-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AaI6jnyLw64mhEZOhnbj/ciNs9eKiF2IsBm6S/hMIqAEFVCcNXr89jtZhqZqeAJu rGT/CSFaySz255eMjJwiRg== 0000929624-97-000663.txt : 19970602 0000929624-97-000663.hdr.sgml : 19970602 ACCESSION NUMBER: 0000929624-97-000663 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970530 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNF TRANSPORTATION INC CENTRAL INDEX KEY: 0000023675 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 941444798 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-A12B SEC ACT: 1934 Act SEC FILE NUMBER: 001-05046 FILM NUMBER: 97617258 BUSINESS ADDRESS: STREET 1: 3240 HILLVIEW AVE CITY: PALO A LTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4154942900 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED FREIGHTWAYS INC DATE OF NAME CHANGE: 19920703 8-A12B 1 FORM 8-A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________ FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 ________________________________________
CNF TRANSPORTATION INC. CNF TRUST I (Exact name of registrant (Exact name of registrant as specified in its charter) as specified in its certificate of trust) DELAWARE DELAWARE (State of incorporation or organization) (State of incorporation or organization) 94-1444798 (APPLIED FOR) (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) - -------------------------------------------- ------------------------------------------- 3240 Hillview Avenue Palo Alto, California 94304 - -------------------------------------------- ------------------------------------------- (Address of principal executive offices) (Zip Code) If this Form relates to the registration of a If this Form relates to the registration of a class of debt securities and is effective class of debt securities and is to become upon filing pursuant to General Instruction effective simultaneously with the A(c)(1), please check the following box. [ ] effectiveness of a concurrent registration statement under the Securities Act of 1933 pursuant to General Instruction A(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which to be so registered each class is to be registered - ------------------- ------------------------------ Term Convertible Securities, Series A New York Stock Exchange ("TECONS/SM/") and the Guarantee with respect thereto
Securities to be registered pursuant to Section 12(g) of the Act: None ------------------ (Title of class) INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED. The classes of securities registered hereby consist of (i) the Term Convertible Securities, Series A (the "TECONS/SM/") which represent preferred undivided beneficial interests in the assets of CNF Trust I, a statutory business trust formed under the laws of the State of Delaware (the "Trust") and (ii) the Guarantee with respect thereto (the "Guarantee"). For a description of the TECONS and the Guarantee, reference is made to the information set forth under the headings "Description of Trust Preferred Securities" and "Description of Trust Preferred Securities Guarantee" in the Prospectus contained in the Registration Statement on Form S-3 (Registration No. 333-26595) filed with the Securities and Exchange Commission (the "Commission") on May 6, 1997 under the Securities Act of 1933, as amended (the "Act"), and amended by Amendment No. 1 thereto filed with the Commission on May 9, 1997 and Post-Effective Amendment No. 1 thereto filed with the Commission on May 30, 1997 (such Registration Statement, as so amended, being hereinafter referred to as the "Registration Statement") and the information set forth under the headings "Description of the TECONS" and "Description of the Guarantee" in a preliminary prospectus supplement relating to the TECONS and the Guarantee filed by the registrants with the Commission pursuant to Rule 424(b) under the Act on May 27, 1997. The above-mentioned descriptions contained in the Prospectus, the Registration Statement and the preliminary prospectus supplement are incorporated by reference into this Registration Statement on Form 8-A. A definitive copy of the Prospectus Supplement relating to the TECONS and the Guarantee will be filed pursuant to Rule 424(b) under the Act with the Commission and shall be incorporated by reference into this Registration Statement on Form 8-A.
Item 2. Exhibits. -------- 2.1 Certificate of Trust dated May 6, 1997 of CNF Trust I (filed herewith). 2.2 Form of Amended and Restated Declaration of Trust of CNF Trust I (incorporated herein by reference to Exhibit 4(l) to the Registration Statement). 2.3 Form of Guarantee Agreement with respect to Trust Preferred Securities (incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement filed with the Commission on May 30, 1997). 2.4 Form of Subordinated Indenture between CNF Transportation Inc. and The First National Bank of Chicago, as trustee (incorporated herein by reference to Exhibit 4(e) to the Registration Statement). 2.5 Form of Supplemental Indenture between CNF Transportation Inc. and The First National Bank of Chicago, as trustee (filed herewith). 2.6 Form of Trust Preferred Security (incorporated herein by reference to Annex I to Exhibit B to Exhibit 4(l) to the Registration Statement).
2 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. Dated: May 30, 1997 CNF Trust I By: CNF Transportation Inc., as Sponsor By: /s/ Eberhard G.H. Schmoller ------------------------------ Eberhard G.H. Schmoller Senior Vice President, General Counsel and Secretary CNF Transportation Inc. By: /s/ Eberhard G.H. Schmoller ------------------------------ Eberhard G.H. Schmoller Senior Vice President, General Counsel and Secretary 3 EX-2.1 2 CERTIFICATE OF TRUST DATED 05-06-97 CERTIFICATE OF TRUST OF CNF TRUST I ----------------------------------- This Certificate of Trust of CNF Trust I (the "Trust"), dated as of May 6, 1997, is being duly executed and filed by First Chicago Delaware Inc., a Delaware corporation, not in its individual capacity, but solely as trustee, and R. Guy Kraines, not in his individual capacity, but solely as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. C. (S) 3801, et ------- -- seq.). - ---- 1. Name. The name of the business trust formed hereby is CNF Trust I. ---- 2. Delaware Trustee. The name and business address of the trustee of the ---------------- Trust in the State of Delaware are First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective upon -------------- filing. IN WITNESS WHEREOF, the undersigned, being the only trustees of the Trust, have executed this Certificate of Trust as of the date first-above written. First Chicago Delaware Inc., not in its individual capacity, but solely as trustee By: /s/ Steven M. Wagner -------------------- Name: Steven M. Wagner Title: Vice President /s/ R. Guy Kraines ------------------ R. Guy Kraines, not in his individual capacity, but solely as trustee EX-2.5 3 FORM OF SUPPLEMENTAL INDENTURE - ------------------------------------------------------------------------------- CNF TRANSPORTATION INC. To THE FIRST NATIONAL BANK OF CHICAGO Trustee _______________ FIRST SUPPLEMENTAL SUBORDINATED INDENTURE _______________ Dated as of June ___, 1997 - ------------------------------------------------------------------------------- TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS Section 1.1 Definition of Terms................................. ARTICLE II GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES....... Section 2.1 Designation and Principal Amount.................... Section 2.2 Maturity............................................ Section 2.3 Form and Payment.................................... Section 2.4 Global Debenture.................................... Section 2.5 Interest............................................ Section 2.6 Enforcement Rights.................................. ARTICLE III REDEMPTION OF THE CONVERTIBLE DEBENTURES......................... Section 3.1 Special Event Redemption............................ Section 3.2 Optional Redemption by Company...................... Section 3.3 No Sinking Fund..................................... ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD............................. Section 4.1 Extension of Interest Payment Period................ Section 4.2 Notice of Extension................................. Section 4.3 Limitation of Transactions.......................... ARTICLE V EXPENSES......................................................... Section 5.1 Payment of Expenses................................. Section 5.2 Payment Upon Resignation or Removal................. ARTICLE VI COVENANT TO LIST ON EXCHANGE..................................... Section 6.1 Listing on an Exchange..............................
i ARTICLE VII CONVERSION OF CONVERTIBLE DEBENTURES............................. Section 7.1 Conversion Rights................................... Section 7.2 Conversion Procedures............................... Section 7.3 Conversion Price Adjustments........................ Section 7.4 Adjustment of Conversion Price-Fundamental Change... Section 7.5 Notice of Certain Events............................ Section 7.6 Company to Provide Stock............................ Section 7.7 Employee Benefit Plans.............................. Section 7.8 Certain Additional Rights........................... Section 7.9 Preferred Stock Purchase Rights..................... ARTICLE VIII FORM OF CONVERTIBLE DEBENTURE.................................... Section 8.1 Form of Convertible Debenture....................... ARTICLE IX ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES......................... Section 9.1 Original Issue of Convertible Debentures............ ARTICLE X MISCELLANEOUS.................................................... Section 10.1 Ratification of Indenture; First Supplemental Indenture Controls................................ Section 10.2 Trustee Not Responsible for Recitals.............. Section 10.3 Governing Law..................................... Section 10.4 Separability...................................... Section 10.5 Counterparts......................................
