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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________
TO ______________.
Commission file number 0-19791
USFREIGHTWAYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3790696
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8550 W. Bryn Mawr Ave., Ste. 700, Chicago, Il. 60631
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (773) 824-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange of which registered
Common Stock $.01 Par Value NASDAQ
Preferred Stock Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
8 1/2 % Notes Due April 15, 2010
6 1/2 % Notes Due May 1, 2009
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. __X____ Yes________No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K ___.
The number of shares of common stock outstanding at March 23, 2001 was
26,223,010. The aggregate market value of the voting stock of the registrant as
of March 23, 2001 was approximately $781,786,597.
DOCUMENTS INCORPORATED BY REFERENCE
1) 2000 Annual Report to Shareholders for the Year Ended December 31, 2000
(Only those portions referenced herein are incorporated in this Form 10-K).
2) Proxy Statement to be filed on or about March 28, 2001 (Only those portions
referenced herein are incorporated in this Form 10-K).
Page 2
USFreightays Corporation
Form 10-K
Year Ended December 31, 2000
PART I
Item 1. Business
Background
USFreightways Corporation ("the Company") provides comprehensive supply
chain management services through its operating subsidiaries. Regional
less-than-truckload ("LTL") general commodities carriers provide overnight and
second-day delivery throughout the United States and into Canada. Logistics
subsidiaries provide integrated supply chain solutions, value added logistics
solutions, reverse logistics services and complete warehouse fulfillment
services to its customers. The Company also provides domestic and international
freight forwarding, import and export air and ocean services as well as premium
regional and national truckload ("TL") service. Principal subsidiaries in the
Regional LTL group are USF Holland Inc. ("Holland"), USF Bestway Inc.
("Bestway"), USF Red Star Inc. ("Red Star"), USF Reddaway Inc. ("Reddaway") and
USF Dugan Inc. ("Dugan"). USF Worldwide Logistics consists of Logistics and
Freight Forwarding Groups. The Logistics group consists of USF Logistics Inc.
("Logistics"), USF Processors Inc ("Processors") and USF Distribution Services
Inc. ("Distribution Services"); the Freight Forwarding group includes several
companies that all now operate under the name USF Worldwide Inc. ("Worldwide");
USF Glen Moore Transport Inc. ("Glen Moore") is the Company's TL carrier.
The Company traces its origins to 1984 when TNT Limited, through its wholly
owned subsidiary TNT Transport Group ("Transport Group"), embarked on a strategy
to establish, through acquisition, a nationwide network of quality regional LTL
carriers. During the same period, the group of businesses that now constitute
the Company also grew as a result of internal expansion and increased
penetration of existing markets. In April 1991 the Company was incorporated as a
holding company for regional trucking companies.
During February 1992 Transport Group sold 19,593,750 shares of common stock
through an initial public offering for which the proceeds were paid to Transport
Group. In a subsequent transaction in May 1993, the Company purchased from
Transport Group all its remaining shares in the Company.
In February 1997, the Company sold 3,105,000 of its shares in a public
offering.
Beginning in June, 2000, the Company repurchased 954,200 of its outstanding
shares under two separate repurchase programs authorized by the board of
directors. The first authorized program included a total of 500,000 shares to be
repurchased. The second authorized program included a total of 1,000,000 shares
to be repurchased. There are currently available, under the second program,
approximately 545,800 shares that could be repurchased.
During 1998, under the purchase method of accounting, the Company acquired
all of the outstanding shares of Golden Eagle Group, Inc., an international
freight forwarding company; Glen Moore Transport, Inc., a truckload freight
carrier; Moore and Son Co., a transportation logistics services company; and the
general commodities business of Vallerie's Transportation Service, Inc. for a
total of $66,379,000 of cash and debt incurred.
During 1999, under the purchase method of accounting, the Company acquired
all of the outstanding shares of Processors Unlimited Company, Ltd., a provider
of reverse logistics services to the grocery and drug industries; Special
Dispatch of Dallas, Inc., a Texas based provider of assembly and distributions
services; Cuxhaven Group, Inc., a domestic freight forwarding company and former
Baltimore, MD agent for Worldwide; Airgo, Inc., a domestic freight forwarding
company and former Seattle, WA agent for Worldwide; Scan Trans, Inc. a domestic
freight forwarding company and former San Francisco, CA agent for Worldwide;
Pace Transportation, Ltd., a domestic freight forwarding company and former
Baltimore, MD agent for Worldwide; Best Ways Air Cargo, a Puerto Rico-based air
freight forwarder and Underwood Trucking, an Indiana -based truckload carrier.
The Company also purchased the general commodities business of CBL Trucking
Inc., a Mid-Atlantic and New England LTL carrier; certain assets of Gulf
International Freight, a domestic freight forwarding company and certain assets
of Pre Trans, a Puerto Rico business unit of Caro Trans International that
provides ocean services. Total consideration for all Fiscal 1999 acquisitions
amounted to $52,054,000 of cash and debt incurred.
During 2000, under the purchase method of accounting, the Company acquired
all of the outstanding shares of Tri-Star Corporation, Inc., a Tennessee based
truckload carrier and Ultimex Global Logistics PLC, a freight forwarder based in
London, England. Total consideration for all Fiscal 2000 acquistions amounted to
$26,188,000 of cash and debt incurred.
PAGE 3
Following is a table depicting revenue by LTL trucking, TL trucking,
Logistics, Freight forwarding and Corporate and other segments for each of the
most recent three years:
Revenue ($ in millions)
Year 1998 % 1999 % 2000 %
------ --- ------ --- ------ ---
LTL trucking $1,540 83.9 $1,750 78.6 $1,914 75.4
TL trucking 13 0.7 45 2.0 86 3.4
Logistics 130 7.1 207 9.3 277 10.9
Freight forwarding 152 8.3 225 10.1 262 10.3
Corporate and other - 0.0 - 0.0 -
------ ---- ------ ---- ------ -----
Total $1,835 100.0 $2,227 100.0 $ 2,539 100.0
------ ----- ------ ----- ------ -----
Regional LTL Trucking
LTL shipments are defined as shipments of less than 10,000 pounds.
Typically, LTL carriers transport freight along scheduled routes from multiple
shippers to multiple consignees utilizing a network of terminals together with
fleets of line-haul and pickup and delivery tractors and trailers. Freight is
picked up from customers by local drivers and consolidated for shipment. The
freight is then loaded into intercity trailers and transferred by line-haul
drivers to the terminal servicing the delivery area. There, the freight is
transferred to local trailers and delivered to its destination by local drivers.
LTL operators are generally categorized as either regional, interregional
or long-haul carriers, depending on the distance freight travels from pickup to
final delivery. Regional carriers usually have average lengths of haul of 500
miles or less and tend to provide either overnight or second day service.
Regional LTL carriers usually are able to load freight for direct transport to a
destination terminal, thereby avoiding the costly and time-consuming use of
breakbulk terminals (where freight is rehandled and reloaded to its ultimate
destination). In contrast, long-haul LTL carriers (average lengths of haul in
excess of 1,000 miles) operate networks of breakbulk and satellite terminals
(hub-spoke systems) and rely heavily on interim handling of freight.
Interregional carriers (500 to 1,000 miles per average haul) also rely on
breakbulk terminals but to a lesser degree than long-haul carriers.
Regional LTL carriers, including the Company's LTL trucking subsidiaries,
principally compete against other regional LTL carriers. To a lesser extent,
they compete against interregional and long-haul LTL carriers. To an even lesser
degree, regional LTL transporters compete against truckload carriers, overnight
package companies, railroads and airlines. Significant barriers to entry into
the regional LTL market exist as a result of the substantial capital
requirements for terminals and revenue equipment and the need for a large,
well-coordinated and skilled work force.
In the competitive environment of each of the Company's LTL trucking
subsidiaries, most LTL carriers have adopted discounting programs that reduce
prices paid by some shippers. Additionally, when new LTL competitors enter a
geographic region, they often utilize discounted prices to lure customers away
from the Company's trucking subsidiaries. Such attempts to gain market share
through price reduction programs exert downward pressure on the industry's price
structure and profit margins and have caused many LTL carriers to cease
operations.
PAGE 4
The LTL Trucking Subsidiaries
The following is a brief description of the Company's LTL regional trucking
subsidiaries. Statistical information for subsidiaries' operations is reported
in the Company's 2000 Annual Report to the Shareholders, and is incorporated by
reference in this Form 10-K as page F22 of Exhibit 13.
USF Holland is the largest of the Company's operating subsidiaries,
transporting LTL shipments interstate throughout the central United States and
into the Southeast. USF Holland uses predominantly single 48 and 53 foot
trailers. The average length of line-haul in the year ended December 31, 2000
was approximately 390 miles.
USF Red Star operates in the eastern United States, as well as to and from
eastern Canada. USF Red Star uses a combination of single and double trailers.
The average length of line-haul in the year ended December 31, 2000 was
approximately 300 miles.
USF Bestway operates throughout the southwest region of the United States
from Texas to California. USF Bestway uses double trailers in its operations.
For the year ended December 31, 2000 the average length of line-haul for USF
Bestway was approximately 411 miles.
USF Reddaway provides LTL carriage along the I-5 corridor from California
to Washington, throughout the northwest United States and into western Canada
and Alaska. The average length of line-haul for the year ended December 31, 2000
was approximately 600 miles. USF Reddaway operates double trailers and, where
possible, triple trailer combinations.
USF Dugan provides service to the Plains states and into the southern
states from Texas to Florida. USF Dugan operates with double and triple
trailers, and the average length of line-haul for the year ended December 31,
2000 was approximately 550 miles.
PAGE 5
Truckload Trucking
TL shipments are defined as shipments of 10,000 or more pounds. Typically,
TL carriers transport freight along irregular routes from single shippers to
single consignees, without the necessity of a network of terminals, together
with fleets of line-haul sleeper tractors and trailers. Consolidated full
truckload freight is picked up from the customer and delivered to its final
destination by either a company long-haul driver or an independent owner-
operator that has a leasing agreement with the carrier.
TL operators are generally categorized as long-haul carriers and to a
lesser degree interregional depending on the distance freight travels from
pickup to final delivery. The average length of haul for most TL operators is in
excess of 1,000 miles.
TL carriers, including the Company's trucking subsidiary, principally
compete against other TL carriers and to some extent the railroads. TL carriers
generally do not compete against LTL carriers. Barriers to entry into the TL
market exist as a result of substantial capital requirements for revenue
equipment and the need for a well-coordinated and skilled work force. The work
force and revenue equipment requirements, to some degree, can be offset through
the leasing of independent contractors that own their equipment. This work force
is not as controllable as the company employee work force.
In the competitive environment of the Company's TL trucking subsidiary,
most TL carriers have adopted discounting programs that reduce prices paid by
some shippers. Additionally, when new TL competitors enter the business, they
often utilize discounted prices to lure customers away from the Company's TL
trucking subsidiary. Such attempts to gain market share through price reduction
programs exert downward pressure on the industry's price structure and profit
margins and have caused TL carriers to cease operations.
The TL Trucking Subsidiary
The following is a brief description of the Company's TL trucking
subsidiary. Statistical information for the subsidiary's operations is reported
in the Company's 2000 Annual Report to the Shareholders, and is incorporated by
reference in this Form 10-K as page F22 of Exhibit 13.
Glen Moore is the Company's TL subsidiary, transporting TL shipments
interstate throughout the United States generally from the Northeast and
Southeast states to the West coast and into the North Central states.Glen Moore
primarily utilizes sleeper line-haul tractors and 53 foot trailers. Glen Moore's
average length of haul is approximately 1,000 miles.
On August 2, 1999, Glen Moore acquired Underwood Trucking ("Underwood") an
Indiana based TL carrier which was merged into Glen Moore.
On January 10, 2000, Glen Moore acquired Tri-Star Transportation, Inc., a
Tennessee based TL carrier which was merged into Glen Moore. At the end of the
current year, Glen Moore operated 599 tractors (mainly sleeper units) and 1,885
trailers.
The Logistics Subsidiaries
Logistics subsidiaries provide integrated supply chain solutions, value
added logistics solutions, reverse logistics services and complete warehouse
fulfillment services to its customers. These activities are conducted through
USF Logistics, which provides integrated supply chain solutions for its clients
including transportation, warehousing, cross-docking, product reconfiguration
and reverse logistics; USF Distribution Services, a national provider of
value-added logistics services to the retail and industrial markets with a
particular focus on consolidation/distribution and fulfillment programs; and USF
Processors a Dallas, TX based provider of reverse logistics services to
manufacturers, distributors and retailers. USF Processors currently operates
from approximately 50 sites across the country, has in excess of 1,900 employees
and contributed approximately $70.6 million in revenue in 2000.
PAGE 6
The Freight Forwarding Subsidiaries
The Company is engaged, through its subsidiary USF Worldwide, in providing
domestic and international freight forwarding for its customers including air
freight services, import and export air and ocean services and customs house
brokerage services.
During 1999, USF Worldwide acquired three of its former agent owned
stations and converted them into company owned stations in key gateway cities.
USF Worldwide acquired two other companies, located in key gateway cities, and
converted them to company owned stations. In order to expand its services into
the growing Caribbean market, USF Worldwide also acquired a Puerto Rico based
air freight forwarder and a Puerto Rico based Non-vessel operating common
carrier.
In October 1999, USF Worldwide formed a partnership under the trading name
USF Asia Group. USF Asia Group, based in Hong Kong, provides sea/air
consolidation, local forwarding, customs clearance, NVOCC and warehousing and
distribution services to companies doing business to and from or within the
Asia-Pacific region. USF Asia contributed approximately $11.7 million in revenue
in 2000.
In August 2000, USF Worldwide acquired Ultimex Global Logistics PLC a
freight forwarder located in London, England. Since its acquisition, Ultimex has
contributed approximately $9.3 million in revenue.
Terminals for Regional LTL Trucking
The Company's 253 terminals are a key element in the operation of its
regional trucklines. The terminals vary significantly in size according to the
markets served. Sales personnel at each terminal are responsible for soliciting
new business. Each terminal maintains a team of dispatchers who communicate with
customers and coordinate local pickup and delivery drivers. Terminals also
maintain teams of dock workers, line-haul drivers and administrative personnel.
The larger terminals also have maintenance facilities and mechanics. Each
terminal is directed by a terminal manager who has general supervisory
responsibilities and also plays an important role in monitoring costs and
service quality.
Revenue Equipment
At December 31, 2000 the Company operated 9,606 tractors and 22,980
trailers of which approximately 95% are owned. USF Logistics leases most of its
tractors and trailers. Each subsidiary selects its own revenue equipment to suit
the customers' needs or conditions prevailing in its region, such as terrain,
climate, and average length of line-haul. Tractors and trailers are built to
standard specifications and generally are not modified to fit special customer
situations.
Each subsidiary has a comprehensive preventive maintenance program for its
tractors and trailers to minimize equipment downtime and prolong equipment life.
Repairs and maintenance are performed regularly at the subsidiaries' facilities
and at independent contract maintenance facilities.
The Company replaces tractors and trailers based on factors such as age and
condition, the market for equipment and improvements in technology and fuel
efficiency. At December 31, 2000 the average age of the Company's line-haul
tractors was 3.5 years and the average age of its line-haul trailers was 7.2
years. Older line-haul tractors are often assigned to pickup and delivery
operations, which are generally operated at lower speeds and over shorter
distances, allowing the Company to extend the life of line-haul tractors and
improve asset utilization. The average age of the Company's pickup and delivery
tractors at December 31, 2000 was 8.3 years.
Sales and Marketing
Sales personnel as well as senior management at each subsidiary are
responsible for soliciting new business and maintaining good customer relations.
In addition, the Company maintains a corporate sales and marketing department
consisting of 20 professionals who are assigned major accounts within specified
geographic regions of the continental United States. These corporate sales
managers solicit business for the regional trucklines from distribution and
logistics executives of large shippers. In many cases, targeted corporations
maintain centralized control of multiple shipping and receiving locations. In
addition, the subsidiaries maintain a combined sales force of approximately 600
sales professionals that work in concert with the corporate sales managers.
PAGE 7
Seasonality
The Company's results, consistent with the trucking and air freight
industry in general, show seasonal patterns with tonnage and revenue declining
during the winter months and, to a lesser degree, during vacation periods in the
summer. Furthermore, inclement weather in the winter months can further
negatively affect the Company's results.
Customers
The Company is not dependent upon any particular industry and provides
services to a wide variety of customers including many large, publicly held
companies. During the year ended December 31, 2000 no single customer accounted
for more than two percent of the Company's operating revenue and the Company's
ten largest customers as a group accounted for approximately 11.6%percent of
total operating revenue. Many of the national account customers use more than
one of the Company's regional trucklines for their transportation requirements.
Cooperation Among Trucklines
The Company's subsidiaries cooperate with each other to market and provide
services along certain routes running between their regions. In such
circumstances, the trucklines jointly price their service and then divide
revenue in proportion to the amount of carriage provided by each company or
based on predetermined formulae.
Information Technology
The Company's regional trucking subsidiaries are linked by technology
featuring information-rich freight management systems that enable timely and
fast schedule adjustments. The Company's worldwide web site, USFreightways.com.,
averages more than 100 thousand hits per day. The Company's secure internet
site, USF Net, receives more than 30 thousand hits per day from customers
accessing detailed product and service information.
The Company's regional trucking subsidiaries are also linked by a wireless
communications network while Glen Moore and the dedicated fleet are linked by
the latest satellite systems in order to efficiently track shipments.
Many of the Company's customers are linked directly to the Company's data
systems via Electronic Data Interchange (EDI) a sophistocated information
exchange platform that is particularly well suited for customers with
significant volumes of business.
Additionally, the Company's document imaging systems currently scan more
than 300 thousand documents per day. The next generation of USF Net will allow
for the viewing of scanned documents online.
In 2000, the Company doubled the size of its corporate information
technology team in order to develop the next generation of web-related and other
information technology systems.
PAGE 8
Fuel
The motor carrier industry is dependent upon the availability of diesel
fuel. Shortages of fuel, increases in fuel costs or fuel taxes, or rationing of
petroleum products could have a material adverse effect on the profitability of
the Company. The Company's LTL regional trucking subsidiaries periodically
maintain a fuel surcharge to partially offset increases in fuel prices. Due to
rising fuel prices, the Company's LTL regional trucking subisiiaries reinstated
a fuel surcharge in the third quarter of 1999 which is still in effect in March
2001. Fuel expense, as a percentage of revenue, approximated 6.0% during 2000 at
the Company's LTL trucking subsidiaries. Prior to the 2000 fourth quarter, the
Company netted fuel surcharges invoiced to customers against fuel expense.
Effective with the 2000 fourth quarter, the Company reclassified fuel surcharges
invoiced to customers as revenue as promulgated under the Securities and
Exchange Commission's Staff Accounting Bulletin Number 101 "Revenue Recognition
in Financial Statements". The Company has restated revenue and expenses for the
first three quarters of 2000 and the fourth quarter of 1999. As a result,revenue
and fuel expense increased by $60.4 million in 2000 and $4.5 million in 1999 in
the Company's trucking subsidiaries. However, there was no effect on income from
operations or net income. Fuel and fuel tax expense in the Company's TL
subsidiary, as a percentage of revenue, approximated 17% during 2000. Fuel
surcharges in the TL industry are more difficult to implement and collect. In
most cases, TL operators generally recover the increases in fuel costs through
increases in rates charged for its services. The Company has not experienced any
difficulty in maintaining fuel supplies sufficient to support its operations.
