<DOCUMENT>

<TYPE>EX-99

<SEQUENCE>2

<FILENAME>ex991.txt

<DESCRIPTION>EX 99.1 AMENDED & RESTATED AGREEMENT STOTLAR

<TEXT>

EXHIBIT 99.1

 

 

                  AMENDED AND RESTATED SEVERANCE AGREEMENT

                           (NON-CHANGE IN CONTROL)

 

 

THIS  AMENDED AND RESTATED SEVERANCE AGREEMENT (NON-CHANGE IN CONTROL), dated

as of and  effective  June  21,  2010,  is  by  and between Con-way Inc. (the

"Employer"), and Douglas W. Stotlar (the "Executive").

 

 

WHEREAS, the Employer and the Executive entered into  a  Severance  Agreement

(Change  in  Control)  dated as of December 18, 2009 which, on the terms  and

subject to the conditions  contained  therein,  provides  for the Employer to

make available to the Executive certain severance payments  and  benefits  in

connection  with  a  Change  in  Control  (as  defined  in  the CIC Severance

Agreement);

 

 

WHEREAS,  the  Employer  and  the  Executive  also  entered  into a Severance

Agreement  (Non-Change  in  Control)  dated  as  of  December  18, 2009  (the

"Original  Agreement")  to  set  forth the terms and conditions on which  the

Employer agreed to make available to the Executive certain severance payments

and benefits in the event of the Executive's  termination  of  employment  in

certain circumstances other than in connection with a Change in Control;

 

 

WHEREAS,  the  Employer and the Executive subsequently entered into Amendment

No. 1 to Severance  Agreement (Non-Change in Control) dated as of January 25,

2010 ("Amendment No. 1") in order to amend certain covenants contained in the

Original Agreement;

 

 

WHEREAS, the parties  have  discovered  that the Original Agreement contained

unintended language that limited the extent  to  which  qualifying  long-term

incentive  awards  would  be  subject  to  partial  acceleration or pro-rated

vesting  upon  a  Severance,  by  providing  that  only qualifying  long-term

incentive awards granted after the date of the Original  Agreement  would  be

subject to partial acceleration or pro-rated vesting;

 

 

WHEREAS,  the  parties  now  wish  to  enter  into  this Amended and Restated

Severance Agreement (Non Change in Control) in order to amend and restate the

provisions of the Original Agreement (as amended by Amendment No. 1) in order

to  correctly  reflect  their  understanding  that  all qualifying  long-term

incentive  awards  would  be  subject  to partial acceleration  or  pro-rated

vesting upon a Severance;

 

 

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.

 

   * 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 Outplacement  Services  at a cost to the Employer not to exceed

          $90,000; and

 

     (iii)The Severance Benefits for a  period  of  24  months  following the

          Severance Date (the "Severance Period").

 

   In addition, if the Executive incurs a Severance the Executive's  unvested

   Qualifying Long-Term Incentive Awards shall vest in accordance with and to

   the  extent  provided  in the Vesting Provisions, using a number of months

   (the "Number of Months")  equal  to  24.  Nothing  in this Agreement shall

   modify or otherwise affect the vesting provisions or other terms of any of

   Executive's long-term incentive awards which are not  Qualifying Long-Term

   Incentive Awards.

 

   * Notwithstanding the definition of the term "Severance"  in the Terms and

     Conditions,  for  purposes  of  this  Agreement  a Severance shall  also

     include  a  Termination  for  Good  Reason  and (subject  to  the  other

     provisions of this Agreement) upon a Termination  for  Good  Reason  the

     Executive  shall  be  entitled  to  receive from the Employer all of the

     payments and benefits described above.

 

 

   "Termination for Good Reason" means termination  by  the  Executive of the

   Executive's                                                     employment

   following the occurrence (without the Executive's express written consent)

   of the following act by the Employer, unless such act is corrected  within

   30  days  of  receipt  by  the  Employer  of  the  Executive's  notice  of

   Termination for Good Reason:

 

 

   (1)A  reduction  of twenty percent (20%) or more in the Executive's target

     total  direct  compensation   (determined  using  the  midpoint  of  the

     applicable long-term incentive  compensation opportunity range), made by

     the  Employer in anticipation of,  or  within  twenty-four  (24)  months

     after,  the sale or other disposition (including by way of a spin-off or

     similar transaction)  by  the  Company  of  one  or  more  of  its three

     principal  operating  units.   As  used  herein,  "target  total  direct

     compensation"  means  the  Executive's annual base salary, target annual

     bonus and target long-term incentive compensation opportunity.

