Supplemental Retirement Benefit 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 plan, hereinafter called the 'Supplemental Plan',
is to provide benefit payments to individuals who are participants (or members,
as the case may be) in funded, tax-qualified defined benefit pension plans
maintained by CSX Corporation (the 'Company') and certain of its affiliated
corporations (whose participation in the Supplemental Plan is approved by the
Compensation Committee of the Board of Directors of the Company ('Compensation
Committee')) and which adopts this Supplemental Plan by action of its board of
directors and whose benefits would otherwise be reduced by Section 415 of the
Internal Revenue Code ('Code') of 1986, as amended ('Code') which imposes
limitations on benefits which may be accrued under such plans ('Code
Limitations'). Notwithstanding the preceding, following a Change of Control, an
affiliated corporation may not become a participating employer in this
Supplemental Plan without the approval of the Benefits Trust Committee.
2. This Supplemental Plan preserves and continues in effect all
provisions for accruals based upon limitations of benefits imposed by Code
Limitations, heretofore credited to Participants under Section V, paragraph
(subsection) 5, of the Special Retirement Plan of CSX Corporation and Affiliated
Corporations ('Special Plan'), the Supplemental Benefits Plan of Sea-Land
Corporation and Participating Companies, and the American Commercial Lines
Benefit Restoration Plan ('Predecessor Plans').
Section II - DEFINITIONS
1. Supplemental Benefit means the benefit described in Section IV of
this Supplemental Plan.
2. The Supplemental Plan shall, where appropriate, refer to and have
meanings consistent with all of the relevant terms of the CSX Pension Plan and
any other regularly maintained funded, tax-qualified defined benefit pension
plan of any other corporation affiliated with the Company whose participation in
the Supplemental Plan as a participating employer is approved by the board of
directors of any such affiliated corporation and by the Compensation Committee.
Such existing regularly maintained defined benefit pension plans which provided
benefits for employees of the Company or its affiliates prior to the Effective
Date of this Supplemental Plan document, or those which may be established
hereafter, as amended from time to time, shall be referred to herein as the
'Pension Plan.'
3. Regardless of formal differences which may exist between the
Supplemental Plan and the Pension Plan or the Predecessor Plans in the use of
terminology, the definitions and principles which are set forth in the Pension
Plan or the Predecessor Plans with respect to compensation, average
compensation, credited service and similar terms shall be construed and applied
hereunder in a manner consistent with the purposes of this Supplemental Plan and
the Pension Plan or the Predecessor Plans. In any instance in which the male
gender is used herein, it shall also include persons of the female gender in
appropriate circumstances.
4. 'Benefits Trust Committee' means the committee created pursuant
to the CSX Corporation and Affiliated Companies Benefits Assurance Trust
Agreement (the 'Benefits Assurance Trust').
5. Any reference to the 'Company's independent actuary', 'independent
actuaries', 'actuary' or 'Actuary' means the independent actuary engaged by CSX
Corporation and, if selected or changed following a Change of Control, approved
by the Benefits Trust Committee.
Section III - MEMBERSHIP
1. Every person who previously participated in a Predecessor Plan
shall automatically be a Participant in this Supplemental Plan on and after
the Effective Date.
2. Each employee who is a Participant in a Pension Plan on or after the
Effective Date shall participate in this Supplemental Plan to the extent of the
benefits provided herein.
3. A Participant's participation in this Supplemental Plan shall
terminate coincident with the termination of such individual's participation in
the Pension Plans; provided, however, in the event that the Participant shall be
reassigned or transferred into the employ of the Company or any of its
affiliates which also is a participating employer in this Supplemental Plan, the
Participant's participation shall be continued.
Section IV - SUPPLEMENTAL BENEFITS
1. All of the provisions, conditions and requirements set forth in the
applicable Pension Plan with respect to the granting and payment of retirement
benefits thereunder shall be equally applicable to the payment of supplemental
benefits hereunder to affected Participants in the Supplemental Plan and to the
payment thereof from the employer's general assets. Whenever an individual
Participant's rights under the Supplemental 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
supplemental benefit under this Supplemental Plan shall be paid to a surviving
spouse or other surviving designated beneficiary in conformance with the
provisions of the Pension Plans, the final installment payment hereunder shall
be made to the estate of the surviving spouse or other surviving designated
beneficiary.