Regulation
In August 1994, two pieces of legislation passed the Congress and were
signed into law that greatly affected the trucking industry. The Trucking
Industry Regulatory Reform Act ("TIRRA") reduced the ICC's authority over motor
carriers by eliminating the tariff-filing requirement for motor common carriers
using individually determined rates, classifications, rules or practices. Under
TIRRA, motor carriers are still required to provide shippers, if requested, with
a copy of the rate, classification, rules or practices of the carrier. Also,
Title VI of the Federal Aviation Administration Authorization Act of 1994 ("the
1994 Act") effectively prohibited state economic regulation of all trucking
operations for motor carriers. The 1994 Act does allow the states to continue
regulation of safety and insurance programs, including carrier inspections. On
December 29, 1995, President Clinton signed the Interstate Commerce Commission
Termination Act of 1995 ("ICCTA") which abolished the ICC as of January 1, 1996
and transferred its residual functions to the Federal Highway Administration and
a newly created Surface Transportation Board within the U. S. Department of
Transportation. Congress has prescribed a transition period during which
regulations implementing the ICCTA including insurance and safety issues must be
promulgated by the Secretary of Transportation.
PAGE 9
The trucking industry remains subject to the possibility of regulatory and
legislative changes that can influence operating practices and the demands for
and the costs of providing services to shippers.
Interstate motor carrier operations are subject to safety requirements
prescribed by the U.S. Department of Transportation ("DOT"), while such matters
as the weight and dimensions of equipment are also subject to Federal and state
regulations. Effective April 1, 1992, truck drivers were required to be
commercial vehicle licensed in compliance with the DOT, and legislation subjects
them to strict drug testing standards. These requirements increase the safety
standards for conducting operations, but add administrative costs and have
affected the availability of qualified, safety conscious drivers throughout the
trucking industry.
The Company uses underground storage tanks at certain terminal facilities and
maintains a comprehensive policy of testing, upgrading, replacing or eliminating
these tanks to protect the environment and comply with various Federal and state
laws. Whenever any contamination is detected, the Company takes prompt remedial
action to remove the contaminants.
Insurance and Safety
One of the risk areas in the Company's businesses is cargo loss and damage,
bodily injury, property damage and workers' compensation. The Company is
effectively self-insured on its significant operations up to $2 million per
occurrence for cargo loss and damage, bodily injury and property damage. The
Company is also predominantly self-insured for workers' compensation for amounts
to $1 million per occurrence. Additionally, the Company insures workers'
compensation for amounts in excess of $1 million per occurrence and all other
losses in excess of $2 million.
Each operating subsidiary employs safety specialists and maintains safety
programs designed to meet its specific needs. In addition, the Company employs
specialists to perform compliance checks and conduct safety tests throughout the
Company's operations. The Company's safety record to date has been good.
Employees
At December 31, 2000 the Company employed 23,462 persons, of whom 13,575
were drivers, 3,243 were dock workers, and the balance support personnel,
including office workers, managers and administrators. Approximately 47 percent
of all employees were members of unions. Approximately 86 percent of these union
workers were employed by USF Holland or USF Red Star and belonged to the
International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America (the "IBT"). Members of the IBT at USF Holland and USF Red Star are
presently working under the terms of a five-year, industry-wide labor agreement
that expires in March 2003.
Item 2. Properties
In May, 2000, the Company relocated its executive offices to 8550 West
Bryn Mawr Ave, Ste. 700, Chicago, IL 60631. The Company's 27,500 square foot
facility is occupied under a lease terminating in August 2008.
Each of the Company's operating subsidiaries also maintains a head office
as well as numerous operating facilities. Of the 253 regional LTL trucking
terminal facilities used by the Company as of December 31, 2000, 110 were owned
and 143 were leased. These facilities range in size according to the markets
served. The Company has not experienced and does not anticipate difficulties in
renewing existing leases on favorable terms or obtaining new facilities as and
when required.
For a description of revenue equipment, refer to Item 1 on revenue
equipment.
PAGE 10
Item 3. Legal Proceedings
The Company is a party to a number of proceedings brought under the
Comprehensive Environmental Response, Compensation and Liability Act, (CERCLA).
The Company has been made a party to these proceedings as an alleged generator
of waste disposed of at hazardous waste disposal sites. In each case, the
Government alleges that the parties are jointly and severally liable for the
cleanup costs. Although joint and several liability is alleged, these
proceedings are frequently resolved on the basis of the quantity of waste
disposed of at the site by the generator. The Company's potential liability
varies greatly from site to site. For some sites the potential liability is de
minimis and for others the costs of cleanup have not yet been determined. While
it is not feasible to predict or determine the outcome of these proceedings or
similar proceedings brought by state agencies or private litigants, in the
opinion of management, the ultimate recovery or liability, if any, resulting
from such litigation, individually or in the aggregate, will not materially
adversely affect the Company's financial condition or results of operations and,
to the Company's best knowledge, such liability, if any, will represent less
than 1% of its revenues.
Also, the Company is involved in other litigation arising in the ordinary
course of business, primarily involving claims for bodily injuries and property
damage. In the opinion of management, the ultimate recovery or liability, if
any, resulting from such litigation, individually or in the aggregate, will not
materially adversely affect the Company's financial condition or results of
operations.
PAGE 11
PART II
Item 5. Market for the Company's Common Stock and related Stockholder Matters
The Company's common stock trades on The NASDAQ Stock Market under the
symbol: USFC. On February 15, 2001 there were approximately 12,000 beneficial
holders of the Company's common stock. For the high and low sales prices for the
common stock for each full calendar quarterly period for 1999 and 2000, see page
F21 of the Company's Annual Report to the Shareholders - Financial Statements
(incorporated by reference under Item 14 herein).
Since July 2, 1992, the Company has paid a quarterly dividend of $.093333
per share. Although it is the present intention of the Company to continue
paying quarterly dividends, the timing, amount and form of future dividends will
be determined by the board of directors and will depend, among other things, on
the Company's results of operations, financial condition, cash requirements,
certain legal requirements and other factors deemed relevant by the board of
directors. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" (incorporated by
reference under Item 14 herein).
Item 6. Selected Financial Data
The information set forth under the caption "Selected Consolidated
Financial Data" on page F21 of the Company's Annual Report to the Shareholders
Financial Statements for the year ended December 31, 2000, is incorporated by
reference under Item 14 herein.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing on pages F3 through F5 of the Company's Annual Report to
the Shareholders - Financial Statements for the year ended December 31, 2000, is
incorporated by reference under Item 14 herein.
Item 8. Financial Statements and Supplementary Data
The Financial Statements and Supplementary Data Appearing on pages F7
through F20 of the Company's Annual Report to the Shareholders - Financial
Statements for the year ended December 31, 2000, are incorporated by reference
under Item 14 herein.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
PAGE 12
PART III
Item 10. Directors and Executive Officers of the Company
The information for directors is reported in the Company's definitive proxy
statement to be filed pursuant to Regulation 14A, and is incorporated by
reference. The following table sets forth certain information as of December 31,
2000 concerning the registrant's executive officers:
Name Age Position
Samuel K. Skinner 62 President and Chief Executive
Officer and Director
Robert V. Fasso 47 President-Regional Carrier Group
Christopher L. Ellis 55 Senior Vice President, Finance & CFO
Samuel K. Skinner, 62, was named as the Company's Chief Executive
Officer and President on June 6, 2000 and Chairman in January 2001, and has
been a director of the Company since December of 1999.
Robert V. Fasso, 47, was appointed as the Company's President-Regional
Carrier Group in September 1997. From July 1993 until January 2001, Mr. Fasso
was President and CEO of the Company's subsidiary USF Bestway Inc. Prior to
that date, he was with Yellow Freight System.
Christopher L. Ellis, 55, has been Senior Vice President, Finance and
Chief Financial Officer of the Company since June 1991.
Item 11. Executive Compensation
This information is reported in the Company's definitive proxy statement
entitled "Management Compensation" and "Compensation Committee Interlocks and
Insider Participation" respectively to be filed pursuant to Regulation 14A, and
is incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is reported in the Company's definitive proxy statement
entitled "Security Ownership of Principal Holders and Management" to be filed
pursuant to Regulation 14A, and is incorporated by reference.
Item 13. Certain Relationships and Related Party Transactions
This information is reported in the Company's definitive proxy statement
entitled "Certain Relationships and Related Transactions" to be filed pursuant
to Regulation 14A, and is incorporated by reference.
PART IV
Item 14. Exhibits, Financial Statements Schedules, and Reports on Form 8-K
(a) (1) Financial Statements
The following consolidated financial statements appearing in
the 2000 Annual Report to the Shareholders are incorporated by
reference in this Annual Report on Form 10-K as Exhibit 13:
Page
Selected Consolidated Financial Data F21
Management's Discussion and Analysis of F2-6
Financial Condition and Results of Operations
Report of Independent Public Accountants F7
Consolidated Financial Statements F8-11
Notes to Consolidated Financial Statements F12-20
PAGE 13
(2) Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts
USFreightways Corporation
Three Years ended December 31, 2000
(dollars in thousands)
Additions
-------------------------
Description Balance at Charges to Charged to Deductions(1) Balance at
Beginning Costs and Other End of
of Period Expenses Accounts Period
- ----------- --------- ---------- ----------- ---------- ---------
Fiscal year ended December 31,1998
Accounts receivable allowances $10,067 $35,815 $0 $34,723 $11,159
for revenue adjusmtents and doubtful accounts
Fiscal year ended December 31, 1999
Accounts receivable allowances $11,159 $35,206 $0 $35,742 $10,623
for revenue adjusmtents and doubtful accounts
Fiscal year ended December 31, 2000
Accounts receivable allowances $10,623 $41,859 $0 $41,314 $11,168
for revenue adjusmtents and doubtful accounts
(1) Primarily uncollectible accounts written off net of recoveries.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
The Board of Directors and Stockholders,
USFreightways Corporation:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in USFreightways
Corporation and Subsidiaries annual report to stockholders and incorporated in
this Form 10-K, and have issued our report thereon dated January 23, 2001. Our
audits were made for the purpose of forming an opinion on those basic
consolidated financial statements taken as a whole. The financial statement
schedule included in this Form 10-K is the responsibility of the company's
management, and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic consolidated financial
statements. The financial statement schedule has been subjected to the auditing
procedures applied in the audits of the basic consolidated financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
January 23, 2001
PAGE 14
(3) Exhibits
Exhibit Document
Number Description
3(a) Amended and Restated Certificate of Incorporation
of USFreightways Corporation (incorporated by
reference from Exhibit 3.1 to USFreightways
Corporation Transition Report on Form 10-K, from
June 29, 1991 to December 28, 1991); Certificate
of Designation for Series A Junior Participating
Cumulative Preferred Stock (incorporated by
reference from Exhibit 3(a) to USFreightways
Corporation Annual Report on Form 10-K for the
year ended January 1, 1994); Certificate of
Amendment of Restated Certificate of
Incorporation of USFreightways Corporation
(incorporated by reference from Exhibit 3(i)
to USFreightways Corporation Quarterly Report on
Form 10-Q for the quarter ended June 29, 1996).
3(b) Bylaws of USFreightways Corporation, as restated as
of October 27, 2000 (filed with this Annual Report on
Form 10-K).
4(a) Indenture,dated as of May 5, 1999 among USFreightways
Corporation, the Guarantors named therein and Bank
One, Michigan, as Trustee (as the successor-in-
interest to NBD Bank)(incorporated by reference from
Exhibit 4.1 to USFreightways Corporation Current
Report on Form 8-K, filed on May 11, 1999).
4(b) First Supplemental Indenture, dated as of January 31,
2000 among USFreightways Corporation, the Guarantors
named therein and Bank One, Michigan, as Trustee
(as the successor-in-interest to NBD Bank)
(incorporated by reference from Exhibit to
USFreightways Corporation Registration Statement on
Form S-3, filed on January 31, 2000, Registration No.
333-95777).
10(a) USFreightways Stock Option Plan (incorporated by
reference from Exhibit 10.18 to USFreightways
Corporation Transition Report on Form 10-K from June
29, 1991 to December 28, 1991).
10(b) Agreement dated March 5, 1993 Supplementing the Tax
Indemnification Agreement between USFreightways
Corporation and TNT Transport Group (incorporated by
reference from Exhibit 10 to USFreightways
Corporation Annual Report on Form 10-K for the year
ended January 2, 1993).
10(c) Stock Option Plan for Non-employee Directors amended
and restated as of April 28, 2000 (filed with this
Annual Report on Form 10-K).
10(d) Employment Agreement of Christopher L. Ellis dated
December 16, 1991 (incorporated by reference from
Exhibit 10(g) to USFreightways Corporation Annual
Report on Form 10-K for the year ended January
1,1994).
PAGE 15
10(e) Form of Election of Deferral (incorporated by
reference from Exhibit 10(h) to USFreightways
Corporation Annual Report on Form 10-K for the year
ended December 31, 1994).
10(f) USFreightways Long-Term Incentive Plan amended and
restated as of April 30, 1999 (incorporated by
reference from Exhibit 10(j) to USFreightways
Corporation Annual Report on Form 10-K for the year
ended December 31, 1999).
10(g) Employment Agreement of Robert V. Fasso dated
December 12, 1997 (incorporated be reference from
Exhibit 10(l) to USFreightways Corporation Annual
Report on Form 10-K for the year ended January 3,
1998).
10(h) $200,000,000 Credit Agreement dated as of November
26, 1997 among USFreightways Corporation, the banks
named therein and NBD Bank, N. A. as agent
(incorporated by reference from Exhibit 10(l) to
USFreightways Corporation Annual Report on Form 10-K
for the year ended January 3, 1998).
10(i) Form of Irrevocable Guaranty and Indemnity relating
to the Credit Agreement described in Exhibit 10(m)
(incorporated by reference from Exhibit 10(l) to
USFreightways Corporation Annual Report on Form 10-K
for the year ended January 3, 1998).
10(j) Restricted Stock Agreement with John Campbell Carruth
dated April 27, 1998 (incorporated by reference from
Exhibit 10.1 to USFreightways Corporation Quarterly
Report on Form 10-Q for the quarter ended July
4,1998).
10(k) USFreightways Corporation Non-Qualified Deferred
Compensation Plan (incorporated by reference from
Exhibit 10(q) to USFreightways Corporation Annual
Report on Form 10-K for the year ended December 31,
1998).
10(l) 6 1/2% Guaranteed Note due May 1, 2009 (incorporated
by reference from Exhibit 4.2 to USFreightways
Corporation Current Report on Form 8-K filed, on May
11, 1999).
10(m) 8 1/2% Guaranteed Note due April 15, 2010
(incorporated) by reference from Exhibit 4.1 to
USFreightways Corporation Current Report on Form 8-K,
filed on April 26, 2000).
10(n) Employment Agreement of Samuel K. Skinner dated as of
June 5, 2000 (incorporated by reference from Exhibit
10.1 to USFreightways Corporation Quarterly Report on
Form 10-Q for the quarter ended July 1, 2000).
10(o) Consulting Agreement and Release of John Campbell
Carruth dated as of October 27, 2000 (filed with this
Annual Report on Form 10-K).
10(p) USFreightways Corporation Supplemental Executive
Retirement Plan (filed with this Annual Report on
Form 10-K).
13 Excerpts from the 2000 USFreightways Corporation
Annual Report to Shareholders.
21 Subsidiaries of USFreightways Corporation
(incorporated by reference from the 2000
USFreightways Corporation Annual Report to
Shareholders).
23 Consent of Arthur Anderson LLP.
24 Power of Attorney.
Exhibits 2, 9, 11, 12, 16, 18 and 22 are not applicable to this filing.
(b) Reports on Form 8-K
None.
PAGE 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Chicago, State of Illinois, on the 26th day of March, 2001.
USFREIGHTWAYS CORPORATION
By: /s/Christopher L. Ellis
--------------------
Christopher L. Ellis
Senior Vice President, Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Title Date
/s/ Samuel K. Skinner * Chairman of the Board March 26, 2001
Samuel K. Skinner President and Chief
Executive Officer and
Director (Principal
Executive Officer)
/s/ Morley Koffman * Director March 26, 2001
Morley Koffman
/s/ William N. Weaver, Jr. * Director March 26, 2001
William N. Weaver, Jr.
/s/ Neil A. Springer * Director March 26, 2001
Neil A. Springer
/s/ Robert V. Delaney * Director March 26, 2001
Robert V. Delaney
/s/ John W. Puth * Director March 26, 2001
John W. Puth
/s/ Anthony J. Paoni * Director March 26, 2001
Anthony J. Paoni
/s/ Christopher L. Ellis Chief Financial Officer March 26, 2001
Christopher L. Ellis (Principal Financial
Officer)
/s/ Robert S. Owen Controller (Principal March 26, 2001
Robert S. Owen Accounting Officer)
/s/ Christopher L. Ellis
* By: Christopher L. Ellis
Attorney-in-Fact
PAGE 17
EXHIBIT 3 (b)
BY-LAWS OF USFREIGHTWAYS CORPORATION
AS ADOPTED OCTOBER 27, 2000
PAGE 18
BY-LAWS
of
USFreightways Corporation
Dated October 27, 2000
ARTICLE I
Offices
SECTION 1.1 Offices. USFreightways Corporation (the
"Corporation") may have offices either within or without the State of Delaware.
The registered office of the Corporation and the name of the registered agent of
the Corporation are as is set forth in the Restated Certificate of Incorporation
of the Corporation, or as may subsequently be or have been changed by resolution
of the Board of Directors (the "Board").
ARTICLE II
Meetings of Stockholders
SECTION 2.1. Annual Meetings. An annual meeting of the
stockholders of the Corporation for the election of directors and for the
transaction of such other business as may properly come before the meeting shall
be held on such date and at such time as the Board may from time to time
determine, or, if not so designated, then at 10:00 a.m., on the third Tuesday in
April in each year if not a legal holiday, and, if a legal holiday, at the same
hour on the next succeeding work day, and at such place as shall be designated
by the Board in the notice thereof.
At any annual meeting of stockholders, only such business
shall be conducted as shall have been brought before the annual meeting (i) by
or at the direction of the chairman of the meeting or (ii) by any stockholder
who complies with the procedures set forth in this Section 2.1.
For business properly to be brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 30 days nor more
than 60 days prior to the annual meeting; provided, however, that in the event
that less than 40 days' notice or prior public disclosure of the date of the
annual meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. To be in proper written form, a
stockholder's notice to the Secretary shall set forth in writing as to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting; (ii) the name
and address, as they appear on the Corporation's books, of the stockholder
proposing such business; (iii) the class and number of shares of the Corporation
which are beneficially owned by the stockholder; and (iv) any material interest
of the stockholder in such business. Notwithstanding anything in the By-laws to
the contrary, no business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this Section 2.1.
SECTION 2.2 Special Meetings. A special meeting of the
stockholders for any purpose or purposes may be called at any time by the Board,
or by any committee of the Board which has been duly designated by the Board and
whose powers and authority, as expressly provided in a resolution of the Board,
include the power to call such meetings, and such meeting shall be held on such
date and at such place and hour as shall be designated in the notice thereof.
Only such business as is specified in the notice of any special meeting of the
stockholders shall come before such meeting.
