SPECIAL RETIREMENT PLAN
OF CSX CORPORATION AND AFFILIATED CORPORATIONS
As Amended and Restated January 1, 1995
(As Amended through December 7, 1999)
TABLE OF CONTENTS
Section I - INTRODUCTION........................................... 1
Section II - PARTICIPATION.......................................... 2
Section III - CREDITABLE SERVICE..................................... 2
Section IV - COMPENSATION AND AVERAGE COMPENSATION.................. 3
Section V - SPECIAL RETIREMENT ALLOWANCES.......................... 3
Section VI - FUNDING METHOD......................................... 5
Section VII - ADMINISTRATION OF SPECIAL PLAN......................... 6
Section VIII - MODIFICATION, AMENDMENT AND TERMINATION................ 7
Section IX - NON-ALIENATION OF BENEFITS............................. 8
Section X - MISCELLANEOUS PROVISIONS............................... 8
Section XI - CHANGE OF CONTROL...................................... 8
Section XII - CONSTRUCTION........................................... 11
APPENDIX I PARTICIPANTS GRANTED ADDITIONAL
CREDITABLE SERVICE PURSUANT TO
SECTION V(4)(b)
Special Retirement Plan
of CSX Corporation and Affiliated Corporations
As Amended and Restated January 1, 1995
(As Amended through December 7, 1999)
Section I - INTRODUCTION
1. The purpose of this retirement plan, hereinafter called the 'Special
Plan,' is to provide an incentive for corporate officers comprising a select
group of management or highly compensated employees to exert maximum efforts for
the Company's success and to remain in the service of the Company until
retirement.
2. The Special Plan as provided herein was originally effective as of
March 1, 1983, and supersedes the Employees' Special Pension Plan of The
Chesapeake and Ohio Railway Company and the Plan for Additional Annuities for
Qualifying Members under the Supplemental Pension Plan of The Baltimore and Ohio
Railroad Company, hereinafter called the 'Former Plans.'
3. The 'Company' as used herein means CSX Corporation and such other of
its affiliated corporations as shall adopt this Special Plan with the approval
of the Compensation Committee and by action of their boards of directors for the
benefit of corporate officers who are covered or may become covered by the
Special Plan.
4. The term 'Compensation Committee' means the Compensation Committee
of the Board of Directors of CSX Corporation (the 'Board of Directors').
5. 'Benefits Trust Committee' means the committee created pursuant
to the CSX Corporation and Affiliated Companies Benefits Assurance Trust
Agreement ('The Benefits Assurance Trust').
6. The Company's 'Independent Accountant' means an independent
accountant or actuary engaged by the Company and, if selected or changed
following a Change of Control, approved by the Benefits Trust Committee.
7. The incentives under the Special Plan shall consist of special
retirement allowances provided by the Company at retirement to certain
employees, hereinafter referred to as 'Participants,' who shall participate as
provided herein (eligibility for participation is set forth in Section II).
8. The Special Plan shall, where appropriate, refer to and have meanings
consistent with all of the relevant terms of any other regularly maintained
pension plan which currently provides or did provide immediately prior to March
1, 1983, retirement benefits for non-contract employees of the Company and is or
was maintained by CSX Corporation or any of its affiliated corporations whose
officers participate in the Special Plan. Such existing regularly maintained
pension plans which provided benefits immediately prior to March 1, 1983 for
employees of the Company, and covered periods of service granted in subsections
4(a) and 4(b) of Section V, or those which may be established hereafter, as
amended from time to time, shall be referred to herein as the 'Pension Plans.'
Accordingly, regardless of formal differences which may exist between the
Special Plan and the Pension Plans in the use of terminology, the definitions
and principles which are set forth in the Pension Plans with respect to
compensation, average compensation, credited service, and similar terms shall be
applied and construed hereunder in a manner consistent with the purposes of the
Special Plan and the Pension Plans. In any instance in which the male gender is
used herein, it shall also include persons of the female gender in appropriate
circumstances.
