exv10w61






Exhibit 10.61




SEVERANCE AGREEMENT

(CHANGE IN CONTROL)



THIS SEVERANCE AGREEMENT (CHANGE IN CONTROL), dated as of and effective December 18, 2009, is
by and between Con-way Inc. (the “Employer”), and Leslie P. Lundberg (the “Executive”).



WHEREAS, the Employer (a) considers it essential to foster the continued employment of key
management personnel, (b) recognizes that the possibility of a Change in Control exists and that
such possibility, and the uncertainty and questions which it may raise among management, may result
in the departure or distraction of management personnel to the detriment of the Employer, and (c)
has determined that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Employer’s management, including the Executive, to their
assigned duties without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control;



NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the
Employer and the Executive hereby agree as follows:





	•	 	The attached Terms and Conditions are incorporated herein and made a part of this
Agreement.






	•	 	The Term of this Agreement shall commence on December 18, 2009 and expire as provided in
the definition of “Term” in Section 1 of the attached Terms and Conditions.






	•	 	Subject to the other provisions of this Agreement, if the Executive incurs a Severance the
Executive shall be entitled to receive from the Employer:






	 	(i)	 	the Severance Payment (the amount of which shall be determined using a multiple (the
“Severance Multiple”) of two);
	 
	 	(ii)	 	the Prorated Target Bonus Amount;
	 
	 	(iii)	 	the Outplacement Services at a cost to the Employer not to exceed $16,000; and
	 
	 	(iv)	 	the Severance Benefits for a period of 24 months following the Severance Date (the
“Severance Period”).






	•	 	If the Executive transfers to and becomes an employee of an Affiliate, the Employer shall
assign this Agreement to the Affiliate (as applicable) which shall become the Employer and
shall assume the obligations of the Employer.






	•	 	This Agreement supersedes (i) all prior severance agreements between the Executive, on the
one hand, and the Employer, the Company or any Affiliate, on the other hand, and (ii) all
prior severance plans, severance policies or other severance arrangements applicable to the
Executive, in each case relating to severance payments and other benefits to be made available
to the Executive upon a change in control.














 











	 	 	 	 	 	 	 	 	 	 	 
	CON-WAY INC.	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

Jennifer W. Pileggi
	 	 
	 	Name:
	 	 

Leslie P. Lundberg
	 	 
	Title:

	 	EVP General Counsel & Secretary
	 	 	 	Address:	 	 	 	 
















 





TERMS AND CONDITIONS OF SEVERANCE AGREEMENT (CHANGE IN CONTROL)




Table of Contents



	 	 	 	 	 
	1. Definitions
	 	 	1	 
	2. Compensation other than Severance Payment, Severance Benefits and Prorated Target Bonus Amount
	 	 	11	 
	3. Severance Payment, Severance Benefits and Prorated Target Bonus Amount
	 	 	12	 
	4. Adjustments
	 	 	14	 
	5. Notice of Termination
	 	 	17	 
	6. Restrictive Covenants
	 	 	18	 
	7. General Provisions
	 	 	20	 
	 
	 	 	 	 
	Exhibit A — Waiver and Release of Claims
	 	 	22	 
	Exhibit B — Assignment and Assumption of Agreement.
	 	 	24	 







	1.	 	DEFINITIONS. As hereinafter used:
	 
	 	 	“Accounting Firm” means a nationally recognized accounting firm selected by the
Board.
	 
	 	 	“Affiliate” means an affiliate of the Company, as defined in Rule 12b-2 promulgated
under Section 12 of the Exchange Act, including any Business Unit.
	 
	 	 	“Agreement” means the Severance Agreement (Change in Control) to which these Terms
and Conditions are attached, including the Terms and Conditions, which are incorporated by
reference in the Agreement. If there is any inconsistency between the Severance Agreement
and these Terms and Conditions, the Terms and Conditions shall govern.
	 
	 	 	“Base Amount” shall have the meaning set forth in Section 280G(b)(3) of the Code.
	 
	 	 	“Board” means the Board of Directors of the Company.
	 
	 	 	“Business Unit” is defined in Section 2 of the EIP.
	 
	 	 	“Cause” for termination by the Employer of the Executive’s employment (following the
applicable procedures set forth in Section 5) means (i) the willful and continued failure by
the Executive to substantially perform the Executive’s duties with the Employer (other than
any such failure resulting from the Executive’s incapacity due to Disability, including any
such actual or anticipated failure after the issuance by the Executive of a notice of intent
to terminate employment for Good Reason, as provided in the definition of Good Reason) after
a written demand for substantial performance is delivered to the Executive by or on behalf
of the Employer Board, which demand specifically identifies the manner in which the Employer
Board believes that the Executive has not substantially performed the Executive’s duties, or
(ii) the willful engaging by the Executive in conduct which is demonstrably and materially
injurious to the Employer, the Company or an Affiliate, monetarily or otherwise. For
purposes of clauses (i) and (ii) of this definition, no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive’s act, or
failure to act, was in the best interest of the Employer, the Company or an Affiliate.





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“Change in Control” means the occurrence of any one of the following events:




	 	(1)	 	25% of the Company’s Voting Securities Acquired by an Outsider. Any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company (not including in the securities beneficially
owned by such person any securities acquired directly from the Company or its
Affiliates) representing 25% or more of the combined voting power of the Company’s then
outstanding voting securities; provided however that “person” shall not include:






	 	(a)	 	the Company or its Affiliates;
	 
	 	(b)	 	any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or its
Affiliates;
	 
	 	(c)	 	any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of Stock; and
	 
	 	(d)	 	any person that, pursuant to Rule 13d-1
promulgated under the Exchange Act, is permitted to, and actually does,
report its beneficial ownership of voting securities of the Company on
Schedule 13G (or any successor schedule) (a “13G Filer”), provided
that, if any 13G Filer subsequently becomes required to or does
report its beneficial ownership of voting securities of the Company on
Schedule 13D (or any successor schedule), then the 13G Filer shall be
deemed a “person” for purposes of clause (1) and shall be deemed to
have acquired, on the first date on which such person becomes required
to or does so report on Schedule 13D (or any successor schedule),
beneficial ownership of all voting securities of the Company
beneficially owned by it on such date.






	 	(2)	 	Members of the Board as of June 1, 2009 cease to constitute a majority of
Directors. The following individuals cease for any reason to constitute a majority of
the number of directors then serving on the Board: individuals who, on June 1, 2009,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then still in office who either were directors
on June 1, 2009 or whose appointment, election or nomination for election was
previously so approved or recommended;
	 
	 	(3)	 	Merger or Consolidation. There is consummated a merger or consolidation of the
Company, a Subsidiary or an Affiliate with any other corporation or other entity, which
merger or consolidation —






	 	(a)	 	results in the voting securities of the Company outstanding immediately
prior thereto failing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or parent entity) more than 50%
of the combined voting power of the voting securities of the Company or the




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	 	 	 	surviving or parent entity outstanding immediately after such merger or
consolidation, or
	 
	 	(b)	 	is effected to implement a recapitalization of the Company (or similar
transaction) in which a “person” (as defined in clause (a) above), directly or
indirectly, acquires 25% or more of the combined voting power of the Company’s then
outstanding securities (not including in the securities beneficially owned by such
person any securities acquired directly from the Company or its Affiliates);






	 	(4)	 	Complete Liquidation or Disposition of All or Substantially All of the
Company’s Assets. The stockholders of the Company approve a plan of complete
liquidation of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets, other
than any such sale or disposition by the Company (including by way of spin-off or other
distribution) to an entity, at least 50% of the combined voting power of the voting
securities of which are owned immediately following such sale or disposition by
stockholders of the Company in substantially the same proportions as their ownership of
the Company immediately prior to such sale or disposition; or
	 
	 	(5)	 	Disposition of a Business Unit. There is consummated the Disposition of a
Business Unit; provided, however, that this clause (5) shall apply only to an
Executive who immediately prior to the Disposition of a Business Unit was employed by
(and on the payroll of) the Business Unit that was the subject of the Disposition of a
Business Unit.






