Exhibit 10.26
CONSOLIDATED FREIGHTWAYS CORPORATION
AMENDED
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
TABLE OF CONTENTS
Page
Preamble 1
ARTICLE 1 Definitions 1
1.1 Account Balance 1
1.2 Annual Bonus 1
1.3 Annual Deferral Amount 1
1.4 Base Annual Salary 2
1.5 Beneficiary 2
1.6 Beneficiary Designation Form 2
1.7 Board 2
1.8 Change in Control 2
1.9 Claimant 3
1.10 Code 3
1.11 Committee 3
1.12 Company 3
1.13 Disability 3
1.14 Election Form 3
1.15 Employer 3
1.16 Moody's Seasoned Corporate Bond Rate 3
1.17 Participant 3
1.18 Plan 3
1.19 Plan Agreement 3
1.20 Plan Entry Date 4
1.21 Plan Year 4
1.22 Pre-Retirement Distribution 4
1.23 Pre-Retirement Survivor Benefit 4
1.24 Retirement 4
1.25 Retirement Benefit 4
1.26 Termination Benefit 4
1.27 Termination of Employment 4
1.28 Unforeseeable Financial Emergency 4
ARTICLE 2 Selection, Enrollment, Eligibility 4
2.1 Selection by Committee 4
2.2 Enrollment Requirement 4
2.3 Commencement of Participation 5
ARTICLE 3 Deferral Commitments/Returns 5
3.1 Minimum Deferral. 5
3.2 Maximum Deferral 5
3.3 Election to Defer 5
3.4 Withholding of Deferral Amounts 6
3.5 FICA Tax 6
3.6 Returns Prior to Distribution 6
3.7 Date on Which Crediting Occurs 6
3.8 Returns and Installment Distributions 6
3.9 Statement of Accounts 7
ARTICLE 4 Pre-Retirement Distribution/ Unforeseeable
Financial Emergencies 7
4.1 Pre-Retirement Distributions 7
4.2 Withdrawal Payout/Suspensions for Unforeseeable
Financial Emergencies 7
ARTICLE 5 Retirement Benefit 8
5.1 Retirement Benefit 8
5.2 Payment of Retirement Benefit 8
5.3 Death Prior to Completion of Retirement Benefit 8
ARTICLE 6 Pre-Retirement Survivor Benefit 9
6.1 Pre-Retirement Survivor Benefit 9
6.2 Payment of Pre-Retirement Survivor Benefit 9
ARTICLE 7 Termination Benefit 9
7.1 Termination Benefit 9
7.2 Payment of Termination Benefit 9
ARTICLE 8 Disability Waiver and Benefit 9
8.1 Disability Waiver 9
8.2 Disability Benefit 10
ARTICLE 9 Beneficiary Designation 10
9.1 Beneficiary 10
9.2 Beneficiary Designation 10
9.3 Spousal Consent 10
9.4 No Beneficiary Designation 10
9.5 Doubt as to Beneficiaries 10
9.6 Discharge of Obligations 10
ARTICLE 10 Leave of Absence 11
10.1 Paid Leave of Absence 11
10.2 Unpaid Leave of Absence 11
ARTICLE 11 Termination, Amendment or Modification 11
11.1 Termination 11
11.2 Amendment 11
11.3 Effect of Payment 11
ARTICLE 12 Administration 12
12.1 Committee Duties 12
12.2 Agents 12
12.3 Binding Effect of Decisions 12
12.4 Indemnification 12
ARTICLE 13 Claims Procedures 12
13.1 Presentation of Claim 12
13.2 Notification of Decision 13
13.3 Review of a Denied Claim 13
13.4 Decision on Review 13
13.5 Legal Action 14
ARTICLE 14 Miscellaneous 14
14.1 Unsecured General Creditor 14
14.2 Employer's Liability 14
14.3 Company's Liability 14
14.4 Nonassignability 14
14.5 Not a Contract of Employment 14
14.6 Furnishing Information 15
14.7 Captions 15
14.8 Governing Use 15
14.9 Pronouns 15
14.10 Notice 15
14.11 Successors 15
14.12 Spouse's Interest 15
14.13 Incompetent 15
14.14 Distribution in the Event of Taxation 16
14.15 Legal Fees To Enforce Rights 16
14.16 Payment of Withholding 16
14.17 Coordination with Other Benefits 16
CONSOLIDATED FREIGHTWAYS CORPORATION
AMENDED
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
Preamble
The purpose of this Plan is to enhance the motivational
value of the salaries and incentive compensation of a select
group of management and highly compensated employees who
contribute materially to the continued growth, development and
future business success of the Company and its subsidiaries by
providing them the opportunity to defer cash compensation. The
Plan is intended to aid the Company and its subsidiaries in
attracting and retaining key employees and give them an incentive
to increase the profitability of the Company and its
subsidiaries. Therefore, the Company adopts this Amended Plan
effective January 1, 2001 as follows:
ARTICLE 1
Definitions
For purposes hereof, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the
following indicated meanings:
1.1 "Account Balance
" means the sum of (i) the total of a Participant's Annual
Deferral Amounts, plus (ii) the return credited in
accordance with the Plan, reduced (iii) by all distributions
made in accordance with the terms and conditions of this
Plan. The Account Balance shall include the amounts
deferred under the Prior Plan which shall be distributed
under the terms of this Plan and in accordance with any
applicable elections of time and form of payment made by the
Participant at the time of deferral under the Prior Plan.
