10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549

Form 10-Q

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 3, 2004 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO _______________

Commission File Number 0-19791

USF CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	36-3790696
(State of Incorporation)	(IRS EmployerIdentification No.)

8550 W. Bryn Mawr Avenue, Suite 700                        Chicago, Illinois	60631
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number
including area code: (773) 824-1000

N/A
(Former name or former address, if changed since the last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes X  No 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 28, 2004, 27,718,021 shares of common stock were outstanding.

PART I: FINANCIAL INFORMATION.

Item 1.  Financial Statements

USF Corporation
Condensed Consolidated Balance Sheets
Unaudited (Dollars in Thousands)

	As of
	April 3, 2004		April 5, 2003
Assets
Current assets:
Cash	$	118,198	$	121,659
Accounts receivable, net		308,343		271,849
Operating supplies and prepaid expenses		35,293		32,014
Deferred income taxes		35,597		33,717
Total current assets		497,431		459,239
Property and equipment, net		747,714		753,902
Goodwill		100,808		100,808
Other assets		44,153		44,139
Total Assets		1,390,106		1,358,088
Liabilities and Stockholders' Equity
Current liabilities:
Current debt		61		60
Accounts payable		49,714		57,286
Accrued salaries, wages and benefits		101,463		93,002
Accrued claims and other		122,094		102,119
Total current liabilities		273,332		252,467
Long-term liabilities
Notes payable and long-term debt		250,071		250,087
Accrued claims and other		99,342		95,084
Deferred income taxes		91,099		95,661
Total Liabilities		713,844		693,299
Commitments and contingencies (Note 7)
Total stockholders' equity		676,262		664,789
Total Liabilites and Stockholders' Equity	$	1,390,106	$	1,358,088
See accompanying Notes to Condensed Consolidated Financial Statements.

2

USF Corporation
Condensed Consolidated Statements of OperationsUnaudited
(Dollars in Thousands, Except Share and Per Share Amounts)

	Quarter Ended
	April 3, 2004			April 5, 2003
Revenue:
LTL Trucking	$	519,697		$	488,863
TL Trucking		34,274			31,750
Logistics		66,437			75,675
Intercompany eliminations		(3,641	)		(2,586	)
		616,767			593,702
Operating expenses:
LTL Trucking		495,659			472,051
TL Trucking		33,462			31,227
Logistics		64,807			75,122
Corporate and Other		9,392			5,236
Intercompany eliminations		(3,641	)		(2,586	)
		599,679			581,050
Income from operations		17,088			12,652
Non-operating income / (expense):
Interest expense		(5,209	)		(5,292	)
Interest income		571			211
Other, net		(390	)		(255	)
Net non-operating expense		(5,028	)		(5,336	)
Income from continuing operations before income taxes and
cumulative effect of accounting change		12,060			7,316
Income tax expense		(4,944	)		(3,076	)
Income from continuing operations before cumulative effect
of accounting change		7,116			4,240
Loss from discontinued operations, net of tax benefits of $5		--			(7	)
Income before cumulative effect of accounting change		7,116			4,233
Cumulative effect of change in accounting for revenue recognition,
net of tax benefits of $1,064		--			(1,467	)
Net income	$	7,116		$	2,766
Income per share from continuing operations:
Basic	$	0.26		$	0.16
Diluted		0.26			0.16
Loss per share--cumulative effect of accounting change:
Basic		--			(0.06	)
Diluted		--			(0.06	)
Net income per share--basic		0.26			0.10
Net income per share--diluted		0.26			0.10
Average shares outstanding--basic		27,556,632			27,005,067
Average shares outstanding--diluted		27,802,815			27,124,223
See accompanying Notes to Condensed Consolidated Financial Statements

3

USF Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited (Dollars in Thousands)

	Year-to-date
	April 3, 2004			April 5, 2003
Cash flows from operating activities:
Net income	$	7,116		$	2,766
Net loss from discontinued operations		--			7
Income from continuing operations after cumulative effect of accounting change		7,116			2,773
Adjustments to reconcile net income from continuing operations after accounting change to net cash provided by operating activities:
Depreciation of property and equipment		26,225			25,903
Cumulative effect of accounting changes net of tax		--			1,467
Amortization of intangible assets		992			259
Deferred taxes		(6,442	)		(4,589	)
Gains on sale of property and equipment		(789	)		(722	)
(Decrease) / increase in other items affecting cash from operating activities		(14,941	)		9,759
Net cash provided by operating activities		12,161			34,850
Cash flows from investing activities:
Acquisition		--			(1,883	)
Mexico loan		(500	)		--
Capital expenditures		(21,445	)		(37,436	)
Proceeds from sale of property and equipment		2,197			1,991
Net cash used in investing activities		(19,748	)		(37,328	)
Cash flows from financing activities:
Dividends paid		(2,562	)		(5,040	)
Employee and director stock transactions		6,703			1,739
Repurchase of common stock		--			(336	)
Net change in short-term bank debt		1			(490	)
Payments on long-term bank debt		(16	)		(255	)
Net cash provided by / (used) in financing activities		4,126			(4,382	)
Net decrease in cash		(3,461	)		(6,860	)
Cash at beginning of period		121,659			54,158
Cash at end of period	$	118,198		$	47,298
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	49		$	157
Income taxes		669			1,170
Non-cash transactions: debt assumed in connection with acquisition		--			2,794
See accompanying Notes to Condensed Consolidated Financial Statements

4

USF Corporation
Condensed Consolidated Statements of Changes in Stockholders’ Equity
Unaudited (Dollars in Thousands)

	Year-to-Date
	April 3, 2004			April 5, 2003
Balance as of December 31, 2003 and 2002, respectively	$	664,789		$	619,131
Net income		7,116			2,766
Foreign currency translation adjustments		238			--
Comprehensive income		7,354			2,766
Employee and director stock transactions		6,703			1,739
Repurchase of common stock		--			(336	)
Dividends declared		(2,584	)		(2,521	)
Balance as of April 3, 2004 and April 5, 2003, respectively	$	676,262		$	620,779
See accompanying Notes to Condensed Consolidated Financial Statements

5

Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

1. Summary of Significant Accounting Policies

Basis of Presentation

These interim financial statements of USF Corporation have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2003. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein.

In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our consolidated financial position as of April 3, 2004, the consolidated results of our operations for the quarters ended April 3, 2004 and April 5, 2003, and our consolidated cash flows for the quarters ended April 3, 2004 and April 5, 2003. Operating results for the quarter ended April 3, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004.

We report on a calendar year basis. Our quarters consist of thirteen weeks that end on a Saturday either before or after the end of March, June and September.

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

2. Earnings Per Share

Basic earnings per share are calculated on net income divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are calculated by dividing net income by the weighted-average number of common shares outstanding plus the shares that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares for the period. Unexercised stock options are the only reconciling items between our basic and diluted earnings per share.

The following table presents information necessary to calculate basic and diluted earnings per share:

	Quarter Ended
	April 3, 2004		April 5, 2003
Weighted-average shares outstanding--basic		27,556,632		27,005,067
Common stock equivalents		246,183		119,156
Weighted-average shares and equivalents--diluted		27,802,815		27,124,223
Anti-dilutive unexercised stock options excluded from calculations		364,834		1,496,300

6

Notes to Condensed Consolidated Financial Statements Continued (Unaudited)
(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

3. Debt

Our debt includes $100,000 of unsecured guaranteed notes due May 1, 2009 and $150,000 of unsecured guaranteed notes due April 15, 2010.

Our guaranteed notes are fully and unconditionally guaranteed, on a joint and several basis, and on an unsecured senior basis, by substantially all of our direct and indirect domestic subsidiaries (the “Subsidiary Guarantors”). All of the assets are owned by the Subsidiary Guarantors and substantially all of our operations are conducted by the Subsidiary Guarantors. Accordingly, the aggregate assets, liabilities, earnings and equity of the Subsidiary Guarantors are substantially equivalent to the assets, liabilities, earnings and equity shown in our consolidated financial statements. Our subsidiaries, other than the Subsidiary Guarantors, are minor. There are no material restrictions on our ability to obtain funds from our subsidiaries by dividend or loan. We, therefore, are not required to present separate financial statements of our Subsidiary Guarantors, and other disclosures relating to them.

We have a $200,000 credit facility with a group of banks that will expire in October 2005. This facility is for working capital, general corporate funding needs, and up to $125,000 for letters of credit under our self-insurance program. As of April 3, 2004 we had no borrowings drawn under the facility and $100,724 in issued letters of credit.

4. Goodwill and Other Intangible Assets

The changes in carrying amounts of goodwill by segment for the year-to-date period ended April 3, 2004 were as follows:

	LTL		TL		Logistics		Total
Balance as of December 31, 2003		57,273		10,878		32,657		100,808
Additions		--		--		--		--
Balance as of April 3, 2004	$	57,273	$	10,878	$	32,657	$	100,808

Intangible assets subject to amortization consist of the following:

			As of April 3, 2004					As of December 31, 2003
	Average Life (Yrs)		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists		5	$	9,514	$	(8,370	)	$	9,444	$	(7,411	)
Non-competes		5		5,347		(5,217	)		5,347		(5,184	)
Total			$	14,861	$	(13,587	)	$	14,791	$	(12,595	)

Aggregate amortization expense for the quarters ended April 3, 2004, and April 5, 2003 was $992 and $259, respectively.

7

Notes to Condensed Consolidated Financial Statements Continued (Unaudited)
(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

Estimated amortization expense for each of the years ending December 31 is as follows:
Year
2004	$	1,960
2005		249
2006		57
Total	$	2,266

5. Segment Reporting

	Quarter Ended
	April 3, 2004			April 5, 2003
Revenue
LTL Trucking		519,697			488,863
TL Trucking		34,274			31,750
Logistics		66,437			75,675
Intercompany eliminations		(3,641	)		(2,586	)
Corporate and Other		--			--
Total Revenue from Continuing Operations	$	616,767		$	593,702
Income From Operations
LTL Trucking		24,038			16,812
TL Trucking		812			523
Logistics		1,630			553
Corporate and Other		(9,392	)		(5,236	)
Income from operations		17,088			12,652
Net non-operating expense		(5,028	)		(5,336	)
Income from continuing operations before income taxes
and cumulative effect of accounting change	$	12,060		$	7,316

8

Notes to Condensed Consolidated Financial Statements Continued (Unaudited)
(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

6. Stock Based Compensation

Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock Based Compensation”, establishes a fair value based method of accounting for stock options. We have elected to continue using the intrinsic value method prescribed under Accounting Principals Board (“APB”) Opinion No. 25 as permitted by SFAS No. 123. For all stock options that have been granted, the exercise prices of the stock options were equal to the market prices of the underlying stock on the grant dates, therefore no compensation expense was recognized. If we had elected to recognize compensation expense based on the fair value of the options at grant date, as prescribed by SFAS No. 123, our net income and earnings per share would have been reduced to the pro forma amounts indicated in the table below:

	Quarter Ended
	April 3, 2004			April 5, 2003
Net income--as reported	$	7,116		$	2,766
Less: total stock-based employee compensation expense determined under fair value
based method for all awards, net of related tax effects		(878	)		(1,263	)
Net income--pro forma		6,238			1,503
Basic earnings per share--as reported		0.26			0.10
Basic earnings per share--pro forma		0.23			0.06
Diluted earnings per share--as reported		0.26			0.10
Diluted earnings per share--pro forma		0.22			0.06

7. Contingencies

We are routinely involved in a number of legal proceedings and claims arising in the ordinary course of business, primarily involving claims for bodily injury and property damage incurred in the transportation of freight. The estimated liability for claims included in liabilities, both current and long-term, is $57,499 and $84,049, respectively, at April 3, 2004, and $57,146 and $75,243, respectively, at April 5, 2003. These liabilities reflect the estimated ultimate cost of self-insured claims incurred, but not paid, for bodily injury, property damage, cargo loss and damage, and workers’ compensation. We believe the outcome of these matters is not expected to have any material adverse effect on our consolidated financial position or results of our operations and have been adequately provided for in our financial statements.

We use underground storage tanks at certain terminal facilities and maintain a comprehensive policy of testing, upgrading, replacing or eliminating these tanks to protect the environment and comply with various Federal and state laws. We take prompt remedial action whenever any contamination is detected.

8. Acquisitions

In February 2003, we acquired the stock of System 81 Express, Inc., a truckload carrier based in Tennessee that owned or operated approximately 140 tractors and 260 trailers, for approximately $1,900 in cash and $2,800 in assumed debt. In addition, contingent payments totaling $314 were subsequently made to the former owners of System 81 Express. Goodwill and other intangible assets of $304 and $461, respectively, were recorded under the acquisition. The acquisition contributed approximately $3,000 to revenue for the first quarter of 2004, an increase of $900 from the first quarter of 2003.

9

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

EXECUTIVE SUMMARY

We are pleased with the improvement in our revenue and operating profit reported for the 2004 first quarter. The overall improved economy, the increased focus on selling our USF PremierPlus® product at competitive rates and the initial favorable impact of our “best practice” initiatives were the main contributors to this quarter’s improvement compared to last year. While we are pleased with our first quarter results, we are not satisfied. We believe there are many opportunities and challenges ahead. These include ensuring that we continue to have the necessary labor resources, adequate capacity in our terminal network and equipment to maintain our customer service standards as business levels increase. These issues, along with continued pricing pressures, in certain geographic areas need to be addressed and managed. We will continue to evaluate our customer base and will shed less profitable accounts while adding new, more profitable business. We are confident we have the resources and plans in place to ensure these issues are addressed in a timely, efficient and cost effective manner.

Our management team remains focused and committed to our goals of sustainable financial success and value creation for our shareholders

CONSOLIDATED RESULTS

Our revenue and net income for the quarters ended April 3, 2004 and April 5, 2003 were as follows:

	Quarter Ended
	April 3, 2004		April 5, 2003
Revenue	$	616,767	$	593,702
Net Income		7,116		2,766

Our net income for the 2003 first quarter was negatively impacted by $1,467 due to a change in the accounting for revenue and expense recognition. Effective January 1, 2003, we recognize revenue for LTL and TL operations by the allocation of revenue between reporting periods based on the relative transit time in each reporting period with expenses recognized as incurred. This change was made to recognize the increase in our average length of haul of freight, which resulted from our implementation of new marketing strategies.

Our consolidated financial statements have been restated to reflect the non-core freight forwarding segment as discontinued operations. Unless otherwise indicated, the following discussion relates to our continuing operations.

10

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

RESULTS OF OPERATIONS

LTL Trucking

Our revenue, income from operations and operating ratios for our LTL segment for the quarters ended April 3, 2004 and April 5, 2003 were as follows:

	Quarter Ended
	April 3, 2004			April 5, 2003
Total Revenue	$	519,697		$	488,863
Income from operations		24,038			16,812
Operating Ratio		95.4	%		96.6	%

Our LTL segment includes our LTL operating companies, each of which generates revenue from LTL and TL shipments. Revenue from LTL shipments represents over 90% of the revenue in the LTL segment. LTL statistics presented in the table below exclude TL shipments.

