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CNF TRANSPORTATION INC.
To
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
_______________
FIRST SUPPLEMENTAL SUBORDINATED INDENTURE
_______________
Dated as of June ___, 1997
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TABLE OF CONTENTS
Page
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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..............................
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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......................................
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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;
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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;
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(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.
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"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.
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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
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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.
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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.
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(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
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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
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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,
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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
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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
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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
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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),
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(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
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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 Xxxxx-
00
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 xxxx 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 xxxx
(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 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) 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