This account shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant
pursuant to this Plan.
1.2 "Annual Bonus
" means any bonus or incentive compensation earned by a
Participant in each Plan Year under all cash bonus and
incentive plans of the Company, and any subsidiary, whether
or not paid in such Plan Year.
1.3 "Annual Deferral Amount
" means that portion of a Participant's Base Annual Salary
and Annual Bonus that a Participant elects to have and is
deferred, in accordance with Article 3, for any one Plan
Year. In the event of Retirement, Disability, death or a
Termination of Employment prior to the end of a Plan Year,
such year's Annual Deferral Amount shall be the actual
amount withheld prior to such event.
1.4 "Base Annual Salary
" means a Participant's base annual salary that is to be
paid to a Participant for each Plan Year, determined as of
the first day of that year, excluding bonuses, commissions,
overtime, incentive payments, non-monetary awards, and other
fees, before reduction for compensation deferred pursuant to
all qualified, nonqualified and Internal Revenue Code
Section 125 plans of the Company or any subsidiary.
1.5 "Beneficiary
" means one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are
entitled to receive benefits under this Plan upon the death
of a Participant.
1.6 "Beneficiary Designation Form
" means the form established from time to time by the
Committee that a Participant completes, signs and returns to
the Committee to designate one or more Beneficiaries.
1.7 "Board
" means the Board of Directors of the Company.
1.8 "Change in Control
" means a change in control of the Company described as
follows:
(a) Any "person" or "group" (as such terms are used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")) is or becomes the "beneficial owner" (as that
term is used in Rule 13(d)3 of the Exchange Act), directly or
indirectly, of 20% or more of the total voting power of all
classes of such stock of the Company then outstanding which is
normally entitled to vote in the election of directors, provided
that such 20% shall be 40% with respect to any "employee benefit
plan" (as such term is defined in section 3(3) of the Employee
Retirement Income Security Act of 1974) maintained by the
Company, or any subsidiary, or trust vehicle maintained
thereunder;
(b) During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board (together
with any new director whose election by the Board or whose
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination was previously so
approved) cease for any reason to constitute at least a majority
thereof;
(c) The consolidation or merger of the Company with or into
another corporation or the conveyance, transfer or lease by the
Company of all or substantially all of its assets to any person,
or the consolidation or merger of any other corporation with or
into the Company, in either event pursuant to a transaction in
which voting stock of the Company is changed into or exchanged
for cash, securities or other property, provided that any such
transaction that is between the Company and its subsidiaries or
between any of its subsidiaries, or involves the exchange of the
Company's voting stock as consideration in the acquisition of
another business or businesses (without change or exchange of the
Company's outstanding voting stock into or for cash, securities
or other property) shall be excluded from the operation of this
clause; or
(d) The shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.
1.9 "Claimant
" means any Participant or Beneficiary of a deceased
Participant who makes a claim for determination under
Section 13.1.
1.10 "Code
" means the Internal Revenue Code of 1986, as amended.
1.11 "Committee
" means the Compensation Committee of the Board or its
delegates.
1.12 "Company
" means Consolidated Freightways Corporation, a Delaware
corporation.
1.13 "Disability
" means a disability for which a Participant qualifies for
benefits under the Consolidated Freightways Corporation
Extended Sick Pay Plan as it may be amended from time to
time.
1.14 "Election Form
" means the form established from time to time by the
Committee that a Participant completes, signs and returns to
the Committee to make an election under the Plan.
1.15 "Employer
" means the Company or any of its subsidiaries that employs
a Participant.