ii FIRST SUPPLEMENTAL INDENTURE, dated as of June ___, 1997 (the "First Supplemental Indenture"), between CNF Transportation Inc., a Delaware corporation (the "Company"), and The First National Bank of Chicago, as trustee (the "Trustee") under the Subordinated Indenture dated as of May ___, 1997 between the Company and the Trustee (the "Indenture"). WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for the future issuance of the Company's unsecured subordinated debt securities to be issued from time to time in one or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture; WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its _______% Convertible Subordinated Debentures due June 1, 2012 (the "Convertible Debentures"), the form and substance of such Convertible Debentures and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this First Supplemental Indenture; WHEREAS, CNF Trust I, a Delaware statutory business trust (the "Trust"), has offered to the public $100,000,000 aggregate liquidation amount ($115,000,000 if the Underwriters' over-allotment option is exercised in full) of its $______ Term Convertible Securities, Series A (the "Trust Preferred Securities"), representing undivided beneficial interests in the assets of the Trust and proposes to invest the proceeds from such offering, together with the proceeds of the issuance and sale by the Trust to the Company of $[3,092,780] aggregate liquidation amount ($[3,556,700] if the Underwriters' over-allotment option is exercised in full) of its Common Securities, in $103,092,800 aggregate principal amount of the Convertible Debentures ($118,556,750 if the Underwriters' over-allotment option is exercised in full); and WHEREAS, the Company has requested that the Trustee execute and deliver this First Supplemental Indenture and all requirements necessary to make this First Supplemental Indenture a valid instrument in accordance with its terms, and to make the Convertible Debentures, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects; 1 NOW THEREFORE, in consideration of the purchase and acceptance of the Convertible Debentures by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Convertible Debentures and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows: ARTICLE I DEFINITIONS SECTION 1.1 DEFINITION OF TERMS. For all purposes of the First Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms which are defined in the Indenture have the same meanings when used in this First Supplemental Indenture; (b) the terms defined in this Article have the meaning assigned to them in this Article and include the plural as well as the singular; (c) all other terms used herein which are defined in the Trust Indenture Act, whether directly or by reference therein, have the meanings assigned to them therein; (d) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles, consistently applied, that are set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States of America which are effective on the date of the Indenture; (e) a reference to a Section or Article is to a Section or Article of this First Supplemental Indenture; 2 (f) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this First Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision; (g) headings are for convenience of reference only and do not affect interpretation; and (h) the following terms have the meanings given to them in the Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Trust Preferred Security Certificate; (iv) Delaware Trustee; (v) Dissolution Tax Opinion: (vi) Distribution: (vii) DTC; (viii) Property Trustee; (ix) Investment Company Event; (x) No Recognition Opinion; (xi) Redemption Tax Opinion; (xii) Regular Trustees; (xiii) Special Event; (xiv) Tax Event; and (xv) Underwriting Agreement. 3 "Additional Interest" shall have the meaning set forth in Section 2.5. "Compounded Interest" shall have the meaning specified in Section 4.l. "Declaration" means the Amended and Restated Declaration of Trust of CNF Trust l, a Delaware statutory business trust, dated as of June [ ], 1997. "Deferred Interest" has the meaning specified in Section 4.1. "Dissolution Event" means that, as a result of the occurrence and continuation of a Special Event, the Trust is to be dissolved in accordance with the Declaration, and the Convertible Debentures held by the Property Trustee are to be distributed to the holders of the Trust Securities issued by the Trust pro rata in accordance with the Declaration. "Extended Interest Payment Period" has the meaning specified in Section 4.1. "Global Debenture" has the meaning specified in Section 2.4. "Maturity Date" means the date on which the Convertible Debentures mature and on which the principal shall be due and payable together with all accrued and unpaid interest thereon including Compounded Interest and Additional Interest, if any. "Non Book-Entry Trust Preferred Securities" has the meaning set forth in Section 2.4. "Optional Redemption Price" has the meaning specified in Section 3.2. "Trading Day" shall mean a day on which any securities are traded on the national securities exchange or quotation system used to determine the Closing Price. "Trust Preferred Securities" has the meaning specified in the recitals to this First Supplemental Indenture. 4 ARTICLE II GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT. There is hereby authorized a series of Securities designated the "_____% Convertible Subordinated Debentures due June 1, 2012," limited in aggregate principal amount to $103,092,800 (except for such additional principal amounts, not to exceed $[15,463,920], of Convertible Debentures issued to cover over-allotments in the initial public offering of Convertible Debentures) which amount shall be as set forth in any written order of the Company for the authentication and delivery of Convertible Debentures pursuant to Section [303] of the Indenture. SECTION 2.2 MATURITY. The Maturity Date is June 1, 2012. SECTION 2.3 FORM AND PAYMENT. Except as provided in Section 2.4, the Convertible Debentures shall be issued in fully registered certificated form without coupons in denominations of $50 in principal amount and integral multiples thereof. Principal and interest on the Convertible Debentures issued in certificated form will be payable, the transfer of such Convertible Debentures will be registrable and such Convertible Debentures will be exchangeable for Convertible Debentures of other authorized denominations of a like aggregate principal amount at the office or agency of the Trustee; provided, however, that payment of interest may be made at the -------- ------- option of the Company by check mailed to the Holder at such address as shall appear in the Security Register or by wire transfer to an account appropriately identified by the Holder. Notwithstanding the foregoing, so long as the Holder of any Convertible Debentures is the Property Trustee, the payment of the principal of and interest (including Compounded Interest and Additional Interest, if any) on such Convertible Debentures held by the Property Trustee will be made at such place and to such account as may be designated by the Property Trustee. 5 SECTION 2.4 GLOBAL DEBENTURE. (a) In connection with a Dissolution Event, (i) the Convertible Debentures in certificated form may be presented to the Trustee by the Property Trustee in exchange for a Global Debenture in an aggregate principal amount equal to the aggregate principal amount of all outstanding Convertible Debentures (a "Global Debenture"), to be registered in the name of DTC, or its nominee, and delivered by the Trustee to DTC (or its custodian) for crediting to the accounts of its participants pursuant to the instructions of the Regular Trustees. The Company upon any such presentation shall execute a Global Debenture in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Indenture and this First Supplemental Indenture. Payments on the Convertible Debentures issued as a Global Debenture will be made to DTC or its nominee: and (ii) if any Trust Preferred Securities are held in non book- entry certificated form, any Trust Preferred Security Certificate which represents Trust Preferred Securities other than Trust Preferred Securities held by the Clearing Agency or its nominee ("Non Book-Entry Trust Preferred Securities") will be deemed to represent beneficial interests in Convertible Debentures having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book-Entry Trust Preferred Securities until such Trust Preferred Security Certificates are presented to the Security Registrar for transfer or reissuance at which time such Trust Preferred Security Certificates will be cancelled and a Debenture, registered in the name of the holder of the Trust Preferred Security Certificate or the transferee of the holder of such Trust Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Trust Preferred Security Certificate cancelled, will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this First Supplemental Indenture. On issue of such Convertible Debentures, Convertible Debentures with an equivalent aggregate principal amount that were presented by the Property Trustee to the Trustee will be deemed to have been cancelled. 6 (b) A Global Debenture may be transferred, in whole but not in part, only to another nominee of DTC or to DTC by its nominee, or to a successor depositary selected or approved by the Company or to a nominee of such successor depositary. SECTION 2.5 INTEREST. (a) Each Convertible Debenture will bear interest at the rate of _____% per annum (the "Coupon Rate") from the first date of issuance until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of Article IV) quarterly in arrears on June 1, September 1, December 1 and March 1 of each year (each, an "Interest Payment Date"), commencing on June 1, 1997, to the Person in whose name such Convertible Debenture or any predecessor Convertible Debenture is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date, which, [in respect of (i) Convertible Debentures of which the Property Trustee is the Holder and the related Trust Preferred Securities are in book-entry only form or (ii) a Global Debenture, shall be the close of business on the Business Day next preceding that Interest Payment Date; provided, that if the Interest Payment Date is a Redemption Date, then the record date for the interest payment shall be as of the opening of business on such day for the purpose of permitting the Holder of a Convertible Debenture to convert on such record date while continuing to be the record holder for the interest payment and therefore entitled to receive the interest payment on the Interest Payment Date notwithstanding conversion on the record date. Notwithstanding the foregoing sentence, if (i) the Convertible Debentures are held by the Property Trustee and the Trust Preferred Securities are no longer in book-entry only form or (ii) the Convertible Debentures are not represented by a Global Debenture, the Company may select a Regular Record Date for such interest installment which shall be any date at least one Business Day before an Interest Payment Date.] (b) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and, for any period of 7 less than a full calendar month, the actual number of days elapsed in such 30- day month. In the event that any date on which interest is payable on the Convertible Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, then such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (c) If at any time when Property Trustee is the sole holder of the Convertible Debentures, the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the U.S., or any other taxing authority, then, in any such case, the Company will pay as additional interest ("Additional Interest") on the Convertible Debentures, to the extent permitted by applicable law, such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will not be less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. SECTION 2.6 ENFORCEMENT RIGHTS. The holders of a majority in liquidation amount of the Trust Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or exercising any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a Holder of the Convertible Debentures. If the Property Trustee fails to enforce its rights under the Convertible Debentures, a holder of Trust Preferred Securities, to the extent permitted by law, may institute a legal proceeding directly against the Company to enforce the Property Trustee's rights under the Convertible Debentures without first instituting any legal proceeding against the Property Trustee or any other Person or entity. Notwithstanding the foregoing, if a Declaration Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal on the Convertible Debentures on the date such interest or principal is otherwise payable (or in the case of redemption, on the redemption date), then the registered holder of the Trust Preferred Securities may directly institute a proceeding for enforcement of payment to such holder of the principal of or