AMENDED AND RESTATED CSX CORPORATION
STOCK PLAN FOR DIRECTORS
(As Amended through May 1, 2001)
1. Name of Plan. This plan shall be known as the "Amended and Restated CSX
Corporation Stock Plan for Directors" (the "Plan".)
2. Purpose of Plan. The purpose of the Plan is to enable CSX Corporation, a
Virginia corporation (the "Company"), to attract and retain persons of
exceptional ability to serve as directors and to solidify the common
interests of its directors and shareholders in enhancing the value of the
Company's Stock. The Plan provides for grants of Stock, grants of options
to acquire Stock, and payment of directors' retainers and fees in Stock.
3. Effective Date and Term and Shares Subject to Plan. The Plan shall be
effective as of the date it is adopted by the Board of Directors of the
Company, subject, however, to approval by at least a majority of the
outstanding shares of Stock present or represented and entitled to vote at
a meeting of shareholders of the Company not later than April 17, 1997, and
shall remain in effect until amended or terminated by action of the Board.
Of the 1,000,000 shares subject to the Plan as of May 1, 1992, the date of
original approval by shareholders of the Company, 956,728 shares remain
unissued and subject to the Plan as of March 18, 1997.
4. Eligible Participants. Each member of the Board from time to time who is
not a full-time employee of the Company or any of its subsidiaries shall be
a participant ("Participant") in the Plan.
5. Definitions.
(a) "Annual Meeting" means the Company's Annual Meeting of Shareholders.
(b) "Board of Directors" or "Board" means the Board of Directors of CSX
Corporation.
(c) "Business Day" means, if relevant to a determination of the value of
Stock, a day on which shares of Stock are or could be traded on the New
York Stock Exchange (or other national stock exchange, or if not so
listed, could be traded over-the-counter). In all other cases, the term
means a day on which the offices of the Company are open for the
conduct of business in the normal course.
(d) "Distribution Event" means any of the events listed in Section 12,
"Change of Control," with the following modification: the words,
"Approval by the shareholders of the Company of," in the first line of
Sections 12(c) and 12(d) are replaced for purposes of this Section 5(d)
with the words, "Consummation of, i.e., actual change in ownership of
-----
Stock,
1
Outstanding Company Voting Securities, and/or assets of the Company or
its principal subsidiary by reason of,".
(e) "Payment Date" means the fifteenth day of the last month of each
quarter of the Corporation's fiscal year or, if the fifteenth day of
such month is not a Business Day, on the next Business Day following
the fifteenth day of such month.
(f) "Fair Market Value" means, as of any given date, the mean between the
high and low selling prices of the Stock per share on the New York
Stock Exchange on such date (or, if there is no reported sale on such
date, on the last preceding date on which any reported sale occurred).
(g) "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 Stock pursuant, and subject, to plans or
agreements adopted or entered into from time to time by the Company.
If the par value of Stock is changed, or in the event of a change in
the capital structure of the Company, the shares resulting from such a
change shall be deemed to be Stock within the meaning the Plan.
6. Shares and Stock Options.
(a) Commencing May 1, 1992, the annual retainer payable to each
Participant for service on the Board shall be payable in part in
shares of Stock subject to any applicable deferrals and restrictions
set forth in Section 8 hereof. Subject to paragraphs (b) and (c)
below, each Participant shall be paid 40 percent of the annual
retainer payable to each Participant for service on the Board (the
"Designated Percentage") in shares of Stock. The shares shall be
deducted at their Fair Market Value, determined as of the Business Day
immediately preceding the date of the Company's Annual Meeting of
Shareholders ("Annual Meeting"), from the Participant's annual
retainer.
(b) Any person who becomes a non-employee director following the Company's
Annual Meeting, whether by appointment or election as a director or by
change in status from a full-time employee, shall receive shares of
Stock as a portion of the compensation to be paid to such Participant
until the next Annual Meeting. The number of shares of Stock issued to
such Participant shall be determined by dividing the product of the
pro rata portion of the annual retainer to be paid to such director
and the Designated Percentage by the Fair Market Value on the day such
person becomes a Participant. A Participant who becomes a non-employee
director following the Company's Annual Meeting may, at the beginning
of such term, make his or her Annual Election as set forth in
paragraph (c) below regardless of the number of months remaining until
the next Annual Meeting.
(c) Each Participant may also make one election during the period from
Annual Meeting to the next Annual Meeting (the "Annual Election") to
receive up to 100 percent of his or her retainers and/or fees in
shares of Stock, subject to any applicable deferrals and restrictions
set forth in Section 8 hereof. The Annual Election must be in writing
and shall be delivered to the Corporate Secretary of the Company no
later than six months prior to the next Annual Meeting. The Annual
Election shall be irrevocable in respect of the year to which it
pertains and shall specify the applicable percentage of the annual
retainers and/or fees above the Designated Percentage that such
Participant wishes to receive in shares of Stock. The Annual Election
shall not be effective until at least six months and one day following
its execution and receipt by the Company.
2
(d) In addition to the awards described in the previous provisions of this
Section 6, the Board may make additional awards of Stock or options to
acquire Stock to Participants upon such terms as it deems fit;
provided, however, that options to acquire Stock ("Stock Options")
shall be subject to the restrictions in Section 10.
7. Payment of Shares. Payments to directors of Stock or Stock Options pursuant
to this Plan shall be made as follows, subject to any applicable deferrals
and restrictions pursuant to Section 8 of this Plan:
(a) Shares payable as the Designated Percentage pursuant to Section 6 of
the Plan shall be payable immediately following the Company's Annual
Meeting.
(b) Following payment of the Designated Percentage, the balance of each
director's retainers to be paid in Stock, if any, shall be prorated and
paid on the Payment Dates remaining until the next Annual Meeting.