SECTION 2.3. Notice of Meetings. Notice of each meeting of the
stockholders shall be given not less than 10 nor more than 60 days before the
date of the meeting to each stockholder of record entitled to notice of, or to
vote at, such meeting by delivering a typewritten or printed notice thereof to
such stockholder personally or by depositing such notice in the United States
mail, postage prepaid, directed to such stockholder at such person's address as
it appears on the stock record of the Corporation. Every such notice shall state
the place, date and hour of the meeting and, in the case of a special meeting is
called. Notice of the time, place and purpose of any meeting of stockholders may
be waived in writing, either before or after such meeting, and will be waived by
any stockholder by such person's attendance thereat, in person or by proxy
(unless such stockholder protests, prior to or at the commencement of the
meeting, the lack of proper notice to such stockholder). Any stockholder waiving
notice of a meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given.
PAGE 19
SECTION 2.4. Adjournments. Any meeting of stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
SECTION 2.5. Quorum and Manner of Acting. The presence in
person or by proxy of stockholders holding of record a majority of the shares of
stock of the Corporation entitled to be voted shall constitute a quorum for the
transaction of business at any meeting of the stockholders. In the absence of a
quorum at any such meeting or any adjournment or adjournments thereof, a
majority in voting interest of those present in person or by proxy and entitled
to vote, or, in the absence therefrom of all the stockholders, any officer
entitled to preside at, or to act as secretary of, such meeting, may adjourn
such meeting from time to time in the manner provided in Section 2.4 until
stockholders holding the amount of stock requisite for a quorum shall be present
in person or by proxy. The absence from any meeting in person or by proxy of
stockholders holding the number of shares of stock of the Corporation required
for action upon any given matter which may properly come before the meeting if
there shall be present there at, in person or by proxy of stockholders holding
the number of shares of stock of the Corporation required for action upon any
given matter shall be present there at, in person or by proxy, stockholders
holding the number of shares of stock of the Corporation required in respect of
such other matter. The stockholders present at a duly called or convened
meeting, at which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
SECTION 2.6. Organization of Meetings. At each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside there at, in the following order of precedence:
(a) the Chairman of the Board, or, if such person is
not present or if no person holds such office, any officer or director of the
Corporation designated by the Board; or
(b) any officer or director of the Corporation designated by a
majority in voting interest of the stockholders present in person or by proxy
and entitled to vote there at.
The person whom the chairman of the meeting shall appoint,
shall act as secretary of the meeting and keep the minutes thereof.
SECTION 2.7. Order of Business. The order of business at each
meeting of the stockholders shall be determined by the chairman of the meeting,
but such order of business may be changed by a majority in voting interest of
those present in person or by proxy at such meeting and entitled to vote there
at. The chairman of the meeting shall have the right and authority to prescribe
such acts and things as are necessary or desirable for the proper conduct of the
meeting, including, without limitation, the establishment of procedures for the
maintenance of order and safety, limitations on the time allotted to questions
or comments on the affairs of the Corporation, restrictions on entry to such
meeting after the time prescribed for the commencement thereof, and the opening
and closing of the voting polls.
The chairman of any meeting shall, if the facts warrant,
determine and declare to such meeting that business was not properly brought
before the annual meeting in accordance with the provisions of Sections 2.1 or
2.2 hereof and, if such person should so determine, such person shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
PAGE 20
SECTION 2.8. Voting. Each stockholder shall, at each meeting
of the stockholders, be entitled to one vote in person or by proxy for each
share of stock of the Corporation which has voting power on the matter in
question held by such person and registered in such person's name on the stock
record of the Corporation:
(a) on the date fixed pursuant to the provisions of Section
8.6 of Article VIII of these By-laws as the record date for the determination of
stockholders who shall be entitled to receive notice of and to vote at such
meeting; or
(b) if no record date shall have been so fixed, then at the
close of business on the day next preceding the day on which notice of the
meeting shall be given or, if notice of the meeting shall be waived, at the
close of business on the day next preceding the day on which the meeting shall
be held, or, if no record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting shall have been fixed,
the day on which the first written consent is expressed.
Shares of its own stock belonging to the Corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or indirectly,
by the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Any vote of stock of the Corporation may be given at any meeting of
the stockholders by the person entitled to vote the same in person or by proxy
(who need not be a stockholder) appointed by an instrument in writing delivered
to secretary of the meeting; provided, however, that no proxy shall be voted or
acted upon after three years from its date unless such proxy provides for a
longer period. The attendance at any meeting of a stockholder who may
theretofore have given a proxy shall not have the effect of revoking the same
unless such person shall in writing so notify the secretary of the meeting prior
to voting of the proxy. Shares standing in the names of two or more persons
shall be voted or represented in accordance with the determination of the
majority of such persons, or, if only one of such persons is present in person
or represented by proxy, such person shall have the right to vote such shares
and such shares shall be deemed to be represented for the purpose of determining
a quorum. At all meetings of stockholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the Certificate of
Incorporation or these By-laws, be decided by the vote which could be cast by
the holders of all shares of stock entitled to vote thereon which are present in
person or represented by proxy at the meeting. Unless otherwise required by law
or directed by the chairman of the meeting, the vote at any meeting of the
stockholders on any question need not be by ballot. On a vote by ballot, each
ballot shall be signed by the stockholder voting, or by such person's proxy if
there be such proxy, and shall state the number of shares voted.
SECTION 2.9. Consent in Lieu of Meeting. Anything herein to
the contrary notwithstanding, any action required to be taken at any annual or
special meeting of stockholders of the Corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken at any
annual or special meeting of such stockholders or may be taken without a
meeting, without prior notice and without a vote if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by stockholders who have not consented in
writing and any certificate filed with respect to such matter shall state that
such written notice has been given.
SECTION 2.10. List of Stockholders. It shall be the duty of
the officer of the Corporation who shall have charge of the stock ledger of
record, either directly or through another officer of the Corporation or agent
thereof, to prepare and make, at least 10 days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote there at,
arranged in alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours for a period of at least 10 days prior
to the meeting, either at the place where the meeting is to be held or at such
other place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting. Such list shall also be produced and
kept at the time and place of the meeting during the whole time thereof and may
be inspected by any stockholder who is present. The stock record shall be the
only evidence as to who are the stockholders entitled to examine the stock
record, such list or the books of the Corporation or to vote in person or by
proxy at any meeting of the stockholders.
SECTION 2.11. Inspectors. Either the Board or, in the absence
of a designation of inspectors by the Board, the chairman of the meeting may, in
its or such person's discretion, appoint two or more inspectors, who need not be
stockholders, who shall receive and take charge of ballots and proxies and
decide all questions relating to the qualification of those asserting the right
to vote and the validity of ballots and proxies. In the event of the failure or
refusal to serve of any inspector designated by the Board, the chairman of the
meeting shall appoint an inspector to act in place of each such inspector
designated by the Board. In the absence of a designation of inspectors by the
Board and the chairman of the meeting, the secretary of the meeting shall
perform the duties which would otherwise have been performed by the inspectors.
PAGE 21
ARTICLE III
Board of Directors
SECTION 3.1. General Powers. The property, business,
affairs and policies of the Corporation shall be managed by or under the
direction of the Board.
SECTION 3.2. Number and Term of Office.The Board shall consist
of not less than three nor more than twenty-one directors. The exact number of
directors shall be determined from time to time by a resolution or resolutions
adopted by the affirmative vote of a majority of the total number of directors
which the corporation would have if there were no vacancies (the "entire
Board"). The directors shall be divided into three classes. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board. If the classes of directors are not
equal in number, the Board shall determine which class shall contain an unequal
number of directors.
Upon, or as soon as practicable following, the filing of the
Restated Certificate of Incorporation, the first class of directors shall be
elected for a term to expire at the annual meeting next ensuing, the second
class until the second annual meeting thereafter, and the third class until the
third annual meeting thereafter. At each succeeding annual meeting of
stockholders, successors to the class of directors whose term expires at that
annual meeting shall be elected for a three-year term. If the number of
directors is changed in accordance with the terms of the Certificate of
Incorporation and this Section 3.2, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible and any additional director of any class
elected to fill a vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of that class, but
in no case will a decrease in the number of directors shorten the term of any
incumbent director. A director shall hold office until the annual meeting for
the year in which his or her term expires and until his or her successor shall
be elected and shall qualify, subject, however, to the director's prior death,
resignation, disqualification or removal from office.
SECTION 3.3 Nomination and Election of Directors. Nominations
of persons for election to the Board may be made at any annual meeting of
stockholders by or at the direction of the Board or by any stockholder of the
Corporation entitled to vote for the election of directors at the meeting who
was a stockholder of record at the time of giving of notice provided for in this
Section 3.3 and who complies with the notice procedures set forth in this
Section 3.3. Any such nomination by a stockholder shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely
notice for an annual meeting, a stockholder's notice shall be delivered to and
received by the Secretary of the Corporation not less than 60 days nor more than
90 days prior to the first anniversary of the preceding year's annual meeting;
provided that, in the event that the date of the annual meeting is advanced by
more than 30 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered and received not
earlier than the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting and
the 10th day following the day on which a public announcement of the date of
such meeting is first made. Notwithstanding anything in the foregoing sentence
to the contrary, in the event that the number of directors to be elected to the
Board is increased and there is no public announcement naming all of the
nominees for director or specifying the size of the increased Board made by the
Corporation at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Section 3.3 shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary of
the Corporation at the principal executive office of the Corporation not later
than the close of business on the 10th day following the day on which such
public announcement is first made by the Corporation.
Nominations of persons for election to the Board may be made
at a special meeting of stockholders at which directors are to be elected
pursuant to the Corporation's notice of meeting (i) by or at the direction of
the Board or (ii) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of notice provided for in this Section 3.3, who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 3.3. In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board, any such stockholder may nominate a person or persons
(as the case may be) for election to such position(s) as specified in the
Corporation's notice of meeting, if the stockholder's notice shall be delivered
to and received by the secretary of the Corporation at the principal executive
offices of the Corporation not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting and the 10th day following the day on which a
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board to be elected at such meeting.
PAGE 22
Any stockholder's notice delivered pursuant to this Section
3.3 shall set forth in writing (i) as to each person whom the stockholder
proposes to nominate for election or re-election as a director (A) the name,
age, business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the number of shares of stock of
the Corporation which are beneficially owned by such person, and (D) any other
information relating to such person that is required to be disclosed in
connection with the solicitation of proxies for election of directors, or as
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934 (the "Exchange Act") (including, without limitation, such
person's written consent to being named in proxy statement as a nominee and to
serving as a director if elected), and any other applicable laws or rules or
regulations of any governmental authority or of any national securities exchange
or similar body overseeing any trading market on which shares of the Corporation
are traded; and (ii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination is made (A) the name and address
of such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (B) the class and number of shares of the Corporation which
are owned beneficially and of record by such stockholder and such beneficial
owner.
At the request of the Board, any person nominated by the Board
for election as a director shall furnish to the Secretary of the Corporation
that information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. No person shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth in this Section 3.3. The chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that a nomination was
not made in accordance with the procedures prescribed by these By-Laws and in
that event the defective nomination shall be disregarded. In addition to the
provisions of this Section 3.3, a stockholder shall also comply with all
applicable requirements of the Exchange Act and the rules and regulations
thereunder, and any other applicable laws or rules or regulations of an
governmental authority or any national securities exchange or similar body
overseeing any trading market on which shares of the Corporation are traded,
with respect to the matters set forth herein.
At each meeting of the stockholders for the election of
directors, provided a quorum is present, the directors nominated in accordance
with this Section 3.3 for election at such meeting shall be elected by a
plurality of the votes validly cast in such election. Directors need not be
stockholders of the Corporation or residents of the State of Delaware.
SECTION 3.4 Meetings.
(a) Regular Meetings.Regular meetings of the Board or any
committee thereof shall be held as the Board or such committee thereof shall
from time to time determine. If any day fixed for a regular meeting shall be a
legal holiday at the place where the meeting is to be held, then the meeting
which would otherwise be held on that day shall be postponed until the next
succeeding business day.
(b) Notice of Meetings. Special meetings of the Board, at
which any and all business may be transacted, shall be held whenever called by
the Chief Executive Officer, the President, the Chairman of the Board or a
majority of the Board.
(c) Notice of Meetings. No notice of regular meetings of the
Board or of any committee thereof or of any adjourned meeting thereof need be
given. Notice shall be given to each special meeting of the Board or adjournment
thereof, including the time and place thereof. Notice of each such meeting shall
be mailed to each director, addressed to such person at such person's residence
or usual place of business, at lease two days before the day on which such
meeting is to be held, or shall be sent to such person at such place by
facsimile, telegraph, cable, wireless or other form of recorded communication,
or be delivered personally or by telephone not later than the day before the day
on which such meeting is to be held, but notice need not be given to any
director who shall attend meeting. A written waiver of notice, signed by the
person entitled thereto, whether before or after the time of the meeting stated
therein, shall be deemed equivalent to notice. The purposes of a meeting of the
Board or any committee thereof need not be specified in the notice thereof.
PAGE 23
(d) Time and Place of Meetings. Regular meetings of the Board
or any committee thereof shall be held at such time or times and place or places
as the Board or such committee may from time to time determine. Each special
meeting of the Board or any committee thereof shall be held at such time and
place as the caller or callers thereof may determine. In the absence of such a
determination, each regular meeting or special meeting of the Board or any
committee thereof shall be held at such time and place as shall be designated in
the notices or waivers of notice thereof.
(e) Quorum and Manner of Acting. A majority of the directors
then in office and a majority of the members of any committee shall be present
in person at any meeting thereof in order to constitute a quorum for the
transaction of business at such meeting and the vote of a majority of the
directors present at any such meeting at which a quorum is present shall be
necessary for the passage of any resolution or for an act to be the act of the
Board or such committee. In the absence of a quorum, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum shall
be present there at. Notice of any adjourned meeting need not be given.
(f) Organization of Meetings. At each meeting of the Board,
the Chairman of the Board or, if such person is not present or if no person
holds such office, any director chosen by a majority of the directors present
there at shall act as chairman of the meeting and preside thereat. The person
whom the chairman of the meeting shall appoint shall act as secretary of such
meeting and keep the minutes thereof. The order of business at each meeting of
the Board shall be determined by the chairman of such meeting.
(g) Consent in Lieu of Meetings. Anything herein to the
contrary notwithstanding, any action required or permitted to be taken at any
meeting of the Board or any committee thereof may be taken without a meeting if
all members of the Board or such committee, as the case may be, consent thereto
in a writing or writings and such writing or writings are filed with the minutes
of the proceedings of the Board or such committee.
(h) Action by Communications Equipment.The directors may
participate in a meeting of the Board or any committee thereof by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and such participation
shall constitute presence in person at such meeting.
SECTION 3.5. Compensation. Each director who is not also a
salaried employee of the Company or any of its affiliates, in consideration of
he or she serving as such, shall be entitled to receive from the Corporation
such amount per annum and such fees for attendance at meetings of the Board or
of any committee, or both, as the Board shall from to time determine. The Board
may provide that the Corporation shall reimburse each director or member of a
committee, including any director who is a salaried employee of the Company or
any of its affiliates, for any expenses incurred by such person on account of
such person's attendance at any such meeting.
PAGE 24
SECTION 3.6. Resignation, Removal and Vacancies. Any director
may resign at any time by giving written notice of such person's resignation to
the Board. Any such resignation shall take effect at the time specified therein
or, if the time when it shall become effective shall not be specified therein,
when accepted by the Board. Except as aforesaid, the acceptance of such
resignation shall not be necessary to make it effective.
Any director may be removed at any time for cause by vote of the
holders of a majority in voting interest of shares then entitled to vote at an
election of directors. The vacancy in the Board caused by any such removal may
be filled by the stockholders at such meeting or as provided in the next
paragraph of these By-laws.
In the case of any vacancy on the Board or in the case of any
newly created directorship, a director to fill the vacancy or the newly created
directorship for the unexpired portion of the term being filled may be elected
by a majority of the directors of the Corporation then in office, though less
than a quorum, or by a sole remaining director. The director elected to fill
such vacancy shall hold office for the unexpired term in respect of which such
vacancy occurred and until such person's successor shall be elected and shall
qualify or until such person's earlier death or resignation or removal in the
manner herein provided.
ARTICLE IV
Committees
SECTION 4.1. Number, Appointment, Term of Office. etc. The
Board, by resolution or resolutions passed by a majority of the Board, may
designate one or more committees, each committee to consist of one or more
directors then in office. Each member of any such committee shall continue as
such only so long as such person remains a director and may be removed at any
time, with or without cause, by a majority of the Board. Any vacancy on any
committee may be filled at any time by the vote of a majority of the Board.
In the absence or in case of the disqualification of a member
or members of any such committee, the member or members of such committee
present and not disqualified from voting at a meeting of such committee, whether
or not such person or they constitute a quorum, may unanimously appoint another
member of the Board to act at such meeting in place of any absent or
disqualified member.
SECTION 4.2. Functions and Powers Each committee shall have
such functions and powers as the Board shall deem advisable and, subject to any
limitations or restrictions which may be prescribed by resolution of the Board,
if an Executive Committee is designated, it shall have and may exercise all the
powers and authority of the Board in the management of the property, business,
affairs and policies of the Corporation, including the power and authority to
declare dividends and to authorize the issuance of stock of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; provided, however, that no committee shall have the power of
authority to: approve amendments to the Certificate of Incorporation of the
Corporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board as provided in Section 151(a) of the Delaware General Corporation
Law, fix the designations and any of the preferences or rights of such shares or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series); adopt agreements of merger or
consolidation; recommend to the stockholders the sale, lease or exchange of all
or substantially all the property and assets of the Corporation; recommend to
the stockholders the dissolution of the Corporation or the revocation of such a
dissolution; or amend these By-laws.
SECTION 4.3. Rules. Subject to the provisions of these
By-laws, each committee by resolution adopted by a majority of all the members
thereof shall fix its rules of procedure.
PAGE 25
ARTICLE V
Officers
SECTION 5.1. Election and Appointment and Term of Office. The
Corporation shall have such officers with such titles as shall be stated in a
resolution of the Board, and with such duties as shall be given them as
hereinafter provided or as may otherwise be specifically given them by the
Board, but such officers shall include at least (a) a Chairman of the Board or
one or more Vice-Chairmen of the Board or a Chief Executive Officer or a
President, or any or all the foregoing, and (b) a Secretary or one or more
Assistant Secretaries or a Treasurer or one or more Assistant Treasurers, or any
or all of the foregoing. One of such officers shall have the duty to record the
proceedings of the meetings of stockholders and directors in a book to be kept
for that purpose. Any number of offices may be held by the same person except
that at least one person who holds an office referred to in clause (a) of the
second preceding sentence shall not be the same as at least one person who holds
any office referred to in clause (b) of the second preceding sentence.
SECTION 5.2. Resignation, Removal and Vacancies. Any officer
may resign at any time by giving written notice of such person's resignation to
the Board. Any such resignation shall take effect at the time specified therein
or, if the time when it shall become effective shall not be specified therein
when accepted by the Board. Except as aforesaid, the acceptance of such
resignation shall not be necessary to make it effective.
Any officer, agent or employee elected or appointed by the
Board may be removed, with or without cause, at any time by the Board. Any agent
or employee appointed by an officer may be removed, with or without cause, at
any time by such officer.
A vacancy in any office may be filled for the unexpired
portion of the term in the same manner as provided in these By-laws for election
or appointment to such office.
