Omnibus Incentive Plan – CSX Corp.
CSX
OMNIBUS INCENTIVE PLAN
As Amended and Restated Effective February 14, 2001
1. Purpose. The purpose of this CSX Omnibus Incentive Plan (the "Plan") is to
further the long term stability and financial success of CSX, its
Subsidiaries, Foreign Affiliates and Affiliates by rewarding selected
meritorious employees. The Board of Directors believes that such awards
will provide incentives for employees to remain with CSX, will encourage
continued work of superior quality and will further the identification of
those employees' interests with those of CSX's shareholders.
2. Definitions. As used in the Plan, the following terms have the meanings
indicated:
(a) "Affiliate" means a corporation, partnership or other entity other
than a Subsidiary or Foreign Affiliate in which CSX or a Subsidiary
owns, directly or indirectly, a substantial interest. The employees of
an Affiliate shall be eligible to participate in the Plan only if the
Board or the Committee approves the participation of the Affiliate in
the Plan.
(b) "Applicable Withholding Taxes" means the aggregate minimum amount of
federal, state, local and foreign income, payroll and other taxes that
an Employer is required to withhold in connection with any Incentive
Award.
(c) "Beneficiary" means the person or entity designated by the
Participant, in a form approved by CSX, to exercise the Participant's
rights with respect to an Incentive Award after the Participant's
death.
(d) "Benefits Trust Committee" means the committee established pursuant to
the CSX Corporation and Affiliated Companies Benefits Assurance Trust.
(e) "Board" means the Board of Directors of CSX Corporation.
(f) "Cause" means: (i) an act or acts of personal dishonesty of a
Participant intended to result in substantial personal enrichment of
the Participant at the expense of the Company or any of its
Subsidiaries, Foreign Affiliates or Affiliates; (ii) a violation of
the management responsibilities by the Participant which is
demonstrably willful and deliberate on the Participant's part and
which is not remedied in a reasonable period of time after receipt of
written notice from the Employer; or, (iii) the conviction of the
Participant of a felony involving moral turpitude.
(g) "Change in Control" means the occurrence of any of the following
events:
(i) Stock Acquisition. The acquisition by any individual, 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 percent or
more of either (A) the then outstanding shares of common stock of
CSX (the "Outstanding Company Common Stock"), or (B) the combined
voting power of the then outstanding voting securities of CSX
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (i), the following acquisitions
shall not constitute a change in control: (A) any acquisition
directly from CSX; (B) any acquisition by CSX; (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by CSX or any corporation controlled by
CSX; or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 2(c); or
(ii) Board Composition. Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the date hereof whose election or nomination for election by
CSX'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
individuals 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; or
(iii) Business Combination. Approval by the shareholders of CSX of a
reorganization, merger, consolidation, or sale or other
disposition of all or substantially all of the assets of CSX 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 "STB") (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
percent 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 CSX or its principal
Subsidiary or all or substantially all of the assets of CSX
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 CSX or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20 percent or more of, respectively, the then
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outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
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 providing for such
Business Combination; or
(iv) Regulated Business Combination. Approval by the shareholders of
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CSX of a Business Combination that is subject, as a matter of law
or contract, to approval by the STB (a "Regulated Business
Combination") unless such Business Combination complies with
clauses (A), (B) and (C) of subsection (iii) of this Section
2(g); or
(v) Liquidation or Dissolution. Approval by the shareholders of CSX
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of a complete liquidation or dissolution of CSX or its principal
Subsidiary.
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Committee" means the Compensation Committee of the Board or its
successor, provided that, if any member of the Compensation Committee
does not qualify as both an outside director for purposes of Code
Section 162(m) and a non-employee director for purposes of Rule 16b-3,
the remaining members of the Compensation Committee (but not less than
two members) shall be constituted as a subcommittee of the
Compensation Committee to act as the Committee for purposes of the
Plan.
(j) "Company Stock" means common stock, $1. 00 par value, of CSX. In the
event of a change in the capital structure of CSX affecting the common
stock (as provided in Section 18), the shares resulting from such a
change in the common stock shall be deemed to be Company Stock within
the meaning of the Plan.
