Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

by and between

 

YRC WORLDWIDE INC.

 

and

 

WILLIAM D. ZOLLARS

 

January 25, 2006

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EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT dated as of January 25, 2006 (this “Agreement”), by
and between William D. Zollars (“Executive”) and YRC Worldwide Inc., a Delaware
corporation (the “Company”).

 

WHEREAS, the Board of Directors of the Company (the “Board”) desires to retain
Executive as the Chairman, President and Chief Executive Officer of the Company
and to encourage Executive’s attention and dedication to the Company as a member
of the Company’s management, in the best interests of the Company and its
shareholders;

 

WHEREAS, Executive is willing to commit himself to serve the Company, on the
terms and conditions provided in this Agreement; and

 

WHEREAS, the Company and Executive desire to set forth in this Agreement the
terms and conditions of Executive’s employment; and

 

WHEREAS, the Company and Executive have simultaneously herewith executed an
Executive Severance Agreement dated of even date herewith covering the situation
where there is a change of control of the Company (the “Severance Agreement”);

 

NOW, THEREFORE, in consideration of the premises and the respective covenants
and agreements of the parties contained in this Agreement, and intending to be
legally bound hereby, the parties to this Agreement agree as follows:

 

1. Employment; Term. The Company agrees to employ Executive, and Executive
accepts employment, on the terms and conditions set forth in this Agreement. The
Company shall employ Executive for the period (the “Employment Period”)
beginning as of January 1, 2006 (the “Effective Date”) and ending on Executive’s
Date of Termination (as defined in Section 7(b)). The term of this Agreement
(the “Term”) shall begin on the Effective Date and shall end on the earlier of
Executive’s Date of Termination or December 31, 2010; provided, that, on
December 31, 2010, and each anniversary of December 31 thereafter, unless
earlier terminated as of Executive’s Date of Termination, the Term shall be
extended for one additional year unless, prior to September 30, 2010 with
respect to the extension on December 31, 2010, and each anniversary of
September 30 thereafter with respect to each subsequent annual extension, the
Company or Executive shall have given notice not to extend the Term.

 

2. Position and Duties.

 

(a) During the Employment Period, Executive shall serve as Chairman, President
and Chief Executive Officer of the Company, in which capacity Executive shall
perform the usual and customary duties, and have the usual customary authority
and status, of those offices, which shall be those normally inherent in such
capacities in U.S. publicly held corporations of similar size and character.
Executive agrees and acknowledges that, in connection with his employment
relationship with the Company, Executive owes fiduciary duties to the Company
and its shareholders and will act in accordance with the standards set forth in
the Code of Conduct of the Company.

 

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(b) During the Employment Period, Executive agrees to devote substantially his
full time, attention and energies to the Company’s business and agrees to
faithfully and diligently endeavor to the best of his ability to further the
best interests of the Company. Executive shall not engage in any other business
activity, whether or not the activity is pursued for gain, profit or other
pecuniary advantage. Subject to Section 9, this Section 2(b) shall not be
construed as preventing Executive from investing his own assets in such form or
manner as will not require his services in the daily operations of the affairs
of the companies in which such investments are made. Further, subject to
Section 9, Executive may serve as a director of other companies so long as his
service is not injurious to the Company, does not present Executive with a
conflict of interest and is approved by the Board or the appropriate committee
of the Board; provided, that Executive may continue to serve as a director of
the companies that Executive serves on the board as of the date of this
Agreement and Executive may serve or continue to serve on the boards of
non-profit or community organizations.

 

(c) In keeping with Executive’s fiduciary duties to the Company, Executive
agrees that he shall not, directly or indirectly, become involved in any
conflict of interest, or upon discovery of a conflict, allow the conflict to
continue, in each case, as the Company’s Code of Conduct provides.

 

3. Place of Performance. In connection with the Company’s employment of
Executive, Executive’s principal business address shall be at the Company’s
current principal executive offices in Overland Park, Kansas (the “Principal
Place of Employment”) or in such other place as Executive and the Company may
agree.

 

4. Compensation and Related Matters.

 

(a) Base Salary. During the Employment Period, the Company shall pay Executive
an annual base salary (“Base Salary”) in an amount that shall be established
from time to time by the Board, payable in approximately equal installments in
accordance with the Company’s customary payroll practices. The Base Salary shall
be set initially at a rate of $1,000,000 per annum. The Base Salary shall be
reviewed at least annually by the Board during the Employment Period and may be
increased but not decreased during the Employment Period.

 

(b) Bonuses. During the Employment Period, Executive shall be eligible to
participate in the Company’s annual pay-for-performance or “PFP” plan, as
amended (the “Annual Incentive Plan”), or any successor plan at a target level
of 125% of Base Salary (the “Annual Bonus”). The Annual Incentive Plan will be
administered in accordance with plan provisions. Executive’s actual bonus levels
will be contingent upon the Company achieving predetermined financial results
and the Board’s approval, including approval of any components based on Company
or individual performance. Executive acknowledges that actual payouts under the
Annual Incentive Plan may be more or less than Executive’s target level based on
the performance of the Company against plan criteria and Executive’s performance
against any individual objectives.

 

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(c) Equity-Based Compensation.

 

(i) Long-Term Incentive Awards. During the Employment Period, Executive shall be
entitled to receive long-term incentive or equity-based compensation awards, in
each case on substantially similar terms and conditions no less favorable than
awards made to the other senior executive officers of the Company. These awards
shall be commensurate with the awards normally granted to the chief executive
officer of other public companies similar in size and character to the Company.
These awards may be granted pursuant to the terms of an equity-based
compensation plan of the Company or otherwise. Executive is currently entitled
to receive long-term incentive awards (“LTIP Awards”) pursuant to the Company’s
2004 Long Term Incentive Plan (the “LTIP”) at a target level of 300% of Base
Salary. The LTIP will be administered in accordance with plan provisions.
Executive’s LTIP Awards will be contingent upon the Company achieving the
predetermined financial results that the LTIP requires and the Board’s approval.
Executive acknowledges the following:

 

(1) actual payouts under the LTIP may be more or less than Executive’s target
level based on the performance of the Company against plan criteria;

 

(2) the Board may reduce any award to any LTIP participant, including Executive,
at the Board’s discretion; and

 

(3) Subject to the requirements of the first two sentences of this
Section 4(c)(i):

 

  (1) the Board may modify the LTIP at any time, including the financial
criteria for granting awards and the types of awards granted;

 

  (2) the Board may replace the LTIP at any time with a different long-term
incentive or equity award plan or program or different type of award;

 

  (3) the Board may adjust Executive’s target percentage for modifications to
the LTIP or the requirements of a replacement plan or program for the LTIP or
replacement awards for LTIP Awards.