1.16 "Moody's Seasoned Corporate Bond Rate
," means the arithmetic average of yields of representative
bonds, including industrials, public utilities, Aaa, Aa, A
and Baa bonds as published by Moody's Investors Service,
Inc. or any successor to that service. For each Plan Year,
this rate shall be determined by the Committee using the
rate most recently published prior to the last day of the
November preceding the Plan Year.
1.17 "Participant
" for any Plan Year means any employee of an Employer
(i) who is selected to participate in the Plan for such Plan
Year by the Committee, (ii) who elects to participate in the
Plan, (iii) who signs a Plan Agreement, an Election Form and
a Beneficiary Designation Form and returns such documents to
the Committee within the time required by the Committee, but
in no event later than the Plan Entry Date, (iv) whose
signed Plan Agreement, Election Form and Beneficiary
Designation Form are accepted by the Committee, (v) who
commences participation in the Plan on his Plan Entry Date,
and (vi) whose participation has not terminated.
1.18 "Plan
" means the Company's Deferred Compensation Plan for
Executives, evidenced by this instrument and by each Plan
Agreement, as amended from time to time.
1.19 "Plan Agreement
" means a written agreement, as may be amended from time to
time, which is entered into by and between the Company and a
Participant.
1.20 "Plan Entry Date
" means the date on which an employee selected by the
Committee to participate in the Plan commences participation
in the Plan in accordance with Article 2. The Plan Entry
Date shall be January 1 of the Plan Year following selection
by the Committee. If an employee is first selected for
participation in the Plan subsequent to January 1 of a Plan
Year, but prior to July 1, the Committee may, in its sole
discretion, authorize a Plan Entry Date for that Plan Year
of July 1.
1.21 "Plan Year
" means the period beginning on January 1 of each year (or,
in certain limited cases, July 1) and continuing through
December 31 of that year.
1.22 "Pre-Retirement Distribution
" means the payout set forth in Section 4.1 below.
1.23 "Pre-Retirement Survivor Benefit
" means the benefit set forth in Article 6 below.
1.24 "Retirement
", "Retires" or "Retired" means early retirement having
attained at least age 55 and completed at least 10 years of
service as defined in the Consolidated Freightways
Corporation Pension Plan, or normal retirement under such
Pension Plan.
1.25 "Retirement Benefit
" means the benefit set forth in Article 5.
1.26 "Termination Benefit
" means the benefit set forth in Article 7.
1.27 "Termination of Employment
" means the ceasing of employment with the Company and its
subsidiaries, voluntarily or involuntarily, for any reason
other than Retirement, Disability or death.
1.28 "Unforeseeable Financial Emergency
" means an unanticipated emergency that is caused by an
event beyond the control of the Participant that would
result in severe financial hardship to the Participant
resulting from (i) a sudden and unexpected illness or
accident of the Participant or a dependent of the
Participant, (ii) a loss of the Participant's property due
to casualty, or (iii) such other extraordinary and
unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in
the sole discretion of the Committee.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee
. Participation in the Plan shall be limited to a select
group of management and highly compensated employees
(employees whose Base Annual Salary is equal to or exceeds
$100,000) of the Company and its subsidiaries. From that
group, the Committee shall select for each Plan Year, in its
sole discretion, those employees eligible to participate in
the Plan for that Plan Year.
2.2 Enrollment Requirement
. As a condition to participation, a selected employee
shall complete, execute and return to the Committee a Plan
Agreement, an Election Form and a Beneficiary Designation
Form for each Plan Year. In addition, the Committee shall
establish from time to time such other enrollment
requirements as it determines in its sole discretion are
necessary.
2.3 Commencement of Participation
. Provided an employee selected to participate in the Plan
has met all enrollment requirements set forth in the Plan
and required by the Committee, that employee shall commence
participation in the Plan on the Plan Entry Date that
immediately follows his election to participate in the Plan.
ARTICLE 3
Deferral Commitments/Returns
3.1 Minimum Deferral.
(a) Minimum. To defer compensation under the Plan in any Plan
Year, a Participant must elect to defer a minimum of $2,000 of
Base Annual Salary, or a minimum of $2,000 of Annual Bonus.
(b) Short Participation Year. If a Participant's Plan
Entry Date is July 1 of any Plan Year, he must defer a
minimum of $1,000 of Base Annual Salary or a minimum of
$1,000 of Annual Bonus.