The following Examples illustrate clause (5):




Example 1. The ownership interests of Business Unit X are sold to an unrelated
purchaser. Executive A was employed by (and on the payroll of) Business Unit X
immediately prior to the sale. A Change in Control has taken place with respect to
Executive A.




Example 2. The assets of Business Unit Y are sold to an unrelated purchaser. Executive B
was employed by (and on the payroll of) Business Unit Y immediately prior to the sale. A
Change in Control has taken place with respect to Executive B.




Example 3. Executive C is employed by (and on the payroll of) a Business Unit as
described in either Example 1 or 2, except that Executive C remains employed by (and on
the payroll of) a Business Unit that continues to be a Business Unit of the Company
following the sale. A Change in Control has taken place with respect to Executive C.




Because the EIP is not intended to serve the same purpose as the Agreement, whether a
“Change in Control” has taken place under the EIP is not relevant in determining whether
benefits are payable under the Agreement. For example, in Example 3, a Change in Control
took place for Executive C under the Agreement, but no Change in Control took place for
Executive C under the EIP. If Executive C terminates employment six months after the Change
in Control occurred under the Agreement, Executive C may or may not be entitled to benefits
under the Agreement, depending on the facts surrounding the termination of employment.
However, no Change in Control would take place under the EIP with respect to Executive C
under the facts of Example 3, whether or not benefits are due under the Agreement.



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“Code” means the Internal Revenue Code of 1986, as amended from time to time.




“Company” means Con-way Inc., a corporation organized under the laws of the State of
Delaware, or any successor corporation.




“Disability” means a physical or mental illness or condition causing the Executive’s
inability to substantially perform the Executive’s duties with the Employer.




“Disposition of a Business Unit” means a sale or other disposition, however
effected, of a Business Unit which is either:




	 	(a)	 	Sale of Ownership Interests. A sale by the Company or an Affiliate of
the then outstanding ownership interests of the Business Unit having more than 50%
of the then existing voting power of all outstanding ownership interests of the
Business Unit, whether by merger, consolidation or otherwise, unless after the sale
the Company, an Affiliate, or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, the Business Unit or any other
Affiliate, individually or collectively, directly or indirectly, owns the then
outstanding ownership interests of the Business Unit having 50% or more of the then
existing voting power of all outstanding ownership interests of the Business Unit;
	 
	 	(b)	 	Sale of Assets. The sale of all or substantially all of the assets of
the Business Unit as a going concern; or
	 
	 	(c)	 	Other Transaction. Any other transaction or course of action engaged
in, directly or indirectly, by the Company, the Business Unit or an Affiliate that
has a substantially similar effect as the transactions of the type referred to in
clause (a) or (b) above,






except as provided in clause (y) or (z) below.




A Disposition of a Business Unit may occur even if such Business Unit constitutes part of a
larger enterprise at the time of the relevant Disposition of a Business Unit transaction and
such Disposition of a Business Unit involves such larger enterprise. However, a “Disposition
of a Business Unit” shall not occur:




	 	(y)	 	Spin-off or Public Offering. In the event of the sale or distribution
of ownership interests (including, without limitation, a spin-off) of the Business
Unit to stockholders of the Company, or the sale of assets of the Business Unit to
any corporation or other entity owned, directly or indirectly, by the stockholders
of the Company, in either case in substantially the same proportions as their
ownership of stock in the Company, or a public offering of the ownership interests
of the Business Unit (even if after the public offering the Company has no direct
or indirect ownership interest in the Business Unit), or
	 
	 	(z)	 	Liquidation. In the event of the closing down or liquidation of the
Business Unit, even if the Business Unit sells all or substantially all of its
assets.






“EIP” means the Company’s 2006 Equity and Incentive Plan, as amended from time
to time, or any successor plan.




“Employer” means the entity specified in the first paragraph of the Agreement or any
assignee or successor (including a successor who assumes the Agreement following a Change in
Control). The fourth bullet of the Agreement provides that, if the Executive



4









 






transfers to the Company or an Affiliate, the Agreement will be assigned, resulting in a
change in the Employer. A draft form of assignment and assumption is attached as Exhibit B.




“Employer Board” means the Board of Directors of the Employer.




“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.




“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and as now or hereafter construed, interpreted and applied by regulations, rulings and
cases.




“Excise Tax” means any excise tax imposed under Section 4999 of the Code.




“Executive” means the individual specified in the first paragraph of the Agreement.




“Good Reason” for termination by the Executive of the Executive’s employment shall
mean the occurrence (without the Executive’s express written consent) after any Change in
Control of any one of the following acts by the Employer, or failures by the Employer to
act, unless such act or failure to act is corrected within 30 days of receipt by the
Employer of notice of the Executive’s intent to terminate for Good Reason hereunder:




	 	(1)	 	the failure of any successor company, following the Change in Control, to
assume the Agreement and all obligations thereunder, as of the date of such Change in
Control;
	 
	 	(2)	 	a material reduction in the authority, duties or responsibilities of the
Executive from the authority, duties and responsibilities in effect immediately prior
to the Change in Control; provided however, a mere change in the Executive’s
title shall not, in and of itself, constitute a material reduction in the authority,
duties or responsibilities of the Executive under this clause (2);
	 
	 	(3)	 	a reduction by the Employer in the Executive’s base salary, cash bonus
opportunity, or long term incentive opportunity, each as in effect immediately prior to
the Change in Control or as the same may thereafter be increased from time to time;
	 
	 	(4)	 	the relocation of the Executive’s principal place of employment to a location
that results in an increase in the Executive’s one way commute of at least 40 miles
more than the Executive’s one way commute immediately prior to the Change in Control,
	 
	 	(5)	 	a substantial increase in the Executive’s business travel obligations from the
Executive’s business travel obligations immediately prior to the Change in Control;
	 
	 	(6)	 	the failure by the Employer to pay to the Executive when due any portion of the
Executive’s current compensation;
	 
	 	(7)	 	the failure by the Employer to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the Employer’s
pension, savings, life insurance, medical, health and accident, or disability plans in
which the Executive was participating immediately prior to the Change in Control
(except for across-the-board changes similarly affecting all or substantially all
employees of the Employer and any entity in control of the Employer), the taking of any
other action by the Employer which would directly or indirectly materially reduce any
of such benefits or deprive the Executive of any material fringe benefit enjoyed




5









 






	 	 	 	by the Executive immediately prior to the Change in Control, or the failure by the
Employer to provide the Executive with the number of paid vacation days or PTO days
(days of paid time off) to which the Executive was entitled;
	 
	 	(8)	 	any purported termination of the Executive’s employment which is not effected
pursuant to a notice of termination satisfying the requirements of Section 5 of these
Terms and Conditions; for purposes of this Agreement, no such purported termination
shall be effective; and
	 
	 	(9)	 	a material breach of this Agreement by the Employer or the Company.






If a Change in Control takes place with respect to the Executive solely because of the
Disposition of a Business Unit as described in clause (5) of the definition of Change in
Control and the Executive continues to be employed by the Company or an Affiliate, but the
position the Executive previously held is no longer needed, then, for purposes of
determining whether there is a substantial adverse alteration in the nature or status of the
Executive’s responsibilities under clause (2) above, all the facts and circumstances shall
be taken into account, and no single or selected set of facts shall be determinative. In
particular, if the Executive receives a bona fide offer of a new or different position with
the Company or an Affiliate, the fact or set of facts that, under the Executive’s new
position, fewer employees may be supervised and/or fewer functional areas may be within the
Executive’s span of control shall not be determinative.