 

(ii) Restricted Share Grant. On the first trading day after the parties execute
and deliver this Agreement, the Company shall grant Executive $1.5 million in
restricted shares of the Company’s common stock (the “Restricted Shares”)
pursuant to the Company’s 2004 Long-Term Incentive and Equity Award Plan (or any
successor to that plan, the “Equity Plan”), subject to the following
restrictions and provisions:

 

(1) The number of Restricted Shares shall be determined by dividing $1.5 million
by the average per share closing price as reported by the NASDAQ Stock Market
for the 30 trading days preceding the date of grant, rounded up to the nearest
whole share.

 

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(2) Executive may not sell, gift, pledge, hypothecate or otherwise transfer the
Restricted Shares until the first to occur of the following:

 

  (a) the determination in Section 4(c)(ii)(3) is made;

 

  (b) a Change of Control (as defined in the Severance Agreement);

 

  (c) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s death;

 

  (d) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s termination of employment due to Disability;

 

  (e) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s termination of employment with Good Reason;

 

  (f) the Date of Termination (as defined in Section 7(b)) with respect to the
Company’s termination of Executive’s employment without Cause.

 

The Company shall place stop transfer instructions with its transfer agent or
equity share plan agent to prevent the transfer of the Restricted Shares until
the first of the foregoing events in this Section 4(c)(ii)(2) occurs. If
certificates representing the Restricted Shares are issued, the Company may
retain possession of the certificates until the first of the foregoing events
occurs and may place the following legend on the certificates:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS AND
RESTRICTIONS CONTAINED IN THAT CERTAIN EMPLOYMENT AGREEMENT BETWEEN WILLIAM D.
ZOLLARS AND YRC WORLDWIDE INC. DATED JANUARY 25, 2006, AND MAY NOT BE SOLD,
GIFTED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS OTHERWISE
PERMITTED IN THE EMPLOYMENT AGREEMENT.”

 

(3) At the first regular meeting of the Board (or the Audit/Ethics Committee of
the Board, whichever is first) following January 1, 2011, but not later than
March 31, 2011, the Board or the Audit/Ethics Committee shall confirm from the
Company’s financial statements whether the Company had positive net income for
the five year

 

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period ended December 31, 2010, as determined under U.S. generally accepted
accounting principles, as in effect as of the date of this Agreement. If the
Company had positive net income for that period as determined pursuant to this
Section 4(c)(ii)(3), the restrictions contained in Section 4(c)(ii)(2) shall
lapse, and the Company shall remove all stop transfer instructions and
restricted legends with respect to the Restricted Shares and take any action
necessary to fully deliver the Restricted Shares to Executive. If the Company
did not have positive net income for that period, or if Executive terminates his
employment with the Company without Good Reason prior to December 31, 2010,
Executive shall forfeit all rights to the Restricted Shares, and the Restricted
Shares shall become the property of the Company.

 

(iii) Right to Receive Shares. At the first regular meeting of the Board
following January 1, 2009, but not later than March 31, 2009, the Company shall
grant Executive $1.5 million (subject to reduction pursuant to
Section 4(c)(iii)(2)) in shares of the Company’s common stock (the “Shares”)
pursuant to the Equity Plan, subject to the following restrictions and
provisions:

 

(1) The number of Shares shall be determined by dividing the award amount by the
average per share closing price as reported by the NASDAQ Stock Market for the
30 days preceding the date of grant, rounded up to the nearest whole share.

 

(2) The Company shall deliver the full $1.5 million in Shares if the Average
Payout Percentage (defined below) is at 100% or greater. If the Average Payout
Percentage is less than 100%, the award amount shall be determined by
multiplying the actual payout percentage times $1.5 million. Executive will
forfeit any payout under this Section 4(c)(iii) if the Average Payout Percentage
is less than 50%. The “Average Payout Percentage” shall be determined by
comparing the Company’s annual return on committed capital (“ROCC”) against the
average annual ROCC of the companies in the S&P Mid Cap Index and the Company’s
annual growth in net operating profit after taxes (“NOPAT”) against the average
annual growth in NOPAT of the companies in the S&P Mid Cap Index, in each case,
for each of the calendar years 2006, 2007, 2008. If the Company’s ROCC and NOPAT
growth for such calendar year are at the 50th percentile for the same measures
for the other companies in the S&P Mid Cap Index, the annual percentage for such
calendar year shall be 100% (the “Annual Percentage”). If either of these
measures are at less than or at greater than the 50% percentile for the same
measure for the other companies in the S&P Mid Cap Index, the Annual Percentage
shall be proportionately increased or reduced on the following weighted basis to
determine the Annual Percentage: The calculation for each calendar year shall be
weighted 70% on the ROCC comparison and 30% on the NOPAT growth comparison. Such
Annual Percentages shall then be averaged to determine the final Average Payout
Percentage. The parties acknowledge

 

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that the calculations for ROCC and NOPAT growth are intended to be made
consistently with the calculations that the Company will make under the LTIP. If
all of the data on the companies that comprise the S&P Mid Cap Index are not
available, the Company may use the available data to compute the Average Payout
Percentage. Solely for the purpose of determining the Average Payout Percentage
for the Shares to be granted under this Section 4(c)(iii), the discretion of the
Compensation Committee of the Board under the LTIP to reduce the payout
percentage shall be ignored.

