Exhibit 10.5
CNF INC.
NONQUALIFIED EXECUTIVE BENEFIT PLANS
TRUST AGREEMENT
2004 RESTATEMENT
This Trust Agreement (the "Trust Agreement") is made this 30th day of
December, 2004, by and between CNF INC. ("the Company") and WACHOVIA
BANK, N.A. ("the Trustee").
Recitals
(a) WHEREAS, the Company has adopted the nonqualified deferred
compensation plans and Agreements (the "Arrangements") listed in
Attachment A;
(b) WHEREAS, the Company has incurred or expects to incur liability
under the terms of such Arrangements with respect to the
individuals participating in such Arrangements (the
"Participants");
(c) WHEREAS, the Company has established a Trust (the "Trust") and
contributed to the Trust assets held therein, subject to the
claims of the Company's creditors in the event of the Company's
Insolvency, as herein defined, until paid to Participants and
their beneficiaries in such manner and at such times as specified
in the Arrangements and in a Trust Agreement with a prior trustee
most recently amended by a 1997 Restatement;
(d) WHEREAS, the Company and the Trustee wish to amend the Trust
Agreement by entering into this 2004 Restatement and, after the
2004 Restatement is signed by the parties, the Company will
remove the prior trustee of the Trust as soon as practicable;
(e) WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the
status of the Arrangements, to the extent they cover employees
rather than non-employee directors, as an unfunded plan
maintained for the purpose of providing deferred compensation for
a select group of management or highly compensated employees for
purposes of Title I of the Employee Retirement Income Security
Act of 1974; and
(f) WHEREAS, it is the intention of the Company to make further
contributions to the Trust to provide itself with a source of
funds (the "Fund") to assist it in satisfying its liabilities
under the Arrangements.
NOW, THEREFORE, the Company appoints Wachovia Bank, N.A. as Trustee of
the Trust effective with the date on which the prior trustee's removal
takes effect and the parties agree that the Trust shall be, effective
on that same date, comprised, held and disposed of as follows:
Section 1. Establishment of The Trust
(a) The Trust is intended to be a trust, of which the Company is the
"grantor", within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly.
(b) The Company shall be considered a grantor for the purposes of the
Trust.
(c) The Trust shall be irrevocable.
(d) The Trustee shall accept the assets transferred to it by the
prior Trustee, consisting primarily of cash and/or life insurance
policies on the lives of Participants, which shall become the
principal of the Trust to be held, administered and disposed of
by the Trustee as provided in this Trust Agreement.
(e) The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Company and shall
be used exclusively for the uses and purposes of Participants and
general creditors as herein set forth. Participants and their
beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights
created under the Arrangements and this Trust Agreement shall be
unsecured contractual rights of Participants and their
beneficiaries against the Company. Any assets held by the Trust
will be subject to the claims of the general creditors of the
Company under federal and state law in the event the Company is
Insolvent, as defined in Section 3(a) herein.
(f) Within ninety (90) days following the end of each plan year, the
Company shall irrevocably deposit additional cash or other
property into the Trust in an appropriate amount sufficient to
pay to each plan Participant or beneficiary the benefits accrued
pursuant to the terms of the Arrangements as of the close of such
plan year. Such a deposit may take the form of an assignment of
all, or a percentage interest in, a promissory note evidencing a
debt obligation to the Company from one of its subsidiaries (a
"Subsidiary Note"). For all purposes of this Trust Agreement, a
Subsidiary Note shall be valued at the stated principal balance
due under it.
(g) Upon a Potential CNF Change in Control, as defined herein, the
Company shall, as soon as possible, but in no event later than
thirty (30) days following the occurrence of the Potential CNF
Change in Control, substitute Marketable Assets for any
Subsidiary Notes held by the Trust and any other property other
than Marketable Assets and transfer additional Marketable Assets
to the Trust so that the Trust will hold Marketable Assets in an
amount that is no less than 100% but no more than 120% of the
benefits accrued pursuant to the terms of the Arrangements as of
the date on which the Potential CNF Change in Control occurred.
For 12 months following a Potential CNF Change in Control, the
Company shall have no right to substitute a Subsidiary Note for
assets of the Trust or to direct that Trust assets be invested in
Subsidiary Notes. In the event a CNF Change in Control, as
defined herein, does not occur within 12 months following a
Potential CNF Change in Control, the Company shall have the
right, after the expiration of such 12 months, to substitute one
or more Subsidiary Notes for part or all of the assets of the
Trust or to direct that Trust assets be invested in Subsidiary
Notes. Any Marketable Assets contributed to the Trust must be
satisfactory to the Trustee in its sole and absolute discretion.