3.2 Maximum Deferral
. For each Plan Year, a Participant may defer up to 100% of
his Base Annual Salary stated as a dollar amount and up to
100% of his Annual Bonus stated as a percentage amount. The
amount of Base Annual Salary and/or Annual Bonus that a
Participant elects to defer shall be reduced by the
Committee, without the consent of the affected Participant,
to the extent necessary to provide for (i) other deferrals
of Base Annual Salary and/or Annual Bonus, as the case may
be, by such Participant under all qualified and nonqualified
plans of the Company or any subsidiary and Code Section 125
plans of the Company or any subsidiary, (ii) any taxes that
are required to be withheld with respect to deferrals under
the Plan, and (iii) any other amounts deducted from Base
Annual Salary and/or Annual Bonus pursuant to applicable law
or authorization by Participant.
3.3 Election to Defer
. In connection with a Participant's first participation in
the Plan, the Participant shall make a deferral election by
delivering to the Committee a completed and signed Election
Form at least 20 days prior to the intended Plan Entry Date,
which election form must be accepted by the Committee prior
to the Plan Entry Date for a valid election to exist. The
Committee shall notify a Participant within ten days of its
receipt of the Election Form if the Committee rejects the
Election Form. For each succeeding Plan Year, a new
Election Form must be delivered to and accepted by the
Committee, in accordance with the rules set forth above,
before the end of the Plan Year preceding the Plan Year for
which the election is made. If the Election Form is not
delivered prior to the Plan Entry Date for a Plan Year, no
Annual Deferral Amount shall be deferred for that Plan Year.
3.4 Withholding of Deferral Amounts
. For each Plan Year, the Base Annual Salary portion of the
Annual Deferral Amount shall be withheld each payroll period
in equal amounts from the Participant's Base Annual Salary.
The Annual Bonus portion of the Annual Deferral Amount shall
be withheld at the time or times the Annual Bonus is or
otherwise would be paid to the Participant.
3.5 FICA Tax
. Any applicable FICA and other payroll taxes on amounts
deferred under this Article shall be withheld from that
portion of the Participant's Base Annual Salary and Annual
Bonus that is not being deferred. If necessary, the
Committee shall reduce the amount of Base Annual Salary
and/or Annual Bonus deferred, in order to comply with this
Section 3.5.
3.6 Returns Prior to Distribution
. Prior to any distribution of benefits under Articles 4,
5, 6, or 7, returns shall be credited to a Participant's
Account Balance and compounded annually on a Participant's
Account Balance as though the Annual Deferral Amount for
that Plan Year was withheld on the Participant's Plan Entry
Date. The rate of return on the Account Balance for each
Plan Year shall be the Moody's Seasoned Corporate Bond Rate,
or such other rate as the Committee may determine in its
sole discretion prior to the beginning of a Plan Year. In
the event of Retirement, death or a Termination of
Employment prior to the end of a Plan Year, that Plan Year's
return will be calculated using a fraction of a full Plan
Year's return, based on the number of days that Participant
was employed with the Employer during the Plan Year prior to
the occurrence of such event.
3.7 Date on Which Crediting Occurs
. Account Balances will be credited with returns in
accordance with Section 3.6 up to the date of distribution
for a lump sum payment and up to the first date of
distribution for installment payments. For purposes of
crediting subsequent returns in the event that installment
payments are made, the Account Balance shall be reduced as
of the day on which the distribution is made.
3.8 Returns and Installment Distributions
. In the event a benefit is paid in installments, a
Participant's unpaid Account Balance shall be credited as
follows:
(a) Crediting. For each Plan Year, the undistributed Account
Balance shall be credited with a return equal to the Moody's
Seasoned Corporate Bond Rate or such higher rate as the Committee
may determine in its sole discretion prior to the beginning of a
Plan Year. Returns shall start to accrue under this Section 3.8
as of the date that returns cease to accrue under Section 3.7
above.
(b) Installments. The installment payments shall be determined
by dividing the Participant's Account Balance at the time of the
commencement of the installment payments by the number of
payments over the installment period. Each payment determined
above will be considered the principal portion of the installment
payment. In addition, each installment payment will include a
return calculated for the preceding quarter using the rate
determined in Section 3.8(a) above. Installment payments shall
commence on the first day of the quarter following the first full
quarter following such Participant's date of Retirement, or when
permitted by the Committee in its sole discretion, Termination of
Employment or death. All additional installment payments shall
be paid on the first day of the remaining calendar quarters of
the payment period.
3.9 Statement of Accounts
. The Committee shall send to each Participant, within
120 days after the close of each Plan Year, a statement in
such form as the Committee deems desirable setting forth the
balance standing to the credit of each Participant in his
Account Balance.
