CSX CORPORATION
Stock Purchase and Loan Plan
As Amended and Restated February 14, 1996,
as Amended through October 6, 1998
1. Purpose
The CSX Corporation 1991 Stock Purchase and Loan Plan (the '1991 Plan')
was established to encourage and increase the ownership of the common stock of
CSX Corporation (the 'Company') by those employees of the Company or a
Subsidiary who, by virtue of their responsibilities or positions, were most
likely to have the opportunity to enhance long-term performance of the Company
and shareholder value. The Company continues to believe that ownership of the
Company's common stock stimulates the efforts of those employees upon whose
judgment and interest the Company is and will be largely dependent for the
successful conduct of its business and will further the identification of those
employees' interests with those of the Company's shareholders.
Unless the 1991 Plan is extended or replaced, these benefits will
generally end July 31, 1996. Management believes it is in the best interests of
the Company's shareholders to extend the 1991 Plan in order to continue the
original objective of assuring that significant amounts of the Company's common
stock are held by employees whose interests are identified with those of the
Company's non-employee shareholders. Accordingly, the 1991 Plan is amended and
restated as of February 14, 1996 (the 'Plan'), to maintain and expand this
objective.
Notwithstanding anything contained in this amended and restated Plan,
the provisions of the 1991 Plan in effect prior to the amendment and restatement
reflected herein shall continue to apply with respect to Company Stock acquired
pursuant to a Purchase Award under the 1991 Plan as to which a Participant is
not granted or does not exercise an Exchange Award.
2. Definitions and Construction
Unless the content clearly indicates to the contrary, in reading this
Plan, the singular shall include plural and the masculine shall include the
feminine.
As used in the Plan, the following terms have the indicated meanings:
(a) 'Applied Dividends' means, as provided in Section 6(e),
dividends paid on pledged Company Stock used to reduce
Interest.
(b) 'Board' means the Company's Board of Directors.
(c) 'Business Day' means, if relevant to a determination of
the value of Company Stock, a day on which shares of
Company Stock are or could be traded on the New York Stock
Exchange.
(d) 'Cause' means a Participant's: (i) act or acts of personal
dishonesty intended to result in substantial personal
enrichment at the expense of the Company or a Subsidiary;
(ii) repeated violations of the Participant's
responsibilities which are
demonstrably willful and deliberate and which are not
remedied in a reasonable period of time after receipt
of written notice from the Company or a Subsidiary; or
(iii) conviction of a felony involving moral turpitude.
(e) 'Change of Control' means any of the following:
(i) Stock Acquisition. The acquisition, by any
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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
(A) the then outstanding shares of common stock
of the Company (the 'Outstanding Company Common
Stock'), or (B) the combined voting power of
the then outstanding voting securities of the
Company entitled to vote generally in the
election of directors (the 'Outstanding
Company Voting Securities'); provided, however,
that for purposes of this subsection (i), the
following acquisitions shall not constitute
a Change of Control: (A) any acquisition
directly from the Company; (B) any acquisition
by the Company; (C) any acquisition by any
employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company; or (D)
any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section
2(e); or
(ii) Board Composition. Individuals who, as of the
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date hereof, constitute the Board of Directors
(the 'Incumbent Board') cease for any reason to
constitute at least a majority of the Board
of Directors; provided, however, that any
individual becoming a director subsequent to 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
(iii) Business Combination. Approval by the
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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:
(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
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immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of, respectively,
the then outstanding shares of common stock
and the combined voting power of the then
outstanding voting securities entitled to
vote generally in the election of directors,
as the case may be, of the corporation
resulting from such Business Combination
(including, without limitation, a
corporation which as a result of such
transaction owns the Company or its
principal Subsidiary or all or
substantially all of the assets of the
Company or its principal Subsidiary either
directly or through one or more
subsidiaries) in substantially the same
proportions as their ownership, immediately
prior to such Business Combination of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities,
as the case may be;
(B) no Person (excluding any corporation
resulting from such Business Combination
or any employee benefit plan (or related
trust) of the Company or such corporation
resulting from such Business Combination)
beneficially owns, directly or indirectly,
20% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power
of the then outstanding voting securities
of such corporation except to the extent
that such ownership existed prior to the
Business Combination; and
(C) at least a majority of the members of the
Board of Directors resulting from such
Business Combination were members of the
Incumbent Board at the time of the execution
of the initial agreement, or of the action
of the Board of Directors, providing for
such Business Combination; or
(iv) Regulated Business Combination. Approval by the
shareholders of the Company of a Business
Combination that is subject, as a matter of law or
contract, to approval by the Agency (a 'Regulated
Business Combination') unless such Business
Combination complies with clauses (A), (B) and (C)
of subsection (iii) of this Section 2(e); or
(v) Liquidation or Dissolution. Approval by the
shareholders of the Company of a complete
liquidation or dissolution of the Company or its
principal Subsidiary.