SECTION 5.3. Duties and Functions. If any of the following
offices is created and a person appointed or elected thereto, and unless the
Board otherwise provides, such offices and persons shall have the following
duties and functions:
(a) Chairman. If a Chairman of the Board is appointed or
elected, such person shall be a member of the Board, shall preside at meetings
of the Board and of the stockholders at which such person shall be present,
shall perform such duties as are incident to the office of the Chairman of the
Board, and shall perform such other duties as may from time to time be
prescribed by the Board.
(b) Vice-Chairman. If any Vice-Chairman or Vice-Chairmen of
the Board are appointed or elected, they shall be members of the Board, shall
perform such duties as are incident to the office of the Vice-Chairman of the
Board, and shall perform such other duties as may from time to time be
prescribed by the Board.
(c) Chairman of the Executive Committee. If a Chairman of the
Executive Committee is appointed or elected, such person shall be a member of
the Board, shall preside at meetings of the Executive Committee, shall when
requested consult with and advise the other officers of the Corporation, and
shall perform such other duties as may be agreed upon with them or as the Board
or the Executive Committee may from time to time determine.
(d) Chief Executive Officer. If a Chief Executive Officer is
appointed or elected, such person shall, subject to the control of the Board,
have general charge and management of the property, business and affairs of the
Corporation and shall have the direction of, and may assign duties to, all other
officers (other than the Chairman and any Vice-Chairman, if either or both is
appointed or elected), agents and employees.
(e) President. If a President is appointed or elected, such
person shall have such powers and duties as shall be prescribed by the Chief
Executive Officer, if one is appointed or elected, or the Board. The President
shall report to the Chief Executive Officer.
PAGE 26
(f) Chief Operating Officer. If any Chief Operating Officer is
appointed or elected, such person shall have such powers and duties as shall be
prescribed by the Chief Executive Officer or the President, if either or both is
appointed or elected, or the Board.
(g) Chief Financial Officer. If any Chief Financial Officer is
appointed or elected, such person shall perform all the powers and duties of the
offices of the chief financial officer and chief accounting officer and in
general shall have overall supervision of the financial operations of the
Corporation. The Chief Financial Officer shall also perform such other duties as
the Chief Executive Officer, the President or the Board may from time to time
determine.
(h) Vice Presidents. If any Vice President or Vice Presidents
are appointed or elected, they shall have such powers and duties as shall be
prescribed by the Chief Executive Officer or the President, if either or both is
appointed or elected, or the Board. Vice Presidents for this purpose shall
include Senior, Executive, Assistant and all other categories or types of Vice
Presidents.
PAGE 27
(i) Secretary. If a Secretary is appointed or elected, such
person shall attend and keep the records of all meetings of the stockholders and
the Board in one or more books kept for that purpose, shall give or cause to be
given due notice of all meetings in accordance with these By-laws and as
required by law, shall notify the several officers of the Corporation of all
action taken by the Board concerning matters relating to their duties, shall
transmit to the proper officers copies of all contracts and resolutions approved
by the Board or any committees of the Board, shall be custodian of the seal of
the Corporation and of all contracts, deeds, documents and other corporate
papers, records (except accounting records) and indicia of title to properties
owned by the Corporation as shall not be committed to the custody of another
officer by the Chief Executive Officer or the President, if either or both is
appointed or elected, or the Board, shall affix or cause to be affixed the seal
of the Corporation to instruments requiring the same when the same have been
signed on behalf of the corporation by a duly authorized officer, shall perform
all duties and have all powers incident to the office of Secretary, and shall
perform such other duties as shall be assigned to such person by the Chief
Executive Officer or the President, if either or both is appointed or elected,
or the Board. One or more Assistant Secretaries may be appointed or elected, who
shall perform all the duties and have all the powers of the Secretary in the
absence of or in case of a failure to appoint or elect or when so delegated by
the Secretary, and as the Chief Executive Officer or the President, if either or
both is appointed or elected, or the Board may direct.
(j) Treasurer. If a Treasurer is appointed or elected, such
person shall perform the duties incident to the office of Treasurer and such
other duties as shall be assigned to such person by the Chief Executive Officer
or the President, if either or both is appointed or elected, or the Board. One
or more Assistant Treasurers may be appointed or elected who shall perform all
the duties and have all the powers of the Treasurer in the absence of, or in the
case of a failure to appoint or elect, or when so delegated by the Treasurer,
and as the Chief Executive Officer or the President, if either or both is
appointed or elected, or the Board may direct.
(k) Controller. If a Controller is appointed or elected, such
person shall perform all the duties incident to the office of Controller and
such other duties as may be assigned to such person by the Chief Executive
Officer or the President, if either or both is appointed or elected., or the
Board. One or more Assistant Controllers may be appointed or elected who shall
perform all the duties and have all the powers of the Controller in the absence
of, or in the case of a failure to appoint or elect, or when so delegated by,
the Controller, and as the Chief Executive Officer or the President, if either
of both is appointed or elected, or the Board may direct.
ARTICLE VI
Waiver of Notices; Place of Meetings
SECTION 6.1. Waiver of Notices. Anything herein to the
contrary notwithstanding, whenever notice is required to be given to any
director or member of a committee or stockholder, a waiver thereof in writing,
signed by the person entitled to such notice shall be deemed equivalent to
notice, whether given before or after the time specified therein and, in the
case of a waiver of notice of a meeting, whether or not such waiver specifies
the purpose of or business to be transacted at such meeting. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
where the person attends the meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened, and does so object.
SECTION 6.2. Place of Meetings. Any meeting of the
stockholders, the Board or any committee may be held within or without the
State of Delaware.
PAGE 28
ARTICLE VII
Execution and Delivery of Documents; Deposits; Proxies; Books and Records
SECTION 7.1. Execution and Delivery of Documents; Delegation.
The Board shall designate the officers, employees and agents of the Corporation
who shall have power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and other
documents for and in the name of the Corporation and may authorize such
officers, employees and agents to delegate such power (including authority to
redelegate) by written instrument to other officers, employees or agents of the
Corporation. Such delegation may be by resolution or otherwise and the authority
granted shall be general or confined to specific matters, all as the Board may
determine. In the absence of such designation referred to in the first sentence
of such designation referred to in the first sentence of this Section, the
officers of the Corporation shall have such power so referred to, to the extent
incident to the normal performance of their duties.
SECTION 7.2. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation or otherwise as the Board or any officer of the Corporation to whom
power in that respect shall have been delegated by the Board shall select.
SECTION 7.3. Proxies in Respect of Stock or Other Securities
of Other Corporations.Unless otherwise provided by the Board, any officer of the
Corporation shall have the authority from time to time to appoint an agent or
agents of the Corporation to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the holder
of stock or other securities in any other corporation, to vote or consent in
respect of such stock or securities and to execute or cause to be executed in
the name and on behalf of the Corporation and under its corporate seal or
otherwise, such written proxies, powers of attorney or other instruments as such
person may deem necessary or proper in order that the Corporation may exercise
such powers and rights. Such officer may instruct any person or persons
appointed as aforesaid as to the manner of exercising such powers and rights.
SECTION 7.4. Books and Records. The books and records of the
Corporation may be kept at such places within or without the State of Delaware
as the proper officers of the Corporation may from time to time determine.
ARTICLE VIII
Certificates; Stock Record; Transfer and Registration; New Certificates;
Record Date, etc.
SECTION 8.1. Certificates for Stock. Every holder of stock of
the Corporation shall be entitled to have a certificate certifying the number of
shares owned by such person in the Corporation and designating the class of
stock to which such shares belong, which shall otherwise be in such form as the
Board shall prescribe. Each such certificate shall be signed by, or in the name
of the Corporation by, the Chairman, a Vice-Chairman, the Chief Executive
Officer, the President or a Vice President of the Corporation and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Corporation. Any of or all such signatures may be facsimiles. In case any
authorized officer who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer or authorized agent
before such certificate is issued, it may nevertheless be issued by the
Corporation with the same effect as if such person were such officer or
authorized agent on the date of issue. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled and a new certificate or
certificates shall not be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled, except in cases provided
for in Section 8.4 of this Article.
SECTION 8.2. Stock Record. A stock record in one or more
counterparts shall be kept of the name of the person, firm or corporation owning
the stock represented by each certificate for stock of the Corporation issued,
the number of shares represented by each such certificate, the date of issue
thereof and, in the case of cancellation, the date of cancellation. The person
in whose name shares of stock stand on the stock record of the Corporation shall
be deemed the owner thereof for all purposes as regards the Corporation.
SECTION 8.3. Transfer and Registration of Stock
(a) Transfer. The transfer of stock and certificates of stock
which represent the stock of the corporation shall be governed by Article 8 of
Subtitle I of Title 6 of the Delaware Code.
(b) Registration. Registration of transfers of shares of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by such person's attorney thereunto authorized by power of
attorney duly executed and filed with an officer of the Corporation, and on the
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a stock power duly executed.
PAGE 29
SECTION 8.4. New Certificates
(a) Lost, Stolen or Destroyed Certificates. Where a stock
certificate has been lost, apparently destroyed or wrongfully taken, the
issuance of a new stock certificate or the claims based on such certificate
shall be governed by Article 8 of Subtitle I of Title 6 of the Delaware Code.
(b) Mutilated Certificates. Where the holder of any
certificate for stock of the Corporation notifies the Corporation of the
mutilation of such certificate within a reasonable time after such person has
notice of it, the Corporation will issue a new certificate for stock in exchange
for such mutilated certificate theretofore issued by it.
(c) Bond. The Board may, in its discretion, require the owner
of the lost, stolen, destroyed or mutilated certificate to give the Corporation
a bond in such sum, limited or unlimited, in such form and with such surety or
sureties sufficed to indemnify the Corporation against any claim that may be
made against it on account of the loss, theft, destruction or mutilation of any
such certificate or the issuance of any such new certificate.
SECTION 8.5. Regulations. The Board may make such rules
and regulations as it may deem expedient, concerning the issue, transfer and
registration of certificates for stock of the Corporation.
SECTION 8.6. Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board may fix, in advance, a record date, which shall not be more than 60
nor less than 10 days before the date of such meeting, nor more than 60 days
prior to any other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action by the Board is necessary, shall
be the day on which the first written consent is expressed; (3) the record date
for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board adopts the resolution relating thereto. A
determination of stockholders entitled to notice of or to vote at a meeting of
the stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.
ARTICLE IX
Seal
SECTION 9.1. Seal. The Corporate seal shall consist of a die
bearing the full name of the Corporation in the outer circle and the legend
"Corporate Seal 1991 Delaware" in the inner circle. This seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE X
Fiscal Year
SECTION 10.1 Fiscal Year. The fiscal year of the Corporation
shall end on the Saturday closest to December 31 in each year, or such other
date as the Board determines.
ARTICLE XI
Amendments
SECTION 11.1. Amendments. These By-laws may be amended,
altered or repealed by the vote of a majority of the Board, subject to the power
of the holders of 66 2/3 of the outstanding stock of the Corporation entitled to
vote in respect thereof by their vote given at an annual meeting or at any
special meeting, to amend, alter, or repeal any By-law made by the Board.
PAGE 30
ARTICLE XII
Subject to Law
SECTION 12.1. Subject to Law. All provisions of these
By-Laws are subject to requirements of applicable law and the Certificate of
Incorporation of the Corporation.
ARTICLE XIII
Indemnification
SECTION 13.1. Power to Indemnify in Actions, Suits or
Proceedings Other Than Those by or in the Right of the Corporation. Subject to
Section 13.3 of this Article XIII, the Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law, any person who is
or was a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, or with respect to any
criminal action or proceeding, that such person had reasonable cause to believe
that such person's conduct was unlawful.
SECTION 13.2. Power to Indemnify in Actions, Suits or
Proceedings by or in the Right of the Corporation. Subject to Section 13.3 of
this Article XIII, the Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law, any person who is or was a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to produce a judgment in its favor
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability, in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
SECTION 13.3. Authorization of Indemnification. Any
indemnification under this Article XIII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 13.1 or Section 13.2 of this Article XIII, as the
case may be. Such determination shall be made (i) by the Board by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) by a committee of such directors designated by a
majority vote of such directors even though less than a quorum, or (iii) if such
a quorum is not obtainable, or, even if it is obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iv) by the stockholders. To the extent, however, that a director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the specific
case.
PAGE 31
SECTION 13.4. Good Faith Defined. For purposes of any
determination under Section 13.3 of this Article XIII, a person shall be deemed
to have acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of the Corporation, or, with respect
to any criminal action or proceeding, to have had no reasonable cause to believe
such person's conduct was unlawful, if such person's action is based on the
records or books of account of the Corporation or another enterprise, or on
information supplied to such person by the officers of the Corporation or
another enterprise in the course of their duties, or on the advice of legal
counsel for the Corporation or another enterprise or on information or records
given or reports made to the Corporation or another enterprise by an independent
certified public accountant or by an appraiser or the expert selected with
reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Section 13.4 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise of
which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this Section 13.4 shall
not be deemed to be exclusive or to limit in any way the circumstances in which
a person may be deemed to have met the applicable standard of conduct set forth
in Sections 13.1 or 13.2 of this Article XIII, as the case may be.
SECTION 13.5 Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 13.3 of this Article
XIII, and notwithstanding the absence of any determination thereunder, any
director, officer, employee or agent may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 13.1 and 13.2 of this Article XIII. The
basis of such indemnification by a court shall be a determination by such court
that indemnification of the director, officer, employee or agent is proper in
the circumstances because such person has met the applicable standards of
conduct set forth in Sections 13.1 or 13.2 of this Article XIII, as the case may
be. Neither a contrary determination in the specific case under Section 13.3 of
this Article XIII nor the absence of any determination thereunder shall be a
defense to such application or create a presumption that the director, officer,
employee or agent seeking indemnification has not met any applicable standard of
conduct. Notice of any application for indemnification pursuant to this Section
13.5 shall be given to the Corporation promptly upon the filing of such
application. If successful, in whole or in part, the director, officer, employee
or agent seeking indemnification shall also be entitled to be paid the expenses
of prosecuting such application.
SECTION 13.6. Expenses Payable in Advance. Expenses incurred
by a director or officer in defending or investigating a threatened or pending
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director, officer, employee or agent to
repay such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation as authorized in this Article
XIII.
SECTION 13.7. Nonexclusivity of Indemnification and
Advancement of Expenses. The indemnification and advancement of expenses
provided by or granted pursuant to this Article XIII shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-Law, agreement, contract,
vote of stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise, both
as to action in their official capacity and as to action in another capacity
while holding such office, it being the policy of the Corporation that
indemnification of the persons specified in Sections 13.1 and 13.2 of this
Article XIII shall be made to the fullest extent permitted by law. The
provisions of this Article XIII shall not be deemed to preclude the
indemnification of any person who is not specified in Section 13.1 or 13.2 of
this Article XIII but whom the Corporation has the power or obligation to
indemnify under the provisions of the Delaware General Corporation Law, or
otherwise.
PAGE 32
SECTION 13.8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power or the obligation to indemnify such
person against such liability under the Delaware General Corporation Law or the
provisions of this Article XIII.
SECTION 13.9. Certain Definitions. For purposes of this
Article XIII references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, shall stand in the same
position under the provisions of this Article XIII with respect to the resulting
or surviving corporation as such person would have with respect to such
constituent corporation if its separate existence had continued. For purposes of
this Article XIII, references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involved services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner such person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article XIII.
SECTION 13.10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article XIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 13.11. Limitation on Indemnification. Notwithstanding
anything contained in this Article XIII to the contrary, except for proceedings
to enforce rights to indemnification (which shall be governed by Section 13.5
hereof), the Corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was authorized
or consented to by the Board.
ARTICLE XIV
Interested Directors
SECTION 14.1. Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the Board or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (1) the material facts as to such
person's relationship or interest and as to the contract or transaction are
disclosed or are known to the Board or the committee, and the Board or committee
in good faith authorizes the contract or transaction by the affirmative votes of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to such person's
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (3) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified, by the Board, a committee thereof, or
the stockholders. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction.
PAGE 33
EXHIBIT 10(c)
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
USFREIGHTWAYS CORPORATION
STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
AMENDED AND RESTATED AS OF APRIL 28, 2000
I. DEFINITIONS AND PURPOSE
A. Definitions:
Unless otherwise specified or unless the context otherwise
requires, the following terms, as used in this Plan, have the
following meanings:
1. Affiliate means a corporation which, for purposes
of Section 422 of the Code, is a parent or subsidiary
of the Company, direct or indirect.
2. Board means the Board of Directors of the Company.
3. Code means the Internal Revenue Code of 1986, as
amended.
4. Committee means the committee to which the Board
delegates the power to act under or pursuant to the
provisions of the Plan, or the Board if no committee
is selected.
5. Company means USFreightways Corporation, a Delaware
corporation, and includes any successor or assignee
corporation or corporations into which the Company
may be merged, changed, or consolidated; any
corporation for whose securities the securities of
the Company shall be exchanged; and any assignee of
or successor to substantially all other assets of the
Company.
6. Disability means a permanent and total disability as
defined in Section 22(e)(3) of the Code.
7. Eligible Director means each person who is a director
of the Company, and who is not an employee of the
Company or any Affiliate of the Company and who has
not been an employee of the Company or any Affiliate
of the Company for all or any part of the preceding
fiscal year.
8. Option means a right or option granted under the
Plan, which right or option shall not be intended to
qualify as an incentive stock option as defined in
Section 422 of the Code.
9. Option Agreement means an agreement between the
Company and a Participant executed and delivered
pursuant to the Plan.
10. Participant means an Eligible Director to whom an
Option is granted under the Plan.
11. Plan means this Stock Option Plan for Non-Employee
Directors, as amended from time to time.
12. Shares means the following shares of the capital
stock of the Company as to which Options have been or
may be granted under the Plan: authorized and
unissued common stock, $0.01 par value, treasury
shares held by the Company or any shares of capital
stock into which the Shares are changed or for which
they are exchanged within the provisions of Article
VI of the Plan.
PAGE 34
B. Purpose of the Plan:
The Plan intended to promote the interests of the Company and
its stockholders by attracting and retaining highly qualified
independent directors through an investment interest in the
Company's future success.
II. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Options may be granted from
time to time shall be Five Hundred Thousand (500,000) Shares.
If an Option ceases to be "outstanding", in whole or in part, the
Shares which were subject to such Option, if the Option was not
exercised, shall be available for the granting of other Options. Any
Option, if the Option was not exercised, shall be available for the
granting of other Options. Any Option shall be treated as "outstanding"
until such Option is exercised in full, or terminates or expires under
the provisions of the Plan or Option Agreement.
Subject to the provisions of Article VI, the aggregate number of Shares
as to which Options may be granted shall be subject to change only by
means of an amendment of the Plan duly adopted by the Company and
approved by the stockholders of the Company within such time period as
may be required by the Securities Exchange Act of 1934, as amended from
time to time.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee is authorized to:
A. Interpret the provisions of the Plan or any Option or Option
Agreement and to make all rules and determinations which it
deems necessary or advisable for the administration of the
Plan;
B. Determine the Eligible Directors to whom Options shall be
granted;
C. Determine the number of Shares for which an Option or Options
shall be granted;
D. Provide for the acceleration of the right to exercise an
Option (or any portion thereof); and
E. Specify the terms and conditions upon which Options may be
granted.
The interpretation and construction by the Committee of any provisions
of the Plan or of any Option granted under it shall be final.