ARTICLE 4
Pre-Retirement Distribution/
Unforeseeable Financial Emergencies
4.1 Pre-Retirement Distributions
. In connection with each election to defer an Annual
Deferral Amount, a Participant may elect to receive a future
distribution from the Plan with respect to that Annual
Deferral Amount prior to Retirement. This Pre-Retirement
Distribution shall be a lump sum payment in an amount, as
chosen by the Participant on the Election Form prior to
making the applicable year's deferral, that is equal to
either (a) the Annual Deferral Amount, or (b) the sum of:
(i) the Annual Deferral Amount and (ii) returns credited in
accordance with Section 3.6 above. If a Participant elects
to receive only the Annual Deferral Amount, the returns
credited on the Annual Deferral Amount shall be distributed
to the Participant (or, in the case of the Participant's
death, to the Participant's Beneficiary) in accordance with
Articles 5, 6, and 7. The Pre-Retirement Distribution shall
be paid within 60 days of the first day of the Plan Year
chosen by the Participant on the Election Form for
distribution. The earliest date that a Participant may
receive a Pre-Retirement Distribution is three (3) years
after the first day of the Plan Year in which the Annual
Deferral Amount is actually deferred.
4.2 Withdrawal Payout/Suspensions for Unforeseeable Financial
Emergencies
. If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to
(i) suspend any deferrals required to be made by a
Participant and/or (ii) receive a partial or full payout
from the Plan. The Committee may, in its sole discretion,
accept or deny such petition. Any payout shall not exceed
the lesser of the Participant's Account Balance, calculated
as if such Participant were receiving a Termination Benefit,
or the amount reasonably needed to satisfy the Unforeseeable
Financial Emergency. The suspension shall continue for such
period of time and/or the reinstatement of deferrals shall
occur at a date, as specified by the Committee, in its sole
discretion. If reinstated, the deduction in each pay period
shall not exceed that made immediately prior to the
suspension. If the petition for a suspension and/or payout
is approved, suspension shall take effect upon the date of
approval and any payout shall be made within 60 days of the
date of approval.
4.3 Withdrawal Election. A Participant (or, after a
Participant's death, his or her Beneficiary) may elect, at any
time, to withdraw all or part of his or her Account Balance,
less a withdrawal penalty equal to ten percent (10%) of such
amount (the net amount shall be referred to as the "Withdrawal
Amount"). In the case of a full withdrawal made before
Retirement, Disability, or death, a Participant's Withdrawal
Amount shall be his or her Account Balance calculated as if there
had occurred a Termination of Employment as of the day of the
election. The minimum amount of any partial withdrawal shall be
$25,000. A withdrawal election can be made at any time, before
or after Retirement, Disability, death or Termination of
Employment, and whether or not the Participant (or Beneficiary)
is in the process of being paid pursuant to an installment
payment schedule. The Participant (or his or her Beneficiary)
shall be paid the Withdrawal Amount within sixty (60) days of his
or her election. Once the Withdrawal Amount is paid, the
Participant's participation in the Plan shall terminate and the
Participant shall not be eligible to participate in the Plan for
the remainder of the Plan Year.
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit
. A Participant who Retires shall receive, as a Retirement
Benefit, his Account Balance.
5.2 Payment of Retirement Benefit
. A Participant, in connection with his or her commencement
of participation in the Plan, shall elect on an Election
Form to receive the Retirement Benefit in a lump sum or in
quarterly payments over a period of five (5), ten (10),
fifteen (15), or twenty (20) years. The Participant may
annually change his or her election to an allowable
alternative payout period by submitting a new Election Form
to the Committee, provided that any such Election Form is
submitted at least two (2) years prior to the Participant's
Retirement and is accepted by the Committee in its sole
discretion. The Election Form most recently accepted by the
Committee shall govern the payout of the Retirement Benefit.
If a Participant does not make any election with respect to
the payment of the Retirement Benefit, then such benefit
shall be payable in a lump sum. The lump sum payment shall
be made no later than sixty (60) days after the
Participant's Retirement. Any installment payments shall be
made in accordance with Section 3.8.
5.3 Death Prior to Completion of Retirement Benefit
. If a Participant dies after Retirement but before the
Retirement Benefit is paid in full, the Participant's unpaid
Retirement Benefit payments shall continue and shall be paid
to the Participant's Beneficiary (i) over the remaining
number of calendar quarters and in the same amounts as that
benefit would have been paid to the Participant had the
Participant survived, or (ii) the then current Account
Balance as of the date of death, in a lump sum, if allowed
in the sole discretion of the Committee.
ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit
. If a Participant dies before he Retires, experiences a
Termination of Employment or suffers a Disability, the
Participant's Beneficiary shall receive a Pre-Retirement
Survivor Benefit equal to the Participant's Account Balance.
6.2 Payment of Pre-Retirement Survivor Benefit
. The Pre-Retirement Survivor Benefit shall be the then
current Account Balance as of the date of death, paid in a
lump sum or, in the Committee's sole discretion, in
installments according to the original election of the
Participant. The lump sum payment shall be made within
60 days of the Committee's receiving proof of the
Participant's death.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit
. If a Participant experiences a Termination of Employment
prior to his Retirement, death or Disability, the
Participant shall receive a Termination Benefit which shall
be equal to the Participant's Account Balance determined as
of the date of his Termination of Employment.
7.2 Payment of Termination Benefit
. The Termination Benefit shall be the then current Account
Balance as of the date of Termination of Employment, paid in
a lump sum or installments as the Participant originally
designated in the applicable Election Form(s), or paid in a
lump sum within 60 days of the Termination of Employment if
the Participant so elected in the applicable Election
Form(s). Notwithstanding the foregoing, if the Participant
incurs a Termination of Employment within one year after a
Change in Control, the Termination Benefit shall be paid in
a lump sum within 20 days of the Termination of Employment.
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver
. A Participant who is determined by the Committee to be
suffering from a Disability shall be excused from fulfilling
that portion of the Annual Deferral Amount commitment that
would otherwise have been withheld from a Participant's Base
Annual Salary or Annual Bonus for the Plan Year or portion
thereof during which the Participant has a Disability.
8.2 Disability Benefit
. A Participant suffering a Disability shall for benefit
purposes under this Plan, continue to be considered an
employee and shall be eligible for the benefits provided for
in Articles 4, 5, 6 or 7 in accordance with the provisions
of those Articles. Notwithstanding, the Committee shall
have the right, in its sole discretion, to terminate a
Participant's participation in the Plan at any time during
which such Participant has a Disability and pay the Account
Balance in a lump sum.
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary
. Each Participant shall designate a Beneficiary to receive
any benefits payable under the Plan upon the Participant's
death.
9.2 Beneficiary Designation
. A Participant shall designate his Beneficiary by
completing and signing the Beneficiary Designation Form, and
submitting it to the Committee or its delegate. A
Participant shall have the right to change a Beneficiary at
any time without the consent of the Beneficiary, by
completing, signing and otherwise complying with the terms
of the Beneficiary Designation Form and the Committee's
rules and procedures, as in effect from time to time. Upon
the receipt by the Committee of a new Beneficiary
Designation Form, all Beneficiary designations previously
filed shall be canceled. The Committee shall be entitled to
rely on the last Beneficiary Designation Form filed by the
Participant with the Committee prior to his death.
9.3 Spousal Consent
. In the case of a married Participant, if the Participant
names someone other than his spouse as a primary
Beneficiary, a spousal consent, in the form designated by
the Committee, must be signed by that Participant's spouse
and returned to the Committee. No consent is required if it
is established to the satisfaction of the Committee that
consent cannot be obtained because the spouse cannot be
located.
9.4 No Beneficiary Designation
. If a Participant fails to designate a Beneficiary as
provided above, the Participant's designated Beneficiary
shall be deemed to be his surviving spouse. If the
Participant has no surviving spouse, the benefits otherwise
payable to a Beneficiary shall be paid to the Participant's
estate.
9.5 Doubt as to Beneficiaries
. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its
discretion, to withhold such payments until the matter is
resolved to the Committee's satisfaction, and/or to require
indemnification.
9.6 Discharge of Obligations
. The payment of benefits under the Plan to a Participant
or Participant's Beneficiary shall fully and completely
discharge the Company and the Participant's Employer from
all obligations under this Plan with respect to the deceased
Participant and all of his Beneficiaries and any others that
may be entitled to such benefits.
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence
. If a Participant is authorized by the Company to take a
paid leave of absence, the Participant shall continue to be
considered employed by the Employer and the Base Annual
Salary and Annual Bonus deferred by the Participant shall
continue to be withheld during such paid leave of absence in
accordance with Section 3.4.
10.2 Unpaid Leave of Absence
. If a Participant is authorized by the Company to take an
unpaid leave of absence, the Participant shall continue to
be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of
the date the leave of absence expires or the Participant
returns to a paid employment status. Upon such expiration
or return, deferrals shall resume for the remaining portion
of the Plan Year in which the expiration or return occurs,
based on the deferral election, if any, made for that Plan
Year.
