Exhibit 10.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
This Settlement Agreement and Mutual Release of Claims
(hereinafter "Release") is made between W. Roger Curry
("Curry") and Consolidated Freightways ("CFC")
(individually, a "Party," and collectively the "Parties")
for the complete and final settlement of the Employment
Agreement, dated as of December 8, 1998 between Curry and
CFC (hereinafter the "Employment Agreement") and the mutual
release of claims, if any. The Parties hereto voluntarily
and knowingly enter into the following Release and have
agreed and do agree as follows:
1 Except as specifically otherwise provided herein, Curry
shall and hereby does, acknowledge full and complete
satisfaction of the Employment Agreement and does hereby
release, absolve and discharge, except as expressly set
forth herein, CFC, its subsidiaries and affiliated
companies, their predecessors, successors and assigns,
past and present, and each of them as well as their
directors, officers, stockholders, agents, servants,
employees, representatives and attorneys, and each of
them (all hereinafter referred to collectively and
individually as "CFC and Affiliates") from any and all
claims, demands, liens, agreements, contracts, covenants,
actions, suits, causes of action, employment
discrimination accusations, wages, obligations, debts,
expenses, damages, judgements, orders, and liabilities of
whatever kind or nature in law, equity or otherwise,
whether known or unknown, suspected or unsuspected, which
Curry now owns or holds or at any time heretofore owned
or held against said entities or persons or any of them,
including specifically but not exclusively and without
limiting the generality of the foregoing (1) any and all
claims arising out of or in any way connected with
Curry`s employment by CFC and Affiliates; (2) any and all
claims arising out of or in any way connected with
Curry's separation from employment with CFC and
Affiliates; (3) any and all claims for wages or
commissions due as a result of said employment
relationship, including any payments under any long or
short term incentive plan; (4) any and all claims for
statutory penalties, interest, or attorneys' fees; (5)
any and all claims for wrongful discharge, whether
contractual or tortious, including any claim for
constructive discharge or forced involuntary retirement;
(6) any and all claims for intentional, negligent, or
wrongful termination; (7) any and all claims for breach
of contract, whether express or implied; (8) any and all
claims for further pension or other retirement benefits
other than those benefits provided herein; (9) any and
all tort claims, including claims for intentional or
negligent infliction of emotional distress or defamation;
(10) any and all claims for breach of the covenant of
good faith and fair dealing, whether contractual or
tortious; (11) any and all claims for labor protection
benefits under state, federal or local law; (12) any and
all claims that could be raised under any state, federal
or municipal laws pertaining to age, sex, race, religion,
veteran status, job protection, national origin,
disability or other employment discrimination of whatever
type; (13) any and all claims arising out of or in any
way connected with Curry's Employment Agreement; (14) any
and all claims for severance benefits and/or payments of
whatever type; (15) any and all claims under any
executive or general employee benefit plans or
arrangements other than those benefits provided herein;
(16) any and all claims arising out of or in any way
connected with any loss, damage or injury whatever, known
or unknown, suspected or unsuspected, resulting from any
act or omission by CFC and Affiliates committed or
omitted prior to the date hereof. Curry hereby releases
all of his employment rights and privileges with the
company and its affiliates. The Company hereby forever
and generally and completely releases and discharges
Curry and his agents, successors, heirs, assigns, and
affiliates, from any and all claims and demands of every
kind and nature, in law, equity or otherwise, based on
any actions, or failures to act, of Curry, and for
damages actual and consequential, past present and future
arising therefrom. The Company represents and warrants
that it has obtained any necessary approvals or
authorizations from its Board of Directors required to
consummate this Agreement and effectuate the resolution
of all claims which are the subject of this Agreement,
and also represents and warrants that it has reasonably
investigated and determined that it has no claims against
Curry at this time.
However, the above releases herein expressly do not apply
to or limit either (1) Curry's legally-vested rights (if
any) under any benefit plan of the company; (2) Curry's
rights to indemnification by the Company as provided for
herein and by law; (3) either Party's potential claims
with regard to the other Party's future activities; or
(4) either Party's rights to enforce the terms of this
Agreement.
