UPDATE 2-YRC deal includes 5 pct wage cut, 20pct stock option

* Workers set for 20 pct stock option in return for cut

* Teamsters get seat on YRC's board

* YRC says deal would save $45 mln per month

* Stock up more than 3 pct post-market (Adds details of YRC announcement, CEO comments, stock action)

CHICAGO, July 14 (Reuters) - A tentative deal between YRC Worldwide Inc (YRCW.O) and the Teamsters union would require the U.S. truck company's workers to take a fresh 5 percent pay cut in return for options to buy 20 percent of stock, the union and YRC said on Tuesday.

Earlier this year, YRC's Teamsters-represented workers approved a 10 percent wage cut in return for a 15 percent stake in the Overland Park, Kansas-based company.

The Teamsters and YRC said the company would be able to cease pension-fund payments for up to 18 months.

YRC said the agreement -- which has yet to be voted on by YRC's rank-and-file -- would save the company some $45 million per month, which would rise to $50 million per month in 2010.

As part of the deal. the union also would get a seat on YRC's board of directors.

The deal is contingent on YRC, the largest trucking company in the United States, reaching agreements with JPMorgan Chase (JPM.N) and its other lenders, according to the document.

"This is a key piece of the puzzle for us," YRC Chief Executive Bill Zollars told Reuters in a telephone interview. "It is very significant for us to have this cushion."

Taken together with its ongoing discussions with its banking group on an amendment to its credit facility plus talks with debt holders on a possible debt exchange, Zollars said the firm was now well placed to survive through the recession.

"If you put all of that together, we are going to be well placed to make it no matter what happens going forward," he added.

YRC is a less-than-truckload company. Less-than-truckload operators consolidate smaller loads into a single truck.

So far this year YRC also has secured seven amendments to its $950 million credit facility from creditors and persuaded the Central States multi-employer pension fund to take property instead of cash for pension payments.

The company also has worked to streamline its national network by shutting facilities and shedding jobs.