exv10w1



 




EXHIBIT 10.1








USF Corporation

8550 W. Bryn Mawr Ave., Suite 700

Chicago, IL 60631



February 7, 2005




Mr. Paul J. Liska

USF Corporation

8550 Bryn Mawr Avenue

Chicago, IL 60631



Dear Paul:


This letter confirms the agreement which we have reached regarding your service as Executive
Chairman of the Board of Directors (the “Board”) of USF Corporation (the
“Company”).





	1.  	Period of Service. The period of your service as Executive Chairman and your
entitlement to compensation hereunder commenced on November 2, 2004 and will continue until
May 1, 2005; provided, commencing December 1, 2004 the period will be extended by one month
for each month of service elapsing thereafter so that the remaining period of service on the
first day of each calendar month is for six months. Notwithstanding, the period of service
may be terminated at any time by the Board or you upon at least 90 days prior written notice
to the other. The Board in its discretion may terminate your service as Executive Chairman on
less than 90 days prior notice, provided that you will receive compensation for the unexpired
balance of the 90-day period following the termination date, in a lump sum in cash within five
(5) days after your termination of service as Executive Chairman, at the rate of $90,000 per
month (prorated for partial months) in lieu of amounts that otherwise would have been paid
under paragraphs 3 and 4 had you continued to serve during such unexpired period. The period
of service also will end in the event of your death, disability or if the shareholders fail to
approve a nomination for your continuing membership on the Board of Directors.





	2.  	Duties. As Executive Chairman of the Board of the Company, you have general
responsibility for the direction and supervision of the Company, with all powers and duties
consistent with such position, subject to the reasonable direction of the Board. You report
directly to the Board and are expected to devote to your duties such time as you and the Board
determine to be necessary for the proper conduct of the business of the Company.




 









 






	3.  	Cash Compensation. While serving as Executive Chairman of the Board, you are
entitled to receive cash compensation in the amount of $45,000 per calendar month, payable in
accordance with the normal payroll practices of the Company.
	 
	4.  	Phantom Stock Units.





	 	(a)  	In addition, you are entitled to compensation in the form of phantom stock
units (“PSU’s”) (reflecting the value of one share of common stock of the
Company for each such unit) for November 2004 and as of the last day of each complete
calendar month thereafter in which you serve as Executive Chairman. The Company will
establish a memorandum bookkeeping account to record all PSUs earned by you each month
and you will be entitled to statements of your account as you reasonably request from
time to time. Your memorandum account will be credited with a number of PSUs for each
such calendar month of service as Executive Chairman, as of the last day of the month,
equal to the quotient of $45,000 divided by the average of the closing prices of
Company common stock on the last five (5) trading days of such month. All PSUs shall
be fully vested on the date credited.
	 
	 	(b)  	If your service as Executive Chairman is terminated by the Board and you
continue as a member of the Board, or your service as Executive Chairman is terminated
by you (whether or not also involuntarily terminating service as a member of the Board
not at the request of the Board), then your PSU account will be paid to you in a lump
sum in cash as to (i) one-half of the PSUs on the date of termination of your service
as Executive Chairman and (ii) one-half of the PSUs three years after the date of
termination of your service as Executive Chairman. If, however, your service as
Executive Chairman is terminated by the Board and the Board removes you, or asks you
to resign from, the Board, then your entire PSU account will be paid to you in a lump
sum in cash within seven (7) days after such termination date. The value of each PSU
on the date payable under this paragraph 4 shall be equal to the average of the
closing prices of Company common stock on the last five (5) trading days preceding the
date so payable.
	 
	 	(c)  	You will not have any interest in any specific assets or shares of stock of
the Company. Your rights in PSUs will not create or be construed to create a trust or
fund or lien of any kind, or a security interest of any kind in any property of the
Company in your favor (or in favor of your legal representative in the event of your
death) or any other person, and you will have no rights greater than those of a
general unsecured creditor of the Company.





	5.  	Incentive Payment. In addition to all other amounts due you under this letter, for
your service as Executive Chairman and your willingness to forego other business opportunities
during such time, upon termination of your service as Executive




 









 






	   	Chairman by the Board (other than due to Cause or your disability), you will receive as an
incentive continuation of cash compensation in the amount of $90,000 per month for six
months following such termination. For this purpose, “Cause” means you have been indicted
(or the equivalent thereof) for any felony or have engaged in any act involving fraud,
theft, misappropriation, or embezzlement against the Company. You will not be entitled to
such amount upon a termination of service as Executive Chairman by you, a termination of
service as Executive Chairman by the Company for Cause, or your service terminates due to
your death or disability.
	 
	6.  	Change of Control. Any provision of this letter to the contrary notwithstanding
(other than as provided at paragraph 7), in the event of a Change of Control (as defined in
the Company’s Long-Term Incentive Plan), all unpaid PSUs and your special incentive (under
paragraph 5) will be paid to you in a lump sum on the date of the Change of Control. You also
shall be entitled to a gross-up payment for amounts constituting an “excess parachute payment”
pursuant to Section 280G of the Internal Revenue Code, as provide on the Attachment hereto.
	 