Section II - PARTICIPATION
1. Every person who was a Participant in the Former Plans as in effect
immediately prior to March 1, 1983, shall continue as a Participant in the
Special Plan on and after such date for the purpose of any applicable provisions
hereof.
2. On and after March 1, 1983, Participants shall include any employees
who participate in the Pension Plans and who are entitled to benefits provided
under Section V, Subsection 8 hereof; provided, however, that the only benefit
that such employees shall be eligible to receive under this Special Plan shall
be the benefit provided in accordance with such Subsection unless they are
otherwise entitled to benefits under other provisions of this Special Plan.
3. On and after March 1, 1983, additional persons eligible to be
Participants shall be those specified in Section V, Subsection 4(c).
Section III - CREDITABLE SERVICE
1. Creditable service under the Special Plan shall have the same meaning
and apply in the same manner as creditable service under the Pension Plans,
except that it shall also include any additional creditable service which may
have been or which may be granted to a Participant in accordance with the
provisions of Section V, Subsections 3 and 4. Provided, however, notwithstanding
any provisions of the Pension Plans to the contrary, a Participant in the
Special Plan who is in the employ of the Company and who does not receive
compensation in any calendar month due to amounts deferred under the Company's
Deferred Compensation Program, Supplementary Savings and Incentive Award
Deferral Plan, and any other amounts of compensation deferred under any other
arrangement approved by the Compensation Committee nevertheless shall receive
creditable service under the Special Plan.
2. Notwithstanding any other provisions of this Special Plan or
the Pensions Plans to the contrary, effective January 1, 1989:
(a) Prior to January 1, 1992, a Participant must have been
continuously employed by the Company for a period of not less
than 10 years to become entitled upon retirement to receive
payment of a special retirement allowance from this Special Plan
in respect of any additional creditable service, pension
supplement, pension or benefit granted under Section V,
Subsections 3(a) or 3(b) of this Special Plan. After December 31,
1991, this Subsection (a) shall only apply to Section V,
Subsection 3(b); and,
(b) Prior to January 1, 1992, a Participant must have been
continuously employed by the Company for a period of not less
than 5 years to become entitled to receive payment of a special
retirement allowance from this Special Plan in respect of any
additional creditable service granted under Section V,
Subsection 4(d), of this Special Plan; provided, however, a
person who has already attained age 60 when he first becomes
employed by the Company, and who also becomes and
continuously remains a Participant from his first date of
employment until attainment of age 65, shall become entitled
upon retirement to receive payment of a special retirement
allowance from this Special Plan in respect of any additional
creditable service granted under Section V, Subsection 4(d) of
this Special Plan; and
(c) After December 31, 1991, a Participant must have been
continuously employed by the Company for a period of not less
than 10 years and must have attained age 55 to become entitled
to receive a special retirement allowance from this Special
Plan in respect to any additional creditable service accrued
after December 31, 1991, granted under Section V, Subsection
4(d), of this Special Plan or a pension or benefit granted
after December 31, 1991 under Section V, Subsection 3(a) of
this Special Plan; provided, however, a Participant who has at
least 5 years of continuous service and who dies while actively
employed shall be entitled to the additional creditable service
accrued after December 31, 1991; and, provided further, a
Participant who terminates employment because of a Divisive
Transaction or a workforce downsizing or with the consent of the
Chief Executive Officer of CSX Corporation ('Chief Executive
Officer') prior to age 55 with 10 years of continuous service
shall be entitled to the additional creditable service
accrued after December 31, 1991. For purposes of this Section
III, Subsection 2(c), 'Divisive Transaction' shall mean a
transaction in which the Participant's employer ceases to be a
subsidiary of CSX Corporation or there is a sale of substantially
all of the assets of the subsidiary.
