CSX MARKET VALUE CASH PLAN
1. Purpose
The CSX Market Value Cash Plan (the 'Plan') is established to compensate
employees of the Company or a Subsidiary who, by virtue of their
responsibilities or positions, are most likely to have the opportunity to
enhance long-term performance of the Company and shareholder value. The Company
believes that compensation programs tied to the value of the Company's common
stock stimulate the efforts of those employees upon whose judgment and interest
the Company is and will be largely dependent for the successful conduct of its
business and will further the identification of those employees' interests with
those of the Company's shareholders.
2. Definitions
Unless the context clearly indicates to the contrary, the singular shall include
the plural and the masculine shall include the feminine.
As used in the Plan, the following terms have the indicated meanings:
(a) 'Agreement' means a Special Award Agreement made by and between the
Company and a Participant pursuant to the Plan.
(b) 'Business Day' means, if relevant to a determination of the value of
Company Stock, a day on which shares of Company Stock are or could be
traded on the New York Stock Exchange.
(c) 'Cash Value Amount' means an amount payable to a Participant upon
the Company Stock achieving or being deemed to have achieved a Market
Price Threshold pursuant to Paragraphs 3(b) or 4(d) of the Plan.
(d) 'Cause' means a Participant's: (i) act or acts of personal
dishonesty intended to result in substantial personal enrichment at the
expense of the Company or a Subsidiary; (ii) repeated violations of the
Participant's responsibilities which are demonstrably willful and
deliberate and which are not remedied in a reasonable period of time
after receipt of written notice from the Company or a Subsidiary; or
(iii) conviction of a felony involving moral turpitude.
(e) 'Change of Control' means any of the following:
(i) Stock Acquisition. The acquisition, by any individual,
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entity or group [within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the 'Exchange Act')] (a 'Person') of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either
(A) the then outstanding shares of common stock of the
Company (the 'Outstanding Company Common Stock'), or (B)
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally
in the election of directors (the 'Outstanding
Company Voting Securities'); provided, however, that for
purposes of this subparagraph (i), the following
acquisitions shall not constitute a Change of Control:
(A) any
acquisition directly from the Company;(B) any acquisition
by the Company;(C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or
(D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C)
of subparagraph (iii) of this Paragraph 2(e); or
(ii) Board Composition. Individuals who, as of the effective
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date hereof, constitute the Board of Directors (the
'Incumbent Board') cease for any reason to constitute at
least a majority of the Board of Directors; provided,
however, that any individual becoming a director
subsequent to that date whose election or nomination for
election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board
of Directors; or
(iii) Business Combination. Approval by the shareholders of the
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Company of a reorganization, merger, consolidation or sale
or other disposition of all or substantially all of the
assets of the Company or its principal subsidiary that is
not subject, as a matter of law or contract, to
approval by the Surface Transportation Board or any
successor agency or regulatory body having jurisdiction
over such transactions (the 'Agency') (a 'Business
Combination'), in each case, unless, following
such Business Combination:
(A) all or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares
of common stock and the combined voting power of
the then outstanding voting securities entitled
to vote generally in the election of directors, as
the case may be, of the corporation resulting from
such Business Combination (including, without
limitation, a corporation which as a result of
such transaction owns the Company or its principal
subsidiary or all or substantially all of the
assets of the Company or its principal subsidiary
either directly or through one or more
subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such
Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be;
(B) no Person (excluding any corporation resulting
from such Business Combination or any employee
benefit plan (or related trust) of the Company or
such corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined
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voting power of the then outstanding voting
securities of such corporation except to the
extent that such ownership existed prior
to the Business Combination; and
(C) at least a majority of the members of the board of
directors resulting from such Business Combination
were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the
action of the Board of Directors, providing for
such Business Combination; or
(iv) Regulated Business Combination. Approval by the
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shareholders of the Company of a Business Combination that
is subject, as a matter of law or contract, to approval by
the Agency (a 'Regulated Business Combination') unless
such Business Combination complies with clauses (A), (B)
and (C) of subparagraph (iii) of this Paragraph 2(e); or
(v) Liquidation or Dissolution. Approval by the shareholders
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of the Company of a complete liquidation or dissolution of
the Company or its principal subsidiary.
(f) 'Committee' means the Compensation Committee of the Board of
Directors of the Company.
(g) 'Company' means CSX Corporation.