 

(3) If prior to the date of grant, any of the following occur:

 

  (a) a Change of Control (as defined in the Severance Agreement);

 

  (b) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s death;

 

  (c) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s termination of employment due to Disability;

 

  (d) the Date of Termination (as defined in Section 7(b)) with respect to
Executive’s termination of employment with Good Reason; or

 

  (e) the Date of Termination (as defined in Section 7(b)) with respect to the
Company’s termination of Executive’s employment without Cause;

 

the Company shall deliver the full amount of the grant to Executive in
accordance with Section 8.

 

(4) If Executive terminates his employment with the Company without Good Reason
prior to December 31, 2008, Executive shall forfeit all rights to the Shares,
and the Shares shall become the property of the Company.

 

(d) Expenses. The Company shall promptly reimburse Executive for all reasonable
legal expenses that Executive has incurred in connection with entering into this
Agreement and all reasonable business expenses that Executive incurs during the
Employment Period in performing services for the Company, including all
reasonable expenses of travel and reasonable living expenses while away from
home on business or at the request of and in the service of the Company;
provided, in each case, that these expenses are incurred and accounted for in
accordance with the Company’s policies and procedures. If Executive successfully
asserts a claim, action or proceeding against the Company for rights,
compensation, or benefits under this Agreement or any other agreement between
Executive and the Company, the Company shall promptly pay or

 

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reimburse Executive for all reasonable costs and expenses, including reasonable
court costs and reasonable attorneys’ fees and expenses, that Executive incurs
in connection with the claim, action or proceeding. For purposes of this
Section 4(d), Executive will be deemed to have successfully asserted a claim,
action or proceeding against the Company if, as a result of the claim, action or
proceeding, the Company pays to Executive, under this Agreement or any other
agreement between Executive and the Company, any amounts in addition to the
amounts the Company asserts Executive is entitled to receive.

 

(e) Other Benefits. During the Employment Period, Executive shall be entitled to
participate in all of the employee benefit plans and arrangements that the
Company makes available to its other senior executive officers, subject to and
on a basis consistent with the terms, conditions and overall administration of
those plans and arrangements, and shall be entitled to special benefits suitable
to the character of the chief executive officer, including, executive life
insurance and an annual physical examination, each within the limitations of the
Company’s programs applicable generally to senior executive officers. The
Company shall provide Executive perquisites at a rate of $150,000 per annum,
which may include compensation for car allowance, club dues, financial planning,
third party aircraft charters or other perquisites of a similar nature and
character that chief executive officers of other companies may be afforded from
time to time or personal use of any aircraft in which the Company owns an
interest. Executive acknowledges that the perquisite compensation and personal
use of Company aircraft will not be included as compensation for the purpose of
pension benefit calculations; however, Executive also acknowledges that both
will be compensation subject to applicable income tax withholding under local,
state, and federal law, including withholding taken out of other compensation
due to imputed income on the use of Company aircraft. Notwithstanding the
foregoing, the Company shall have the right to change, amend or discontinue any
benefit plan or arrangement other than Section 4(h), so long as any changes are
similarly applicable to senior executive officers of the Company generally.

 

(f) Vacation. During the Employment Period, Executive shall be entitled to 25
vacation days annually in accordance with the standard written policy applicable
to senior executive officers of the Company.

 

(g) Services Furnished. During the Employment Period, the Company shall provide
Executive with office space, stenographic assistance and such other facilities
and services as are suitable to his position and no less favorable as those that
the Company provides to other senior executive officers of the Company.

 

(h) Supplemental Retirement Benefits.

 

(i) The Company shall provide Executive with supplemental retirement benefits in
accordance with this Section 4(h) pursuant to which Executive shall receive a
lump sum payment from the Company an amount equal to the difference between:

 

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(1) The net present value (using the Discount Rate (as defined below) and
mortality factors provided under the Yellow Corporation Pension Plan (the
“Pension Plan”)) of the monthly benefit that Executive would have received under
Section 4.3 of the Pension Plan if the benefit would have commenced at
Executive’s Normal Retirement Date (as defined under the Pension Plan)) and if
would have been paid in the form of a single life annuity payable over the
longer of the lives of Executive or his current spouse on the date of this
Agreement (“Executive’s Current Spouse”), or if Executive is not married to
Executive’s Current Spouse on the Date of Termination, over the life of the
Executive, using his actual Credited Service (as defined under the Pension Plan)
credited under the Pension Plan after the date of Executive’s commencement of
employment with the Company’s subsidiary, Yellow Transportation, Inc. (i.e.,
September 6, 1996) plus 16 years of Credited Service and using compensation (as
described in Section 2.1(h)(2) of the Pension Plan) but without any reduction
under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the
“Code”); and

 

(2) The net present value (using the Discount Rate (as defined below) and
mortality factors provided under the Pension Plan) of the monthly benefit
actually payable to Executive under Section 4.3 of the Pension Plan, calculated
as of the earliest date the Pension Plan commences or would commence payment of
a vested pension under the Pension Plan in the form of a single life annuity, if
any.

 

(3) For purposes of this Agreement, the term “Discount Rate” means 8.25%;
provided, that if the Executive remains employed with the Company through
December 31, 2010, or prior to December 31, 2010, the Company undergoes a Change
of Control (as defined in the Severance Agreement), or if Executive dies,
becomes Disabled, is terminated by the Company without Cause or terminates his
employment for Good Reason, the term “Discount Rate” means the Moody’s Corporate
Bond Rate in existence at the time of the lump sum payment.

 

(ii) Following the termination of Executive’s employment, the supplemental
retirement benefit in this Section 4(h) shall be payable in accordance with
Section 8. If the payment date is earlier than Executive’s Normal Retirement
Date (as defined in the Pension Plan), an actuarial reduction (using the factors
as provided in Section 4.2(b) of the Pension Plan) shall be taken into account
due to the early payment date versus the Normal Retirement Date in calculating
the lump sum.

 

(iii) In the event of a Change of Control (as defined in the Severance
Agreement), the Executive shall receive the supplemental retirement benefit
described in this Section 4(h) in a lump sum within 30 days following such
Change of Control; provided that such benefit shall be determined by taking into
account an actuarial reduction (using the factors as provided in Section 4.2(b)
of the Pension Plan) due to the early payment date versus the Normal Retirement
Date in calculating the lump sum.