interest on the Convertible Debentures having a principal amount equal to the 8 aggregate liquidation amount of the Trust Preferred Securities of such holder (a "Direct Action") on or after the respective due date specified in the Convertible Debentures. In connection with such Direct Action, the Company shall remain obligated to pay the principal or interest on such Convertible Debentures, and the Company shall be subrogated to the rights of such holder of Trust Preferred Securities under the Declaration to the extent of any payment made by the Company to such holder of Trust Preferred Securities in such Direct Action. The holders of Trust Preferred Securities will not be able to exercise any other remedy available to the holders of the Convertible Debentures. ARTICLE III REDEMPTION OF THE CONVERTIBLE DEBENTURES SECTION 3.1 SPECIAL EVENT REDEMPTION. If a Special Event has occurred and is continuing and: (i) the Regular Trustees have received an opinion (a "Redemption Tax Opinion") of nationally recognized independent tax counsel experienced in such matters that, as a result of a Tax Event, there is more than an insubstantial risk that the Company would be precluded from deducting the interest on the Convertible Debentures for federal income tax purposes on a current accrual basis (by reason of deferral, disallowance or otherwise) even if the Convertible Debentures were distributed to the holders of the Trust Securities in liquidation of such holders' interests in the Trust as described above; or (ii) the Regular Trustees shall have been informed by such tax counsel that a No Recognition Opinion cannot be delivered to the Trust, the Company shall have the right, upon not less than 30 nor more than 60 days' notice, to redeem the Convertible Debentures, in whole or in part for cash, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the redemption date, within 90 days following the occurrence of such Tax Event, and promptly following such redemption, the Trust Securities will be redeemed by the Trust at a redemption price equal to the liquidation amount of such Trust Preferred Securities plus accumulated and unpaid Distributions thereon; provided, 9 however, that if at the time there is available to the Company or the Trust the opportunity to eliminate, within such 90-day period, the Tax Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure which in the sole judgment of the Company has or will cause no adverse effect on the Trust, the Company or the holders of the Trust Securities and will involve no material costs, the Company or the Trust will pursue such measure in lieu of redemption. SECTION 3.2 OPTIONAL REDEMPTION BY COMPANY. (a) Subject to the provisions of Section 3.2(b) and to the provisions of Article [Eleven] of the Indenture, except as otherwise may be specified in Section 3.1 or elsewhere in this First Supplemental Indenture, the Company shall have the right to redeem the Convertible Debentures, in whole or in part, from time to time, on or after June 1, 2000. Any redemption pursuant to this paragraph will be made upon not less than 30 days nor more than 60 days notice to the Holders of the Convertible Debentures, at the following prices (expressed as percentages of the principal amount of the Convertible Debentures) (the "Optional Redemption Price") together with accrued and unpaid interest, including Compounded and Additional Interest to, but excluding, the Redemption Date, if redeemed during the 12-month period beginning June 1: Year Redemption Price ---- ---------------- 2000........................... % 2001........................... % 2002........................... % 2003........................... % 2004........................... % and 100% if redeemed on or after June 1, 2005 If Convertible Debentures are redeemed on any June 1, September 1, December 1, or March 1, accrued and unpaid interest shall be payable to Holders of record on the relevant record date. So long as the corresponding Trust Preferred Securities are outstanding, the proceeds from the redemption of the Convertible Debentures will be 10 used to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Convertible Debentures so redeemed. If the Convertible Debentures are only partially redeemed pursuant to this Section 3.2, the Convertible Debentures will be redeemed pro rata or by lot or by any other method utilized by the Trustee. The Optional Redemption Price shall be paid prior to 12:00 noon, New York time, on the Redemption Date or at such earlier time as the Company determines; provided that the Company shall deposit with the Trustee an amount sufficient to pay the Optional Redemption Price by 10:00 a.m., New York time, on the date such Optional Redemption Price is to be paid. (b) If a partial redemption of the Convertible Debentures would result in the delisting of the Trust Preferred Securities issued by the Trust from any national securities exchange or other organization on which the Trust Preferred Securities are then listed, the Company shall not be permitted to effect such partial redemption and may only redeem the Convertible Debentures in whole. SECTION 3.3 NO SINKING FUND. The Convertible Debentures are not entitled to the benefit of any sinking fund. ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD. So long as the Company shall not be in default in the payment of interest on the Convertible Debentures, the Company has the right at any time and from time to time, during the term of the Convertible Debentures, to defer payments of interest for successive periods not exceeding 20 consecutive quarters for each Extension Period. At the end of each Extension Period, the Company shall pay all interest then accrued and unpaid including, to the extent permitted by applicable law, any Additional Interest, together with interest thereon compounded quarterly at the rate specified for the convertible Debentures to the extent permitted by applicable law ("Compound Interest"); [provided, that during 11 any Extension Period, (a) the Company shall not declare or pay dividends on, make any distribution with respect to, or redeem, purchase, acquire or make a liquidation payment with respect o, any of its capital stock (other than (A)(i) purchases or acquisitions of shares of the Company's capital stock (or capital stock equivalents) in connection with the satisfaction by the Company of its obligations under Company's capital stock (or capital stock equivalents) in connection with the satisfaction by the Company of its obligations under any officers, directors or employee benefit plans (or any options or other instruments issued thereunder) or the satisfaction by the Company of its obligations pursuant to any contract or security requiring the Company to purchase shares of the Company's capital stock (or capital stock equivalents), (ii) purchases of shares of the Company's capital stock (or capital stock equivalents) from officers, directors or employees of the Company or its subsidiaries pursuant to employment agreements or upon termination of employment or retirement, (iii) as a result of a reclassification, combination or subdivision of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (iv) dividends or distributions of shares of common stock on common stock, (v) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or any security being converted or exchanged into such capital stock, (vi) dividends or distributions on, or redemptions, purchases or acquisitions of, or liquidation payments with respect to, the Series B Preferred Stock, (vii) any dividend or distribution of capital stock (or capital stock equivalents) in connection with the implementation of a stockholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, or (B) guarantee payments made with respect to any of the foregoing), (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Convertible Debentures and (c) the Company shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Guarantee or the Company's guarantee of the Trust Common Securities).] Prior to the termination of any such Extension Period of less than 20 consecutive quarters, the Company may further defer payments of interest by extending he interest payment period; provided, however, that, such Extension Period, including all such previous and further extensions, may not exceed 20 consecutive quarters or extend beyond the maturity of the Convertible Debentures. Upon the termination of any Extension period and the payment of all amounts then due on the Convertible Debentures, the Company may com mence a new Extension Period, subject to the terms set forth in this section. No interest shall be due or 12 payable on the Convertible Debentures during an Extension Period, except at the end thereof. SECTION 4.2 NOTICE OF EXTENSION. (a) If the Property Trustee shall be the sole holder of the Convertible Debentures, the Company shall give the Regular Trustees and the Property Trustee notice of its selection of such Extension Period one Business Day prior to the earlier of (i) the next succeeding date Distributions on the Trust Preferred Securities are payable and (ii) the related record date for such Distribution on the Trust Preferred Securities. The Regular Trustees shall give notice of the Company's selection of such Extension Period to the holders of the Trust Preferred Securities. (b) If the Property Trustee shall not be the sole holder of the Convertible Debentures, the Company shall give the holders of the Trust Preferred Securities notice of its selection of such Extension Period ten Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) the date upon which the Company is required to give notice to the New York Stock Exchange (or other applicable self-regulatory organization) or to holders of the Convertible Debentures of the record or payment date of such related interest payment. (c) The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in the maximum Extended Interest Payment Period permitted under Section 4.1. SECTION 4.3 LIMITATION OF TRANSACTIONS. If the Company shall exercise its right to defer payment of interest as provided in Section 4.1, then (i) the Company shall not declare or pay dividend on, make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than (A) (1) purchases or acquisitions of shares of the Company's capital stock (or capital stock equivalents) in connection with the satisfaction by the Company of its obligations under any officers, directors or employee benefit plans (or any options or other instruments issued thereunder) or the satisfaction by the Company of its obligations pursuant to any contract or security requiring the Company to purchase shares of the Company's capital stock (or capital stock equivalents), 13 (2) purchases of shares of the Company's capital stock (or capital stock equivalents) from officers, directors or employees of the Company or its subsidiaries pursuant to employment agreements or upon termination of employment or retirement, (3) as a result of a reclassification, combination or subdivision of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (4) dividends or distributions of shares of common stock on common stock, (5) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or any security being converted or exchanged, (6) dividends or distributions on, or redemptions, purchases or acquisitions of, or liquidation payments with respect to, the Series B Preferred Stock, (7) purchases or other acquisitions of common stock in connection with a dividend reinvestment or other similar plan, or (8) any dividend or distribution of capital stock (or capital stock