(h) Upon a CNF Change in Control, the Company shall, as soon as
possible, but in no event later than thirty (30) days following
the occurrence of the CNF Change in Control, substitute
Marketable Assets for any Subsidiary Notes held by the Trust and
any other property other than Marketable Assets and transfer
additional Marketable Assets to the Trust so that the Trust will
hold Marketable Assets in an amount that is no less than 100% but
no more than 120% of the sum of (A) the benefits accrued pursuant
to the terms of the Arrangements as of the date on which the CNF
Change in Control occurred plus (B) an expense reserve for the
Trustee in the amount of $125,000. After a CNF Change in Control
described in Section 15(a)(4)(i) through (iv), the Company shall
no longer have any right to substitute a Subsidiary Note for
assets of the Trust or to direct that Trust assets be invested in
Subsidiary Notes.
(i) Upon a Unit Change in Control, the Company shall, as soon as
possible, but in no event later than thirty (30) days following
the occurrence of such Unit Change in Control, substitute
Marketable Assets for any Subsidiary Notes held by the Trust and
any other property other than Marketable Assets and transfer
additional Marketable Assets to the Trust so that the Trust will
hold Marketable Assets in an amount that is no less than 100% but
no more than 120% of the benefits accrued pursuant to the terms
of the Arrangements with respect to Participants to whom such
Unit Change in Control applies, as of the date on which the Unit
Change in Control occurred. For 12 months following a Unit
Change in Control, the Company shall have no right to substitute
a Subsidiary Note for assets of the Trust or to direct that Trust
assets be invested in Subsidiary Notes if the effect of such
substitution or direction would be to cause the Trust to hold
Marketable Assets with a value less than the benefits accrued
pursuant to the terms of the Arrangements with respect to
Participants to whom such Unit Change in Control applies. The
Company shall have the right, after the expiration of such 12
months, to substitute one or more Subsidiary Notes for part or
all of the assets of the Trust or to direct that Trust assets be
invested in Subsidiary Notes.
Section 2. Payments to Participants and Their Beneficiaries
(a) Prior to a CNF Change in Control, benefit payments due under an
Arrangement will be made by the Company or by the Trustee at the
direction of the Company. The entitlement of a Participant or
his or her beneficiaries to benefits under an Arrangement shall
be determined by the committee responsible for administration of
the Arrangement, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the
Arrangement.
(b) The Company may make payment of benefits directly to the
Participants or their beneficiaries as they become due under the
terms of the Arrangements. If, as a result of the Company's
payment of benefits, the Trust holds assets in excess of 120% of
the amount necessary to pay the benefits payable pursuant to the
terms of the Arrangements, together with anticipated fees and
expenses of the Trustee, the Trustee shall promptly transfer from
the Trust to the Company the amount of the benefits paid by the
Company.
(c) If payment is by the Trustee and the Trust does not have
sufficient Marketable Assets to make payments of benefits in
accordance with the terms of the Arrangements, the Company shall
make the balance of each such payment as it falls due in
accordance with the Arrangements. The Trustee shall notify the
Company where principal and earnings are not sufficient. Nothing
in this Agreement shall relieve the Company of its liabilities to
pay benefits due under the Arrangements except to the extent such
liabilities are met by application of assets of the Trust.
(d) After a Potential CNF Change in Control or a CNF Change in
Control, the Company shall deliver to the Trustee a schedule of
benefits accrued under the Arrangements. After a Unit Change in
Control, the Company shall deliver to the Trustee a schedule of
benefits accrued under the Arrangements with respect to each
Participant to whom the Unit Change in Control applies. After a
Unit Change in Control (with respect to the benefits of
Participants to whom the Unit Change in Control applies), a
Potential CNF Change in Control, or a CNF Change in Control --
(1) The Trustee shall pay benefits due in accordance with such
schedule, unless the Company pays the benefits pursuant to
Section 2(a).
(2) The committee responsible for administration of the
Arrangements shall continue to make the determination of
benefits due to Participants or their beneficiaries and
shall provide the Trustee with an updated schedule of
benefits due.
(3) A Participant or the beneficiary of a deceased Participant
may make application to the Trustee for an independent
decision as to the amount or form of their benefits due
under the Arrangements pursuant to the procedures set forth
in Attachment B.
(4) In making any determination required or permitted to be
made by the Trustee under this Section, the Trustee shall,
in each such case, reach its own independent determination,
in its absolute and sole discretion, as to the
Participant's or beneficiary's entitlement to a payment
hereunder and shall make payment from the Trust in
accordance with that determination.
(5) In making its determination, the Trustee may consult with
and make such inquiries of such persons, including the
Participant or beneficiary, the Company, legal counsel,
actuaries or other persons, as the Trustee may reasonably
deem necessary. Any reasonable costs incurred by the
Trustee in arriving at its determination shall be
reimbursed by the Company and, to the extent not paid by
the Company within a reasonable time, shall be charged to
the Trust.