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination
. The Company reserves the right to terminate the Plan at
any time. Prior to a Change in Control, the Committee shall
have the right, at its sole discretion, and notwithstanding
any elections made by the Participant to pay the then
outstanding Account Balance in a lump sum. After a Change
in Control the Company shall be required to pay such
benefits in a lump sum.
11.2 Amendment
. The Board may, at any time, amend or modify the Plan in
whole or in part, provided, however, that no amendment or
modification shall decrease or restrict a Participant's
Account Balance at the time the amendment or modification is
made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the
amendment or modification, or, if the amendment or
modification occurs after the date upon which the
Participant was eligible to Retire, the Participant had
Retired as of the effective date of the amendment or
modification. The amendment or modification of the Plan
shall not affect the payment of benefits to any Participant
or Beneficiary who has become entitled to the payment of
benefits under the Plan as of the date of the amendment or
modification.
11.3 Effect of Payment
. The full payment of the applicable benefit under
Articles 4, 5, 6 or 7 of the Plan shall completely discharge
all obligations to a Participant under this Plan and the
Plan Agreement, and the Participant's Plan Agreement shall
terminate.
ARTICLE 12
Administration
12.1 Committee Duties
. This Plan shall be administered by the Committee or its
delegates. The Committee shall also have the discretion and
authority to make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of
this Plan and decide or resolve any and all questions
including interpretations of this Plan, as may arise in
connection with the Plan. A majority of the Committee shall
constitute a quorum and a majority of the members present at
any meeting at which a quorum is present or acts approved in
writing or in a telephone meeting by all of the members
shall constitute a decision by the entire Committee.
12.2 Agents
. In the administration of this Plan, the Committee may,
from time to time, delegate to such persons as it deems
appropriate such administrative duties as it sees fit and
may from time to time consult with counsel who may be
counsel to the Company or a subsidiary.
12.3 Binding Effect of Decisions
. The decision or action of the Committee with respect to
any question arising out of or in connection with the
administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any
interest in the Plan.
12.4 Indemnification
. The Company shall indemnify and hold harmless the named
fiduciaries and any officers or employees of the Company and
its subsidiaries to which fiduciary responsibilities have
been delegated from and against any and all liabilities,
claims, demands, costs and expenses including attorneys
fees, arising out of an alleged breach in the performance of
their fiduciary duties under the Plan and ERISA, other than
such liabilities, claims, demands, costs and expenses as may
result from the gross negligence or willful misconduct of
such person. The Company shall have the right, but not the
obligation, to conduct the defense of such person in any
proceeding to which this paragraph applies.
ARTICLE 13
Claims Procedures
13.1 Presentation of Claim
. Any Participant or Beneficiary of a deceased Participant
may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim
must be made within 60 days after such notice was received
by the Claimant. All other claims must be made within
180 days of 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.
13.2 Notification of Decision
. The Committee 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 Committee 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 Plan
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 in
Section 13.3 below.
13.3 Review of a Denied Claim
. Within 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part,
a Claimant (or the Claimant's duly authorized
representative) may file with the Committee a written
request for a 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 Committee, in its sole
discretion, may grant.
13.4 Decision on Review
. The Committee 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 Committee's decision must be
rendered within 120 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 Plan provisions upon
which the decision was based; and
(c) such other matters as the Committee deems relevant.
13.5 Legal Action
. A Claimant's compliance with the foregoing provisions of
this Article 13 is a mandatory prerequisite to a
Participant's right to commence any legal action with
respect to any claim for benefits under this Plan.
ARTICLE 14
Miscellaneous
14.1 Unsecured General Creditor
. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights,
interest or claims in any property or assets of the Company
or an Employer. Any and all of the Company's assets shall
be, and remain, its general, unpledged and unrestricted
assets. The Company's obligation under the Plan shall be
merely that of an unfunded and unsecured promise to pay
money in the future.
14.2 Employer's Liability
. An Employer other than the Company shall have no
liability to a Participant or a Participant's Beneficiary
for payment of any benefits under the Plan.
14.3 Company's Liability
. Amounts payable to a Participant on his Account Balance
under Article 3 shall be paid from the general assets of the
Company (including without limitation the assets of any
trust established to fund payment of obligations hereunder)
exclusively.
14.4 Nonassignability
. Neither a Participant nor any other person shall have the
right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to
be unassignable and non-transferable, except that the
foregoing shall not apply to any family support obligations
set forth in a court order. No part of the amounts payable
shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any
other person, nor be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or
insolvency.