			LTL Statistics
First Quarter	Revenue (thousands)		Tons (thousands)		Shipments (thousands)		Revenue per Shipment		Revenue per Hundred- weight		Weight per Shipment (pounds)		Length of Haul (miles)
2004	$	489,855		2,194.3		3,753.7	$	130.50	$	11.16		1,169		497
2003		466,633		2,070.0		3,650.2		127.84		11.27		1,134		488

2004 First Quarter Compared to 2003 First Quarter

In the 2004 first quarter our LTL segment’s total revenue and income from operations increased from the 2003 first quarter by 6.3% and 43.0%, respectively. The following provides an understanding of the factors that impacted our operating results:

• Total revenue increased 6.3% (7.9% on a daily average basis) as a result of focused sales efforts and improving general economic conditions, particularly in the Midwest.

• USF PremierPlus® revenue increased 16.3% to $68,911 as a result of our marketing and service efforts in inter-regional transport. USF PremierPlus® revenue represented 13.0% and 11.8% of LTL revenue in the first quarter of 2004 and 2003, respectively.

• LTL tonnage increased 6.0% (7.6% on a daily average basis), primarily as the result of the increase in our USF PremierPlus® business.

• Revenue per hundredweight decreased by 1.0% as a result of an increase in average shipment weight of 35 pounds, along with significant growth in two large accounts that were historically priced very aggressively.

• Revenue increases and cost-savings related to our “best practices” initiatives, in part, contributed to our improved operating ratio.

• In order to maintain service levels with the increase in business, particularly in March, we incurred additional expenses in overtime pay and short term equipment rentals, which negatively impacted our operating results.

Included in the first quarter results was a 6.6% increase in revenue at USF Holland, our largest LTL carrier. USF Holland also recorded an improvement in their operating ratio of over 100 basis points. Also, included in the LTL segment’s results was a 10% increase in revenue at USF Reddaway.

11

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

TL Trucking

	Quarter Ended
	April 3, 2004			April 5, 2003
Total Revenue	$	34,274		$	31,750
Income from operations		812			523
Operating Ratio		97.6	%		98.4	%

The following provides an understanding of the factors that impacted our operating results:

• 2004 first quarter included $3,000 in revenue from the February 2003 acquisition of System 81 Express, an increase of $900 from the 2003 first quarter.

• Revenue per loaded mile, excluding fuel surcharges, increased 2.1% as a result of the improving economy, additional accessorial billings and rate increases with selected customers.

• Operating profits improved as a result of additional revenue, reduction in empty miles and improved driver productivity.

• The new hours of service regulations had minimal, if any, impact on our results.

Logistics

	Quarter Ended
	April 3, 2004			April 5, 2003
Total Revenue	$	66,437		$	75,675
Income from operations		1,630			553
Operating Ratio		97.6	%		99.3	%

The following provides an understanding of the factors that impacted our operating results:

• Revenue decreased by $9,238 (or 12.2%) primarily due to the bankruptcy of a major customer in the 2003 first quarter as well other lost business that occurred after the end of the first quarter 2003. This revenue decrease was offset, in part, by increased revenue of approximately $3,000 through increased business with existing customers as well as new customers in our transportation management, ocean freight forwarding and Canadian operations.

• The 2003 first quarter included a bad debt write off of $2,000 related to the major customer’s bankruptcy.

• Adjusted for the bad debt write off, operating profits in the 2004 first quarter were $948 lower than the 2003 first quarter primarily due to a $9,238 reduction in revenue.

12

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

Corporate and Other

	Quarter Ended
	April 3, 2004			April 5, 2003
Corporate & Other	$	(9,392	)	$	(5,236	)

The following provides an understanding of the factors that impacted our operating results:

• Depreciation expense increased by $1,000 in the 2004 first quarter compared to the 2003 first quarter as a result of capital expenditures made on projects in prior years that are now being depreciated.

• Amortization of intangibles increased to $992 in 2004 from $259 due to the acquisitions of System 81 Express, Inc. and Plymouth Rock Transportation Corporation in 2003.

• The remainder of the increase is primarily the result of consulting fees that were incurred this quarter related to several of our revenue enhancement and “best practices” initiatives, and additional employee costs that were incurred related to management additions at the corporate office.

Non-operating Income and Expense

Interest expense principally includes interest on our guaranteed unsecured notes of $250,000. We had cash invested in interest bearing instruments during the first quarter of 2004 and 2003. At the end of the first quarter of 2004 and 2003, we had cash and cash equivalents of $118,198 and $47,298, respectively.

Outlook—Unknown Trends or Uncertainties

We expect improvement in our operating results in 2004 as a result of an improved economy and our strategic initiatives. We believe our 2004 initiatives will provide increased revenue opportunities and generate cost savings through operational efficiencies. We believe achieving improved operating results are dependent on us executing our strategic initiatives, the level of competition, and the extent of the improvement in the US economy. We currently estimate that our full year earnings per share will be in the $1.95 — $2.15 range.

We have been subject to organization efforts by the International Brotherhood of Teamsters. We understand there will be union issues over time. We will deal with these organization efforts appropriately but ultimately we cannot predict the outcome of these activities.

13

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

LIQUIDITY AND CAPITAL RESOURCES

The following is a table of our contractual obligations and other commercial commitments as of April 3, 2004:

	Payments & Commitments by Period
	Total		Through December, 31 2004		2-3 Years		4-5 Years		After 5 Years
Contractual Obligations
Long-Term Debt	$	250,132	$	61	$	71	$	--	$	250,000
Operating Leases		60,093		20,230		26,508		8,495		4,860
Total Contractual Obligations	$	310,225	$	20,291	$	26,579	$	8,495	$	254,860
Other Commitments
Mexico Loan (1)	$	4,135	$	4,135	$	--	$	--	$	--
Purchase Commitments (2)		52,720		52,311		409		--		--
Total Commitments	$	56,855	$	56,446	$	409	$	--	$	--
(1) As of April 3, 2004, we invested $5,865 in the form of a loan, which can be increased to $10,000. (2) At April 3, 2004 our capital purchase commitments included $2,098 for land and improvements, $50,006 for revenue equipment and $616 for information technology related projects.

We believe that projected cash flows from operating activities, cash on hand and funding from our committed credit facilities will be adequate to finance our anticipated cash needs for 2004.

Sources and Uses of Cash

Operations

Our primary sources and uses of cash result from the realization of trade accounts receivable and settlement of payroll, trade accounts payable, and operating accruals, including insurance and claims. During the first quarter of 2004 we did not experience any unusual transactions or trends in these areas that would impact our cash position.

Net cash provided by operating activities decreased $22,689 in the 2004 first quarter from the 2003 first quarter. This was primarily due to increased revenue in March 2004, and the subsequent increase in net trade accounts receivable at the end of the 2004 first quarter.

There have not been, and we do not expect, any material changes to the underlying drivers of our operating cash flows. We believe that cash generated from our core operations, cash on hand and, if needed, our credit facilities to be sufficient to fund our operations.

Investing

We maintain an appropriate level of tractors and trailers to ensure the effectiveness of our operations. Purchases of tractors and trailers have been, and are expected to be, our most significant type of capital expenditure. These purchases can be deferred or accelerated in order for us to respond to changes in economic conditions and the market for these assets. Purchases of tractors and trailers were $1,922 and $12,130, and total capital expenditures were $21,445 and $37,436 during the first quarter of 2004 and 2003, respectively. Purchases of land and buildings in the 2004 first quarter were $9,653 compared to $12,326 in the 2003 first quarter.

We increased our loan related to our Mexican joint venture by $500 to $5,865.

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(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

Financing

We have a $200,000 committed credit facility that expires in October 2005. The facility allows up to $125,000 for standby letters of credit to cover our self-insurance programs and other miscellaneous letter of credit requirements. In addition to our committed credit facility, we maintain an uncommitted line of credit, which provides $10,000 of short-term funds. At April 3, 2004, we had no borrowings under these facilities and had $100,724 of outstanding standby letters of credit under the revolving credit facility.

Our external debt financing arrangements are discussed in Note 3 to the Condensed Consolidated Financial Statements.

Debt Instruments, Guarantees, and Related Covenants

Our financing arrangements include covenants that require us to comply with certain financial ratios including net worth and funded debt to adjusted cash flows. We are in compliance with these covenants and do not believe these covenants would restrict us from securing additional financing, if necessary.

Cash Management

Cash decreased by $3,461 in the first quarter of 2004 compared to a decrease of $6,860 in the same period of 2003.

Dividends

Our quarterly dividend rate is .0933 per share. During the first quarter of 2004, we paid cash dividends totaling $2,562.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to the impact of interest rate changes. Our exposure to changes in interest rates is limited to borrowings under a line of credit agreement, which has variable interest rates tied to LIBOR. There have been no borrowings under this agreement in the current year-to-date period nor during 2003. In addition, we have $150,000 of unsecured notes with an 8 1/2% fixed annual interest rate and $100,000 of unsecured notes with a 6 1/2% fixed annual interest rate. We have no hedging instruments. From time to time, we invest excess cash in overnight money market accounts. At April 3, 2004, we had approximately $109,600 that was invested in overnight money market accounts, which yielded approximately 1.1% per annum.

We have a $200,000 credit facility with a group of banks that will expire in October 2005. This facility is for working capital, general corporate funding needs, and up to $125,000 for letters of credit issued under our self-insurance program. As of April 3, 2004 we had no borrowings drawn under the facility and $100,724 in issued letters of credit.

The facility bears interest at LIBOR, plus a margin depending on our debt rating. In addition, there are other fees associated with the facility and certain financial covenants including minimum net worth and maximum funded debt to adjusted cash flow.

Item 4. Controls and Procedures

In order to ensure that information for disclosure in our filings of periodic reports with the Securities and Exchange Commission is identified, recorded, processed, summarized, and reported on a timely basis, we have adopted disclosure controls and procedures. Our Chief Executive Officer, Richard P. DiStasio, and our Chief Financial Officer, Thomas E. Bergmann, have reviewed and evaluated our disclosure controls and procedures as of April 27, 2004, and have concluded that our disclosure controls and procedures were adequate as of that date.

There were no changes in our internal controls over financial reporting identified in connection with the foregoing evaluation that occurred during our current year’s first quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

15

(Dollars in Thousands, Except Share and Per Share Amounts, Unless Otherwise Indicated)

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

Our trucking subsidiaries are parties to a number of proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act, (CERCLA). They have been made parties to these proceedings as an alleged generator of waste disposed of at hazardous waste disposal sites. In each case, the Government alleges that the parties are jointly and severally liable for the cleanup costs. Although joint and several liability is alleged, these proceedings are frequently resolved on the basis of the quantity of waste disposed of at the site by the generator. Our potential liability varies greatly from site to site. For some sites the potential liability is de minimis and for others the costs of cleanup have not yet been determined. It is not feasible to predict or determine the outcome of these or similar proceedings brought by state agencies or private litigants. We believe such liability, if any, would not materially adversely affect our financial condition or results of operations.

On December 23, 2003, Idealease Services, Inc. (“Idealease”) filed a complaint against Logistics, in the Circuit Court of Cook County in Chicago, Illinois. Idealease is asking the court to require Logistics to specifically perform an alleged contractual obligation to buy back from Idealease a fleet of vehicles it claims is valued at approximately $14,500 or to pay Idealease that amount. Idealease also contends that Logistics is liable for $557 in lease payments and that certain riders to a lease agreement are invalid due to a lack of consideration. Logistics denies the material allegations in the Idealease complaint and plans to vigorously contest the lawsuit in court.

We are involved in other litigation arising in the ordinary course of business, primarily involving claims for bodily injury, property damage, and workers’ compensation. We believe the ultimate recovery or liability, if any, resulting from such litigation, individually or in total, would not materially adversely affect our financial condition or results of operations.

Item 2. Changes in Securities and Use of Proceeds.

                           N/A

Item 3. Defaults Upon Senior Securities.

                           N/A

Item 4. Submission of Matters to a Vote of Security Holders.

                           N/A

Item 5. Other Information.

                           N/A

16

Item 6. Exhibits and Reports on Form 8-K.

                                            (a) Exhibits

1. Exhibit 3.1-Bylaws of USF Corporation, restated as of January 29, 2004.

2. Exhibit 10.1-Employment Agreement of Thomas E. Bergmann.

3. Exhibit 31.1-Section 302 Certification of Chief Executive Officer.

4. Exhibit 31.2-Section 302 Certification of Chief Financial Officer.

5. Exhibit 32.1-Statement of Chief Executive Officer Pursuant to Section 1350(a) of Title 18, United States Code (furnished not filed with this Quarterly Report on Form 10-Q)

6. Exhibit 32.2-Statement of Chief Financial Officer Pursuant to Section 1350(a) of Title 18, United States Code (furnished not filed with this Quarterly Report on Form 10-Q)

                                            (b) Current Reports on Form 8-K were filed:

1. A Current Report on Form 8-K was filed on January 23, 2004 announcing the filing of a complaint against the Company’s subsidiary USF Logistics Services Inc. by Idealease Services Inc.

2. A Current Report on Form 8-K was filed on January 29, 2004 announcing the Company’s 4^th Quarter, 2003 earnings.

3. A Current Report on Form 8-K was filed on January 29, 2004 announcing the retirement of the Company’s Chief Financial Officer.

4. A Current Report on Form 8-K was filed on January 30, 2004 announcing the Company’s adoption of an Amended and Restated Rights Agreement.

17

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated May 7, 2004.

	USF CORPORATION
By:	/s/ Thomas E. Bergmann Thomas E. Bergmann Senior Vice President, Finance & Chief Financial Officer
By:	/s/ James T. Castro James T. Castro Vice President, Controller and Principal Accounting Officer

18

EX-31

EXHIBIT 31.1

CERTIFICATION

I, Richard P. DiStasio, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of USF Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record process, summarize and report financial information; and

(b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2004

/s/ Richard P. DiStasio
Richard P. DiStasio
President & Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, Thomas E. Bergmann, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of USF Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record process, summarize and report financial information; and

(b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Thomas E. Bergmann
Thomas E. Bergmann
Senior Vice President, Finance
& Chief Financial Officer

Date: May 7, 2004

EX-32

EXHIBIT 32.1

CERTIFICATION OF PRESIDENT & CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350(a)

In connection with the accompanying Quarterly Report on Form 10-Q of USF Corporation for the quarter ended April 3, 2004, I, Richard P. DiStasio, President & Chief Executive Officer of USF Corporation, hereby certify pursuant to 18 U.S.C. Section 1350(a), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Quarterly Report on Form l0-Q for the quarter ended April 3, 2004, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended April 3, 2004, fairly presents, in all material respects, the financial condition and results of operations of USF Corporation.

A signed original of this written statement required by Section 906 has been provided to USF Corporation and will be retained by USF Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Richard P. DiStasio
Richard P. DiStasio
President & Chief Executive Officer

Date: May 7, 2004

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350(a)

In connection with the accompanying Quarterly Report on Form 10-Q of USF Corporation for the quarter ended April 3, 2004, I, Thomas E. Bergmann, Senior Vice President, Finance and Chief Financial Officer of USF Corporation, hereby certify pursuant to 18 U.S.C. Section 1350(a), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Quarterly Report on Form l0-Q for the quarter ended April 3, 2004, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended April 3, 2004, fairly presents, in all material respects, the financial condition and results of operations of USF Corporation.