If the Executive is employed by a Business Unit prior to a Change in Control and continues
to be employed by the Business Unit following the Change in Control, in a substantially
similar functional position and with substantially the same duties and responsibilities
within the Business Unit, clause (2) of this definition of Good Reason shall not apply to
the Executive in connection with such Change in Control, and the Executive may not terminate
his or her employment for Good Reason on the grounds that the Executive has been assigned
duties inconsistent with the Executive’s status as an executive of the Employer or that
there has been a substantial adverse alteration in the nature or status of the Executive’s
responsibilities from those in effect immediately prior to the Change in Control, even if
after the Change in Control the Business Unit is part of a different organization which
differs from the Company in size, reporting structure or other aspects.




The Executive’s right to terminate the Executive’s employment for Good Reason shall not be
affected by the Executive’s incapacity due to Disability except as otherwise provided in the
definition of Severance.




If Good Reason first occurs during the last 30 days of the Term and the Executive gives
notice of the Executive’s intent to terminate for Good Reason before the end of the Term,
the correction period referred to in the first sentence of this definition of Good Reason
shall end on the date of termination specified in Section 5.3.




The Executive’s continued employment after Good Reason occurs shall not constitute consent
to, or a waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.




“Health Benefits” means health maintenance organization, insured or self-funded
medical, dental, vision, prescription drug and behavioral health benefits.




“Outplacement Services” means professional outplacement services determined by
the



6









 







Employer to be suitable to the Executive’s position. The maximum amount that the Employer
will pay for such services is set forth on the first page of the Agreement. The outplacement
services shall be made available until the earlier of (i) such time as the aggregate cost to
the Employer of the outplacement services reaches the maximum amount specified on the first
page of the Agreement, and (iii) the date on which the Executive obtains another full-time
job. The Employer will not pay the Executive cash in lieu of professional outplacement
services.




“Person” means any person, as such term is used in Sections 13(d) and 14(d) of the
Exchange Act other than (i) the Company or its Affiliates, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or its
Affiliates, and (iii) any corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of the Common Stock.




“Potential Change in Control” shall be deemed to have occurred if:




	 	(1)	 	the Company or any Affiliate enters into a definitive agreement contemplating
transactions that, if consummated, would result in the occurrence of a Change in
Control;
	 
	 	(2)	 	the Company or any “person,” as such term is used in Sections 13(d) and 14(d)
of the Exchange Act publicly announces an intention to take or to consider actions,
including but not limited to proxy contests or consent solicitations, which, if
consummated, would constitute a Change in Control;
	 
	 	(3)	 	any Person becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing 15% or
more of either the then outstanding shares of the common stock of the Company or the
combined voting power of the Company’s then outstanding securities (not including in
the securities beneficially owned by such Person any securities acquired directly from
the Company or its Affiliates); or
	 
	 	(4)	 	the Board or the Employer Board if the Employer is other than the Company
adopts a resolution to the effect that, for purposes of the Agreement, a Potential
Change in Control has occurred.






If the Potential Change in Control referred to in clause (1) or (2) would arise because of
an event described in clause (5) in the definition of Change in Control, the Potential
Change in Control shall apply only if the Executive is employed by (and on the payroll of)
the Business Unit that would be the subject of the Disposition of a Business Unit.




“Prorated Target Bonus Amount” means an amount equal to Executive’s Target Bonus for
the calendar year in which a Severance occurs, multiplied by a fraction, the numerator of
which is the number of days that have elapsed in such calendar year prior to the Change in
Control and the denominator of which is 365.




“Severance” means the termination of an Executive’s employment with the Employer
following a Change in Control and during the Term of the Agreement, either (i) by the
Employer other than for Cause, or (ii) by the Executive for Good Reason.




For purposes of the Agreement, the Executive’s employment shall be deemed to have been
terminated following a Change in Control by the Employer other than for Cause or



7









 







by the Executive with Good Reason if (i) the Executive’s employment is terminated by the
Employer without Cause following a Potential Change in Control but prior to a Change in
Control (whether or not a Change in Control ever occurs) and such termination was at the
request or direction of a Person who has entered into an agreement with the Company or
Affiliate the consummation of which would constitute a Change in Control, (ii) the Executive
terminates employment for Good Reason following a Potential Change in Control but prior to a
Change in Control (whether or not a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request or direction of such Person; or
(iii) the Executive’s employment is terminated by the Employer without Cause or by the
Executive for Good Reason and such termination or the circumstance or event which
constitutes Good Reason is otherwise in connection with or in anticipation of a Change in
Control (whether or not a Change in Control ever occurs). For purposes of this paragraph, a
Change in Control shall be deemed to have occurred for purposes of the definition of Good
Reason either (x) if a Potential Change in Control has occurred or (y) if the termination or
the circumstance or event which would constitute Good Reason if a Change in Control had
occurred is in connection with or in anticipation of a Change in Control (whether or not a
Change in Control ever occurs).




An Executive will not be considered to have incurred a Severance (i) if the Executive’s
employment is discontinued by reason of (A) the Executive’s death, or (B) the Executive’s
Disability for a period of not less than six consecutive months or (ii) in the event of the
divestiture of a facility, sale of a business or Business Unit, or the outsourcing of a
business activity with which the Executive is affiliated, notwithstanding the fact that such
divestiture, sale or outsourcing constitutes, or takes place following a Change in Control
and during the Term of the Agreement, if the Executive is offered a position with the
successor company that, if accepted, would not give rise to Good Reason, and such successor
company agrees to assume the obligations of the Agreement with respect to such Executive.




If any benefits provided to the Executive under the Agreement are treated as deferred
compensation subject to Code section 409A, the Executive will not be considered to have
incurred a Severance until the Executive incurs a “separation from service,” becomes
“disabled,” or dies. (The terms quoted in the immediately-preceding sentence have the
meanings set forth in Code section 409A(a)(2)(A).)




For purposes of applying the provisions of Code section 409A to this Agreement, each
separately identified amount to which Executive is entitled under this Agreement shall be
treated as a separate payment. In addition, to the extent permissible under Code section
409A, any series of installment payments under this Agreement shall be treated as a right to
a series of separate payments.




“Severance Benefits” means:




	 	(1)	 	life and accident benefits substantially similar to those provided to the
Executive and the Executive’s dependents immediately prior to the Severance or, if more
favorable to the Executive, immediately prior to the Change in Control, at no greater
cost to the Executive than the cost to the Executive immediately prior to the Severance
or the Change in Control in this Agreement (based on whether the benefits provided are
substantially similar to those provided prior to the Severance or those provided prior
to the Change in Control); provided, however, that, unless the Change
in Control took place because of the event described in clause (5) of the definition of
Change in Control (as modified hereby), the Employer may apply to such benefits any
across




8









 






	 	 	 	the board changes similarly affecting all or substantially all employees participating
in such benefits; and
	 
	 	(2)	 	Health Benefits for the Severance Period substantially similar to those
provided to Executive and Executive’s dependents by or on behalf of the Executive’s
Employer immediately prior to the Severance or, if more favorable to the Executive,
those provided immediately prior to the Change in Control, in accordance with the
following:






	 	(a)	 	if the Company, the Employer or a successor company maintains a retiree
medical plan in which Executive and Executive’s dependents are eligible to
participate (with no preexisting condition limitations) and to receive the Health
Benefits, then subject to subsection (6) of this definition of “Severance
Benefits,” Employer or the successor company shall pay to Executive, in accordance
with the provisions of Section 3.2, a lump sum payment equal to the aggregate
premiums that Executive would be required to pay in order to obtain coverage for
Executive and Executive’s dependents under such plan for the Severance Period.
	 