(d) Prior to a Change of Control, in no event shall a Participant be
eligible to receive a payment in respect of any benefits granted
under Section V, Subsections 3(a), 3(b) or 4(d) of this
Special Plan before such date as the Participant attains the
earliest retirement age specified in the particular Pension Plan
in which the Participant also participates, unless an earlier
payment from the Special Plan is specifically authorized by the
Compensation Committee. The Compensation Committee shall have
full authority and sole discretion to interpret and
administer the foregoing rules, and any decision made by the
Compensation Committee shall be final and binding. Following
a Change of Control, the same rules apply except that the
Benefits Trust Committee shall have full authority and sole
discretion to interpret and administer the foregoing rules.
Any such decision made by the Benefits Trust Committee shall be
final and binding.
(e) In the event of a Change of Control, as defined in Section XI,
the age 55 and length of service requirements contained in
Section III, Subsection (2)(c), shall be waived for those
Participants who are employed by the Company at the time of the
Change of Control.
Section IV - COMPENSATION AND AVERAGE COMPENSATION
Compensation and average compensation under the Special Plan shall have
the same meanings and apply in the same manner as those terms do under the
Pension Plans, except as provided in Section V, Subsection 3(b); provided,
however, that amounts deferred under the Company's Deferred Compensation
Program, Supplementary Savings and Incentive Award Deferral Plan, and any other
amounts of compensation deferred under any other arrangement approved by the
Compensation Committee shall be included in the determination of compensation
and average compensation; and further provided, that compensation and average
compensation hereunder shall not be limited to the amount of $150,000, or such
other amount as adjusted by regulation, as imposed by Sections 401(a)(17) and
415(d) of the Internal Revenue Code.
Section V - SPECIAL RETIREMENT ALLOWANCES
1. All of the provisions, conditions, and requirements set forth in the
Pension Plans with respect to the granting and payment of retirement benefits
thereunder shall be equally applicable to the granting of the special retirement
allowances hereunder to Participants in the Special Plan and to the payment
thereof from the Company's general assets or from the Benefits Assurance Trust.
Except as otherwise may be provided in this Special Plan, whenever a
Participant's rights under the Special Plan are to be determined, appropriate
reference shall be made to the particular Pension Plan in which such person is
also a participant. Notwithstanding the preceding sentence, if a special
retirement allowance under the Special Plan shall be paid to a surviving spouse
in conformance with the provisions of the Pension Plans, the final installment
payment hereunder shall be made only to the estate of such surviving spouse and
shall not be otherwise paid, regardless of any different provision for such
payment which may be prescribed in the Pension Plans.
2. All special retirement allowances being paid on March 1, 1983, under
the Former Plans as they existed immediately prior to such date shall be
continued and be paid hereunder, and, persons participating under the Former
Plans shall continue to participate hereunder in accordance with the terms and
conditions of the Former Plans and any applicable provisions of this Special
Plan.
3. The Compensation Committee, upon the recommendation of the Chief
Executive Officer, may grant to an officer of the Company the following benefits
under the Special Plan:
(a) Additional creditable service, pensions or benefits hereunder
other than as provided in the Pension Plan, in recognition of
previous service deemed to be of special value to the Company.
(b) A pension supplement hereunder in a particular instance as
determined by the Compensation Committee, to be calculated on the
basis of specific instructions which may depart only for such
purpose from any of the terms, conditions or requirements of the
Pension Plans, notwithstanding the provisions of Section I,
Subsection 5, and Section V, Subsection 1, hereof.
4. The following additional creditable service under the Special
Plan shall be granted by the Company at retirement under the Pension Plans:
(a) To those Participants of the 'Former Plans,' creditable service
equal to that accrued under Section V, Subsection 4 of The
Employees' Special Plan of The Chesapeake and Ohio Railway
Company or under paragraphs 1, 2 and 3 of the Plan for Additional
Annuities for Qualifying Members Under the Supplemental Pension
Plan of the Baltimore and Ohio Railroad Company, provided that,
effective upon a Participant's retirement on or after March 1,
1983, creditable service under the Special Plan and Pension Plans
shall not exceed 44 years.