 

 

   Notwithstanding the definition  of  "Severance  Payment"  in  the attached

   Terms and Conditions, in the event of a Termination for Good Reason  based

   upon  clause  (1)  above,     "Severance Payment" shall mean a payment, in

   lieu of any other severance payment  or  severance 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 as in effect immediately  prior  to the

   reduction  in  target  total direct compensation referred to in clause (1)

   above  and  (B)  the  Executive's  Target  Bonus  for  the  calendar  year

   immediately prior to the calendar year in which the Severance occurs.

 

 

   Except in the case of a  Termination  for Good Reason, in no event shall a

   "Severance" occur if the Executive terminates  his  or her employment with

   the Employer for any reason. The term "Cause" shall not include any actual

   or  anticipated  failure  by  the Executive to substantially  perform  the

   Executive's duties with the Employer  after  the issuance by the Executive

   of a notice of Termination for Good Reason.

 

 

   * Any Termination for Good Reason shall be communicated  by written notice

     from the Executive to the Employer in accordance with Section 7.9 of the

     Terms  and  Conditions.  A  Notice of Termination for Good Reason  shall

     indicate the specific provision  in  the Agreement relied upon and shall

     set forth in reasonable detail the facts  and  circumstances  claimed to

     provide  a  basis  for  Termination  for  Good  Reason.  The  notice  of

     termination  shall specify the termination date, which shall not be less

     than thirty (30)  days nor more than sixty (60) days, respectively, from

     the date such notice  is given and which (notwithstanding the definition

     of "Severance Date" in  the  Terms  and Conditions) shall constitute the

     "Severance Date" for purposes of the  Agreement.  Once the Executive has

     specified a date of termination in a notice of termination,  the date of

     termination may not be changed except by mutual consent of the  Employer

     and the Executive.

 

 

   * 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.

 

 CON-WAY INC.                             EXECUTIVE

 

 By: ___________________________          By:

 Name:  Jennifer W. Pileggi               ______________________________

 Title: EVP General Counsel &             Name:     Douglas W. Stotlar

 Secretary

 

 

 

 

 

TERMS AND CONDITIONS OF AMENDED AND RESTATED SEVERANCE AGREEMENT (NON-CHANGE

                                   IN CONTROL)

 

                              Table of Contents

 

          1.  Definitions.................................................1

          2.  Prior Arrangements; CIC Severance Agreements................5

          3.  Compensation other than Severance Payment and

                   Severance Benefits ....................................6

          4.  Severance Payment and Severance Benefits;

                   Outplacement Services; Vesting of Qualifying

                   Long-Term Incentive Awards.............................6

          5.  Notice of Termination.......................................8

          6.  Restrictive Covenants.......................................8

          7.  General Provisions.........................................11

 

          Exhibit A - Waiver and Release of Claims.......................13

          Exhibit B - Assignment and Assumption of Agreement.............15

 

 

   1.DEFINITIONS.  As hereinafter used:

 

     "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  Amended  and  Restated  Severance Agreement (Non-

     Change  in  Control) to which these Terms and Conditions  are  attached,

     including the  Terms and Conditions, which are incorporated by reference

     in the Agreement.

 

     "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)

     fraud,  misappropriation or embezzlement by the  Executive  against  the

     Employer, the Company or any Affiliate, (ii)

     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)

     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 (iii) 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 (ii)  and

     (iii)  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.

 

     "Change  in  Control"  has  the  meaning  set forth in the CIC Severance

     Agreement.

 

     "CIC  Severance  Agreement"  means the Severance  Agreement  (Change  in

     Control) dated as of December  18, 2009, as amended, entered into by the

     Executive and the Employer.

 

     "COBRA"  means the Consolidated Omnibus  Budget  Reconciliation  Act  of

     1985, as amended, supplemented or substituted from time to time.

 

     "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.

 

     "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. The last bullet of the Agreement

     provides  that,  if  the  Executive  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.

 

     "Executive" means the individual specified in the first paragraph of the

     Agreement.

 

     "Health Benefits" means health maintenance organization, insured or

     self-funded medical, dental, vision, prescription drug and behavioral

     health benefits.

 

 

     "Involuntary  Termination"  means   the   actual   termination   of  the

     Executive's  employment by the Employer for any reason other than death,

     Disability, Cause or Change in Control. Under no circumstances shall any

     alleged  constructive   termination   of   the   Executive's  employment

     constitute an Involuntary Termination.

 

 

     "Number of Months" has the meaning specified in the Agreement.

 

     "Outplacement   Services"   means  professional  outplacement   services

     determined by the Employer to  be  suitable to the Executive's position.

     The maximum amount that the Employer  will  pay for such services is set

     forth  in  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 in the Agreement,  and  (ii) 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.

