UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 29, 2005
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Date of Report (Date of earliest event reported)
CNF Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-5046 94-1444798
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
2855 Campus Drive, Suite 300, San Mateo, California 94403
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(Address of principal executive offices)
(zip code)
Registrant's telephone number, including area code:
(650) 378-5200
3240 Hillview Avenue, Palo Alto, California 94304
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant
under any of the following provisions (see General Instruction A.2
below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
The Company maintains a number of compensation plans in which the named
executive officers of the Company are eligible to participate. Among these
plans are the Company's 1997 Equity and Incentive Plan, Value Management Plan
and 2005 Deferred Compensation Plan for Executives. At a meeting held on
September 25, 2005, the Compensation Committee of the Board of Directors of
the Company approved amendments to the plans referred to above, as described
below.
1997 Equity and Incentive Plan. The definition of the term "Change in
Control" in the 1997 Equity and Incentive Plan was amended (i) by deleting
clause (v) of the definition (which provided that a sale or other disposition
of two of the Company's three primary business units would constitute a
Change in Control for grantees employed by CNF Inc.) and (ii) by changing the
date referenced in clause (ii) of the definition from January 1, 2003 to
January 1, 2006, so that a Change in Control generally occurs if individuals
who on January 1, 2006 constitute the Board cease for any reason to
constitute a majority of the number of directors.
Value Management Plan. The Value Management Plan was amended to provide
that:
(i) a Plan participant who, as a result of a transfer or transfers, is
employed by more than one business unit during a three-year Plan cycle
will receive a prorated payment (if any) for that cycle based on (A)
the performance of the respective business units during the periods of
time in which he or she was employed by the business units and (B) the
length of time employed by each business unit during the three-year
Plan cycle (with the amount of time determined by measuring from the
first day of the month following the month in which the transfer is
effective in the Company's payroll records);
(ii) for purposes of determining the payment (if any) to which a Plan
participant is entitled for a three-year Plan cycle, a pay increase
that is associated with a promotion and that occurs within three months
following the beginning of the Plan cycle will be given effect;
(iii) the term "Change in Control" has the meaning specified in the Company's
1997 Equity and Incentive Plan, as amended.
The amendments described in clauses (i) and (ii) above are effective
commencing with the 2005 Plan cycle, except that the amendments are not
effective as to covered employees within the meaning of Section 162(m) of the
Internal Revenue Code with respect to a Plan cycle commencing before January
1, 2006.
2005 Deferred Compensation Plan for Executives. The 2005 Deferred
Compensation Plan was amended to provide that for those Plan participants who
will be paid out in cash for their Phantom Stock Units at the time of
distribution, the valuation of the Phantom Stock Units will be based on the
Company's common stock price on (1) the date of separation from service, for
those who elected to receive their distribution in a lump sum upon separation
from service, and (2) the date that is ten (10) days prior to the end of each
calendar quarter for those who elected to receive their distribution in
quarterly installments.
In addition to the amendments to the 2005 Deferred Compensation Plan for
Executives, the Compensation Committee delegated to the Company's Chief
Executive Officer, Chief Financial Officer and General Counsel (any one of
whom may act alone), the duty to elect, in his or her sole discretion, to
make all or part of distributions from a participant's Phantom Stock Account
in the 2005 Deferred Compensation Plan for Executives in cash or in Company
stock, provided that none of the specified officers may make the election as
to his or her own Phantom Stock Account. The Committee made the same
delegation with respect to the Company's Deferred Compensation Plan for
Executives that governs deferrals made prior to January 1, 2005. The
Committee also adopted the claims procedures set forth in the Value
Management Plan for purposes of deciding all claims under the Company's 1997
Equity and Incentive Plan.
Item 1.02 Termination of a Material Definitive Agreement
The Company is party to severance agreements with each of the following
executive officers, which agreements prescribe certain severance benefits to
be provided to the executives in the event of a change in control (as
defined) of the Company.
Douglas W. Stotlar President and Chief Executive Officer
Kevin C. Schick Senior Vice President and Chief Financial Officer
Jennifer W. Pileggi Senior Vice President and General Counsel
David S. McClimon Senior Vice President
Bryan M. Millican Senior Vice President - Sales and Marketing
In addition, Mr. McClimon is party to a severance agreement with Con-Way
Transportation Services, Inc., which agreement prescribes certain severance
benefits to be provided to Mr. McClimon in the event of a change in control
(as defined) of Con-Way Transportation Services, Inc..
Copies of the severance agreements with Messrs. Stotlar and Schick and Ms.
Pileggi are filed as exhibits to the Company's Form 8-K filing dated March 4,
2005. Copies of the severance agreements with Messrs. McClimon, Millican and
Schick are filed as exhibits to the Company's Form 10-Q filing dated August
5, 2005.
Each of the severance agreements described above is currently scheduled to
terminate on December 31, 2006. However, each agreement also contains an
"evergreen" provision that will automatically extend the term of the
agreement for an additional year on January 1 of each year unless, not later
than September 30 of the preceding year, the executive officer, on the one
hand, or the Company or Company subsidiary, as applicable, on the other hand,
gives written notice to the other party of an intention not to extend the
term of the agreement. As a result, absent any such notice, on January 1,
2006 the term of each of the severance agreements described above would
automatically be extended to December 31, 2007.
At a meeting held on September 25, 2005, the Compensation Committee of the
Board of Directors of the Company authorized and directed the Company and the
Company subsidiaries to give the notices not to extend the terms of the
severance agreements described above, and such notices have been sent to the
executive officers. However, at the same meeting the Compensation Committee
authorized the Company to enter into new severance agreements with the
executive officers named above, subject to the Committee's prior approval of
the terms of the new agreements. The Company currently expects that these
new agreements will be entered into before the end of calendar year 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
CNF Inc.
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(Registrant)
September 29, 2005 /s/ Jennifer W. Pileggi
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Jennifer W. Pileggi
Senior Vice President,
General Counsel & Secretary