(b) To those Participants in the Special Plan who are listed in
Appendix I, and who are also participants in the Pension Plans,
additional creditable service under the Special Plan will be
granted as indicated for each individual as shown in Appendix I,
provided that additional creditable service under the Special
Plan and credited service under the Pension Plans at retirement
shall not exceed 44 years.
(c) On and after March 1, 1983, new admissions into the class of
persons who may become Participants in the Special Plan to
receive additional creditable service hereunder shall only
include participants in the Pension Plans who are appointed by
the Chief Executive Officer or his designee.
(d) In addition to the additional creditable service granted to
Participants under (a) or (b) above, beginning March 1, 1983,
one year of additional creditable service shall be granted for
each year of actual service (with allowances for months less
than twelve) between ages 45 and 65 during which a person is a
Participant. Those who become qualified as provided in (c)
above shall have one year of additional credited service
granted, beginning no earlier than the date they are both a
Participant and at least age 45, for each year of actual
service (with allowances made for months less than twelve)
during which they remain a Participant, but only up to age 65.
Additional creditable service granted under the Special Plan
shall be combined with credited service under the Pension
Plan (but only if credited service under the Pension Plans does
not exceed 44 years), to result in total credited service and
additional creditable service under the Pension Plans and the
Special Plan which shall not exceed a maximum of 44 years. The
position, compensation, and other conditions upon which a
non-contract employee's participation herein is based shall be
determined from time to time in the absolute discretion of the
Compensation Committee. Effective December 31, 1993, there
shall be no new admissions into the class of persons who may
receive additional benefits pursuant to this subsection 4(d);
provided, however, the Chief Executive Officer may, by express
agreement, offer the additional benefits pursuant to this
subsection 4(d) to selected individuals.
(e) Anything to the contrary notwithstanding, any Participant in the
Special Plan receiving additional creditable service under this
Subsection 4, and whose responsibilities and compensation are
reduced, may, in the discretion of the Compensation Committee or
the Chief Executive Officer, cease to receive any further
additional creditable service hereunder.
(f) A Participant's accrual of additional creditable service as
provided herein shall not be subject to termination except as
provided in subparagraph (e) above, or upon retirement or
termination of employment.
(g) Prior to January 1, 1992, a Participant who receives benefits
under a Salary Continuance and Long-Term Disability Plan of the
Company shall continue to accrue additional creditable service
hereunder subject to the same rules that are applicable in such
instances under the Pension Plans.
(h) It is the intent of this Section V that, for the purpose of the
Special Plan, the additional creditable service provided
hereunder when added to credited service under the Pension Plans
or otherwise, shall not in any case exceed 44 years in the
aggregate.
(i) To those Participants who become qualified as provided in (a),
(b) or (c) above, a special retirement allowance shall be payable
under the Special Plan to such Participants or their surviving
spouses equal to any amount due under the Pension Plans which is
not paid in full under the Pension Plans.
(j) Notwithstanding the preceding, following a Change of Control, any
additional service or benefits granted under Article V,
Subsection 4 shall be subject to the approval of the Benefits
Trust Committee.
5. The Company shall accrue and pay under this Special Plan as an
additional supplemental benefit any annual pension benefits that would have been
payable under the Pension Plans as in effect on September 1, 1974, or
thereafter, if Sections 415(b) and 401(a)(17) of the Internal Revenue Code, and
any other relevant provisions of law that impose limitations or have the effect
of limiting the accrual of benefits under the Pension Plans, had not been
enacted into law, unless such additional supplemental benefit is provided by the
Company through another plan created for that purpose.
6. The Company shall accrue reserves to the credit of the Special Plan
in advance to cover the costs of any additional creditable service, pensions or
benefits granted under Subsections 3 and 4 hereof, and such pensions or benefits
or special retirement allowances reflecting such credit shall be paid under the
Special Plan. Where additional creditable service is granted, upon retirement in
accordance with the provisions of the Pension Plans, the Participant shall
receive a special retirement allowance equal to the difference between the
retirement allowance computed under the Pension Plans and the amount which would
be payable if the additional credit granted hereunder had been included with the
actual credited service in the computation of the retirement allowance payable
under the Pension Plans. Where a pension or other benefit is granted to a
Participant, such pension or benefit shall be payable as a special retirement
allowance from the Special Plan.