equivalents) in connection with the implementation of a stockholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, or (B) guarantee payments made with respect to any of the foregoing) (ii) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Convertible Debentures and (iii) the Company shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Guarantee or the Company's guarantee of the Trust Common Securities). ARTICLE V EXPENSES SECTION 5.1 PAYMENT OF EXPENSES. In connection with the offering, sale and issuance of the Convertible Debentures to the Property Trustee and in connection with the sale of the Trust Securities by the Trust, the Company, in its capacity as borrower with respect to the Convertible Debentures, shall: (a) pay all costs and expenses relating to the offering, sale and issuance of the Convertible Debentures and the sale of the Trust Securities, including commissions to the underwriters payable pursuant to the Underwriting 14 Agreement and compensation of the Trustee under the Indenture in accordance with the provisions of Section [607] of the Indenture; (b) pay all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization of the Trust, the fees and expenses of the Property Trustee and the Delaware Trustee, the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection wish the acquisition, financing, and disposition of Trust assets); (c) pay all costs and expenses related to the enforcement by the Property Trustee of the rights of the holders of the Trust Preferred Securities; (d) be primarily liable for any indemnification obligations arising with respect to the Declaration; and (e) pay any and all taxes (other than United States withholding taxes attributable to the Trust or its assets) and all liabilities, costs and expenses with respect to such taxes of the Trust. SECTION 5.2 PAYMENT UPON RESIGNATION OR REMOVAL. Upon termination of this First Supplemental Indenture or the Indenture or the removal or resignation of the Trustee pursuant to Section [610] of the Indenture, the Company shall pay to the Trustee all amounts accrued to the date of such termination, removal or resignation. Upon termination of the Declaration or the removal or resignation of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to Section [5.07] of the Declaration, the Company shall pay to the Delaware Trustee or the Property Trustee, and their respective counsel, as the case may be, all amounts accrued to the date of such termination, removal or resignation. 15 ARTICLE VI COVENANT TO LIST ON EXCHANGE SECTION 6.1 LISTING ON AN EXCHANGE. If the Convertible Debentures are to be distributed to the holders of the Trust Preferred Securities issued by the Trust upon a Dissolution Event, the Company will use its best efforts to list such Convertible Debentures on the New York Stock Exchange, Inc. or on such other exchange as the Trust Preferred Securities are then listed. ARTICLE VII CONVERSION OF CONVERTIBLE DEBENTURES SECTION 7.1 CONVERSION RIGHTS. Subject to and upon compliance with the provisions of this Article VII, the Convertible Debentures are convertible, at the option of the Holder, at any time through the close of business on June 1, 2012 (or, in the case of Convertible Debentures called for redemption, prior to the close of business on the Business Day prior to the corresponding redemption date) into fully paid and nonassessable shares of CNF Common Stock of the Company at an initial conversion rate of __________ shares of CNF Common Stock for each $50 in aggregate principal amount of Convertible Debentures (equal to a conversion price (as adjusted from time to time, the "Conversion Price") of $__________ per share of CNF Common Stock), subject to adjustment as described in this Article VII. A Holder of Convertible Debentures may convert any portion of the principal amount of the Convertible Debentures into that number of fully paid and nonassessable shares of CNF Common Stock obtained by dividing the principal amount of the Convertible Debentures to be converted by the Conversion Price in effect at the close of business on the Conversion Date. All calculations under this Article VII shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. SECTION 7.2 CONVERSION PROCEDURES. 16 (a) In order to convert all or a portion of the Convertible Debentures, the Holder thereof shall deliver to the Conversion Agent an irrevocable Notice of Conversion setting forth the principal amount of Convertible Debentures to be converted, together with the name or names, if other than the Holder, in which the shares of CNF Common Stock should be issued upon conversion and, if such Convertible Debentures are definitive Convertible Debentures, surrender to the Conversion Agent the Convertible Debentures to be converted, duly endorsed or assigned to the Company or in blank. In addition, a holder of Trust Preferred Securities may exercise its right under the Declaration to convert such Trust Preferred Securities into CNF Common Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion setting forth the information called for by the preceding sentence and directing the Conversion Agent (i) to exchange such Trust Preferred Security for a portion of the Convertible Debentures held by the Trust (at an exchange rate of $50 principal amount of Convertible Debentures for each Trust Preferred Security) and (ii) to immediately convert such Convertible Debentures, on behalf of such holder, into CNF Common Stock of the Company pursuant to this Article VII and, if such Trust Preferred Securities are in definitive form, surrendering such Trust Preferred Securities, duly endorsed or assigned to the Company or in blank. So long as any Trust Preferred Securities are outstanding, the Trust shall not convert any Convertible Debentures except pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder of Trust Preferred Securities. If a Trust Preferred Security is surrendered for conversion after the close of business on any regular record date for payment of a Distribution and before the opening of business on the corresponding Distribution payment date, then, notwithstanding such conversion, the Distribution payable on such Distribution payment date will be paid in cash to the Person in whose name the Convertible Debenture is registered at the close of business on such record date, and (other than a Convertible Debenture or a portion of a Convertible Debenture called for redemption on a redemption date occurring after such record date and on or prior to such Distribution payment date) when so surrendered for conversion, the Convertible Debenture must be accompanied by payment of an amount equal to the Distribution payable on such Distribution payment date. Except as otherwise provided in the immediately preceding sentence, in the case of any Convertible Debenture which is converted, interest whose Maturity Date is after the date of conversion of such Convertible Debenture shall not be payable, and the Company shall not make nor be required to make any other payment, adjustment or allowance with respect to accrued but unpaid interest on the Convertible Debentures being converted, which shall be deemed to be paid in full. Each 17 conversion shall be deemed to have been effected immediately prior to the close of business on the day on which the Notice of Conversion was received (the "Conversion Date") by the Conversion Agent from the Holder or from a holder of the Trust Preferred Securities effecting a conversion thereof pursuant to its conversion rights under the Declaration, as the case may be. The Person or Persons entitled to receive the CNF Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such CNF Common Stock as of the Conversion Date. As promptly as practicable on or after the Conversion Date, the Company shall issue and deliver at the office of the Conversion Agent, unless otherwise directed by the Holder in the Notice of Conversion, a certificate or certificates for the number of full shares of CNF Common Stock issuable upon such conversion, together with the cash payment, if any, in lieu of any fraction of any share to the Person or Persons entitled to receive the same. Conversion Agent shall deliver such certificate or certificates to such Person or Persons. (b) The Company's delivery upon conversion of the fixed number of shares of CNF Common Stock into which the Convertible Debentures are convertible (together with the cash payment, if any, in lieu of fractional shares) shall be deemed to satisfy the Company's obligation to pay the principal amount at Maturity of the portion of Convertible Debentures so converted and any unpaid interest (including Compounded Interest) accrued on such Convertible Debentures at the time of such conversion. (c) No fractional shares of CNF Common Stock will be issued as a result of conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a cash adjustment in an amount equal to the same fraction of the Closing Price of such fractional interest on the date on which the Convertible Debentures were duly surrendered to the Conversion Agent for conversion, or, if such day is not a Trading Day, on the next Trading Day, and the Conversion Agent in turn will make such payment, if any, to the Holder of the Convertible Debentures or the holder of the Trust Preferred Securities so converted. (d) In the event of the conversion of any Convertible Debenture in part only, a new Convertible Debenture or Convertible Debentures for the unconverted portion thereof will be issued in the name of the Holder thereof upon the cancellation thereof in accordance with Section [1402] of the Indenture. (e) In effecting the conversion transactions described in this Section 7.2, the Conversion Agent is acting as agent of the holders of Trust 18 Preferred Securities (in the exchange of Trust Preferred Securities for Convertible Debentures) and as agent of the Holders of Convertible Debentures (in the conversion of Convertible Debentures into CNF Common Stock), as the case may be. The Conversion Agent is hereby authorized (i) to exchange Convertible Debentures held by the Trust from time to time for Trust Preferred Securities in connection with the conversion of such Trust Preferred Securities in accordance with this Article VII and (ii) to convert all or a portion of the Convertible Debentures into CNF Common Stock and thereupon to deliver such shares of CNF Common Stock in accordance with the provisions of this Article VII and to deliver to the Trust a new Convertible Debenture or Convertible Debentures for any resulting unconverted principal amount. SECTION 7.3 CONVERSION PRICE ADJUSTMENTS. (a) The Conversion Price shall be adjusted from time to time as follows: (i) In case the Company issues CNF Common Stock as a dividend or distribution on CNF Common Stock; (ii) In case of a subdivision, combination or reclassification the CNF Common Stock; (iii) In case the Company issues to all holders of CNF Common Stock certain rights or warrants to subscribe for or purchase CNF Common Stock at less than the then current market price; (iv) In case of a distribution to all holders of CNF Common Stock (A) equity securities of the Company (other than CNF Common Stock), (B) evidences of indebtedness of the Company and/or (C) other assets (including securities, but excluding (1) any rights or warrants referred to in clause (iii) above, (2) any rights or warrants to acquire any capital stock of any entity other than the Company or any subsidiary of the Company, (3) any dividends or distributions in connection with the liquidation, dissolution or winding-up of the Company, (4) any