CNF INC.
1997 EQUITY AND INCENTIVE PLAN
(2006 Amendment and Restatement)
Table of Contents
1. - Purpose; Types of Awards; Construction...1
2. - Definitions..............................1
3. - Administration...........................6
4. - Eligibility..............................7
5. - Stock Subject to the Plan................8
6. - Specific Terms of Awards.................8
7. - Change in Control Provisions............13
8. - Claims Procedures.......................13
9. - General Provisions......................14
1. Purpose; Types of Awards; Construction.
The purpose of the CNF Inc. 1997 Equity and Incentive Plan (the "Plan")
is to afford an incentive to selected employees of CNF Inc. (the
"Company") and its Subsidiaries and Affiliates to continue as employees,
to increase their efforts on behalf of the Company and to promote the
success of the Company's business. Pursuant to the Long-Term Incentive
Program described herein, there may be granted stock options (including
"incentive stock options" and "non-qualified stock options"), stock
appreciation rights (either in connection with stock options granted
under the Plan or independently of stock options), restricted stock,
phantom stock units, dividend equivalents and other long-term stock-
based or cash-based Awards, and pursuant to the Annual Incentive
Compensation Program described herein, there may be granted short-term
cash-based Awards. Phantom stock units may also be issued under the Plan
to employees who have elected phantom stock units as an investment
alternative under deferred compensation plans. The Plan is designed so
that Awards granted hereunder intended to comply with the requirements
for "performance-based compensation" under Section 162(m) of the Code
may comply with such requirements and, insofar as may be applicable to
such Awards, the Plan shall be interpreted in a manner consistent with
such requirements.
2. Definitions.
For purposes of the Plan, the following terms shall be defined as set
forth below:
"Affiliate" means an affiliate of the Company, as defined in Rule 12b-2
promulgated under Section 12 of the Exchange Act, including a Business
Unit.
"Annual Incentive Compensation Program" means the program described in
Section 6(c) hereof.
"Award" means any Option, SAR, Restricted Stock, Phantom Stock Unit,
Dividend Equivalent or Other Stock-Based Award or Other Cash-Based Award
granted under the Plan.
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Company.
"Business Unit" means an entity, whether or not incorporated, more than
50% of the outstanding ownership interests of which are owned by the
Company, directly or indirectly through one or more ownership chains
where each link in the chain owns more than 50% of the outstanding
ownership interests of the next link (either alone or together with
other links in the same chain or another chain).
"Change in Control" means the occurrence of any one of the following
events:
(a) 25% of the Company's Voting Securities Acquired by an Outsider. Any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, other than (i) the Company or its Affiliates, (ii)
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or its Affiliates, and (iii) any
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of Stock) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities
acquired directly from the Company or its Affiliates) representing
25% or more of the combined voting power of the Company's then
outstanding voting securities;
(b) Members of the Board as of January 1, 2006 cease to constitute a
majority of Directors. The following individuals cease for any
reason to constitute a majority of the number of directors then
serving: individuals who, on January 1, 2006, constitute the Board
and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company)
whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended
by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on January 1, 2006 or whose
appointment, election or nomination for election was previously so
approved or recommended;
(c) Merger or Consolidation. There is consummated a merger or
consolidation of the Company, a Subsidiary or an Affiliate with any
other corporation or other entity, which merger or consolidation --
(i) results in the voting securities of the Company outstanding
immediately prior thereto failing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving or parent entity) more than 50% of
the combined voting power of the voting securities of the
Company or the surviving or parent entity outstanding
immediately after such merger or consolidation, or
(ii) is effected to implement a recapitalization of the Company (or
similar transaction) in which a "person" (as defined in clause
(a) above), directly or indirectly, acquires 25% or more of
the combined voting power of the Company's then outstanding
securities (not including in the securities beneficially owned
by such person any securities acquired directly from the
Company or its Affiliates);
(d) Complete Liquidation or Disposition of more than 75% of the
Company's Assets. The stockholders of the Company approve a plan of
complete liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of assets
having an aggregate book value at the time of such sale or
disposition of more than 75% of the total book value of the
Company's assets on a consolidated basis (or any transaction having
a similar effect), other than any such sale or disposition by the
Company (including by way of spin-off or other distribution) to an
entity, at least 50% of the combined voting power of the voting
securities of which are owned immediately following such sale or
disposition by stockholders of the Company in substantially the
same proportions as their ownership of the Company immediately
prior to such sale or disposition; or
(e) Disposition of a Business Unit. There is consummated the
Disposition of a Business Unit; provided, however, that this clause
(e) shall apply only to employees who (i) immediately prior to the
Disposition of a Business Unit were employed by (and on the payroll
of) the Business Unit that was the subject of the Disposition of a
Business Unit (for purposes of this clause (e) the "Subject
Business Unit") and (ii) immediately following the Disposition of a
Business Unit are employed by (and on the payroll of) either
(i) in the case of a sale of ownership interests within the
meaning of clause (a) of the definition of Disposition of a
Business Unit (or similar transaction or course of action
under clause (c) of the definition of Disposition of a
Business Unit), the Subject Business Unit, its successor, or
an employer affiliated with the Subject Business Unit or its
successor, or
(ii) in the case of a sale of assets within the meaning of clause
(b) of the definition of Disposition of a Business Unit (or
similar transaction or course of action under clause (c) of
the definition of Disposition of a Business Unit), the
purchaser of the assets, its successor, or an employer
affiliated with the purchaser of the assets or its successor.