	 	(b)	 	if the Company, the Employer or a successor company does not maintain a
retiree medical plan in which Executive and Executive’s dependents are eligible to
participate (with no preexisting condition limitations) and to receive the Health
Benefits, the Employer or successor company shall promptly purchase, at its own
expense and at no cost to the Executive, an individual policy from an A-rated third
party insurer under which Executive and Executive’s dependents shall receive the
benefits described above (with no preexisting condition limitations).
	 
	 	(c)	 	If at any time during the Severance Period the Employer or the
successor company ceases to make available any Health Benefits under the retiree
medical plan described in (a) above under which Executive and Executive’s
dependents are obtaining coverage, or materially modifies the Health Benefits
available under the retiree medical plan to the detriment of the Executive, then
Employer or the successor company shall promptly purchase, at its own expense and
at no cost to the Executive, a individual policy from an A-rated third party
insurer under which Executive and Executive’s dependents shall receive the Health
Benefits (with no preexisting condition limitations) for the remainder of the
Severance Period.






provided, however, that




	 	(3)	 	benefits otherwise receivable pursuant to (1) and (2) shall be reduced to the
extent benefits of same type are actually received by or are made available to
Executive and Executive’s dependents, as set forth below (and Executive shall promptly
notify Employer or any successor company of any such benefits):






	 	(a)	 	benefits otherwise receivable pursuant to (1) and (2) shall be reduced
to the extent benefits of the same type are actually received by the Executive or
the Executive’s dependents following the Executive’s termination of employment with
the Employer, with no applicable pre-existing condition exclusions; or
	 
	 	(b)	 	benefits otherwise receivable pursuant to (1) and (2) shall be reduced
to the extent benefits of the same type are made available to the Executive and
Executive’s dependents (whether or not Executive elects to actually receive such





9









 






benefits) by a new employer of Executive following the Executive’s termination of
employment with the Employer, with no applicable pre-existing condition exclusions
are applicable;




provided, however, for avoidance of doubt, benefits made available to one or more of
Executive and Executive’s dependents by the employer of Executive’s spouse shall not reduce
the benefits otherwise available pursuant to (1) and (2), except to the extent Executive’s
spouse elects to receive such benefits from his or her employer;




	 	(4)	 	the Employer shall reimburse the Executive for the excess, if any, of the cost
to the Executive of benefits received or made available pursuant to (1) and (2) over
such cost immediately prior to the Severance or, if more favorable to the Executive,
immediately prior to the Change in Control;
	 
	 	(5)	 	if the Executive dies, the Employer shall continue to provide the Executive’s
dependents with the benefits otherwise receivable pursuant to (1) and (2) on the same
basis as if the Executive had survived, and
	 
	 	(6)	 	if any such benefits are treated as deferred compensation subject to Code
section 409A and the Executive is a Specified Employee, the Executive shall pay the
full cost of such benefits for the first six months after the Severance Date and the
Employer shall reimburse the Executive for such payments as soon as practicable
thereafter but not later than nine (9) months from the date the Executive paid such
costs.






“Severance Date” means the date on which an Executive incurs a Severance, which
shall be the date of termination as determined under Section 5.3.




“Severance Multiple” has the meaning set forth on the first page of the Agreement.




“Severance Payment” means a payment, in lieu of any other severance payment or
benefit pursuant to any other plan or agreement of the Employer, the Company or any
Affiliate to which the Executive is otherwise entitled, of an amount equal to the product of
(i) the Severance Multiple multiplied by (ii) the sum of (A) the Executive’s annual base
salary immediately prior to the Severance Date or, if higher, in effect immediately prior to
the Change in Control, and (B) the Executive’s Target Bonus for the calendar year in which
the Change in Control occurred.




“Severance Period” has the meaning set forth on the first page of the Agreement.




“Specified Employee” has the meaning set forth in the Con-way Inc. 2005 Deferred
Compensation Plan for Executives and Key Employees, as amended and restated in December 2008
and as subsequently amended from time to time.




“Subsidiary” means any corporation in an unbroken chain of corporations beginning
with the Company if each of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.




“Target Bonus” means, for any calendar year, an amount equal to (i) the Executive’s
Annual Compensation (as defined in the Company’s Executive Incentive Plan) for that calendar
year multiplied by (ii) the Participation Percentage (as defined in the Executive
Incentive Plan) applicable to executives in the Executive’s grade level (i.e., E1, E2, E3,
E4 or E5) for that calendar year, as determined by the Compensation Committee of the Board.
“Target Bonus” shall be determined in the manner provided in the preceding



10









 







sentence whether or not the Executive is a participant in the Executive Incentive Plan
during that calendar year, and shall not be based on the Executive’s target bonus under any
other annual incentive plan in which the Executive participates during that calendar year.
If during the calendar year for which the Target Bonus is determined the Executive has not
assigned to an executive grade level of E1, E2, E3, E4 or E5, the Executive’s grade level
for purposes of this definition shall be the grade level between E1 and E5 that the
Compensation Committee of the Board has determined is equivalent to the Executive’s actual
grade level.




“Tax Counsel” has the meaning set forth in Section 4.2 hereof.




“Taxes” means all federal, state, local and other taxes (including Excise Taxes), to
the extent applicable to all or any part of the Total Payments.




“Term” means the period of time commencing on the date specified in the Agreement
and continuing through December 31, 2011; provided, however, that commencing
on January 1, 2011, and each January 1 thereafter, the Term shall automatically be extended
for one additional year unless, not later than September 30 of the preceding year, the
Employer or the Executive shall have given notice not to extend the Term; and
further provided, however, that if a Change in Control shall occur
during the Term, the Term shall expire on the date which is 24 months after the date on
which such Change in Control occurred.




“Terms and Conditions” means these terms and conditions.




“Total Payments” means the payments or benefits (including without limitation the
Severance Payment and the Severance Benefits) received or to be received by the Executive in
connection with a Change in Control or the Executive’s termination of employment (whether
pursuant to the terms of the Agreement or any other agreement, plan, or arrangement with the
Employer, any Person whose actions result in a Change in Control or any Person affiliated
with the Employer or such Person).




	2.	 	COMPENSATION OTHER THAN SEVERANCE PAYMENT, SEVERANCE BENEFITS AND PRORATED TARGET
BONUS AMOUNT.






	 	2.1	 	Following the occurrence of a Change in Control or Potential Change in Control
and during the Term, during any period that the Executive fails to perform the
Executive’s full-time duties with the Employer as a result of incapacity due to
Disability, the Employer shall pay the Executive’s full salary to the Executive at the
rate in effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or benefit
plan, program or arrangement maintained by the Employer during such period (other than
any disability plan), until such time (if any) as the Executive’s employment is
terminated by the Employer for Disability.
	 
	 	2.2	 	If the Executive shall incur a Severance, the Employer shall pay the
Executive’s full salary to the Executive through the Severance Date at the rate in
effect immediately prior to the Severance Date or, if higher, the rate in effect
immediately prior to the Change in Control, together with all compensation and benefits
payable to the Executive through the Severance Date under the terms of the Employer’s
compensation and benefit plans, programs or arrangements as in effect immediately prior
to the Severance Date or, if more favorable to the




11









 






	 	 	 	Executive, as in effect immediately prior to the Change in Control or Potential
Change in Control.
	 