dividends or distributions payable solely in cash that may from time to time be fixed by the Board of Directors of the Company and (5) any dividends or distributions referred to in clause (i) or (ii) above); 19 (v) In case the Company shall issue dividends or distributions to all holders of CNF Common Stock consisting of cash, excluding (a) any cash dividends on CNF Common Stock to the extent that the aggregate cash dividends per share of CNF Common Stock in any consecutive 12-month period do not exceed the greater of (x) the amount per share of CNF Common Stock of the cash dividends paid on CNF Common Stock in the immediately preceding 12-month period, to the extent that such dividends for the immediately preceding 12-month period did not require an adjustment of the conversion price pursuant to this clause (v) (as adjusted to reflect subdivisions or combinations of CNF Common Stock), and (y) 15% of the average of the daily Closing Price of CNF Common Stock for the ten consecutive Trading Days immediately prior to the date of declaration of such dividend, and (b) any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company or a redemption of any rights issued under a rights agreement; provided, however, that no adjustment shall be made pursuant to this clause (v) if such distribution would otherwise constitute a Fundamental Change (as defined below) and be reflected in a resulting adjustment described below; and (vi) In the case of the payment to holders of CNF Common Stock in respect of a tender or exchange offer by the Company or any subsidiary of the Company for CNF Common Stock to the extent that the cash and value of any other consideration included in such payment per share of CNF Common Stock exceed (by more than 10%, with any smaller excess being disregarded in computing the adjustment provided hereby) the first reported sale price per share of CNF Common Stock on the Trading Day next succeeding the Expiration Time for such tender or exchange offer. (vii) If any adjustment is required to be made as set forth in clause (v) above as a result of a distribution which is a dividend described in subclause (a) of clause (v) above, such adjustment would be based upon the amount by which such distribution exceeds the amount of the dividend permitted to be excluded pursuant to such subclause (a) of clause (v). If an adjustment is required to be made as set forth in clause (v) above as a 20 result of a distribution which is not such a dividend, such adjustment would be based upon the full amount of such distribution. If an adjustment is required to be made as set forth in clause (vi) above, such adjustment would be calculated based upon the amount by which the aggregate consideration paid for the CNF Common Stock acquired in the tender or exchange offer exceeds 110% of the value of such shares based on the first reported sale price of CNF Common Stock on the Trading Day next succeeding the Expiration Time. In lieu of making such a conversion price adjustment in the case of certain dividends or distributions, the Company may provide that upon the conversion of the Trust Preferred Securities the holder converting such Trust Preferred Securities will receive, in addition to the CNF Common Stock (if any) to which such holder is entitled, the cash, securities or other property which such holder would have received if such holder had, immediately prior to the record date for such dividend or distribution, converted its Trust Preferred Securities into CNF Common Stock. (viii) No adjustment in the conversion price will be required unless the adjustment would require a change of at least 1% in the on version price then in effect; provided, however, that any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. In addition, no adjustment to the conversion price will be required in connection with the issuance of rights pursuant to a shareholder rights plan or similar plan or the repurchase or redemption of those rights. If any action would require adjustments of the conversion price pursuant to more than one of the provisions described above, only one adjustment shall be made and such adjustment shall be the amount of adjustment that has the highest absolute value to the holders of the Trust Preferred Securities. (ix) In any case in which this Article VII provides that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event (A) issuing to the holder of any Convertible Debentures converted after such record date and before the occurrence of such event the additional shares of CNF Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the CNF Common Stock 21 issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder any amount in cash in lieu of any fractional shares pursuant to this Article VII. (x) For purposes of this Article VII, "CNF Common Stock" includes any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company. However, subject to the provisions of this Article VII, shares issuable on conversion of Convertible Debentures shall include only shares of the class designated as the Company Common Stock on the date of the initial issuance of Convertible Debentures by the Company or shares of any class or classes resulting from any reclassification or reclassification thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, however, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. (b) Whenever the Conversion Price is adjusted as herein provided: (i) the Company shall compute the adjusted Conversion Price and shall prepare a certificate signed by the Chief Financial Officer or the Treasurer of the Company setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed with the Trustee and the transfer agent for the Trust Preferred Securities and the Convertible Debentures; and (ii) a notice stating the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall as soon as practicable be mailed by the Company to all record holders of Trust Preferred Securities and the Convertible Deben- 22 tures at their last addresses as they appear upon the stock transfer books of the Company and the Trust. SECTION 7.4 ADJUSTMENT OF CONVERSION PRICE - FUNDAMENTAL CHANGE. (a) In the event that the Company shall be a party to any transaction or series of transactions constituting a Fundamental Change (including, without limitation, (i) any recapitalization or reclassification of CNF Common Stock (other than a change in par value or a change from par value to no par value or from no par value to par value, or as a result of a subdivision or combination of CNF Common Stock); (ii) any consolidation or merger of the Company with or into another corporation as a result of which holders of CNF Common Stock shall be entitled to receive securities or other property or assets (including cash) with respect to or in exchange for CNF Common Stock (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of the outstanding CNF Common Stock); (iii) any sale or transfer of all or substantially all of the assets of the Company; or (iv) any compulsory share exchange) pursuant to which holders of CNF Common Stock shall be entitled to receive other securities, cash or other property, then appropriate provision shall be made so that the holder of each Trust Preferred Security then outstanding shall have the right thereafter to convert such Trust Preferred Security only into (x) if any such transaction does not constitute a Common Stock Fundamental Change (as defined below), the kind and amount of the securities, cash or other property that would have been receivable upon such recapitalization, reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of CNF Common Stock issuable upon conversion of such Trust Preferred Securities immediately prior to such recapitalization, reclassification, consolidation, merger, sale, transfer or share exchange, alter, in the case of a Non-Stock Fundamental Change (as defined below), giving effect to any adjustment in the conversion price in accordance with clause (i) of the following paragraph, and (y) if any such transaction constitutes a Common Stock Fundamental Change, shares of common stock of the kind received by holders of CNF Common Stock as a result of such Common Stock Fundamental Change in an amount determined in accordance with clause (ii) of the following paragraph. The company formed by such consolidation or resulting from such merger or which acquires such assets or which acquires the CNF Common Stock, as the case may be, shall enter into a supplemental indenture with the Trustee, reasonably satisfactory in form to the Trustee and executed and delivered to the Trustee, the provisions of which shall establish such right. Such supplemental indenture shall 23 provide for adjustments which, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as practical to the relevant adjustments provided for in the preceding paragraphs and in this paragraph. (b) Notwithstanding any other provision in the preceding paragraphs, if any Fundamental Change occurs, the conversion price in effect will be adjusted immediately after that Fundamental Change as follows: (i) in the case of a Non-Stock Fundamental Change, the conversion price per share of CNF Common Stock immediately following such Non-Stock Fundamental Change will be the lower of (a) the conversion price in effect immediately prior to such Non-Stock Fundamental Change, but after giving effect to any other adjustments effected pursuant to the preceding paragraphs, and (b) the result obtained by multiplying the greater of the Applicable Price (as defined below) or the then applicable Reference Market Price (as defined below) by a fraction of which the numerator will be 100 and the denominator of which will be an amount based on the date such Non-Stock Fundamental Change occurs. For the 12-month period beginning June 1, 1997, the denominator will be , and the denominator will decrease by during each successive 12-month period; provided, that the denominator shall in no event be less than 100.0; For the twelve month period beginning June 1: Year Denominator ---- ----------- 1997................. 1998................. 1999................. 2000................. 2001................. 2002................. 2003................. 2004................. 2005 and thereafter.. 100.00; (ii) in the case of a Common Stock Fundamental Change, the conversion price per share of CNF Common Stock immediately following the Common Stock Fundamental 24 Change will be the conversion price in effect immediately prior to the Common Stock Fundamental Change, but after giving effect to any other adjustments effected pursuant to the preceding paragraphs, multiplied by a fraction, the numerator of which is the Purchaser Stock Price (as defined below) and the denominator of which is the Applicable Price; provided, however, that in the event of a Common Stock Fundamental Change in which (a) 100% of the value of the consideration received by a holder of CNF Common Stock (subject to certain limited exceptions) is shares of common stock of the successor, acquiror or other third party (and cash, if any, paid with respect to any fractional interests in the shares of common stock resulting from the Common Stock Fundamental Change) and (b) all of the CNF Common Stock (subject to certain limited exceptions) shall have been exchanged for, converted into, or acquired for, shares of common stock (and cash, if any, with respect to fractional interests) of the successor, acquiror or other third party, the conversion price per share of CNF Common Stock immediately following the Common Stock Fundamental Change shall be the conversion price in effect immediately prior to the Common Stock Fundamental Change divided by the number of shares of common stock of the successor, acquiror, or other third party received by a holder of one share of CNF Common Stock as a result of the Common Stock Fundamental Change. (c) The following definitions shall apply to terms used in this Article VII: (i) "Applicable Price" shall mean (A) in the event of a Non- Stock Fundamental Change in which the holders of CNF Common Stock receive only cash, the amount of cash receivable by a holder of one share of CNF Common Stock and (B) in the event of any other Fundamental Change, the average of the Closing Prices for one share of CNF Common Stock during the ten Trading Days immediately prior to the record date for the determination of the holders of CNF Common Stock entitled to receive cash, securities, property or other assets in connection with such Fundamental Change or, if there is no such record date, prior to the date upon which the holders of CNF Common Stock shall have the right to receive such cash, securities, property or other assets. 