7. In the event any Participant in the Special Plan receives as a
participant in the Pension Plans, a pension or retirement benefit payable in a
form other than a straight life annuity in accordance with the provisions of the
Pension Plans, his special retirement allowance under this Section V shall also
be payable in a similar form. Notwithstanding any other provision of this
Special Plan to the contrary, certain senior executives of the Company or its
affiliates (as identified by the Chief Executive Officer of the Company from
time to time), will, prior to their commencement of retirement benefits under
the Company's qualified pension plan, be permitted to elect to receive (or elect
for a beneficiary to receive in the event of the executive's death) the
actuarial present value of their benefits under this Special Plan in a lump sum.
Such election shall be in accordance with rules established by the Special
Plan's Administrator. For purposes of this subsection 7, the `actuarial present
value' shall be determined as of the Valuation Date preceding the date of the
payment of the benefit and on the basis of the UP 1984 Mortality Table, set back
one year, and a discount rate equal to the interest rate promulgated by the
Pension Benefit Guaranty Corporation for use in determining the sufficiency of
single employer defined benefit pension plans terminating on that date.
8. The Company shall accrue and pay under this Special Plan any annual
pension benefit which otherwise would have been payable under the Pension Plans
but for the Participant's deferral of compensation under the Company's Deferred
Compensation Program, Supplementary Savings and Incentive Award Deferral Plan,
or under any other deferred compensation arrangement approved by the
Compensation Committee.
9. The obligations of the Company or any of its affiliated corporations
and the benefit due any Participant, surviving spouse or beneficiary under this
Plan shall be reduced by any amount received in regard thereto under the
Benefits Assurance Trust or any similar trust or other vehicle.
Section VI - FUNDING METHOD
1. The benefits provided under the Special Plan shall be financed by the
Company and no contribution shall be required of Participants. The Company shall
accrue reserves on its books as follows:
(a) As of March 1, 1983, an amount shall be calculated with respect
to the Former Plans which shall be the actuarially determined
present value as of that date of all special retirement
allowances payable under the Former Plans and, under a schedule
approved by the Company's Independent Accountant, the reserve
previously accrued will be adjusted.
(b) As of March 1, 1983, the actuarially determined present value as
of that date of all special retirement allowances payable under
Section V, Subsection 4(b) shall be calculated and, under a
schedule approved by the Company's Independent Accountant, a
reserve equal to that amount established.
(c) During the year 1983, there shall be accrued the amount required
to allow regular interest on the adjusted reserve provided in (a)
and (b) above. Each year thereafter there shall be accrued the
amount required to allow regular interest on the average reserves
standing to the credit of the Special Plan during the preceding
year.
(d) Each year the reserves shall be adjusted to reflect the payment
of special retirement allowances during the year.
(e) Such additional reserves shall be accrued from time to time as
may be required in accordance with Section V, Subsections 3 and
4, on account of grants thereunder made after March 1, 1983.
(f) There shall be accrued from time to time, as required, additional
reserves on account of benefits pursuant to Section V, Subsection
6.
(g) At such times as the Plan Administrator shall recommend, the
reserves accrued to the credit of the Special Plan shall be
adjusted on the basis of actuarial valuations to reflect the
experience under the Special Plan, or amendments thereto, or
changes in the rate of regular interest, or any other actuarial
assumptions.
2. The Company shall provide all funds required for the administration
expenses of the Special Plan.
3. The Company has established the CSX Corporation and Affiliated
Companies Benefits Assurance Trust ('Trust'). Except as provided in Section
XI, the Company is not obligated to make any contribution to the Trust.