	 	2.3	 	If the Executive shall incur a Severance, the Employer shall pay to the
Executive the Executive’s normal post termination compensation and benefits as such
payments become due (other than severance payments under any severance plan as in
effect immediately prior to the Severance). Such post termination compensation and
benefits shall be determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Severance or, if more favorable to
the Executive, as in effect immediately prior to the Change in Control or Potential
Change in Control.






	3.	 	SEVERANCE PAYMENT, SEVERANCE BENEFITS AND PRORATED TARGET BONUS AMOUNT.






	 	3.1	 	Subject to the other provisions of this Agreement (including, without
limitation, Section 4 of these Terms and Conditions), if the Executive incurs a
Severance, the Executive shall be entitled to receive from the Employer the Severance
Payment, the Prorated Target Bonus Amount, the Outplacement Services, and the other
Severance Benefits. If (i) the Employer is not the Company, (ii) the Severance is
related to a Change in Control or a Potential Change in Control that occurred other
than because of the Disposition of a Business Unit as provided in clause (5) of the
definition of Change in Control, and (iii) the Employer does not provide all or any
part of the Severance Payment, the Prorated Target Bonus Amount, the Outplacement
Services, and the Severance Benefits, the Company shall fulfill the obligations of the
Employer under the Agreement, and the Executive need not exhaust the remedies provided
in Section 3.4 and 3.5 against the Employer before being entitled to receive the
Severance Payment and the Severance Benefits from the Company.
	 
	 	3.2	 	The Employer shall pay to the Executive the Severance Payment, the Prorated
Target Bonus Amount and any Severance Benefits that are payable in cash, in each case
less amounts withheld for Taxes as required under applicable law, on the earliest date
or dates permitted under Code section 409A, as determined by Tax Counsel or, in the
absence of a determination by Tax Counsel, on the date that is six (6) months and one
(1) day after the Severance Date (or as soon as practicable thereafter, but in no event
later than ten (10) business days immediately following such date). The Employer shall
use good faith efforts to obtain from Tax Counsel the determinations contemplated by
this Section 3.2. The Executive shall be liable for the payment of all Taxes. The
Employer shall be entitled to withhold from amounts to be paid to the Executive
hereunder any Taxes which it is from time to time required to withhold.
	 
	 	3.3	 	The Executive shall not be eligible to receive a Severance Payment, a
Prorated Target Bonus Amount, Severance Benefits or Outplacement Services under the
Agreement unless the Executive (or, in the event of the death of the Executive, the
executor, personal representative or administrator of the Executive’s estate) first
executes a written release substantially in the form attached as Exhibit A hereto
after the Severance Date and such release becomes effective prior to the time that the
Executive (or the Executive’s estate, as applicable) is to receive all




12









 






	 	 	 	or any part of the Severance Payment, the Prorated Target Bonus Amount, the
Severance Benefits or Outplacement Services.
	 
	 	3.4	 	In the event that the Executive or a dependent of the Executive believes that
he or she is not receiving the full amounts to which he or she is entitled under the
Agreement, such person may make a claim to the Employer Board (or the Board if the
second sentence of Section 3.1 applies), and the claims procedure set forth in Section
15 of the EIP shall apply with the Employer Board (or the Board if the second sentence
of Section 3.1 applies) treated as the Committee. Although claims for amounts under
this Agreement are governed by claims procedures under the EIP that also apply to
ERISA-covered claims, neither this Agreement nor any amounts payable hereunder are, or
are intended to be, governed by ERISA.
	 
	 	3.5	 	Any further dispute or controversy arising under or in connection with the
Agreement which remains after the final decision of the Employer Board as contemplated
by Section 3.4 shall be settled exclusively by arbitration, conducted before a single
neutral arbitrator in accordance with the American Arbitration Association’s National
Rules for Resolution of Employment Disputes as then in effect. Such arbitration shall
be conducted in the metropolitan area closest to where the Executive lives. Judgment
may be entered on the arbitrator’s award in any court having jurisdiction over such
metropolitan area; provided however, that the Executive shall be entitled to
seek specific performance of his/her right to be paid or to receive benefits hereunder
during the pendency of any dispute or controversy under or in connection with this
Agreement. The fees and expenses of the arbitrator and the arbitration shall be borne
by the Employer or the Company.
	 
	 	 	 	If, for any legal reason, a controversy arising from or concerning the
interpretation or application of this Agreement cannot be arbitrated as provided
above, the parties agree that any civil action shall be brought in United States
District Court in the metropolitan area closest to where the Executive lives or,
only if there is no basis for federal jurisdiction, in state court closest to where
the Executive lives. The parties further agree that any such civil action shall be
tried to the court, sitting without a jury. The parties knowingly and voluntarily
waive trial by jury.
	 
	 	 	 	Notwithstanding the foregoing, if at the time a dispute or controversy arises the
Executive is working outside of the United States, and if at such time the Executive
maintains a residence in the United States, the dispute or controversy will be
resolved (i) by arbitration in the metropolitan area closest to the Executive’s
residence in the United States or (ii) by litigation in the United States District
Court in the metropolitan area closest to the Executive’s residence in the United
States or, only if there is no basis for federal jurisdiction, in state court
closest to the Executive’s residence in the United States. If the Executive does not
maintain a United States residence at such time, the dispute or controversy will be
subject to arbitration in San Mateo, California or to litigation in the United
States District Court for the Northern District of California (or if such court does
not have jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in California).
	 
	 	3.6	 	The Employer shall pay to the Executive all legal fees and expenses incurred by
the Executive (i) in seeking in good faith to obtain or enforce any benefit or right




13









 






	 	 	 	provided by the Agreement or (ii) in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payment shall be made within five (5)
business days after delivery of the Executive’s written requests for payment
accompanied with such evidence of fees and expenses incurred as the Employer
reasonably may require. The Employer shall not be obligated to pay legal fees and
expenses incurred by any person other than the Executive or the Executive’s
successor in interest hereunder. However, the Employer shall be obligated to pay
legal fees and expenses incurred by the Executive on behalf of the Executive’s
dependents and legal fees and expenses incurred by the estate of the Executive on
behalf of the Executive or the Executive’s dependents.
	 
	 	3.7	 	The Employer agrees that, if the Executive’s employment with the Employer
terminates following a Change in Control that is applicable to the Executive and during
the Term of the Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive hereunder. Further,
the amount of any payment or benefit provided for in the Agreement shall not be reduced
(except as provided in clause (3) of the definition of Severance Benefits) by any
compensation earned by the Executive as the result of employment by another employer,
by retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Employer, or otherwise.






	4.	 	ADJUSTMENTS.






	 	4.1	 	Notwithstanding any other provisions of this Agreement, in the event it is
determined that any payment or distribution of the Total Payments would be subject to
the Excise Tax, then the Total Payments may be reduced as provided in Section 4.5
below. All determinations required to be made under this Section 4 shall be made by
the Accounting Firm.
	 
	 	4.2	 	For purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) the Accounting
Firm shall make such determination with the assistance of tax counsel (“Tax Counsel”)
reasonably acceptable to the Executive and selected by the Accounting Firm, (ii) no
portion of the Total Payments the receipt or enjoyment of which the Executive shall
have waived at such time and in such manner as not to constitute a “payment” within the
meaning of section 280G(b) of the Code shall be taken into account, (iii) no portion of
the Total Payments shall be taken into account which, in the opinion of Tax Counsel
does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of
the Code, including but not necessarily limited to amounts which, in the opinion of Tax
Counsel, constitutes reasonable compensation for services actually rendered on or after
the Change in Control pursuant to section 280G(b)(4)(A) of the Code, (iv) in
calculating the Excise Tax, amounts treated as an “excess parachute payment” within the
meaning of section 280G(b)(1) of the Code shall be reduced by the portion of the
Executive’s Total Payments which, in the opinion of Tax Counsel, constitutes reasonable
compensation for services actually rendered prior to the Change in Control pursuant to
section 280G(b)(4)(B) of the Code, with reasonable compensation for services actually
rendered prior to the Change in Control being offset against the Base Amount and (v)
the value of any non-cash benefit or any deferred payment or benefit included in the
Total




14









 






	 	 	 	Payments shall be determined by the Accounting Firm in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.
	 