(k) "Covered Employee" means a Participant who the Committee determines is
or may become a covered employee within the meaning of Code Section
162(m) during the performance period for a Performance Grant.
(l) "CSX" means CSX Corporation.
(m) "Date of Grant" means the date on which the Committee grants an
Incentive Award.
(n) "Disability" or "Disabled" means, as to an Incentive Stock Option, a
Disability within the meaning of Code Section 22(e)(3). As to all
other Incentive Awards, a Disability shall occur when the Participant
is eligible for benefits under the CSX Salary Continuance and
Long-Term Disability Plan or another long-term disability plan of CSX
applicable to the Participant.
(o) "Divisive Transaction" means a transaction in which the Participant's
Employer ceases to be a Subsidiary, Foreign Affiliate or Affiliate or
a sale of substantially all of the assets of a Subsidiary, Foreign
Affiliate or Affiliate.
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(p) "Employer" means CSX and each Subsidiary, Foreign Affiliate or
Affiliate that employs one or more Participants.
(q) "Fair Market Value" means the mean between the highest and lowest
registered sales prices of a share of Company Stock on the New York
Stock Exchange, as reported in the Wall Street Journal (or other
authoritative source approved by the Committee) on the day of
reference.
(r) "Foreign Affiliate" means an entity that is not organized under the
laws of the United States, or any state thereof or any political
subdivision of any state, and in which CSX has, directly or
indirectly, a substantial interest.
(s) "Good Reason," as to any Participant, means (i) the Participant's
compensation or employment related benefits are reduced (other than
across-the-board reductions that affect management employees
generally); (ii) the Participant's status, title(s), office(s),
working conditions, or management responsibilities are diminished
(other than changes in reporting or management responsibilities
required by applicable federal or state law); or (iii) the location of
Participant's place of employment is changed by more than 30 miles
without the Participant's consent.
(t) "Incentive Award" means, collectively, a Performance Grant or the
award of Restricted Stock, an Option, a Restricted Stock Unit, a Stock
Appreciation Right, or a Dividend Right under the Plan.
(u) "Incentive Stock Option" means an Option that qualifies for favorable
federal income tax treatment under Code Section 422.
(v) "Mature Shares" means shares of Company Stock for which the holder has
good title, free and clear of all liens and encumbrances and which the
holder either (i) has held for at least six months or (ii) has
purchased on the open market.
(w) "Nonqualified Stock Option" means an Option that is not an Incentive
Stock Option.
(x) "Option" means a right to purchase Company Stock granted under the
Plan, at a price determined in accordance with the Plan.
(y) "Participant" means any employee of CSX, a Subsidiary, a Foreign
Affiliate or an Affiliate who receives an Incentive Award under the
Plan.
(z) "Performance Criteria" means any of the following areas of performance
of CSX, any Subsidiary, any Foreign Affiliate, or any Affiliate:
return on invested capital (ROIC); free cash flow; value added (ROIC
less cost of capital multiplied by capital); total shareholder return;
economic value added (net operating profit after tax less cost of
capital); operating ratio; cost reduction (or limits on cost
increases); debt to capitalization; debt to equity; earnings; earnings
before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings per share (including or
excluding nonrecurring items); earnings per share before extraordinary
items; income from operations (including or excluding nonrecurring
items); income from operations compared to capital spending; net
income (including or excluding nonrecurring items, extraordinary items
and/or the accumulative effect of accounting changes); net sales;
price per share of
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Company Stock; return on assets; return on capital employed; return on
equity; return on investment; return on sales; and sales volume.
Any Performance Criteria may be used to measure the performance of CSX
as a whole or any Subsidiary, Foreign Affiliate, Affiliate or business
unit of CSX. As determined by the Committee, Performance Criteria
shall be derived from the financial statements of CSX, its
Subsidiaries or affiliated entities prepared in accordance with
generally accepted accounting principles applied on a consistent
basis, or, for Performance Criteria that cannot be so derived, under a
methodology established by the Committee prior to the issuance of a
Performance Grant that is consistently applied.
(aa) "Performance Goal" means an objectively determinable performance goal
established by the Committee with respect to a given Performance Grant
that relates to one or more Performance Criteria.
(bb) "Performance Grant" means an Incentive Award payable in Company Stock,
cash, or a combination of Company Stock and cash that is made pursuant
to Section 8.