Because severance agreements and severance plans are not intended to
serve the same purpose as the Plan, whether benefits are payable under a
severance agreement or a severance plan does not determine whether a
"Change in Control" has taken place under the Plan.
"Claimant" means any person who believes that he or she is not receiving
the full benefits to which he or she is entitled under the Plan.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the committee established by the Board to administer
the Plan, the composition of which shall at all times satisfy the
provisions of Rule 16b-3, Section 162(m) of the Code and applicable New
York Stock Exchange Rules; provided, however, that the Board may, if it
so chooses, retain authority to administer all or any part of the Plan
and, to the extent the Board does so, references in the Plan to
"Committee" shall mean and be references to the Board.
"Company" means CNF Inc., a corporation organized under the laws of the
State of Delaware, or any successor corporation.
"Disposition of a Business Unit" means a sale or other disposition,
however effected, of a Business Unit which is either:
(a) Sale of Ownership Interests. A sale by the Company or an Affiliate
of the then outstanding ownership interests of the Business Unit
having more than 50% of the then existing voting power of all
outstanding ownership interests of the Business Unit, whether by
merger, consolidation or otherwise, unless after the sale the
Company, an Affiliate, or any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, the
Business Unit or any other Affiliate, individually or collectively,
directly or indirectly, owns the then outstanding ownership
interests of the Business Unit having 50% or more of the then
existing voting power of all outstanding ownership interests of the
Business Unit;
(b) Sale of Assets. The sale of all or substantially all of the assets
of the Business Unit as a going concern; or
(c) Other Transaction. Any other transaction or course of action
engaged in, directly or indirectly, by the Company, the Business
Unit or an Affiliate that has a substantially similar effect as the
transactions of the type referred to in clause (a) or (b) above,
except as provided in clause (y) or (z) below.
A Disposition of a Business Unit may occur even if such Business Unit
constitutes part of a larger enterprise at the time of the relevant
Disposition of a Business Unit transaction and such Disposition of a
Business Unit involves such larger enterprise. However, a "Disposition
of a Business Unit" shall not occur:
(y) Spin-off or Public Offering. In the event of the sale or
distribution of ownership interests (including, without limitation,
a spin-off) of the Business Unit to stockholders of the Company, or
the sale of assets of the Business Unit to any corporation or other
entity owned, directly or indirectly, by the stockholders of the
Company, in either case in substantially the same proportions as
their ownership of stock in the Company, or a public offering of
the ownership interests of the Business Unit (even if after the
public offering the Company has no direct or indirect ownership
interest in the Business Unit), or
(z) Liquidation. In the event of the closing down or liquidation of the
Business Unit, even if the Business Unit sells all or substantially
all of its assets.
"Dividend Equivalent" means a right, granted to a Grantee under Section
6(b)(v), to receive cash or Stock equal in value to dividends paid with
respect to a specified number of shares of Stock. Dividend Equivalents
may be awarded on a free-standing basis or in connection with another
Award, and may be paid currently or on a deferred basis.
"Effective Date" means January 27, 1997, the date that the Plan was
adopted by the Board. The provisions of this 2006 Amendment and
Restatement shall apply to Awards granted on or after January 1, 2006
and to Awards subject to the 2006 Amendment and Restatement of the CNF
Inc. Value Management Plan. Other Awards shall be governed by the prior
provisions of the Plan, except as provided in Section 8(g) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.