 

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(iv) Executive’s Current Spouse shall be entitled to the payment in this
Section 4(h) if Executive dies prior to receiving the payment.

 

(v) If Executive dies prior to the Date of Termination (as defined in
Section 7(b)), and at the time of his death is neither survived by nor married
to Executive’s Current Spouse, no supplemental retirement benefits shall be
distributed under this Section 4(h).

 

(vi) For purposes of Section 502 of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), the dispute resolution procedure in Section 14
shall constitute the procedure for resolving disputes with respect to claims for
benefits under this Section 4(h); provided, that this Section 4(h)(v) shall not
be construed as a waiver of any other rights that ERISA provides Executive,
including the right to bring a civil action under Section 502 of ERISA in a
court of competent jurisdiction solely with respect to this Section 4(h) after
complying with the dispute resolution procedure in Section 14.

 

5. Offices. Executive agrees to serve without additional compensation, if
elected or appointed, as a director of any of the Company’s subsidiaries and as
a member of any committees of the board of directors of any those subsidiaries,
and in one or more executive positions of any of the Company’s subsidiaries;
provided, that Executive is indemnified for serving in any and all of those
capacities on a basis no less favorable than is currently or may be provided to
any other director of the Company, any of its subsidiaries, or in connection
with any such executive position, as the case may be. This indemnity is in
addition to and not in replacement of the Company’s obligations to provide
indemnity pursuant to Section 10.

 

6. Termination. In the event of a termination of Executive’s employment in
accordance with any of the provisions of Section 6 or 7, the Employment Period
and the Term shall expire as of the Date of Termination (as defined in
Section 7(b)).

 

(a) Death. Executive’s employment terminates upon his death if he dies prior to
the Date of Termination (as defined in Section 7(b)).

 

(b) Disability. If, Executive becomes Disabled (defined below), the Company may
terminate Executive’s employment. Executive shall be considered “Disabled” if
Executive is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months or is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering Executive. The existence of a Disability shall be evidenced by
such medical certification as the Secretary of the Company reasonably requires
and as the Board approves.

 

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During any period that Executive fails to perform his duties hereunder as a
result of becoming Disabled (“Disability Period”), Executive shall continue to
receive his Base Salary at the rate in effect at the beginning of the period as
well as all other payments and benefits set forth in Section 4, reduced by any
payments made to Executive during the Disability Period under the disability
benefit plans of the Company then in effect or under the Social Security
disability insurance program.

 

(c) Cause. The Company may terminate Executive’s employment for Cause. “Cause”
means the occurrence of any of the following events:

 

(i) Executive willfully engages in conduct that is materially and demonstrably
injurious to the Company; or

 

(ii) Executive willfully engages in an act or acts of dishonesty resulting in
material personal gain to Executive at the expense of the Company;

 

provided, that, Executive shall have 30 days from the date on which Executive
receives the Company’s Notice of Termination for Cause above to remedy any
occurrence constituting Cause.

 

Cause shall not exist unless and until the Company has delivered to Executive a
copy of a resolution that the Board adopts at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an opportunity
for Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board, Executive was guilty of the conduct
constituting Cause and specifying the particulars thereof in detail.

 

(d) Good Reason. Executive may terminate his employment for “Good Reason.” Good
Reason means the occurrence, without Executive’s prior written consent, of any
one or more of the following:

 

(i) The assignment to Executive of any duties inconsistent with Executive’s
position (including status, office, title and reporting requirements),
authorities, duties or other responsibilities that Section 2 contemplates;

 

(ii) The relocation of the Principal Place of Employment to a location more than
35 miles from the Principal Place of Employment;

 

(iii) A significant reduction in the Executive’s annual compensation
opportunity, including the Executive’s Base Salary (as defined in Section 4(a),
but subject to the prohibition on any decrease thereof as provided in such
Section 4(a)), Annual Bonus (as defined in Section 4(b)), and long-term
incentive opportunity (as described in Section 4(c)(i)), when taken as a whole;
and

 

(iv) The Company’s material breach of any provision of this Agreement;

 

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provided, in any case, that the Company shall have 30 days from the date on
which the Company receives Executive’s Notice of Termination for Good Reason to
remedy any occurrence constituting Good Reason.

 

(e) Either party may terminate this Agreement at any time by giving the Board or
Executive, as the case may be, no less than 90 days’ prior written notice, in
accordance with Sections 7 and 12, of the party’s intent to so terminate this
Agreement.

 

7. Termination Procedure.

 

(a) Notice of Termination. Any termination of Executive’s employment by the
Company or by Executive (other than death) shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement, a
“Notice of Termination” means a notice that sets forth the specific termination
provision in this Agreement relied upon and describes in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive’s employment.

 

(b) Date of Termination. “Date of Termination” means:

 

(i) If Executive’s employment is terminated due to death, the date of
Executive’s death;

 

(ii) If Executive’s employment is terminated pursuant to Section 6(b), 90 days
after Notice of Termination is given (provided that Executive shall not have
returned to the performance of his duties on a full-time basis during such
90-day period);

 

(iii) If Executive’s employment is terminated pursuant to Section 6(c), the date
specified in the Notice of Termination, which date may be no earlier than the
date Executive is given notice in accordance with Section 12;

 

(iv) If Executive’s employment is terminated pursuant to Section 6(d), the date
on which a Notice of Termination is given or any later date (within 90 days of
the date of such Notice of Termination) set forth in such Notice of Termination;
and

 

(v) If Executive’s employment is terminated for any other reason, the date
specified in the Notice of Termination, which date shall be not earlier than
90 days following the date on which Notice of Termination is given.

 

8. Compensation upon Termination or During Disability.

 

(a) Accrued Obligation Defined. “Accrued Obligation” means amounts payable to
Executive (or his designated beneficiary or legal representative, as
applicable), when due, of all vested benefits to which Executive is entitled
under Section 4(h) and the terms of the employee benefit plans in which
Executive is a participant, in each case, as of the Date of Termination and a
lump sum amount in cash equal to the sum of:

 

(i) Earned and unpaid salary through the Date of Termination;

 

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(ii) Any compensation previously deferred by Executive and any accrued vacation
pay for vacation that has not yet been taken on the Date of Termination;

 

(iii) In the event of a termination of Executive’s employment pursuant to
Sections 6(a) or (b), the prorated Annual Bonus, calculated at target, for the
year including the Date of Termination; and

 

(iv) Any other amounts due Executive as of the Date of Termination, in each case
to the extent not already paid.