 

     "Qualifying Long-Term Incentive Award" means:

 

     (i)  a stock option,  stock appreciation right ("SAR") or similar award,

          or  a restricted stock  or  restricted  stock  unit  ("RSU")  award

          (whether cash-based or equity-based, and whether payable in cash or

          in stock);

 

     (ii) that is outstanding on the Severance Date;

 

     (iii)that has a vesting period that is longer than one year in duration;

          and

 

     (iv) that  is  non-performance-based  or, if performance-based, is based

          solely on changes in the price of the Company's common stock.

 

 

     "Severance" means an Involuntary Termination.

 

     "Severance  Benefits" means 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 Date. To the extent possible, the Health Benefits shall

     be provided at the Employer's expense  through COBRA, in accordance with

     the  applicable plans, programs or policies  of  the  Company.  For  any

     portion  (if  any)  of the Severance Period in which the Health Benefits

     cannot be provided through  COBRA, the Employer 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).

 

     The Health Benefits 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)The Health Benefits 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)The Health Benefits 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

        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  Health  Benefits otherwise

     available, except to the extent the Executive's spouse elects to receive

     such benefits from his or her employer;

 

     The Employer shall reimburse the Executive for the excess,  if  any,  of

     the  cost to the Executive of Health Benefits over such cost immediately

     prior to the Severance.

 

     If the  Executive  dies,  the  Employer  shall  continue  to provide the

     Executive's dependents with the Health Benefits otherwise receivable  on

     the same basis as if the Executive had survived.

 

     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 5.2.

 

     "Severance Multiple" has the meaning set forth in 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  time  of Severance and (B)

     the Executive's Target Bonus for the calendar year immediately  prior to

     the calendar year in which the Severance occurs.

 

     "Severance Period" has the meaning set forth in 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.

 

     "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 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"  means  reputable  outside  tax counsel retained  by  the

     Employer and reasonably acceptable to the Executive.

 

     "Taxes" means all federal, state, local and  other  taxes, to the extent

     applicable to all or any part of the Severance Payment  and/or Severance

     Benefits.

 

     "Terms and Conditions" means these terms and conditions.

 

     "Vesting Provisions" means:

 

     (a)for  each stock option, stock appreciation right ("SAR")  or  similar

        award,  and  for  each  non-performance  based  restricted  stock  or

        restricted  stock  unit  ("RSU")  award,  in  each  case  that  is  a

        Qualifying   Long-Term   Incentive   Award   scheduled   to  vest  in

        installments over time, all unvested options, SARs or similar  units,

        shares  of  restricted  stock or RSUs included in such award that are

        scheduled to vest on or before  the date that is the Number of Months

        after the Severance Date shall vest; and

 

     (b)for  each  stock option, SAR or similar  award,  and  for  each  non-

        performance based restricted stock or RSU award, in each case that is

        a Qualifying  Long-Term  Incentive  Award subject to cliff-vesting, a

        percentage of the award shall vest, with the percentage determined by

        dividing the Number of Months by the  total  number  of months in the

        cliff-vesting period.

 

        Example 1: Assume the Number of Months applicable to Executive  A  is

        18.  On  January  26,  2009 Executive A received a stock option grant

        that is scheduled to vest  in three equal installments, on January 1,

        2010, January 1, 2011 and January 1, 2012, respectively.  Executive A

        incurs a Severance on December  20,  2009.  On the Severance Date the

        stock option installments scheduled to vest on  January  1,  2010 and

        January  1, 2011 would vest but the installment scheduled to vest  on

        January 1,  2012 (more than 18 months after the Severance Date) would

        not vest under the Vesting Provisions.

 

        Example 2:  Assume  the Number of Months applicable to Executive A is

        18. On January 26, 2009  Executive  A  received  a  grant  of  10,000

        restricted  stock  units  with  36  month  cliff vesting. Executive A

        incurs a Severance on December 20, 2009.  On the Severance Date 5,000

        restricted stock units (18 months/36 months)  would  vest  under  the

        Vesting Provisions.

 

2.   PRIOR ARRANGEMENTS; CIC SEVERANCE AGREEMENTS.

 

 

     2.1The  parties  agree that all prior employment, separation, severance,

        termination, change  of control, or similar agreements, arrangements,

        or plans (other than the  CIC  Severance  Agreement), whether oral or

        written, covering the Executive are terminated and superseded and any

        notice periods with respect to such terminations are deemed satisfied

        or explicitly waived.

 

 

     2.2The  parties  further  agree  that  the  CIC Severance  Agreement  is

        intended to provide for severance payments  and  benefits  to be made

        available  to  the  Executive  (on  the  terms  and  subject  to  the

        conditions  contained  therein)  only  upon a qualifying severance in

        connection  with  a Change in Control, and  that  this  Agreement  is

        intended to provide  for  severance  payments and benefits to be made

        available to the Executive (on the terms  and  subject  to conditions

        contained  herein)  only  in  connection  with a qualifying severance

        occurring other than in connection with a Change  in  Control.  In no

        event  and under no circumstances shall the Executive be entitled  to

        receive  severance payments and benefits under both the CIC Severance

        Agreement and under this Agreement.