(f) 'Commitment Date' means a date fixed by the Committee
which shall be the first day of the Commitment Period.
(g) 'Commitment Period' means a period of twenty (20) Business
Days beginning with the Commitment Date during which a
Participant who has been granted a Purchase Award must
purchase all or part of the underlying Company Stock.
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(h) 'Committee' means the Committee of the Board appointed to
administer the Plan as provided in Section 10.
(i) 'Company' means CSX Corporation.
(j) 'Company Stock' means the common stock of the Company and
rights, options or warrants for the purchase of securities
of the Company which may be issued with shares of common
stock pursuant, and subject to, plans or agreements
adopted or entered into from time to time by the Company.
(k) 'Disability' means the inability to perform the services
for which a Participant was employed as a result of a
physical or mental impediment entitling the Participant to
begin receiving benefits under the CSX Salary Continuation
and Long-Term Disability Plan.
(l) 'Equity' means, as of any date, the Exchange Award
Purchase Price of a share of Company Stock less the
applicable portion of the unpaid balance and accrued
interest of a Purchase Loan to which such share of Company
Stock is subject.
(m) 'Exchange Act' means the Securities Exchange Act of 1934,
as amended.
(n) 'Exchange Award' means a Purchase Award granted pursuant
to Section 4 to a Participant who received a Purchase
Award under the 1991 Plan.
(o) 'Exchange Award Down Payment' means a dollar amount
computed by taking a percentage, to be determined by the
Committee, of the Exchange Award Purchase Price of the
Company's common stock on the Commitment Date multiplied
by the number of shares in the Exchange Award; provided,
however, such percentage shall not be less than 10% nor
more than 25%.
(p) 'Insider' means any person subject to Section 16(b) of the
Exchange Act.
(q) 'Interest' means an amount calculated using the Applicable
Federal Rate, as determined for purposes of Section
1274(d) of the IRC.
(r) 'Interest Spread' means, at the time of determination,
Interest accrued on a Purchase Loan reduced by Applied
Dividends.
(s) 'IRC' means the Internal Revenue Code of 1986, as amended.
(t) 'Market Price' means the average of the high and the low
price of a share of Company Stock on the New York Stock
Exchange (or the average of the bid and asked prices if
there were no sales), on any Business Day as reported in
The Wall Street Journal.
(u) 'Participant' means an employee of the Company or a
Subsidiary who is designated by the Committee, in its sole
discretion, as eligible for and who receives a Purchase
Award.
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(v) 'Purchase Award' means a right to purchase a specified
number of shares of Company Stock with Purchase Loan
rights.
(w) 'Purchase Loan' means an extension of credit to a
Participant by the Company evidenced by a non-recourse
promissory note for (i) in the case of a new Purchase
Loan, 90% or 95% of the Purchase Price of the Company
Stock awarded to the Participant under the Plan, or (ii)
in the case of a Purchase Loan made pursuant to an
exchange of Company Stock pursuant to Section 4, the
Purchase Price of the Company Stock awarded to the
Participant under an Exchange Award, less his Exchange
Award Down Payment, and in either case, bearing Interest,
and secured by a pledge of all of the shares of Company
Stock purchased by the Participant.
(x) 'Purchase Note' means a promissory note evidencing the
Purchase Loan for the balance of the Purchase Price
without recourse rights against the maker and with other
terms and conditions established by the Committee
consistent with the Plan.
(y) 'Purchase Note Repayment Amount' means the then unpaid
balance of the Purchase Note, accrued and unpaid interest,
applicable federal and state payroll and withholding taxes
on income recognized on the transaction, and any brokerage
fees, collection fees and costs associated with the
Purchase Loan.