A signed original of this written statement required by Section 906 has been provided to USF Corporation and will be retained by USF Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Thomas E. Bergmann
Thomas E. Bergmann
Senior Vice President, Finance
& Chief Financial Officer

Date: May 7, 2004

EX-3.(II)

EXHIBIT 3.1

AMENDED AND RESTATED BYLAWS

OF

USF CORPORATION

AS ADOPTED ON JANUARY 29, 2004

BYLAWS

OF

USF CORPORATION

Dated January 29, 2004

OFFICES

        Section ..1 Offices. USF Corporation (the “Corporation”) may have offices either within or without the State of Delaware. The registered office of the Corporation and the name of the registered agent of the Corporation are as set forth in the Restated Certificate of Incorporation of the Corporation, as amended, and as may from time to time be amended (the “Charter of the Corporation”) by resolution of the Board of Directors (the “Board”).

MEETINGS OF STOCKHOLDERS

        Section ..1 Annual Meetings. An annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date and at such time as the Board may from time to time determine, or, if not so designated, then at 10:00 a.m., on the third Tuesday in April in each year if not a legal holiday, and, if a legal holiday, at the same hour on the next succeeding work day, and at such place as shall be designated by the Board in the notice thereof. Any previously scheduled annual meeting of the stockholders may be postponed by resolution of the Board upon public announcement made on or prior to the date previously scheduled for such annual meeting of stockholders if the Board determines that such postponement serves a necessary corporate interest or otherwise is in the best interests of the stockholders.

        At any annual meeting of stockholders, only such business shall be conducted as shall have been brought before the annual meeting (i) by or at the direction of the chairman of the meeting or (ii) by any stockholder who complies with the procedures set forth in this Section 2.1.

        For business properly to be brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than thirty (30) days nor more than sixty (60) days prior to the annual meeting; provided, however, that in the event that less than forty (40) days’ notice or prior public announcement of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the (tenth) 10th day following the day on which such notice of the date of the annual meeting was mailed or such public announcement was made. To be in proper written form, a stockholder’s notice to the Secretary shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business; (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder; and (iv) any material interest of the stockholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.1.

        For purposes of this Section 2.1 and Sections 2.2 and 3.3, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

        Section ..2 Special Meetings. A special meeting of the stockholders for any purpose or purposes may be called at any time only by the Board, or by any committee of the Board which has been duly designated by the Board and whose powers and authority, as expressly provided in a resolution of the Board, include the power to call such meetings, and such meeting shall be held on such date and at such place and hour as shall be designated in the notice thereof. Only such business as is specified in the notice of any special meeting of the stockholders shall come before such meeting. Any previously scheduled special meeting of the stockholders may be postponed by resolution of the Board upon public announcement made on or prior to the date previously scheduled for such special meeting of stockholders if the Board determines that such postponement serves a necessary corporate interest or otherwise is in the best interests of the stockholders.

        Section ..3 Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, if any, date and hour of each meeting of the stockholders, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than ten (10) days nor more than sixty (60) days prior to the meeting, to each stockholder of record entitled to vote at such meeting. If a stockholder meeting is to be held via electronic communications and stockholders will take action at such meeting, the notice of such meeting must: (i) specify the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present and vote at such meeting; and (ii) provide the information required to access the stockholder list.

        For notice given by electronic transmission to a stockholder to be effective, such stockholder must consent to the Corporation’s giving notice by that particular form of electronic transmission. A stockholder may revoke consent to receive notice by electronic transmission by written notice to the Corporation. A stockholder’s consent to notice by electronic transmission is automatically revoked if the Corporation is unable to deliver two consecutive electronic transmission notices and such inability becomes known to the Secretary, Assistant Secretary, the transfer agent or other person responsible for giving notice.

        Notices are deemed given (i) if by mail, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the record of stockholders of the Corporation, or, if he or she shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, then directed to him or her at such other address; (ii) if by facsimile, when faxed to a number where the stockholder has consented to receive notice; (iii) if by electronic mail, when mailed electronically to an electronic mail address at which the stockholder consented to receive such notice; (iv) if by posting on an electronic network (such as a website or chatroom) together with a separate notice to the stockholder of such specific posting, upon the later to occur of (A) such posting or (B) the giving of the separate notice of such posting; or (v) if by any other form of electronic communication, when directed to the stockholder in the manner consented to by the stockholder. Such further notice shall be given as may be required by law.

        A written waiver of any notice of any annual or special meeting signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, shall be deemed equivalent to notice, whether provided before of after the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

        Section ..4 Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

        Section ..5 Quorum. Except as otherwise required by law or by the Charter of the Corporation, the presence in person or by proxy of the holders of record of a majority of the shares of stock of the Corporation entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

        Section ..6 Proxies. Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action in writing without a meeting may authorize another person or persons to vote at any such meeting and express such consent or dissent for him or her by proxy. A stockholder may authorize a valid proxy by executing a written instrument signed by such stockholder, or by causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature, or by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person designated as the holder of the proxy, a proxy solicitation firm or a like authorized agent. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless such person shall in writing so notify the secretary of the meeting prior to voting of the proxy. Proxies by telegram, cablegram or other electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

        Section ..7 Organization of Meetings. At each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside there at, in the following order of precedence:

        (a)     the Chairman of the Board, or, if such person is not present or if no person holds such office, any officer or director of the Corporation designated by the Board; or

        (b)     any officer or director of the Corporation designated by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote there at.

        The person whom the chairman of the meeting shall appoint, shall act as secretary of the meeting and keep the minutes thereof.

        Section ..8 Order of Business. The order of business at each meeting of the stockholders shall be determined by the chairman of the meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote there at. The chairman of the meeting shall have the right and authority to prescribe such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof, and the opening and closing of the voting polls.

        The chairman of any meeting shall, if the facts warrant, determine and declare to such meeting that business was not properly brought before the meeting in accordance with the provisions of Sections 2.1 or 2.2 hereof and, if such person should so determine, such person shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

Section .9 Voting. Each stockholder shall, at each meeting of the stockholders, be entitled to one vote in person or by proxy for each share of stock of the Corporation which has voting power on the matter in question held by such person and registered in such person’s name on the stock record of the Corporation:

        (a)     on the date fixed pursuant to the provisions of Section 8.6 of Article VIII of these Bylaws as the record date for the determination of stockholders who shall be entitled to receive notice of and to vote at such meeting; or

        (b)     if no record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice of the meeting shall be given or, if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held, or, if no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall have been fixed, the day on which the first written consent is expressed.

Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Any vote of stock of the Corporation may be given at any meeting of the stockholders by the person entitled to vote the same in person or by proxy (who need not be a stockholder) appointed by an instrument in writing pursuant to Section 2.6 of these Bylaws. Shares standing in the names of two or more persons shall be voted or represented in accordance with the determination of the majority of such persons, or, if only one of such persons is present in person or represented by proxy, such person shall have the right to vote such shares and such shares shall be deemed to be represented for the purpose of determining a quorum. At all meetings of stockholders a plurality of the votes cast shall be necessary to elect the directors. All other proposals, unless otherwise provided by law, or the Charter of the Corporation, must receive a majority of the votes that could be cast by the holders of all shares of stock that are present in person or represented by proxy and that are entitled to vote upon such proposals. Unless otherwise required by law or directed by the chairman of the meeting, the vote at any meeting of the stockholders on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by such person’s proxy if there be such proxy, and shall state the number of shares voted.

        Section ..10 List of Stockholders. It shall be the duty of the officer of the Corporation who shall have charge of the stock ledger of record, either directly or through another officer of the Corporation or agent thereof, to prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote there at, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at the place where the meeting is to be held or at such other place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The stock record shall be the only evidence as to who are the stockholders entitled to examine the stock record, such list or the books of the Corporation or to vote in person or by proxy at any meeting of the stockholders.

        Section ..11 Inspectors. Preceding any meeting of the stockholders, the Board shall appoint one or more persons to act as Inspectors of Elections, and may designate one or more alternate inspectors. In the event no inspector or alternate is able to act, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of an inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall:

        (a)     ascertain the number of shares outstanding and the voting power of each;

        (b)     determine the shares represented at a meeting and the validity of proxies and ballots;

        (c)     specify the information relied upon to determine the validity of electronic transmissions in accordance with Section 2.6 hereof;

        (d)     count all votes and ballots;

        (e)     determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and

        (f)     certify his or her determination of the number of shares represented at the meeting, and his or her count of all votes and ballots.

        The inspector may appoint or retain other persons or entities to assist in the performance of the duties of inspector.

        When determining the shares represented and the validity of proxies and ballots, the inspector shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Section 2.6 of these Bylaws, ballots and the regular books and records of the Corporation. The inspector may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers or their nominees or a similar person which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspector considers other reliable information as outlined in this section, the inspector, at the time of his or her certification pursuant to (f) of this section shall specify the precise information considered, the person or persons from whom the information was obtained, when this information was obtained, the means by which the information was obtained, and the basis for the inspector’s belief that such information is accurate and reliable.

        Section ..12 Opening and Closing of Polls. The date and time for the opening and the closing of the polls for each matter to be voted upon at a stockholder meeting shall be announced at the meeting. The inspector of the election shall be prohibited from accepting any ballots, proxies or votes nor any revocations thereof or changes thereto after the closing of the polls, unless the Court of Chancery upon application by a stockholder shall determine otherwise.

        Section ..13 Consent in Lieu of Meeting. To the fullest extent permitted by law, whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted (but not less than the minimum number of votes otherwise prescribed by law) and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

        Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by law to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

        In the event of the delivery to the Corporation of a consent, the Secretary of the Corporation shall provide for the safe-keeping of such consent and shall promptly conduct such ministerial review of the sufficiency of the consents and of the validity of the action to be taken by stockholder consent as he or she deems necessary or appropriate, including, without limitation, whether the holders of a number of shares having the requisite voting power to authorize or take the action specified in the consent have given consent; provided, however, that if the corporate action to which the consent relates is the removal or replacement of one or more members of the Board, the Secretary of the Corporation shall promptly designate two persons, who shall not be members of the Board, to serve as Inspectors with respect to such consent and such Inspectors shall discharge the functions of the Secretary of the Corporation under this Section 2.13. If after such investigation the Secretary or the Inspectors (as the case may be) shall determine that the consent is valid and that the action therein specified has been validly authorized, that fact shall forthwith be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders, and the consent shall be filed in such records, at which time the consent shall become effective as stockholder action. In conducting the investigation required by this Section 2.13, the Secretary or the Inspectors (as the case may be) may, at the expense of the Corporation, retain special legal counsel and any other necessary or appropriate professional advisors, and such other personnel as they may deem necessary or appropriate to assist them, and shall be fully protected in relying in good faith upon the opinion of such counsel or advisors.

BOARD OF DIRECTORS

        Section ..1 General Powers.The property, business, affairs and policies of the Corporation shall be managed by or under the direction of the Board.

        Section ..2 Number and Term of Office. The Board shall consist of not less than three directors nor more than twenty-one directors. The exact number of directors shall be determined from time to time by a resolution or resolutions adopted by the affirmative vote of a majority of the total number of directors which the corporation would have if there were no vacancies (the “entire Board”). The directors shall be divided into three classes. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board. If the classes of directors are not equal in number, the Board shall determine which class shall contain an unequal number of directors.

        At each annual meeting of stockholders, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed in accordance with the terms of the Charter of the Corporation and this Section 3.2, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to the director’s prior death, resignation, disqualification or removal from office.

        Section ..3 Nomination and Election of Directors, and Non-Executive Chairman.

        (a)    Nomination and Election. Nominations of persons for election to the Board may be made at any annual meeting of stockholders by or at the direction of the Board or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who was a stockholder of record at the time of giving of notice provided for in this Section 3.3(a) and who complies with the notice procedures set forth in this Section 3.3(a). Any such nomination by a stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely notice for an annual meeting, a stockholder’s notice shall be delivered to and received by the Secretary of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual meeting; provided that, in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, notice by the stockholder to be timely must be so delivered and received not earlier than the ninetieth (90^th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60^th) day prior to such annual meeting and the tenth (10^th) day following the day on which a public announcement of the date of such meeting is first made. Notwithstanding anything in the foregoing sentence to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least seventy (70) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 3.3 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the Corporation.

        Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 3.3(a), who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 3.3(a). In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice shall be delivered to and received by the secretary of the Corporation at the principal executive offices of the Corporation not earlier than the ninetieth (90^th) day prior to such special meeting and not later than the close of business on the later of the sixtieth (60^th) day prior to such special meeting and the tenth (10^th) day following the day on which a public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.

        Any stockholder’s notice delivered pursuant to this Section 3.3(a) shall set forth in writing (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the number of shares of stock of the Corporation which are beneficially owned by such person, and (D) any other information relating to such person that is required to be disclosed in connection with the solicitation of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the “Exchange Act”) (including, without limitation, such person’s written consent to being named in proxy statement as a nominee and to serving as a director if elected), and any other applicable laws or rules or regulations of any governmental authority or of any national securities exchange or similar body overseeing any trading market on which shares of the Corporation are traded; and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (A) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

        At the request of the Board, any person nominated by the Board for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder’s notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.3(a). The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws and in that event the defective nomination shall be disregarded. In addition to the provisions of this Section 3.3(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, and any other applicable laws or rules or regulations of an governmental authority or any national securities exchange or similar body overseeing any trading market on which shares of the Corporation are traded, with respect to the matters set forth herein.

        At each meeting of the stockholders for the election of directors, provided a quorum is present, the directors nominated in accordance with this Section 3.3(a) for election at such meeting shall be elected by a plurality of the votes validly cast in such election. Directors need not be stockholders of the Corporation or residents of the State of Delaware.

        (b)    Non-Executive Chairman. The Board, by resolution or resolutions passed by a majority of the Board, may designate a director to the position of Non-Executive Chairman of the Board with such duties as shall be given such person as hereinafter provided or as may otherwise be specifically given such person by the Board.

        The Non-Executive Chairman of the Board may resign at any time by giving written notice of such person’s resignation to the Board. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, when accepted by the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective.

        The Non-Executive Chairman of the Board shall continue as such only as long as such person remains a director and may be removed at any time, with or without cause, by a majority of the Board.

        The Non-Executive Chairman of the Board shall have the following duties and functions: (i) preside at meetings of the Board and of the stockholders; (ii) collaborate with the Chief Executive Officer on Board meetings and agendas; (iii) lead the evaluation process of the Chief Executive Officer; (iv) serve as an ex-officio member of any Board committee; (v) assist the Board in the appointment of Board committee chairs; (vi) assist the Board in the assignment of various tasks of the Corporation to the Board committees; (vii) collaborate with the Chairman of the Nominating and Corporate Governance Committee in the Board assessment process; and (viii) perform such other duties as may from time to time be prescribed by the Board.

       Section ..4     Meetings.

        (a)    Regular Meetings. Regular meetings of the Board or any committee thereof shall be held as the Board or such committee thereof shall from time to time determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be postponed until the next succeeding business day.

        (b)    Notice of Meetings. Special meetings of the Board, at which any and all business may be transacted, shall be held whenever called by the Chief Executive Officer, the President, the Chairman of the Board or a majority of the Board.

