Current Report

Common Stock (on an as-if converted basis) immediately after giving effect to the Exchange Offer (but prior to dilution related to Common Stock issued pursuant options to be issued to employees pursuant to Section 11 of the Amended and Restated Memorandum of Understanding on the Job Security Plan dated July 9, 2009 (the “ Job Security Plan ”), between employees represented by the International Brotherhood of Teamsters and certain subsidiaries of the Company (the “ Union Options ”) and any options to purchase Common Stock, rights to receive Common Stock or Common Stock to be issued to management, directors and other employees (the “ Company Equity ”) pursuant to the Company’s 2004 Long-Term Incentive and Equity Award Plan (or any replacement thereof, the “ Equity Plan ”) as approved after the Exchange Offer by YRCW’s then existing Board of Directors (or a duly constituted compensation committee thereof), in each case described below). The allocation of shares of Common Stock and Preferred Stock among the Notes and Old CoCo Notes shall be based on the percentage of principal amount of the Notes and Old CoCo Notes as set forth in Annex B . Share amounts and percentages discussed in this term sheet disregard out of the money options and restricted stock units issued prior to the date of this term sheet. During the Exchange Offer and prior to the first shareholder vote, the Company shall not issue additional options.

The Exchange Offer will have the terms and conditions as outlined in this Term Sheet. Concurrently with the Exchange Offer, the Company will undertake a consent solicitation in which it will seek consents from the tendering holders of the Notes and the Old Coco Notes to amend (i) the indentures, by and between YRCW and Deutsche Bank Trust Company Americas, as trustee (the “ Coco Trustee ”), (A) dated as of December 31, 2004, pursuant to which the 5% Net Share Settled Notes were issued, (B) dated as of December 31, 2004, pursuant to which the 3.375% Net Share Settled Notes were issued, (C) dated as of November 25, 2003, pursuant to which the Old 3.375% Notes were issued and (D) dated as of August 8, 2003, pursuant to which the Old 5% Notes were issued (collectively, the “ Coco Indentures ”) and (ii) the indenture, dated as of May 5, 1999, by and between YRC Regional Transportation, Inc. (formerly USFreightways Corporation) and The Bank of New York Mellon Trust Company (as successor-in-interest to NBD Bank), as trustee (the “ 8  ¹ / 2 % Trustee ”), pursuant to which the 8  ¹ / 2 % Notes were issued (collectively with the Coco Indentures, the “ Indentures ”), to remove substantially all of the restrictive covenants, certain events of defaults and, as applicable, all existing “put rights” from the Indentures.

The Second Amended and Restated Job Security Plan by and among YRC Inc., USF Holland, Inc. and New Penn Motor Express, Inc. and the Teamsters National Freight Industry Negotiating Committee (the “TNFINC”) of the International Brotherhood of Teamsters (the “IBT”), as set forth in that certain Memorandum of Understanding, dated July 2009, without giving effect to any amendment, restatement, supplement or any other modification after such date (the “ MOU ”), shall have been ratified by the members in accordance with its terms and shall remain in full force and effect, and furthermore, any amendment, taken as a whole, to the MOU after the date hereof may not be adverse to the Noteholders.

Following the receipt of the Shareholders Approval (as defined below), YRCW will issue the Union Options, which will represent 20% of its fully diluted Common Stock (before giving effect to the Equity Plan (as defined below)) and will have a strike price based on the implied equity value of the Company represented by the obligations under the Notes and Old CoCo Notes being exchanged divided by the amount of YRCW’s common stock on a fully diluted basis that will be held by the Noteholders following the issuance of the Union Options and the implementation of the Equity Plan (i.e., the Union Options will strike after the value of the Noteholders’ Common Stock equals the aggregate par value plus accrued interest of the 5% Notes, the 3.375% Notes and the 8  ¹ / 2 % Notes).

The Exchange Offer will have other customary conditions, including:

•        the Company having obtained all required governmental approvals required for the consummation of the Exchange Offer;

•        the Registration Statement relating to the Exchange Offer having been declared effective under the Securities Act of 1933, as amended, and not subject to any stop order suspending its effectiveness or any proceedings seeking a stop order;

Offering Amount:

5,000,000 shares of Preferred Stock in an aggregate face amount of $250.0 million and the maximum amount shares of Common Stock permitted to be issued by the Company under the Delaware General Corporate Law which the Company current anticipates will not be less than 42,000,000.