(z) 'Purchase Price' or 'Exchange Award Purchase Price' means,
with respect to a share of Company Stock, the average of
the Market Price for the five (5) consecutive Business
Days immediately preceding the Commitment Date.
(aa) 'Retirement' means the termination of employment (for
reasons other than Cause) (i) at or after age 65, or (ii)
after age 55 with at least 10 years of service with the
Company and/or a Subsidiary.
(ab) 'Subsidiary' means a corporation more than 50% of the
voting shares of which are owned directly or indirectly by
the Company.
3. Company Stock
There shall be an aggregate of 9,000,000 shares of Company Stock
reserved for issuance under the Plan, subject to Section 9 of the Plan
(concerning changes in the capital structure of the Company). Shares that have
been awarded under the Plan but not issued, or shares that have been issued but
are returned to the Company in conformity with the Plan (including shares of
Company Stock retained, canceled or repurchased by the Company in conjunction
with the payment of a Purchase Loan or withholding taxes), may again be awarded
under the Plan.
4. Exchange of Shares
To encourage, extend and expand the continued ownership of Company
Stock, Participants in the 1991 Plan whose Purchase Loans mature July 31, 1996,
without regard to the one-year extension provided for under Section 6(b), may be
given a one-time irrevocable election to exchange all, or a portion to be
determined by the Committee, of any shares purchased under the 1991 Plan for an
enhanced Purchase Award under the Plan (an 'Exchange Award'). To the extent such
shares are exchanged they shall
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constitute the 'Exchanged Shares.' Exchange Awards shall be issued for not more
than the number of shares of common stock determined by dividing the excess of
the Exchange Award Purchase Price, as of the Commitment Date of the Exchange
Award, of the number of shares relating to a Purchase Loan issued pursuant to
the 1991 Plan over the outstanding amount due on the Purchase Loan on such date
by 25% of the Exchange Award Purchase Price of the Company's common stock on
such date. In the case of a Participant who exercises an Exchange Award, his
1991 Purchase Notes shall be canceled.
5. Stock Purchase Awards
On or as soon as practicable after a Commitment Date, the Committee
shall give notice to each Participant (or to the class of Participants) eligible
for an award stating (i) the number of shares of Company Stock covered by each
such Purchase Award or a formula for determining the number of shares of Company
Stock covered by each such Purchase Award, and (ii) the price, other terms and
conditions, if any, pertaining to each such Purchase Award and Purchase Loan
that must be satisfied by a Participant in order to exercise the Purchase Award.
A Participant shall exercise a Purchase Award and Purchase Loan rights
by delivering to the Company during the Commitment Period (i) a notice stating
the amount of his down payment (which shall be 5% or 10% of the Purchase Price
or his Exchange Award Down Payment in the case of an Exchange Award) and his
intention to deliver a Purchase Note for the balance of the Purchase Price, and
(ii) where applicable, the down payment (which shall be deemed paid in the case
of an Exchange Award) and a Purchase Note.
The grant of a Purchase Award and Purchase Loan to a Participant shall
not obligate the Company or a Subsidiary of the Company to pay the Participant
any particular amount of remuneration, to continue the employment of a
Participant after the grant or to make further grants to a Participant at any
time thereafter.
6. Purchase Loans
The Company shall, subject to paragraph (a) below, upon the Committee's
recommendation, extend a Purchase Loan to a Participant upon exercise of a
Purchase Award subject to the following terms and conditions:
(a) The original principal amount of a new Purchase Loan shall be
the difference between the Participant's down payment
(which shall be 5% or 10% of the Purchase Price) and the Purchase
Price. In the case of an Exchange Award, the Purchase Loan shall
be the difference between the Participant's Exchange Award
Down Payment and the Exchange Award Purchase Price. The down
payment for a new Purchase Loan shall be in cash, or, if
authorized by the Committee (i) by delivery of shares of Company
Stock having a Market Price equal to the required down payment on
date of transfer to the Company, or (ii) by delivery to the
Company of a promissory note with terms and conditions fixed
by the Committee and with full recourse rights against the maker.
The Exchange Award Down Payment shall be deemed to have been paid
by the Equity in a Participant's Exchanged Shares subject to a
Purchase Loan under the 1991 Plan.
(b) The Purchase Loan shall be due and payable as provided in the
provisions of the Purchase Note executed by the Participant.