(h) 'Company Stock' means the common stock of the Company and rights,
options or warrants for the purchase of securities of the Company which
may be issued with shares of common stock pursuant and subject to plans
or agreements adopted or entered into from time to time by the Company.
(i) 'Deferral Election' shall have the meaning set forth in Paragraph
3(d).
(j) 'Disability' means the inability to perform the services for which a
Participant was employed as a result of a physical or mental impediment
entitling the Participant to begin receiving benefits under the CSX
Salary Continuation and Long-Term Disability Plan.
(k) 'IRC' means the Internal Revenue Code of 1986 as amended.
(l) 'Market Price' means the average of the high and the low price of a
share of Company Stock on the New York Stock Exchange (or the average of
the bid and asked prices if there were no sales) on any Business Day as
reported in The Wall Street Journal.
(m) 'Market Price Threshold' shall have the meaning set forth in
Paragraph 3(b).
(n) 'Payment Date' shall have the meaning set forth in Paragraph 3(c).
(o) 'Purchase Loan' means an extension of credit to a Participant by the
Company to purchase shares of Company Stock, evidenced by a Stock
Purchase Pledge and Loan Agreement made by and between the Participant
and the Company pursuant to the CSX Corporation Stock Purchase and Loan
Plan.
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(p) 'Retirement' means termination of employment (for reasons other than
Cause) (i) at or after age 65, or (ii) after age 55 with at least 10
years of service with the Company and/or a Subsidiary.
(q) 'Subsidiary' means a corporation more than 50% of the voting shares
of which are owned directly or indirectly by the Company.
(r) 'Supplementary Savings Plan' means the Supplementary Savings and
Incentive Award Deferral Plan for Eligible Executives of CSX Corporation
and Affiliated Companies, as amended from time to time.
(s) 'Table' means the table of Market Price Thresholds and corresponding
Cash Value Amounts as set forth in an Agreement for the purpose of
determining the value of a Unit.
(t) 'Unit' means an interest in the Plan that may be granted to a
Participant pursuant to Paragraph 3(a).
3. Units; Cash Value Amount
(a) The Company may, in an Agreement made pursuant to this CSX Market
Value Cash Plan and subject to the approval of the Committee, grant
Units to a Participant.
(b) If at any time after the Effective Date of an Agreement and prior to
January 1, 2003, the Market Price of the Company Stock equals or exceeds
one of the amounts specified as a Market Price Threshold in the Table (a
'Market Price Threshold') for a period of fifteen (15) consecutive
Business Days, the Market Price Threshold will be achieved and, with
respect to each such Market Price Threshold, the corresponding Cash
Value Amount specified in the Table for each Unit held by the
Participant shall be payable to the Participant. Once a Market Price
Threshold has been achieved or deemed to have been achieved during the
term of an Agreement with respect to a Participant, it shall not again
be achieved or deemed to be achieved during such term of the Agreement
with respect to such Participant.
(c) Unless a valid Deferral Election has been made as provided for in
Paragraph 3(d), Cash Value Amounts will be paid to the Participant as
soon as practicable following the month in which the corresponding
Market Price Threshold is achieved (the 'Payment Date').
(d) If a Participant is eligible to participate in the Supplementary
Savings Plan, with respect to a specified calendar year, the Participant
may elect in writing, on forms provided by the Committee, to defer
payment of any Cash Value Amounts which would otherwise become payable
as a result of any Market Price Threshold which is achieved (or is
deemed to be achieved under Paragraph 4(d)) in such calendar year (the
'Deferral Election'). Deferral Elections must be filed with the
Committee prior to the beginning of the calendar year to which they
relate and will be irrevocable as of the first day of the calendar year
to which they relate. Cash Value Amounts shall be deferred pursuant to
the Supplementary Savings Plan, shall be credited on the Payment Date to
an account therein, and shall be payable at the time and in the manner
provided for under the Supplementary Savings Plan; provided, however,
that except in the case of death, Disability or Change of Control as
defined in the Plan, the Participant may not begin receiving
distributions from his account prior to January 1, 2005. Nothing in the
Plan or
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an Agreement shall grant a Participant any right to participate in
the Supplementary Savings Plan.