(cc) "Restricted Stock" means Company Stock awarded under Section 6.
(dd) "Restricted Stock Unit" means a right granted to a Participant to
receive Company Stock or cash awarded under Section 7.
(ee) "Retirement" means a Participant's termination of employment after age
55 with eligibility to begin immediately receiving retirement benefits
under an Employer's defined benefit pension plan.
(ff) "Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934, as
amended. A reference in the Plan to Rule 16b-3 shall include a
reference to any corresponding rule (or number redesignation) of any
amendments to Rule 16b-3 enacted after the effective date of the
Plan's adoption.
(gg) "Senior Executive Incentive Award" means an award made to a
Participant under the terms of the Senior Executive Incentive Plan.
(hh) "Senior Executive Incentive Plan" means the CSX Senior Executive
Incentive Plan.
(ii) "Stock Appreciation Right" means a right to receive amounts awarded
under Section 10.
(jj) "Subsidiary" means any corporation in which CSX owns stock possessing
more than 50 percent of the combined voting power of all classes of
stock or which is in a chain of corporations with CSX in which stock
possessing more than 50 percent of the combined voting power of all
classes of stock is owned by one or more other corporations in the
chain.
(kk) "Vesting Event" means the occurrence of any of the events listed in
Section 2(g), with the following modification: The words, "Approval by
the shareholders of CSX of," in the first line of Sections 2(g)(iii)
and 2(g)(iv) are replaced for purposes of this Section 2(kk) with the
words, "Consummation of, i.e., actual change in ownership of
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Outstanding Corporation Common Stock, Outstanding Corporation Voting
Stock, and/or assets of CSX or its principal Subsidiary by reason of
,".
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3. Stock.
(a) Subject to Section 18 of the Plan, there shall be reserved for
issuance under the Plan an aggregate of 6 million (6,000,000) shares
of Company Stock, which shall be authorized, but unissued shares, plus
any shares of Company Stock that are represented by awards granted
under any prior plan of the Company, which are forfeited, expire or
are cancelled without the delivery of shares or which result in the
forfeiture of shares back to CSX. Shares allocable to Incentive Awards
granted under the Plan that expire, are forfeited, otherwise terminate
unexercised, or are settled in cash may again be subjected to an
Incentive Award under the Plan. For purposes of determining the number
of shares that are available for Incentive Awards under the Plan, the
number shall include the number of shares surrendered by a Participant
actually or by attestation or retained by CSX in payment of Applicable
Withholding Taxes and any Mature Shares surrendered by a Participant
upon exercise of an Option or in payment of Applicable Withholding
Taxes. Shares issued under the Plan through the settlement, assumption
of substitution of outstanding awards or obligations to grant future
awards as a condition of an Employer acquiring another entity shall
not reduce the maximum number of shares available for delivery under
the Plan. Shares issued under the Senior Executive Incentive Plan
shall reduce the maximum number of shares available for delivery under
the Plan.
(b) No more than 1,200,000 shares may be allocated to the Incentive
Awards, including the maximum amounts payable under a Performance
Grant, that are granted to any individual Participant during any
36-month period. The maximum number of shares that may be issued as
Restricted Stock, Restricted Stock Units, Dividend Equivalents and
under Performance Grants, Stock Awards or Senior Executive Incentive
Plan Grants shall be 1,200,000 shares, provided that any shares of
Restricted Stock, Restricted Stock Units, Dividend Equivalents,
Performance Grants or Stock Awards that are forfeited shall not count
against this limit. The maximum cash payment that can be made for all
Incentive Awards granted to any one individual shall be $3,000,000
times the number of 12-month periods in any performance cycle for any
single or combined performance goals. Any amount that is deferred by a
Participant shall be subject to the previous limit on the maximum cash
payment in the year in which the deferral is made and not in any later
year in which payment is made.
4. Eligibility.
(a) All present and future employees of CSX, a Subsidiary, or a Foreign
Affiliate at the time of grant shall be eligible to receive Incentive
Awards under the Plan. If an Affiliate is approved to participate in
the Plan, all present and future employees of an Affiliate at the time
of grant shall be eligible to receive Incentive Awards under the Plan.
