YELLOW CORP
EXECUTIVE SEVERANCE AGREEMENT
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<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>c72888exv10w1.txt
<DESCRIPTION>EXECUTIVE SEVERANCE AGREEMENT
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                                                                    EXHIBIT 10.1

                          EXECUTIVE SEVERANCE AGREEMENT


         AGREEMENT between Yellow Corporation, a Delaware corporation ("Yellow")
and Daniel J. Churay (the "Executive"),

         WITNESSETH:

         WHEREAS, the Compensation Committee of the Board of Directors (the
"Board") of Yellow has recommended, and the Board has approved, Yellow entering
into severance agreements with key executives of Yellow and its Subsidiaries
(hereinafter sometimes collectively referred to as the "Corporation"; and

         WHEREAS, the Executive is a key executive of Yellow or one of its
subsidiaries and has been selected by the Board as a key executive; and

         WHEREAS, should Yellow receive any proposal from a third person
concerning a possible Business Combination with, or acquisition of equity
securities of, Yellow, the Board believes it important that the Corporation and
the Board be able to rely upon the Executive to continue in his position, and
that Yellow have the benefit of the Executive performing his duties without his
being distracted by the personal uncertainties and risks created by such a
proposal;

         NOW, THEREFORE, the parties agree as follows:

         1.       Definitions.

         (a)      "Business Combination" means any transaction which is referred
                  to in any one or more of clauses (a) through (e) of Section 1
                  of Subparagraph A of Article Seventh of the Certificate of
                  Incorporation of Yellow Corporation.

         (b)      "Cause" means conviction of a felony involving moral turpitude
                  by a court of competent jurisdiction, which is no longer
                  subject to direct appeal, or an adjudication by a court of
                  competent jurisdiction, which is no longer subject to direct
                  appeal, that the Executive is mentally incompetent or that he
                  is liable for willful misconduct in the performance of his
                  duty to the Corporation which is demonstrably and materially
                  injurious to the Corporation.

         (c)      "Change of Control," for the purposes of this Agreement, shall
                  be deemed to have taken place if: (i) a third person,
                  including a "group" as defined in Section 13(d)(3) of the
                  Securities Exchange Act of 1934, purchases or otherwise
                  acquires shares of the Corporation after the date hereof and
                  as a result thereof becomes the beneficial owner of shares of
                  the Corporation having 20% or more of the total number of
                  votes that may be cast for election of directors of Yellow; or
                  (ii) as the result of, or in connection with any cash tender
                  or exchange offer, merger or other Business Combination, or
                  contested election, or any combination of the foregoing
                  transactions, the Continuing Directors shall cease to
                  constitute a majority of the Board of Directors of Yellow or
                  any successor to Yellow.

         (d)      "Continuing Director" means a director of Yellow who meets the
                  definition of Continuing Director contained in Section 7 of
                  Subparagraph C of Article Seventh of the Certificate of
                  Incorporation of Yellow Corporation.

         (e)      "Corporation" means Yellow Corporation and its subsidiaries.


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         (f)      "Normal Retirement Age" means the last day of the calendar
                  month in which the Executive's 65th birthday occurs.

         (g)      "Permanent Disability" means a physical or mental condition
                  which permanently renders the Executive incapable of
                  exercising the duties and responsibilities of the position he
                  held immediately prior to any Change of Control.

         (h)      "Subsidiary" means any domestic or foreign corporation, a
                  majority of whose shares normally entitled to vote in electing
                  directors is owned directly or indirectly by Yellow or by
                  other Subsidiaries.

         2.       Services During Certain Events. In the event a third person
                  begins a tender or exchange offer, circulates a proxy to
                  shareholders, or takes other steps seeking to effect a Change
                  of Control (as herein defined), the Executive agrees that he
                  will not voluntarily leave the employ of the Corporation
                  without the consent of the Corporation, and will render the
                  services contemplated in the recitals to this Agreement, until
                  the third person has abandoned or terminated his or its
                  efforts to effect a Change of Control or until 90 days after a
                  Change of Control has occurred. In the event the Executive
                  fails to comply with the provisions of this paragraph, the
                  Corporation will suffer damages which are difficult, if not
                  impossible, to ascertain. Accordingly, should the Executive
                  fail to comply with the provisions of this paragraph, the
                  Corporation shall retain the amounts which would otherwise be
                  payable to the Executive hereunder as fixed, agreed and
                  liquidated damages but shall have no other recourse against
                  the Executive.