4. The Special Plan is intended to be unfunded for tax purposes and for
purposes of Title I of ERISA. Participants in the Special Plan have the status
of general unsecured creditors of the Company, and the Special Plan constitutes
a mere promise by the participating employer to make benefit payments in the
future.
5. To the extent reflected by resolutions of the applicable boards of
directors, obligations for benefits under this Special Plan shall be joint and
several.
Section VII - ADMINISTRATION OF SPECIAL PLAN
1. Prior to a Change of Control, the Plan Administrator for the CSX
Pension Plan shall be responsible for the general administration of the Special
Plan and for carrying out its provisions.
2. Following a Change of Control, the Benefits Trust Committee may
remove and/or replace the Plan Administrator as to the Special Plan.
Additionally, following a Change of Control, any and all benefits determinations
for Participants, their beneficiaries, heirs and assigns and decisions regarding
benefit claims under this Special Plan shall rest with the Benefits Trust
Committee or its delegate in its sole and absolute discretion.
Section VIII - MODIFICATION, AMENDMENT AND TERMINATION
1. The Special Plan represents a contractual obligation heretofore
entered into by the Company in consideration of services rendered and to be
rendered by Participants covered under the Special Plan. Prior to a Change of
Control, the Company reserves the right at any time and from time to time to
modify or amend in whole or in part any or all of the provisions of this Special
Plan, or to terminate this Special Plan; provided, however, prior to December 1,
1991, no modification or amendment shall be made to this Special Plan unless
there have been modifications or amendments to correlative provisions of the
Pension Plans, and any modifications or amendments to this Special Plan shall
coincide with the modifications or amendments of the Pension Plans (except
nonconforming revisions to administrative provisions shall be permitted); and
provided, further, that this Special Plan shall only be terminated if the
Pension Plans are terminated, subject to the following limitations:
(a) In the event any modification or amendment adversely affects the
benefits to be received by a retired Participant and the
designated surviving spouse of a retired Participant, they shall
be entitled to receive for life the special retirement allowance
they would have received had the Special Plan not been modified
or amended, and each designated surviving spouse of a retired
Participant shall become entitled to receive for life the special
retirement allowance that such designated surviving spouse would
have received had the Special Plan not been modified or amended.
(b) In the event of the termination of this Special Plan, each
retired Participant and designated surviving spouse of a retired
Participant shall be entitled to receive for life the special
retirement allowance they would have received had the Special
Plan not been terminated, and each designated surviving spouse of
a retired Participant shall become entitled to receive for life
the special retirement allowance that such designated surviving
spouse would have received had the Special Plan not been
terminated.
(c) In the event any modification or amendment adversely affects the
benefit which an active Participant would have been entitled to
receive if such amendment or modification had not been made, such
active Participant shall, so long as he remains in the active
service of the Company, only continue to accrue creditable
service and benefits prospectively in accordance with the
provisions of the Special Plan as so modified or amended, unless
the Participant shall earlier cease to receive any additional
creditable service as provided in Section V, Subsection 4(e).
(d) In the event this Special Plan is terminated, each active
Participant, in consideration of his continued service to the
Company until the date of his termination from active employment
by retirement or otherwise, shall be entitled to retain his
accrued additional service, or pension or benefits as granted
hereunder to such Participant, in accordance with the provisions
of this Special Plan in effect on the day prior to the date of
termination, unless the Participant shall earlier cease to
receive any additional creditable service as provided in Section
V, Subsection 4(e).
(e) In lieu of paying special retirement allowances in accordance
with the foregoing provisions, the Plan Administrator, at its
election, may direct the discharge of all obligations to retired
Participants, designated spouses of retired Participants, and
active Participants by cash payments of equivalent actuarial
value or through the provision of immediate or deferred annuities
or other periodic payments of equivalent actuarial value, as it
shall in its sole discretion determine, provided that following a
Change of Control, the authority to make such decisions shall
rest solely with the Benefits Trust Committee.
2. Following a Change of Control, this Special Plan may not be
amended or terminated without the approval of the Benefits Trust Committee.