(6) The Company waives any right to contest any amount paid
over by the Trustee hereunder pursuant to a good faith
determination made by the Trustee notwithstanding any claim
by or on behalf of the Company (absent a manifest abuse of
discretion by the Trustee) that such payments should not be
made.
(e) The Trustee agrees that it will not itself institute any action
at law or at equity, whether in the nature of an accounting,
interpleading action, request for a declaratory judgment or
otherwise, requesting a court or administrative or quasi-judicial
body to make the determination required to be made by the Trustee
under this Section 2 in the place and stead of the Trustee. The
Trustee may (and, if necessary or appropriate, shall) institute
an action to collect a contribution due the Trust following a CNF
Change in Control or in the event that the Trust should ever
experience a short-fall in the amount of assets necessary to make
payments pursuant to the terms of the Arrangements.
Section 3. Trustee Responsibility Regarding Payments To The Trust
Beneficiary When The Company Is Insolvent
(a) The Trustee shall cease payment of benefits to Participants and
their beneficiaries if the Company is Insolvent. The Company
shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they
become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, the principal
and income of the Trust shall be subject to claims of general
creditors of the Company under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer
of the Company shall have the duty to inform the
Trustee in writing that the Company is Insolvent. If
a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has
become Insolvent, the Trustee shall determine whether
the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment
of benefits to Participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge that the
Company is Insolvent, or has received notice from the
Company or a person claiming to be a creditor alleging
that the Company is Insolvent, the Trustee shall have
no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished
to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning
the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue
payments to Participants or their beneficiaries and
shall hold the assets of the Trust for the benefit of
the Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights
of Participants or their beneficiaries to pursue their
rights as general creditors of the Company with
respect to benefits due under the Arrangements or
otherwise.
(4) The Trustee shall resume the payment of benefits to
Participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after the
Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Participants or their
beneficiaries under the terms of the Arrangements for the period
of such discontinuance, less the aggregate amount of any payments
made to Participants or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such
period of discontinuance.
Section 4. Payments When a Short-Fall of The Trust Assets Occurs
(a) If there are not sufficient assets for the payment of current and
expected future benefits pursuant to Section 2 or Section 3(c)
hereof and the Company does not otherwise make such payments
within a reasonable time after demand from the Trustee, the
Trustee shall allocate the Trust assets among the Participants or
their beneficiaries in the following order of priority:
(1) vested Participants (regardless of whether they are
actively employed) and their beneficiaries; and
(2) non-vested Participants (regardless of whether they are
actively employed) and their beneficiaries.
(b) Within each category, assets shall be allocated pro-rata with
respect to the total present value of benefits expected for each
Participant or beneficiary within the category, and payments to
each Participant or beneficiary shall be made to the extent of
the assets allocated to each Participant or beneficiary.
(c) Upon receipt of a contribution from the Company necessary to make
up for a short-fall in the payments due, the Trustee shall resume
payments to all the Participants and beneficiaries under the
Arrangements. Following a CNF Change in Control, the Trustee
shall have the right and duty to compel a contribution to the
Trust from the Company to make-up for any short-fall.
Section 5. Payments to the Company
Except as provided in Section 2(b) or Section 3 hereof, the Company
shall have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all
payment of benefits have been made to Participants and their
beneficiaries pursuant to the terms of the Arrangements.
Section 6. Investment Authority
(a) The Trustee shall not be liable in discharging its duties
hereunder, including without limitation its duty to invest and
reinvest the Fund, if it acts for the exclusive benefit of the
Participants and their beneficiaries, in good faith and as a
prudent person would act in accomplishing a similar task and in
accordance with the terms of this Trust Agreement and any
applicable federal or state laws, rules or regulations.