The Committee shall have the power and complete discretion, as
provided in Section 19, to select eligible employees to receive
Incentive Awards and to determine for each employee the nature of the
award and the terms and conditions of each Incentive Award.
(b) The grant of an Incentive Award shall not obligate an Employer to pay
an employee any particular amount of remuneration, to continue the
employment of the employee after the grant or to make further grants
to the employee at any time thereafter.
5. Stock Options.
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(a) The Committee may make grants of Options to Participants. The
Committee shall determine the number of shares for which Options are
granted, the Option exercise price per share, whether the Options are
Incentive Stock Options or Nonqualified Stock Options, and any other
terms and conditions to which the Options are subject.
(b) The exercise price of shares of Company Stock covered by an Option
shall be not less than 100 percent of the Fair Market Value of the
Company Stock on the Date of Grant. Except as provided in Section 18,
the exercise price of an Option may not be decreased after the Date of
Grant. Except as provided in Section 18, a Participant may not
surrender an Option in consideration for the grant of a new Option
with a lower exercise price. If a Participant's Option is cancelled
before its termination date, the Participant may not receive another
Option within 6 months of the cancellation unless the exercise price
of such Option is no less than the exercise price of the cancelled
Option.
(c) An Option shall not be exercisable more than 10 years after the Date
of Grant. The aggregate Fair Market Value, determined at the Date of
Grant, of shares for which Incentive Stock Options become exercisable
by a Participant during any calendar year shall not exceed $100,000.
6. Restricted Stock Awards.
(a) The Committee may make grants of Restricted Stock to Participants. The
Committee shall establish as to each award of Restricted Stock the
terms and conditions to which the Restricted Stock is subject,
including the period of time before which all restrictions shall lapse
and the Participant shall have full ownership of the Company Stock
(the "Restriction Period"). The Committee in its discretion may award
Restricted Stock without cash consideration.
(b) Except as provided below in Section 6(c), the minimum Restriction
Period applicable to any award of Restricted Stock that is not subject
to performance standards restricting transfer shall be three years
from the Date of Grant. Except as provided below in Section 6(c), the
minimum Restriction Period applicable to any award of Restricted Stock
that is subject to performance standards shall be one year from the
Date of Grant.
(c) Restriction Periods of shorter duration than provided in Section 6(b)
and Section 7(b) may be approved for awards of Restricted Stock or
Restricted Stock Units combined with respect to up to 600,000 shares
of Company Stock under the Plan.
(d) Restricted Stock may not be sold, assigned, transferred, pledged,
hypothecated, or otherwise encumbered or disposed of until the
restrictions have lapsed or been removed. Certificates representing
Restricted Stock shall be held by CSX until the restrictions lapse and
the Participant shall provide CSX with appropriate stock powers
endorsed in blank.
7. Restricted Stock Units.
(a) The Committee may make grants of Restricted Stock Units to
Participants. The Committee shall establish as to each award of
Restricted Stock Units the terms and conditions to which the
Restricted Stock Units are subject. Upon lapse of the restrictions, a
Restricted Stock Unit shall entitle the Participant to receive from
CSX a share of Company Stock or a cash amount equal to the Fair Market
Value of the Company Stock on the date that the restrictions lapse.
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(b) Except as provided in Section 6(c), the minimum Restriction Period
applicable to any award of Restricted Stock Units that is not subject
to performance standards restricting transfer shall be three years
from the Date of Grant. Except as provided in Section 6(c), the
minimum Restriction Period applicable to any award of Restricted Stock
Units that is subject to performance standards shall be one year from
the Date of Grant.
8. Performance Grants.
(a) The Committee may make Performance Grants to any Participant. Each
Performance Grant shall contain the Performance Goals for the award,
including the Performance Criteria, the target and maximum amounts
payable and such other terms and conditions of the Performance Grant.
As to each Covered Employee, each Performance Grant shall be granted
and administered to comply with the requirements of Code Section
162(m).
(b) The Committee shall establish the Performance Goals for Performance
Grants. The Committee shall determine the extent to which any
Performance Criteria shall be used and weighted in determining
Performance Grants. The Committee may increase, but not decrease, any
Performance Goal during a performance period for a Covered Employee.