        (c)    Notice of Meetings. No notice of regular meetings of the Board or of any committee thereof or of any adjourned meeting thereof need be given. Notice shall be given to each special meeting of the Board or adjournment thereof, including the time and place thereof. Notice of each such meeting shall be mailed to each director, addressed to such person at such person’s residence or usual place of business, at least two (2) days before the day on which such meeting is to be held, or shall be sent to such person at such place by facsimile, telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. The purposes of a meeting of the Board or any committee thereof need not be specified in the notice thereof.

        (d)    Time and Place of Meetings. Regular meetings of the Board or any committee thereof shall be held at such time or times and place or places as the Board or such committee may from time to time determine. Each special meeting of the Board or any committee thereof shall be held at such time and place as the caller or callers thereof may determine. In the absence of such a determination, each regular meeting or special meeting of the Board or any committee thereof shall be held at such time and place as shall be designated in the notices or waivers of notice thereof.

        (e)    Quorum and Manner of Acting. A majority of the directors then in office and a majority of the members of any committee shall be present in person at any meeting thereof in order to constitute a quorum for the transaction of business at such meeting and the vote of a majority of the directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or for an act to be the act of the Board or such committee. In the absence of a quorum, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present there at. Notice of any adjourned meeting need not be given.

        (f)    Organization of Meetings. At each meeting of the Board, the Chairman of the Board or, if such person is not present or if no person holds such office, any director chosen by a majority of the directors present there at shall act as chairman of the meeting and preside thereat. The person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. The order of business at each meeting of the Board shall be determined by the chairman of such meeting.

        (g)    Consent in Lieu of Meetings. Anything herein to the contrary notwithstanding, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in a writing or writings and such writing or writings are filed with the minutes of the proceedings of the Board or such committee.

        (h)    Action by Communications Equipment. The directors may participate in a meeting of the Board or any committee thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

        Section ..5 Compensation. Each director who is not also a salaried employee of the Company or any of its affiliates, in consideration of he or she serving as such, shall be entitled to receive from the Corporation such amount per annum and such fees for attendance at meetings of the Board or of any committee, or both, as the Board shall from to time determine. The Board may provide that the Corporation shall reimburse each director or member of a committee, including any director who is a salaried employee of the Company or any of its affiliates, for any expenses incurred by such person on account of such person’s attendance at any such meeting.

        Section ..6 Resignation, Removal and Vacancies. Any director may resign at any time by giving written notice of such person’s resignation to the Board. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, when accepted by the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective.

        Any director may be removed at any time for cause by vote of the holders of a majority in voting interest of shares then entitled to vote at an election of directors. The vacancy in the Board caused by any such removal may be filled by the stockholders at such meeting or as provided in the next paragraph of these Bylaws.

        In the case of any vacancy on the Board or in the case of any newly created directorship, a director to fill the vacancy or the newly created directorship for the unexpired portion of the term being filled may be elected by a majority of the directors of the Corporation then in office, though less than a quorum, or by a sole remaining director. The director elected to fill such vacancy shall hold office for the unexpired term in respect of which such vacancy occurred and until such person’s successor shall be elected and shall qualify or until such person’s earlier death or resignation or removal in the manner herein provided.

COMMITTEES

        Section ..1 Number, Appointment, Term of Office, etc. The Board, by resolution or resolutions passed by a majority of the Board, may designate one or more committees, each committee to consist of one or more directors then in office. Each member of any such committee shall continue as such only so long as such person remains a director and may be removed at any time, with or without cause, by a majority of the Board. Any vacancy on any committee may be filled at any time by the vote of a majority of the Board.

        In the absence or in case of the disqualification of a member or members of any such committee, the member or members of such committee present and not disqualified from voting at a meeting of such committee, whether or not such person or they constitute a quorum, may unanimously appoint another member of the Board to act at such meeting in place of any absent or disqualified member.

        Section ..2 Functions and Powers. Each committee shall have such functions and powers as the Board shall deem advisable and, subject to any limitations or restrictions which may be prescribed by resolution of the Board, if an Executive Committee is designated, it shall have and may exercise all the powers and authority of the Board in the management of the property, business, affairs and policies of the Corporation, including the power and authority to declare dividends and to authorize the issuance of stock of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that no committee shall have the power of authority to: approve amendments to the Charter of the Corporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board as provided in Section 151(a) of the Delaware General Corporation Law, fix the designations and any of the preferences or rights of such shares or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series); adopt agreements of merger or consolidation; recommend to the stockholders the sale, lease or exchange of all or substantially all the property and assets of the Corporation; recommend to the stockholders the dissolution of the Corporation or the revocation of such a dissolution; or amend these Bylaws.

        Section ..3 Rules. Subject to the provisions of these Bylaws, each committee by resolution adopted by a majority of all the members thereof shall fix its rules of procedure.

OFFICERS

        Section ..1 Election and Appointment and Term of Office. The Corporation shall have such officers with such titles as shall be stated in a resolution of the Board, and with such duties as shall be given them as hereinafter provided or as may otherwise be specifically given them by the Board, but such officers shall include at least (a) a Chairman of the Board or one or more Vice-Chairmen of the Board or a Chief Executive Officer or a President, or any or all the foregoing, and (b) a Secretary or one or more Assistant Secretaries or a Treasurer or one or more Assistant Treasurers, or any or all of the foregoing. One of such officers shall have the duty to record the proceedings of the meetings of stockholders and directors in a book to be kept for that purpose. Any number of offices may be held by the same person except that at least one person who holds an office referred to in clause (a) of the second preceding sentence shall not be the same as at least one person who holds any office referred to in clause (b) of the second preceding sentence.

        Section ..2 Resignation, Removal and Vacancies. Any officer may resign at any time by giving written notice of such person’s resignation to the Board. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein when accepted by the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective.

        Any officer, agent or employee elected or appointed by the Board may be removed, with or without cause, at any time by the Board. Any agent or employee appointed by an officer may be removed, with or without cause, at any time by such officer.

        A vacancy in any office may be filled for the unexpired portion of the term in the same manner as provided in these Bylaws for election or appointment to such office.

        Section ..3 Duties and Functions. If any of the following offices is created and a person appointed or elected thereto, and unless the Board otherwise provides, such offices and persons shall have the following duties and functions:

        (a)    Chairman. If a Chairman of the Board is appointed or elected, such person shall be a member of the Board, shall preside at meetings of the Board and of the stockholders at which such person shall be present, shall perform such duties as are incident to the office of the Chairman of the Board, and shall perform such other duties as may from time to time be prescribed by the Board.

        (b)    Vice-Chairman. If any Vice-Chairman or Vice-Chairmen of the Board are appointed or elected, they shall be members of the Board, shall perform such duties as are incident to the office of the Vice-Chairman of the Board, and shall perform such other duties as may from time to time be prescribed by the Board.

        (c)    Chairman of the Executive Committee. If a Chairman of the Executive Committee is appointed or elected, such person shall be a member of the Board, shall preside at meetings of the Executive Committee, shall when requested consult with and advise the other officers of the Corporation, and shall perform such other duties as may be agreed upon with them or as the Board or the Executive Committee may from time to time determine.

        (d)    Chief Executive Officer. If a Chief Executive Officer is appointed or elected, such person shall, subject to the control of the Board, have general charge and management of the property, business and affairs of the Corporation and shall have the direction of, and may assign duties to, all other officers (other than the Chairman and any Vice-Chairman, if either or both is appointed or elected), agents and employees.

        (e)    President. If a President is appointed or elected, such person shall have such powers and duties as shall be prescribed by the Chief Executive Officer, if one is appointed or elected, or the Board. The President shall report to the Chief Executive Officer.

        (f)    Chief Operating Officer. If any Chief Operating Officer is appointed or elected, such person shall have such powers and duties as shall be prescribed by the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board.

        (g)    Chief Financial Officer. If any Chief Financial Officer is appointed or elected, such person shall perform all the powers and duties of the offices of the chief financial officer and chief accounting officer and in general shall have overall supervision of the financial operations of the Corporation. The Chief Financial Officer shall also perform such other duties as the Chief Executive Officer, the President or the Board may from time to time determine.

        (h)    Vice Presidents. If any Vice President or Vice Presidents are appointed or elected, they shall have such powers and duties as shall be prescribed by the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board. Vice Presidents for this purpose shall include Senior, Executive, Assistant and all other categories or types of Vice Presidents.

        (i)    Secretary. If a Secretary is appointed or elected, such person shall attend and keep the records of all meetings of the stockholders and the Board in one or more books kept for that purpose, shall give or cause to be given due notice of all meetings in accordance with these Bylaws and as required by law, shall notify the several officers of the Corporation of all action taken by the Board concerning matters relating to their duties, shall transmit to the proper officers copies of all contracts and resolutions approved by the Board or any committees of the Board, shall be custodian of the seal of the Corporation and of all contracts, deeds, documents and other corporate papers, records (except accounting records) and indicia of title to properties owned by the Corporation as shall not be committed to the custody of another officer by the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board, shall affix or cause to be affixed the seal of the Corporation to instruments requiring the same when the same have been signed on behalf of the corporation by a duly authorized officer, shall perform all duties and have all powers incident to the office of Secretary, and shall perform such other duties as shall be assigned to such person by the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board. One or more Assistant Secretaries may be appointed or elected, who shall perform all the duties and have all the powers of the Secretary in the absence of or in case of a failure to appoint or elect or when so delegated by the Secretary, and as the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board may direct.

        (j)    Treasurer. If a Treasurer is appointed or elected, such person shall perform the duties incident to the office of Treasurer and such other duties as shall be assigned to such person by the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board. One or more Assistant Treasurers may be appointed or elected who shall perform all the duties and have all the powers of the Treasurer in the absence of, or in the case of a failure to appoint or elect, or when so delegated by the Treasurer, and as the Chief Executive Officer or the President, if either or both is appointed or elected, or the Board may direct.

(k)     Controller. If a Controller is appointed or elected, such person shall perform all the duties incident to the office of Controller and such other duties as may be assigned to such person by the Chief Executive Officer or the President, if either or both is appointed or elected., or the Board. One or more Assistant Controllers may be appointed or elected who shall perform all the duties and have all the powers of the Controller in the absence of, or in the case of a failure to appoint or elect, or when so delegated by, the Controller, and as the Chief Executive Officer or the President, if either of both is appointed or elected, or the Board may direct.

WAIVER OF NOTICES; PLACE OF MEETINGS

        Section ..1 Waiver of Notices. Anything herein to the contrary notwithstanding, whenever notice is required to be given to any director or member of a committee, a waiver thereof in writing, signed by the person entitled to such notice shall be deemed equivalent to notice, whether given before or after the time specified therein and, in the case of a waiver of notice of a meeting, whether or not such waiver specifies the purpose of or business to be transacted at such meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and does so object.

        Section ..2 Place of Meetings. Any meeting of the stockholders, the Board or any committee may be held within or without the State of Delaware.

EXECUTION AND DELIVERY OF DOCUMENTS;
DEPOSITS; PROXIES; BOOKS AND RECORDS

        Section ..1 Execution and Delivery of Documents; Delegation. The Board shall designate the officers, employees and agents of the Corporation who shall have power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation. Such delegation may be by resolution or otherwise and the authority granted shall be general or confined to specific matters, all as the Board may determine. In the absence of such designation referred to in the first sentence of such designation referred to in the first sentence of this Section, the officers of the Corporation shall have such power so referred to, to the extent incident to the normal performance of their duties.

        Section ..2 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or any officer of the Corporation to whom power in that respect shall have been delegated by the Board shall select.

        Section ..3 Proxies in Respect of Stock or Other Securities of Other Corporations. Unless otherwise provided by the Board, any officer of the Corporation shall have the authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, to vote or consent in respect of such stock or securities and to execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as such person may deem necessary or proper in order that the Corporation may exercise such powers and rights. Such officer may instruct any person or persons appointed as aforesaid as to the manner of exercising such powers and rights.

        Section ..4 Books and Records. The books and records of the Corporation may be kept at such places within or without the State of Delaware as the proper officers of the Corporation may from time to time determine.

CERTIFICATES; STOCK RECORD; TRANSFER AND REGISTRATION;
NEW CERTIFICATES; RECORD DATE, ETC.

        Section ..1 Certificates for Stock. Every holder of stock of the Corporation shall be entitled to have a certificate certifying the number of shares owned by such person in the Corporation and designating the class of stock to which such shares belong, which shall otherwise be in such form as the Board shall prescribe. Each such certificate shall be signed by, or in the name of the Corporation by, the Chairman, a Vice-Chairman, the Chief Executive Officer, the President or a Vice President of the Corporation and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any of or all such signatures may be facsimiles. In case any authorized officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer or authorized agent before such certificate is issued, it may nevertheless be issued by the Corporation with the same effect as if such person were such officer or authorized agent on the date of issue. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled and a new certificate or certificates shall not be issued in exchange for any existing certificate until such existing certificate shall have been so canceled, except in cases provided for in Section 8.4 of this Article.

        Section ..2 Stock Record. A stock record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the stock represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date of issue thereof and, in the case of cancellation, the date of cancellation. The person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation.

        Section ..3 Transfer and Registration of Stock.

        (a)    Transfer. The transfer of stock and certificates of stock which represent the stock of the corporation shall be governed by Article 8 of Subtitle I of Title 6 of the Delaware Code.

        (b)    Registration. Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by such person’s attorney thereunto authorized by power of attorney duly executed and filed with an officer of the Corporation, and on the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed.

        Section ..4 New Certificates

        (a)    Lost, Stolen or Destroyed Certificates. Where a stock certificate has been lost, apparently destroyed or wrongfully taken, the issuance of a new stock certificate or the claims based on such certificate shall be governed by Article 8 of Subtitle I of Title 6 of the Delaware Code.

        (b)    Mutilated Certificates. Where the holder of any certificate for stock of the Corporation notifies the Corporation of the mutilation of such certificate within a reasonable time after such person has notice of it, the Corporation will issue a new certificate for stock in exchange for such mutilated certificate theretofore issued by it.

        (c)    Bond. The Board may, in its discretion, require the owner of the lost, stolen, destroyed or mutilated certificate to give the Corporation a bond in such sum, limited or unlimited, in such form and with such surety or sureties sufficient to indemnify the Corporation against any claim that may be made against it on account of the loss, theft, destruction or mutilation of any such certificate or the issuance of any such new certificate.

        Section ..5 Additional Rules and Regulations. Subject to the provisions of the Charter of the Corporation and these Bylaws, the Board may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of stock of the Corporation.

        Section ..6 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed; (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

SEAL

        Section ..1 Seal. The Corporate seal shall consist of a die bearing the full name of the Corporation in the outer circle and the legend “Corporate Seal 1991 Delaware” in the inner circle. This seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

FISCAL YEAR

        Section ..1 Fiscal Year. The fiscal year of the Corporation shall end on the Saturday closest to December 31 in each year, or such other date as the Board determines.

AMENDMENTS

        Section ..1 Amendments. These Bylaws may be amended, altered or repealed by the vote of a majority of the Board, subject to the power of the holders of 66 2/3 percent of the outstanding stock of the Corporation entitled to vote in respect thereof by their vote given at an annual meeting or at any special meeting, to amend, alter, or repeal any By-law made by the Board.