2.Except as modified by paragraph 1 above, this Release is
expressly intended to waive any and all claims either
Party may presently possess or previously possessed,
however enumerated and regardless of the nature, source
or basis for any such claim. The Parties hereby intend
this Release to have a broad effect and to settle all
disputes, without limitation of any kind or nature, which
either Party may have against each other.
The Parties knowingly waive the requirement of California
Civil Code Section 1542, which reads as follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in its
favor at the time of executing the Release, which, if
known by him, must have materially affected his
settlement with the debtor."
Notwithstanding the provisions of Section 1542 and of any
other laws of similar scope and effect, and for the
purpose of implementing a full and complete release of
claims, CFC and Curry expressly acknowledge that this
Release is intended to include in its effect, without
limitation, all claims which they do not know or suspect
to exist in their favor at the time of execution of this
Release.
3 Curry acknowledges and agrees that the only
representations or inducements that have been made to him to
secure his signature on this document and the only
consideration he will receive for signing this Release are
as appears in this document, and Curry further agrees that
this document constitutes the entire agreement between him
and CFC and Affiliates on the subject of his separation from
employment.
4 Curry expressly waives any rights or claims under the
Federal Age Discrimination in Employment Act and Older
Workers' Benefit Protection Act in connection with his
separation from employment at CFC and Affiliates. Curry,
with the advice of competent counsel, and after having been
advised to consult with an attorney, affirms that he has had
at least twenty-one (21) days in which to consider executing
the release of age discrimination claims under the
aforementioned statutes. Curry is further aware of his
right to revoke the waiver of age discrimination claims
within seven (7) days after signing this Release. In the
event Curry revokes the waiver of claims contained herein,
within seven (7) days after signing this Release he shall
immediately return to CFC all sums and benefits he has
received pursuant to this Release.
5 In consideration of the representations of Curry herein,
CFC agrees to provide the following severance pay and
arrangements:
a) Within ten (10) days from the date of this release,
$2,218,783
b) Quarterly payments, less applicable taxes, beginning
March 31, 2000 on a January 1, 2000 balance of $2,654,498
relating to deferred compensation earned on or prior to
December 31, 1996. The amount and duration of the payments,
together with accrued interest, shall be made in accordance
with the CNF Transportation Inc. Stock Appreciation Rights
Plan and Long-term Incentive Plan, which are a part of this
Release.
c) Promptly issue Curry 200,000 shares of CF stock upon
payment of withholding tax of $484,500. The withholding tax
shall be deducted from the $2,218,783 payable under section
5(a) above. CF will provide Curry a W-2 by January 31, 2001
showing compensation of $1,425,000.
d) Promptly issue Curry 100,000 shares of CF stock upon
attainment of the required CF stock price of $11.96 or in
the event of a Change of Control (unless otherwise
determined by the Compensation Committee of the Board of
Directors prior to the occurrence thereof), all in
accordance with the terms of the Stock Award and Deferral
Agreement, between Curry and CFC dated as of December 2,
1996, and the 1996 Stock Option and Incentive Plan. As
provided therein, the right to receive such shares will be
forfeited on January 24, 2001, unless the restrictions have
lapsed prior to that date.
e) Promptly issue Curry 30,000 shares of CFC stock upon
attainment of the required CF stock price of $20 or in the
event of a Change in Control (unless the surviving or
acquiring corporation refuses to assume such stock award and
the applicable agreement), all in accordance with the terms
of the Stock Award and Deferral Agreement, between Curry and
CFC, dated as of May 12, 1999, and the 1996 Stock Option and
Incentive Plan. As provided therein, the right to receive
such shares will be forfeited on January 24, 2001, unless
the restrictions have lapsed prior to that date.
f) Issue upon the exercise of stock options up to 100,000
shares of CFC stock for $14.0625 per share provided such
options are exercised on or prior to January 24, 2003, all
in accordance with the terms of the Stock Option Grant
Notice, dated June 16, 1999, the corresponding Stock Option
Agreement, the 1999 Equity Incentive Plan and the Notice of
Exercise.
g) Pay on behalf of Curry on the last day of each month
beginning March 31, 2000 an amount equivalent to the retiree
medical premium, less applicable taxes, through December 31,
2002.
