts or
omissions on or after the date of Executive's execution of this Agreement;
and (v) claims for industrial injury or illness arising under any workers'
compensation law.
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 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 (or any similar provision under the
law of any other state) 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.
2. 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.
3. 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.
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4. Integration
This Agreement is final, complete, exclusive, unambiguous, and
fully integrated with respect to its subject matter, such that no parol or
other evidence shall be admissible to contradict, explain, or supplement this
Agreement. All prior employment agreements, settlement agreements,
negotiations, drafts, representations, stipulations, summaries, notices, and
proposals by either party with respect to the subject matter of this
Agreement are merged herein, extinguished, and superceded, except to the
extent that the same have been expressly referred to in this Agreement as
having continued effect.
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. Executive stipulates and agrees that
no representation or promise has been made to Executive by Company, any
person or entity, except as recited expressly in this Agreement. All
agreements and understandings between the parties concerning compensation,
fees and benefits to be provided to Executive are embodied and expressed in
this Agreement.
5. 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.
6. 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.
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7. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
8. 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.
9. 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.
10. 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 Santa Xxxxx County, California
before a single neutral arbitrator selected jointly by the parties. The
parties agree that this Section 15 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 Company shall be unconditionally responsible for the fees
and expenses of the arbitrator. If, for any legal reason, a controversy
subject to this Section 15 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 Xxxx 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 Xxxxx. 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.
11. Representation by Counsel
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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/Xxxxxx X. Xxxxxx
______________________________ Dated: December 6, 2004
Xxxxxx X. Xxxxxx
CNF Inc.
/s/ W. Xxxxx Xxxxxxx Jr.
By:____________________________ Dated: December 6, 2004
W Xxxxx Xxxxxxx, Jr.
Chairman of the Board
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