         3.       Termination After Change of Control. "Termination" shall
                  include (a) termination by the Corporation of the employment
                  of the Executive with the Corporation within two years after a
                  Change of Control for any reason other than death, Permanent
                  Disability, retirement at or after his Normal Retirement Age,
                  or Cause or (b) resignation of the Executive after the
                  occurrence of any of the following events within two years
                  after a Change of Control of Yellow:

         a)       An adverse change of the Executive's title or a reduction or
                  adverse change in the nature or scope of the Executive's
                  authority or duties from those being exercised and performed
                  by the Executive immediately prior to the Change of Control.

         b)       A transfer of the Executive to a location which is more than
                  35 miles away from the location where the Executive was
                  employed immediately prior to the Change of Control.

         c)       Any reduction in the rate of the Executive's annual salary
                  below his rate of annual salary immediately prior to the
                  Change of Control.

         d)       Any reduction in the level of the Executive's fringe benefits
                  or bonus below a level consistent with the Corporation's
                  practice prior to the Change of Control.

         4.       Termination of Payments. In the event of a Termination, as
                  defined in Paragraph 3, Yellow shall provide to the Executive
                  the following benefits:

         a)       Yellow shall pay to the Executive on or before the Executive's
                  last day of employment with the Corporation, as additional
                  compensation for services


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                  rendered to the Corporation, a lump sum cash amount (subject
                  to the minimum applicable federal, state or local lump sum
                  withholding requirements, if any, unless the Executive
                  requests that a greater amount be withheld) equal to two times
                  the highest base salary and bonuses paid or payable to the
                  Executive by the Corporation with respect to any 12
                  consecutive month period during the three years ending with
                  the date of the Executive's Termination. In the event there
                  are fewer than 120 whole or partial months remaining from the
                  date of the Executive's Termination to his Normal Retirement
                  Age, the Executive shall be paid three times such highest base
                  salary and bonuses.

         b)       During the "Applicable Period" (as hereinafter defined),
                  following the Executive's Termination, the Executive shall be
                  deemed to remain an employee of the Corporation for purposes
                  of the applicable medical, life insurance and long-term
                  disability plans and programs covering key executives of the
                  Corporation and shall be entitled to receive the benefits
                  available to key executives thereunder, provided, however,
                  that in the event the Executive's participation in any such
                  employee benefit plan or program is barred, the Corporation
                  shall arrange to provide the Executive with substantially
                  similar benefits. For purposes of this Agreement, the
                  "Applicable Period" shall mean (i) if there are fewer than 120
                  whole or partial months remaining from the date of the
                  Executive's Termination to his Normal Retirement Date, three
                  years, or (ii) if subclause (i) above is not applicable, two
                  years.

         c)       The Executive shall be entitled to the Gross-Up Payment, if
                  any, described in Paragraph 6.

         5.       Stock-Out of Options. In the event of a Change of Control, the
                  Executive shall receive in exchange for his non-qualified
                  stock options and incentive stock options granted by the
                  Corporation which are outstanding on the date of the Change of
                  Control, common stock of Yellow (or, if Yellow or its
                  successor becomes a subsidiary of another company, common
                  stock of such other company) having a fair market value equal
                  to the fair market value of such stock options on the
                  effective date of the Change of Control (such value to be
                  determined by an independent accounting firm retained by
                  Yellow using a Black-Scholes based pricing formula without
                  giving consideration to the lack of transferability and the
                  risk of forfeiture). Such options shall thereupon terminate.
                  For as long as this Agreement shall be in effect, the
                  provisions of this Paragraph 5 shall be deemed to have amended
                  the terms of any and all existing option agreements between
                  the Executive and the Corporation except any option agreements
                  representing incentive stock options outstanding on the date
                  of this Agreement.