The term of the Purchase Note shall not exceed a period
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of five (5) years; provided, however, the Participant, in
his discretion, may extend the Purchase Note for one (1) year;
provided, further, that the Committee, may, in its
discretion, extend a Purchase Note for up to two (2) years, in
which event the Purchase Note may be prepaid at the election of
the Participant at any time within such extension period
subject to the same rules and conditions as if it had been
paid at maturity. In no event may the Purchase Note term,
including extensions, exceed seven (7) years.
(c) Purchase Notes shall be in the form approved by the Committee and
shall contain such terms and conditions, not inconsistent with
the Plan, as the Committee shall determine in its sole
discretion; provided, that each Purchase Note shall be subject to
the terms of the Plan.
(d) A Participant shall effect a pledge of all shares of Company
Stock acquired by the Participant upon the exercise of the
Purchase Award by delivering to the Company (i) the certificate
or certificates for the acquired shares of Company Stock,
accompanied by a duly executed stock power in blank, and (ii) a
properly executed stock pledge agreement in the form approved by
the Committee.
(e) Dividends paid on shares of Company Stock pledged as security
for a Purchase Loan shall be first treated as Applied Dividends
and then applied to repay the Purchase Note. At the discretion
of the Committee, the Company shall also pay (i) dividend
equivalents on the number of shares purchased pursuant to a
Purchase Note equal to the number of shares representing the
Participant's Equity in the Exchanged Shares, and (ii) only
after all interest and Purchase Price reductions are realized
under Section 6(g), dividend equivalents on the number of shares
purchased pursuant to a Purchase Note in excess of the number
of shares in (i), above, if any.
(f) Within ten (10) Business Days after the maturity date of a
Purchase Loan, or on the date or dates, if installments are
elected pursuant to Section 7(c), as of which a Participant
elects to prepay a Purchase Loan and Purchase Note in accordance
with Section 7, the Participant shall repay in full the Purchase
Note Repayment Amount or the portion related to an installment
under Section 7(c). Payment may be made by (1) a personal check
or money order payable to CSX Corporation; (2) a tender by the
employee (in accordance with procedures established by the
Company) of shares of the Company's common stock having a
Fair Market Value on the date of tender equaling the Purchase
Note Repayment Amount or such installment portion; (3) the
delivery of irrevocable instructions to a broker to promptly
deliver to the Company either sale proceeds of shares sold
to pay the Purchase Note Repayment Amount or such installment
portion or the amount loaned by the broker to pay such amount; or
(4) any combination of (1), (2) and (3). If, pursuant
to procedures established by the Company for compliance with
applicable securities laws, the Company believes that the sale
of Company Stock on the open market to repay a Purchase Note
would violate any provision of applicable securities laws or
cause a Participant to incur a liability under Section 16(b)
of the Exchange Act, the maturity date may be extended by the
Committee until the first day the purchase by the sale of the
pledged shares on the open market can be made without violating
such securities laws or the Participant incurring liability
under Section 16(b). If, pursuant to procedures established
by the Company for compliance with applicable tax laws, the
Company believes that the repayment of a Purchase Note or the
sale of pledged shares of Company Stock on the open market to
repay a Purchase Note would cause any portion of a
Participant's compensation under the Plan to be nondeductible
under Section 162(m) of the IRC, the maturity date may be
extended by
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the Committee until the first day the repayment of
a Purchase Note or the sale of pledged shares of Company Stock
on the open market to repay a Purchase Note can be made
without such compensation being non-deductible under Section
162(m) of the IRC, but in no event shall such extension of the
maturity date be for a period greater than one (1) year.
(g) In the absence of any contrary contractual agreement with a
Participant, the Purchase Price of one half of the pledged shares
of Company Stock shall be adjusted as follows if at any time
after the first anniversary date of a Purchase Note the Market
Price of Company Stock equals or exceeds the Purchase Price of
the Participant's Company Stock by the amount specified below for
a period of ten (10) consecutive Business Days:
Stock Price Purchase Price Reductions
Purchase Price + 20% 10%
Purchase Price + 30% 20%
Purchase Price + 40% 30%
Purchase Price + 50% 40%
Purchase Price + 60% 50%
Purchase Price + 70% 60%
Purchase Price + 80% 70%
Purchase Price + 90% 80%
Purchase Price + 100% 100%
The principal amount of a Participant's Purchase Loan and
Purchase Note, plus accrued and unpaid Interest, as well as any
accrued and unpaid Interest on a down payment loan referenced in
Section 6(a) shall be adjusted pursuant to Section 2.5 of the
Stock Purchase Pledge and Loan Agreement. The amount of such
adjustment to the principal amount of a Participant's Purchase
Loan and Purchase Note shall equal the amount of the Purchase
Price adjustment provided above. The provisions of this Section
and any applicable adjustments to Interest and a Purchase Note
shall be applied at the time of repayment of a Purchase Note.