The Performance Goals for any Performance Grant for a Covered Employee
shall be made not later than 90 days after the start of the period for
which the Performance Grant relates and shall be made prior to the
completion of 25 percent of such period.
(c) The Committee shall establish for each Performance Grant the amount of
Company Stock or cash payable at specified levels of performance,
based on the Performance Goal for each Performance Criteria. The
Committee shall make all determinations regarding the achievement of
any Performance Goals. The Committee may not increase the amount of
cash or Common Stock that would otherwise be payable upon achievement
of the Performance Goal or Goals but may reduce or eliminate the
payments except as provided in a Performance Grant.
(d) The actual payments to a Participant under a Performance Grant will be
calculated by applying the achievement of Performance Criteria to the
Performance Goal. The Committee shall make all calculations of actual
payments and shall certify in writing the extent, if any, to which the
Performance Goals have been met.
9. Stock Awards. The Committee may make Stock Awards to any Participant. The
Committee shall establish the number of shares of Common Stock to be
awarded and the terms and conditions applicable to each Stock Award. The
Committee will make all determinations regarding the achievement of any
performance restrictions on a Stock Award. The Common Stock under a Stock
Award shall be issued by CSX upon the satisfaction of the terms and
conditions of a Stock Award. No more than 1,200,000 shares of Company Stock
(reduced by shares issued under Restricted Stock or Restricted Stock Units
subject to Section 6(c)) may be granted under Stock Awards without
performance restrictions.
10. Stock Appreciation Rights. The Committee may make grants of Stock
Appreciation Rights to Participants. The Committee shall establish as to
each award of Stock Appreciation Rights the terms and conditions to which
the Stock Appreciation Rights are subject. The following provisions apply
to all Stock Appreciation Rights:
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(a) A Stock Appreciation Right shall entitle the Participant, upon
exercise of the Stock Appreciation Right, to receive in exchange an
amount equal to the excess of (x) the Fair Market Value on the date of
exercise of the Company Stock covered by the surrendered Stock
Appreciation Right over (y) an amount not less than 100 percent of the
Fair Market Value of the Company Stock on the Date of Grant of the
Stock Appreciation Right. The Committee may limit the amount that the
Participant will be entitled to receive upon exercise of Stock
Appreciation Rights.
(b) A Stock Appreciation Right may not be exercisable more than 10 years
after the Date of Grant. A Stock Appreciation Right may only be
exercised at a time when the Fair Market Value of the Company Stock
covered by the Stock Appreciation Right exceeds the Fair Market Value
of the Company Stock on the Date of Grant of the Stock Appreciation
Right. The Stock Appreciation Right may provide for payment in Company
Stock or cash, or a fixed combination of Company Stock or cash, or the
Committee may reserve the right to determine the manner of payment at
the time the Stock Appreciation Right is exercised.
11. Dividend Equivalents. The Committee may make grants of Dividend Equivalents
to any Participant. The Committee shall establish the terms and conditions
to which the Dividend Equivalents are subject. Dividend Equivalents may be
granted in connection with any other Incentive Award or separately. Under a
Dividend Equivalent, a Participant shall be entitled to receive currently
or in the future payments equivalent to the amount of dividends paid by CSX
to holders of Company Stock with respect to the number of Dividend
Equivalents held by the Participant. The Dividend Equivalent may provide
for payment in Company Stock or cash, or a fixed combination of Company
Stock or cash, or the Committee may reserve the right to determine the
manner of payment at the time the Dividend Equivalent is payable.
12. Method of Exercise of Options. Options may be exercised by the Participant
(or his guardian or personal representative) giving notice to the Corporate
Secretary of CSX or his delegate pursuant to procedures established by CSX
of the exercise stating the number of shares the Participant has elected to
purchase under the Option. The exercise price may be paid in cash; or if
the terms of an Option permit, (i) delivery or attestation of Mature Shares
(valued at their Fair Market Value) in satisfaction of all or any part of
the exercise price, (ii) delivery of a properly executed exercise notice
with irrevocable instructions to a broker to deliver to CSX the amount
necessary to pay the exercise price from the sale or proceeds of a loan
from the broker with respect to the sale of Company Stock or a broker loan
secured by Company Stock, or (iii) a combination of (i) and (ii).