 

(b) Disability; Death. Following the termination of Executive’s employment
pursuant to Sections 6(a) or (b), the Company shall pay to Executive (or
Executive’s Current Spouse, if applicable) the Accrued Obligation within 30 days
of the Date of Termination.

 

(c) By the Company for Cause. If during the Term Executive’s employment is
terminated by the Company pursuant to Section 6(c), the Company shall pay to
Executive the Accrued Obligation within 30 days following the six month
anniversary of the Date of Termination. Following the payment, the Company shall
have no further obligations to Executive other than as law or the terms of an
employee benefit plan of the Company may require.

 

(d) By Executive Without Good Reason. If during the Term Executive terminates
his employment for any reason other than Good Reason, the Company shall pay to
Executive the Accrued Obligation within 30 days following the six month
anniversary of the Date of Termination. Following the payment, the Company shall
have no further obligations to Executive other than as law or the terms of an
employee benefit plan of the Company may require. Executive shall not have
breached this Agreement if he terminates his employment for any reason. If
during the Term Executive terminates his employment for any reason other than
Good Reason, Death or Disability, Executive’s vested options shall be
exercisable for 90 days following the Date of Termination notwithstanding the
terms and conditions of the option to the contrary.

 

(e) By the Company Without Cause or by Executive for Good Reason. If during the
Term the Company terminates Executive’s employment other than for Cause, death
or Disability or if Executive terminates his employment for Good Reason, then:

 

(i) The Company shall pay Executive the Accrued Obligation within 30 days
following the six month anniversary of the Date of Termination;

 

(ii) The Company shall pay Executive his target Annual Bonus for the fiscal year
in which the Date of Termination occurred as if the target had been exactly met;

 

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(iii) The Company shall pay to Executive, within 30 days following the six month
anniversary of the Date of Termination, a lump sum cash amount (subject to the
minimum applicable federal, state or local lump sum withholding requirements, if
any) equal to two times (except in the case of a termination of Executive’s
employment after or in connection with a Change of Control (as defined in the
Severance Agreement), in which case the lump sum cash amount shall equal three
times) the sum of:

 

(1) Executive’s Base Salary (as in effect as of the Date of Termination); and

 

(2) Executive’s Annual Bonus in effect for the year that includes the Date of
Termination, calculated at the target percentage then in effect multiplied by
Executive’s Base Salary;

 

(iv) All equity-based awards then held by Executive shall immediately become
fully vested, other than those awards generated under the LTIP; provided that,
for purposes of the LTIP (and any awards granted under that plan) Executive’s
age plus years of service shall be deemed to equal 75, and the termination shall
be treated as if Executive retired under the LTIP and any share unit agreements
that the Company granted under the LTIP. Executive shall have the right to
exercise any options until the expiration date of the option; and

 

(v) For 24 months following the Date of Termination, Executive (and, if
applicable under the applicable benefit plan, his spouse and family) shall
remain covered by the employee benefit plans (such as medical, dental,
pharmaceutical and vision plans) that covered him (or them) immediately prior to
the Date of Termination as if he had remained in employment during the 24-month
period; provided, that there shall be excluded for this purpose any plan that
provides for payment for time not worked (such as vacation, pension, 401(k),
perquisite and long-and short-term disability plans). If Executive’s
participation in any plan is barred, the Company shall arrange to provide
Executive with substantially similar benefits. Any medical, dental,
pharmaceutical or vision coverage for such 24-month period shall become
secondary for Executive (or his spouse) upon the earlier of the date on which
Executive (or his spouse) begins to be covered by a comparable coverage that a
new employer provides or the earliest date on which Executive (or his spouse) is
enrolled in Medicare or a comparable government program.

 

The Company agrees that, if Executive’s employment with the Company terminates
for any reason during the Term, Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to Executive
pursuant to this Section 8. Except with respect to the benefits pursuant to
Section 8(e)(v), the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation Executive earns as the result
of another employer employing Executive or by retirement benefits. Payments to
Executive under this Section 8 (other than Accrued Obligations) are contingent
upon Executive’s execution of a release substantially in the form of Exhibit A.

 

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(f) Termination After or in Connection With a Change of Control. The following
provisions shall apply in the case of a termination of Executive’s employment
after or in connection with a Change of Control (as defined in the Severance
Agreement):

 

(i) If Executive is entitled to payments pursuant to this Section 8(f) and is
entitled to payments pursuant to the Severance Agreement, Executive must choose
either the payments pursuant to this Section 8(f) or the Severance Agreement,
but not both;

 

(ii) The provisions of Section 6 of the Severance Agreement shall apply to any
payment made to Executive under this Agreement to the extent applicable;

 

(iii) Section 5 of the Severance Agreement shall apply regardless of Executive’s
choice under Section 8(f)(i); and

 

(iv) Executive may terminate his employment with the Company at any time within
the three-month period that begins six months after a Change of Control (as
defined in the Severance Agreement) by giving the Company a written notice of
such termination at least 30 days before the Date of Termination. In the event
of Executive’s termination of employment within such three-month period,
Executive shall be entitled to the rights, compensation and benefits described
in Section 8(e).

 

(g) Acceleration of Vesting and Exerciseability of Equity and Long-Term
Incentive Awards. The Company and Executive acknowledge that, unless this
Agreement expressly provides otherwise, the terms of Executive’s option, share
unit and other long-term incentive award agreements and Section 5 of the
Severance Agreement govern acceleration of vesting and exerciseability and other
rights comprising Executive’s awards.