Decreases in the Market Price of Company Stock subsequent to the
completion of a measuring period shall be disregarded for
purposes of the adjustments authorized by this Section.
(h) In the event of a change in capital structure involving any of
the pledged shares of Company Stock, as provided in Section 9,
such newly acquired shares shall be pledged to the Company as
substitute or additional security.
(i) Notwithstanding anything in this Section 6 to the contrary, the
Company shall not be required to make a Purchase Loan to a
Participant if making such Purchase Loan will (i) cause the
Company to violate any covenant or other similar provision in any
indenture, loan agreement, or other agreement, or (ii) violate
any applicable federal, state or local law.
(j) Upon issuance by the Company of Company Stock purchased
pursuant to a Purchase Award, the affected Participant shall be
deemed a shareholder of the Company and (subject to the terms of
the Plan, the Purchase Loan, the Purchase Note and related
documents) shall be entitled to dividend and voting rights with
respect to the Company Stock purchased.
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7. Termination of Employment; Change of Control; Prepayment of Purchase
Loan
If before a Purchase Note is repaid a Participant's employment
terminates for any reason, or he is no longer employed by a continuing
Subsidiary, or a Change of Control occurs, the following provisions shall apply
notwithstanding any terms in the Purchase Note to the contrary:
(a) Death or Disability. If a Participant's termination of
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employment results from death or Disability, the affected
Participant (or the Participant's estate or personal
representative) may either (i) continue to hold the Purchase Note
and participate in the Plan for three years (or, if earlier,
until the maturity date of the Purchase Loan, as extended
by either the Participant or the Committee, pursuant to Section
6(b)), or (ii) within ninety (90) days of said termination of
employment (A) elect to prepay the Purchase Note, or (B) elect to
rescind the Exchange Award or the Purchase Award, as the case may
be. If the Participant elects to prepay the Purchase Note
under (ii)(A), the Purchase Note shall become due and payable on
the prepayment date elected by the Participant. If an election
to prepay the Purchase Note is effective prior to the first
anniversary of the execution of the Purchase Note, Section
6(g) shall not apply; if it is effective on or after the first
anniversary of its execution, Section 6(g) shall apply. If the
Participant elects to rescind the Exchange Award or the Purchase
Award under (ii)(B), the shares of Company Stock acquired by the
Participant upon the exercise of the Exchange Award or Purchase
Award shall be transferred to the Company, the Purchase Note
shall be canceled, the Participant shall have no further rights
under the Plan, and the Company shall have no further
obligations to the Participant, except that the Company shall
pay to or with respect to the Participant, in consideration for
the cancellation of the Participant's rights under the Exchange
Award or Purchase Award, an amount equal to his Exchange
Award Down Payment, as adjusted under Section 7(h), or, if
applicable, the Purchase Award down payment paid to the Company
pursuant to Section 6(a).
(b) Involuntary Termination With Consent of Company. If a
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Participant's employer terminates his employment for reasons
other than Cause, the affected Participant may, within ninety
(90) days of said termination of employment (i) elect to prepay
the Purchase Note, or (ii) elect to rescind the Exchange Award
or the Purchase Award, as the case may be. If the
Participant elects to prepay the Purchase Note under (i), the
Purchase Note shall become due and payable on the prepayment date
elected by the Participant. If the Participant elects to rescind
the Exchange Award or the Purchase Award under (ii), the
shares of Company Stock acquired by the Participant upon the
exercise of the Exchange Award or Purchase Award shall be
transferred to the Company, the Purchase Note shall be
canceled, the Participant shall have no further rights under the
Plan, and the Company shall have no further obligations to the
Participant, except that the Company shall pay to or with
respect to the Participant, in consideration for the
cancellation of the Participant's rights under the Exchange
Award or Purchase Award, an amount equal to his Exchange
Award Down Payment, as adjusted under Section 7(h), or, if
applicable, the Purchase Award down payment paid to the Company
pursuant to Section 6(a). If the Participant's termination of
employment is prior to the first anniversary of the execution of
the Purchase Note, Section 6(g) shall not apply; if it is
on or after the first anniversary of the execution of the
Purchase Note, Section 6(g) shall apply.