(b) Subject to the Company's power to direct the investment of the
Fund prior to a CNF Change in Control pursuant to Section 6(c),
the Trustee shall have the power in investing and reinvesting the
Fund in its sole discretion:
(1) To invest and reinvest in any readily marketable common and
preferred stocks, bonds, notes, debentures (including
convertible stocks and securities but not including any
stock or security of the Trustee other than a de minimis
amount held in a collective or mutual fund), certificates
of deposit or demand or time deposits (including any such
deposits with the Trustee) and shares of investment
companies and mutual funds, without being limited to the
classes or property in which the Trustees are authorized to
invest by any law or any rule of court of any state and
without regard to the proportion any such property may bear
to the entire amount of the Fund;
(2) To invest and reinvest all or any portion of the Fund
collectively through the medium of any proprietary mutual
fund that may be established and maintained by the Trustee;
(3) To commingle for investment purposes all or any portion of
the Fund with assets of any other similar trust or trusts
established by the Company with the Trustee for the purpose
of safeguarding deferred compensation or retirement income
benefits of its employees and/or directors;
(4) To retain any property at any time received by the Trustee;
(5) To sell or exchange any property held by it at public or
private sale, for cash or on credit, to grant and exercise
options for the purchase or exchange thereof, to exercise
all conversion or subscription rights pertaining to any
such property and to enter into any covenant or agreement
to purchase any property in the future;
(6) To participate in any plan of reorganization,
consolidation, merger, combination, liquidation or other
similar plan relating to property held by it and to consent
to or oppose any such plan or any action thereunder or any
contract, lease, mortgage, purchase, sale or other action
by any person;
(7) To deposit any property held by it with any protective,
reorganization or similar committee, to delegate
discretionary power thereto, and to pay part of the
expenses and compensation thereof any assessments levied
with respect to any such property to deposited;
(8) To extend the time of payment of any obligation held by it;
(9) To hold uninvested any moneys received by it, without
liability for interest thereon, but only in anticipation of
payments due for investments, reinvestments, expenses or
disbursements;
(10) To exercise all voting or other rights with respect to any
property held by it and to grant proxies, discretionary or
otherwise;
(11) For the purposes of the Trust, to borrow money from others,
to issue its promissory note or notes therefor, and to
secure the repayment thereof by pledging any property held
by it;
(12) To employ suitable contractors and counsel, who may be
counsel to the Company or to the Trustee, and to pay their
reasonable expenses and compensation from the Fund to the
extent not paid by the Company;
(13) To register investments in its own name or in the name of a
nominee; to hold any investment in bearer form; and to
combine certificates representing securities with
certificates of the same issue held by it in other
fiduciary capacities or to deposit or to arrange for the
deposit of such securities with any depository, even
though, when so deposited, such securities may be held in
the name of the nominee of such depository with other
securities deposited therewith by other persons, or to
deposit or to arrange for the deposit of any securities
issued or guaranteed by the United States government, or
any agency or instrumentality thereof, including securities
evidenced by book entries rather than by certificates, with
the United States Department of the Treasury or a Federal
Reserve Bank, even though, when so deposited, such
securities may not be held separate from securities
deposited therein by other persons; provided, however, that
no securities held in the Fund shall be deposited with the
United States Department of the Treasury or a Federal
Reserve Bank or other depository in the same account as any
individual property of the Trustee, and provided, further,
that the books and records of the Trustee shall at all
times show that all such securities are part of the Trust
Fund;
(14) To settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust,
respectively, to commence or defend suits or legal
proceedings to protect any interest of the Trust, and to
represent the Trust in all suits or legal proceedings in
any court or before any other body or tribunal; provided,
however, that the Trustee shall not be required to take any
such action unless it shall have been indemnified by the
Company to its reasonable satisfaction against liability or
expenses it might incur therefrom;
(15) To hold and retain policies of life insurance, annuity
contracts, and other property of any kind which policies
are contributed to the Trust by the Company or any
subsidiary of the Company or are purchased by the Trustee;
(16) To hold any other class of assets which may be contributed
by the Company and that is deemed reasonable by the
Trustee, unless expressly prohibited herein;
(17) To loan any securities at any time held by it to brokers or
dealers upon such security as may be deemed advisable, and
during the terms of any such loan to permit the loaned
securities to be transferred into the name of and voted by
the borrower or others; and
(18) Generally, to do all acts, whether or not expressly
authorized, that the Trustee may deem necessary or
desirable for the protection of the Fund.
(c) Prior to a CNF Change in Control, the Company shall have the
right, subject to this Section to direct the Trustee with respect
to investments.
(1) The Company may at any time direct the Trustee to segregate
all or a portion of the Fund in a separate investment
account or accounts and may appoint one or more investment
managers and/or an investment committee established by the
Company to direct the investment and reinvestment of each
such investment account or accounts. In such event, the
Company shall notify the Trustee of the appointment of each
such investment manager and/or investment committee. No
such investment manager shall be related, directly or
indirectly, to the Company, but members of the investment
committee may be employees of the Company.
(2) Thereafter (until a CNF Change in Control), the Trustee
shall make every sale or investment with respect to such
investment account as directed in writing by the investment
manager or investment committee. It shall be the duty of
the Trustee to act strictly in accordance with each
direction. The Trustee shall be under no duty to question
any such direction of the investment manager or investment
committee, to review any securities or other property held
in such investment account or accounts acquired by it
pursuant to such directions or to make any recommendations
to the investment managers or investment committee with
respect to such securities or other property.
(3) Notwithstanding the foregoing, the Trustee, without
obtaining prior approval or direction from an investment
manager or investment committee, shall invest cash balances
held by it from time to time in short term cash equivalents
including, but not limited to, through the medium of any
short term common, collective or commingled trust fund
established and maintained by the Trustee subject to the
instrument establishing such trust fund, U.S. Treasury
Bills, commercial paper (including such forms of commercial
paper as may be available through the Trustee's Trust
Department), certificates of deposit (including
certificates issued by the Trustee in its separate
corporate capacity), and similar type securities, with a
maturity not to exceed one year; and, furthermore, sell
such short term investments as may be necessary to carry
out the instructions of an investment manager or investment
committee regarding more permanent type investment and
directed distributions.