	 	4.3	 	The Accounting Firm’s determinations under this Agreement shall be completed
within sixty (60) days of the Executive’s Severance, shall be set forth in writing
pursuant to Section 4.4 and shall be conclusive and binding on the Executive and the
Company for all purposes. The Company and the Executive shall furnish to the
Accounting Firm such information and documents as the Accounting Firm may reasonably
request in order to make a determination hereunder. The Company shall bear all costs
the Accounting Firm and/or the Tax Counsel may reasonably incur in connection with any
calculations contemplated hereunder.
	 
	 	4.4	 	If the Accounting Firm determines that the unreduced Total Payments (or reduced
payment amount under Section 4.5, if applicable) are not subject to Excise Tax, it
will, at the same time as it makes such determination furnish the Company and the
Executive a written statement setting forth the manner in which such determination was
made and the basis for such determination, including without limitation any opinions or
other advice the Accounting Firm has received from Tax Counsel or other advisors or
consultants,(and any such opinions or advice which are in writing shall be attached to
the statement).
	 
	 	4.5	 	In the event the Accounting Firm determines that the Executive’s Total Payments
are subject to Excise Tax, the Accounting Firm shall also calculate a “reduced payment
amount” by reducing the Executive’s Total Payments to the minimum extent necessary so
that no portion of any of the Total Payments, as so reduced, is subject to Excise
Taxes. The Executive shall receive either (i) the unreduced Total Payments otherwise
due to him or her or (ii) the reduced payment amount described in the preceding
sentence, whichever will provide the Executive with the greater after-tax economic
benefit taking into account for these purposes any applicable Excise Tax as described
in Section 4.6, below. Determination of the reduced payment amount actually payable to
the Executive shall be subject to Section 4.7, below.
	 
	 	4.6	 	When determining under Section 4.5 which of the Total Payments or the reduced
payment amount will produce the greater after-tax economic benefit for the Executive,
the Accounting Firm will take into consideration federal, state and local income taxes
on the (unreduced) Total Payments as well as on the reduced payment amount, including
the phase out of itemized deductions and personal exemptions attributable to the Total
Payments and reduced payment amount, as the case may be, as well as the amount of
Excise Tax to which the Executive would be subject on the unreduced Total Payments.
For purposes of this Section 4.6, (i) the Executive shall be deemed to pay federal
income tax at the highest marginal rate of federal income taxation in the calendar year
in which the applicable unreduced Total Payment or reduced payment amount is to be made
and state and local income taxes at the highest marginal rate of taxation in the state
and locality of the Executive’s residence in the calendar year in which the applicable
unreduced Total Payment or reduced payment amount is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such state
and local taxes and (ii) except to the extent that the Executive otherwise notifies the
Company, the Executive shall be deemed to be subject to the loss of itemized deductions
and personal exemptions to the maximum extent provided by the Code for each dollar of
incremental income.




15









 






	 	4.7	 	Where the Accounting Firm has determined under Section 4.5 that the reduced
payment amount will be of greater economic benefit to the Executive than would the
unreduced Total Payments, then such reduced payment amount will be determined by
reducing the Total Payments otherwise payable to the Executive, in the following order:






	 	(1)	 	first, by eliminating the acceleration of
vesting of any stock options for which the exercise price exceeds the
fair market value (and if there is more than one option award so
outstanding, then the acceleration of the vesting of the most “under
water” option shall be reduced first, and so-on);
	 
	 	(2)	 	second, by reducing any cash payments not
subject to Code section 409A;
	 
	 	(3)	 	third, by reducing any benefit continuation
payments (and if there be more than one such payment, by reducing the
payments in reverse order, with the payments made the earliest being
reduced first);
	 
	 	(4)	 	fourth, by reducing any cash payments that are
subject to Code section 409A (and if there be more than one such
payment, by reducing the payments in reverse order, with the payments
made the earliest being reduced first);
	 
	 	(5)	 	fifth, by reducing the payments of any
restricted stock, restricted stock units, phantom shares, performance
share units, performance shares or similar equity-based awards that
have been awarded to the Executive by the Company that are subject to
performance-based vesting (and if there be more than one such award
held by Executive, by reducing the awards in the reverse order of the
date of their award, with the most-recently awarded reduced first and
the oldest award reduced last);
	 
	 	(6)	 	sixth, by reducing the payments of any
restricted stock, restricted stock units, phantom shares, performance
share units, performance shares or similar equity-based awards that
have been awarded to the Executive by the Company that are subject to
time-based vesting (and if there be more than one such award held by
Executive, by reducing the awards in the reverse order of the date of
their award, with the most-recently awarded reduced first and the
oldest award reduced last); and
	 
	 	(7)	 	seventh, by reducing the acceleration of
vesting of any stock options that are not described in (1), above.






	 	4.8	 	Where the Accounting Firm has determined that the Total Payments are subject to
Excise Tax, and that the unreduced Total Payments will be of greater economic benefit
to the Executive than the reduced payment amount, then the federal, state and local
income or other tax returns filed by the Executive shall be prepared and filed on a
consistent basis with the determination of the Accounting Firm with respect to the
Excise Tax. The Executive shall make proper payment of any Excise Tax, and at the
request of the Company, provide to the Company true and correct copies (with any
amendments) of his/her federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents reasonably requested by the
Company evidencing such payment, provided that any information unrelated to the Excise
Tax may be deleted from the copies of the returns and documents delivered to the
Company.




16









 






	 	4.9	 	The Executive shall provide the Company prompt notice of any claim by or
other correspondence from the Internal Revenue Service or other applicable taxing
authority relating to the application of Excise Tax to the Total Payments.
	 
	 	4.10	 	The provisions of this Section 4 shall survive the termination or expiration of
this Agreement for any reason.






	5.	 	NOTICE OF TERMINATION.






	 	5.1	 	During the Term, any purported termination of the Executive’s employment (other
than by reason of death) shall be communicated by written notice of termination from
the Employer to the Executive or the Executive to the Employer in accordance with
Section 7.9, and shall follow the applicable procedures set forth in this Section 5.
	 
	 	5.2	 	The notice of termination shall indicate the specific termination provision in
the Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. A notice of termination for Cause shall include a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Employer Board at a meeting of the
Employer Board which was called and held for the purpose of considering such
termination (after reasonable notice to the Executive of no less than thirty (30) days
and an opportunity for the Executive, together with the Executive’s counsel, to be
heard before the Employer Board and to have no less than thirty (30) days to
substantially cure the acts or omissions that are the basis for Executive’s termination
of employment) finding that, in the good faith opinion of the Employer Board, the
Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of
Cause herein, and specifying the particulars thereof in detail.
	 
	 	5.3	 	The notice of termination shall specify the date of termination which, in the
case of a termination by the Employer, shall not be less than thirty (30) days (except
in the case of a termination for Cause, in which case the provisions of Section 5.2
shall control) and, in the case of a termination by the Executive, shall not be less
than thirty (30) days nor more than sixty (60) days, respectively, from the date such
notice of termination is given.






	 	(1)	 	Once the Employer or the Executive has specified a date of
termination in a notice of termination, the date of termination cannot be
changed by the Employer or the Executive except by mutual consent.
	 
