Exhibit 10.10
CONSOLIDATED FREIGHTWAYS CORPORATION
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
CONSOLIDATED FREIGHTWAYS CORPORATION
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
TABLE OF CONTENTS
Page
Preamble
Article 1 Definitions
1.1 Account Balance
1.2 Annual Bonus
1.3 Annual Deferral Amount
1.4 Base Annual Salary
1.5 Beneficiary
1.6 Beneficiary Designation Form
1.7 Board
1.8 Change in Control
1.9 Claimant
1.10 Code
1.11 Committee
1.12 Company
1.13 Disability
1.14 Election Form
1.15 Employer
1.16 Moody's Seasoned Corporate Bond Rate
1.17 Participant
1.18 Plan
1.19 Plan Agreement
1.20 Plan Entry Date
1.21 Plan Year
1.22 Pre-Retirement Distribution
1.23 Pre-Retirement Survivor Benefit
1.245 Retirement
1.25 Retirement Benefit
1.26 Termination Benefit
1.27 Termination of Employment
1.28 Unforeseeable Financial Emergency
Article 2 Selection, Enrollment, Eligibility
2.1 Selection by Committee
2.2 Enrollment Requirement
2.3 Commencement of Participation
Article 3 Deferral Commitments/Returns
3.1 Minimum Deferral
3.2 Maximum Deferral
3.3 Election to Defer
3.4 Withholding of Deferral Amounts
3.5 FICA Tax
3.6 Returns Prior to Distribution
3.7 Date on Which Crediting Occurs
3.8 Returns and Installment Distributions
3.9 Statement of Accounts
Article 4 Pre-Retirement Distribution/Unforeseeable
Financial Emergencies
4.1 Pre-Retirement Distributions
4.2 Withdrawal Payout/Suspensions for
Unforeseeable Financial Emergencies
Article 5 Retirement Benefit
5.1 Retirement Benefit
5.2 Payment of Retirement Benefit
5.3 Death Prior to Completion of Retirement Benefit
Article 6 Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit
6.2 Payment of Pre-Retirement Survivor Benefit
Article 7 Termination Benefit
7.1 Termination Benefit
7.2 Payment of Termination Benefit
Article 8 Disability Waiver and Benefit
8.1 Disability Waiver
8.2 Disability Benefit
Article 9 Beneficiary Designation
9.1 Beneficiary
9.2 Beneficiary Designation
9.3 Spousal Consent
9.4 No Beneficiary Designation
9.5 Doubt as to Beneficiaries
9.6 Discharge of Obligations
Article 10 Leave of Absence
10.1 Paid Leave of Absence
10.2 Unpaid Leave of Absence
Article 11 Termination, Amendment or Modification
11.1 Termination
11.2 Amendment
11.3 Effect of Payment
Article 12 Administration
12.1 Committee Duties
12.2 Agents
12.3 Binding Effect of Decisions
12.4 Indemnification
Article 13 Claims Procedures
13.1 Presentation of Claim
13.2 Notification of Decision
13.3 Review of a Denied Claim
13.4 Decision on Review
13.5 Legal Action
Article 14 Miscellaneous
14.1 Unsecured General Creditor
14.2 Employer's Liability
14.3 Company's Liability
14.4 Nonassignability
14.5 Not a Contract of Employment
14.6 Furnishing Information
14.7 Captions
14.8 Governing Use
14.9 Pronouns
14.10 Notice
14.11 Successors
14.12 Spouse's Interest
14.13 Incompetent
14.14 Distribution in the Event of Taxation
14.15 Legal Fees To Enforce Rights
14.16 Payment of Withholding
14.17 Coordination with Other Benefits
CONSOLIDATED FREIGHTWAYS CORPORATION
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 the Plan
effective January 1, 1997 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
5 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.
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 shall
elect on an Election Form prior to the beginning of a
Plan Year to receive the Retirement Benefit for such Plan
Year in a lump sum or in quarterly payments over a period
of 5, 10, 15 or 20 years. The lump sum payment shall be
made within 60 days of the Participant's Retirement. Any
installment payment shall be made in accordance with
Section 3.8 above.
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
175 Linfield Drive
Menlo Park, California 94025
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 Plan
as of November 20, 1996.
Consolidated Freightways Corporation
By: STEPHEN D. RICHARDS
Stephen D. Richards
Its: Senior Vice President