(4) The Trustee shall neither be liable nor responsible for any
loss resulting to the Fund by reason of any sale or
purchase of an investment directed by an investment manager
or investment committee nor by reason of the failure to
take any action with respect to any investment which was
acquired pursuant to any such direction in the absence of
further directions of such investment manager or investment
committee.
(d) Following a CNF Change in Control, the Trustee shall have
the sole and absolute discretion in the management of the
Trust assets and shall have all the powers set forth under
Section 6(b). In investing the Trust assets, the Trustee
shall consider:
(1) the needs of the Arrangements;
(2) the need for matching of the Trust assets with the
liabilities of the Arrangements; and
(3) the duty of the Trustee to act solely in the best
interests of the Participants and their beneficiaries.
(e) The Trustee shall have the right, in its sole discretion, to
delegate its investment responsibility to an investment
manager who may be an affiliate of the Trustee. In the
event the Trustee shall exercise this right, the Trustee
shall remain, at all times responsible for the acts of an
investment manager. The Trustee shall have the right to
purchase an insurance policy or an annuity to fund the
benefits of the Arrangements.
(f) The Company shall have the right at any time, and from time
to time in its sole discretion, to substitute assets (other
than securities issued by the Trustee or the Company) of
equal fair market value for any asset held by the Trust.
This right is exercisable by the Company in a nonfiduciary
capacity without the approval or consent of any person in a
fiduciary capacity; provided, however, that, following a
Potential CNF Change in Control or a CNF Change in Control -
(1) No such substitution shall be permitted unless the
Trustee determines that the fair market values of the
substituted assets are equal.
(2) Assets owned by the Trust may not be substituted with
obligations of the Company, its subsidiaries or its
successors.
(3) The restrictions of Sections 1(f), 1(g), 1(h) and 1(i)
shall apply with respect to assets that are Subsidiary
Notes and the amount of Marketable Assets.
(g) In no event may the Trustee invest in securities (including
stock or rights to acquire stock) or obligations issued by
the Company, other than a de minimis amount held in common
investment vehicles in which the Trustee invests. This
restriction does not apply to the investment in Subsidiary
Notes authorized by Sections 1(g). All rights associated
with assets of the Trust shall be exercised by Trustee or
the person designated by Trustee (including the Company or
any person designated by the Company, as indicated in
Section 6(c)), and shall in no event be exercisable by or
rest with plan Participants.
(h) In the event that the Trustee is directed to invest in a
Subsidiary Note pursuant to this Section 6, the Trustee
shall hold such Subsidiary Note exclusively without
liability for any failure to diversify or as may otherwise
be required of trustees by applicable law.
Section 7. Insurance Contracts
(a) To the extent that the Trustee is directed by the Company prior
to a CNF Change in Control to invest part or all of the Trust
Fund in insurance contracts, the type and amount thereof shall be
specified by the Company. The Trustee shall be under no duty to
make inquiry as to the propriety of the type or amount so
specified.
(b) Each insurance contract issued shall provide that the Trustee
shall be the owner thereof with the power to exercise all rights,
privileges, options and elections granted by or permitted under
such contract or under the rules of the insurer. The exercise by
the Trustee of any incidents of ownership under any contract
shall, prior to a CNF Change in Control, be subject to the
direction of the Company. After a CNF Change in Control, the
Trustee shall have all such rights.
(c) The Trustee shall have no power to name a beneficiary of the
policy other than the Trust, to assign the policy (as distinct
from conversion of the policy to a different form) other than to
a successor Trustee, or to loan to any person the proceeds of any
borrowing against an insurance policy held in the Trust Fund.
(d) No insurer shall be deemed to be a party to the Trust and an
insurer's obligations shall be measured and determined solely by
the terms of contracts and other agreements executed by the
insurer.
Section 8. Disposition of Income
During the term of the Trust, all income received by the Trust, net of
expenses and taxes payable by the Trust, shall be accumulated and
reinvested within the Trust.
Section 9. Accounting by The Trustee
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions
required to be made, including such specific records as shall be
agreed upon in writing between the Company and the Trustee. Within
forty-five (45) days following the close of each calendar year and
within forty-five (45) days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company a written account of
its administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such removal
or resignation setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all
securities and investments purchased and sold with the cost or net
proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities
and other property held in the Trust at the end of such year or as of
the date of such removal or resignation, as the case may be. In the
event the Company objects to such a written accounting, Trustee may
have its accounting settled by a court of competent jurisdiction. The
Trustee shall be entitled to hold and to commingle the assets of the
Trust in one Fund for investment purposes but at the direction of the
Company prior to a CNF Change in Control, the Trustee shall create one
or more sub-accounts.