(c) Retirement. If a Participant's termination of employment
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results from his Retirement, the affected Participant may
either (i) continue to hold the Purchase Note and participate
in the Plan for three (3) years (or, if earlier, until the
maturity date of the Purchase Loan, as
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extended by either the Participant, or the Committee, pursuant to
Section 6(b)), (ii) prepay the Purchase Note within ninety (90)
days of said termination of employment, or (iii) repay the
Purchase Note in no more than three (3) installments, due over
the remaining term of the Purchase Note, including extensions.
If an election to prepay the Purchase Note under (ii) or (iii)
above is effective prior to the first anniversary of the
execution of the Purchase Note, Section 6(g) shall not apply; if
it is effective on or after the first anniversary of its
execution, Section 6(g) shall apply.
(d) Voluntary Termination with Consent of Company or Involuntary
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Termination. If the Participant's termination of employment is
-----------
voluntary and with the consent of the Company, or, if his
employer terminates his employment for reasons other than
Cause and the Company does not consent to the Participant's
termination being treated under Section 7(b), the maturity
date of the Purchase Note shall be accelerated without further
action of the Committee or the Company and shall be required to
be prepaid within ninety (90) days of said termination of
employment. If a Participant's termination of employment is
prior to the first anniversary of the execution of the
Purchase Note, Section 6(g) shall not apply; if it is on or
after the first anniversary of the execution of the Purchase
Note, Section 6(g) shall apply.
(e) Termination for Cause or Voluntary Termination Without Consent
----------------------------------------------------------------
of Company. If the Participant's termination of employment is
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involuntary for Cause or a voluntary termination without the
consent of the Company, Section 6(g) shall not apply and the
Participant agrees to rescind the Exchange Award or the
Purchase Award, as the case may be. In such case the shares of
Company Stock acquired by the Participant upon the exercise
of the Exchange Award or Purchase Award shall be transferred to
the Company, the Purchase Note shall be canceled, the Participant
shall have no further rights under the Plan, and the Company
shall have no further obligations to the Participant, except that
the Company shall pay to or with respect to the Participant, in
consideration for the cancellation of the Participant's rights
under the Exchange Award or Purchase Award, an amount equal to
the excess (if any) of the lesser of: (i) the Market Price on the
date of termination of employment; or (ii) an amount equal to
his Exchange Award Down Payment, as adjusted by Section 7(h), or,
if applicable, the Purchase Award down payment paid to the
Company pursuant to Section 6(a); less the Purchase Note
Repayment Amount.
(f) Divisive Transaction. If the Participant's employer ceases to be
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a Subsidiary or if there is a sale of substantially all of the
assets of the Subsidiary, the affected Participant may, within
ninety (90) days of the closing of such divisive transaction (i)
elect to prepay the Purchase Note, or (ii) elect to rescind the
Exchange Award or the Purchase Award, as the case may be. If
the Participant elects to prepay the Purchase Note under (i),
the Purchase Note shall become due and payable on the
prepayment date elected by the Participant. If the
Participant elects to rescind the Exchange Award or the Purchase
Award under (ii), the shares of Company Stock acquired by
the Participant upon the exercise of the Exchange Award or
Purchase Award shall be transferred to the Company, the
Purchase Note shall be canceled, the Participant shall have
no further rights under the Plan, and the Company shall have no
further obligations to the Participant, except that the Company
shall pay to or with respect to the Participant, in
consideration for the cancellation of the Participant's rights
under the Exchange Award or Purchase Award, an amount equal to
his Exchange Award Down Payment, as adjusted under Section 7(h),
or, if applicable, the Purchase Award down payment paid to the
Company pursuant to Section 6(a). Section 6(g) shall
apply to all Participants affected by a divisive transaction.
The foregoing shall apply whether or not
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the participant continues in the employ of the Subsidiary but
shall not apply should the Participant continue in the employ of
the Company or another Subsidiary not part of the divisive
transaction.