 

3.   COMPENSATION OTHER THAN SEVERANCE PAYMENT AND SEVERANCE BENEFITS.

 

     3.1If 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,

        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.

 

     3.2If 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.

 

4.   SEVERANCE PAYMENT AND SEVERANCE BENEFITS; OUTPLACEMENT SERVICES; VESTING

     OF QUALIFYING LONG-TERM INCENTIVE AWARDS.

 

     4.1Subject to the other provisions of this Agreement (including, without

        limitation,  Section  5  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  Severance

        Benefits and the Outplacement Services.  In addition, the Executive's

        unvested  Qualifying  Long-Term  Incentive  Awards   shall   vest  in

        accordance with and to the extent provided in the Vesting Provisions.

 

     4.2The Employer shall pay to the Executive the Severance Payment 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 4.2.  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.

 

     4.3The Executive shall not be eligible to receive the Severance Payment,

        Severance Benefits or Outplacement Services 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  on  or  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 or any part of

        the  Severance Payment, the Severance Benefits  or  the  Outplacement

        Services.

 

     4.4In 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 and the claims procedure  set  forth in Section

        15  of  the  EIP shall apply with the Employer Board 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.

 

     4.5Any  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 4.4 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.

 

        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).

 

     4.6The Employer shall pay to the  Executive  all legal fees and expenses

        incurred  by  the Executive in seeking in good  faith  to  obtain  or

        enforce any benefit  or right provided by the Agreement. 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.

 

     4.7The Employer agrees that, if the Executive incurs  a  Severance,  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 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.

 

5.   NOTICE OF TERMINATION.

 

     5.1 Any Involuntary Termination  shall be communicated by written notice

        from the Employer to the Executive  in  accordance  with Section 7.9,

        and shall follow the applicable procedures set forth  in this Section

        5.  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.

 

     5.2The notice of termination from the Employer shall specify the date of

        termination, which shall not be less than ten (10) days from the date

        such notice of termination is given. Once the Employer  has specified

        a  date  of  termination  in  a  notice  of termination, the date  of

        termination  may  not  be  changed except by mutual  consent  of  the

        Employer and the Executive.

 

6.   RESTRICTIVE COVENANTS.

 

 

     6.1Confidential  Information.   The   Executive   agrees,   during   the

        Executive's  employment  and  at all times thereafter, that he or she

        shall  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

        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  Employer,  any  of  its

        subsidiaries, affiliated companies  or  businesses,  which shall have

        been obtained by the 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  the  Executive or any  representative  of  the

        Executive;  or  (iii)  the  Executive  is  required  to  disclose  by

        applicable  law,  regulation or  legal  process  (provided  that  the

        Executive provides  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.

 

 

     6.2Non-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 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.

 

     6.3Non-Disparagement.   The  Executive  agrees,  during  the Executive's

        employment  and at all times thereafter, 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.

 

      6.4Reasonableness.  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.

 

     6.5Equitable Relief.

 

        (a)Executive acknowledges  that  the  restrictions  contained in this

          Section  6  are reasonable and necessary to protect the  legitimate

          interests of  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.

 

          (b)Executive agrees that 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.

 

        (c)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

          Employer  or  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 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  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.

 

 

     6.6Survival of Provisions.  The obligations  contained  in  this Section

        shall survive the termination of Executive's employment with Employer

        and shall be fully enforceable thereafter.

 

7.   GENERAL PROVISIONS.

 

     7.1Except  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.

 

     7.2If  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.

 

     7.3Neither 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.

 

     7.4If  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.

 

     7.5The 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  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.

 

     7.6The 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 the 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.

 

     7.7The  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.

 

     7.8The 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.

 

     7.9All  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.

 

    7.10The 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.

 

***********

                                                                    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" (in each case as

defined  in  the  Amended  and Restated Severance  Agreement  (Non-Change  in

Control), dated as of _________,  entered  into  between  me and the Employer

(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 Employer 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.

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

 

 

***********

 

 

                                                                    EXHIBIT B

 

                        Assignment and Assumption of

                  Amended and Restated Severance Agreement

                          Between ____________ and

                               ______________,

                              As of ___________

 

 

____________  (the  "Old Employer") and ______________ (the "Executive") have

entered into an Amended  and  Restated  Severance  Agreement  (Non-Change  in

Control)   dated   ______________   (the   "Agreement").   The  Executive  is

transferring  employment  from  the  Old Employer to ____________  (the  "New

Employer"), effective ________. The last  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 last 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:                          |                               |

-----------------------------------------------------------------

 

 

 

</TEXT>

</DOCUMENT>