"Fair Market Value" per share of Stock as of a particular date means (i)
the closing sales price per share of Stock on the national securities
exchange on which the Stock is principally traded, for the last
preceding date on which there was a sale of such Stock on such exchange,
or (ii) if the shares of Stock are then traded in an over-the-counter
market, the average of the closing bid and asked prices for the shares
of Stock in such over-the-counter market for the last preceding date on
which there was a sale of such Stock in such market, or (iii) if the
shares of Stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as the Committee, in
its sole discretion, shall determine.
"Grantee" means a person who, as an employee of the Company, a
Subsidiary or an Affiliate, has been granted an Award under the Plan.
"ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.
"Long-Term Incentive Program" means the program described in Section
6(b) hereof.
"NQSO" means any Option that is designated as a non-qualified stock
option.
"Option" means a right, granted to a Grantee under Section 6(b)(i), to
purchase shares of Stock. An Option may be either an ISO or an NQSO;
provided that ISOs may be granted only to employees of the Company or a
Subsidiary.
"Other Cash-Based Award" means an Award under the Annual Incentive
Compensation Program or the Long-Term Incentive Program, which Award is
not denominated or valued by reference to Stock, including an Award
which is subject to the attainment of Performance Goals or otherwise as
permitted under the Plan and including an Award under the CNF Inc. Value
Management Plan.
"Other Stock-Based Award" means an Award under the Long-Term Incentive
Program that is denominated or valued in whole or in part by reference
to Stock and is payable in cash.
"Performance Goals" means performance goals based on one or more of the
following criteria: (i) pre-tax income or after-tax income, (ii)
operating profit, (iii) return on equity, assets, capital or investment,
(iv) earnings or book value per share, (v) sales or revenues,
(vi) operating expenses, (vii) Stock price appreciation, (viii) total
stockholder return (i.e., Stock price appreciation plus dividends) and
(ix) implementation or completion of critical projects or processes.
Where applicable, the Performance Goals may be expressed in terms of
attaining a specified level of the particular criteria or the attainment
of a percentage increase or decrease in the particular criteria, and may
be applied to one or more of the Company, a Subsidiary or Affiliate, or
a division or strategic business unit of the Company, or may be applied
to the performance of the Company relative to a market index, a group of
other companies or a combination thereof, all as determined by the
Committee. The Performance Goals may include a threshold level of
performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be made
(or specified vesting will occur), and a maximum level of performance
above which no additional payment will be made (or at which full vesting
will occur). Each of the foregoing Performance Goals shall be determined
in accordance with generally accepted accounting principles and shall be
subject to certification by the Committee; provided that the Committee
shall have the authority to make equitable adjustments to the
Performance Goals in recognition of unusual or non-recurring events
affecting the Company or any Subsidiary or Affiliate or the financial
statements of the Company or any Subsidiary or Affiliate, in response to
changes in applicable laws or regulations, or to account for items of
gain, loss or expense determined to be extraordinary or unusual in
nature or infrequent in occurrence or related to the disposal of a
segment of a business or related to a change in accounting principles.
"Phantom Stock Unit" means a right granted under Section 6(b)(iv) or
issued under Section 6(d) to receive Stock or cash at the end of a
specified deferral period, which right may be conditioned on the
satisfaction of certain requirements (including the satisfaction of
certain Performance Goals).
"Plan" means this CNF Inc. 1997 Equity and Incentive Plan, as amended
from time to time.
"Plan Year" means a calendar year.
"Restricted Stock" means an Award of shares of Stock to a Grantee under
Section 6(b)(iii) that may be subject to certain transferability and
other restrictions and to a risk of forfeiture (including by reason of
not satisfying certain Performance Goals).
"Rule 16b-3" means Rule 16b-3, as from time to time in effect
promulgated by the Securities and Exchange Commission under Section 16
of the Exchange Act, including any successor to such Rule.
"Stock" means shares of the common stock, par value $0.625 per share, of
the Company.
"SAR" or "Stock Appreciation Right" means the right allowing a Grantee
under Section 6(b)(ii), to elect to receive an amount equal to the
appreciation in the Fair Market Value of Stock from the grant date to
the exercise date, with payment to be made in cash or Stock as specified
in the Award or determined by the Committee.
"Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Company if, at the time of granting of an Award, each
of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
3. Administration.
The Plan shall be administered by the Committee. The Committee shall
have the authority in its discretion, subject to and not inconsistent
with the express provisions of the Plan, to administer the Plan and to
exercise all the powers and authorities either specifically granted to
it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Awards; to
determine the persons to whom and the time or times at which Awards
shall be granted; to determine the type and number of Awards to be
granted, the number of shares of Stock to which an Award may relate and
the terms, conditions, restrictions and Performance Goals relating to
any Award; to determine Performance Goals no later than such time as is
required to ensure that an underlying Award which is intended to comply
with the requirements of Section 162(m) of the Code so complies; to
determine whether, to what extent, and under what circumstances an Award
may be settled, canceled, forfeited, exchanged, or surrendered; to make
adjustments in the terms and conditions (including Performance Goals)
applicable to Awards; to designate Affiliates; to construe and interpret
the Plan and any Award; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions
of the Award Agreements (which need not be identical for each Grantee);
and to make all other determinations deemed necessary or advisable for
the administration of the Plan. Notwithstanding the foregoing and except
as otherwise provided in the second paragraph of Section 5 below, the
Committee shall not have the authority to lower the exercise price of
any outstanding option or SAR, nor shall the Committee have the
authority to settle, cancel or exchange any outstanding option or SAR in
consideration for the grant of a new Award with a lower exercise price,
and the Committee may only grant those Awards that either comply with
the applicable requirements of Section 409A of the Code or do not result
in the deferral of compensation within the meaning of Section 409A of
the Code.
The Committee may appoint a chairperson and a secretary and may make
such rules and regulations for the conduct of its business as it shall
deem advisable, and shall keep minutes of its meetings. All
determinations of the Committee shall be made by a majority of its
members either present in person or participating by conference
telephone at a meeting or by written consent. The Committee may delegate
to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. All decisions,
determinations and interpretations of the Committee shall be final and
binding on all persons, including the Company, and any Subsidiary,
Affiliate or Grantee (or any person claiming any rights under the Plan
from or through any Grantee) and any stockholder.
No member of the Board or Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any
Award granted hereunder.
4. Eligibility.
Awards may be granted to selected employees of the Company and its
present or future Subsidiaries and Affiliates, in the discretion of the
Committee. In determining the persons to whom Awards shall be granted
and the type of any Award (including the number of shares to be covered
by such Award), the Committee shall take into account such factors as
the Committee shall deem relevant in connection with accomplishing the
purposes of the Plan.
5. Stock Subject to the Plan.
The maximum number of shares of Stock reserved for the grant or
settlement of Awards under the Plan shall be 9,700,000, subject to
adjustment as provided herein. No more than 2,425,000 shares of Stock
may be awarded in the aggregate in respect of stock-based Awards
(including Options, SARs, Restricted Stock and Phantom Stock Units) to a
single individual over the term of the Plan and no more than 1,900,000
shares of Stock may be awarded in the aggregate in respect of Restricted
Stock and Phantom Stock Units to all Grantees over the term of the Plan,
in each case subject to adjustment as provided herein. Determinations
made in respect of the limitation set forth in the preceding sentence
shall be made in a manner consistent with Section 162(m) of the Code. No
more than 9,700,000 shares of Stock may be issued under the Plan through
ISOs, subject to adjustment as provided herein. Such shares may, in
whole or in part, be authorized but unissued shares or shares that shall
have been or may be reacquired by the Company in the open market, in
private transactions or otherwise. If any shares subject to an Award are
forfeited, canceled, exchanged or surrendered or if an Award otherwise
terminates or expires without a distribution of shares to the Grantee,
the shares of stock with respect to such Award shall, to the extent of
any such forfeiture, cancellation, exchange, surrender, termination or
expiration, again be available for Awards under the Plan. Upon the
exercise of any Award granted in tandem with any other Awards or awards,
such related Awards or awards shall be canceled to the extent of the
number of shares of Stock as to which the Award is exercised and,
notwithstanding the foregoing, such number of shares shall no longer be
available for Awards under the Plan.
