CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
OF CNF INC.
I. PURPOSE OF THE
The purpose of the Compensation Committee (the "Committee") of
the Board of Directors (the "Board") of CNF Inc. (the "Corporation")
is (i) to oversee the Corporation's executive compensation policies
and plans in order to promote the attraction and retention of
executive officers and to motivate their performance in the
achievement of the Corporationís business objectives, (ii) to
oversee the Corporationís tax-qualified and other non-executive
benefit plans, and (iii) to produce a Committee report on executive
compensation as required by the Securities and Exchange Commission
("SEC") to be included in the Corporation's annual proxy statement
or annual report on Form 10-K filed with the SEC.
The Committeeís purpose does not extend to the exercise of any
fiduciary responsibility with respect to the tax-qualified
retirement plans and non-executive welfare benefit plans of the
Corporation, such responsibility having been assigned by the Board
to a committee of the Corporationís senior management.
II. COMPOSITION OF THE
The Committee shall consist of three or more directors as
determined from time to time by the Board, based upon
recommendations of the Director Affairs Committee.
Each member of the Committee shall be qualified to serve on
the Committee pursuant to the requirements of the New York Stock
Exchange (the ďNYSEĒ), and any additional requirements that the
Board deems appropriate. Members of the Committee shall also
qualify as "non-employee directors" within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended,
and "outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended, and shall satisfy any
other necessary standards of independence under the federal
securities and tax laws.
Any vacancy on the Committee shall be filled by majority vote of
the Board, based upon recommendations of the Director Affairs
Committee. No member of the Committee shall be removed
except by majority vote of the Board.
III. MEETINGS AND PROCEDURES OF
The Committee shall meet as often as it determines necessary to
carry out its duties and responsibilities. The
Committee, in its discretion, may ask members of management or
others to attend its meetings (or portions thereof) and to provide
pertinent information as necessary.
The Committee may form subcommittees for any purpose that the
Committee deems appropriate and may delegate to such subcommittees
such power and authority as the Committee deems appropriate;
provided, however, that no subcommittee shall consist of
fewer than two members; and provided further that the
Committee shall not delegate to a subcommittee any power or
authority required by any law, regulation or listing standard to be
exercised by the Committee as a whole.
A majority of the members of the Committee present in person or
by means of a conference telephone or other communications equipment
by means of which all persons participating in the meeting can hear
each other shall constitute a quorum.
The Committee shall report regularly to the Board on its
activities, as appropriate.
IV. DUTIES AND RESPONSIBILITIES OF
The Committee shall have the following duties and
- To review at least annually the Corporationís goals,
objectives and policies regarding executive compensation and, if
the Committee deems it appropriate, recommend that the Board amend
these goals, objectives and policies.
- To review at least annually the Corporation's executive
compensation plans in light of the Corporationís goals, objectives
and policies regarding executive compensation, and, if the
Committee deems it appropriate, amend the existing executive
compensation plans, or recommend to the Board the adoption of new
executive compensation plans.
- To review and approve corporate goals and objectives relevant
to the compensation of the Corporationís Chief Executive Officer,
and to evaluate the performance of the Chief Executive Officer in
light of those goals and objectives and, either as a Committee or
together with the other independent directors (as directed by the
Board), determine and approve the Chief Executive Officer's
compensation level based on this evaluation. In determining
the long-term incentive component of the Chief Executive Officer's
compensation, the Committee shall consider all relevant factors,
including the Corporation's performance and relative stockholder
return, the value of similar awards to chief executive officers of
comparable companies, and the awards given to the Chief Executive
Officer of the Corporation in past years.
- To review and approve the compensation of such other
executives of the Corporation as the Committee deems
- To grant stock options, restricted stock and other awards
under the Corporationís equity and other compensation plans for
- To review and approve the performance goals for all
performance-based awards to executives, review and certify the
results and approve the payments required upon attainment of the
- To review perquisites or other personal benefits to the
Corporation's executive officers and recommend any changes to the
- To produce a Committee report on executive compensation as
required by the SEC to be included in the Corporation's annual
proxy statement or annual report on Form 10-K filed with the SEC.
- To review at least annually the Corporation's tax-qualified
and other non-executive benefit plans in light of the goals and
objectives of these plans, and amend, or recommend that the Board
amend these plans if the Committee deems it appropriate. Any plan
amendment that would have a material cost increase to the
Corporation or material effect on the Corporationís employees as a
whole requires Board approval; and any plan amendment that does
not require Board approval may be approved by the Chairman of the
Committee. All plan amendments approved by the Chairman
shall be reported to the Committee at its next scheduled meeting.
- To perform such duties and responsibilities as may be assigned
to the Committee under the terms of any compensation or other
employee benefit plan.
V. EVALUATION OF THE
The Committee shall, on an annual basis, evaluate its
performance. In conducting this review, the Committee shall
evaluate whether this Charter appropriately addresses the matters
that are or should be within its scope and shall recommend such
changes as it deems necessary or appropriate. The Committee
shall address all matters that the Committee considers relevant to
its performance, including at least the following: the
adequacy, appropriateness and quality of the information and
recommendations presented by the Committee to the Board, the manner
in which they were discussed or debated, and whether the number and
length of meetings of the Committee were adequate for the Committee
to complete its work in a thorough and thoughtful manner.
The Committee shall deliver to the Board a report, which may be
oral, setting forth the results of its evaluation, including any
recommended amendments to this Charter and any recommended changes
to the Corporation's or the Board's policies or procedures.
VI. INVESTIGATIONS AND STUDIES;
The Committee may conduct or authorize investigations into or
studies of matters within the Committee's scope of responsibilities,
and may retain, at the Corporation's expense, such independent
counsel or other consultants or advisers as it deems
necessary. The Committee shall have the sole authority to
retain or terminate any compensation consultant to assist the
Committee in carrying out its responsibilities, including sole
authority to approve the consultant's fees and other retention
terms, such fees to be borne by the Corporation.
While the members of the Committee have the duties and
responsibilities set forth in this Charter, nothing contained in
this Charter is intended to create, or should be construed as
creating, any responsibility or liability of members of the