 

9. Confidential Information; Non-Competition; Non-Solicitation.

 

(a) Confidential Information. Executive shall hold in a fiduciary capacity for
the benefit of the Company all trade secrets, confidential information and
knowledge or data relating to the Company and its businesses that Executive
obtained during Executive’s employment by the Company and that have not or do
not become public knowledge (collectively “Confidential Information”); provided
that information that Executive has made public or caused to be made public in
violation of this Agreement or some other duty of confidence to the Company
shall be considered to be Confidential Information. Confidential Information
shall not include information that:

 

(i) Was already in Executive’s possession prior to his employment by Yellow
Transportation, Inc., a subsidiary of the Company, on September 6, 1996;
provided that the information is not known by Executive to be subject to another
confidentiality agreement with, or other obligation of secrecy to, the Company
or any of its subsidiaries,

 

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(ii) Becomes generally available to the public other than as a result of
Executive’s disclosure; except, for information that Executive or the Company
either is legally required to disclose or that Executive has a good faith belief
in his discretion as Chairman of the Board, President and Chief Executive
Officer of the Company should be disclosed, or

 

(iii) Becomes available to Executive on a non-confidential basis from a source
other than the Company or any of its subsidiaries or any of their respective
directors, officers, employees, agents or advisors; provided, that Executive
does not know the source to be bound by a confidentiality agreement with or
other obligation of secrecy to the Company or any of its subsidiaries.

 

After the Date of Termination, Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any Confidential Information to anyone other than the
Company and those the Company designates. Any termination of Executive’s
employment or of this Agreement shall have no effect on the continuing operation
of this Section 9(a). Executive agrees to return all Confidential Information,
including all photocopies, extracts and summaries thereof, and any Confidential
Information stored electronically on tapes, computer disks or in any other
manner to the Company at any time upon the Company’s request and upon the
termination of his employment for any reason.

 

(b) Non-Competition. During the Employment Period and for a period of 24 months
following the Date of Termination (the “Restricted Period”), Executive shall not
engage in Competition, as defined below, with the Company; provided, that it
shall not be a violation of this Section 9(b) for Executive to become the
registered or beneficial owner of up to 5% of any class of the capital stock of
a business registered under the Securities Exchange Act of 1934, as amended,
provided that Executive does not actively participate in the business until such
time as this covenant expires.

 

“Competition” means Executive’s engaging in, or otherwise directly or indirectly
being employed by or acting as a consultant or lender to, or being a director,
officer, employee, principal, agent, stockholder, member, owner or partner of,
or permitting his name to be used in connection with the activities of any other
business or organization that competes, directly or indirectly, with the
business of the Company (in such geographic territories as the Company and its
subsidiaries conduct business, as of the date of such determination, through the
Date of Termination (as defined in Section 7(b)), after which time the
geographic territories covered by this Section 9(b) shall include the
territories in which the Company and its subsidiaries conducted business as of
the Date of Termination) as the same shall be constituted at any time during the
Term.

 

(c) Non-Solicitation. During the Restricted Period, Executive shall not,
directly or indirectly, for his benefit or for the benefit of any other person,
firm or entity, do any of the following without the written consent of the
Company:

 

(i) Solicit, from any customer doing business with the Company as of the Date of
Termination that is known to Executive, business of the same or of a similar
nature to the business of the Company with the customer;

 

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(ii) Solicit, from any potential customer of the Company that is known to
Executive, business of the same or of a similar nature to that which has been
the subject of a known written or oral bid, offer or proposal by the Company, to
such potential customer, or of substantial preparation with a view to making
such a bid, proposal or offer to such potential customer, within six months
prior to the Date of Termination;

 

(iii) Solicit the employment or services of any person who Executive knew was
employed by the Company six months prior to the date of the solicitation; or

 

(iv) Otherwise knowingly interfere in any material respect with the business or
accounts of the Company.

 

(d) Publicity. Executive agrees that the Company may use, and hereby grants the
Company the nonexclusive and worldwide right to use, Executive’s name, picture,
likeness, photograph, signature or any other attribute of Executive’s persona
(collectively “Persona”) in any media for any advertising, publicity or other
purpose at any time, either during or subsequent to his employment by the
Company. Executive agrees that the use of his Persona will not result in any
invasion or violation of any privacy or property rights Executive may have; and
Executive agrees that he will receive no additional compensation for the use of
his Persona. Executive further agrees that any negatives, prints or other
material for printing or reproduction purposes prepared in connection with the
use of his Persona by the Company shall be and are the sole property of the
Company.

 

(e) Executive acknowledges that the Company has a substantial and legitimate
interest in protecting the Company’s Confidential Information and goodwill.
Executive agrees that the provisions of this Section 9 are reasonably necessary
to protect the Company’s legitimate business interests and are designed to
protect the Company’s Confidential Information and goodwill.

 

(f) Executive agrees that the scope of the restrictions as to time, geographic
area, and scope of activity in this Section 9 are reasonably necessary for the
protection of the Company’s legitimate business interests and are not oppressive
or injurious to the public interest. Executive agrees that in the event of a
breach or threatened breach of any of the provisions of this Section 9, the
Company shall be entitled to injunctive relief against Executive’s activities to
the extent allowed by law, and Executive waives any requirement for the posting
of any bond or other security by the Company in connection with such action.
Executive further agrees that any breach or threatened breach of any of the
provisions of Section 9(a) would cause injury to the Company for which monetary
damages alone would not be a sufficient remedy.

 

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10. Indemnification; Legal Fees. The Company shall indemnify Executive to the
fullest extent permitted by the laws of the Company’s state of incorporation in
effect at that time, or the certificate of incorporation and by-laws of the
Company, whichever affords the greater protection to Executive. Executive shall
also be entitled to such limitations on liability as are provided in the
certificate of incorporation of the Company. Additionally, Executive will be
entitled to any insurance policies the Company may elect to maintain generally
for the benefit of its officers and directors against all costs, charges and
expenses incurred in connection with any action, suit or proceeding to which he
may be made a party by reason of being a director or officer of the Company. The
Company agrees to advance to Executive any expenses (including attorneys’ fees)
incurred by Executive in defending any civil, criminal, administrative or
investigative action, suit or proceeding, to the extent related to Executive’s
position with the Company (as described in Section 2(a)), prior to the final
disposition of such action, suit or proceeding; provided, that Executive must
agree in writing to repay such advanced amounts if it is ultimately determined
that Executive was not entitled to indemnification from the Company with respect
to such action, suit or proceeding under applicable Delaware law. Except with
respect to an action, suit or proceeding involving the payment of money only and
for which Executive is totally indemnified by the Company, no action, suit or
proceeding may be settled without the written consent of Executive, with such
consent to not be unreasonably withheld.