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         6.       Additional Payments by Yellow.

         a)       Gross-Up Payment. In the event it shall be determined that any
                  payment or benefit of any type by the Corporation to or for
                  the benefit of the Executive, whether paid or payable or
                  distributed or distributable pursuant to the terms of this
                  Agreement or otherwise (determined without regard to any
                  additional payments required under this Paragraph 6) (the
                  "Total Payments") would be subject to the excise tax imposed
                  by Section 4999 of the Internal Revenue Code of 1986, as
                  amended (the "Code") (or any similar tax that may hereafter be
                  imposed) or any interest or penalties with respect to such
                  excise tax (such excise tax, together with any such interest
                  and penalties, are collectively referred to as the "Excise
                  Tax"), then the Executive shall 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 imposed with respect to such taxes),
                  including any Excise Tax, imposed upon the Gross-Up Payment,
                  the Executive retains an amount of the Gross-Up Payment equal
                  to the Excise Tax imposed upon the Total Payments. Payment of
                  the Gross-Up Payment shall be made promptly following the
                  determination by the Accounting Firm as described in
                  subparagraph (b) of this Paragraph 6 or in accordance with
                  subparagraph (c) of this Paragraph 6.

         b)       Determination by Accountant. All determinations required to be
                  made under this Paragraph 6, including whether a Gross-Up
                  Payment is required and the amount of such Gross-Up Payment,
                  shall be made by an independent accounting firm retained by
                  Yellow (the "Accounting Firm"), which shall provide detailed
                  supporting calculations both to Yellow and the Executive
                  within 15 business days of the date of Termination, if
                  applicable, or such earlier time as is requested by Yellow. If
                  the Accounting Firm determines that no Excise Tax is payable
                  by the Executive, it shall furnish the Executive with an
                  opinion that he has substantial authority not to report any
                  Excise Tax on his federal income tax return. Any determination
                  by the Accounting Firm shall be binding upon Yellow and the
                  Executive. As a result of the uncertainty in the application
                  of Section 4999 of the Code at the time of the initial
                  determination by the Accounting Firm hereunder, it is possible
                  that Gross-Up Payments which will not have been made by Yellow
                  should have been made ("Underpayment") consistent with the
                  calculations required to be made hereunder. In the event that
                  Yellow exhausts its remedies pursuant to subparagraph (c) of
                  this Paragraph 6 and the Executive thereafter is required to
                  make a payment of any Excise Tax, the Accounting Firm shall
                  determine the amount of the Underpayment that has occurred and
                  any such Underpayment shall be promptly paid by Yellow to or
                  for the benefit of the Executive. Yellow shall promptly pay
                  all expenses of the Accounting Firm pursuant to this Paragraph
                  6.

         c)       Notification Required. The Executive shall notify Yellow in
                  writing of any claim by the Internal Revenue Service that, if
                  successful, would require the payment by Yellow of the
                  Gross-Up Payment. Such notification shall be given as soon as
                  practicable but no later than ten business days after the
                  Executive knows of such claim and shall apprise Yellow of the
                  nature of such claim and the date on which such claim is
                  requested to be paid. The Executive shall not pay such claim
                  prior to the expiration of the thirty-day period following the
                  date on which it gives such notice to Yellow (or such shorter
                  period ending on the date that any payment of taxes with
                  respect to such claim is due). If Yellow notifies the


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                  Executive in writing prior to the expiration of such period
                  that it desires to contest such claim, the Executive shall:

                           (i)      give Yellow any information reasonably
                                    requested by Yellow relating to such claim,

                           (ii)     take such action in connection with
                                    contesting such claim as Yellow shall
                                    reasonably request in writing from time to
                                    time, including, without limitation,
                                    accepting legal representation with respect
                                    to such claim by an attorney reasonably
                                    selected by Yellow,