In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Stock, or
recapitalization, Stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or
other similar corporate transaction or event) affects the Stock such
that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Grantees under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems necessary
or appropriate to any or all of (i) the number and kind of shares of
Stock or cash that may thereafter be issued in connection with Awards,
(ii) the number and kind of shares of Stock or cash issued or issuable
in respect of outstanding Awards, (iii) the exercise price, grant price,
or purchase price relating to any Award; provided that, with respect to
ISOs, such adjustment shall be made in accordance with Section 424(h) of
the Code, (iv) the Performance Goals and (v) the individual limitations
applicable to Awards.
6. Specific Terms of Awards.
(a) General. The term of each Award shall be for such period as may be
determined by the Committee. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company
or a Subsidiary or Affiliate upon the grant, maturation, or
exercise of an Award may be made in Stock or cash, or a combination
thereof, as the Committee shall determine at the date of grant or
thereafter and may be made in a single payment or transfer, in
installments, or on a deferred basis. The Committee may make rules
relating to installment or deferred payments with respect to
Awards, including the rate of interest to be credited with respect
to such payments. In addition to the foregoing, the Committee may
impose on any Award or the exercise thereof, at the date of grant
or thereafter, such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee
shall determine.
(b) Long-Term Incentive Program. The Committee is authorized to grant
to Grantees the following Awards under the Long-Term Incentive
Program, as deemed by the Committee to be consistent with the
purposes of the Plan. The Committee shall determine the terms and
conditions of such Awards at the date of grant or thereafter.
(i) Options. The Committee is authorized to grant Options to
Grantees on the following terms and conditions:
(1) Type of Award. The Award Agreement evidencing the grant
of an Option under the Plan shall designate the Option
as an ISO or an NQSO.
(2) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the
Committee; provided that, such exercise price shall be
not less than the Fair Market Value of a share on the
date of grant of such Option. The exercise price for
Stock subject to an Option may be paid in cash or by an
exchange of Stock previously owned by the Grantee, or a
combination of both, in an amount having a combined
value equal to such exercise price.
(3) Term and Exercisability of Options. Options shall be
exercisable over the exercise period (which shall not
exceed ten years from the date of grant), at such times
and upon such conditions as the Committee may determine,
as reflected in the Award Agreement; provided that, the
Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such time
and under such circumstances as it, in its sole
discretion, deems appropriate. An Option may be
exercised to the extent of any or all full shares of
Stock as to which the Option has become exercisable, by
giving written notice of such exercise to the Committee
or its agent.
(4) Termination of Employment, etc. An Option may not be
exercised unless the Grantee is then in the employ of
the Company or a Subsidiary or an Affiliate (or a
company or a parent or subsidiary company of such
company issuing or assuming the Option in a transaction
to which Section 424(a) of the Code applies), and unless
the Grantee has remained continuously so employed since
the date of grant of the Option; provided that, the
Award Agreement may contain provisions extending the
exercisability of Options, in the event of specified
terminations, to a date not later than the expiration
date of such Option.
(5) Other Provisions. Options may be subject to such other
conditions including, but not limited to, restrictions
on transferability of the shares acquired upon exercise
of such Options, as the Committee may prescribe in its
discretion or as may be required by applicable law.
(ii) SARs. The Committee is authorized to grant SARs to Grantees on
the following terms and conditions:
(1) In General. Unless the Committee determines otherwise,
an SAR (i) granted in tandem with an NQSO may be granted
at the time of grant of the related NQSO or at any time
thereafter or (ii) granted in tandem with an ISO may
only be granted at the time of grant of the related ISO.
An SAR granted in tandem with an Option shall be
exercisable only to the extent the underlying Option is
exercisable.
(2) SARs. An SAR shall confer on the Grantee a right to
receive an amount with respect to each share subject
thereto, upon exercise thereof, equal to the excess of
(i) the Fair Market Value of one share of Stock on the
date of exercise over (ii) the grant price of the SAR
(which in the case of an SAR granted in tandem with an
Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other
SAR shall be such price as the Committee may determine,
but not less than the Fair Market Value of a share on
the date of grant of such SAR).
