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Corporate Governance


CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF CNF INC.


I.  PURPOSE OF THE COMMITTEE

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 COMMITTEE

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

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

The Committee shall have the following duties and responsibilities: 

  1. 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.
  2. 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. 
  3. 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.  
  4. To review and approve the compensation of such other executives of the Corporation as the Committee deems appropriate.    
  5. To grant stock options, restricted stock and other awards under the Corporationís equity and other compensation plans for executives.
  6. 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 goals.
  7. To review perquisites or other personal benefits to the Corporation's executive officers and recommend any changes to the Board.
  8. 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.
  9. 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.
  10. 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 COMMITTEE

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; OUTSIDE ADVISERS

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 Committee.

Audit Committee
Directors Affairs Committee