                           (iii)    cooperate with Yellow in good faith in order
                                    to effectively contest such claim,

                           (iv)     permit Yellow to participate in any
                                    proceedings relating to such claim,
                                    provided, however, that Yellow shall bear
                                    and pay directly all costs and expenses
                                    (including additional interest and
                                    penalties) incurred in connection with such
                                    contest and shall indemnify and hold the
                                    Executive harmless, on an after-tax basis,
                                    for any Excise Tax or income tax, including
                                    interest and penalties with respect thereto,
                                    imposed as a result of such representation
                                    and payment of costs and expenses. Without
                                    limitation on the foregoing provisions of
                                    this subparagraph (c), Yellow shall control
                                    all proceedings taken in connection with
                                    such contest and, at its sole option, may
                                    pursue or forego any and all administrative
                                    appeals, proceedings, hearings and
                                    conferences with the taxing authority in
                                    respect of such claim and may, at its sole
                                    option, either direct the Executive to pay
                                    the tax claimed and sue for a refund, or
                                    contest the claim in any permissible manner,
                                    and the Executive agrees to prosecute such
                                    contest to a determination before any
                                    administrative tribunal, in a court of
                                    initial jurisdiction and in one or more
                                    appellate courts, as Yellow shall determine;
                                    provided, however, that if Yellow directs
                                    the Executive to pay such claim and sue for
                                    a refund, Yellow shall advance the amount of
                                    such payment to the Executive, on an
                                    interest-free basis and shall indemnify and
                                    hold the Executive harmless, on an after-tax
                                    basis, from any Excise Tax or income tax,
                                    including interest or penalties with respect
                                    thereto, imposed with respect to such
                                    advance or with respect to any imputed
                                    income with respect to such advance; and
                                    further provided that any extension of the
                                    statute of limitations relating to payment
                                    of taxes for the taxable year of the
                                    Executive with respect to which such
                                    contested amount is claimed to be due is
                                    limited solely to such contested amount.
                                    Furthermore, Yellow's control of the contest
                                    shall be limited to issues with respect to
                                    which a Gross-Up Payment would be payable
                                    hereunder and the Executive shall be
                                    entitled to settle or contest, as the case
                                    may be, any other issue raised by the
                                    Internal Revenue Service or any other taxing
                                    authority.

         d)       Repayment. If, after the receipt by the Executive of an amount
                  paid or advanced by Yellow pursuant to this Paragraph 6, the
                  Executive becomes

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                  entitled to receive any refund with respect to such claim, the
                  Executive shall (subject to Yellow's complying with the
                  requirements of this Paragraph 6), promptly pay to Yellow the
                  amount of such refund (together with any interest paid or
                  credited thereon after taxes applicable thereto). If, after
                  the receipt by the Executive of an amount paid or advanced by
                  Yellow pursuant to this Paragraph 6, a determination is made
                  that the Executive shall not be entitled to any refund with
                  respect to such claim and Yellow does not notify the Executive
                  in writing of its intent to contest such denial of refund
                  prior to the expiration of thirty days after such
                  determination, then such payment or advance shall be forgiven
                  and shall not be required to be repaid and the amount of such
                  payment or advance shall offset, to the extent thereof, the
                  amount of Gross-Up Payment required to be paid.

         7.       General.

         a)       Arbitration. Any dispute between the parties hereto arising
                  out of, in connection with, or relating to this Agreement or
                  the breach thereof shall be settled by arbitration in Overland
                  Park, Kansas, in accordance with the rules then in effect of
                  the American Arbitration Association ("AAA"). Arbitration
                  shall be the exclusive remedy for any such dispute except only
                  as to failure to abide by an arbitration award rendered
                  hereunder. Regardless of whether or not both parties hereto
                  participate in the arbitration proceeding, any arbitration
                  award rendered hereunder shall be final and binding on each
                  party hereto and judgment upon the award rendered may be
                  entered in any court having jurisdiction thereof.