SUBJECT TO LAW

        Section ..1 Subject to Law.All provisions of these Bylaws are subject to requirements of applicable law and the Charter of the Corporation.

INDEMNIFICATION

        Section ..1 Power to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation. Subject to Section 13.3 of this Article XIII, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law, any person who is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolocontendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, or with respect to any criminal action or proceeding, that such person had reasonable cause to believe that such person’s conduct was unlawful.

        Section ..2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 13.3 of this Article XIII, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law, any person who is or was a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to produce a judgment in its favor by reason of the fact that he is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        Section ..3 Authorization of Indemnification. Any indemnification under this Article XIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 13.1 or Section 13.2 of this Article XIII, as the case may be. Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) by a committee of such directors designated by a majority vote of such directors even though less than a quorum, or (iii) if such a quorum is not obtainable, or, even if it is obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iv) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

        Section ..4 Good Faith Defined. For purposes of any determination under Section 13.3 of this Article XIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or the expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 13.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 13.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 13.1 or 13.2 of this Article XIII, as the case may be.

        Section ..5 Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 13.3 of this Article XIII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 13.1 and 13.2 of this Article XIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standards of conduct set forth in Sections 13.1 or 13.2 of this Article XIII, as the case may be. Neither a contrary determination in the specific case under Section 13.3 of this Article XIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director, officer, employee or agent seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 13.5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director, officer, employee or agent seeking indemnification shall also be entitled to be paid the expenses of prosecuting such application.

        Section ..6 Expenses Payable in Advance. Expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director, officer, employee or agent to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article XIII.

        Section ..7 Nonexclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by or granted pursuant to this Article XIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in their official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 13.1 and 13.2 of this Article XIII shall be made to the fullest extent permitted by law. The provisions of this Article XIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 13.1 or 13.2 of this Article XIII but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law, or otherwise.

        Section ..8 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the Delaware General Corporation Law or the provisions of this Article XIII.

        Section ..9 Certain Definitions. For purposes of this Article XIII references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article XIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article XIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involved services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article XIII.

        Section ..10 Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article XIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

        Section ..11 Limitation on Indemnification. Notwithstanding anything contained in this Article XIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 13.5 hereof), the Corporation shall not be obligated to indemnify any director, officer, employee or agent in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board.

        Section ..12 Severability. If this Article XIII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article XIII that shall not have been invalidated and to the fullest extent permitted by applicable law.

INTERESTED DIRECTORS

        Section ..1 Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

EX-10

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective as of February 2, 2004 (the “Effective Date”), by and between USF Corporation, a Delaware corporation (the “Employer”), and Thomas E. Bergmann (the “Executive”).

RECITALS

    A.        The Employer desires that the Executive provide services for the benefit of the Employer and its wholly-owned subsidiaries and the Executive desires to accept such employment with the Employer.

    B.        The Employer and the Executive acknowledge that the Executive will be a senior member of the management team of the Employer and, as such, will participate in implementing the Employer’s business plan.

    C.        In the course of employment with the Employer, the Executive will have access to certain confidential information that relates to or will relate to the business of the Employer and its wholly-owned subsidiaries.

    D.        The Employer desires that any such information not be disclosed to other parties or otherwise used for unauthorized purposes.

        NOW, THEREFORE, in consideration of the above premises and the following mutual covenants and conditions, the parties agree as follows:

1. Employment. As of the Effective Date, the Employer shall employ the Executive as its Senior Vice President and Chief Financial Officer. The Executive hereby accepts such employment on the following terms and conditions.

2. Duties. The Executive shall have the duties, responsibilities, powers, and authority customarily associated with the position of Senior Vice President and Chief Financial Officer. The Executive shall report to, and follow the direction of, the President and Chief Executive Officer. In addition to the foregoing, the Executive also shall perform such other and unrelated services and duties as may be assigned to him from time to time by the President and Chief Executive Officer consistent with his position as Senior Vice President and Chief Financial Officer. The Executive shall diligently, competently, and faithfully perform all duties, and shall devote his entire business time, energy, attention, and skill to the performance of duties for the Employer or its wholly-owned subsidiaries and will use his best efforts to promote the interests of the Employer. It shall not be considered a violation of the foregoing for the Executive to serve on corporate, industry, civic, religious or charitable boards or committees, so long as such activities do not individually or in the aggregate significantly interfere with the performance of the Executive’s responsibilities as an employee of the Employer in accordance with this Agreement.

3. Executive Loyalty. Subject to the exceptions set forth in Paragraph 2, the Executive shall devote all of his time, attention, knowledge, and skill solely and exclusively to the business and interests of the Employer, and the Employer shall be entitled to all benefits and profits arising from or incident to any and all work, services, and advice of the Executive. The Executive expressly agrees that during the term of this Agreement, he shall not engage, directly or indirectly, as a partner, officer, director, member, manager, stockholder, advisor, agent, employee, or in any other form or capacity, in any other business similar to that of the Employer. The foregoing notwithstanding, and except as otherwise set forth in Paragraph 8, nothing herein contained shall be deemed to prevent the Executive from investing his money in the capital stock or other securities of any corporation whose stock or securities are publicly-owned or are regularly traded on any public exchange, nor shall anything herein contained be deemed to prevent the Executive from investing his money in real estate, or to otherwise manage his personal investments and financial affairs.

4. Compensation.

(a) Salary. The Employer shall pay the Executive an annual base salary of $425,000 (the “Base Salary”), payable in substantially equal installments in accordance with the Employer’s payroll policy from time to time in effect. The Executive’s Base Salary shall be subject to any payroll or other deductions as may be required to be made pursuant to law, government order, or by agreement with, or consent of, the Executive. Changes to the Base Salary, as adjusted, may be made following an annual salary review, the first of which shall take place in or around the end of 2004, and all subsequent reviews shall occur thereafter at the same time as reviews are conducted generally for executive officers of the Employer. The Base Salary shall not be reduced, and the term Base Salary shall refer thereafter to the Base Salary, as it may be increased from time to time.

(b) Performance Bonus. The Executive shall participate in a bonus program, which program shall provide the Executive with an opportunity to achieve a target calendar year bonus of eighty percent (80%) of the Base Salary. For the calendar year ending December 31, 2004, the Executive shall be guaranteed a bonus of no less than one hundred fifty thousand dollars ($150,000). Beginning with 2004, the actual terms and conditions of the annual bonus program shall be established by the Employer, with input from the Executive, shall be memorialized in a written document to be prepared by the Employer and which will be incorporated herein by reference, and will provide for the payment of an annual bonus hereunder if the Employer achieves specified company-wide objectives and if the Executive achieves specified personal management objectives. Any bonus earned hereunder shall be payable no later than ninety (90) days following the end of the calendar year for which the bonus is earned.

(c) Stock Options. On the Effective Date, the Employer shall grant the Executive a non-qualified option to purchase fifty thousand (50,000) shares of the common stock of the Employer. Such stock option shall be granted in accordance with and pursuant to the terms of the Employer’s Long-Term Incentive Plan. The stock option shall be granted at an exercise price equal to the “fair market value” of such common stock of the Employer on a date certain during the first week of employment of the Executive. The grant of such stock option, and the terms thereof, has been memorialized in the Option Agreement attached hereto as Exhibit A.

(d) Stock Grant. On the Effective Date, the Executive shall be provided with a grant of 10,000 shares of common stock of the Employer. The grant of such stock, and the terms thereof, has been memorialized in the Restricted Stock Grant Agreement attached hereto as Exhibit B.

(e) Other Benefits. During the term of this Agreement, the Employer shall:

(i) include the Executive in any life insurance, disability insurance, medical, dental or health insurance, vacation (4 weeks per calendar year, prorated for any partial calendar year), savings, pension and retirement plans and other benefit plans or programs (including, if applicable, any excess benefit or supplemental executive retirement plans) maintained by the Employer for the benefit of its executives; and

(ii) include the Executive in such perquisites as the Employer may establish from time to time that are commensurate with his position and at least comparable to those received by other executives of the Employer (including, but not limited to, an automobile allowance of $1,000 per month).

5. Expenses. The Employer shall reimburse the Executive for all reasonable and approved business expenses, provided the Executive submits paid receipts or other documentation acceptable to the Employer and as required by the Internal Revenue Service to qualify as ordinary and necessary business expenses under the Internal Revenue Code of 1986, as amended (the “Code”).

6. Termination. The Executive’s services shall terminate upon the first to occur of the following events:

(a) Disability or Death. Upon the Executive’s date of death or the date the Executive is given written notice that he has been determined to be disabled by the Employer. For purposes of this Agreement, the Executive shall be deemed to be disabled if the Executive, as a result of illness or incapacity, shall be unable to perform substantially his required duties for a period of four (4) consecutive months or for any aggregate period of six (6) months in any twelve (12) month period. A termination of the Executive’s employment by the Employer for disability shall be communicated to the Executive by written notice and shall be effective on the tenth (10th) business day after receipt of such notice by the Executive, unless the Executive returns to full-time performance of his duties before such tenth (10th) business day.

(b) Cause. On the date the Employer provides the Executive with written notice that he is being terminated for “cause.” For purposes of this Agreement, the Executive shall be deemed terminated for cause if the Employer terminates the Executive after the Executive:

(i) shall have been indicted (or the equivalent thereof) for any felony or any other act involving fraud, theft, misappropriation, dishonesty, or embezzlement; or

(ii) shall have committed intentional acts of misconduct that materially impair the goodwill or business of the Employer or cause material damage to its property, goodwill, or business; or

(iii) shall have refused to, or willfully failed to, perform his material duties hereunder; provided, however, that no termination under this subparagraph (iii) shall be effective unless the Executive does not cure such refusal or failure to the Employer’s reasonable satisfaction as soon as practicable after the Employer gives the Executive written notice identifying such refusal or failure (and, in any event, within thirty (30) calendar days after receipt of such written notice).

No act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith.

(c) Without Cause. On the date the Employer terminates the Executive’s employment for any reason, other than a reason otherwise set forth in this Paragraph 6, provided that the Employer shall give the Executive sixty (60) days written notice prior to such date of its intention to terminate such employment.

(d) Resignation. On the date the Executive terminates his employment for any reason, other than a reason otherwise set forth in this Paragraph 6, provided that the Executive shall give the Employer thirty (30) days written notice prior to such date of his intention to terminate this Agreement.

7. Compensation Upon Termination.

(a) Termination Payment. If the Executive’s services are terminated pursuant to Paragraph 6(a), 6(b) or 6(d), the Executive shall be entitled to his Base Salary through his final date of active employment plus any accrued but unused vacation pay. The Executive also shall be entitled to any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or required under the terms of any death, insurance, or retirement plan, or stock option program or agreement, provided by the Employer and to which the Executive is a party or in which the Executive is a participant, including, but not limited to, any short-term or long-term disability plan or program, if applicable.

(b) Severance Payment. Except as otherwise provided in this Paragraph 7(b), if the Executive’s services are terminated pursuant to Paragraph 6(c), the Executive shall be entitled to his Base Salary through his final date of active employment, plus any accrued but unused vacation pay. The Executive also shall be entitled to a severance amount equal to the sum of (i) two times the Base Salary, plus (ii) one times the target bonus. Such severance payment shall be payable to the Executive over twenty-four (24) months following the date of termination, provided (a) the Executive signs an agreement that waives any rights the Executive may otherwise have against the Employer and releases the Employer from actions, suits, claims, proceedings and demands related to the period of employment and/or the termination of employment, and (b) the Employer shall be permitted to offset from the severance payment hereunder any salary paid to the Executive during the sixty (60) day written notice period, if the Employer, in its discretion, directs the Executive to perform no substantial services during such sixty (60) day written notice period. For twenty-four (24) months (the “Continuation Period”) following such termination, the Executive shall, at the Company’s expense, continue to be eligible to participate, on his behalf and on behalf of his dependents and beneficiaries, in the Company’s medical and dental insurance benefit plans and programs (the “Benefit Plans”) on the same terms as provided to the Executive under the Company’s Benefit Plans as in existence at any time during the 90-day period prior to his termination. Upon the expiration of the Continuation Period, the Executive shall be entitled to elect any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The foregoing notwithstanding, if the Company is unable to effectuate the Executive’s continued participation in the Benefit Plans in accordance with the terms of this subsection (iii), the Company agrees that it shall pay the full cost of any COBRA continuation coverage elected by the Executive and for which the Executive (and his dependents and beneficiaries) is eligible during the Continuation Period. The Company’s obligation hereunder with respect to the foregoing benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer’s employee benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive hereunder as long as the aggregate coverage and benefits of the combined employee benefit plans is no less favorable to the Executive than the coverage and benefits required to be provided hereunder. Any payments made to the Executive under the foregoing provisions of this Paragraph 7(b) shall, if employment is terminated within twelve (12) months of the Effective Date, be reduced by any wages and/or compensation earned by the Executive through his performance of substantially full-time employment during the duration of such twenty-four (24) month period.

(c) Change In Control Payment. The Executive shall be a party to the Employer’s Severance Protection Agreement, which shall supersede the provisions of Paragraph 7(b) and entitle the Executive to a severance payment upon a Change in Control, as defined therein (except for a severance payment under Paragraph 6(b)(iii), which shall be governed solely by the provisions of Paragraph 7(b)). A copy of the Severance Protection Agreement is attached hereto as Exhibit C.

8. Protective Covenants. The Executive acknowledges and agrees that solely by virtue of his employment by, and relationship with, the Employer, he has acquired and will acquire “Confidential Information”, as hereinafter defined, as well as special knowledge of the Employer’s relationships with its customers and suppliers, and that, but for his association with the Employer, the Executive would not or will not have had access to said Confidential Information or knowledge of said relationships. The Executive further acknowledges and agrees (i) that the Employer has long term, near-permanent relationships with its customers and suppliers, and that those relationships were developed at great expense and difficulty to the Employer over several years of close and continuing involvement; and (ii) that the Employer’s relationships with its customers and suppliers are and will continue to be valuable, special and unique assets of the Employer and that the identity of its customers and suppliers is kept under tight security with the Employer and cannot be readily ascertained from publicly available materials or from materials available to the Employer’s competitors. In return for the consideration described in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and as a condition precedent to the Employer entering into this Agreement, and as an inducement to the Employer to do so, the Executive hereby represents, warrants, and covenants as follows:

(a) The Executive has executed and delivered this Agreement as his free and voluntary act, after having determined that the provisions contained herein are of a material benefit to him, and that the duties and obligations imposed on him hereunder are fair and reasonable and will not prevent him from earning a comparable livelihood following the termination of his employment with the Employer.

(b) The Executive has read and fully understands the terms and conditions set forth herein, has had time to reflect on and consider the benefits and consequences of entering into this Agreement, and has had the opportunity to review the terms hereof with an attorney or other representative, if he so chooses.

(c) The execution and delivery of this Agreement by the Executive does not conflict with, or result in a breach of or constitute a default under, any agreement or contract, whether oral or written, to which the Executive is a party or by which the Executive may be bound. In addition, the Executive has informed the Employer of, and provided the Employer with copies of, any non-competition, confidentiality, work-for-hire or similar agreements to which the Executive is subject or may be bound.