(c) Unless otherwise specified by resolution of the Board of Directors, any
compensation to be paid in Stock and any grant of Stock shall be made
on or as of the Payment Date next succeeding the date on which such
payments have been earned or are otherwise payable or issuable.
(d) The number of shares to be issued in payment of retainers and fees
denominated in dollars shall be calculated on the basis of the Fair
Market Value on the Payment Date as of which such shares are issued.
8. Deferrals and Restrictions on Payment. Payment of shares issuable under
Section 6 shall, at the Participant's election (which election must be in
writing and shall be delivered to the Corporate Secretary of the Company no
later than six months prior to the next Annual Meeting), be deferred in
accordance with a deferral election made by the Participant and filed with
the Company. The Company shall transfer shares of Stock or other assets
equal in value to a number of shares as to which payment is deferred to a
trust to secure the Company's obligation to pay shares of Stock to the
Participant in the future, but any assets transferred shall remain subject
to the claims of the Company's creditors and any interest the Participant
may be deemed to have in the trust may not be sold, hypothecated or
transferred (including, without limitation, transfer by gift or donation).
The Company shall distribute Stock deferred pursuant to this Section 8 in
accordance with elections made by each participant on forms approved by the
Board; provided, however, that upon a Distribution Event, as hereinafter
defined, all Stock previously deferred shall be issued immediately, except
that a Participant may elect that shares which would be distributed to him
or to her upon a Distribution Event may continue to be held in trust for
distribution in accordance with this Section 8. Such election with respect
to Distribution Event described in the preceding sentence shall be
effective no earlier than the Annual Meeting following such election. The
Participant's right to receive the shares issued under Section 6 shall not
be affected by a termination of the trust described herein.
9. Share Certificates, Voting and Other Rights. The certificates for shares
issued hereunder shall be issued in the name of the Participant or the
trustee of the trust described in Section 8, as the case may be, and shall
be held by such Participant or such trustee; provided, however, that each
Participant shall be entitled to all rights of a shareholder with respect
to Stock for all such shares issued in his name, including the right to
vote the shares, and the Participant or the trustee, as the case may be,
shall receive all dividends and other distributions paid or made with
respect thereto.
3
10. Procedures with Respect to Stock Options.
(a) Each Stock Option granted pursuant to the Plan:
(i) will consist of an option to purchase shares of Stock at a
purchase price not less than 100 percent of the Fair Market Value
of the Stock on the date of grant;
(ii) will be exercisable during the time period specified in the terms
of the grant and reflected in an agreement entered into with a
Participant, but such exercise shall not be earlier than one year
after the date of grant of the Stock Option and not later than 15
years after the date of grant of the Stock Option, with the
determination of the final date of exercise of the Stock Option to
be made at the time of grant.
(b) In the event of the death of a Participant who holds unexercised Stock
Options awarded under the Plan, the Stock Option may be exercised by a
beneficiary designated by the Participant prior to his death, or if no
beneficiary is designated, by the executor or executrix of the
Participant's estate or by the person or persons to whom the
Participant's rights have passed by will or the laws of descent and
distribution, such exercise to be in accordance with the provisions of
the Plan and to the same extent as though the Participant were then
living.
11. Fractions of Shares. The Company shall not issue fractions of shares.
Whenever under the terms of the Plan a fractional share would otherwise be
required to be issued, the Participant or the trustee of the trust
described in Section 8, as the case may be, shall be paid in cash for such
fractional share based upon the same Fair Market Value which was utilized
to determine the number of shares to be issued on the relevant Payment
Date.
12. Change of Control. "Change of Control" shall mean any of the following:
(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 percent or more of either (i) the then
outstanding shares of Stock of the Company, 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, however, that for purposes of
this subsection (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 12; 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
4
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 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:
(i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the 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 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 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 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 12; or
(e) Liquidation or Dissolution. Approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company or its
principal subsidiary.
13. Withholding Taxes. Whenever the Company proposes or is required to issue or
to transfer shares of Stock under the Plan, or whenever the Company is
required to withhold taxes upon exercise of Stock Options under the Plan,
a Participant:
(a) Shall remit to the Company an amount sufficient to satisfy any
federal, state or local withholding tax liability prior to the
delivery of any certificate or certificates for such shares; or
5
(b) To the extent permitted by applicable laws, including regulations
promulgated under the Securities Exchange Act of 1934, such federal,
state or local withholding tax liability may be satisfied prior to the
delivery of any certificate or certificates for the shares by an
adjustment, equal in value to such liability, in the number of shares
to be transferred to the Participant.
14. Amendment. This Plan may be amended by action of a majority of the Board of
Directors, and approval by shareholders shall not be required for any
amendment which does not authorize additional shares to be subject to the
Plan.
15. Administration. The Plan will be administered by the Board. Except as
otherwise specifically provided in the Plan, the Board will have the entire
authority to interpret and administer the Plan, including the power and
complete discretion with respect to any award of Stock or Stock Options to
determine the terms and conditions of the award, the number of shares of
Stock to be covered by the award, the time or times when an award will be
granted, when Stock Options may be exercised, and the manner in which
payment may be made upon the exercise of Stock Options. If the Board
determines that a spin-off, stock dividend or other distribution not in the
form of cash or Stock, consolidation, merger, dissolution, liquidation or
other similar corporate transaction or event affects a Stock Option such
that an adjustment is appropriate to preserve the intended benefits of a
Stock Option, the Board may make such equitable changes or adjustments in
the Stock Option as it deems necessary or appropriate. The Board may adopt
rules and regulations for carrying out the Plan. The interpretation and
construction of any provision of the Plan by the Board will be final and
conclusive.
6