(iii)Restricted Stock. The Committee is authorized to grant
Restricted Stock to Grantees on the following terms and
conditions:
(1) Issuance and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability and
other restrictions as the Committee may impose at the
date of grant or thereafter, which restrictions may
lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise,
as the Committee may determine; provided, however,
notwithstanding the foregoing but subject to Section 7
hereof, each Restricted Stock Award shall be subject to
restrictions, imposed at the date of grant, relating to
either or both of (i) the attainment of Performance
Goals by the Company or (ii) the continued employment of
the Grantee with the Company, a Subsidiary or an
Affiliate. All performance based Restricted Stock Awards
will have a minimum performance period of one year, with
no vesting prior to the end of the performance period
except in the case of death, disability or a Change in
Control. With respect to any shares of Restricted Stock
subject to restrictions which lapse solely based on the
Grantee's continuation of employment with the Company, a
Subsidiary or an Affiliate, such restrictions shall
lapse over a vesting schedule (so long as the Grantee
remains employed with the Company, a Subsidiary or an
Affiliate) no shorter in duration than three years from
the date of grant; provided that, such vesting schedule
may provide for partial or installment vesting from time
to time during such period, subject to acceleration in
the case of death, disability or a Change in Control.
Except to the extent otherwise provided in an Award
Agreement, a Grantee granted Restricted Stock shall have
all of the rights of a stockholder including, without
limitation, the right to vote Restricted Stock and the
right to receive dividends thereon (subject to
subsection (4) below).
(2) Forfeiture. Upon termination of employment with the
Company or a Subsidiary or Affiliate, during the
applicable restriction period, Restricted Stock and any
accrued but unpaid dividends or Dividend Equivalents
that are at that time subject to restrictions shall be
forfeited; provided that, the Committee may provide, by
rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock will
be waived in whole or in part in the event of
terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part
the forfeiture of Restricted Stock.
(3) Certificates for Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the
Grantee, such certificates shall bear an appropriate
legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and
the Company shall retain physical possession of the
certificate.
(4) Dividends. Dividends paid on Restricted Stock shall be
paid at the dividend payment date, in cash or in shares
of unrestricted Stock having a Fair Market Value equal
to the amount of such dividends. Stock distributed in
connection with a stock split or stock dividend, and
distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent
as the Restricted Stock with respect to which such Stock
has been distributed.
(iv) Phantom Stock Units. The Committee is authorized to grant
Phantom Stock Units to Grantees, subject to the following
terms and conditions:
(1) Award and Restrictions. Delivery of Stock or cash, as
determined by the Committee, will occur upon expiration
of the deferral period specified for Phantom Stock Units
by the Committee. The Committee may condition the
vesting and/or payment of Phantom Stock Units, in whole
or in part, upon the attainment of Performance Goals.
(2) Forfeiture. Upon termination of employment during the
applicable deferral period or portion thereof to which
forfeiture conditions apply, or upon failure to satisfy
any other conditions precedent to the delivery of Stock
or cash to which such Phantom Stock Units relate, all
Phantom Stock Units that are then subject to deferral or
restriction shall be forfeited; provided that, the
Committee may provide, by rule or regulation or in any
Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions
relating to Phantom Stock Units will be waived in whole
or in part in the event of termination resulting from
specified causes, and the Committee may in other cases
waive in whole or in part the forfeiture of Phantom
Stock Units.
(v) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Grantees. The Committee may provide,
at the date of grant, that Dividend Equivalents shall be paid
or distributed when accrued or shall be deemed to have been
reinvested in additional Stock, or other investment vehicles
as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents)
shall be subject to all conditions and restrictions of the
underlying Awards to which they relate.
(vi) Other Stock-Based or Cash-Based Awards. The Committee is
authorized to grant Awards to Grantees in the form of Other
Stock-Based Awards or Other Cash-Based Awards, as deemed by
the Committee to be consistent with the purposes of the Plan.
Awards granted pursuant to this paragraph may be granted with
value and payment contingent upon the attainment of certain
Performance Goals, so long as such goals relate to periods of
performance in excess of one calendar year. The Committee
shall determine the terms and conditions of such Awards at the
date of grant or thereafter. The maximum payment that any
Grantee may receive pursuant to an Award granted under this
paragraph in respect of any performance period shall be
$3,000,000. Payments earned hereunder may be decreased or,
with respect to any Grantee who is not a "covered employee"
within the meaning of Section 162(m) of the Code (a "Covered
Employee"), increased in the sole discretion of the Committee
based on such factors as it deems appropriate. No payment
shall be made prior to the certification by the Committee that
any applicable Performance Goals have been attained. The
Committee may establish such other rules applicable to the
Other Stock-Based or Cash-Based Awards to the extent not
inconsistent with Section 162(m) of the Code.