(d) The Executive agrees that, during the time of his employment with the Employer and for a period of one (1) year following the later of (i) the termination of the Executive’s employment hereunder pursuant to Paragraph 6(b) or 6(d), or (ii) one year following the date of the last payment provided for under Paragraph 7(b), the Executive will not, except on behalf of the Employer, anywhere in North America, or in any other place or venue where the Employer or any affiliate, subsidiary, or division thereof now conducts or operates, or may conduct or operate, its business prior to the date of the Executive’s termination of employment:

(i) directly or indirectly, contact, solicit or direct any person, firm, corporation, association or other entity to contact or solicit, any of the Employer’s customers for the purpose of providing any products and/or services that are the same as or similar to the products and services provided by the Employer to its customers during the term hereof. In addition, the Executive will not disclose the identity of any such customers to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever; or

(ii) solicit or accept if offered to him, with or without solicitation, on his own behalf or on behalf of any other person, the services of any person who is a then current employee of the Employer (or was an employee of the Employer during the year preceding such solicitation), nor solicit any of the Employer’s then current employees (or an individual who was employed by or engaged by the Employer during the year preceding such solicitation) to terminate employment or an engagement with the Employer, nor agree to hire any then current employee (or an individual who was an employee of the Employer during the year preceding such hire) of the Employer into employment with himself or any company, individual or other entity; or

(iii) directly or indirectly, whether as an investor (excluding investments representing less than one percent (1%) of the common stock of a public company), lender, owner, stockholder, officer, director, consultant, employee, agent, salesperson or in any other capacity, whether part-time or full-time, become associated with any business involved in a business similar to, or comparable to, the business of the Employer or any affiliate of the Employer; or

(e) The Executive acknowledges and agrees that the scope described above is necessary and reasonable in order to protect the Employer in the conduct of its business and that, if the Executive becomes employed by another employer, he shall be required to disclose the existence of this Paragraph 8 to such employer and the Executive hereby consents to and the Employer is hereby given permission to disclose the existence of this Paragraph 8 to such employer.

(f) For purposes of this Paragraph 8, “customer” shall be defined as any person, firm, corporation, association, or entity that purchased any type of product and/or service from the Employer or is or was doing business with the Employer or the Executive within the twelve (12) month period immediately preceding termination of the Executive’s employment.

(g) The Executive agrees that both during his employment and thereafter the Executive will not, for any reason whatsoever, use for himself or disclose to any person not employed by the Employer any “Confidential Information” of the Employer acquired by the Executive during his relationship with the Employer, both prior to and during the term of this Agreement. The Executive further agrees to use Confidential Information solely for the purpose of performing duties with, or for, the Employer and further agrees not to use Confidential Information for his own private use or commercial purposes or in any way detrimental to the Employer. The Executive agrees that “Confidential Information” includes but is not limited to: (1) any financial, engineering, business, planning, operations, services, potential services, products, potential products, technical information and/or know-how, organization charts, formulas, business plans, production, purchasing, marketing, pricing, sales, profit, personnel, customer, broker, supplier, or other lists or information of the Employer; (2) any papers, data, records, processes, methods, techniques, systems, models, samples, devices, equipment, compilations, invoices, customer lists, or documents of the Employer; (3) any confidential information or trade secrets of any third party provided to the Employer in confidence or subject to other use or disclosure restrictions or limitations; and (4) any other information, written, oral, or electronic, whether existing now or at some time in the future, whether pertaining to current or future developments, and whether previously accessed during the Executive’s tenure with the Employer or to be accessed during his future employment with the Employer, which pertains to the Employer’s affairs or interests or with whom or how the Employer does business. The Employer acknowledges and agrees that Confidential Information does not include (a) information properly in the public domain, (b) information in the Executive’s possession prior to the date of his original association with the Employer, or (c) information which is required to be disclosed by law or legal process provided that the Executive notifies the Employer prior to or, if such advance notification is not possible, promptly after such disclosure and cooperates with the Employer in obtaining any protective order regarding or other confidential treatment of such information.

(h) In the event that the Executive intends to communicate information to any individual(s), entity or entities (other than the Employer), to permit access by any individual(s), entity or entities (other than the Employer), or to use information for the Executive’s own account or for the account of any individual(s), entity or entities (other than the Employer) and such information would be Confidential Information hereunder but for the exceptions set out at (a) and (b) of Paragraph 8(g) of this Agreement, the Executive shall notify the Employer of such intent in writing, including a description of such information, no less than fifteen (15) days prior to such communication, access or use.

(i) During and after the term of employment hereunder, the Executive will not remove from the Employer’s premises any documents, records, files, notebooks, correspondence, reports, video or audio recordings, computer printouts, computer programs, computer software, price lists, microfilm, drawings or other similar documents containing Confidential Information, including copies thereof, whether prepared by him or others, except as his duty shall require, and in such cases, will promptly return such items to the Employer. Upon termination of his employment with the Employer, all such items including summaries or copies thereof, then in the Executive’s possession, shall be returned to the Employer immediately.

(j) The Executive recognizes and agrees that all ideas, inventions, patents, copyrights, copyright designs, trade secrets, trademarks, processes, discoveries, enhancements, software, source code, catalogues, prints, business applications, plans, writings, and other developments or improvements and all other intellectual property and proprietary rights and any derivative work based thereon (the “Inventions”) made, conceived or completed by the Executive, alone or with others, during the term of his employment, whether or not during working hours, that are within the scope of the Employer’s business operations or that relate to any of the Employer’s work or projects (including any and all inventions based wholly or in part upon ideas conceived during the Executive’s employment with the Employer), are the sole and exclusive property of the Employer. The Executive further agrees that (1) he will promptly disclose all Inventions to the Employer and hereby assigns to the Employer all present and future rights he has or may have in those Inventions, including without limitation those relating to patent, copyright, trademark or trade secrets; and (2) all of the Inventions eligible under the copyright laws are “work made for hire.” At the request of the Employer, the Executive will do all things deemed by the Employer to be reasonably necessary to perfect title to the Inventions in the Employer and to assist in obtaining for the Employer such patents, copyrights or other protection as may be provided under law and desired by the Employer, including but not limited to executing and signing any and all relevant applications, assignments or other instruments. Notwithstanding the foregoing, pursuant to the Employee Patent Act, Illinois Public Act 83-493, the Employer hereby notifies the Executive that the provisions of this Paragraph 8 shall not apply to any Inventions for which no equipment, supplies, facility or trade secret information of the Employer was used and which were developed entirely on the Executive’s own time, unless (1) the Invention relates (i) to the business of the Employer, or (ii) to actual or demonstrably anticipated research or development of the Employer, or (2) the Invention results from any work performed by the Executive for the Employer.

(k) The Executive acknowledges and agrees that all customer lists, supplier lists, and customer and supplier information, including, without limitation, addresses and telephone numbers, are and shall remain the exclusive property of the Employer, regardless of whether such information was developed, purchased, acquired, or otherwise obtained by the Employer or the Executive. The Executive also agrees to furnish to the Employer on demand at any time during the term of this Agreement, and upon the termination of this Agreement, any other records, notes, computer printouts, computer programs, computer software, price lists, microfilm, or any other documents related to the Employer’s business, including originals and copies thereof. The Executive recognizes and agrees that he has no expectation of privacy with respect to the Employer’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and that the Executive’s activity and any files or messages on or using any of those systems may be monitored at any time without notice.

(l) The Executive acknowledges that he may become aware of “material” nonpublic information relating to customers whose stock is publicly traded. The Executive acknowledges that he is prohibited by law as well as by Employer policy from trading in the shares of such customers while in possession of such information or directly or indirectly disclosing such information to any other persons so that they may trade in these shares. For purposes of this Paragraph 8(l), “material” information may include any information, positive or negative, which might be of significance to an investor in determining whether to purchase, sell or hold the stock of publicly traded customers. Information may be significant for this purpose even if it would not alone determine the investor’s decision. Examples include a potential business acquisition, internal financial information that departs in any way from what the market would expect, the acquisition or loss of a major contract, or an important financing transaction.

(m) The Employer does not wish to incorporate any unlicensed or unauthorized material into its products or services or those of its subsidiaries. Therefore, the Executive agrees that he will not knowingly disclose to the Employer, use in the Employer’s business, or cause the Employer to use, any information or material which is confidential or proprietary to any third party including, but not limited to, any former employer, competitor or client, unless the Employer has a right to receive and use such information. The Executive will not incorporate into his work any material which is subject to the copyrights of any third party unless the Employer has a written agreement with such third party or otherwise has the right to receive and use such information.

(n) It is agreed that any breach or anticipated or threatened breach of any of the Executive’s covenants contained in this Paragraph 8 will result in irreparable harm and continuing damages to the Employer and its business and that the Employer’s remedy at law for any such breach or anticipated or threatened breach will be inadequate and, accordingly, in addition to any and all other remedies that may be available to the Employer at law or in equity in such event, any court of competent jurisdiction may issue a decree of specific performance or issue a temporary and permanent injunction, without the necessity of the Employer posting bond or furnishing other security and without proving special damages or irreparable injury, enjoining and restricting the breach, or threatened breach, of any such covenant, including, but not limited to, any injunction restraining the Executive from disclosing, in whole or part, any Confidential Information. The Executive acknowledges the truthfulness of all factual statements in this Agreement and agrees that he is estopped from and will not make any factual statement in any proceeding that is contrary to this Agreement or any part thereof.

9. Notices. Any and all notices required in connection with this Agreement shall be deemed adequately given only if in writing and (a) personally delivered, or sent by first class, registered or certified mail, postage prepaid, return receipt requested, or by recognized overnight courier, (b) sent by facsimile, provided a hard copy is mailed on that date to the party for whom such notices are intended, or (c) sent by other means at least as fast and reliable as first class mail. A written notice shall be deemed to have been given to the recipient party on the earlier of (a) the date it shall be delivered to the address required by this Agreement; (b) the date delivery shall have been refused at the address required by this Agreement; (c) with respect to notices sent by mail or overnight courier, the date as of which the Postal Service or overnight courier, as the case may be, shall have indicated such notice to be undeliverable at the address required by this Agreement; or (d) with respect to a facsimile, the date on which the facsimile is sent and receipt of which is confirmed. Any and all notices referred to in this Agreement, or which either party desires to give to the other, shall be addressed to his residence in the case of the Executive, or to its principal office in the case of the Employer.

10. Waiver of Breach. A waiver by the Employer of a breach of any provision of this Agreement by the Executive shall not operate or be construed as a waiver or estoppel of any subsequent breach by the Executive. No waiver shall be valid unless in writing and signed by an authorized officer of the Employer.

11. Assignment. The Executive acknowledges that the services to be rendered by him are unique and personal. Accordingly, the Executive may not assign any of his rights or delegate any of his duties or obligations under this Agreement. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer.

12. Entire Agreement. This Agreement sets forth the entire and final agreement and understanding of the parties and contains all of the agreements made between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless in writing and signed by the Employer and the Executive.

13. Severability. If any provision of this Agreement shall be found invalid or unenforceable for any reason, in whole or in part, then such provision shall be deemed modified, restricted, or reformulated to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified, restricted, or reformulated or as if such provision had not been originally incorporated herein, as the case may be. The parties further agree to seek a lawful substitute for any provision found to be unlawful; provided, that, if the parties are unable to agree upon a lawful substitute, the parties desire and request that a court or other authority called upon to decide the enforceability of this Agreement modify those restrictions in this Agreement that, once modified, will result in an agreement that is enforceable to the maximum extent permitted by the law in existence at the time of the requested enforcement.

14. Headings. The headings in this Agreement are inserted for convenience only and are not to be considered a construction of the provisions hereof.

15. Execution of Agreement. This Agreement may be executed in several counterparts, each of which shall be considered an original, but which when taken together, shall constitute one agreement.

16. Recitals. The recitals to this Agreement are incorporated herein as an integral part hereof and shall be considered as substantive and not precatory language.

17. Arbitration. Any controversy, claim or dispute arising out of or relating to the Executive’s employment or termination of employment, whether or not the controversy, claim or dispute arises under this Agreement (other than any controversy , claim or dispute arising under Paragraph 8) shall be resolved by arbitration in accordance with the National Rules for the Resolution of Employment Disputes (“Rules”) of the American Arbitration Association through a single arbitrator selected in accordance with the Rules. The decision of the arbitrator shall be rendered within thirty (30) days of the close of the arbitration hearing and shall include written findings of fact and conclusions of law reflecting the appropriate substantive law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof in the State of Illinois. In reaching his or her decision, the arbitrator shall have no authority (a) to authorize or require the parties to engage in discovery (provided, however, that the arbitrator may schedule the time by which the parties must exchange copies of the exhibits that, and the names of the witnesses whom, the parties intend to present at the hearing), (b) to interpret or enforce Paragraph 8 of the Agreement (for which Paragraph 19 shall provide the sole and exclusive venue), (c) to change or modify any provision of this Agreement, (d) to base any part of his or her decision on the common law principle of constructive termination, or (e) to award punitive damages or any other damages not measured by the prevailing party’s actual damages and may not make any ruling, finding or award that does not conform to this Agreement. Each party shall bear all of his or its own legal fees, costs and expenses of arbitration and one-half (1/2) of the costs of the arbitrator.

18. Indemnification. To the fullest extent permitted by law, the Employer agrees to indemnify the Executive against, and to hold the Executive harmless from any and all claims, lawsuits, losses, damages, assessments, penalties, expenses, costs and liabilities of any kind or nature, including without limitation, court costs and attorneys’ fees, which the Executive may sustain directly as a result of, or in connection with, any act or omission by the Employer or its employees or any suit or other proceeding brought by a third party (including but not limited to governmental or regulatory agencies or bodies) in connection with the foregoing or in connection with any act or omission of the Executive while he was employed or served as an officer or director of the Employer or any wholly-owned subsidiary thereof, unless such claim, lawsuit, loss, damage, assessment, penalty, expense, cost or liability is the result of the Executive’s gross negligence or willful misconduct.

19. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without reference to its conflict of law provisions. Furthermore, as to Paragraph 8, the Executive agrees and consents to submit to personal jurisdiction in the state of Illinois in any state or federal court of competent subject matter jurisdiction situated in Cook County, Illinois. The Executive further agrees that the sole and exclusive venue for any suit arising out of, or seeking to enforce, the terms of Paragraph 8 of this Agreement shall be in a state or federal court of competent subject matter jurisdiction situated in Cook County, Illinois. In addition, the Executive waives any right to challenge in another court any judgment entered by such Cook County court or to assert that any action instituted by the Employer in any such court is in the improper venue or should be transferred to a more convenient forum.

IN WITNESS WHEREOF, the parties have set their signatures on the date first written above.

EMPLOYER:	EXECUTIVE:
USF CORPORATION, a Delaware corporation
/s/ Richard P. DiStasio By: Richard P. DiStasio Its: President & Chief Executive Officer	/s/ Thomas E. Bergmann

EXHIBIT A

USF CORPORATION
NONSTATUTORY STOCK OPTION AGREEMENT

        THIS AGREEMENT is made effective February X, 2004 (the “Grant Date”), between USF Corporation, a Delaware corporation (the “Company”), and Thomas E. Bergmann (the “Optionee”).