Closing of Issuance:

Upon the consummation of the Exchange Offer (i.e., on the Effective Date).

Liquidation Preference:

$50.0 per share, as may be increased as set forth in the “Dividends” section below (the “ Liquidation Preference ”). Whether the Liquidation Preference will increase following an injunction that significantly delays the Merger is to be determined by the Noteholders and the Company.

Pre-exchange shares outstanding:

60,164,231 shares of Common Stock issued and outstanding as of October 30, 2009.

Post-exchange shares outstanding

60,164,231 shares of Common Stock held by pre-exchange shareholders and approximately 42,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock held by Noteholders. The Noteholders would hold 95% of the shares of Common Stock on an as converted basis.

Conversion:

The Preferred Stock will not be convertible into Common Stock until the Stockholders’ Approval is received. Upon receipt of the Stockholders’ Approval, based on the shares outstanding as of October 30, 2009 each share of Preferred Stock will automatically convert into shares of Common Stock, at a rate equal to 220.22 shares of Common Stock per $50.0 of Liquidation Preference of the Preferred Stock (representing an initial conversion price of $0.227 per share) (the conversion price, subject to anti-dilution adjustment as set forth below, the “ Conversion Price ”). Notwithstanding the foregoing, to the extent such conversion would result in a Noteholder holding more than 9.9% of the issued and outstanding Common Stock of the Company, such Noteholder’s shares of Preferred Stock shall only convert on such date (and automatically from time to time after such date) in such a manner as will result in such Noteholder holding not more than 9.9% of the issued and outstanding Common Stock.

Mandatory Conversion:

All shares of Preferred Stock outstanding on the date that is eighteen months following the date on which the Shareholders’ Approval is received shall automatically convert into Common Stock at the Conversion Price.

Dividends:

The Preferred Stock will not accrue dividends until and unless the date on which the holders of Common Stock vote to reject the proposal to increase the amount of authorized shares of Common Stock at the first meeting of shareholders upon which such matter is submitted for a vote (the “ Dividend Accrual Date ”) or otherwise on the 60th day following the closing of the Exchange Offer if the Shareholder Approval has not been obtained by such date. Beginning on and following such Dividend Accrual Date and ending on the earlier of (i) such date on which the

Additional Voting Rights:

Holders of a majority of the Preferred Stock then outstanding, voting as a separate class, must approve (except with respect to the Shareholders’ Approval and the Merger):

•        any amendment to the YRCW’s certificate of incorporation or bylaws that would adversely affect the rights of the holders of the Preferred Stock;

•        any amendment, alteration or change to the rights, preferences and privileges of the Preferred Stock;

•        any declaration of, or payment in respect of, any dividend or other distribution upon, in each case prior to the date on which the Shareholders’ Approval is received, any shares of capital stock ranking equally to the Preferred Stock (“Parity Stock”) or junior to the Preferred Stock, including the Common Stock (“Junior Stock”);

•        any redemption, repurchase or acquisition, in each case prior to the date on which the Shareholders’ Approval is received, of any Parity Stock, Junior Stock or any capital stock of any of the Company’s subsidiaries (subject to customary exceptions); and

•        the authorization of, issuance of, or reclassification into, in each case prior to the date on which the Shareholders’ Approval is received, Parity Stock (including additional shares of Preferred Stock), capital stock that would rank senior to the Preferred Stock or debt securities convertible into capital stock.

Title of Notes and Old CoCo

Notes to be Tendered

Issuer

Shares allocated pro rata based on the
sum of (i) the below percentage
weighting of principal amount claims
and (ii) 100% of accrued interest

Old 3.375% Notes

YRC Worldwide Inc.

  97%

3.375% Net Share Settled Notes

YRC Worldwide Inc.

  97%

Old 5% Notes

YRC Worldwide Inc.

100%

5% Net Share Settled Notes

YRC Worldwide Inc.

100%

8  ¹ / 2 % Notes

YRC Regional Transportation, Inc.

103%