(c) Annual Incentive Compensation Program. The Committee is authorized
to grant Awards to Grantees pursuant to the Annual Incentive
Compensation Program in the form of Other Cash-Based Awards, as
deemed by the Committee to be consistent with the purposes of the
Plan. Grantees will be selected by the Committee with respect to
participation for a Plan Year and may include all employees. Each
Award granted under the Annual Incentive Compensation Program in
respect of a Plan Year will be contingent on the attainment by the
Company of one or more Performance Goals. The maximum payment that
any Grantee may receive pursuant to an Award granted under the
Annual Incentive Compensation Program in respect of any Plan Year
shall be $3,000,000. Payments earned hereunder may be decreased or,
with respect to any Grantee who is not a Covered Employee,
increased in the sole discretion of the Committee based on such
factors as it deems appropriate. No payment to any Covered Employee
shall be made prior to the certification by the Committee that any
applicable Performance Goals have been attained. The Committee may
establish such other rules applicable to the Annual Incentive
Compensation Program to the extent not inconsistent with
Section 162(m) or 409A of the Code.
(d) Phantom Stock Units under Deferred Compensation Plans. The
Committee is authorized to issue Phantom Stock Units to employees
who have elected phantom stock units as an investment alternative
under deferred compensation plans, including the Company's Deferred
Compensation Plan for Executives and the Company's 2005 Deferred
Compensation Plan for Executives. Such Awards may be settled
hereunder by the delivery of cash or shares of Stock and shall
otherwise be subject to the terms and conditions of such plans.
7. Change in Control Provisions.
Unless otherwise determined by the Committee and evidenced in an Award
Agreement or in a plan pursuant to which Awards are granted, in the
event of a Change in Control:
(a) any Award carrying a right to exercise that was not previously
exercisable and vested shall become fully exercisable and vested;
and
(b) the restrictions, payment conditions, and forfeiture conditions
applicable to any other Award granted under the Plan shall lapse
and such Awards shall be deemed fully vested, and any Performance
Goals imposed with respect to Awards shall be deemed to be fully
achieved.
8. Claims Procedures
(a) Claims. A Claimant may submit a claim for benefits in writing to
the Committee. All benefit claims must be filed with the Committee
within six months following the time the benefit was due.
(b) Disposition of Claim. The Committee shall send a written
notification to the Claimant as to the disposition of the claim
within sixty (60) days after receipt of such written claim, unless
special circumstances require an extension of time for processing
the claim. If an extension is required, the Claimant must be given
written notice prior to the termination of the initial 60-day
period. In no event may such extension exceed a period of 60 days
from the end of such initial period. The extension notice must
indicate the special circumstances requiring an extension of time
and the date by which the Committee expects to render the benefit
determination. In the event the claim is wholly or partially
denied, such written notification shall (i) state the specific
reason or reasons for the denial, (ii) make specific reference to
pertinent Plan provisions on which the denial is based, (iii)
provide a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation
of why such material or information is necessary, (iv) set forth
the procedure by which the Claimant may appeal the denial of his or
her claim, including a statement of the Claimant's right to bring a
civil action under section 502(a) of ERISA following an adverse
benefit determination on review, and (v) advise the Claimant that
the Claimant's failure to appeal the action to the Committee in
writing within the 60-day period will render the Committee's
determination final, binding and conclusive. Notice may be written
or electronic.
(c) Appeals. In the event a Claimant wishes to appeal the denial of the
claim, the Claimant may request a review of such denial by making
application in writing to the Committee within sixty (60) days
after receipt of such denial. The Claimant (or his or her duly
authorized legal representative) may, upon written request to the
Committee, review any documents pertinent to his or her claim, and
submit in writing issues and comments in support of his or her
position.
(d) Disposition of Appeal. Within sixty (60) days after receipt of a
written appeal (unless special circumstances, such as the need to
hold a hearing, require an extension of time, but in no event more
than one hundred twenty (120) days after such receipt), the
Committee shall notify the Claimant of the final decision. The
final decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the Claimant, and specific references to the
pertinent Plan provisions on which the decision is based.
(e) Determinations. All benefit claim determinations shall be made in
accordance with governing plan documents. Where appropriate, the
Plan provisions must be applied consistently with respect to
similarly-situated Claimants.
(f) Exhaustion of Administrative Remedies. The Claimant must exhaust
these administrative remedies prior to commencing any other
proceeding with respect to claims arising under the Plan.
