Execution Copy
1
AMENDMENT NO.1
TO
AMENDED AND RESTATED
SEVERANCE AGREEMENT
BY AND BETWEEN
CNF INC. AND SANCHAYAN C. RATNATHICAM
Effective January 1, 2003
This Amendment No. 1 (this "Amendment") is made to the Amended
and Restated Severance Agreement as of December 4, 2001 by and
between CNF Inc., a Delaware corporation (the "Company"), and
Sanchayan C. Ratnathicam (the "Executive") (the "Severance
Agreement").
WHEREAS, on December 4, 2001, the Company and the Executive
entered into this Severance Agreement;
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of the Company and of its
stockholders to amend the Severance Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Amendment, the Company and the
Executive agree as follows (capitalized terms used without
definition have the meanings given to those terms in the
Severance Agreement):
1. Amendment to Severance Payment. The severance payment set
forth in
Section 6.1(A) of the Severance Agreement shall be amended
in its entirety to read as follows:
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and
in lieu of any severance benefit otherwise payable to
the Executive, the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to three
times the sum of (i) the Executive's annual base salary
as in effect immediately prior to the Date of
Termination or, if higher, in effect immediately prior
to the Change in Control and (ii) the average annual
bonus earned by the Executive pursuant to any annual
bonus or incentive plan maintained by the Company in
respect of the three fiscal years ending immediately
prior to the fiscal year in which occurs the Change in
Control.
2. Amendment to Additional Retirement Benefits. The additional
retirement benefits set forth in Section 6.1(D) of the
Severance Agreement shall be amended in its entirety to read
as follows:
(D) In addition to the retirement benefits to which the
Executive is entitled under each Pension Plan or any
successor plan thereto, the Company shall pay the
Executive a lump sum amount, in cash, equal to the
excess, if any, of (i) the actuarial equivalent of the
aggregate retirement pension which the Executive would
have accrued under the terms of all Pension Plans
(without regard to any amendment to any Pension Plan
made subsequent to a Change in Control and on or prior
to the Date of Termination, which amendment adversely
affects in any manner the computation of retirement
benefits thereunder), determined only for the purposes
of meeting the Rule of 85 (as defined in the Company
Retirement Plan) as if the Executive (A) had
accumulated (after the Date of Termination) thirty-six
(36) additional months of service credit thereunder and
(B) had attained an age which is three years older than
the age the Executive had attained as of the Date of
Termination, over (ii) the actuarial equivalent of the
aggregate retirement pension (taking into account any
early retirement subsidies associated therewith) which
the Executive had accrued pursuant to the provisions of
the Pension Plans as of the Date of Termination;
provided, however, if the Rule of 85 applies to the
Executive on the Date of Termination, then no payment
shall be due under this Section 6.1 (D). For purposes
of this Section 6.1(D), "actuarial equivalent" shall be
determined using the same assumptions utilized under
the applicable Pension Plan immediately prior to the
Date of Termination or, if more favorable to the
Executive, immediately prior to the Change in Control.
3. Amendment to Definition of the Term "Good Reason". Section
15(P) of the Severance Agreement (definition of the term
"Good Reason") shall be amended by deleting the following
paragraph at the end of Section 15(P):
"Notwithstanding anything in this Agreement to the
contrary, if the Executive's employment is terminated
by the Executive for any reason during the one-month
period commencing on the first anniversary of a Change
in Control, such termination shall be deemed a
termination of the Executive's employment for Good
Reason."
4. Effective Date. The effective date of this Amendment shall
be January 1, 2003. Except as expressly amended, the
Severance Agreement remains unchanged and in full force and
effect.
CNF INC.
By: /s/ Gregory L. Quesnel
-----------------------------
Name: Gregory L. Quesnel
Title: President and Chief Executive
Officer
EXECUTIVE
By: /s/ Sanchayan C. Ratnathicam
-----------------------------
Name: Sanchayan C. Ratnathicam
Address: 704 Murphy Drive
San Mateo, CA 94402