	7.  	Tax Limitations. Any provision of this letter to the contrary notwithstanding, the
date of payment of any unpaid PSUs or any other compensation payable to you shall be postponed
to the earliest such date as may be necessary to avoid (a) a disallowance of a deduction to
the Company pursuant to Section 162(m) of the Internal Revenue Code (“Code”) and (b)
an acceleration of income and imposition of tax penalties and interest under Section 409A of
the Code.
	 
	8.  	No Other Compensation or Benefits. Unless otherwise hereafter agreed by the Board in
its sole discretion, the compensation described above will be your exclusive compensation for
your service as Executive Chairman of the Board of the Company. Accordingly, you hereby
waive, to the full extent permitted by law, participation in all other compensation and
employee benefit plans, programs and practices of the Company, including (but not by way of
limitation) annual or long-term incentive compensation plans, retirement plans (including the
Capital Accumulation Plan and any other supplemental executive retirement plan) and severance
pay plans (including any severance program for senior executives).
	 
	9.  	Expenses. During the period of your service, you will be entitled to be reimbursed,
pursuant to the Company’s applicable expense reimbursement policies, for travel and other
expenses incurred by you in connection with your services rendered pursuant to this letter
agreement.
	 
	10.  	Indemnification. To the fullest extent permitted by law, the Company will, during
and after the term of your service as Executive Chairman of the Board, insure you under any
policy of directors and officers liability insurance that insures members of the Board and
will indemnify you (including the advancement of expenses) for any judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys’ fees, incurred by you in
connection with the defense of any




 









 






	   	lawsuit or other claim to which you are made or threatened to be made a party by reason of
being or having been an officer, director or employee of the Company.
	 
	11.  	Death. In the event of your death, all unpaid PSUs and other amounts due you
hereunder will be paid to the legal representative of your estate.
	 
	12.  	Withholding Taxes. The Company will provide for the withholding of any taxes
required to be withheld by federal, state or local law with respect to any payment made by or
on behalf of the Company to you or for your benefit in connection with your service as
Executive Chairman of the Board. The Company may, at its option, (a) withhold such taxes from
any cash payments to which you become entitled, (b) require you to pay to the Company in cash
such amounts as may be required to satisfy such withholding obligations and/or (c) make other
satisfactory arrangements with you to satisfy such withholding obligations.



If the foregoing is consistent with your understanding, please countersign the enclosed copy of
this letter and return it to me.




Sincerely,



	 	 	 	 
	USF CORPORATION

 	 
	By:  	/s/ Neil A. Springer 	 
	 	Neil A. Springer, Director 	 
	Date:  	February 7, 2005	 





Accepted and agreed to

this 7th day of February, 2005



/s/ Paul J. Liska

Paul J. Liska




 









 





ATTACHMENT




     (A) If it is determined that any amount, right or benefit paid or payable (or otherwise
provided or to be provided) to the Executive Chairman by the Company or any of its affiliates under
this letter agreement or any other plan, program or arrangement under which Executive Chairman
participates or is a party, other than amounts payable under this Attachment (collectively, the
“Payments”), would constitute an “excess parachute payment” within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended from time to time (the “Code”),
subject to the excise tax imposed by Section 4999 of the Code, as amended from time to time (the
“Excise Tax”), then the Executive Chairman shall be entitled to receive an additional
payment from the Company (a “Gross-Up Payment”) in an amount such that, after payment by
the Executive Chairman of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income and employment taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment (and any
interest and penalties imposed with respect thereto), the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax (including any interest and penalties imposed with respect
thereto) imposed upon the Payments.



     (B) All determinations required to be made under this Attachment, including whether and when a
Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by an independent, nationally recognized
accounting firm mutually acceptable to the Company and the Executive (the “Auditor”). The
Auditor shall promptly provide detailed supporting calculations to both the Company and Executive
Chairman following any determination that a Gross-Up Payment is necessary. All fees and expenses
of the Auditor shall be paid by the Company. Any Gross-Up Payment, as determined pursuant to this
Attachment, shall be paid by the Company to the Executive Chairman within 5 days of the receipt of
the Auditor’s determination. All determinations made by the Auditor shall be binding upon the
Company and the Executive Chairman; provided that if, notwithstanding the Auditor’s initial
determination, the Internal Revenue Service (or other applicable taxing authority) determines that
an additional Excise Tax is due with respect to the Payments, then the Auditor shall recalculate
the amount of the Gross-Up Payment based upon the determinations made by the Internal Revenue
Service (or other applicable taxing authority) after taking into account any additional interest
and penalties (the “Recalculated Amount”) and the Company shall pay to the Executive
Chairman the excess of the Recalculated Amount over the Gross-Up Payment initially paid to the
Executive within 5 days of the receipt of the Auditor’s recalculation the Gross-Up Payment.