4. Termination of Employment; Change of Control
If, after the Effective Date of an Agreement and prior to January 1, 2003, a
Participant's employment terminates for any reason, or a Change of Control
occurs, the following provisions shall apply notwithstanding any other terms in
the Agreement to the contrary:
(a) Death, Disability or Retirement. If the Participant's termination of
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employment results from his death, Disability or Retirement, the
Participant shall cease to accrue benefits under Paragraphs 3(b) and
4(d) of the Plan on the date which is the earlier of three (3) years
following said termination of employment or December 31, 2002.
(b) Voluntary or Involuntary Termination. If the Participant's
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termination of employment is either voluntary or involuntary, the
Participant shall cease to accrue benefits under Paragraphs 3(b) and
4(d) of the Plan immediately upon said termination of employment.
(c) Divisive Transaction. If the Participant's employer ceases to be a
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Subsidiary or if there is a sale of substantially all of the assets of a
Subsidiary which is the Participant's employer, the Participant shall
cease to accrue benefits under Paragraphs 3(b) and 4(d) of the Plan
immediately upon the closing of such divisive transaction. The foregoing
shall apply whether or not the Participant continues in the employ of
such Subsidiary but shall not apply should the Participant continue in
the employ of the Company or another Subsidiary not part of the divisive
transaction.
(d) Change of Control. If, after the Effective Date of an Agreement and
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prior to January 1, 2003, a Change of Control occurs, for purposes of
Paragraph 3(b) all Market Price Thresholds shall be deemed to have been
achieved; the Payment Date shall be a date, as determined by the
Committee, not later than ninety (90) days following said Change of
Control, unless a valid Deferral Election has been made as provided for
in Paragraph 3(d), in which case, with respect to those Cash Value
Amounts subject to such Deferral Election, the Payment Date shall be a
date not later than seven (7) days following said Change of Control; and
the Participant shall cease to accrue benefits under Paragraphs 3(b) and
4(d) of the Plan immediately after the later of the applicable Payment
Dates.
(e) Certain Terms of Agreements. Notwithstanding any provision of the
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Plan to the contrary, in the discretion of the Committee, an Agreement
may provide, to the extent deemed appropriate by the Committee to
eliminate or reduce the applicability or impact of Sections 280G and/or
4999 of the IRC, for a reduction of any benefit under the Plan.
5. Miscellaneous
(a) Administration of the Plan. The Committee shall be responsible for
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administering the Plan and shall have the power to construe and
interpret the Plan. The Committee may appoint such agents, who need not
be members of the Committee and who may be employees of the Company or a
Subsidiary, as it may deem necessary for the effective performance of
its duties, and may delegate to such agents such powers and duties as
the Committee may deem appropriate
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and that are not inconsistent with the intent of the Plan. A decision of
the Committee shall be final and conclusive on all persons, except to
the extent otherwise provided by law.
(b) Term of the Plan. The Plan became effective on October 7, 1998.
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Unless extended, amended or terminated by action of the Committee as
provided for in subparagraph (c) below, the Plan shall remain in effect
until December 31, 2002, and shall terminate on that date. No new Units
shall be granted after the termination date; provided, however, that
Agreements entered into before termination of the Plan shall remain in
effect in accordance with their terms.
(c) Termination and Modification. The Plan may be extended, amended or
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terminated at any time by action of the Committee. An extension,
amendment or termination of the Plan shall not, without consent of the
affected Participant, adversely impact a Participant's rights under an
Agreement previously made pursuant to the Plan.
(d) Notices. All notices, requests and other communications required or
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permitted to be given under the Plan shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed first
class, postage prepaid as follows: (i) if to the Company, at its
principal business address to the attention of the Corporate Secretary;
(ii) if to any Participant, at the last address of the Participant known
to the sender at the time the notice or communication is sent.
(e) No Contract for Employment. The existence of the Plan does not
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constitute a contract for continued employment between a Participant and
the Company or its Subsidiaries.
(f) Unsecured Creditor; Non-Alienation. The rights of a Participant
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under the Plan and Agreement shall be solely those of an unsecured
creditor of the Company and the Company's promise to pay benefits under
an Agreement entered into pursuant to the Plan shall be an unfunded
promise. A Participant's right to benefits under the Plan and an
Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment
or garnishment by the Participant's creditors.
(g) Governing Law. The terms of the Plan shall be governed by and
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construed in accordance with the laws of the Commonwealth of Virginia.
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Market Value Cash Plan - CSX Corp.
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