Section 10.Responsibility of The Trustee
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and
with like aims, provided, however, that the Trustee shall incur
no liability to any person for any action taken pursuant to a
direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the
Arrangements or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute, subject, however to Section 2(e) hereof.
(b) The Company hereby indemnifies the Trustee against losses,
liabilities, claims, costs and expenses in connection with the
administration of the Trust as a result of the Trustee's
following directions given by the Company or reliance on
information provided by the Company. To the extent the Company
fails to make any payment on account of an indemnity provided in
this paragraph 10(b), in a reasonably timely manner, the Trustee
may obtain payment from the Trust. If the Trustee undertakes or
defends any litigation for the purpose of protecting a
Participant's or beneficiary's rights under the Arrangements, the
Company agrees to indemnify the Trustee against the Trustee's
costs, reasonable expenses and liabilities (including, without
limitation, attorneys' fees and expenses) relating thereto and to
be primarily liable for such payments. If the Company does not
pay such costs, expenses and liabilities in a reasonably timely
manner, the Trustee may obtain payment from the Trust.
(c) Prior to a CNF Change in Control, the Trustee may consult with
legal counsel (who may also be counsel for the Company generally)
with respect to any of its duties or obligations hereunder.
Following a CNF Change in Control the Trustee shall select
independent legal counsel and may consult with counsel or other
persons with respect to its duties and with respect to the rights
of Participants or their beneficiaries under the Arrangements.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist
it in performing any of its duties or obligations hereunder and
may rely on any determinations made by such agents and
information provided to it by the Company.
(e) The Trustee shall have, without exclusion, all powers conferred
on the Trustee by applicable law, unless expressly provided
otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not
have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom, within
the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
Section 11.Compensation and Expenses of The Trustee
The Trustee's compensation shall be as agreed in writing from time to
time by the Company and the Trustee. The Company shall pay all
administrative expenses and the Trustee's fees and shall promptly
reimburse the Trustee for any fees and expenses of its agents. If not
so paid, the fees and expenses shall be paid from the Trust.
Section 12.Resignation and Removal of The Trustee
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective sixty (60) days after receipt
of such notice unless the Company and the Trustee agree
otherwise.
(b) The Trustee may be removed by the Company on sixty days (60) days
notice or upon shorter notice accepted by the Trustee.
(c) If the Trustee resigns or is removed within two years after a CNF
Change in Control, the Trustee may apply to a court of competent
jurisdiction to select a successor Trustee in accordance with the
provisions of Section 12(b) prior to the effective date of the
Trustee's resignation or removal.
(d) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred
to the successor Trustee. The transfer shall be completed within
sixty (60) days after receipt of notice of resignation, removal
or transfer, unless the Company extends the time limit.
(e) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 13 hereof, by the effective
date of resignation or removal under paragraph(s) (a) or (b) of
this section. If no such appointment has been made, the Trustee
may apply to a court of competent jurisdiction for appointment of
a successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be allowed as administrative
expenses of the Trust.
Section 13.Appointment of Successor
(a) Subject to Section 12(c), if the Trustee resigns or is removed in
accordance with Section 12(a) or (b), the Company shall appoint a
bank or trust company in good standing, organized and doing
business under the laws of the United States or a state thereof,
with a market capitalization exceeding $100,000,000 and
authorized under the laws governing its organizaton to exercise
corporate trustee powers, as a successor to replace the Trustee
upon resignation or removal. The successor Trustee shall have
all of the rights and powers of the former Trustee, including
ownership rights in the Trust. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company
or the successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust
assets, subject to Section 8 and 9 hereof. The successor Trustee
shall not be responsible for and the Company shall indemnify and
defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or
from any other past event, or any condition existing at the time
it becomes successor Trustee.
Section 14.Amendment or Termination
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company; provided that -
(1) After a CNF Change in Control has occurred, no amendment
may be made to the Trust without the approval of seventy-
five percent (75%) of all Participants (counting the
beneficiaries of a deceased Participant as a single
Participant) except as may be required to maintain the tax
status or the ERISA status of this Trust.
(2) No such amendment shall increase the duties or
responsibilities of the Trustee unless the Trustee consents
thereto in writing.
(b) The Trust shall not terminate until the date on which
Participants and their beneficiaries have received all of the
benefits due to them under the terms and conditions of the
Arrangements; provided that, upon the written approval of
seventy-five percent (75%) of all Participants (counting the
beneficiaries of a deceased Participant as a Participant), the
Company may terminate this Trust prior to the time all benefit
payments under the Arrangements have been made. Upon termination
of the Trust, the Trustee shall make a final accounting and shall
distribute to the Company the net balance of any remaining assets
of the Trust. Upon making such a distribution, the Trustee shall
be relieved from all further liability.