25 (ii) "Common Stock Fundamental Change" shall mean any Fundamental Change in which more than 50% of the value (as determined in good faith by the Board of Directors of the Company) of the consideration received by the holders of CNF Common Stock pursuant to such transactions consists of shares of common stock that, for the ten consecutive Trading Days immediately prior to such Fundamental Change, has been admitted for listing or admitted for listing subject to notice of issuance on a national securities exchange or quoted on the Nasdaq National Market; provided, -------- however, that a Fundamental Change shall not be a CNF Common Stock ------- Fundamental Change unless either (A) the Company continues to exist after the occurrence of such Fundamental Change and the outstanding Convertible Debentures continue to exist as outstanding Convertible Debentures, or (B) the outstanding Convertible Debentures continue to exist as Convertible Debentures and are convertible into common stock of the successor to the Company. (iii) "Fundamental Change" shall mean the occurrence of any transaction or event or series of transactions or events pursuant to which all or substantially all of the CNF Common Stock shall be exchanged for, converted into, acquired for or constitutes solely the right to receive cash, securities, property or other assets (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise); provided, however, in the -------- ------- case of a plan involving more than one such transaction or event, for purposes of adjustment of the Conversion Price, such Fundamental Change shall be deemed to have occurred when substantially all of the CNF Common Stock had been exchanged for, converted into, or acquired for or constitutes solely the right to receive cash, securities, property or other assets, but the adjustment shall be based upon the consideration which the holders of CNF Common Stock received in such transaction or event as a result of which more than 50% of the CNF Common Stock shall have been exchanged for, converted into, or acquired for or shall constitute solely the right to receive cash, securities, property or other assets. 26 (iv) "Non-Stock Fundamental Change" shall mean any Fundamental Change other than a CNF Common Stock Fundamental Change. (v) "Purchaser Stock Price" shall mean, with respect to any CNF Common Stock Fundamental Change, the average of the Closing Prices for one share of the common stock received by holders of CNF Common Stock in such CNF Common Stock Fundamental Change during the ten Trading Days immediately prior to the record date for the determination of the holders of CNF Common Stock entitled to receive such common stock or, if there is no such record date, prior to the date upon which the holders of CNF Common Stock shall have the right to receive such common stock. (vi) "Reference Market Price" shall initially mean $_______ (which is an amount equal to 66-2/3% of the last reported sale price for the CNF Common Stock on the New York Stock Exchange on ____________, 1997) and, in the event of any adjustment to the Conversion Price other than as a result of a Fundamental Change, the Reference Market Price shall also be adjusted so that the ratio of the Reference Market Price to the Conversion Price after giving effect to any such adjustment shall always be the same as the ratio of $_______ to the initial Conversion Price set forth in this Article VII. (d) In determining the amount and type of consideration received by a holder of CNF Common Stock in the event of a Fundamental Change, consideration received by a holder of CNF Common Stock pursuant to a statutory right of appraisal will be disregarded. SECTION 7.5 NOTICE OF CERTAIN EVENTS. In case: (i) the Company shall declare a dividend (or any other distribution) on CNF Common Stock that would cause an adjustment to the Conversion Price of the Convertible Debentures pursuant to the terms of any of the subparagraphs above (including 27 such an adjustment that would occur but for the terms of the first sentence of Section 7.3(a)(viii) above); or (ii) the outstanding shares of CNF Common Stock shall be subdivided into a greater number of shares of CNF Common Stock or combined into a smaller number of shares of CNF Common Stock; or (iii) the Company shall authorize the granting to the holders of CNF Common Stock generally of rights or warrants (for a period expiring within 45 days after the record date fixed for a distribution of such rights and warrants) to subscribe for or purchase any shares of the Company's capital stock or other capital stock of any class or of any other rights (including any Rights Offerings); or (iv) of any reclassification of CNF Common Stock (other than a subdivision or combination of the outstanding shares of CNF Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company or a compulsory share exchange; or (v) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; then the Company shall (i) if any Trust Preferred Securities are outstanding, cause to be filed with the transfer agent for the Trust Preferred Securities, and shall cause to be mailed to the holders of record of the Trust Preferred Securities, at their last addresses as they shall appear upon the stock transfer books of the Trust or (ii) shall cause to be mailed to all Holders at their last addresses as they shall appear in the Security Register, at least 15 days prior to the applicable record or effective date hereinafter specified, a notice stating (A) the date on which a record (if any) is to be taken for the purpose of such dividend, distribution, rights or warrants or, if a record is not to be taken, the date as of which the holders of CNF Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined or (B) the date on which such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up is expected to become effective, and the date as of 28 which it is expected that holders of CNF Common Stock of record shall be entitled to exchange their shares of CNF Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up (but no failure to mail such notice or any defect therein or in the mailing thereof shall affect the validity of the corporate action required to be specified in such notice). SECTION 7.6 COMPANY TO PROVIDE STOCK. The Company shall reserve, free from pre-emptive rights, out of its authorized but unissued shares, sufficient shares to provide for the conversion of the Convertible Debentures from time to time as such Convertible Debentures are presented for conversion, provided, that nothing contained herein shall be construed to preclude the Company from satisfying its obligations in respect of the conversion of Convertible Debentures by delivery of repurchased shares of CNF Common Stock which are held in the treasury of the Company. If any shares of CNF Common Stock to be reserved for the purpose of conversion of Convertible Debentures hereunder require registration with or approval of any governmental authority under any Federal or State law before such shares may be validly issued or delivered upon conversion, then the Company covenants that it will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be, provided, however, that nothing in this Section 7.6 shall be deemed to affect in any way the obligations of the Company to convert Convertible Debentures into CNF Common Stock as provided in this Article VII. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of the CNF Common Stock, the Company will take all corporate action which may, in the Opinion of Counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of CNF Common Stock at such adjusted Conversion Price. The Company covenants that all shares of CNF Common Stock which may be issued upon conversion of Convertible Debentures will upon issue be fully paid and non-assessable by the Company and free of pre-emptive rights. SECTION 7.7 EMPLOYEE BENEFIT PLANS. 29 Notwithstanding the foregoing provisions, the issuance of any shares of CNF Common Stock or options or rights to purchase such shares pursuant to any employee benefit plan or program of the Company or pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of June __, 1997 shall not be deemed to constitute an issuance of CNF Common Stock or exercisable, exchangeable or convertible securities by the Company to which any of the adjustment provisions described above applies. There shall also be no adjustment of the Conversion Price (i) in case of the issuance of any stock (or securities convertible into or exchangeable for stock) of the Company except as specifically described in this Article VII, (ii) as the result of the issuance of CNF Common Stock upon conversion of the Trust Preferred Securities or the Convertible Debentures or (iii) as the result of the issuance of Rights. SECTION 7.8 CERTAIN ADDITIONAL RIGHTS. In case the Company shall, by dividend or otherwise, declare or make a distribution on the CNF Common Stock referred to in Section 7.3 (c) or 7.3(d) (including, without limitation, dividends or distributions referred to in the last sentence of Section 7.3(e)), the Holder of the Convertible Debentures, upon the conversion thereof subsequent to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution and prior to the effectiveness of the Conversion Price adjustment in respect of such distribution, shall also be entitled to receive for each share of CNF Common Stock into which the Convertible Debentures are converted, the portion of the shares of CNF Common Stock, rights, warrants, evidences of indebtedness, shares of capital stock, cash and assets so distributed applicable to one share of CNF Common Stock; provided, however, that, at the election of the Company (whose election shall be evidenced by a resolution of the Board of Directors) with respect to all Holders so converting, the Company may, in lieu of distributing to such Holder any portion of such distribution not consisting of cash or securities of the Company, pay such Holder an amount in cash equal to the fair market value thereof (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors). If any conversion of Convertible Debentures described in the immediately preceding sentence occurs prior to the payment date for a distribution to holders of CNF Common Stock which the Holder of Convertible Debentures so converted is entitled to receive in accordance with the immediately preceding sentence, the Company may elect (such election to be evidenced by a resolution of the Board of Directors) to distribute