	 	(2)	 	The date of termination must be at least 30 days after the
notice of termination unless the termination is for Good Reason and Good Reason
first occurs during the last 30 days of the Term (determined without regard to
this Section 5.3(2)), in which event the date of termination shall be (i) the
end of the Term (determined without regard to this Section 5.3(2)) if the
Employer receives notice of the Executive’s intent to terminate for Good Reason
ten days or more before the end of the Term (determined without regard to this
Section 5.3(2)) or (ii) the later of ten days after receipt by the Employer of
notice of the Executive’s intent to terminate for Good Reason or five days
after the end of the Term (determined without regard to this Section 5.3(2)) if




17









 






	 	 	 	the Employer does not receive notice of the Executive’s intent to terminate for
Good Reason ten days or more before the end of the Term (determined without
regard to this Section 5.3(2)).






	 	5.4	 	Failure by the Employer to follow the procedures set forth in this Section 5
shall result in (i) in the case of a purported termination for Cause, any actual
termination being deemed to be and being treated for all purposes of this Agreement as
a termination without Cause and (ii) Good Reason for termination by the Executive of
the Executive’s own employment.






	6.	 	RESTRICTIVE COVENANTS.






	 	6.1	 	Confidential Information. The Executive agrees that during the Executive’s
employment and at all times thereafter during the Severance Period, the Executive will
not, directly or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the Executive’s assigned duties
and for the benefit of the Employer, either during the period of the Executive’s
employment or at any time thereafter, any nonpublic, proprietary or confidential
information, knowledge or data relating to the Employer, any of its subsidiaries,
affiliated companies or businesses, which shall have been obtained by Executive during
the Executive’s employment with the Employer. This Section 6.1 applies to, but is not
limited to, the Employer’s, and its parent’s, subsidiaries’, and affiliates’ legal
matters, technical data, systems and programs, financial and planning data, business
development or strategic plans or data, marketing strategies, software development,
product development, pricing, customer information, trade secrets, personnel
information, and other privileged or confidential business information.
	 
	 	 	 	The foregoing shall not apply to information that (i) was known to the public prior
to its disclosure to the Executive; (ii) becomes known to the public subsequent to
disclosure to the Executive through no wrongful act of Executive or any
representative of the Executive; or (iii) the Executive is required to disclose by
applicable law, regulation or legal process (provided that Executive provides the
Employer with prior notice of the contemplated disclosure and reasonably cooperates
with the Executive at its expense in seeking a protective order or other appropriate
protection of such information). Notwithstanding clauses (i) and (ii) of the
preceding sentence, the Executive’s obligation to maintain such disclosed
information in confidence shall not terminate where only portions of the information
are in the public domain.
	 
	 	6.2	 	Non-Solicitation. The Executive agrees that during the Executive’s employment
and at all times thereafter during the Severance Period, the Executive will not,
directly or indirectly, individually or on behalf of any other person, firm,
corporation or other entity, knowingly solicit, aid or induce (i) any employee of the
Employer to leave such employment in order to accept employment with or render services
to or with any other person, firm, corporation or other entity unaffiliated with the
Employer or knowingly take any action to materially assist or aid any other person,
firm, corporation or other entity in identifying or hiring any such employee, or (ii)
any customer of the Employer to purchase goods or services then sold by the Employer or
from another person, firm, corporation or other entity or assist or aid any other
persons or entity in identifying or soliciting any such customer.




18









 






	 	6.3	 	Non-Disparagement. The Executive agrees that during the Executive’s employment
and at all times thereafter during the Severance Period, the Executive will not to
make, participate in the making of, or encourage any other person to make, any
statements, written or oral, that criticize or disparage the Employer, the Company or
any Affiliate, or their respective employees, officers, directors, products or
services. The Employer agrees that it shall use its best reasonable efforts to assure
that none of its executive officers or directors make, participate in the making of, or
encourage any other person to make, any statements, written or oral, that criticize or
disparage the Executive. Notwithstanding the foregoing, statements made in the course
of sworn testimony in administrative, judicial or arbitral proceedings (including,
without limitation, depositions in connection with such proceedings) shall not be
subject to this requirement.
	 
	 	6.4	 	Reasonableness. In the event the provisions of this Section 6 shall ever be
deemed to exceed the time, scope or geographic limitations permitted by applicable
laws, then such provisions shall be reformed to the maximum time, scope or geographic
limitations, as the case may be, permitted by applicable laws.
	 
	 	6.5	 	Equitable Relief.






	 	(1)	 	The Executive acknowledges that the restrictions contained in
this Section 6 are reasonable and necessary to protect the legitimate interests
of the Employer, that the Employer would not have entered into the Agreement in
the absence of such restrictions, and that any violation of any provision of
this Section 6 will result in irreparable injury to Employer. By entering into
the Agreement, the Executive represents that his or her experience and
capabilities are such that the restrictions contained in this Section 6 will
not prevent the Executive from obtaining employment or otherwise earning a
living at the same general level of economic benefit as is currently the case.
The Executive further represents and acknowledges that (i) he or she has been
advised by Employer to consult his or her own legal counsel in respect of this
Agreement, and (ii) that he or she has had full opportunity, prior to agreeing
to enter into the Agreement, to review thoroughly this Agreement with his or
her counsel.
	 
	 	(2)	 	The Executive agrees that the Employer shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Section 6, which rights shall
be cumulative and in addition to any other rights or remedies to which Employer
may be entitled. In the event that any of the provisions of this Section 6
should ever be adjudicated to exceed the time, geographic, service, or other
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service, or other limitations permitted by applicable law.
	 
	 	(3)	 	The Executive irrevocably and unconditionally (i) agrees that
any suit, action or other legal proceeding arising out of this Section 6,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief or other equitable relief, may be
brought in the United States District Court for the Northern District of
California, or if such




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	 	 	 	court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in California, (ii) consents
to the non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waives any objection which the Executive may have to the
laying of venue of any such suit, action or proceeding in any such court.
Executive also irrevocably and unconditionally consents to the service of any
process, pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 7.9.






	 	6.6	 	Survival of Provisions. The obligations contained in this Section shall
survive the termination of the Executive’s employment with the Employer and shall be
fully enforceable thereafter.






	7.	 	GENERAL PROVISIONS.






	 	7.1	 	Except as otherwise provided herein or by law, no right or interest of the
Executive under the Agreement shall be assignable or transferable, in whole or in part,
either directly or by operation of law or otherwise, including without limitation by
execution, levy, garnishment, attachment, pledge or in any manner; no attempted
assignment or transfer thereof shall be effective; and no right or interest of the
Executive under the Agreement shall be liable for, or subject to, any obligation or
liability of such Executive. When a payment is due under the Agreement to an Executive
who is unable to care for his or her affairs, payment may be made directly to the
Executive’s legal guardian or personal representative.
	 
	 	7.2	 	If the Employer, the Company or any Affiliate is obligated pursuant to
applicable law or by virtue of being a party to a contract (other than this Agreement)
to pay severance pay, a termination indemnity, notice pay or the like or if the
Employer, the Company or any Affiliate is obligated by law to provide advance notice of
separation (“Notice Period”), then any Severance Payment hereunder shall be reduced by
the amount of any such severance pay, termination indemnity, notice pay or the like, as
applicable, and by the amount of any compensation received during any Notice Period.
	 
	 	7.3	 	Neither the entering into of this Agreement, nor the payment of any benefits
hereunder shall be construed as giving the Executive, or any person whomsoever, the
right to be retained in the service of the Employer, and the Executive shall remain
subject to discharge to the same extent as if the Agreement had never been executed.
	 