Section 15.Change in Control
(a) For purposes of this Trust Agreement, the following terms shall
be defined as set forth below:
(1) "Affiliate" means an entity described in Rule 12b-2
promulgated under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(2) "CNF Change in Control" means any of the following:
(i) Any Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by
such person any securities acquired directly from the
Company or its Affiliates) representing 25% or more of
the combined voting power of the Company's then
outstanding voting securities;
(ii) The following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the effective date of the
Trust, constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company) whose appointment or
election by the Board or nomination for election by
the Company's stockholders was approved or recommended
by a vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors on the effective date of the Trust or whose
appointment, election or nomination for election was
previously so approved or recommended;
(iii)There is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted
into voting securities of the surviving or parent
entity) more than 50% of the combined voting power of
the voting securities of the Company or such surviving
or parent entity outstanding immediately after such
merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no
Person, directly or indirectly, acquired 25% or more
of the combined voting power of the Company's then
outstanding securities (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
Affiliates); or
(iv) The stockholders of the Company approve a plan of
complete liquidation of the Company or there is
consummated an agreement for the sale or disposition
by the Company of assets having an aggregate book
value at the time of such sale or disposition of more
than 75% of the total book value of the Company's
assets on a consolidated basis (or any transaction
having a similar effect), other than any such sale or
disposition by the Company (including by way of spin-
off or other distribution) to an entity, at least 50%
of the combined voting power of the voting securities
of which are owned immediately following such sale or
disposition by stockholders of the Company in
substantially the same proportions as their ownership
of the Company immediately prior to such sale or
disposition;
(3) "Marketable Assets" means cash or any asset the Trustee may
invest in pursuant to Section 6(b)(1) or Section 6(c)(3).
(4) "Person" means 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, $0.625 par value per share,
of the Company).
(5) "Potential CNF Change in Control" means any of the
following:
(i) The Company enters into an agreement, the consummation
of which would result in the occurrence of a CNF
Change in Control;
(ii) The Company or any Person publicly announces an
intention to take or to consider taking actions,
including but not limited to proxy contests or consent
solicitations, which, if consummated, would constitute
a CNF Change in Control;
(iii)Any Person becomes the "beneficial owner", as defined
in Rule 13d-3 under the Exchange Act, directly or
indirectly, of securities of the Company representing
15% or more of either the then outstanding shares of
common stock of the Company or the combined voting
power of the Company's then outstanding securities
(not including in the securities beneficially owned by
such Person any securities acquired directly from the
Company or its Affiliates); or
(iv) The Board of Directors of the Company adopts a
resolution to the effect that, for purposes of this
Trust Agreement, a Potential CNF Change in Control has
occurred.
(6) "Unit Change in Control" means any of the following:
(i) There is consummated the sale or other disposition by
the Company, however effected, of either of the two
primary business units of the Company, whether in a
single transaction or in a series of transactions
occurring within an 18-month period, and whether or
not such business unit constitutes part of a larger
enterprise at the time of the sale or other
disposition; provided, however, that this clause (i)
shall apply only to Participants who are employed by
the Company; and provided further, that the Board of
Directors of the Company may, upon notice to the
affected Participants given at any time, terminate
this clause (i) without the consent of such
Participants, except that any such notice shall not be
effective to terminate this clause (i) if a CNF Change
in Control or a Unit Change in Control occurs pursuant
to this clause (i) within ninety (90) days after such
notice is given; or
(ii) There is consummated the sale or other disposition,
however effected, of either of the primary business
units of the Company, whether or not such business
unit constitutes part of a larger enterprise at the
time of the sale or other disposition; provided,
however, that this clause (ii) shall apply only to
Participants (i) who, immediately prior to such sale
or other disposition, were employed by the business
unit that is sold or otherwise disposed of and (ii)
who are not employed by the Company or any of its
subsidiaries immediately following such sale or other
disposition.
As used in clauses (i) and (ii) above, "primary business
units" means Con-Way Transportation Services, Inc., and
Menlo Worldwide Forwarding, Inc., and a "sale or other
disposition" of a business unit includes:
(A) a sale by the Company of the then outstanding shares
of capital stock of the business unit having more than
50% of the then existing voting power of all
outstanding securities of the business unit, whether
by merger, consolidation or otherwise;
(B) the sale of all or substantially all of the assets of
the business unit; and
(C) any other transaction or course of action (including,
without limitation, a spin-off or other distribution)
engaged in, directly or indirectly, by the Company or
the business unit that has a substantially similar
effect as the transactions of the type referred to in
clause (a) or (b) above;
it being the intent that a sale or other disposition of a
business unit occurs even if (x) such business unit
constitutes part of a larger enterprise at the time of the
relevant sale or disposition transaction and (y) such sale
or disposition transaction involves such larger enterprise
(such as, by way of example and without limitation, when
one or more business units are subsidiaries of a common
parent and either (A) the common parent is spun-off or (B)
there is consummated a sale of the stock or other equity
interests in the common parent having more than 50% of the
then existing voting power of all outstanding securities of
the common parent).