13. Tax Withholding. Whenever payment under an Incentive Award is made in cash,
the Employer will withhold an amount sufficient to satisfy any Applicable
Withholding Taxes. Each Participant shall agree as a condition of receiving
an Incentive Award payable in the form of Company Stock, to pay to the
Employer, or make arrangements satisfactory to the Employer regarding the
payment to the Employer of, Applicable Withholding Taxes. To satisfy
Applicable Withholding Taxes and under procedures established by the
Committee or its delegate, a Participant may elect to (i) make a cash
payment or authorize additional withholding from cash compensation, (ii)
deliver Mature Shares (valued at their Fair Market Value) or (iii) have CSX
retain that number of shares of Company Stock (valued at their Fair Market
Value) that would satisfy all or a specified portion of the Applicable
Withholding Taxes.
14. Transferability of Incentive Awards. Incentive Awards other than Incentive
Stock Options shall not be transferable by a Participant and exercisable by
a person other than the Participant, except as expressly provided in the
Incentive Award. Incentive Stock Options, by their terms, shall not be
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transferable except by will or by the laws of descent and distribution and
shall be exercisable, during the Participant's lifetime, only by the
Participant.
15. Deferral Elections. The Committee may permit Participants to elect to defer
the issuance of Company Stock or the settlement of awards in cash under the
Plan pursuant to such rules, procedures, or programs as it may establish.
16. Effective Date of the Plan. The effective date of the Plan is April 27,
2000. The Plan shall be submitted to the shareholders of CSX for approval.
Until (i) the Plan has been approved by CSX's shareholders, and (ii) the
requirements of any applicable federal or state securities laws have been
met, no Restricted Stock shall be awarded that is not contingent on these
events and no Option granted shall be exercisable.
17. Termination, Modification, Change. If not sooner terminated by the Board,
this Plan shall terminate at the close of business on April 26, 2010. No
Incentive Awards shall be made under the Plan after its termination. Prior
to a Change in Control, the Board may amend or terminate the Plan as it
shall deem advisable; provided that no change shall be made that increases
the total number of shares of Company Stock reserved for issuance pursuant
to Incentive Awards granted under the Plan (except pursuant to Section 18),
or reduces the minimum exercise price for Options unless such change is
authorized by the shareholders of CSX. A termination or amendment of the
Plan shall not, without the consent of the Participant, adversely affect a
Participant's rights under an Incentive Award previously granted to him or
her. After a Change in Control, all amendments to the Plan are subject to
the approval of the Benefits Trust Committee.
18. Change in Capital Structure.
(a) In the event of a stock dividend, stock split or combination of
shares, share exchange, recapitalization or merger in which CSX is the
surviving corporation or other change in CSX capital stock (including,
but not limited to, the creation or issuance to shareholders generally
of rights, options or warrants for the purchase of common stock or
preferred stock of CSX), the number and kind of shares of stock or
securities of CSX to be subject to the Plan and to Incentive Awards
then outstanding or to be granted, the maximum number of shares or
securities which may be delivered under the Plan under Sections 3(a),
3(b), 6(b) or 9, the exercise price, the terms of Incentive Awards and
other relevant provisions shall be adjusted by the Committee in its
discretion, whose determination shall be binding on all persons. If
the adjustment would produce fractional shares with respect to any
unexercised Option, the Committee may adjust appropriately the number
of shares covered by the Option so as to eliminate the fractional
shares.
(b) If CSX is a party to a consolidation or a merger in which CSX is not
the surviving corporation, a transaction that results in the
acquisition of substantially all of CSX's outstanding stock by a
single person or entity, or a sale or transfer of substantially all of
CSX's assets, the Committee may take such actions with respect to
outstanding Incentive Awards as the Committee deems appropriate.
(c) Notwithstanding anything in the Plan to the contrary, the Committee
may take the foregoing actions without the consent of any Participant,
and the Committee's determination shall be conclusive and binding on
all persons for all purposes.
19. Administration of the Plan.
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(a) Prior to a Change in Control, the Committee shall administer the Plan.
The Committee shall have general authority to impose any term,
limitation or condition upon an Incentive Award that the Committee
deems appropriate to achieve the objectives of the Incentive Award.