Section IX - NON-ALIENATION OF BENEFITS
1. No benefit under the Special Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void, except as specifically provided
in the Special Plan, nor shall any benefit be in any manner liable for or
subject to the debt, contracts, liabilities, engagements, or torts of the person
entitled to such benefit; and in the event that the Plan Administrator shall
find that any active or retired Participant or designated spouse or spouse under
the Special Plan has become bankrupt or that any attempt has been made to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge any of
his benefits under the Special Plan, except as specifically provided in the
Special Plan, then such benefits shall cease to accrue and shall be determined,
and in that event, the Plan Administrator shall hold or apply the same to or for
the benefit of such active or retired Participant or spouse, in such manner as
the Plan Administrator may deem proper.
2. Notwithstanding the preceding, following a Change of Control, the
Plan Administrator shall not implement such action without the consent of the
Benefits Trust Committee.
Section X - MISCELLANEOUS PROVISIONS
1. Anything in the Special Plan to the contrary notwithstanding, prior
to a Change of Control, if the Plan Administrator finds that any retired
Participant or spouse is engaged in acts detrimental to the Company or is
engaged or employed in any occupation which is in competition with the Company,
and if after due notice such retired Participant or spouse continues to be so
engaged or employed, the Plan Administrator shall suspend the special retirement
allowance of such person, which suspension shall continue until removed by
notice from the Plan Administrator; provided, however, that if such suspension
has continued for one year, the Plan Administrator shall forthwith cancel such
Participant's or spouse's special retirement allowance. Furthermore, if the Plan
Administrator finds that any Participant has been discharged for having
performed acts detrimental to the Company, then regardless of any other
provision in the Special Plan, no benefit shall be payable to or on account of
any such Participant's coverage under this Special Plan. Notwithstanding the
preceding, following a Change of Control, the Plan Administrator shall not
implement such action or make such determination without the consent of the
Benefits Trust Committee.
2. The establishment of the Special Plan shall not be construed as
conferring any legal rights upon any employee for a continuation of employment,
nor shall it interfere with the rights of the Company to discharge any employee
and to treat him without regard to the effect which such treatment might have
upon him as a Participant in the Special Plan.
Section XI - CHANGE OF CONTROL
1. If a Change of Control has occurred, the Company shall contribute to
the Trust within 7 days of such Change of Control, a lump sum contribution equal
to the greatest of:
(a) the aggregate value of the amount each Participant would be
eligible to receive under subsection (2), below;
(b) the present value of accumulated Plan benefits based on
the assumptions the Company's independent actuary deems
reasonable for this purpose, as of a Valuation Date, as defined
in subsection (6), below, coinciding with or next preceding the
date of Change of Control, to the extent such amounts are not
already in the Trust. The aggregate value of the amount of the
lump sum to be contributed to the Trust pursuant to this
Section XI shall be determined by the Company's independent
actuaries. Thereafter, the Company's independent actuaries
shall annually determine as of a Valuation Date for each
Participant not receiving a lump sum payment pursuant to
subsection (2), below, the greater of:
(i) the amount such Participant would have received under
subsection (2) had such Participant not made the election
under subsection (3), below, if applicable; and
(ii) the present value of accumulated benefits based on
assumptions the actuary deems reasonable for this purpose.
To the extent that the value of the assets held in the
Trust relating to this Special Plan does not equal the
amount described in the preceding sentence, at the time of
the valuation, the Company shall make a lump sum
contribution to the Trust equal to the difference; or
(c) the amount determined under Section 1(h) of the Benefits
Assurance Trust attributable to liabilities relating to this
Plan.
2. In the event a Change of Control has occurred, the trustee of the
Benefits Assurance Trust shall, within 45 days of such Change of Control, pay to
each Participant not making an election under subsection (3), a lump sum payment
equal to the actuarial present value of the aggregate special retirement
allowance each Participant (or any beneficiary of a Participant) has accrued as
of the Valuation Date preceding the date of such Change of Control pursuant to
the terms of Section V of this Special Plan. If a Participant's benefit has not
commenced as of such date, such lump sum shall be determined assuming that:
(a) The Participant's benefit would commence at the earliest date he
would qualify for early or normal retirement under the Plan, were
his employment with the Company to continue, but in no event
earlier than the later of age 55 or the date of such Change on
Control.