The foregoing notwithstanding, (1) a sale or other
disposition of a business unit shall not be deemed to have
occurred for purposes of clauses (i) and (ii) above
(x) except in the case of a transaction described in clause
(B) above, so long as the Company or any of its Affiliates,
individually or collectively, own the then outstanding
shares of capital stock of the business unit having 50% or
more of the then existing voting power of all outstanding
securities of the business unit, or (y) in the event of the
sale of shares of capital stock of the business unit (or
the sale of shares or other equity interests in any parent
company of such business unit) to any trustee or other
fiduciary holding securities under an employee benefit plan
of the Company, the business unit or any other Affiliate of
the Company, and (2) a sale or other disposition of a
business unit shall not be deemed to have occurred for
purposes of clause (ii) above in the event of the sale or
distribution of shares of capital stock (including, without
limitation, a spin-off) of the business unit to
shareholders of the Company, or the sale of assets of the
business unit to any corporation or other entity owned,
directly or indirectly, by the shareholders of the Company,
in either case in substantially the same proportions as
their ownership of stock in the Company.
(b) The General Counsel of the Company shall have the specific
authority to determine whether a Potential CNF Change in Control,
a CNF Change in Control, or a Unit Change in Control has
transpired and shall be required to give the Trustee notice of a
Potential CNF Change in Control, a CNF Change in Control, or a
Unit Change in Control. The Trustee shall be entitled to rely
upon such notice, but if the Trustee receives notice of a
Potential CNF Change in Control, a CNF Change in Control, or a
Unit Change in Control from another source, the Trustee shall
make its own independent determination.
Section 16.Miscellaneous
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) The Company hereby represents and warrants that all of the
Arrangements have been established, maintained and administered
in accordance, in material respects, with all applicable laws,
including without limitation, ERISA.
(c) Benefits payable to Participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or
equitable process.
(d) This Trust Agreement shall be governed by and construed in
accordance with the laws of North Carolina.
(e) The CNF Inc. 2005 Deferred Compensation Plan for Executives and
the CNF Inc. 2005 Supplemental Excess Retirement Plan are
intended to meet the requirements of Section 409A of the Internal
Revenue Code, the regulations thereunder, and any additional
guidance provided by the Treasury Department. The CNF Inc.
Deferred Compensation Plan for Executives and the CNF Inc.
Supplemental Excess Retirement Plan are intended to be exempt
from such requirements. Any provision of this Trust Agreement
that would cause any Arrangement to fail to meet such
requirements shall be void and, notwithstanding any other
provisions of this Trust Agreement, the Trust Agreement may be
amended by the Company and the Trustee to comply with such
requirements.
IN WITNESS WHEREOF, this Trust Agreement has been executed on behalf
of the parties hereto on the day and year first above written.
CNF INC. WACHOVIA BANK, N.A. as TRUSTEE
By: /s/ Mark C. Thickpenny By: /s/ Shelley C. Anderson
------------------------ -------------------------
Its: Vice President - Treasurer Its: AVP
Attachment A
The following Arrangements are covered by this Trust:
CNF Inc. Deferred Compensation Plan for Executives
CNF Inc. 2005 Deferred Compensation Plan for Executives
CNF Inc. Supplemental Excess Retirement Plan
CNF Inc. 2005 Supplemental Excess Retirement Plan
Attachment B
Claims Procedures
(Applicable in the event of a Potential CNF
Change in Control, a CNF Change in Control,
or a Unit Change in Control, as provided in
Section 2(d)(3))
Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant may deliver to the Trustee a written claim for a
determination as to the amount or form of the benefits distributable
to such Claimant from the Arrangements. A claim must be made within
one year following the date on which the event that caused the claim
to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
Notification of Decision. The Trustee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made,
and that the claim has been allowed in full; or
(b) that the Trustee has reached a conclusion contrary, in
whole or in part, to the Claimant's requested
determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or
any part of it;
(ii) specific reference(s) to pertinent provisions of the
Arrangements upon which such denial was based;
(iii)a description of any additional material or
information necessary for the Claimant to clarify or
perfect the claim, and an explanation of why such
material or information is necessary; and
(iv) an explanation of the claim review procedure set forth
below.
Review of a Denied Claim. Within six months after receiving a notice
from the Trustee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Trustee a written request to review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Trustee, in its sole and
absolute discretion, may grant.
Decision on Review. The Trustee shall render its decision on review
promptly and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Trustee's decision must be rendered within 60 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Arrangement
provisions upon which the decision was based; and
(c) such other matters as the Trustee deems relevant.