h) On the last day of each month, beginning April 30,
2000, pay Curry $1,400 per month, in lieu of a car allowance
and 401(k) matches, through December 31, 2002, less
applicable withholding taxes. As soon as practicable, pay
Curry $2,800 for February and March, 2000.
i) Pay CFC's share of the split dollar life insurance
premiums, provided Curry pays his share of the premiums, in
accordance with the split-dollar life program available to
senior executives of CFC. Curry authorizes CFC to deduct
such premiums monthly from the retirement payments.
j) Provide the vested retirement benefits under the CFC
Pension Plan in accordance with its terms and the
supplemental retirement benefits under the CFC Supplemental
Retirement Plan, with age and service credit through
December 31, 2002. Retiree medical premiums shall be
deducted from pension payments.
k) Provide Curry all retiree benefits generally available
to employees.
l) Reimburse Curry for annual tax preparation services
through December 31, 2002, of up to $2,500, and for an
executive physical according to the terms of the program for
other executives.
6. Curry agrees to bear all tax consequences and pay all
withholding taxes for which he is liable for sums referred
to herein in connection with this settlement, and agrees to
hold harmless and indemnify CFC and Affiliates against all
liabilities, penalties, interest and expenses (including
reasonable attorneys' fees and expenses) in the event that
any proceeding is instituted by any governmental agency in
connection with the tax consequences of said sums.
7. Curry agrees to cooperate with CFC and Affiliates at
CFC's expense but without additional compensation in
connection with any claims, disputes or lawsuits on an as-
needed basis. CFC shall pay Curry an hourly consulting fee
of $250.00 for Curry's assistance, provided however, Curry
shall not be paid to prepare for or give testimony in a
deposition or at trial.
8. Curry agrees that he will not seek or accept employment
with CFC or its affiliated companies in the future.
9. CFC and Curry agree that, in any publication or
communication, they shall represent that Curry has retired
from employment with CFC. In addition, each Party agrees
not to illegally disparage the other Party.
10. The terms of settlement and this Release of claims are
a private matter and are to be held in strict confidence by
CFC and Curry and their attorneys and shall not be disclosed
to other persons other than their attorneys, spouses,
financial planners, tax return preparers, government taxing
authorities, or as required to comply with legal process or
other legal requirements. The Parties understand that this
is a material term of the Release and that any disclosure by
the Parties of the terms and conditions of the Release shall
be treated as a breach and will entitle the Parties, at
their option, to seek all damages occasioned by the breach.
11. The Parties recognize that, in connection with Curry's
employment, he had access to certain written and oral
information, data, marketing techniques and information,
administrative and operational procedures, materials,
marketing plans, strategic planning, pricing guidelines,
contract terms, and other trade secrets or confidential or
proprietary information of CFC and its affiliated companies,
which information is not otherwise generally available to
the public (the "Confidential Information"). The Parties
further recognize that Curry may have, on behalf of CFC and
its affiliated companies, produced, refined, or contributed
to the production or refinement of such Confidential
Information. The Parties further recognize that CFC and its
affiliated companies had and have a right to protect the
confidentiality and ownership of that Confidential
Information, that the nature of their businesses is highly
specialized and unique, and that Curry's position with CFC
and its affiliated companies was one of confidence and
trust.
Curry agrees never to use, for himself or others, or
disclose to any individual, directly or indirectly, any
Confidential Information, as described in the preceding
paragraph, without the prior written consent of CFC.
Curry understands that an unauthorized disclosure or use
of Confidential Information, as set forth herein, will
entitle CFC, at is option, to seek all damages occasioned
by the breach.
Curry covenants and agrees that he will, upon execution
of this Release, deliver to CFC any and all Confidential
Information as defined above, including but not limited
to any and all records, forms, contracts, studies,
reports, appraisals, strategic planning documents, price
lists, shipper or customer lists or information, special
pricing arrangements, financial data, lists of names or
other shipper data, and any other articles or papers,
computer tapes, and materials that have come into his
possession by reason of his employment with CFC, together
with all copies thereof, whether or not any of said items
were prepared by him, and he shall not retain memoranda
or copies of said items.