IV. ELIGIBILITY FOR PARTICIPATION
Each Participant must be an Eligible Director of the Company at the
time an Option is granted. Each Eligible Director shall be granted, at
the later of the effective date of the Plan or the date such director
becomes an Eligible Director, and at such other time or times as
described in Article V, an Option to purchase Shares under the Plan. In
addition to the formula-based Shares set forth in Article V, the
Committee may at any time and from time to time grant one or more
additional Options to one or more Eligible Directors ("Discretionary
Options") and may designate the number of Shares to be subject to each
Discretionary Option so granted, provided however that no grant of a
Discretionary Option to purchase Shares shall permit unrestricted
ownership of Shares by the Eligible Director for at least six (6)
months from the date of grant of the Discretionary Option, unless the
Committee determines that the grant of such Discretionary Option to
purchase Shares otherwise satisfies the then current Rule 16b-3
requirements under the Securities Exchange Act of 1934.
PAGE 35
V. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be set forth in an Option Agreement, duly executed on
behalf of the Company and by the participant to whom such Option is
granted. Except for the setting of the Option price under Paragraph A
of this Article V, no Option shall be granted and no purported grant of
any Option shall be effective until such Option Agreement shall have
been duly executed on behalf of the Company and by the Participant.
Each such Option Agreement shall be subject to at least the following
terms and conditions:
A. OPTION PRICE:
The exercise price of the Shares covered by each Option
granted under the Plan shall be equal to 100% of the "fair
market value" of the Shares on the date of the granted Option.
If the Shares are listed on any national securities exchange,
the fair market value shall be the mean average of the high
and low sales prices, if any, on the largest such exchange on
the date of the grant of the Option, or, if none, on the most
recent trade date thirty (30) days or less prior to the date
of the grant of the Option. If the Shares are not then listed
on any such exchange, the fair market value of such Shares
shall be the closing "Ask" prices, if any, as reported on the
National Association of Securities Dealers automated Quotation
System ("NASDAQ") for the date of the grant of the Option, or
if none, on the most recent trade date thirty (30) days or
less prior to the date of the grant of the Option for which
such quotations are reported. If the Shares are not then
either listed on any such exchange or quoted on NASDAQ, the
fair market value shall be the mean between the average of the
"Bid" and the average of the "Ask" prices, if any, as reported
in the National daily Quotation Service for the date of the
grant of the Option, or, if none, for the most recent trade
date thirty (30) days or less prior to the date of the grant
of the Option for which such quotations are reported.
B. NUMBER OF SHARES:
Each Eligible Director shall automatically, at the later of
the effective date of the Plan or the date such director
becomes an Eligible Director, be granted an Option under this
Plan to acquire 10,000 Shares. Upon the fifth and tenth
anniversaries of such initial grant, each Participant shall
automatically be granted Options under this Plan to acquire an
additional 10,000 Shares at each such anniversary, provided
the Participant is an Eligible Director at such anniversary.
In addition to the foregoing, each Eligible Director may from
time to time be granted by the Committee, in its discretion, a
Discretionary Option.
C. TERM OF OPTION:
No Option granted under the Plan shall be exercisable after
the expiration of ten (10) years from the date of the grant.
D. DATE OF EXERCISE:
1. Options granted to an Eligible Director under the
Plan on the Plan's effective date shall become
exercisable cumulatively in accordance with the
following schedule:
Years Elapsed Since Cumulative Number of Shares
Date of Grant For Which Option May Be Exercised
Less than 1 2,000
1 3,600
2 5,200
3 6,800
4 8,400
5 or more 10,000
2. Options granted to an Eligible Director under the
Plan after the Plan's effective date shall become
exercisable cumulatively in accordance with the
following schedule:
Years Elapsed Since Cumulative Number of Shares
Date of Grant For Which Option May Be Exercised
Less than 1 0
1 2,000
2 4,000
3 6,000
4 8,000
5 or more 10,000
PAGE 36
The foregoing schedules notwithstanding, if a Participant
shall cease to be a director of the Company because of death
or Disability, all Shares for which an Option has been granted
shall become immediately exercisable and shall be exercisable
in accordance with Paragraph F.
Not withstanding anything herein to the contrary, upon the
authorization of the grant of a Discretionary Option, or at
anytime thereafter, the Committee may prescribe the date or
dates on which the Discretionary Option becomes exercisable,
and may provide that the Discretionary Option become
exercisable in installments over a period of years, or upon
the attainment of stated goals.
E. MEDIUM OF PAYMENT:
The Option price shall be paid on the date of purchase
specified in the notice of exercise, as set forth in Paragraph
G. It shall be paid in the legal tender of the United States,
or, at the election of the Participant, by surrender to the
Company of previously owned shares with an aggregate fair
market value (on the date of the exercise) equal to the Option
price to be paid; provided, however, that if such shares were
acquired pursuant to an incentive stock option plan (as
defined in Code Section 422) of the Company or Affiliate, then
the applicable holding period requirements of said Section 422
have been met with respect to such shares, and, provided
further, that if (i) such shares were granted pursuant to an
option, then such option must have been granted at least six
(6) months prior to the exercise of the Option hereunder; and
(ii), such shares were purchased other than through the grant
and exercise of an option, such shares were owned by the
Participant for more than six (6) months prior to the exercise
of the Option hereunder.
F. TERMINATION OF STATUS:
1. In the event that a Participant shall cease to be a director
of the Company for any reason other than death, Disability, or
voluntary termination as a director of the Company on or after
the attainment of his or her 65th birthday, his or her Option
shall be exercisable, only to the extent that it was
exercisable at the date he or she ceased to be a director and
only until the first to occur of one (1) year after such date
or until the date on which the Option otherwise expires
according to its terms.
2. In the event that a Participant shall cease to be a director
of the Company because of death or Disability, his or her
Option may be exercised in its entirety (notwithstanding the
vesting schedule set forth in Paragraph D of this Article V or
in any Option Agreement) within the originally prescribed term
of the Option by the Participant or by any person or persons
designated by the Participant as the executors or
administrators of the Participant's estate, or by any person
or persons who shall have acquired the Option directly from
the Participant by his or her will or the applicable law of
descent and distribution.
3. In the event that a Participant shall cease to be a director
of the Company because of voluntary termination as a director
of the Company on or after the attainment of his or her 65th
birthday and that Participant has served as a director of the
Company for five (5) years or more, his or her Option may be
exercised in its entirety (notwithstanding the vesting
schedule set forth in Paragraph D of this Article V or in any
Option Agreement) within the originally prescribed term of the
Option by the Participant; provided that the Committee, in its
sole discretion, approves the exercise of the Option in its
entirety.
PAGE 37
4. In the event that a Participant shall cease to be a
director of the Company because of voluntary termination
as a director of the Company on or after the attainment of
his or her 72nd birthday an Participant has not served as a
director of the Company for five (5) years, his or her
Option shall be exercisable (notwithstanding the vesting
schedule set forth in Paragraph D of this Article V or in
any Option Agreement) within the originally prescribed term
of the Option by the Participant, to the extent that (a) it
was exercisable at the date he or she ceased to be a
director and (b) if the Option was exercisable periodically,
to the extent of any additional rights that would have become
exercisable (had the Participant not voluntarily terminated as
a director of the Company) during successive one year periods
from the Participant's date of termination for each year the
Participant served as a director of the Company.
G. EXERCISE OF OPTION AND ISSUE OF STOCK:
Option shall be exercised by giving written notice to the
Company. Such written notice shall: (1) be signed by the
person exercising the Option, (2) state the number of Shares
with respect to which the Option is being exercised, and (3)
specify a date (other than a Saturday, Sunday or legal
holiday) not less than five (5) nor more than ten (10) days
after the date of such written notice, as the date on which
the Shares will be purchased. Such tender and conveyance shall
take place at the principal office of the Company during
ordinary business hours, or at such other hour and place
agreed upon by the Company and the person or persons
exercising the Option. On the date specified in such written
notice (which date may be extended by the Company in order to
comply with any law or regulation which requires the Company
to take any action with respect to the Option Shares prior to
the issuance thereof, whether pursuant to the provisions of
Article VI or otherwise), the Company shall accept payment for
the Option Shares and shall deliver to the person or persons
exercising the Option in exchange therefor an appropriate
certificate or certificates for paid non-assessable Shares. In
the event of any failure to take up and pay for the number of
Shares specified in such written notice on the date set forth
therein (or on the extended date as above provided), the right
to exercise the Option shall terminate with respect to such
number of Shares, but shall continue with respect to the
remaining Shares covered by the Option and not yet acquired
pursuant thereto.
H. RIGHTS AS A STOCKHOLDER:
No Participant to whom an Option has been granted shall have
rights as a stockholder with respect to any Shares covered by
such Option except as to such Shares as have been issued to or
registered in the Company's share register in the name of such
Participant upon the due exercise of the Option and tender of
the full Option price.
I. ASSIGNABILITY AND TRANSFERABILITY OF OPTION:
By its terms, an Option granted to a participant shall not be
transferable by the Participant and shall be exercisable,
during the Participant's lifetime, only by such Participant.
Such Option shall not be assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment, or similar process.
Any attempted transfer, assignment, pledge, hypothecation or
other disposition of any Option or of any rights granted
thereunder contrary to the provisions of this Paragraph I, or
the levy of any attachment or similar process upon an Option
or such rights, shall be null and void.
VI. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding shares of the Company are changed
into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization , merger, consolidation, recapitalization,
reclassification, change in par value, stock split-up, combination of
shares or dividend payable in capital stock , or the like, appropriate
adjustments to prevent dilution or enlargement of the rights granted
to, or available for, Participants shall be made in the number and kind
of shares for the purchase of which Options may be granted under the
Plan, and, in addition, appropriate adjustment shall be made in the
number and kind of Shares and in the Option price per share subject to
outstanding options. Notwithstanding anything herein to the contrary,
in the event of an offer for the Company's shares, the adoption of a
plan of merger or consolidation under which all of the shares of the
Company would be eliminated, or a sale of substantially all of the
Company's assets, a Participant shall be entitled to exercise
immediately all or any portion of the Shares to which he or she
received an Option, regardless of the number of years elapsed since the
date of the grant .
PAGE 38
VII. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in
connection with a transaction to which the preceding Article VI is
applicable, all Options granted hereunder shall terminate and become
null and void; provided, however, that if the rights of a Participant
under the applicable Options have not otherwise terminated and expired,
the Participant shall have the right immediately prior to such
dissolution or liquidation to exercise any Option granted hereunder to
the extent that the right to purchase Shares thereunder has become
exercisable as of the date immediately prior to such dissolution or
liquidation.
VIII. TERMINATION OF THE PLAN
The Plan shall terminate fifteen (15) years from the date of its
adoption. The Plan may be terminated at an earlier date by vote of the
Board; provided, however, that any such earlier termination shall not
affect any Options granted or Option Agreements executed prior to the
effective date of such termination. Except as may otherwise by provided
for under Articles VI and VII, and notwithstanding anything in this
Plan to the contrary, any Options granted prior to the effective date
of the Plan's termination may be exercised, if otherwise exercisable
until ten (10) years have elapsed from the date the Option is granted,
and the provisions of the Plan with respect to the full and final
authority of the Committee under the Plan shall continue to control.
IX. AMENDMENT OF THE PLAN
The Plan may be amended by the Board and such amendment shall become
effective upon adoption by the Board; provided, however, that any
amendment to Article II above or that otherwise requires the approval
of the stockholders of the Company in accordance with the Rule 16b-3
requirements of the Securities Exchange Act of 1934, as amended from
time to time, shall be subject to approval of the stockholders within
the requisite time period of such Act, and provided, further, that the
Plan may not be amended more frequently than once every six (6) months,
unless an amendment is necessary to comply with the Code or the
Employee Retirement Income Security Act of 1974, as amended, and is
otherwise permitted by Rule 16b-3.
X. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or members of the Committee, the members of the Committee
shall be indemnified by the Company against all reasonable expenses,
including attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be
a party by reason of any action taken by them as members of the
Committee and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding
that the Committee member is liable for gross negligence or willful
misconduct in the performance of his or her duties. To receive such
indemnification, a Committee member must first offer in writing to the
Company the opportunity, at his own expense, to defend any such action,
suit or proceeding.
XI. RESTRICTIONS
If the Company shall determine, in its discretion, that the Shares
under the Plan must be registered or qualified under any applicable
state or federal securities law before they may be offered or sold to
the Participant, or that the consent or approval of any governmental
regulatory body is necessary or desirable in connection with the
issuance of such Shares, such Option may not be exercised by the
Participant unless the Shares have been so registered, qualified, or
listed, or until such consent or approval shall have been obtained,
free of any conditions not acceptable to the Company. The Company shall
use reasonable efforts to qualify the Shares, obtain the benefit of any
applicable exemption from such qualification, or obtain any such
consent or approval, provided that no Participant shall have any right
to require the company to undertake any registration or other action
which the Company determines, in its sole discretion, to be unduly
burdensome.
PAGE 39
XII. SAVINGS CLAUSE
This Plan intended to comply in all respects with applicable law and
regulations, including Rule 16b-3 of the Securities and Exchange
Commission. In case any one or more provisions of this Plan shall be
held invalid, illegal, or unenforceable in any respect under applicable
law and regulation (including Rule 16b-3), the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and the invalid, illegal, or unenforceable
provisions shall be deemed null and void; however, to the extent
permitted by law, any provision that could be deemed null and void
shall first be construed, interpreted, or revised retroactively to
permit this Plan to be construed in compliance with all applicable law
(including Rule 16b-3) so as to foster the intent of this Plan.
Notwithstanding anything herein to the contrary, no grant of, or Option
to purchase, Shares shall permit unrestricted ownership of Shares by
the Participant for at least six (6) months from the date of grant or
Option to purchase.
XIII. EFFECTIVE DATE
This Plan shall become effective upon adoption by the Board. The
adoption of the Plan shall be subject to subsequent approval by the
stockholders of the Company at the next annual meeting of the company's
stockholders unless such approval is not required by any rules or
regulations promulgated by the Securities and Exchange Commission under
Section 16(b) of the Securities Exchange Act of 1934, as amended from
time to time. Notwithstanding the foregoing, if the Plan shall have
been approved by the Board prior to such annual meeting, Options shall
be granted to Eligible Directors prior to the date of such annual
meeting in accordance with Article V, subject to such subsequent
stockholder approval but such Options shall not become exercisable
until such approval is obtained or its is determined that such approval
is not required.
XIV. GOVERNING LAW
This Plan shall be governed by the laws of the State of Delaware and
construed in accordance therewith.
Originally adopted and effective on the 29th day of October, 1993 by the Board
of Directors. Amended and restated this 28th day of April 2000 by the Board of
Directors.
PAGE 40
EXHIBIT 10(o)
CONSULTING AGREEMENT AND RELEASE
This Consulting Agreement and Release ("Agreement") is made and entered
into as of the 3rd day of November, 2000 (the "Effective Date"), by and between
USFreightways Corporation, a Delaware corporation (the "Company"), and John
Campbell Carruth ("Carruth"). The terms "Company" and "Carruth" may collectively
be referred to as the "parties."
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Termination of Employment.
-------------------------
(a) Effective the close of business on December 31, 2000, Carruth and the
Company agree that Carruth will resign his employment with the Company and its
subsidiaries and affiliates as the result of his voluntary retirement, and
Carruth shall further resign as Chairman of, and as a member of, the Board of
Directors of the Company and from any other officer or director positions he
holds at the Company (including any of the Company's affiliates or
subsidiaries), and the Company accepts each and all of such resignations;
provided, however, that Carruth may remain a director of Auto Warehouse Co.
Inc., as the Company's designated representative. Carruth represents that no
disagreement exists regarding the Company's operations, policies or practices.
Carruth will be entitled to receive any bonus amounts for which he is eligible
in the year 2000 under the existing bonus plan(s) of the Company. The Company
shall make available to Carruth any financial statements necessary for Carruth
to determine his eligibility for a bonus under such plan(s).
(b) Carruth shall be allowed to retain his home computer, which is Company
property, and the Company-owned automobile.
2. Consulting Relationship
(a) Unless sooner terminated as hereinafter provided, the Company and
Carruth hereby agree that, from January 1, 2001 through December 31, 2005 (the
"Term"), Carruth shall provide services to the Company as a consultant on the
terms as set forth in this Agreement.
(b) The Company hereby engages Carruth, and Carruth hereby accepts such
engagement, as a general advisor to the Company for the compensation and on the
terms and conditions hereinafter expressed. Carruth shall perform such
consulting duties, for up to twenty (20) hours per month, as are reasonably
assigned to him by the Company in regard to its business (the "Services"). The
Services will include Carruth's advice, counsel and assistance to be furnished
at the reasonable request of the Company from time to time in connection with
its business. The Company agrees to give Carruth reasonable notice of what
Services it desires and when it desires them to be performed. In that
connection, the Company and Carruth agree to cooperate in resolving any
scheduling problems that may arise with respect to Carruth being available at
the times requested. Carruth shall diligently, competently, and faithfully
perform all duties, and shall use his best efforts to promote the interests of
the Company.
(c) Carruth shall at all times during the Term be acting and performing
hereunder as an independent contractor. Carruth will not be acting as an
employee, agent, partner, servant or representative of the Company, and Carruth
will not have any authority to bind the Company or any subsidiary of the Company
in any manner. As an independent contractor, Carruth shall not participate in
any employee benefit plan or program or be subject to any employment rules,
regulations or policies of the Company, except as otherwise provided herein.
Carruth shall have exclusive control of the method of performance of his duties
hereunder and shall independently manage and control his activities subject only
to the terms of this Agreement. Carruth recognizes, acknowledges and agrees
that, as an independent contractor, all income paid to him under this Agreement
for the Services shall constitute income from self-employment and Carruth shall
be required to pay self-employment taxes pursuant to Section 1401 of the
Internal Revenue Code of 1986, as amended. Carruth further recognizes,
acknowledges and agrees that because of his status as an independent contractor,
the Company, its officers, directors, and employees shall have no obligation or
liability whatsoever to Carruth, his heirs, assigns, or creditors for workers'
compensation, federal and state payroll taxes, unemployment compensation,
minimum wages, Social Security assessments or similar charges, taxes or
liabilities applicable to an employment relationship.
PAGE 41
3. Fees
(a) As compensation for the Services and for the covenants contained in
Paragraph 7, and as a settlement payment hereunder, the Company shall pay to
Carruth an annual amount equal to $250,000 (the "Fee"), payable in substantially
equal monthly installments. Two hundred thousand dollars of such Fee shall be
attributable to the payment for consulting services and the covenants contained
in Paragraph 7, and fifty thousand dollars of such Fee shall be in consideration
of the release in Paragraph 4 hereunder. As further elaboration of such
payments, ten percent of the release payments shall be in consideration of the
release of any claim under the Age Discrimination in Employment Act of 1967, as
amended, and as described in Paragraph 4, and Carruth agrees that such
consideration is in addition to anything of value to which he already is
entitled. The remainder of the release payments shall be in consideration of the
release of all other claims described below in Paragraph 4.
(b) In the event that Carruth should die during the Term of this Agreement, or
become Disabled (as defined in Paragraph 5(b)), the Fee that would otherwise be
paid to Carruth shall be paid to either Carruth, if he is Disabled, or, if he
should die, to such beneficiary(ies) as are designated by Carruth within
forty-five (45) days after the Effective Date of this Agreement. If Carruth
should die during the Term of this Agreement without designating any
beneficiary(ies) under this Section 3(b), the Fee shall be paid to his surviving
spouse, or, if there is no surviving spouse, the Fee shall be made to Carruth's
estate.