 

11. Successors; Binding Agreement.

 

(a) Binding Agreement. This Agreement shall be binding on each party’s
successors as described in this Section 11.

 

(b) Company’s Successors. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Executive to compensation from the Company in the same amount and
on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, “Company” shall mean
the Company and any successor to its business or assets that executes and
delivers the agreement provided for in this Section 11 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.

 

(c) Executive’s Successors. This Agreement and all rights of Executive under
this Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts unless otherwise provided herein shall be paid in accordance with the
terms of this Agreement to Executive’s devisee, legatee or other designee or, if
there is no such designee, to Executive’s estate.

 

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12. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to the addressee as follows:

 

If to Executive:

 

Mr. William D. Zollars

11513 Pawnee Circle

Leawood, Kansas 66211

 

If to the Company:

 

YRC Worldwide Inc.

Attention: Corporate Secretary

10990 Roe Avenue

Overland Park, Kansas 66211

 

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

 

13. Amendment or Modification; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless the waiver, modification or discharge is
agreed to in writing that the parties sign. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter of this Agreement have
been made by either party that are not set forth expressly in this Agreement.

 

14. Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement, Executive’s employment or termination of
employment by the Company or Executive’s rights, compensation or benefits (a
“Dispute”) shall be settled in accordance with the procedures described in this
Section 14.

 

(a) First, the parties shall attempt in good faith to resolve any Dispute
promptly by negotiations between Executive and executives or directors of the
Company who have authority to settle the Dispute (the “Company
Representatives”). Either party may give the other disputing party written
notice of any Dispute not resolved in the normal course of business. Within five
days after the effective date of that notice, Executive and the Company
Representative shall agree upon a mutually acceptable time and place to meet and
shall meet at that time and place, and thereafter as often as they reasonably
deem necessary, to exchange relevant information and to attempt to resolve the
Dispute. The first of those meetings shall take place within 30 days of the
effective date of the disputing party’s notice. If the Dispute has not been
resolved within 60 days of the disputing party’s notice, or if the parties fail
to agree on a time and place for an initial meeting within five days of that
notice, either party may initiate mediation and arbitration of the Dispute as
provided hereinafter. If a negotiator intends to be

 

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accompanied at a meeting by an attorney, the other negotiators shall be given at
least three business days’ notice of that intention and may also be accompanied
by an attorney. All negotiations pursuant to this Section 14 shall be treated as
compromise and settlement negotiations for the purposes of applicable rules of
evidence and procedure.

 

(b) Second, if the Dispute is not resolved through negotiation as provided in
Section 14(a), either disputing party may require the other to submit to
non-binding mediation with the assistance of a neutral, unaffiliated mediator.
If the parties encounter difficulty in agreeing upon a neutral, they shall seek
the assistance of the American Arbitration Association in the selection process.

 

(c) Any Dispute that has not been resolved by the non-binding procedures
provided in Sections 14(a) and 14(b) within 90 days of the initiation of the
first of the procedures shall be finally settled by arbitration conducted
expeditiously in accordance with the Commercial Arbitration Rules of the
American Arbitration Association or of such similar organization as the parties
may mutually agree; provided, that if one party has requested the other to
participate in a non-binding procedure and the other has failed to participate
within 30 days of the written request, the requesting party may initiate
arbitration before the expiration of the period. The arbitration shall be
conducted by three independent and impartial arbitrators. Executive shall
appoint one arbitrator, the Company shall appoint a second arbitrator, and the
first two arbitrators selected shall appoint a third arbitrator. The arbitration
shall be held in Overland Park, Kansas. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. The arbitrators shall award
the prevailing party in the arbitration its costs and expenses, including
reasonable attorney’s fees, incurred in connection with the Dispute. The
arbitrators shall not award any amount to either Executive or the Company in
excess of the compensation, employee benefits and indemnification amounts that
the Company paid or should have paid to Executive pursuant to this Agreement.

 

(d) Notwithstanding the Dispute resolution provisions of this Section 14, either
party may bring an action in a court of competent jurisdiction in an effort to
enforce the provisions of this Section 14 and to seek injunctive relief to
protect the party’s rights pending resolution of a Dispute pursuant to this
Section 14, including the Company’s rights pursuant to Section 9 of this
Agreement.

 

15. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware without
regard to its conflicts of law principles.

 

16. Miscellaneous. The obligations of the parties under Sections 8, 9, 10 and 14
shall survive the expiration of the Term. The compensation and benefits payable
to Executive or his beneficiary under Section 8 shall be in lieu of any other
severance benefits to which Executive may otherwise be entitled upon his
termination of employment under any severance plan, program, policy or
arrangement of the Company other than the Severance Agreement, and Executive
shall not be entitled to receive any benefits under Section 8 if he has become
eligible to receive benefits under the Severance Agreement.

 

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17. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect throughout the Term. Should any one or more of the provisions of this
Agreement be held to be excessive or unreasonable as to duration, geographical
scope or activity, then that provision shall be construed by limiting and
reducing it so as to be reasonable and enforceable to the extent compatible with
the applicable law.

 

18. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

 

19. Release. After the Date of Termination (as defined in Section 7(b)) and
prior but subject to the receipt of any payments under Section 8 (other than the
Accrued Obligation), Executive hereby agrees to execute and be bound by, as a
condition precedent to receiving said benefits and compensation, the Release
attached hereto as Exhibit A, such Release being incorporated herein by
reference.

 

20. Payment Obligations Absolute. The Company’s obligations to pay Executive the
compensation and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstance, including any
set-off, counterclaim, recoupment, defense or other right that the Company may
have against Executive or anyone else. Notwithstanding the foregoing, the
Company shall have the right to withhold all applicable federal, state or local
taxes on any amount paid or payable under this Agreement. All amounts that the
Company owes under this Agreement shall be paid without notice or demand. Each
and every payment that the Company makes under this Agreement shall be final,
and the Company will not seek to recover all or any part of any payment from
Executive or from whosoever may be entitled to the payment, for any reason
whatsoever. Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and except as otherwise provided herein, the obtaining of any
such other employment shall in no event affect the Company’s obligations to make
the payments that this Agreement requires.