14.5 Not a Contract of Employment
. The terms and conditions of this Plan nor any actions
taken hereunder shall not be deemed to constitute a contract
of employment between the Company or an Employer and the
Participant, nor give Participant any right to be retained
as an employee of the Company or its subsidiaries. Such
employment relationship can be terminated at any time for
any reason, with or without cause, unless expressly provided
in a written employment agreement. This Plan shall only
create a contractual obligation on the part of the Company,
and shall not be construed as creating a trust or any
fiduciary relationship.
14.6 Furnishing Information
. A Participant will cooperate with the Committee by
furnishing any and all information requested by the
Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to
taking such physical examinations as the Committee may deem
necessary.
14.7 Captions
. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.
14.8 Governing Use
. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of
California.
14.9 Pronouns
. Masculine pronouns wherever used shall include feminine
pronouns.
14.10 Notice
. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in
writing and hand-delivered, or sent by registered or
certified mail, return receipt requested, to:
Consolidated Freightways Corporation
Compensation Committee
Deferred Compensation Plan for Executives
16400 SE CF Way
Vancouver, WA 98683
Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in
writing and hand-delivered, or sent by mail, to the last
known address of the Participant.
14.11 Successors
. The provisions of this Plan shall be binding upon and
inure to the benefit of the Participant's Company and its
successors and assigns and the Participant, the
Participant's Beneficiaries, and their permitted successors
and assigns.
14.12 Spouse's Interest
. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not
limited to such spouse's will, nor shall such interest pass
under the laws of intestate succession.
14.13 Incompetent
. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person
declared incompetent or to a person incapable of handling
the disposition of that person's property, the Committee may
direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may
require proof of minority, incompetency, incapacity or
guardianship, as it may deem appropriate and/or such
indemnification of the Committee, the Company and the
Participant's Employer and security, as it deems
appropriate, in its sole discretion, prior to distribution
of the benefit. Any payment of a benefit shall be a payment
for the account of the Participant and the Participant's
Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment
amount.
14.14 Distribution in the Event of Taxation
. If, for any reason, all or any portion of a Participant's
benefit under this Plan becomes taxable to the Participant
prior to receipt, a Participant may petition the Committee
for a distribution of assets sufficient to meet the
Participant's tax liability (including additions to tax,
penalties and interest). Upon the grant of such a petition,
which grant shall not be unreasonably withheld, the Company
shall distribute to the Participant immediately available
funds in an amount equal to that Participant's federal,
state and local tax liability associated with such event of
taxation (which amount shall not exceed a Participant's
accrued benefit under the Plan), such tax liability shall be
measured by using that Participant's then current highest
federal, state and local marginal tax rate, plus the rates
or amounts for the applicable additions to tax, penalties
and interest. If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when
the Participant's petition is granted. Such a distribution
shall reduce the benefits to be paid under this Plan.
14.15 Legal Fees To Enforce Rights
. If the Company has failed to comply with any of its
obligations under the Plan or any agreement thereunder or,
if the Company, the Participant's Employer or any other
person takes any action to declare the Plan void or
unenforceable or institutes any litigation or other legal
action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the
Company irrevocably authorizes such Participant to retain
counsel of his choice and agrees to pay the reasonable legal
fees and expenses of the Participant incurred in connection
with the initiation or defense of any litigation or other
legal action, whether by or against the Company, or any
director, officer, shareholder or other person affiliated
with the Company, or any successor thereto in any
jurisdiction, provided that such Participant prevails in
such action.
14.16 Payment of Withholding
. As a condition of receiving benefits under the Plan, the
Participant shall pay the Company and/or the applicable
Employer not less than the amount of all applicable federal,
state, local and foreign taxes required by law to be paid or
withheld relating to the receipt or entitlement to benefits
hereunder. The Company may withhold taxes from any benefits
paid and/or from Base Annual Salary or Annual Bonus, in its
sole discretion.
14.17 Coordination with Other Benefits
. The benefits provided for a Participant and Participant's
Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan
or program for employees of the Company and its
subsidiaries. The Plan shall supplement and shall not
supersede, modify or amend any other such plan or program
except as may otherwise be expressly provided. In no event
shall distributions under the Plan prior to Retirement have
the effect of increasing payments otherwise due under the
various retirement plans of the Company and its
subsidiaries.
IN WITNESS WHEREOF, the Company has signed this Amended Plan
as of November 13, 2000.
Consolidated Freightways Corporation
By: /s/Stephen D. Richards
Stephen D. Richards
Its: Senior Vice President