to such Holder a due bill for the shares of CNF Common 30 Stock, rights, warrants, evidences of indebtedness, shares of capital stock, cash or assets to which such Holder is so entitled, provided, that such due bill (a) meets any applicable requirements of the principal national securities exchange or other market on which the CNF Common Stock is then traded and (b) requires payment or delivery of such shares of CNF Common Stock, rights, warrants, evidences of indebtedness, shares of capital stock, cash or assets no later than the date of payment or delivery thereof to holders of shares of CNF Common Stock receiving such distribution. SECTION 7.9 PREFERRED STOCK PURCHASE RIGHTS. [ (a) So long as Rights of a kind similar to those anticipated to be declared in the first quarter of 1997 by the Board of Directors pursuant to the Rights Agreement between the Company and the Person named therein as Rights Agent (the "Rights Agreement"), as the same may hereafter be amended or reissued ("Rights"), are attached to the outstanding shares of CNF Common Stock, each share of CNF Common Stock issued upon conversion of the Convertible Debentures prior to the earliest of any Distribution Date (as defined in the Rights Agreement), the date of redemption of the Rights or the date of expiration of the Rights shall be issued with Rights in a number equal to the number of Rights then attached to each such outstanding share of CNF Common Stock. (b) For the purposes of Section 7.3(a)(iii), upon the earlier to occur of (i) the eleventh day following a Section ll(a)(ii) Event and (ii) an event described in Section 13(a)(x), (y) or (z) of the Rights Agreement, then an issuance of rights to purchase shares of CNF Common Stock during a period not exceeding 45 days from the date of such dividend or other distribution shall be deemed to have occurred, unless the Rights were redeemed or expired prior to such eleventh day or such Section 13(a) Event, as the case may be, unless the Company has taken action pursuant to Section 11(a)(iii) or Section 13 of the Rights Agreement to substitute other consideration for all or any portion of the Series C Preferred Stock ("Series C Stock") otherwise issuable upon exercise of a Right. For purposes of the reduction of the conversion price provided for in Section 7.3(a)(iii) upon such deemed issuance of rights, each share of Series C Stock shall be deemed to constitute 100 shares of CNF Common Stock (subject to adjustment as provided in the Rights Plan), and the date fixed for determination of stockholders entitled to receive such rights shall be the close of business on the tenth such day following such Section 11(a)(ii) Event or the date of such Section 13(a) Event, as the case may be; provided, however, that the current market price 31 per share of the CNF Common Stock shall be determined based on the 10 consecutive Trading Days prior to and including the Distribution Date. (c) For the purposes of Section 7.3(a)(iv), if the Company has taken action pursuant to Section l1(a)(iii) or Section 13 of the Rights Agreement to substitute other consideration for all or any portion of the Series C Stock otherwise issuable upon exercise of a Right, upon the earlier to occur of (x) the eleventh day following a Stock Acquisition Date and (y) a Section 13(a) Event, then an issuance of Securities shall be deemed to have occurred, unless the Rights have been redeemed or have expired prior to such eleventh Business Day or such Section 13(a) Event, as the case may be. For purposes of this reduction of the conversion price provided for in Section 7.3(a)(iv) upon such deemed issuance of Securities, the date fixed for determination of stockholders entitled to receive such rights shall be the close of business on the tenth such day following such Section 11(a)(ii) Event or the date of such Section 13(a) Event, as the case may be; provided, however, that the current market price per share of the CNF Common Stock shall be determined based on the 10 consecutive Trading Days prior to and including the Distribution Date. (d) For purposes of Section 7.3(a)(iii) and Section 7.3(a)(iv), the redemption by the Company of Rights shall be deemed to be an expiration of such Rights. (e) If any Convertible Debenture has been converted on or after the Distribution Date and on or before the tenth day following such Section 11(a)(ii) Event or the date of such Section 13(a) Event, as the case may be, then as soon as practicable following the date on which the adjustment required by subsection (a)(iii) and (a)(iv) of Section 7.3 is made, the Company shall issue to the holder of the Convertible Debenture so converted a number of additional shares of CNF Common Stock (and cash in lieu of any fraction share) that would have been issuable upon such conversion had such adjustment been made immediately prior to such conversion.] ARTICLE VIII FORM OF CONVERTIBLE DEBENTURE SECTION 8.1 FORM OF CONVERTIBLE DEBENTURE. 32 The Convertible Debentures and the Trustee's Certificate of Authentication to be endorsed thereon are to be substantially in the following forms: [(FORM OF FACE OF CONVERTIBLE DEBENTURE)] [IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING - - This Debenture is a Global Debenture within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Convertible Debenture is exchangeable for Convertible Debentures registered in the name of a Person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Convertible Debenture (other than a transfer of this Convertible Debenture as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee) may be registered except in limited circumstances. Unless this Convertible Debenture is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Convertible Debenture issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] No.___ CNF TRANSPORTATION, INC. _____% CONVERTIBLE SUBORDINATED DEBENTURE DUE JUNE 1, 2012 CNF Transportation,Inc., a Delaware corporation (the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________ or regis- 33 tered assigns, the principal sum of Dollars ($____) on June 1, 2012, and to pay interest on said principal sum from June __, 1997, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on June 1, September 1, and December 1 and March 1 of each year commencing September 1, 1997, at the rate of _____% per annum until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded quarterly. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. Except as provided in the following sentence, the amount of interest payable for any period shorter than a full quarterly period for which interest is computed, will be computed on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable on this Convertible Debenture is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture (referred to on the reverse hereof) be paid to the Person in whose name this Convertible Debenture (or one or more Predecessor Securities, as defined in said Indenture) is registered on the Regular Record Date for such interest installment, which shall be the close of business on the Business Day next preceding such Interest Payment Date unless otherwise provided in the Indenture. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid to the Person in whose name this Convertible Debenture (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of the Convertible Debentures not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Convertible Debentures may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Convertible Debenture shall be payable at the office or agency of the Trustee 34 maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Security Register or by wire transfer to an account appropriately identified by the Holder. Notwithstanding the foregoing, so long as the Holder of this Convertible Debenture is the Property Trustee, the payment of the principal of (and premium, if any) and interest on this Convertible Debenture will be made at such place and to such account as may be designated by the Property Trustee. The indebtedness evidenced by this Convertible Debenture is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness, and this Convertible Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Convertible Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. This Convertible Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. The provisions of this Convertible Debenture are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. 35 IN WITNESS WHEREOF, the Company has caused this instrument to be executed under its corporate seal. CNF TRANSPORTATION INC. By: _______________________ Name: Title: [Seal] Attest: ________________________ Name: Title: 36 [FORM OF CERTIFICATE OF AUTHENTICATION] CERTIFICATE OF AUTHENTICATION This is one of the Convertible Debentures of the series designated therein referred to in the within-mentioned Indenture. Dated:______________ THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: _______________________ Authorized Signatory 37 [FORM OF REVERSE OF DEBENTURE] This Convertible Debenture is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the "Debentures"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to a Subordinated Indenture dated as of June __, 1996, duly executed and delivered between the Company and The First National Bank of Chicago, a Delaware banking corporation, as Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture dated as of June __, 1997, between the Company and the Trustee (the Indenture as so supplemented, the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Debentures. By the terms of the Indenture, the Debentures are issuable thereunder in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Debentures is limited in aggregate principal amount as specified in said First Supplemental Indenture and herein sometimes referred to as the "Convertible Debentures." Because of the occurrence and continuation of a Special Event, in certain circumstances, this Convertible Debenture may become due and payable at the principal amount (the "Redemption Price") together with any accrued and unpaid interest thereon. The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Company determines. The Company shall have the right to redeem this Convertible Debenture at the option of the Company, upon not less than 30 nor more than 60 days notice, without premium or penalty, in whole or in part at any time on or after June 1, 2000 (an "Optional Redemption") at the following prices (expressed as percentages of the principal amount of the Convertible Debentures) (the "Optional Redemption Price") together with accrued and unpaid interest, including Additional Interest and Compounded Interest to, but excluding, the redemption date, if redeemed during the 12-month period beginning June 1: 38 Year Redemption Price ---- ---------------- 2000.................................................... % 2001.................................................... % 2002.................................................... % 2003.................................................... % 2004.................................................... % and 100% if redeemed on or after June 1, 2007. If Convertible Debentures are redeemed on any June 1, September 1, or December 1, or March 1, accrued and unpaid interest shall be payable to holders of record on the relevant record date. So long as the corresponding Trust Preferred Securities are outstanding, the proceeds from the redemption of any of the Convertible Debentures will be used to redeem Trust Preferred Securities. If the Convertible Debentures are only partially redeemed by