        WHEREAS, in accordance with the terms of that certain Employment Agreement as executed by and between the Company and the Optionee effective of even date herewith (the “Employment Agreement”), the Company desires to grant to the Optionee an option to purchase shares of its common capital stock (the “Shares”) under the Company’s Long-Term Incentive Plan (the “Plan”); and

        WHEREAS, the Company and the Optionee understand and agree that any terms used herein have the same meanings as in the Plan (the Optionee being referred to in the Plan as a “Participant”).

        NOW, THEREFORE, in consideration of the following mutual covenants and for other good and valuable consideration, the parties agree as follows:

1. GRANT OF OPTION

The Company grants to the Optionee the right and Option to purchase all or any part of an aggregate of 50,000 Shares (the “Option”) on the terms and conditions and subject to all the limitations set forth herein and in the Plan, which is incorporated herein by reference. The Optionee acknowledges receipt of a copy of the Plan and acknowledges that the definitive records pertaining to the grant of this Option, and exercises of rights hereunder, shall be retained by the Company. The Option granted herein is intended to be a Nonstatutory Option as defined in the Plan.

2. PURCHASE PRICE

The purchase price of the Shares subject to the Option shall be $_________ per Share, the fair market value of a Share as of the Grant Date.

3. EXERCISE OF OPTION

Subject to the Plan and this Agreement, the Option shall be exercisable as follows:

EXERCISE PERIOD

No. of Shares	Commencement Date	Expiration Date
10,000	1st Anniversary of Grant Date	10th Anniversary of Grant Date
10,000	2nd Anniversary of Grant Date	10th Anniversary of Grant Date
10,000	3rd Anniversary of Grant Date	10th Anniversary of Grant Date
10,000	4th Anniversary of Grant Date	10th Anniversary of Grant Date
10,000	5th Anniversary of Grant Date	10th Anniversary of Grant Date

Notwithstanding the foregoing, if the Optionee’s services are terminated by the Company (without “cause,” as such term is defined in the Employment Agreement) either (A) (1) within six (6) months following a Change in Control, or (2) the Optionee voluntarily terminates his employment within six (6) months following a Change in Control or (B) at any time after execution of this Agreement, all Shares, whether or not exercisable in accordance with the Schedule set forth above, shall become immediately exercisable. For purposes of this Agreement, a “Change in Control” shall be as defined in Exhibit C of the Employment Agreement.

4. ISSUANCE OF STOCK

The Option may be exercised in whole or in part (to the extent that it is exercisable in accordance with its terms) by giving written notice (or any other approved form of notice) to the Company. Such written notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised, shall contain the warranty, if any, required under the Plan and shall specify a date (other than a Saturday, Sunday or legal holiday) not less than five (5) nor more than ten (10) days after the date of such written notice, as the date on which the Shares will be purchased, at the principal office of the Company during ordinary business hours, or at such other hour and place agreed upon by the Company and the person or persons exercising the Option, and shall otherwise comply with the terms and conditions of this Agreement and the Plan. On the date specified in such written notice (which date may be extended by the Company if any law or regulation requires the Company to take any action with respect to the Shares prior to the issuance thereof), the Company shall accept payment for the Shares and shall deliver to the Optionee an appropriate certificate or certificates for the Shares as to which the Option was exercised.

The Option price of any Shares shall be payable at the time of exercise as determined by the Company either:

(a) in cash, by certified check or bank check, or by wire transfer; or

(b) in whole shares of the Company’s common stock, provided, however, that (i) if such shares were acquired pursuant to an incentive stock option plan (as defined in Code Section 422) of the Company or Affiliate, then the applicable holding period requirements of said Section 422 have been met with respect to such shares, (ii) if the Optionee is subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended from time to time, and if such shares were granted pursuant to an option, then such option must have been granted at least six (6) months prior to the exercise of the Option hereunder, and (iii) such shares were owned by the Optionee for six (6) or more months prior to the exercise of the Option hereunder; or

(c) through the delivery of cash or the extension of credit by a broker-dealer to whom the Optionee has submitted notice of exercise or otherwise indicated an intent to exercise an Option (a so-called “cashless” exercise), but only to the extent that the Company’s corporate counsel has determined that such a “cashless” exercise is a permissible method of exercise for the Optionee under Section 13(k) of the Securities Exchange Act of 1934, as amended; or

(d) in any combination of (a), (b), or (c) above.

The fair market value of the stock to be applied toward the purchase price shall be determined as of the date of exercise of the Option in a manner consistent with the determination of fair market value with respect to the grant of an Option under the Plan. Any certificate for shares of outstanding stock of the Company used to pay the purchase price shall be accompanied by a stock power duly endorsed in blank by the registered holder of the certificate, with signature guaranteed in the event the certificate shall also be accompanied by instructions from the Optionee to the Company’s transfer agent with respect to disposition of the balance of the shares covered thereby.

The Company shall pay all original issue taxes with respect to the issuance of Shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith. The holder of this Option shall have the rights of a stockholder only with respect to those Shares covered by the Option which have been registered in the holder’s name in the share register of the Company upon the due exercise of the Option.

5. NON-ASSIGNABILITY

This Option shall not be transferable by the Optionee and shall be exercisable only by the Optionee, except as the Plan may otherwise provide.

6. NOTICES

Any notices required or permitted by the terms of this Agreement or the Plan shall be given by registered or certified mail, return receipt requested, addressed as follows:

To the Company:	USF Corporation 8550 West Bryn Mawr Avenue Suite 700 Chicago, Illinois 60631 Attn: Long-Term Incentive Plan Committee
To the Optionee:	Thomas E. Bergmann 60 S. Wynstone Drive North Barrington, IL 60010

or to such other address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have been given when mailed in accordance with the foregoing provisions.

7. GOVERNING LAW

        This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois.

8. BINDING EFFECT

        This Agreement shall (subject to the provisions of Section 5 hereof) be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

        IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement to be executed on their behalf, by their duly authorized representatives, all on the day and year first above written.

COMPANY:	OPTIONEE:
USF CORPORATION
By:______________________________ Its:______________________________	______________________________

EXHIBIT B

USF CORPORATION
RESTRICTED STOCK GRANT AGREEMENT

        THIS AGREEMENT is made effective February X, 2004 (the “Grant Date”) between USF Corporation, a Delaware corporation (the “Company”), and Thomas E. Bergmann (the “Recipient”).

        WHEREAS, in accordance with the terms of that certain Employment Agreement as executed by and between the Company and the Recipient effective of even date herewith (the “Employment Agreement”), the Company desires to grant to the Recipient certain shares (the “Shares”) of its common capital stock (the “Stock”); and

        WHEREAS, such Shares are not being issued under the Company’s Long-Term Incentive Plan (the “Plan”) but the Company and the Recipient understand and agree that any terms used herein have the same meanings as if such Shares were granted as restricted stock under the Plan (the Recipient being referred to in the Plan as a “Participant”).

        NOW, THEREFORE, in consideration of the following mutual covenants and for other good and valuable consideration, the parties agree as follows:

1. GRANT OF RESTRICTED STOCK

The Company hereby grants to the Recipient 10,000 Shares of Stock on the terms and conditions and subject to all the limitations set forth herein and in the Plan, which is incorporated herein by reference. The Recipient acknowledges receipt of a copy of the Plan. The Company and the Recipient acknowledge that the number of Shares of Stock granted hereunder equals $_______ of Stock on the Grant Date.

2. PURCHASE PRICE

The purchase price of the Stock shall be deemed to be zero Dollars per Share. The foregoing notwithstanding, the Recipient shall not, without the consent of the Company, make any election under Section 83(b) of the Code to recognize income at the date of grant.

3. CERTIFICATES AND SHAREHOLDER RIGHTS

The Company’s Transfer Agent and Registrar shall prepare and issue a stock certificate in the Recipient’s name representing the Shares of Stock that the Recipient has been granted. From and after the issuance of the certificate, the Recipient shall be the holder of record with respect to the Stock. The Company shall take such actions as are necessary to register the Shares under the applicable securities laws on or before the date such Shares cease to be subject to the restrictions described in Paragraph 4.

4. RESTRICTIONS AND VESTING

(a) Until the passage of the time periods or the occurrence of the events specified in Paragraph 4(b) below, the Recipient shall not sell, transfer, convey, pledge, encumber, or otherwise dispose of all or a portion of any interest in the Stock.

(b) Subject to this Agreement, the restrictions hereunder shall lapse on the first to occur of the following dates or events, whichever is applicable:

(i)	Total Number of Shares	Date Restrictions Lapse
	2,500 2,500 2,500 2,500	February X, 2005 February X, 2006 February X, 2007 February X, 2008
(ii)	Total Number of Shares	Event on Which Restrictions Lapse
	10,000 10,000 10,000	Recipient's Death or Disability as defined in the Plan Termination by the Company without "Cause" as defined in the Employment Agreement Ocurrence of a Change in Control, as defined in Exhibit C to the Employment Agreement

Except as provided above, any Stock the restrictions on which have not lapsed upon the Recipient’s termination of employment shall be forfeited immediately and this statement shall constitute the written notice required under the Plan of such forfeiture.

5. DIVIDENDS

From and after the date the Recipient acquires the Shares, and is issued a certificate or certificates, the Recipient shall be entitled, with respect to the Recipient’s Shares of Stock, to any dividends declared by the Company on its Shares of Common Stock and paid in the form of cash or other property.

6. RELEASE OF RESTRICTIONS

Cash dividends paid with respect to Shares of Stock shall be paid to the Recipient. In the case of dividends declared by the Company and payable in the form of Common Stock or other securities of the Company, then such securities shall be subject to the terms and conditions of the Plan and this Agreement, shall be represented by certificates issued in the name of the Recipient but shall be subject to the restrictions and vesting schedules specified in Paragraph 4, provided that the restrictions applicable to securities issued as a dividend on certain Shares shall lapse concurrently with the restrictions on the underlying Shares.

7. RELEASE OF RESTRICTIONS

At such time as the restrictions on the Shares of Stock lapse, or as soon thereafter as may be practicable, the restrictive legend shall be removed from the certificate or certificates.

8. WITHHOLDING

The Company shall have the power and right to deduct or withhold, or require the Recipient to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes required by law to be withheld with respect to any grant made under or as a result of this Agreement. In the alternative, the Recipient may elect, subject to Company approval, to satisfy the withholding requirement in whole or in part, by having the Company withhold Shares that would otherwise be transferred to the Recipient having a fair market value, on the date the tax is to be determined, equal to the minimum marginal tax that could be imposed on the transaction. All elections shall be made in writing and signed by the Recipient.

9. NOTICES

Any notices required or permitted by the terms of this Agreement or the Plan shall be given by registered or certified mail, return receipt requested, addressed as follows:

To the Company:	USF Corporation 8550 West Bryn Mawr Avenue Suite 700 Chicago, Illinois 60631 Attn: Long-Term Incentive Plan Committee
To the Optionee:	Thomas E. Bergmann 60 S. Wynstone Drive North Barrington, IL 60010

or to such other address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have been given when mailed in accordance with the foregoing provisions.

10. GOVERNING LAW

        This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois.

11. BINDING EFFECT

This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

        IN WITNESS WHEREOF, the Company and the Recipient have caused this Agreement to be executed on its and his behalf effective the day and year first above written.

COMPANY:	OPTIONEE:
USF CORPORATION
By:______________________________ Its:______________________________	______________________________

EXHIBIT C

USF CORPORATION

SEVERANCE PROTECTION AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of February X, 2004 by and between USF Corporation, a Delaware corporation (the “Company”), and Thomas E. Bergmann (the “Executive”).

RECITALS

A.         The Board recognizes that the possibility of a Change in Control exists and that the threat or the occurrence of a Change in Control can distract its key management personnel because of the uncertainties inherent in such a situation.

B The Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of a threat or occurrence of a Change in Control and to ensure his continued dedication and efforts in such event.

C.         In order to induce the Executive to remain in the employ of the Company, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits in the event his employment is terminated as a result of, or in connection with, a Change in Control in the Company.

NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, the parties agree as follows:

1. Term of Agreement. This Agreement shall commence as of February 2, 2004 and shall continue in effect until December 31, 2004; provided, however, that commencing on January 1, 2005 and on each January 1 thereafter, the term of this Agreement shall automatically be extended for one (1) year unless either the Company or the Executive shall have given written notice to the other at least ninety (90) days prior thereto that the term of this Agreement shall not be so extended; and provided, further, that notwithstanding any such notice by the Company not to extend, if a Change in Control shall occur during the term hereof, the term of this Agreement shall not expire prior to the expiration of twenty-four (24) months after the occurrence of a Change in Control.

2. Definitions.

2.1. “Accrued Compensation” shall mean all amounts earned or accrued through the Termination Date, but not paid as of the Termination Date, including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date, (c) vacation pay, and (d) bonuses and other incentive compensation (other than the Pro Rata Bonus).

2.2. “Act” shall mean the Securities Exchange Act of 1934, as amended.

2.3. “Base Amount” shall mean the greater of the Executive’s annual base salary (a) at the rate in effect on the Termination Date or (b) at the highest rate in effect at any time during the ninety (90) day period prior to the Change in Control, and shall include all amounts of his base salary that are deferred under any qualified or non-qualified employee benefit plan of the Company, or any other agreement or arrangement.

2.4. “Board” shall mean the Board of Directors of the Company.

2.5. “Bonus Amount” shall mean the Executive’s target bonus as established by the Company for the fiscal year in which the Change of Control occurs which shall be no less than eighty percent (80%) of the Executive’s maximum payout as established by the Company for the fiscal year in which the Change in Control occurs.

2.6. Termination of employment is for “Cause” if the Executive has been convicted of a felony or the termination is evidenced by a resolution adopted in good faith by two-thirds of the Board that the Executive (a) failed to perform his reasonably assigned duties with the Company (other than a failure resulting from the Executive’s incapacity due to physical or mental illness or from the Executive’s assignment of duties that would constitute Good Reason), which failure continued for a period of at least thirty (30) days after a written notice of demand for performance had been delivered to the Executive specifying the manner in which the Executive had failed to perform, or (b) intentionally engaged in conduct that is demonstrably and materially injurious to the Company; provided, however, that no termination of the Executive’s employment shall be for Cause as set forth in clause (b) above until (i) there shall have been delivered to the Executive a written notice setting forth that the Executive committed the conduct set forth in clause (b) and specifying the particulars thereof in detail, and (ii) the Executive shall have been provided an opportunity to be heard in person by the Board (with the assistance of the Executive’s counsel if the Executive so desires).

2.7. “Change in Control” shall mean, the occurrence of any of the following events:

(a) any person (as such term is defined in Section 3 of the Act and used in Rule 13d-5 of the SEC under the Act) or group (as such term is defined in Section 13(d) of the Act), other than a Subsidiary or any employee benefit plan (or any related trust) of the Company or a Subsidiary, becomes the beneficial owner of twenty-five percent (25%) or more of the common stock of the Company or of Voting Securities representing twenty-five percent (25%) or more of the combined voting power of all Voting Securities of the Company;

(b) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided that any individual who becomes a director after the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote or written consent of at least two-thirds of the directors then comprising the Incumbent Directors shall be considered an Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company (as such terms are used in Rule 14a-11 of the SEC under the Act); or

(c) approval by the stockholders of the Company of any of the following:

(i) a merger, reorganization or consolidation (“Merger”) with respect to which the individuals and entities who were the respective beneficial owners of the Voting Securities of the Company immediately before such Merger do not, after such Merger, beneficially own, directly or indirectly, more than seventy-five percent (75%) of the Voting Securities of the Company resulting from such Merger, or

(ii) the sale or other disposition of all or substantially all of the assets of the Company.