(c) The settlement payments hereunder shall be subject to any payroll or other
deductions as may be required to be made pursuant to law, government order, or
by agreement with, or consent of Carruth. The Company and Carruth agree that as
of December 31, 2000 he will have been paid for all earned but unused vacation
pay. Except as set forth in this Agreement, no other sums (contingent or
otherwise) shall be paid to Carruth in respect of his employment, or consulting
relationship; provided, however, that Carruth (i) shall be entitled to receive
his account balance, if any, under any Company Section 401(k) or other
retirement or stock purchase plan in accordance with the terms of such plan or
plans and subject to any restrictions therein; and (ii) may elect to continue
his health insurance coverage, as mandated by COBRA, which may continue to the
extent required by applicable law; provided, moreover, that if Carruth elects
COBRA continuation coverage, the Company shall pay for such health insurance
coverage at the same rate as it pays for health insurance coverage for its
active employees (with Carruth required to pay for any employee-paid portion of
such coverage, if any). The foregoing notwithstanding, nothing herein provided
shall be construed to extend the period of time over which such COBRA
continuation coverage may otherwise be provided to Carruth. Following the
expiration of the COBRA continuation coverage period, or in lieu of COBRA
continuation coverage, the Company shall pay premiums, on Carruth's and his
spouse's behalf, to a Medicare supplemental policy (a so-called "MediGap
Policy"), with the amount of such premiums to be paid during the Term of this
Agreement and as more particularly described on Exhibit A.
(d) Carruth shall continue to have the rights as set forth in those certain
option agreements dated February 6, 1997, December 12, 1997, October 30, 1998
and February 21, 2000, respectively (the "Option Agreements"); provided,
however, and notwithstanding anything in the Option Agreements or the Company's
Long-Term Incentive Plan to the contrary, Carruth shall become vested on
December 31, 2000 in all shares subject to such options and shall be entitled to
exercise the options under the Option Agreements through and including December
31, 2005. In order for Carruth to exercise such options, he must provide the
Company with an affirmative representation at the time of exercise that he is in
compliance with Paragraph 7 of this Agreement.
PAGE 42
4. Release of Claims
(a) Other than as provided in this Agreement, as a material inducement
to the Company to enter into this Agreement and in further consideration of the
payments to be made to Carruth in Paragraph 3 above, Carruth, with full
understanding of the content and legal effect of this Agreement and having the
right and opportunity to consult with his counsel, releases and discharges the
Company, its shareholders, officers, directors, supervisors, managers,
employees, agents, representatives, attorneys, parent companies, divisions,
subsidiaries, and affiliates, and its and their predecessors, successors, heirs,
executors, administrators, and assigns (collectively, the "Released Parties")
from any and all claims, actions, causes of action, grievances, suits, charges,
or complaints of any kind or nature whatsoever, that he has ever had or now has,
whether fixed or contingent, liquidated or unliquidated, known or unknown,
suspected or unsuspected, and whether arising in tort, contract, statute, or
equity, before any federal, state, local, or private court, agency, arbitrator,
mediator, or other entity, regardless of the relief or remedy. Without limiting
the generality of the foregoing, it being the intention of the parties to make
this Agreement as broad and as general as the law permits, this Agreement
specifically includes any and all claims arising from any alleged violations by
the Released Parties under the Age Discrimination in Employment Act of 1967, as
amended (ADEA); Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1866, as amended by the Civil Rights Act of 1991 (42 U.S.C. ss.
1981); the Rehabilitation Act of 1973, as amended; the Illinois Wage Payment and
Collection Act (except for any entitlement to Carruth's year 2000 bonus, if
any); the Illinois Human Rights Act, the Chicago Human Rights Ordinance, the
Cook County Human Rights Act, and other similar state or local laws; the
Employee Retirement Income Security Act of 1974, as amended (except for claims
for benefits under any employee benefit plan, as defined therein); the Americans
with Disabilities Act; the Family and Medical Leave Act; the Equal Pay Act;
Executive Order 11246; Executive Order 11141; and any other statutory claim of
employment or other contract or implied contract claim, or common law claim for
wrongful discharge, breach of an implied covenant of good faith and fair
dealing, defamation, or invasion of privacy arising out of or involving his
employment with the Company, the termination of his employment with the Company
or involving any continuing effects of his employment with the Company or
termination of employment with the Company. Carruth further acknowledges that he
is aware that statutes exist that render null and void releases and discharges
of any claims, rights, demands, liabilities, actions, and causes of action which
are unknown to the releasing and discharging party at the time of execution of
the release and discharge. Carruth hereby expressly waives, surrenders, and
agrees to forego any protection to which he otherwise would be entitled by
virtue of the existence of any such statute in any jurisdiction, including, but
not limited to the State of Illinois.
(b) Carruth, for himself, his heirs, executors, administrators,
successors and assigns agrees not to bring, file, charge, claim, sue or cause,
assist, or permit to be brought, filed, charged or claimed any action, cause of
action, or proceeding regarding or in any way related to any of the claims
released under Paragraph 4(a) hereof, and further agrees that this Agreement is,
will constitute and may be pleaded as, a bar to any such claim, action, cause of
action or proceeding.
(c) Notwithstanding any other provision of the Agreement to the
contrary, the release under Paragraph 4(a) above shall not apply to any claim
arising from any breach of this Agreement by the Company or any failure by the
Company to comply with any or all of the provisions of this Agreement or from
any rights or claims that may arise after the date this Agreement is executed by
Carruth.
PAGE 43
(d) Carruth represents and certifies that he has carefully read and
fully understands all of the provisions and effects of this Agreement, has
knowingly and voluntarily entered into this Agreement freely and without
coercion, and acknowledges that on November 3, 2000, the Company advised him to
consult with an attorney prior to executing this Agreement and further advised
him that he had at least twenty-one (21) days (until November 24, 2000) within
which to consider this Agreement. Carruth is voluntarily entering into this
Agreement and neither the Company nor its agents, representatives, or attorneys
made any representations concerning the terms or effects of this Agreement other
than those contained in the Agreement itself.
(e) Carruth acknowledges that he has seven (7) days from the date this
Agreement is executed in which to revoke his acceptance of this Agreement, and
this Agreement will not be effective or enforceable until such seven (7) day
period has expired.
5. Termination. Notwithstanding anything in Paragraph 2(a) of this
Agreement to the contrary, Carruth's Services shall terminate upon the first
to occur of the following events:
(a) At the end of the Term.
(b) Upon Carruth's date of death or the date Carruth is given written
notice that he has been determined to be Disabled (as defined herein) by the
Company. For purposes of this Agreement, Carruth shall be deemed to be
"Disabled" if Carruth, as a result of illness or other physical or mental
incapacity, shall be unable to perform his required duties hereunder for a
period of four (4) consecutive months or for any aggregate period of six (6)
months in any twelve (12) month period.
(c) On the date Carruth terminates his engagement for any reason.
(d) On the date the Company terminates Carruth's Services for any reason.
PAGE 44
6. Compensation Upon Termination. If Carruth's Services are terminated pursuant
to Paragraph 5(b) or 5(d), Carruth or his beneficiary(ies) shall be entitled to
the Fees and benefits through the end of the Term; provided, however, that
Carruth shall not be entitled to that portion of the Fees allocated to
consulting services (under Paragraph 3(a)) and benefits set forth in Paragraph
3(d) from the date of his breach of Paragraph 7 through the end of the Term if
the Company terminates the Agreement due to any breach of Paragraph 7 . In the
event Carruth's Services terminate pursuant to Paragraph 5(a) or 5(c), Carruth
shall be entitled to none of the Fees or benefits set forth in Paragraphs 3(a),
3(b), 3(c) and 3(d) of the Agreement following the date of such termination;
provided however, that the Company has the sole discretion to continue to pay
Carruth the Fees allocated to consulting services in exchange for Carruth's
continued compliance with Paragraph 7 even after Carruth terminates the Services
under Paragraph 5(c) until December 31, 2005.
7. Protective Covenants. Carruth acknowledges and agrees that solely by virtue
of his prior employment by, and relationship with, the Company, as Chairman of
its Board of Directors, and President and Chief Executive Officer, he has
acquired (and, in connection with his engagement hereunder, he will continue to
acquire) "Confidential Information", as hereinafter defined, as well as special
knowledge of the Company's relationships with its Customers, and that but for
his association with the Company, Carruth would not have had access to said
Confidential Information or knowledge of said relationships. Carruth further
acknowledges and agrees (i) that the Company has long term, near-permanent
relationships with its Customers, and that those relationships were developed at
great expense and difficulty to the Company over several years of close and
continuing involvement; (ii) that the Company's relationships with its Customers
are and will continue to be valuable, special and unique assets of the Company
and that the identity of its Customers is kept under tight security with the
Company and cannot be readily ascertained from publicly available materials or
from materials available to the Company's competitors; and (iii) that the
Company has the following protectable interest that is critical to its
competitive advantage in the industry and would be of demonstrable value in the
hands of a competitor: the Company's systematic ways of scheduling and
programming its routes and services. In return for the consideration described
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and as a condition precedent to
the Company entering into this Agreement and as an inducement to the Company to
do so, Carruth hereby represents, warrants, and covenants as follows:
(a) Carruth has executed and delivered this Agreement as his free and
voluntary act after having determined that the provisions contained herein are
of a material benefit to him, and that the duties and obligations imposed on him
hereunder are fair and reasonable and will not prevent him from earning a
comparable livelihood following the termination of his employment and engagement
with the Company.
(b) Carruth has read and fully understands the terms and conditions set
forth herein, has had time to reflect on and consider the benefits and
consequences of entering into this Agreement, and has had the opportunity to
review the terms hereof with an attorney or other representative, if he so
chooses.
(c) The execution and delivery of this Agreement by Carruth does not
conflict with, or result in a breach of or constitute a default under, any
agreement or contract, whether oral or written, to which Carruth is a party or
by which Carruth may be bound.
(d) Carruth agrees that, through December 31, 2005 (unless Carruth is
terminated by the Company under Paragraph 5(d), in which event this Paragraph
7(d) shall be inapplicable), he will not, except on behalf of the Company,
anywhere in the United States or in any other place or venue where the Company
now conducts or operates, or may conduct or operate, its business prior to the
date of the termination of Carruth's consulting engagement:
(i) directly or indirectly, contact, solicit or direct any person,
firm, or corporation to contact or solicit, any of the Company's
Customers or Prospective Customers (as hereinafter defined) for the
purpose of selling or attempting to sell any products and/or services
that are the same as or similar to the products and services provided
by the Company to its Customers as of the date of the execution of this
Agreement or at the time during the term of Carruth's consulting
engagement. In addition, Carruth will not disclose the identity of any
such Customers or Prospective Customers, or any part thereof to any
person, corporation, association, or other entity for any reason or
purpose whatsoever; or
PAGE 45
(ii) solicit or accept if offered to him with or without solicitation,
on his own behalf or on behalf of any other person, the services of any
person who is then a current employee of the Company or any of its
subsidiaries at a level of vice president or above, nor solicit any of
those employees to terminate employment with the Company or any of its
subsidiaries nor agree to hire any then current employee of the Company
or any of its subsidiaries at a level of vice president or above into
employment with himself or any company, individual or other entity on
his own behalf or on behalf of any other person; or
(iii) act as a consultant, advisor, officer, manager, agent, director,
partner, independent contractor, owner, or employee for or on behalf of
any of the Company's Customers or Prospective Customers (as hereinafter
defined), with respect to or in any way with regard to any aspect of
the Company's business and/or any other business activities in which
the Company engages during the term hereof, if such act(s) could have a
material adverse effect on the business or financial conditions of the
Company; or
(iv) directly or indirectly, whether as an investor (excluding
investments representing less than one percent (1%) of the common stock
of a public company), lender, owner, stockholder, officer, director,
consultant, employee, agent, salesperson or in any other capacity,
whether part-time or full-time, become associated with any business
involved in the trucking, logistics or freight forwarding business, if
such association could have a material adverse effect on the business
or financial conditions of the Company; or
(v) directly or indirectly, whether as an investor,
lender, owner, stockholder, officer, director,
consultant, employee, agent, salesperson or in any
other capacity, whether part-time or full-time,
become associated with, or provide any information
to, any business or other entity that seeks to
acquire, invest, or take any interest in the Company
or any of its subsidiaries.
In order for the Company to be able to assess the impact of any act(s) or
association, Carruth shall be required to advise the Company of any act(s) or
association that may fall within the scope of subparagraphs (iii) or (iv) within
two (2) business days of the first date of such act(s) or association.
(e) Carruth acknowledges and agrees that the scope described above is
necessary and reasonable in order to protect the Company in the conduct of its
business and that, if Carruth becomes employed by or associated with another
entity or employer, he shall be required to disclose the existence of this
Paragraph 7 to such entity or employer.
(f) For purposes of this Paragraph 7, "Customer" shall be defined as
any person, or entity that purchased any type of product and/or service from the
Company or its subsidiaries or is or was doing business with the Company or its
subsidiaries or Carruth within the eighteen (18) month period immediately
preceding termination of Carruth's engagement hereunder. For purposes of this
Paragraph 7, "Prospective Customer" shall be defined as any person or entity (1)
for whom the Company or its subsidiaries is in the process of preparing a
proposal, or (2) solicited by the Company or its subsidiaries, or Carruth
(whether directly or indirectly) with a proposal, written or oral, within the
twelve (12) month period immediately preceding termination of Carruth's
engagement hereunder, for the purpose of having such persons, firms, or entities
become a Customer of the Company or its subsidiaries.
PAGE 46
(g) Carruth agrees that both during his employment, engagement as a
consultant and thereafter, Carruth will not for any reason whatsoever, use for
himself or disclose to any person not employed by the Company any "Confidential
Information" of the Company acquired by Carruth during his relationship with the
Company. Carruth agrees to use Confidential Information solely for the purpose
of performing duties with the Company and agrees not to use Confidential
Information for his own private use or commercial purposes or in any way
detrimental to the Company. Carruth agrees that Confidential Information
includes but is not limited to: (1) any financial, business, planning,
operations, services, potential services, products, potential products,
technical information and/or know-how, formulas, production, purchasing,
marketing, sales, personnel, customer, broker, supplier, or other information of
the Company; (2) any papers, data, software programs or applications, records,
processes, methods, techniques, systems, models, samples, devices, equipment,
compilations, invoices, customer lists, or documents of the Company; (3) any
confidential information or trade secrets of any third party provided to the
Company in confidence or subject to other use or disclosure restrictions or
limitations; and (4) any other information, written, oral or electronic, whether
existing now or at some time in the future, whether pertaining to current or
future developments, and whether previously accessed during Carruth's tenure
with the Company or to be accessed during his future engagement with the
Company, which pertains to the Company's affairs or interests or with whom or
how the Company does business. The Company acknowledges and agrees that
Confidential Information does not include (i) information properly in the public
domain, or (ii) information in Carruth's possession prior to the date of his
employment with the Company or any of its predecessors.
(h) In the event that the Carruth intends to communicate information to
any individual(s), entity or entities (other than the Company), to permit access
by any individual(s), entity or entities (other than the Company), or to use
information for his own account or for the account of any individual(s), entity
or entities (other than the Company) and such information would be Confidential
Information hereunder but for the exceptions set out at (i) and (ii) of
Paragraph 7(g) of this Agreement, Carruth shall notify the Company of such
intent in writing, including a description of such information, no less than
fifteen (15) days prior to such communication, access or use.
(i) During and after the term of his engagement hereunder, Carruth will
not remove from the Company's premises any documents, records, files, notebooks,
correspondence, computer printouts, computer programs, computer software, price
lists, microfilm, or other similar documents (the "Record") containing
Confidential Information, including copies thereof whether prepared by him or
others, except as his duty shall require, and in such cases, will promptly
return such items to the Company; provided, however, that Carruth may remove any
Record that the President and Chief Executive Officer of the Company authorizes
Carruth to remove for his use in order to perform the Services under this
Agreement. Upon termination of his engagement with the Company, all such items
including summaries or copies thereof, then in Carruth's possession, shall be
returned to the Company immediately.
(j) Carruth recognizes and agrees that all ideas, inventions,
enhancements, plans, writings, and other developments or improvements (the
"Inventions") conceived by Carruth, alone or with others, during the term of his
employment or engagement, whether or not during working hours, that are within
the scope of the Company's business operations or that relate to any of the
Company's work or projects, are the sole and exclusive property of the Company.
Carruth further agrees that (1) he will promptly disclose all Inventions to the
Company and hereby assigns to the Company all present and future rights he has
or may have in those Inventions, including without limitation those relating to
patent, copyright trademark or trade secrets; and (2) all of the Inventions
eligible under the copyright laws are "work made for hire." At the request of
and without charge to the Company, Carruth will do all things deemed by the
Company to be reasonably necessary to perfect title to the Inventions in the
Company and to assist in obtaining for the Company such patents, copyrights or
other protection as may be provided under law and desired by the Company,
including but not limited to executing and signing any and all relevant
applications, assignments or other instruments. Notwithstanding the foregoing,
pursuant to the Employee Patent Act, Illinois Public Act 83-493, the Company
hereby notifies Carruth that the provisions of this Paragraph 7 shall not apply
to any Inventions for which no equipment, supplies, facility or trade secret
information of the Company was used and which were developed entirely on
Carruth's own time, unless (i) the Invention relates (A) to the business of the
Company, or (B) to actual or demonstrably anticipated research or development of
the Company, or (ii) the Invention results from any work performed by Carruth
for the Company.
PAGE 47
(k) Carruth acknowledges and agrees that all customer lists, supplier
lists, and customer and supplier information including, without limitation
addresses and telephone numbers, are and shall remain the exclusive property of
the Company, regardless of whether such information was developed, purchased,
acquired, or otherwise obtained by the Company or Carruth.
(l) It is agreed that any breach or anticipated or threatened breach of
any of Carruth's covenants contained in this Paragraph 7 will result in
irreparable harm and continuing damages to the Company and its business and that
the Company's remedy at law for any such breach or anticipated or threatened
breach will be inadequate and, accordingly, in addition to any and all other
remedies that may be available to the Company at law or in equity in such event,
or under subparagraph (m) below, any court of competent jurisdiction may issue a
decree of specific performance or issue a temporary and permanent injunction,
without the necessity of the Company posting bond or furnishing other security
and without proving special damages or irreparable injury, enjoining and
restricting the breach, or threatened breach, of any such covenant, including,
but not limited to, any injunction restraining Carruth from disclosing, in whole
or in part, any Confidential Information. Carruth acknowledges the truthfulness
of all factual statements in this Agreement and agrees that he is estopped from
and will not make any factual statement in any proceeding that is contrary to
this Agreement or any part thereof.
(m) If Carruth breaches the terms of this Paragraph 7, Carruth explicitly
agrees that he shall forfeit his right to (1) exercise any unexercised
options previously granted to him under the Option Agreements from the
date of Carruth's breach of Paragraph 7 and (2) receive any further
Fees under this Agreement. Notwithstanding any other term or condition
to the contrary, Carruth shall not be required to return to the Company
(1) any Fees already paid to him or
(2) any proceeds from the sale of common stock of the Company obtained
in any stock option exercise if such payment or exercise occurred prior
to any breach by Carruth of the terms of Paragraph 7; provided however,
that the forfeiture provisions contained in this Paragraph 7(m) shall
not in anyway limit the remedies for injunctive relief otherwise
available to the Company upon breach by Carruth of the terms of this
Paragraph 7.