                  The party seeking arbitration shall notify the other party in
                  writing and request the AAA to submit a list of 5 or 7
                  potential arbitrators. In the event the parties do not agree
                  upon an arbitrator, each party shall, in turn, strike on
                  arbitrator from the list, the Corporation having the first
                  strike, until only one arbitrator remains, who shall arbitrate
                  the dispute. The arbitration hearing shall be conducted within
                  30 days of the selection of an arbitrator or at the earliest
                  date thereafter that the arbitrator is available.

         b)       Indemnification. If arbitration occurs as provided for herein
                  and the Executive is awarded more than the Corporation has
                  asserted is due him or otherwise substantially prevails
                  therein, the Corporation shall reimburse the Executive for his
                  reasonable attorneys' fees, costs and disbursements incurred
                  in such arbitration and hereby agrees to pay interest on any
                  money award obtained by the Executive from the date payment
                  should have been made until the date payment is made,
                  calculated at the prime interest rate of NationsBank, N.A.,
                  Kansas City, Missouri, in effect from time to time from the
                  date that payment(s) to him should have been made under this
                  Agreement. If the Executive enforces the arbitration award in
                  court, the Corporation shall reimburse the Executive for his
                  reasonable attorneys' fees, costs and disbursements incurred
                  in such enforcement.

         c)       Payment Obligations Absolute. Yellow's obligation to pay the
                  Executive the compensation and to make the arrangements
                  provided herein shall be absolute and unconditional and shall
                  not be affected by any circumstance, including, without
                  limitation, any setoff, counterclaim, recoupment, defense or
                  other right which the Corporation may have against him or
                  anyone else, except as provided in paragraph 2 hereof. All
                  amounts payable by Yellow hereunder shall be paid


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                  without notice or demand. Each and every payment made
                  hereunder by Yellow shall be final and Yellow will not seek to
                  recover all or any part of such payment from the Executive or
                  from whosoever may be entitled thereto, for any reason
                  whatsoever. The Executive shall not be obligated to seek other
                  employment in mitigation of the amounts payable or
                  arrangements made under any provision of this Agreement, and
                  the obtaining of any such other employment shall in no event
                  affect any reduction of Yellow's obligations to make the
                  payments required to be made under this Agreement.

         d)       Continuing Obligations. The Executive shall retain in
                  confidence any confidential information known to him
                  concerning the Corporation and its respective businesses until
                  such information is publicly disclosed.

         e)       Successors. This Agreement shall be binding upon and insure to
                  the benefit of the Executive and his estate and the
                  Corporation and any successor of the Corporation, but neither
                  this Agreement nor any rights arising hereunder may be
                  assigned or pledged by the Executive.

         f)       Severability. Any provision in this Agreement which is
                  prohibited or unenforceable in any jurisdiction shall, as to
                  such jurisdiction, be ineffective only to the extent of such
                  prohibition or unenforceability without invalidating or
                  affecting the remaining provisions hereof, and any such
                  prohibition or unenforceability in any jurisdiction shall not
                  invalidate or render unenforceable such provision in any other
                  jurisdiction.

         g)       Controlling Law. This Agreement shall in all respects be
                  governed by and construed in accordance with the laws of the
                  State of Delaware.

         h)       Termination. This Agreement shall terminate if a majority of
                  the Continuing Directors determines that the Executive is no
                  longer a key executive and so notifies the Executive; except
                  that such determination shall not be made, and if made shall
                  have no effect, (i) within two years after the Change of
                  Control in question or (ii) during any period of time when
                  Yellow has knowledge that any third person has taken steps
                  reasonably calculated to effect a Change of Control until, in
                  the opinion of a majority of the Continuing Directors the
                  third person has abandoned or terminated his efforts to effect
                  a Change of Control. Any decision by a majority of the
                  Continuing Directors that the third person has abandoned or
                  terminated his efforts to effect a Change of Control shall be
                  conclusive and binding on the Executive.


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         IN WITNESS WHEREOF, the parties have executed this Agreement on the
_______ day of _____________, _________.


         EXECUTIVE:                                  YELLOW CORPORATION



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


                                                     ATTEST:



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


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