the Company pursuant to an Optional Redemption, the Convertible Debentures will be redeemed pro rata or by lot or by any other method utilized by the Trustee. In the event of redemption of this Convertible Debenture in part only, a new Convertible Debenture or Convertible Debentures of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Convertible Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Debentures of each series affected at the time outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Debentures of such 39 series; provided, however, that no such supplemental indenture shall (a) change the fixed maturity of any Debenture of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or make any change that adversely affects the right to convert any Debenture of any series or make any change in the subordination provisions that adversely affects the rights of any Holders of any Debenture of any series, without the consent of the Holder of each Debenture so affected, or (b) reduce the aforesaid percentage of Debentures of such series, the Holders of which are required to consent to any such supplemental indenture, without the consent of the Holders of each Debenture of any series then outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Debentures of any series at the time outstanding affected thereby, on behalf of all of the Holders of the Debentures of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any Debentures of such series or in respect of a covenant that cannot be amended without the consent of the Holder of each Debenture affected. Any such consent or waiver by the registered Holder of this Convertible Debenture (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Convertible Debenture and of any Convertible Debenture issued in exchange therefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Convertible Debenture. No reference herein to the Indenture and no provision of this Convertible Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Convertible Debenture at the time and place and at the rate and in the money herein prescribed. As long as an Event of Default under Section [501(1)] of the Indenture shall not have occurred and be continuing, the Company shall have the right at any time during the term of the Convertible Debentures and from time to time to extend the interest payment period of such Convertible Debentures for up to 20 consecutive quarters (an "Extended Interest Payment Period"), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Convertible Debentures to the extent that payment of such interest is enforceable under applicable law). Before 40 the termination of any such Extended Interest Payment Period, the Company may further extend such Extended Interest Payment Period, provided that such Extended Interest Payment Period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters. At the termination of any such Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, the Company may commence a new Extended Interest Payment Period. As provided in the Indenture and subject to certain limitations therein set forth, this Convertible Debenture is transferable by the registered Holder hereof on the Security Register of the Company, upon surrender of this Convertible Debenture for registration of transfer at the office or agency of the Trustee in the City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Convertible Debentures of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Convertible Debenture, the Company, the Trustee, any paying agent and the Security Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Convertible Debenture shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal here of and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Convertible Debenture, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof 41 and as part of the consideration for the issuance hereof, expressly waived and released. The Holder of any Convertible Debenture has the right, exercisable at any time through the close of business (New York time) on June 1, 2012 (or, in the case of a Convertible Debenture called for redemption, prior to the close of business on the Business Day prior to the corresponding redemption date), to convert the principal amount thereof (or any portion thereof that is an integral multiple of $50) into shares of CNF Common Stock at the initial conversion rate of __________ shares of CNF Common Stock for each Convertible Debenture (equivalent to a Conversion Price of $__________ per share of CNF Common Stock), subject to adjustment under certain circumstances. To convert a Convertible Debenture, a Holder must (a) complete and sign a conversion notice substantially in the form attached hereto, (b) surrender the Convertible Debenture to a Conversion Agent, (c) furnish appropriate endorsements or transfer documents if required by the Conversion Agent and (d) pay any transfer or similar tax, if required. If a Convertible Debenture is surrendered for conversion after the close of business on any regular record date for payment of a Distribution and before the opening of business on the corresponding Distribution payment date, then, notwithstanding such conversion, the Distribution payable on such Distribution payment date will be paid in cash to the Person in whose name the Convertible Debenture is registered at the close of business on such record date, and (other than a Convertible Debenture or a portion of a Convertible Debenture called for redemption on a redemption date occurring after such record date and on or prior to such Distribution payment date) when so surrendered for conversion, the Convertible Debenture must be accompanied by payment of an amount equal to the Distribution payable on such Distribution payment date. The number of shares issuable upon conversion of a Convertible Debenture is determined by dividing the principal amount of the Convertible Debenture converted by the Conversion Price in effect on the Conversion Date. No fractional shares will be issued upon conversion but a cash adjustment will be made for any fractional interest. The outstanding principal amount of any Convertible Debenture shall be reduced by the portion of the principal amount thereof converted into shares of CNF Common Stock. [The Convertible Debentures of this series are issuable only in registered form without Coupons in denominations of $50 and any integral multiple thereof.] [This Global Debenture is exchangeable for Convertible Debentures in definitive form only under certain limited circumstances set forth 42 in the Indenture. Convertible Debentures of this series so issued are issuable only in registered form without Coupons in denominations of $50 and any integral multiple thereof.] As provided in the Indenture and subject to certain limitations therein set forth, Convertible Debentures of this series are exchangeable for a like aggregate principal amount of Convertible Debentures of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Convertible Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE CONVERTIBLE DEBENTURES. 43 [FORM OF ELECTION TO CONVERT] ELECTION TO CONVERT To: CNF Transportation Inc.: The undersigned owner of this Convertible Debenture hereby irrevocably exercises the option to convert this Convertible Debenture, or the portion below designated, into Common Stock of CNF TRANSPORTATION INC. in accordance with the terms of the Indenture referred to in this Convertible Debenture, and directs that the shares issuable and deliverable upon conversion, together with any check in payment for fractional shares, be issued in the name of and delivered to the undersigned, unless a different name has been indicated in the assignment below. If shares are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Date: ______________ [_] in whole Portion of Convertible Debenture to be converted ($50 or integral multiple thereof) $___________________ _________________________________ Signature (for conversion only) Please print or typewrite name and address, including zip code and social security or other identifying number: __________________ __________________ _____________________________ Signature Guarantee* 44 *Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Conversion Agent, which requirements include membership of participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Conversion Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities and Exchange Act of 1934, as amended. 45 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible Debenture to: _________________________________ _________________________________ _________________________________ (Insert assignee's social security or tax identification number) _________________________________ _________________________________ _________________________________ (Insert address and zip code of assignee) _________________________________ _________________________________ _________________________________ and irrevocably appoints __________________________________________________ _____________________________________________________ agent to transfer this Convertible Debenture on the books of the Trust. The agent may substitute another to act for him or her. Date: _____________________ Signature: __________________ (Sign exactly as your name appears on the other side of this Convertible Debenture) Signature Guarantee*:_________________________________ *Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the 46 requirements of the Conversion Agent, which requirements include membership of participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Conversion Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities and Exchange Act of 1934, as amended. ARTICLE IX ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES SECTION 9.1 ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES. Convertible Debentures in the aggregate principal amount of $103,092,800 ($118,556,750 if the Underwriters' over-allotment option is exercised in full) may, upon execution of this First Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and make available for delivery said Convertible Debentures to or upon the written order of the Company, signed by its Chairman, any Vice Chairman, its President, or any Vice President and its Treasurer or an Assistant Treasurer, without any further action by the Company. ARTICLE X MISCELLANEOUS SECTION 10.1 RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE CONTROLS. The Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. The provisions of this First Supplemental Indenture shall supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith. SECTION 10.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS. 47 The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture. SECTION 10.3 GOVERNING LAW. This First Supplemental Indenture and each Convertible Debenture shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. SECTION 10.4 SEPARABILITY. In case any one or more of the provisions contained in this First Supplemental Indenture or in the Convertible Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this First Supplemental Indenture or of the Convertible Debentures, but this First Supplemental Indenture and the Convertible Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 10.5 COUNTERPARTS. This First Supplemental indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the day and year first above written. CNF TRANSPORTATION INC. By: ___________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By: _____________________________ Name: Title: 48 -----END PRIVACY-ENHANCED MESSAGE-----