(n) Notwithstanding any other terms or conditions of this Paragraph 7,
Carruth may, at any time, contact the President and Chief Executive
Officer of the CompanY in writing, in the event he determines that
any activity he intends on engaging in might violate thi Paragraph 7,
and request a waiver of the provisions of this Paragraph 7. The
Company's Board of Directors shall have the unilateral and sole
discretion to determine whether or not to grant such a waiver and
shall respond to Carruth with its decision within ten(10) days of
receipt of his waiver request.
8. Non-Disparagement. Carruth represents that he will not make to anyone any
disparaging, untrue, or misleading written or oral statements about or relating
to the Company or its products or services (or about or relating to any officer,
director, agent, employee, or other person active on the Company's behalf). If
the Company believes that there has been a violation of this Paragraph 8, the
burden shall be on the Company to establish that any statement was disparaging,
untrue or misleading.
9. Carruth's Additional Obligations.
(a) Carruth agrees to obtain the prior approval of the Company's Board
of Directors before Carruth serves on any corporate or industry boards or
committees within the trucking, logistics or freight forwarding business;
provided that Carruth may be elected to the Board of Directors of CRST, Inc.;
provided, however, that he shall recuse himself from any discussions regarding
the Company and/or any of its then current subsidiaries and shall not offer any
advice or counsel as a director that would be harmful to the Company and/or its
subsidiaries. Notwithstanding the terms and conditions of this Paragraph 9(a),
Carruth still must comply with the provisions of Paragraph 7.
(b) Except as otherwise set forth in Paragraph 9(a), Carruth and the
Company expressly agree that during the term of this Agreement, Carruth may
engage, directly or indirectly, as a partner, officer, stockholder, advisor,
agent, or employee in any other business that is not similar to that of the
Company.
(c) Carruth agrees that he will keep the terms and amounts set forth in
this Agreement completely confidential and will not disclose any information
concerning this Agreement's terms and amounts to any person other than his
present attorney, accountants, tax advisors, or immediate family.
PAGE 48
10. Future Cooperation. In connection with any and all claims, disputes,
negotiations, investigations, lawsuits or administrative proceedings involving
the Company, and in which Carruth has knowledge of the underlying matter,
Carruth agrees to make himself available, upon reasonable notice from the
Company and without the necessity of subpoena, to provide information or
documents, provide declarations or statements to the Company, meet with
attorneys or other representatives of the Company, prepare for and give
depositions or testimony, and/or otherwise cooperate in the investigation,
defense or prosecution of any or all such matters.
11. General Provisions.
------------------
(a) All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) three (3) business days
after it is sent by registered or certified mail, return receipt requested,
postage prepaid, (ii) when receipt is electronically confirmed, if sent by fax
(provided that a hard copy shall be promptly sent by first class mail), or (iii)
one (1) business day following deposit with a recognized national overnight
courier service for next day delivery, charges prepaid, and, in each case,
addressed to the intended recipient as set forth below:
To Company: USFreightways Corporation
8550 W. Bryn Mawr Ave.
Suite 700
Chicago, IL 60631
Attention: Richard C. Pagano, Vice President,
General Counsel & Secretary
Fax: (773) 824-2200
To Carruth: John Campbell Carruth
316 Rivershire Court
Lincolnshire, IL 60069-3814
Either party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is delivered to the individual for whom it is intended. Either party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
(b) Neither this Agreement nor any of the terms or conditions hereof
may be waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith.
(c) The captions and paragraph headings used in this Agreement are for
convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(d) Except as otherwise provided, Carruth and the Company shall each
pay his or its own expenses, including, without limitation, the expenses of his
or its own counsel, incurred in connection with the preparation, execution and
delivery of this Agreement.
(e) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Illinois, without reference to its conflict of
law provisions. Furthermore, as to Paragraph 7, Carruth agrees and consents to
submit to personal jurisdiction in the state of Illinois in any state or federal
court of competent subject matter jurisdiction situated in Cook County,
Illinois. Carruth further agrees that the sole and exclusive venue for any suit
arising out of, or seeking to enforce, the terms of Paragraph 7 of this
Agreement shall be in a state or federal court of competent subject matter
jurisdiction situated in Cook County, Illinois. In addition, Carruth waives any
right to challenge in another court any judgment entered by such Cook County
court or to assert that any action instituted by the Company in any such court
is in the improper venue or should be transferred to a more convenient forum.
PAGE 49
(f) A waiver by the Company of a breach of any provision of this
Agreement by Carruth shall not operate or be construed as a waiver or estoppel
of any subsequent breach by Carruth. No waiver shall be valid unless in writing
and signed by an authorized officer of the Company.
(g) In light of the unique personal services to be performed by Carruth
hereunder, it is acknowledged and agreed that any purported or attempted
assignment or transfer by Carruth of this Agreement or any of Carruth's duties,
responsibilities, or obligations hereunder shall be void. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original hereof, but all of which together
shall constitute one and the same instrument.
(i) If any provision of this Agreement shall be found by a court to be
invalid or unenforceable, in whole or in part, then such provision shall be
construed and/or modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein, as the case may be.
(j) This Agreement and the Option Agreements constitute the sole and
entire agreement and understanding between the parties hereto as to the subject
matter hereof, and supersede all prior discussions, agreements and
understandings of every kind and nature between the parties hereto as to such
subject matter, including specifically Carruth's June 1, 1998 Employment
Agreement with the Company; provided however that Carruth's April 27, 1998
Restricted Stock Agreement remains in full force and effect as of the Effective
Date and shall remain in full force and effect for the remainder of the Term
until it expires on its own terms no sooner than April 27, 2002.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
USFREIGHTWAYS CORPORATION JOHN CAMPBELL CARRUTH
By:
----------------------------
Its:
--------------------------- -----------------------------
Exhibit A
The Company shall reimburse each of Cam and Margaret Carruth for a
"Plan J" MediGap policy (or an equivalent policy) from the Country Life
Insurance Company (or a comparable company).
The Company shall reimburse Carruth during the Term of the Agreement
for the premiums for such policies, in an amount not to exceed:
Margaret Carruth
Annual Premium $2,458.00
Cam Carruth
Annual Premium $2,615.00
PAGE 50
EXHIBIT 10(p)
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
USFreightways Corporation
Supplemental Executive Retirement Plan
Master Plan Document
Effective December 10, 1999
Copyright(C)1999
By Compensation Resource Group, Inc.
All Rights Reserved
TABLE OF CONTENTS
Page
Purpose 1
ARTICLE 1 Definitions 1
ARTICLE 2Selection, Enrollment, Eligibility 6
2.1 Selection by Committee 6
2.2 Enrollment Requirements 6
2.3 Eligibility; Commencement of Participation 6
2.4 Termination of Participation and/or Deferrals 6
ARTICLE 3Deferral Commitments/Company Matching/Crediting Taxes 7
3.1 Annual Company Contribution Amount 7
3.2 Investment of Trust Assets 7
3.3 Vesting 7
3.4 Crediting/Debiting of Account Balances 8
3.5 FICA and Other Taxes 10
ARTICLE 4 Retirement Benefit 10
4.1 Retirement Benefit 10
4.2 Payment of Retirement Benefit 10
4.3 Death Prior to Completion of Retirement Benefit 11
ARTICLE 5 Pre-Retirement Survivor Benefit 11
5.1 Pre-Retirement Survivor Benefit 11
5.2 Payment of Pre-Retirement Survivor Benefit 11
ARTICLE 6 Termination Benefit 11
6.1 Termination Benefit 11
6.2 Payment of Termination Benefit 11
6.3 Death Prior to Completion of Retirement Benefit 11
ARTICLE 7Disability Benefit 11
7.1 Continued Eligibility; Disability Benefit 12
ARTICLE 8Beneficiary Designation 12
8.1 Beneficiary 12
8.2 Beneficiary Designation; Change; Spousal Consent 12
8.3 Acknowledgement 12
8.4 No Beneficiary Designation 12
8.5 Doubt as to Beneficiary 12
8.6 Discharge of Obligations 13
ARTICLE 9 Leave of Absence 13
9.1 Paid Leave of Absence 13
ARTICLE 10 Termination, Amendment or Modification 13
10.1 Termination 13
10.2 Amendment 13
10.3 Plan Agreement 14
10.4 Effect of Payment 14
PAGE 51
ARTICLE 11 Administration 14
11.1 Committee Duties 14
11.2 Administration Upon Change In Control 14
11.3 Agents 15
11.4 Binding Effect of Decisions 15
11.5 Indemnity of Committee 15
11.6 Employer Information 15
ARTICLE 12 Other Benefits and Agreements 15
12.1 Coordination with Other Benefits 15
ARTICLE 13 Claims Procedures 16
13.1 Presentation of Claim 16
13.2 Notification of Decision 16
13.3 Review of a Denied Claim 16
13.4 Decision on Review 16
13.5 Legal Action 17
ARTICLE 14 Trust 17
14.1 Establishment of the Trust 17
14.2 Interrelationship of the Plan and the Trust 17
14.3 Distributions From the Trust 17
ARTICLE 15 Miscellaneous
15.1 Status of Plan 17
15.2 Unsecured General Creditor 17
15.3 Employer's Liability 17
15.4 Nonassignability 18
15.5 Not a Contract of Employment 18
15.6 Furnishing Information 18
15.7 Terms 18
15.8 Captions 18
15.9 Governing Law 18
15.10 Notice 18
15.11 Successors 19
15.12 Spouse's Interest 19
15.13 Validity 19
15.14 Incompetent 19
15.15 Court Order 19
15.16 Distribution in the Event of Taxation 19
15.17 Insurance 20
15.18 Legal Fees To Enforce Rights After Change in Control 20
PAGE 52
U.S. FREIGHT WAYS CORP.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective December 10, 1999
Purpose
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees who contribute materially
to the continued growth, development and future business success of
USFreightways Corporation, a Delaware corporation, and its subsidiaries, if
any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and
for purposes of Title I of ERISA.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings: -
1.1 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the Company Contribution
Account balance. The Account Balance 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, or his or
her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Company Contribution Amount" shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.1.
1.3 "Annual Installment Method" shall be an annual installment payment
over 15 years, in accordance with this Plan, calculated as follows:
The Account Balance of the Participant shall be calculated as of the
close of business on the first business day of the year. The annual
installment for that year shall be calculated by dividing this
balance by the following annual annuity factor:
Annual Installment Year Annual Annuity Factor
1 9.74546799
2 9.35765074
3 8.94268630
4 8.49867434
5 8.02358154
6 7.51523225
7 6.97129851
8 6.38928940
Annual Installment Year Annual Annuity Factor
9 5.76653966
10 5.10019744
11 4.38721126
12 3.62431604
13 2.80801817
14 1.93457944
15 1.00000000
Each annual installment shall be paid on or as soon as practicable
after the first business day of the applicable year.
1.4 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 8, that are entitled
to receive benefits under this Plan upon the death of a Participant.
1.5 "Beneficiary Designation Form" shall mean 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.
1.6 "Board" shall mean the board of directors of the Company.
1.7 "CEO" shall mean the chief executive officer of the Company.
PAGE 53
1.8 "Change in Control" shall mean:
(a) the acquisition by any individual,entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or any
comparable successor provisions, referred herein as"Person"),
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act)of thirty percent (30%) or
more of either (i)the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
clause (a), the following acquisitions shall not constitute a
Change of Control; (I) any acquisition directly from the
Company, (II) any acquisition by the Company, (III) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (IV) any acquisition by any
corporation pursuant to a transaction which complies with
subclauses (i), (ii) or (iii) of clause (3); or
(b) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided. however,
that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board, shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of any actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Company Common stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty
percent (50%) of, respectively, the then outstanding shares
of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination or the Outstanding Company Common Stock
and outstanding Company Voting Securities,as the case may be,
(ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, thirty percent (30%) or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination
were members of the Board of Directors of the Company at the
time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination.
PAGE 54
1.9 "Claimant" shall have the meaning set forth in Section 13.1.
1.10 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.11 "Committee" shall mean the committee described in Article 11.
1.12 "Company" shall mean USFreightways Corporation,a Delaware corporation,
and any successor to all or substantially all of the Company's assets
or business.
1.13 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting
provisions of this Plan that relate to the Participant's Company
Contribution Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant's Company Contribution Account.
1.14 "Deduction Limitation" shall mean the following described limitation
on a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this limitation
shall be applied to all distributions that are "subject to the
Deduction Limitation" under this Plan. If an Employer determines in
good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely by
reason of the limitation under Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of
any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.4 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or
his or her Beneficiary (in the event of the Participant's death) at
the earliest possible date, as determined by the Employer in good
faith, on which the deductibility of compensation paid or payable to
the Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m), or if
earlier, the effective date of a Change in Control. Notwithstanding
anything to the contrary in this Plan, the Deduction Limitation shall
not apply to any distributions made after a Change in Control.
1.15 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a
Participant does not participate in such a plan, a period of
disability during which the Participant would have qualified for
permanent disability benefits under such a plan had the Participant
been a participant in such a plan, as determined in the sole
discretion of the Committee. If the Participant's Employer does not
sponsor such a plan, or discontinues to sponsor such a plan,
Disability shall be determined by the Committee in its sole
discretion.
1.16 "Disability Benefit" shall mean the benefit set forth in Article 7.
1.17 "Election Form" shall mean 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.
1.18 "Employee" shall mean a person who is an employee of any Employer.
1.19 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan as a sponsor.
1.20 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.21 "First Plan Year" shall mean the period beginning December 10, 1999
and ending December 31, 1999.
PAGE 55
1.22 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement
has not terminated. A spouse or former spouse of a Participant shall
not be treated as a Participant in the Plan or have an account
balance under the Plan, even if he or she has an interest in the
Participant's benefits under the Plan as a result of applicable law
or property settlements resulting from legal separation or divorce.
1.23 "Plan" shall mean the Company's Supplemental Executive Retirement
Plan, which shall be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.
1.24 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between an Employer
and a Participant. Each Plan Agreement executed by a Participant and
the Participant's Employer shall provide for the entire benefit to
which such Participant is entitled under the Plan; should there be
more than one Plan Agreement, the Plan Agreement bearing the latest
date of acceptance by the Employer shall supersede all previous Plan
Agreements in their entirety and shall govern such entitlement. The
terms of any Plan Agreement may be different for any Participant, and
any Plan Agreement may provide additional benefits not set forth in
the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit
limitations must be agreed to by both the Employer and the
Participant.
1.25 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.
1.26 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 5.
1.27 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability on or after the
attainment of (i) age sixty-five (65) and (ii) five (5) Years of Plan
Participation.
1.28 "Retirement Benefit" shall mean the benefit set forth in Article 4.
1.29 "Termination Benefit" shall mean the benefit set forth in Article 6.
1.30 "Termination of Employment" shall mean the severing of employment
with all Employers, voluntarily or involuntarily, for any reason
other than Retirement, Disability, death or an authorized leave of
absence.
1.31 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement, dated as of _________________ between
the Company and the trustee named therein, as amended from time to
time.
1.32 "Years of Plan Participation" shall mean the total number of full Plan
Years a Participant has been a Participant in the Plan while employed
by one or more Employers. Any partial year shall not be counted.
Notwithstanding the previous sentence, a Participant's first Plan Year
of participation shall be treated as a full Plan Year for purposes of
this definition, even if it is only a partial Plan Year of
participation. Notwithstanding any provision of this Plan that may be
construed to the contrary, any period after the Participant has
experienced a Termination of Employment shall not be counted.
1.33 "Years of Service" shall mean the total number of full years in which
a Participant has been employed by one or more Employers. For purposes
of this definition, a year of employment shall be a 365 day period (or
366 day period in the case of a leap year) that, for the first year of
employment, commences on the Employee's date of hiring and that, for
any subsequent year, commences on an anniversary of that hiring date.
Any partial year of employment shall not be counted.
PAGE 56
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 of the
Employers, as determined by the Committee in its sole discretion. From
that group, the CEO shall select, in his or her sole discretion,
Employees to participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each
selected Employee shall complete, execute and return to the Committee
a Plan Agreement, an Election Form and a Beneficiary Designation Form,
all within 30 days after he or she is selected to participate in the
Plan. 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 Eligibility; Commencement of Participation. Provided an Employee
selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee shall commence participation in
the Plan on the first day of the month following the month in which
the Employee completes all enrollment requirements. If an Employee
fails to meet all such requirements within the period required, in
accordance with Section 2.2, that Employee shall not be eligible to
participate in the Plan until the first day of the Plan Year following
the delivery to and acceptance by the Committee of the required
documents.
2.4 Termination of Participation. If the Committee determines in good
faith that a Participant no longer qualifies as a member of a select
group of management or highly compensated employees, as membership in
such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its
sole discretion, to deem the Participant to have retired solely for
the purposes of this Plan, to immediately distribute the Participant's
then vested Account Balance and terminate the Participant's
participation in the Plan. Notwithstanding the foregoing and any other
provision of this Plan that may be interpreted to the contrary, if the
CEO determines in his or her sole and absolute discretion, at any time
and for any reason or no reason, that a Participant no longer
qualifies to participate in this Plan, the CEO shall have the right to
immediately distribute the Participant's then vested Account Balance
and terminate the Participant's participation in the Plan.
ARTICLE 3
Company Contribution/Crediting/Taxes
3.1 Annual Company Contribution Amount. For each Plan Year (including,
without limitation, the First Plan Year), an Employer, in its sole
discretion, may, but is not required to, credit any amount it desires
to any Participant's Company Contribution Account under this Plan,
which amount shall be for that Participant the Annual Company
Contribution Amount for that Plan Year. The amount so credited to a
Participant may be smaller or larger than the amount credited to any
other Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other Participants
receive an Annual Company Contribution Amount for that Plan Year. The
Annual Company Contribution Amount, if any, shall be credited as of
the last day of the Plan Year. If a Participant is not employed by an
Employer as of the last day of a Plan Year other than by reason of his
or her Retirement or death while employed, the Annual Company
Contribution Amount for that Plan Year shall be zero.
3.2 Investment of Trust Assets. The Trustee of the Trust shall be
authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest
the assets of the Trust in accordance with the applicable Trust
Agreement, including the disposition of stock and reinvestment of the
proceeds in one or more investment vehicles designated by the
Committee.
PAGE 57
3.3 Vesting.
(a) A Participant's Account Balance shall vest on the basis of
the Participant's Years of Plan Participation, in accordance
with the following schedule:
Years of Plan Participation Vested Percentage of
Account Balance
Years of Plan Participation less than 6 0 %
6 or more Years of Plan Participation, but 20 %
less than 7
7 or more Years of Plan Participation, but 40 %
less than 8
8 or more Years of Plan Participation, but 60 %
less than 9
9 or more Years of Plan Participation, but 80 %
less than 10
10 or more Years of Plan Participation 100 %
(b) Notwithstanding anything to the contrary contained in this
Section 3.3, in the event a Participant becomes eligible to
Retire while employed by one or more Employers, the
Participant's Account Balance shall immediately become 100%
vested (if it is not already vested in accordance with the
above vesting schedule).
(c) Notwithstanding anything to the contrary contained in this
Section 3.3, if a Participant attains age 65 with less than
five (5) Years of Plan Participation, the Participant shall,
for purposes of the above vesting schedule only (and not
for purposes of Section 1.27), be deemed credited with
an additional five (5) Years of Plan Participation.
(d) Notwithstanding anything to the contrary contained in this
Section 3.3, in the event of a Participant's death while
employed by one or more Employers, the Participant's Account
Balance shall immediately become 100% vested (if it is not
already vested in accordance with the above vesting
schedule).