(g) Change of Control. If a Change of Control occurs, Sections 7(a)
-----------------
through (f) shall no longer be applicable, the Interest and
Purchase Price Reductions under Section 6(g) shall be applied
as if the Stock Price had increased by 100% and the Participant
may either (i) continue to hold the Purchase Note and participate
in the Plan until the maturity date of the Purchase Note,
including any extensions, or (ii) within ninety (90) days of
said Change of Control and, if applicable, within ninety (90)
days of a final Agency action in a Regulated Business
Combination under Section 2(e) (iv), (A) elect to prepay the
Purchase Note, or (B) elect to rescind the Exchange Award or
the Purchase Award, as the case may be. If the Participant
elects to prepay the Purchase Note under (ii)(A), the Purchase
Note shall become due and payable on the prepayment date elected
by the Participant, and the provisions of Section 6(g) shall
apply. If the Participant elects to rescind the Exchange Award
or the Purchase Award under (ii)(B), the shares of Company Stock
acquired by the Participant upon the exercise of the Exchange
Award or Purchase Award shall be transferred to the Company,
the Purchase Note shall be canceled, the Participant shall
have no further rights under the Plan, and the Company shall have
no further obligations to the Participant, except that the
Company shall pay to or with respect to the Participant,
in consideration for the cancellation of the Participant's
rights under the Exchange Award or Purchase Award, an amount
equal to his Exchange Award Down Payment, as adjusted under
Section 7(h), or, if applicable, the Purchase Award down
payment paid to the Company pursuant to Section 6(a).
(h) Adjustment of Exchange Award Down Payment. Solely for purposes
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of determining the amount available to a Participant under this
Section 7, a Participant's Exchange Award Down Payment shall be
adjusted as follows: the dollar amount of the Exchange Award
Down Payment computed as of the date of the Exchange of Shares
pursuant to Section 4 shall be divided by the Market Price on the
date of such Exchange of Shares, to arrive at a number of
equivalent shares. On the Purchase Loan maturity date or
prepayment date applicable under this Section 7, the number
of equivalent shares determined in the preceding sentence
will be multiplied by the Market Price on such date to arrive at
the Participant's Exchange Award Down Payment as adjusted.
(i) Certain Terms of Purchase Awards or Exchange Awards. Notwithstanding
any provision of this Plan to the contrary, in the discretion of the Committee,
a Purchase Award and/or Exchange Award may provide, to the extent deemed
appropriate by the Committee to eliminate or reduce the applicability or impact
of Sections 280G and/or 4999 of the IRC, for: (i) the cancellation of shares
and/or a reduction or increase in the amount of a Purchase Note, (ii) a
limitation of the reduction of the Purchase Price pursuant to Section 7(g)
above, (iii) the elimination of any acceleration of a Purchase Note or right to
prepay such Note, or (iv) a reduction or limitation of any other benefit under
this Plan or otherwise to a Participant.
8. Non-transferability of Purchase Awards
Except as provided in Section 7(a), neither right of Participation nor
Purchase Awards are assignable or transferable.
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9. Change in Capital Structure
If the number of outstanding shares of Company Stock is increased or
decreased as a result of a subdivision or consolidation of shares, the payment
of a stock dividend, stock split, or any other change in capitalization effected
without receipt of consideration by the Company (including, but not limited to,
the creation or issuance to the shareholders generally of rights, options or
warrants for the purchase of common or preferred stock of the Company), or if a
spin-off transaction occurs, then the number and kind of shares of stock or
securities of the Company to be subject to the Plan, the maximum number of
shares or securities which may be delivered under the Plan, and other relevant
provisions shall be appropriately adjusted by the Committee, whose determination
shall be binding and conclusive on all persons.
If there is a Change of Control, the Committee may take such actions,
not inconsistent with the Plan, with respect to outstanding unexercised Purchase
Awards as the Committee deems appropriate.
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.