Curry acknowledges and agrees that he will not use for
himself or others or disclose to any individual directly
or indirectly any Confidential Information as defined
above. Further he will not use for himself or others or
disclose to any individual directly or indirectly any
Confidential Information as defined above. Further he
will not use for himself or others or disclose to any
individual directly or indirectly any information
concerning customer shipping volumes, rates, price lists,
special pricing arrangements, financial data, strategic
planning information, or other shipper data, that he
learned or acquired while at CFC that is not otherwise
readily available from the shipper/customer or other
public source.
12. By entering into this Release, it is expressly agreed
between the Parties that neither Party admits any liability
or wrongdoing in connection with any aspect of Curry's
employment by CFC and its affiliated companies or his
retirement from that employment. Neither the agreement to
enter into this Release nor anything in this Release shall
be admissible in any proceeding as evidence of any admission
by CFC or Curry of any breach of any contractual obligation,
wrongdoing, or other wrongful action in any form whatsoever.
The Parties hereto enter into this Release in order to
resolve actual and potential claims, and no admission of
liability can be implied from that action.
13. CFC agrees that it will defend and indemnify Curry for
actions taken by him while employed at CFC and its
affiliated companies which were within the course and scope
of his employment to the fullest extent permitted by law,
CFC's articles of incorporation and by-laws.
14. The terms of this Release are contractual and not a
mere recital. Should any provision, or part of any
provision or application thereof be held invalid, the
invalidity shall not affect any other provisions or
applications of the Release which can be given effect
without the invalid provision or applications, and to this
end provisions of this Release are declared to be severable.
15. The Release shall bind and benefit all Parties hereto,
their spouses, legal successors, heirs, assigns, partners,
guarantors, agents, executors, representatives and advisors,
and all other claiming by and through them. In the case of
any corporation, the Release shall bind and benefit its
subsidiaries, affiliates, parents, assigns, employees,
successors-in-interest, agents, directors, officers, and
shareholders.
16. All Parties and their counsel have reviewed this
Release, and the normal rule of construction providing that
any ambiguities are to be resolved against the drafting
Party shall not be employed in the interpretation of this
Release.
17. No breach of any provisions hereto can be waived unless
done so expressly and in writing. Express waiver of any one
breach shall not be deemed a waiver of any other breach of
the same or any other provisions hereof. The Release may be
amended or modified only by a written agreement executed by
all Parties to this Release.
18. The Parties represent and declare that, in executing
this Release, they relied solely upon their own judgment,
belief and knowledge, and the advice and recommendations of
their own independently selected counsel, concerning the
nature, extent and duration of their rights and claims, and
that they have not been influenced to any extent whatsoever
in executing the same by any representations or statements
not expressly contained or referred to in this Release.
19. The interpretation of this Release and the provisions
thereof shall be governed by the laws of the State of
California.
20. All Parties acknowledge they have carefully read and
understood the contents of the Release. The Parties hereto
further expressly agree that the considerations recited in
this Release are the sole and only considerations for this
agreement, and that no representations, promises, or
inducements have been made by any Party or its officers,
employees, agents, or attorneys thereof other than as appear
in this Release. This Release supercedes any other oral or
written agreements or understandings between the Parties
regarding any matter within the scope of the Release. The
Parties hereto acknowledge voluntarily entering into this
agreement with full knowledge of the rights that they may be
waiving.
21. Curry shall not be required to mitigate the amount of
payments hereunder by seeking other employment or otherwise,
and any amount earned by Curry as a result of employment by
others shall not reduce payments hereunder.
22. The Company will reimburse Curry or Curry's successor-
in-interest for all reasonable attorney fees and costs
associated with bringing any action under the Release to
enforce his rights hereunder, regardless of the outcome of
such proceeding, provided the court does not find the claim
was brought in bad faith. Curry will reimburse CFC for all
reasonable attorney fees and cost associated with bringing
any action under this Release to enforce its rights if CFC
is the "prevailing party" as defined under California law.
Date: April 14, 2000
W. Roger Curry Consolidated Freightways Corporation
/s/ W. R. Curry By:_/s/ Stephen D. Richards
Name: Stephen D. Richards
Title: Senior Vice President and
General Counsel