(e) Notwithstanding anything to the contrary contained in this
Section 3.3, in the event of a Change in Control while a
Participant is employed by one or more Employers, the
Participant's Account Balance shall immediately become 100%
vested (if it is not already vested in accordance with the
above vesting schedule).
(f) Notwithstanding subsection (a) or subsection (d), the
vesting schedule for a Participant's Account Balance shall
not be accelerated to the extent that the Committee
determines that such acceleration would cause the deduction
limitations of Section 280G of the Code to become effective.
In the event that all of a Participant's Account Balance is
not vested pursuant to such a determination, the Participant
may request independent verification of the Committee's
calculations with respect to the application of Section
2800. In such case, the Committee must provide to the
Participant within 15 business days of such a request an
opinion from a nationally recognized accounting firm
selected by the Participant (the "Accounting Firm"). The
opinion shall state the Accounting Firm's opinion that any
limitation in the vested percentage hereunder is necessary
to avoid the limits of Section 2800 and contain supporting
calculations. The cost of such opinion shall be paid for by
the Company.
PAGE 58
3.4 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time to
time by the Committee, in its sole discretion, amounts shall be
credited or debited to a Participant's Account Balance in accordance
with the following rules:
(a) Election of Measurement Funds. A Participant, in connection
with his or her initial enrollment in accordance with
Section 2.3 above, shall elect, on the Election Form, one
or more Measurement Fund(s) (as described in Section 3.4(c)
below) to be used to determine the additional amounts to be
credited to his or her Account Balance for the first
calendar quarter or portion thereof in which the
Participant commences participation in the Plan and
continuing thereafter for each subsequent calendar quarter
in which the Participant participates in the Plan, unless
changed in accordance with the next sentence. Commencing
with the first calendar quarter that follows the
Participant's commencement of participation in the Plan
and continuing thereafter for each subsequent calendar
quarter in which the Participant participates in the Plan,
no later than the next to last business day of the calendar
quarter, the Participant may (but is not required to)
elect, by submitting an Election Form to the Committee
that is accepted by the Committee, to add or delete one
or more Measurement Fund(s) to be used to determine the
additional amounts to be credited to his or her Account
Balance, or to change the portion of his or her Account
Balance allocated to each previously or newly elected
Measurement Fund. If an election is made in accordance with
the previous sentence, it shall apply to the next calendar
quarter and continue thereafter for each subsequent calendar
quarter in which the Participant participates in the Plan,
unless changed in accordance with the previous sentence.
(b) Proportionate Allocation. In making any election described in
Section 3.4(a) above, the Participant shall specify on the
Election Form, in increments of one percentage point (1%),
the percentage of his or her Account Balance to be allocated
to a Measurement Fund (as if the Participant was making an
investment in that Measurement Fund with that portion of his
or her Account Balance).
(c) Measurement Funds. The Participant may elect one or more of
the following measurement funds, based on certain mutual
funds (the "Measurement Funds"), for the purpose of crediting
additional amounts to his or her Account Balance:
(1) Dreyfus Stock Index Fund;
(2) Fidelity VIP Equity-Income Portfolio;
(3) Fidelity VIP Growth Portfolio;
(4) Fidelity VIP High Income Portfolio;
(5) Fidelity VIP Overseas Portfolio;
(6) Fidelity VIP II Contrafund Portfolio;
(7) Fidelity VIP III Growth Opportunities Portfolio; and
(8) NSAT Money Market Fund.
As necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such
action will take effect as of the first day of the calendar
quarter that follows by thirty (30) days the day on which the
Committee gives Participants advance written notice of such
change.
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be
determined by the Committee, in its reasonable discretion,
based on the performance of the Measurement Funds themselves.
A Participant's Account Balance shall be credited or debited
on a daily basis based on the performance of each Measurement
Fund selected by the Participant, as determined by the
Committee in its sole discretion, as though (i) a
Participant's Account Balance were invested in the
Measurement Fund(s) selected by the Participant, in the
percentages applicable to such calendar quarter, as of the
close of business on the first business day of such calendar
quarter, at the closing price on such date; (ii) the portion
of the Annual Company Contribution Amount that was actually
credited during any calendar quarter were invested in the
Measurement Fund(s) selected by the Participant, in the
percentages applicable to such calendar quarter, no later
than, the close of business on the first business day after
the day on which such amounts are actually first credited, at
the closing price on such date; and (iii) any distribution
made to a Participant that decreases such Participant's
Account Balance ceased being invested in the Measurement
Fund(s), in the percentages applicable to such calendar
quarter, no earlier than one business day prior to the
distribution, at the closing price on such date.
PAGE 59
(e) No Actual Investment. Notwithstanding any other provision
of this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes
only, and a Participant's election of any such Measurement
Fund, the allocation of his or her Account Balance thereto,
the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance
shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any
such Measurement Fund. In the event that the Company or
the Trustee (as that term is defined in the Trust), in its
own discretion, decides to invest funds in any or all of
the Measurement Funds, no Participant shall have any
rights in or to such investments themselves. Without
limiting the foregoing, a Participant's Account Balance
shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the
Company or the Trust; the Participant shall at all times
remain an unsecured creditor of the Company.
(f) Selection of Measurement Funds after Death. Notwithstanding
any provision of this Plan that may be interpreted to the
contrary, and in accordance with the rules and regulations
established by the Committee for such purpose, the
Measurement Funds to be used to determine additional amounts
to be credited or debited to a Participant's Account Balance
after the death of the Participant shall be selected by his
or her Beneficiaries.
3.5 FICA and Other Taxes.
(a) Account Balance. When a participant becomes vested in a
portion of his or her Account Balance, the Participant's
Employer(s) shall withhold from the Participant's base annual
salary and/or bonus, in a manner determined by the
Employer(s), the Participant's share of FICA and other
employment taxes due on such vested portion of his or her
Account Balance. If necessary, the Committee may reduce the
vested portion of the Participant's Account Balance in order
to comply with this Section 3.5.
(b) Distributions. The Participant's Employer(s), or the trustee
of the Trust, shall withhold from any payments made to a
Participant under this Plan all federal, state and local
income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) or the
trustee of the Trust.
ARTICLE 4
Retirement Benefit
4.1 Retirement Benefit. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit, his or
her vested Account Balance.
4.2 Payment of Retirement Benefit. A Participant shall receive the
Retirement Benefit pursuant to the Annual Installment Method over 15
years. Installment payments shall commence no later than 60 days after
the last day of the Plan Year in which the Participant Retires. Any
payment made shall be subject to the Deduction Limitation.
4.3 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 (a) over the
remaining number of years and in the same amounts as that benefit
would have been paid to the Participant had the Participant survived,
or (b) in a lump sum, if requested by the Beneficiary and allowed in
the sole discretion of the Committee, that is equal to the
Participant's unpaid remaining vested Account Balance.
PAGE 60
ARTICLE 5
Pre-Retirement Survivor Benefit
5.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation,
the Participant's Beneficiary shall receive a Pre-Retirement Survivor
Benefit equal to the Participant's Account Balance if the Participant
dies while employed by one or more Employers.
5.2 Payment of Pre-Retirement Survivor Benefit. The Pre-Retirement
Survivor Benefit shall be received by the Participant's Beneficiary in
a lump sum. The lump sum payment shall be made no later than 60 days
after the last day of the Plan Year in which the Committee is provided
with proof that is satisfactory to the Committee of the Participants
death. Any payment made shall be subject to the Deduction Limitation.
ARTICLE 6
Termination Benefit
6.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's vested Account Balance if a Participant
experiences a Termination of Employment prior to his or her
Retirement, death or Disability.
6.2 Payment of Termination Benefit. A Participant shall receive the
Retirement Benefit pursuant to the Annual Installment Method over 15
years. Installment payments shall commence no later than 60 days after
the last day of the first Plan Year in which the Participant would
have otherwise become eligible to Retire, but for the Termination of
Employment. Any payment made shall be subject to the Deduction
Limitation.
6.3 Death Prior to Completion of Termination Benefit. If a Participant
dies after experiencing a Termination of Employment but before the
Termination Benefit is paid in full, the Participant's unpaid
Termination Benefit payments shall continue and shall be paid to the
Participant's Beneficiary (a) over the remaining number of years and
in the same amounts as that benefit would have been paid to the
Participant had the Participant survived, or (b) in a lump sum, if
requested by the Beneficiary and allowed in the sole discretion of the
Committee, that is equal to the Participants unpaid remaining vested
Account Balance.
ARTICLE 7
Disability Benefit
7.1 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits
provided for in Articles 4, 5 or 6 in accordance with the provisions
of those Articles. Notwithstanding the above, the Committee shall have
the right to, in its sole and absolute discretion and for purposes of
this Plan only, and must in the case of a Participant who is otherwise
eligible to Retire, deem the Participant to have Retired, at any time
(or in the case of a Participant who is eligible to Retire, as soon as
practicable) after such Participant is determined to be suffering a
Disability, in which case the Participant shall receive a Disability
Benefit equal to his or her Account Balance at the time of the
Committee's determination; provided, however, that should the
Participant otherwise have been eligible to Retire, he or she shall be
paid in accordance with Article 4. The Disability Benefit shall be
paid in a lump sum within 60 days of the Committee's exercise of such
right. Any payment made shall be subject to the Deduction Limi
ARTICLE 8
Beneficiary Designation
8.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary
designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which
the Participant participates.
PAGE 61
8.2 Beneficiary Designation; Change: Spousal Consent. A Participant shall
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
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. If the Participant
names someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance 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 and accepted by the
Committee prior to his or her death.
8.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledge in
writing by the Committee or its designated agent.
8.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 8.1, 8.2 and 8.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the
Participant's estate.
8.5 Doubt as to Beneficiary. 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
cause the Participant's Employer to withhold such payments until
this matter is resolved to the Committee's satisfaction.
8.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
the Participant, and that Participant's Plan Agreement shall terminate
upon such full payment of benefits.
ARTICLE 9
Leave of Absence
9.1 Leave of Absence. If a Participant is authorized by the Participant's
Employer for any reason to take a paid or unpaid leave of absence from
the employment of the Employer, the Participant shall continue to be
considered employed by the Employer.
ARTICLE 10
Termination, Amendment or Modification
10.1 Termination. Although each Employer anticipates that it will continue
the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at
any time in the future. Accordingly, each Employer reserves the right
to discontinue its sponsorship of the Plan and/or to terminate the
Plan at any time with respect to any or all of its participating
Employees, by action of its board of directors. Upon the termination
of the Plan with respect to any Employer, the Plan Agreements of the
affected Participants, who are employed by that Employer shall
terminate and their Account Balances, determined as if they had
experienced a Retirement on the date of Plan termination shall be paid
to the Participants as follows: Prior to a Change in Control, if the
Plan is terminated with respect to all of its Participants, an
Employer shall have the right, in its sole discretion, and
notwithstanding any elections made by the Participant, to pay such
benefits in a lump sum or pursuant to the Annual Installment Method
over 15 years, with amounts credited and debited during the
installment period as provided herein. If the Plan is terminated with
respect to less than all of its Participants, an Employer shall be
required to pay such benefits in a lump sum. After a Change in
Control, the Employer shall be required to pay such benefits in a lump
sum. The termination of the Plan shall not adversely affect any
Participant or Beneficiary who has become entitled to the payment of,
any benefits under the Plan as of the date of termination; provided
however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying
the Account Balance in a lump sum or pursuant to an Annual Installment
Method using fewer years.
PAGE 62
10.2 Amendment. Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its
board of directors; provided, however, that: (i) no amendment or
modification shall be effective to decrease or restrict the value of a
Participant's Account Balance in existence at the time the amendment
or modification is made, calculated as if the Participant had
experienced a Retirement as of the effective date of the amendment or
modification and (ii) no amendment or modification of this Section
10.2 or Section 11.2 of the Plan shall be effective. The amendment or
modification of the Plan shall not affect 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; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the Account
Balance in a lump sum or pursuant to an Annual Installment Method
using fewer years.
10.3 Plan Agreement. Despite the provisions of Sections 10.1 and 10.2
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the consent of the
Participant.
10.4 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 and his or her designated Beneficiaries
under this Plan and the Participant's Plan Agreement shall terminate.
ARTICLE 11
Administration
11.1 Committee Duties. Except as otherwise provided in this Article 11,
this Plan shall be administered by a Committee which shall consist of
the Board, or such committee as the Board shall appoint. Members of
the Committee may be Participants under this Plan. The Committee shall
also have the discretion and authority to (i) make, amend, interpret,
and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all
questions including interpretations of this Plan, as may arise in
connection with the Plan. Any individual serving on the Committee who
is a Participant shall not vote or act on any matter relating solely
to himself or herself. When making a determination or calculation, the
Committee shall be entitled to rely on information furnished by a
Participant or the Company.
11.2 Administration Upon Change In Control. For purposes of this Plan, the
Company shall be the "Administrator" at all times prior to the
occurrence of a Change in Control. Upon and after the occurrence of a
Change in Control, the "Administrator" shall be an independent third
party selected by the Trustee and approved by the individual who,
immediately prior to such event, was the Company's Chief Executive
Officer or, if not so identified, the Company's highest ranking
officer (the "Ex-CEO"). The Administrator shall have the discretionary
power to determine all questions arising in connection with the
administration of the Plan and the interpretation of the Plan and
Trust including, but not limited to benefit entitlement
determinations; provided, however, upon and after the occurrence of a
Change in Control, the Administrator shall have no power to direct the
investment of Plan or Trust assets or select any investment manager or
custodial firm for the Plan or Trust. Upon and after the occurrence of
a Change in Control, the Company must: (1) pay all reasonable
administrative expenses and fees of the Administrator; (2) indemnify
the Administrator against any costs, expenses and liabilities
including, without limitation, attorney's fees and expenses arising in
connection with the performance of the Administrator hereunder, except
with respect to matters resulting from the gross negligence or willful
misconduct of the Administrator or its employees or agents; and (3)
supply full and timely information to the Administrator or all matters
relating to the Plan, the Trust, the Participants and their
Beneficiaries, the Account Balances of the Participants, the date and
circumstances of the Retirement, Disability, death or termination of
employment of the Participants, and such other pertinent information
as the Administrator may reasonably require. Upon and after a Change
in Control, the Administrator may be terminated (and a
replacement appointed) by the Trustee only with the approval of the
Ex-CEO. Upon and after a Change in Control, the Administrator may not
be terminated by the Company.
PAGE 63
11.3 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may
be counsel to any Employer.
11.4 Binding Effect of Decisions. The decision or action of the
Administrator 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.
11.5 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the duties
of the Committee may be delegated, and the Administrator against any
and all claims, losses, damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except in the
case of willful misconduct by the Committee, any of its members, any
such Employee or the Administrator..
11.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full
and timely information to the Committee and/or Administrator, as the
case may be, on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement,
Disability, death or termination of employment of its Participants,
and such other pertinent information as the Committee or Administrator
may reasonably require.
ARTICLE 12
Other Benefits and Agreements
12.1 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 Participant's Employer. The
Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
ARTICLE 13
Claims Procedures
13.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below
as a "Claimant") 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.
PAGE 64
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 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 Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
ARTICLE 14
Trust
14.1 Establishment of the Trust. The Company shall establish the Trust, and
each Employer shall at least annually transfer over to the Trust such
assets as the Employer determines, in its sole discretion, are
necessary to provide, on a present value basis, for its respective
future liabilities created with respect to the Annual Company
Contribution Amounts for such Employer's Participants for all periods
prior to the transfer, as well as any debits and credits to the
Participants' Account Balances for all periods prior to the transfer,
taking into consideration the value of the assets in the trust at the
time of the transfer.
14.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant
to receive distributions pursuant to the Plan. The provisions of the
Trust shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust.
Each Employer shall at all times remain liable to carry out its
obligations under the Plan.
14.3 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
PAGE 65
ARTICLE 15
Miscellaneous
15.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted to the extent possible in a manner consistent with that
intent.
15.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs and successors shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
15.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer
shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.
15.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate 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. No part
of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law
in the event of a Participant's or any other person's bankruptcy or
insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
15.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged
to be an "at will" employment relationship that can be terminated at
any time for any reason, or no reason, with or without cause, and with
or without notice, unless expressly provided in a written employment
agreement. Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer as an Employee
or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.
15.6 Furnishing Information. A Participant or his or her Beneficiary 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.
15.7 Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were in the feminine in all cases where
they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were
used in the plural or the singular, as the case may be, in all cases
where they would so apply.
15.8 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.
15.9 Governing Law. Subject to ERISA, the provisions of this Plan shall
be construed and interpreted according to the internal laws of the
State of Illinois without regard to its conflicts of laws principles.
PAGE 66
15.10 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, to the
address below:
USFreightways Corporation
8550 W. Bryn Mawr Avenue
Suite 700
Chicago,1L 60631
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.
15.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
15.12 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.
15.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been
inserted herein.
15.14 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, incompetence, incapacity or
guardianship, as it may deem appropriate 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.
15.15 Court Order. The Committee is authorized to make any payments directed
by court order in any action in which the Plan or the Committee has
been named as a party. In addition, if a court determines that a
spouse or former spouse of a Participant has an interest in the
Participant's benefits under the Plan in connection with a property
settlement or otherwise, the Committee, in its sole discretion, shall
have the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
15.16 Distribution in the Event of Taxation.
(a) In Genera1. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the
Trust after a Change in Control, for a distribution of that
portion of his or her benefit that has become taxable. Upon
the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall
be granted), a Participant's Employer shall distribute to the
Participant immediately available funds in an amount equal to
the taxable portion of his or her benefit (which amount shall
not exceed a Participant's unpaid Account Balance
under the Plan). The tax liability distribution shall be made
within 90 days of the date when the Participant's petition is
granted. Such a distribution shall affect and reduce the
benefits to be paid under this Plan.
(b) Trust. If the Trust terminates in accordance with its terms
and benefits are distributed from the Trust to a Participant,
the Participant's benefits under this Plan shall be reduced
to the extent of such distributions.
PAGE 67
15.17 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and
in such forms as they may choose. The Employers or the trustee of the
Trust, as the case may be, shall be the sole owner and beneficiary of
any such insurance. The Participant shall have no interest whatsoever
in any such policy or policies, and at the request of the Employers
shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or
companies to whom the Employers have applied for insurance.
15.18 Legal Fees To Enforce Rights After Change in Control. The Company and
each Employer is aware that upon the occurrence of a Change in
Control, the Board or the board of directors of a Participant's
Employer (which might then be composed of new members) or a
shareholder of the Company or the Participant's Employer, or of any
successor corporation might then cause or attempt to cause the
Company, the Participant's Employer or such successor to refuse to
comply with its obligations under the Plan and might cause or attempt
to cause the Company or the Participant's Employer to institute, or
may institute, litigation seeking to deny Participants the benefits
intended under the Plan. In these circumstances, the purpose of the
Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the
Participant's Employer or any successor corporation has failed to
comply with any of its obligations under the Plan or any agreement
thereunder or, if the Company, such 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 and the Participant's Employer irrevocably authorize
such Participant to retain counsel of his or her choice at the expense
of the Company and the Participant's Employer (who shall be jointly
and severally liable) to represent such Participant in connection with
the initiation or defense of any litigation or other legal action,
whether by or against the Company, the Participant's Employer or any
director, officer, shareholder or other person affiliated with the
Company, the Participant's Employer or any successor thereto in any
jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of January 12,
2000.
USFreightways Corporation
a Delaware corporation
By: /s/ Christopher L. Ellis
Title: Senior Vice President, Finance & CFO