(g) Effective Date. This Section 8 shall apply to all Awards
outstanding as of January 1, 2006, in addition to the Awards
referred to in the definition of Effective Date in this Plan.
9. General Provisions.
(a) Nontransferability. Unless otherwise provided in an Award
Agreement, Awards shall not be transferable by a Grantee except by
will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined under the Code or
Title I of the Employee Retirement Income Security Act of 1974, as
amended, and shall be exercisable during the lifetime of a Grantee
only by such Grantee or his guardian or legal representative.
(b) No Right to Continued Employment, etc. Nothing in the Plan or in
any Award granted or any Award Agreement or other agreement entered
into pursuant hereto shall confer upon any Grantee the right to
continue in the employ of the Company, any Subsidiary or any
Affiliate or to be entitled to any remuneration or benefits not set
forth in the Plan or such Award Agreement, or other agreement or to
interfere with or limit in any way the right of the Company or any
such Subsidiary or Affiliate to terminate such Grantee's
employment.
(c) Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any
other payment to a Grantee, amounts of withholding and other taxes
due in connection with any transaction involving an Award (not to
exceed the statutory minimum), and to take such other action as the
Committee may deem advisable to enable the Company and Grantees to
satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to
make cash payments in respect thereof in satisfaction of a
Grantee's tax obligations.
(d) Stockholder Approval; Amendment and Termination. The Board may at
any time and from time to time alter, amend, suspend, or terminate
the Plan in whole or in part; provided, however, that no amendment
shall be effective without stockholder approval if such approval is
required by law or New York Stock Exchange rules. Notwithstanding
the foregoing, no amendment shall affect adversely any of the
rights of any Grantee, without such Grantee's consent, under any
Award theretofore granted under the Plan. Unless earlier terminated
by the Board pursuant to the provisions of the Plan, the Plan shall
terminate on the tenth anniversary of its Effective Date. No Awards
shall be granted under the Plan after such termination date.
(e) Section 409A. If any provision of this Plan, an Award Agreement, or
a plan pursuant to which Awards are granted would cause
compensation to be includible in a Grantee's income pursuant to
Section 409A(a)(1)(A) of the Code, such provision shall be void,
and the Plan, Award Agreement, or such plan shall be amended
retroactively in such a way as to achieve substantially similar
economic results without causing such inclusion.
(f) No Rights to Awards; No Stockholder Rights. No Grantee shall have
any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Grantees. Except as
provided specifically herein, a Grantee or a transferee of an Award
shall have no rights as a stockholder with respect to any shares
covered by the Award until the date of the issuance of a stock
certificate to him for such shares.
(g) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Grantee pursuant to an
Award, nothing contained in the Plan or any Award shall give any
such Grantee any rights that are greater than those of a general
creditor of the Company.
(h) No Fractional Shares. No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash or other Awards shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or
any rights thereto shall be forfeited or otherwise eliminated.
(i) Regulations and Other Approvals.
(i) The obligation of the Company to sell or deliver Stock with
respect to any Award granted under the Plan shall be subject
to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as
may be deemed necessary or appropriate by the Committee.
(ii) Each Award is subject to the requirement that, if at any time
the Committee determines, in its absolute discretion, that the
listing, registration or qualification of Stock issuable
pursuant to the Plan is required by any securities exchange or
under any state or federal law, or the consent or approval of
any governmental regulatory body is necessary or desirable as
a condition of, or in connection with, the grant of an Award
or the issuance of Stock, no such Award shall be granted or
payment made or Stock issued, in whole or in part, unless
listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not
acceptable to the Committee.
(iii)In the event that the disposition of Common Stock acquired
pursuant to the Plan is not covered by a then current
registration statement under the Securities Act of 1933, as
amended, and is not otherwise exempt from such registration,
such Stock shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, or
regulations thereunder, and the Committee may require a
Grantee receiving Stock pursuant to the Plan, as a condition
precedent to receipt of such Stock, to represent to the
Company in writing that the Stock acquired by such Grantee is
acquired for investment only and not with a view to
distribution.
(j) Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of
Delaware without giving effect to the conflict of laws principles
thereof.
CNF Inc.
By:__________________________________________
Jennifer W. Pileggi
Senior Vice President, General Counsel and
Secretary
2006 Amended and Restated Equity and Incentive Plan
Executed: ___________________