(b) The Participant would qualify for an early (or normal) retirement
benefit as of the date determined in (a).
(c) If married, the Participant would receive his benefit under the
50% Joint and Survivor form of payment with the spouse as
beneficiary; if not married, the benefit would be payable in the
form of a single life annuity.
The actuarial present value shall be determined on the basis of the UP
1984 Mortality Table, set back one year, and a discount rate equal to the
interest rate promulgated by the Pension Benefit Guaranty Corporation for use in
determining the sufficiency of single employer defined benefit pension plans
terminating on the date of such Change in Control.
3. Each Participant may elect in a time and manner determined by the
Compensation Committee, but in no event later than December 31, 1996, or the
occurrence of a Change of Control, if earlier, to have amounts and benefits
determined and payable under the terms of this Special Plan as if a Change of
Control had not occurred. New Participants in the Plan may elect in a time and
manner determined by the Compensation Committee, but in no event later than 90
days after becoming a Participant, to have amounts and benefits determined and
payable under the terms of this Special Plan as if a Change of Control had not
occurred. A Participant who has made an election, as set forth in the two
preceding sentences, may, at any time and from time to time, change that
election; provided, however, a change of election that is made within one year
of a Change of Control shall be invalid.
4. Notwithstanding anything in this Special Plan to the contrary, each
Participant who has made an election under subsection (3), above, may elect
within 90 days following a Change of Control, in a time and manner determined by
the Compensation Committee, to receive a lump sum payment calculated under the
provisions of subsection (2), above, determined as of the Valuation Date next
preceding such payment, except that such amount shall be reduced by 5% and such
reduction shall be irrevocably forfeited to the Company by the Participant.
Furthermore, as a result of such election, the Participant shall no longer be
eligible to participate or otherwise benefit under the Special Plan. Payments
under this subsection (4) shall be made not later than 7 days following receipt
by the Company of the Participant's election. The Compensation Committee shall,
no later than 7 days after a Change of Control has occurred, cause written
notification to be given to each Participant eligible to make an election under
this subsection (4), that a Change of Control has occurred and informing such
Participant of the availability of the election.
5. As used in this Plan the term 'Change of Control' shall mean:
(a) 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% or more of
either (i) the then outstanding shares of common stock
of the Company (the 'Outstanding Company Common
Stock'), or (ii) 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,
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however, that for purposes of this subsection
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(a), the following acquisitions shall not constitute
a Change of Control: (i) any acquisition directly from
the Company; (ii) any acquisition by the Company; (iii)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or (iv) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section XI(5); or
(b) Board Composition. Individuals who, as of the 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 the date hereof 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
(c) Business Combination. Approval by the shareholders of the
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 Interstate Commerce Commission 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:
(i) 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;
(ii) 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 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
(iii) 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
(d) Regulated Business Combination. Approval by the
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 (i), (ii)
and (iii) of subsection (c) of this Section XI(5); or
(e) 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.
6. For purposes of this Section XI, the term 'Valuation Date' means the
last day of each calendar year and such other dates as the Plan Administrator
deems necessary or appropriate to value the Participant's benefits under this
Special Plan, except that following a Change of Control, the Benefits Trust
Committee shall have final approval of any date selected other than the last day
of each calendar year.
Section XII - CONSTRUCTION
The special Plan and the rights and obligations of the parties hereunder
shall be construed in accordance with the laws of the Commonwealth of Virginia.
02/17/2000
APPENDIX I
PARTICIPANT'S GRANTED ADDITIONAL CREDITABLE SERVICE
PURSUANT TO SECTION V(4)(b)
Special Retirement Plan - CSX Corp.
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