10. Administration of the Plan
The Plan shall be administered by the Committee, consisting of not less
than three Directors of the Company appointed by the Board. Subject to paragraph
(d) below, the Committee shall be the Compensation Committee of the Board or
such subcommittee appointed by the Compensation Committee consisting of not
fewer than two non-employee directors. The Committee shall at all times consist
of outside directors within the meaning of Section 162(m) of the IRC. The
Committee shall have general authority to impose any limitation or condition
upon a Purchase Award the Committee deems appropriate to achieve the objectives
of the Purchase Award and the Plan, and in addition, and without limitation and
in addition to powers set forth elsewhere in the Plan, shall have the following
specific authority:
(a) The Committee shall have the power and complete discretion to
determine (i) which employees of the Company or a Subsidiary
shall be Participants, (ii) which Participants shall receive
a Purchase Award with Purchase Loan rights, (iii) the number of
shares of Company Stock to be covered by each Purchase Award,
(iv) the Market Price of Company Stock, (v) the time or times
when a Purchase Award shall be granted, (vi) whether a Disability
exists, (vii) the manner in which payment will be made upon the
exercise of a Purchase Award, (viii) the number of shares of
Company Stock required to be pledged at any given time, and
to make appropriate adjustments and (ix) any additional
requirements relating to Purchase Awards that the Committee deems
appropriate.
(b) The Committee may adopt rules and regulations for carrying out
the Plan and for the sale or other disposition of Company Stock
acquired pursuant to the Plan. The interpretation and
construction of any provision of the Plan by the Committee shall
be final and conclusive. The Committee may consult with counsel,
who may be counsel to the Company, and shall not incur any
liability for any action taken in good faith in reliance upon the
advice of counsel.
(c) A majority of the members of the Committee shall constitute a
quorum, and all actions of the Committee shall be taken by a
majority of the members present. Any action may be
12
taken by a written instrument signed by all of the members, and
any action so taken shall be fully effective as if it had been
taken at a meeting.
(d) The Board may from time to time appoint or remove members and
fill vacancies, however caused, in the Committee. Insofar as
it is necessary to satisfy the requirements of Section 16(b) of
the Exchange Act and Rule 16b-3 thereunder, no member of the
Committee shall be eligible to participate in the Plan or in
any other plan of the Company or a Subsidiary that entitles
participants to acquire stock, stock options or stock
appreciation rights of the Company or a Subsidiary, and no
person shall become a member of the Committee if, within
the preceding one-year period, the person shall have been
eligible to participate in such a plan.
(e) Down payment loans under the 1991 Plan shall be extended on a
full recourse basis for up to seven (7) years in the case of any
Participant who receives and exercises an Exchange Award. To the
extent that a Purchase Note is extended, accelerated or prepaid
under the terms of the Plan, said extension, acceleration or
prepayment shall also apply to the down payment loan.
11. Effective Date of the Plan
The 1991 Plan became effective as of December 12, 1990. This amendment
and restatement of the 1991 Plan shall be effective as of February 14, 1996, and
shall be submitted to the shareholders of the Company for approval. Until (i)
the Plan has been approved by the Company's shareholders, (ii) the Company Stock
issuable under the Plan has been registered with the Securities and Exchange
Commission, (iii) the Company Stock is accepted for listing on the New York
Stock Exchange, and (iv) the requirements of any applicable state securities
laws have been met, no Purchase Award shall be granted or Purchase Loan
authorized by the Committee.
12. Termination, Modification
If not sooner amended or terminated by the Board, this Plan shall
terminate at the close of business on February 13, 2006. No Purchase Awards
shall be made under this Plan after termination. The Board may terminate the
Plan or may amend the Plan in such respects as it shall deem advisable;
provided, however, that, if necessary to satisfy the requirements of Section
16(b) of the Exchange Act, the New York Stock Exchange or applicable state law,
the shareholders of the Company must approve any amendment that would (i)
materially increase the benefits accruing to Participants under the Plan, (ii)
materially increase the number of shares of Company Stock that may be issued
under the Plan, or (iii) materially modify the Plan's eligibility requirements.
A termination or amendment of the Plan shall not, without the consent of the
affected Participant, adversely impact a Participant's rights under a Purchase
Award previously granted to him.
13. Notice
All notices and other communications required or permitted to be given
under this Plan shall be in writing and shall be deemed to have been duly given
if delivered personally or mailed first class, postage prepaid, as follows: (i)
if to the Company--at its principal business address to the attention of the
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Secretary; (ii) if to any Participant--at the last address of the Participant
known to the sender at the time the notice or other communication is sent.
14. Governing Law
The terms of this Plan shall be governed by the laws of the Commonwealth
of Virginia.
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Stock Purchase and Loan Plan - CSX Corp.
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