 

21. Construction and Interpretation. As used in this Agreement, unless the
context expressly requires the contrary, references to Sections shall mean the
sections and subsections of this Agreement; to a “party” means Executive or the
Company or to the “parties” means both of them; to “including” shall mean
“including (without limitation)”; to a “person” shall mean both legal entities
and natural persons; to sections of any statute shall be deemed also to refer to
any successor provisions to such sections; to the singular shall include the
plural and vice versa; and references to the masculine shall include the
feminine and neutral and vice versa.

 

22. Entire Agreement. This Agreement and the Severance Agreement set forth the
entire agreement of the parties in respect of the subject matter contained in
this Agreement and the Severance Agreement, and this Agreement supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; provided, that the Severance Agreement
shall not be superseded hereby unless Executive elects to receive payments
pursuant to Section 8(f) of this Agreement (provided further that, in such
event, provisions of the Severance Agreement referred to in Section 8 of this
Agreement shall apply to the extent contemplated by such reference).

 

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23. Deferred Compensation. This Agreement is intended to meet the requirements
of Section 409A of the Code and may be administered in a manner that is intended
to meet those requirements and shall be construed and interpreted in accordance
with such intent. To the extent that an award or payment, or the settlement or
deferral thereof, is subject to Section 409A of the Code, except as Executive
and the Compensation Committee of the Board otherwise determines in writing, the
award shall be granted, paid, settled or deferred in a manner that will meet the
requirements of Section 409A of the Code, including regulations or other
guidance issued with respect thereto, such that the grant, payment, settlement
or deferral shall not be subject to the excise tax applicable under Section 409A
of the Code. Any provision of this Agreement that would cause the award or the
payment, settlement or deferral thereof to fail to satisfy Section 409A of the
Code shall be amended to comply with Section 409A of the Code on a timely basis,
which may be made on a retroactive basis, in accordance with regulations and
other guidance issued under Section 409A of the Code.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

 

ATTEST:   YRC WORLDWIDE INC. By:  

/s/ Daniel J. Churay

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  By:  

/s/ Steven T. Yamasaki

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    Daniel J. Churay       Steven T. Yamasaki     Senior Vice President, General
Counsel & Secretary       Senior Vice President – Human Resources        
EXECUTIVE:        

/s/ William D. Zollars

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        WILLIAM D. ZOLLARS

 

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EXHIBIT A

 

RELEASE

 

Executive hereby irrevocably and unconditionally releases, acquits and forever
discharges YRC Worldwide Inc., a Delaware corporation (the “Company”) and its
affiliated companies and their directors, officers, employees and
representatives, (collectively “Releasees”), from any and all claims,
liabilities, obligations, damages, causes of action, demands, costs, losses and
expenses (including attorneys’ fees) of any nature whatsoever, whether known or
unknown, including, but not limited to, rights arising out of alleged violations
of any contracts, express or implied, any covenant of good faith and fair
dealing, express or implied, or any tort, or any legal restrictions on the
Company’s right to terminate employees, or any federal, state or other
governmental statute, regulation, or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, and the Federal Age Discrimination in
Employment Act, that Executive claims to have against any of the Releasees (in
each case, except as to indemnification provided by any or all of:

 

(a) Executive’s Employment Agreement with the Company (as amended or superseded
from time to time),

 

(b) by the Company’s bylaws,

 

(c) by any indemnification agreement or arrangement permitted by Section 145 of
the Delaware General Corporation Law, and

 

(d) by directors, officers and other liability insurance coverages to the extent
you would have enjoyed such coverages had you remained a director or officer of
the Company).

 

In addition, Executive waives all rights and benefits afforded by any state laws
that provide in substance that a general release does not extend to claims that
a person does not know or suspect to exist in his favor at the time of executing
the release that, if known by him, must have materially affected Executive’s
settlement with the other person. The only exception to the foregoing are claims
and rights that may arise after the date of execution of this Release.

 

In connection with the execution of this Release, Executive desires to make
certain representations, acknowledgments, and explicit statements of agreement:

 

A. Executive represents that he has the capacity to read the Release, understand
its language, meaning and effect, and consents to the execution of such Release.

 

B. Executive agrees that among the rights knowingly and voluntarily waived are
the rights to bring any demands, complaints, causes of action, claims and
charges against the Company under any federal, state, or local law, regulation
or decision, including, but not limited to, all claims arising under the Age
Discrimination in Employment Act of 1967.

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C. Executive understands that, except as otherwise provided herein with respect
to the Employment Agreement entered into between Executive and the Company and
his rights to immunity, indemnity and defense, this Release includes a waiver of
certain demands, complaints, causes of action, claims and charges against the
Company and its affiliated entities and their shareholders, members, partners,
directors, managers, officers, employees and agents, which Executive may have as
a result of any act that has heretofore occurred.

 

D. Executive acknowledges that he would not otherwise have been entitled to
certain consideration, and that the Company has agreed to provide such
consideration in return for Executive’s agreement to be bound by the terms of
this Release.

 

E. Executive acknowledges and represents that the Company has advised him to
discuss both the form and content of this Release with an attorney, and that he
has had an opportunity to do so.

 

F. Executive acknowledges that he has been offered the opportunity to consider
this Release for 21 days before executing it. Executive and the Company each
acknowledge that for a period of 7 days from the date of Executive’s execution
of this Release, he shall retain the right to revoke this Release by written
notice delivered to the Board before the end of such period, and that this
Release shall not become effective or enforceable until the expiration of such
date.

 

Executive represents and acknowledges that in executing this Release he does not
rely and has not relied upon any representation or statement, oral or written,
not set forth herein or in the Agreement made by any of the Releasees or by any
of the Releasees’ agents, representatives or attorneys with regard to the
subject matter, basis or effect of this Release, the Employment Agreement or
otherwise.

 

AGREED AND ACCEPTED, on this              day of             .

 

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WILLIAM D. ZOLLARS