	 	7.4	 	If any provision of the Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and the
Agreement shall be construed and enforced as if such provisions had not been included.
	 
	 	7.5	 	The Company, the Employer and the Executive intend for the Agreement to comply
with the requirements of Code section 409A such that none of the
payments hereunder will result in compensation to be includible in the Executive’s
income pursuant to Code section 409A(a)(1)(A). The Agreement shall be interpreted in
a manner consistent with such intent.
	 
	 	 	 	If any provision of the Agreement would cause compensation to be includible in




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	 	 	 	the Executive’s income pursuant to Code section 409A(a)(1)(A), such provision shall be
void, and the Employer shall have the unilateral right to amend the Agreement
retroactively for compliance with Coode section 409A in such a way as to achieve
substantially similar economic results without causing such inclusion. Any such
amendment shall be binding on the Executive. In the event the Agreement does not
comply with the requirements of Code section 409A, the Executive will be solely
responsible for any adverse tax consequences to the Executive.
	 
	 	7.6	 	The Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the Employer and its successors and assigns, and by the Executive and by
the personal and legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees of the Executive. If the Executive shall die while
any amount would still be payable to such Executive (other than amounts which, by their
terms, terminate upon the death of the Executive) if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of the Agreement to the executors, personal representatives or
administrators of the Executive’s estate.
	 
	 	7.7	 	The headings and captions herein are provided for reference and convenience
only, shall not be considered part of the Agreement, and shall not be employed in the
construction of the Agreement.
	 
	 	7.8	 	The Agreement shall not be funded. The Executive shall not have any right to,
or interest in, any assets of the Employer which may be applied by the Employer to the
payment of benefits or other rights under the Agreement.
	 
	 	7.9	 	All notices and all other communications provided for in the Agreement (i)
shall be in writing, (ii) shall be hand delivered, sent by overnight courier or by
United States registered mail, return receipt requested and postage prepaid, addressed,
in the case of the Employer, to the principal office of the Employer, attention
President, and in the case of the Company, to 2855 Campus Drive, San Mateo, California
94403, attention General Counsel, and in the case of the Executive, to the last known
address of the Executive, and (iii) shall be effective only upon actual receipt.
	 
	 	7.10	 	The Agreement shall be construed and enforced according to the laws of the
State of Delaware (without giving effect to the conflict of laws principles thereof) to
the extent not preempted by federal law, which shall otherwise control.





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EXHIBIT A




WAIVER AND RELEASE OF CLAIMS



In consideration of, and subject to, the payment to be made to me by ___
(the “Employer”)
of the “Severance Payment” and the “Prorated Target Bonus Amount” (in each case as defined in the
Severance Agreement, dated as of ___, entered into between me and the Company (the
“Agreement”)), I hereby waive any claims I may have for employment or re-employment by the Employer
or any parent or subsidiary of the Employer after the date hereof, and I further agree to and do
release and forever discharge the Employer and any parent or subsidiary of the Employer, and their
respective past and present officers, directors, shareholders, insurers, employees and agents from
any and all claims and causes of action, known or unknown, arising out of or relating to my
employment with the Employer or any parent or subsidiary of the Employer, or the termination
thereof, including, but not limited to, wrongful discharge, breach of contract, tort, fraud, the
Civil Rights Acts, Age Discrimination in Employment Act as amended by the Older Workers’ Benefits
Protection Act, Employee Retirement Income Security Act of 1974, Americans with Disabilities Act,
or any other federal, state or local legislation or common law relating to employment or
discrimination in employment or otherwise; provided however, that no claim that I may have against
the Employer in any capacity other than as an Employer shall be waived pursuant to this Waiver and
Release.



Notwithstanding the foregoing or any other provision hereof, nothing in this Waiver and Release of
Claims shall adversely affect (i) my rights to ongoing Severance Benefits under the terms of the
Agreement; (ii) my rights to benefits (other than severance payments or benefits) under plans,
programs and arrangements of the Employer or any parent or subsidiary of the Employer; (iii) my
rights to indemnification under any indemnification agreement, applicable law or the certificates
of incorporation or bylaws of the Employer or any parent or subsidiary of the Employer, (iv) my
rights under any director’s and officers’ liability insurance policy covering me, (v) my workers
compensation rights, or (vi) my unemployment insurance rights.



I acknowledge that I have signed this Waiver and Release of Claims voluntarily, knowingly, of my
own free will and without reservation or duress, and that no promises or representations have been
made to me by any person to induce me to do so other than the promise of payment set forth in the
first paragraph above and the Employer’s acknowledgment of my rights reserved under the second
paragraph above.



I understand that this release will be deemed to be an application for benefits under the Agreement
and that my entitlement thereto shall be governed by the terms and conditions of the Agreement and
any applicable plan. I expressly hereby consent to such terms and conditions.



I acknowledge that (i) I am waiving any rights or claims I might have under the Age Discrimination
in Employment Act, as amended by the Older Workers Benefit Protection Act (“ADEA”); (ii) I have
received consideration beyond that to which I was previously entitled; (iii) I have been given
forty-five (45) days to review and consider this Waiver and Release of Claims (unless I have signed
a written waiver of such review and consideration period); (iv) I have had the opportunity to
consult with an attorney or other advisor of my choice and have been advised by the Company to do
so if I choose; and (vi) I have been separately furnished a written schedule of all persons, listed
by job title and age, within the affected decisional unit who were selected and not selected for
the benefits extended by this Agreement, as may be required by the ADEA. I may revoke this Waiver
and Release of Claims seven days or less after its execution by providing written notice to the
Employer.






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I acknowledge that it is my intention and the intention of the Employer in executing this Waiver
and Release of Claims that the same shall be effective as a bar to each and every claim, demand and
cause of action hereinabove specified. In furtherance of this intention, I hereby expressly waive
any and all rights and benefits conferred upon me by the provisions of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, to the extent applicable to me, and expressly I consent that this Waiver and
Release of Claims shall be given full force and effect according to each and all of its express
terms and provisions, including as well those related to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims, demands and causes of
action hereinabove specified. SECTION 1542 provides:





“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.”


I acknowledge that I may hereafter discover claims or facts in addition to or different from those
which I now know or believe to exist with respect to the subject matter of this Waiver and Release
of Claims and which, if known or suspected at the time of executing this Waiver and Release of
Claims, may have materially affected this settlement.



Finally, I acknowledge that I have read this Waiver and Release of Claims and understand all of its
terms.




	 	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 

	 	 
	 

	 	Name
	 
	 	 
	 

	 	 
	 

	 	Date Signed






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EXHIBIT B




Assignment and Assumption of

Severance Agreement

Between                      and

                    ,

As of                     



                     (the “Old Employer”) and                      (the “Executive”) have entered into a
Severance Agreement dated                      (the “Agreement”). The Executive is transferring
employment from the Old Employer to                      (the “New Employer”), effective ___. The
fourth bullet of the Agreement provides that, if the Executive transfers to the Company or an
Affiliate, the Old Employer shall assign the Agreement to the Company or Affiliate. To order to
carry out the provisions of the fourth bullet of the Agreement —





	1.	 	The Old Employer hereby assigns the Agreement to the New Employer.
	 
	2.	 	The New Employer hereby assumes the obligations of the Old Employer under the Agreement.
	 
	3.	 	The assignment and assumption are effective as of the date employment is transferred.
	 
	4.	 	The Executive hereby acknowledges receipt of notice of the assignment and assumption.





	 	 	 	 	 	 	 	 	 	 	 
	THE OLD EMPLOYER	 	 	 	THE NEW EMPLOYER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

	 	 
	 	Name:
	 	 

	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 






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