Clauses (a), (b) and (c) of this definition notwithstanding, a Change in Control shall not occur if the Executive is, by written agreement executed before such Change in Control, a participant on such Executive’s own behalf in a transaction in which, pursuant to the written agreement, the Executive has an equity interest in the resulting entity or a right to acquire such an equity interest.

2.8. “Disability” shall mean a physical or mental condition that impairs the Executive’s ability to substantially perform his duties with the Company for a period of one hundred eighty (180) consecutive days and, as a result of which, the Executive has not returned to employment prior to the Termination Date as stated in the Notice of Termination.

2.9. “Effective Date” shall mean the date on which this Agreement is executed.

2.10. “Good Reason” shall mean the occurrence after a Change in Control of any of the events or conditions described in paragraphs (a) through (h) hereof:

(a) a change in the Executive’s status, title, position or responsibilities (including reporting responsibilities) which, in the Executive’s reasonable judgment, represents a diminution or an adverse change from his status, title, position or responsibilities as in effect at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter; the assignment to the Executive of any duties or responsibilities which, in the Executive’s reasonable judgment, are inconsistent with his status, title, position or responsibilities as in effect at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter; or any removal of the Executive from or failure to reappoint or reelect him to any of such positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death, or by the Executive other than for Good Reason;

(b) a reduction in the Executive’s base salary or any failure to pay the Executive any compensation or benefits to which he is entitled within five (5) days of the date due;

(c) the Company’s requiring the Executive to be based at any place outside a 40-mile radius of the location of the Company’s corporate headquarters immediately prior to the Change of Control, except for reasonably required travel that is not materially greater than such travel requirements prior to the Change in Control;

(d) the failure by the Company to (1) continue in effect (without reduction in benefit levels and/or reward opportunities) any material compensation or employee benefit plan in which the Executive was participating at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter, unless such plan is replaced with a plan that provides substantially equivalent compensation or benefits to the Executive or (2) provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other employee benefit plan, program and practice in which the Executive was participating at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter;

(e) the insolvency or the filing (by any party, including the Company) of a petition for bankruptcy of the Company, which petition is not dismissed within sixty (60) days;

(f) any material breach by the Company of any provision of this Agreement;

(g) any purported termination of the Executive’s employment for Cause by the Company which does not comply with the terms of Section 2.6; or

(h) the failure of the Company to obtain an agreement, satisfactory to the Executive, from any Successors and Assigns to assume and agree to perform this Agreement.

Any event or condition described in this Section 2.10(a) through (h) that occurs prior to a Change in Control, but which the Executive reasonably demonstrates (1) was at the request of a third party, or (2) otherwise arose in connection with, or in anticipation of, a Change in Control that actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control.

2.11. “Notice of Termination” shall mean, following a Change in Control, a written notice of termination of the Executive’s employment from the Company that indicates, if applicable, the specific termination provision in this Agreement relied upon and that sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provisions so indicated.

2.12. “Pro Rata Bonus” shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the fiscal year through the Termination Date and the denominator of which is three hundred sixty-five (365).

2.13. “SEC” shall mean the Securities and Exchange Commission.

2.14. “Subsidiary” shall mean a corporation in which greater than fifty percent (50%) of the shares are owned, directly or indirectly, by the Company or a subsidiary of the Company.

2.15. “Successors and Assigns” shall mean a corporation or other entity acquiring all or substantially all the stock, assets and/or business of the Company whether by operation of law or otherwise.

2.16. “Termination Date” shall mean in the case of the Executive’s death, his date of death; in the case of Good Reason, the last day of his employment; and in all other cases, the date specified in the Notice of Termination, provided, however, that if the Executive’s employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination shall be at least thirty (30) days from the date the Notice of Termination is given to the Executive, and provided further, that in the case of Disability, the Executive shall not have returned to the full-time performance of his duties during such period of at least thirty (30) days.

2.17. “Voting Securities” shall mean those securities of a corporation that are entitled to vote generally in the election of directors of such corporation.

3. Termination of Employment.

3.1. If, during the term of this Agreement, the Executive’s employment with the Company shall be terminated within twenty-four (24) months following a Change in Control of the Company, the Executive shall be entitled to the following compensation and benefits:

(a) If the Executive’s employment with the Company shall be terminated (1) by the Company for Cause or Disability, (2) by reason of the Executive’s death, or (3) by the Executive other than for Good Reason, the Company shall pay to the Executive the Accrued Compensation and, if such termination is other than by the Company for Cause, the Pro Rata Bonus.

(b) If the Executive’s employment with the Company shall be terminated for any reason other than as specified in Section 3.1(a), the Executive shall be entitled to the following:

(i) The Company shall pay the Executive his Accrued Compensation and the Pro Rata Bonus;

(ii) The Company shall pay the Executive as severance pay and, in lieu of any further compensation for periods subsequent to the Termination Date, a payment equal to two (2) times the sum of (A) the Base Amount and (B) the Bonus Amount.

(iii) For eighteen (18) months (the “Continuation Period”) following such termination, the Company shall continue to provide, at its expense, life insurance coverage to the Executive on the same terms as provided to the Executive by the Company under any life insurance plan or program as in existence at any time during the 90-day period prior to the Change in Control or at any time thereafter or, if such coverage, in whole or in part, is no longer provided to similarly situated executives who continue in the employ of the Company during the Continuation Period, such life insurance coverage as is provided to those similarly situated executives during the Continuation Period, in either case to the extent such insurance coverage is permissible under the terms of the Company’s life insurance plans or programs. The Company agrees that it shall, if necessary for the continuation of such insurance coverage, take any steps that are reasonably necessary to amend its life insurance plans or programs in order to permit the Executive to continue to receive coverage under such plans, provided the cost to the Company of taking such actions is not commercially unreasonable. The Company’s obligation hereunder with respect to the foregoing life insurance benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer’s employee benefit plans, in which case the Company may reduce the coverage of any life insurance benefits it is required to provide the Executive hereunder as long as the aggregate insurance coverage of the combined plans is no less favorable to the Executive than the life insurance coverage required to be provided hereunder. In addition to the foregoing, if the Executive elects any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Company agrees that it shall pay the full cost of such coverage during the Continuation Period, or if shorter, until the Executive is no longer eligible for COBRA continuation coverage. This subsection (iii) shall not be interpreted so as to limit benefits to which the Executive or his dependents or beneficiaries may otherwise be entitled under any of the Company’s employee benefit plans, programs or practices following the Executive’s termination of employment, including without limitation, their entitlement to retiree medical and life insurance benefits.

(iv) (A) The restrictions on any outstanding incentive awards granted to the Executive under the USF Corporation Long-Term Incentive Plan (the “Stock Plan”) or under any other incentive plan or arrangement (including any restricted stock plan) shall lapse and such incentive awards shall become one hundred percent (100%) vested, all stock options and stock appreciation rights granted to the Executive shall become immediately exercisable and shall become one hundred percent (100%) vested, and all performance units granted to the Executive shall become one hundred percent (100%) vested and (B) the Executive shall have the right to require the Company to purchase, for cash, any shares of unrestricted stock or shares purchased upon exercise of any options, at a price equal to the fair market value of such shares on the date of purchase by the Company. For purposes of this Agreement, if the shares are listed on any national securities exchange, the fair market value shall be the mean average of the high and low sales prices, if any, on the largest such exchange on the date of purchase by the Company or, if there are no sales on such date, on the most recent trade date thirty (30) days or less prior to the date of purchase by the Company. If the shares are not listed on any national securities exchange, the fair market value of such shares shall be determined by a nationally recognized investment banking firm mutually agreed upon by the Company and the Executive. If the parties shall be unable to mutually agree upon an investment banking firm, then each of the Company and the Executive shall designate an investment banking firm within ten (10) days of the date on which it is determined that the parties are unable to mutually agree upon an investment banking firm. The two (2) independent firms shall, within ten (10) days, jointly select a third nationally recognized investment banking firm, whose determination of the fair market value shall be final, binding and conclusive on the Company and the Executive. All costs associated with the determination of fair market value shall be borne by the Company. Notwithstanding anything in this paragraph (iv) to the contrary, if there exists an inconsistency between the terms of the Stock Plan and this paragraph (iv), such that the terms of this paragraph (iv) cannot be applied in a manner that is consistent with the Stock Plan, then the terms of the Stock Plan shall govern, provided, however, that the Company shall pay the Executive in one single sum the difference between (1) the amount that the Executive would receive by applying this paragraph most favorably to the Executive, without regard to the Stock Plan, and (2) the amount that the Executive would receive under this paragraph after applying any limitations imposed by the Stock Plan.

(v) The Company shall pay the full cost of outplacement services for the Executive for a period of six (6) months following such termination or, if earlier, until the Executive obtains full-time employment, to be provided by an outplacement services firm selected by the Executive.

(c) The amounts provided for in Sections 3.1(a) and 3.1(b)(i) and (ii) shall be paid in a single lump sum cash payment within thirty (30) days after the Executive’s Termination Date (or earlier if required by applicable law).

(d) The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment, except as provided in Section 3.1(b)(iii).

3.2. The severance pay and benefits provided for in this Section 3 shall also be in lieu of any other severance or termination pay to which the Executive may be entitled under any Company severance or termination plan, program, practice or arrangement.

3.3. Other than as set forth in Section 3.2, the Executive’s entitlement to any other compensation or benefits shall be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices then in effect.

4. Notice of Termination. Following a Change in Control, any purported termination of the Executive’s employment by the Company shall be communicated by Notice of Termination to the Executive.

5. Excise Tax Payments.

5.1. If any payment (within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) to the Executive pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company (a “Payment” or “Payments”) would be subject to an excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any interest or penalties, other than interest and penalties imposed by reason of the Executive’s failure to file timely a tax return or pay taxes shown due on his return, imposed with respect to such taxes and the Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment, the Executive will receive an amount as a Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

5.2. An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm selected by the Company and reasonably acceptable to the Executive (the “Accounting Firm”). If the Company and the Executive shall be unable to mutually agree upon an accounting firm, then each of the Company and the Executive shall designate an independent accounting firm within ten (10) days of the date on which it is determined that the parties are unable to mutually agree upon an accounting firm. The two (2) independent accounting firms shall, within ten (10) days, jointly select a third independent accounting firm, which third firm shall be the Accounting Firm for purposes of this Section 5.2. The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and the Executive within five (5) days of the Termination Date, or such other time as requested by the Company or by the Executive (provided the Executive reasonably believes that any of the Payments may be subject to the Excise Tax), and if the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to a Payment or Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten (10) days of the delivery of the Determination to the Executive, the Executive shall have the right to dispute the Determination (the “Dispute”). The Gross-Up Payment, if any, as determined pursuant to this Section 5.2 shall be paid by the Company to the Executive within fifteen (15) days of the receipt of the Determination. The existence of the Dispute shall not in any way affect the Executive’s right to receive the Gross-Up Payment in accordance with the Determination. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Executive subject to the application of Section 5.3 below.

5.3. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a portion thereof) will be paid which should not have been paid (an “Excess Payment”) or a Gross-Up Payment (or a portion thereof) which should have been paid will not have been paid (an “Underpayment”). An Underpayment shall be deemed to have occurred (a) upon notice (formal or informal) to the Executive from any governmental taxing authority that the Executive’s tax liability (whether in respect of the Executive’s current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which the Company has failed to make a sufficient Gross-Up Payment, (b) upon a determination by a court, (c) by reason of a determination by the Company, or (d) upon the resolution of the Dispute to the Executive’s satisfaction. If an Underpayment occurs, the Executive shall promptly notify the Company and the Company shall promptly, but in any event, at least five (5) days prior to the date on which the applicable government taxing authority has requested payment, pay to the Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of the Executive’s failure to file timely a tax return or pay taxes shown due on the Executive’s return) imposed on the Underpayment. An Excess Payment shall be deemed to have occurred upon a “Final Determination” (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or portion thereof) with respect to which the Executive had previously received a Gross-Up Payment. A “Final Determination” shall be deemed to have occurred when the Executive has received from the applicable government taxing authority a refund of taxes or other reduction in the Executive’s tax liability and upon either (a) the date a determination is made by, or an agreement is entered into with, the applicable governmental taxing authority which finally and conclusively binds the Executive and such taxing authority, or in the event that a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (b) the statute of limitations with respect to the Executive’s applicable tax return has expired. If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by the Company to the Executive and the Executive shall pay to the Company on demand (but not less than ten (10) days after the determination of such Excess Payment and written notice has been delivered to the Executive) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to the Executive until the rate of repayment to the Company.

6. Successors; Binding Agreement.

6.1. This Agreement shall be binding upon and shall inure to the benefit of the Company and its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.

6.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive or his beneficiaries or legal representatives, except by will or by the laws of descent and distribution, and this Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

7. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of (a) the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the Dispute, and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive may be entitled to receive benefits, and (b) the Executive’s hearing before the Board as contemplated in Section 2.6 of this Agreement.

8. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of a change of address shall be effective only upon receipt.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except as otherwise expressly provided herein) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except as otherwise expressly provided herein). Amounts that are vested benefits or that the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as expressly modified by this Agreement.

10. Settlement of Claims. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others.

11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

12. Payments to Beneficiary. If the Executive dies before receiving amounts to which the Executive is entitled under this Agreement, such amounts shall be paid in a lump sum to the beneficiary designated in writing by the Executive, or if none is so designated, to the Executive’s estate.

13. Non-alienation of Benefits. Benefits payable under this Agreement shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, before actually being received by the Executive, and any such attempt to dispose of any right to benefits payable under this Agreement shall be void.

14. Severability. If any one or more articles, sections or other portions of this Agreement are declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not serve to invalidate any article, section or other portion not so declared to be unlawful or invalid. Any article, section or other portion so declared to be unlawful or invalid shall be construed so as to effectuate the terms of such article, section or other portion to the fullest extent possible while remaining lawful and valid.

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

16. Tax Withholding. The Company may withhold from any amounts payable under this Agreement any federal, state or local taxes that are required to be withheld pursuant to any applicable law or regulation.

17. Obligations Unfunded. The obligations of the Company under this Agreement shall be unfunded and unsecured. The Company is not required to segregate any assets that may at any time be required to provide benefits under this Agreement.

18. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, to the extent that such laws are not preempted by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

19. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof.

20. Application of ERISA. This Agreement constitutes part of a welfare plan for certain selected employees, as set forth in Department of Labor Regulation § 2520.104-24. Accordingly, nothing herein shall be deemed to limit or restrict any rights or entitlements to which the Executive is entitled under ERISA, and any such rights or entitlements are expressly incorporated herein by reference.

        IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written.

EMPLOYER:	EXECUTIVE:
USF CORPORATION, a Delaware corporation
/s/ Richard P. DiStasio By: Richard P. DiStasio Its: President & Chief Executive Officer	/s/ Thomas E. Bergmann