The Committee may adopt rules and regulations for carrying out the
Plan with respect to Participants. The interpretation and construction
of any provision of the Plan by the Committee shall be final and
conclusive as to any Participant.
(b) Except as provided in Section 5(b), the Committee shall have the power
to amend the terms of previously granted Incentive Awards that were
granted by that Committee so long as the terms as amended are
consistent with the terms of the Plan and provided that the consent of
the Participant is obtained with respect to any amendment that would
be detrimental to him or her, except that such consent will not be
required if such amendment is for the purpose of complying with Rule
16b-3 or any requirement of the Code applicable to the Incentive
Award.
(c) The Committee shall have the power and complete discretion (i) to
delegate to any individual, or to any group of individuals employed by
the Company or any Subsidiary, the authority to grant Stock Awards
under the Plan and (ii) to determine the terms and limitations of any
delegation of authority; provided that no individual Stock Award
granted under a delegation by the Committee may exceed a Fair Market
Value of $500,000 on the Date of Grant.
(d) Following a Change in Control, the Benefits Trust Committee, at its
discretion, may assume any or all of the duties and responsibilities
of the Committee as to the Plan. All actions by the Benefits Trust
Committee shall be consistent with the provisions of the CSX
Corporation and Affiliated Companies Benefits Assurance Trust.
(e) If the Participant's Employer is involved in a Divisive Transaction,
the Committee may take such actions with respect to outstanding
Incentive Awards as the Committee deems appropriate.
(f) If a Participant or former Participant (1) becomes associated with,
recruits or solicits customers or other employees of an Employer, is
employed by, renders services to, or owns any interest in (other than
any nonsubstantial interest, as determined by the Committee) any
business that is in competition with CSX, its Subsidiaries, Foreign
Affiliates or Affiliates, (2) has his employment terminated by his
Employer on account of actions by the Participant which are
detrimental to the interests of CSX, its Subsidiaries, Foreign
Affiliates or Affiliates, or (3) engages in, or has engaged in,
conduct which the Committee determines to be detrimental to the
interests of CSX, the Committee may, in its sole discretion, cancel
all outstanding Incentive Awards, including immediately terminating
any options held by the Participant, regardless of whether then
exercisable.
(g) In the event of the death of a Participant, any outstanding Incentive
Awards that are otherwise exercisable may be exercised by the
Participant's Beneficiary or, if no Beneficiary is designated, by the
personal representative of the Participant's estate or by the person
to whom rights under the Incentive Award shall pass by will or the
laws of descent and distribution.
20. Change in Control.
(a) Notwithstanding any provision of the Plan or any Incentive Award to
the contrary:
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(i) Upon the occurrence of the date of a Change in Control, (i) all
Options and Stock Appreciation Rights granted before February 13, 2001
shall become fully exercisable, (ii) all terms and conditions on
Restricted Stock and Restricted Stock Units granted before February
13, 2001 shall be deemed satisfied, and (iii) all Performance Grants,
Stock Awards and Dividend Equivalents granted before February 13, 2001
shall be deemed to be fully earned and to be immediately payable in
cash;
(ii)upon the occurrence of the date of a Vesting Event, (i) all
Options and Stock Appreciation Rights granted on or after February 13,
2001 shall become fully exercisable, (ii) all terms and conditions on
Restricted Stock and Restricted Stock Units granted on or after
February 13, 2001 shall be deemed satisfied, and (iii) all Performance
Grants, Stock Awards and Dividend Equivalents granted on or after
February 13, 2001 shall be deemed to be fully earned and to be
immediately payable in cash;
(iii) all Options and Stock Appreciation Rights held by a Participant
(A) who resigns within three months after an event constituting Good
Reason or (B) whose employment is terminated without Cause by the
Company or an Affiliate, in either case upon or after an event
described in Section 2(g)(iii) or 2(g)(iv) and prior to the earlier of
(x) the consummation of such event, i.e., actual change in ownership
of Outstanding Corporation Common Stock, Outstanding Corporation
Voting Stock, and/or assets of CSX or its principal Subsidiary and (y)
the determination by the Board of Directors that such event has been
unwound or reversed or is no longer expected to be consummated, which
Options and Stock Appreciation Rights were not fully exercisable at
the time of such termination of employment, shall become fully
exercisable upon the consummation of the event described in Section
2(g)(iii) or 2(g)(iv), as applicable. Such Options and Stock
Appreciation Rights shall be exercisable following the consummation of
such event for the period specified in the Incentive Award for
exercise following termination of employment other than due to death
or Disability or until the expiration of the original option term, if
sooner; provided, that prior to consummation of such event or a Board
of Directors determination, as referenced above, such Options and
Stock Appreciation Rights shall remain outstanding and be exercisable
only at the time and to the extent set forth in the Incentive Award;
(iv)any terms and conditions of all Restricted Stock and Restricted
Stock Units held by a Participant (A) who resigns within three months
of an event constituting Good Reason or (B) whose employment is
terminated without Cause by the Company or an Affiliate, in either
case upon or after an event described in Section 2(g)(iii) or 2(g)(iv)
and prior to the earlier of (x) the consummation of such event, i.e.,
----
actual change in ownership of Outstanding Corporation Common Stock,
Outstanding Corporation Voting Stock, and/or assets of CSX or its
principal Subsidiary and (y) the determination by the Board of
Directors that such event has been unwound or reversed or is no longer
expected to be consummated, which terms and conditions had not been
satisfied at the time of such termination of employment, shall be
deemed satisfied upon the consummation of the event described in
Section 2(g)(iii) or 2(g)(iv), as applicable; provided, that prior to
the consummation of such event or a Board of Directors determination,
as referenced above, such Restricted Stock and Restricted Stock Units
shall remain outstanding and be subject to the terms and conditions
set forth in the Incentive Award; and
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(v) all Performance Grants, Stock Awards and Dividend Equivalents held
by a Participant (A) who resigns within three months of an event
constituting Good Reason or (B) whose employment is terminated without
Cause by the Company or an Affiliate, in either case upon or after an
event described in Section 2(g)(iii) or 2(g)(iv) and prior to the
earlier of (x) the consummation of such event, i.e., actual change in
----
ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of CSX or its principal
Subsidiary and (y) the determination by the Board of Directors that
such event has been unwound, reversed, or is no longer expected to be
consummated, which had not been fully earned at the time of such
termination of employment, shall be deemed to be fully earned and
immediately payable in cash upon the consummation of the event
described in Section 2(g)(iii) or 2(g)(iv), as applicable; provided,
that prior to the consummation of such event or a Board of Directors'
determination, as referenced above, such Performance Grants, Stock
Awards and Dividend Equivalents shall remain outstanding and be
subject to the terms and conditions set forth in the Incentive Award.
(b) Upon a Change in Control, CSX or the Employer of the Participant
shall, as soon as possible, but in no event more than seven days
following a Change in Control, make an irrevocable contribution to the
Benefits Trust in an amount that is sufficient to pay each Participant
or Beneficiary of this Plan the unfunded portion of the benefits (i)
to which Participants of this Plan or their Beneficiaries are entitled
and for which the Company is liable pursuant to the terms of this Plan
as of the date on which the Change in Control occurred and (ii) if the
Change in Control is not also a Vesting Event, to which Participant or
their Beneficiaries would be entitled and for which the Company would
be liable if the Change of Control had been a Vesting Event. The
amount of the Company's irrevocable contribution shall be based on the
accounting for the most recent calendar year or more recent period for
the Plan, as approved by an independent actuary or accountant engaged
by the Company prior to the Change in Control and approved by the
Benefits Trust Committee, if selected or changed following a Change in
Control (the "Actuary"), and shall include an amount deemed necessary
to pay estimated administrative expenses for the following five years.
The Benefits Trust Committee shall cause such accounting to be
updated, using participant data supplied to the Actuary by the
Company, through a date no earlier than the date of the initial
contribution and notify the Company of the amount of additional
contributions required as soon as possible. The Benefits Trust is the
CSX Corporation and Affiliated Companies Executives' Stock Trust or
other similar trusts sponsored by CSX or another Employer.
21. Interpretation. The terms of this Plan shall be governed by the laws of the
Commonwealth of Virginia without regard to its conflict of laws rules.
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