2. Each Participant shall receive a Supplemental Benefit under this
Supplemental Plan in an amount equal to the difference, if any, between (i) the
Participant's monthly retirement income benefit under the provisions of the
particular Pension Plan in which such person is also a participant calculated
before the application of any Code Limitations and (ii) the Participant's
monthly retirement income benefit determined after application of the Code
Limitations.
3. Notwithstanding any other provision of this Supplemental Plan to the
contrary, a Supplemental Benefit shall not be determined or paid which would
duplicate a payment of benefit provided to a Participant under the Pension Plan,
the Predecessor Plans or any other unfunded or funded retirement plan of the
Company or any of its affiliated corporations. Further, the obligations of the
Company or any of its affiliated companies and the benefit plan due any
Participant, surviving spouse or beneficiary hereunder shall be reduced by any
amount received in regard thereto from the Benefits Assurance Trust or any
similar trust or other vehicle.
4. A Supplemental Benefit payable under the provisions of this
Supplemental Plan shall be paid in such forms and at such times as shall be
consistent with the payment of the Participant's retirement income benefit under
the particular Pension Plan in which such person is also a participant.
Notwithstanding the foregoing, prior to a Change of Control, the Company may
delay payment of a Supplemental Benefit under the Supplemental Plan to any
Participant who is determined to be among the top five most highly paid
executives for the year that the Supplemental Benefit payment would otherwise be
paid; provided, however, if a Participant's payment is delayed, that will not
decrease the total Supplemental Benefit to which he is entitled. Notwithstanding
the preceding, following a Change of Control, the authority to delay payment of
a Supplemental Benefit rests solely with the Benefits Trust Committee.
5. Notwithstanding any other provision of this Supplemental 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 Supplemental Plan in a lump sum. Such
election shall be in accordance with rules established by the Supplemental
Plan's Administrator. For purposes of this subsection 5, 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.
Section V - FUNDING METHOD
1. The Supplemental Benefit shall be paid exclusively from the general
assets of the applicable employers participating in the Supplemental Plan or
from the Benefits Assurance Trust which has been established to secure the
payment of the obligations created herein. No Participant or other person shall
have any rights or claims against the assets of the employers or against the
Benefits Assurance Trust which are superior to or different from the right or
claim of a general, unsecured creditor of any participating employer.
2. The Supplemental Plan is intended to be unfunded for tax purposes and
for purposes of Title I of ERISA, and constitutes a mere promise by the
participating employer to make benefit payments in the future.
3. The employers participating in the Supplemental Plan shall provide
all funds required to pay benefits accrued and to administer this Supplemental
Plan.
4. To the extent reflected by resolutions of the applicable boards of
directors, obligations for benefits under this Supplemental Plan shall be joint
and several.
Section VI - ADMINISTRATION OF PLAN
1. Prior to a Change of Control, the Plan Administrator of the CSX
Pension Plan shall be the 'Plan Administrator' of this Supplemental Plan and
shall be responsible for the general administration of the Supplemental Plan,
claims review and for carrying out its provisions. Administration of this
Supplemental Plan shall be carried out consistent with the terms and conditions
of the Pension Plan and the Supplemental Plan.
2. Following a Change of Control, the Benefits Trust Company may remove
and/or replace the Plan Administrator.
3. The Plan Administrator shall have sole and absolute discretion to
interpret the Plan, determine eligibility for and benefits due hereunder.
Decisions of the Plan Administrator regarding participation in and the
calculation of benefits under this Supplemental Plan, shall at all times be
binding and conclusive on Participants, their beneficiaries, heirs and assigns.
4. Notwithstanding Subsection 3 above, following a Change of Control,
final benefit determinations for Participants, their beneficiaries, heirs and
assigns and decisions regarding benefit claims under this Supplemental Plan
shall rest with the Benefits Trust Committee or its delegate in its sole and
absolute discretion.
Section VII - CERTAIN RIGHTS AND OBLIGATIONS
1. (a) Prior to a Change of Control the Compensation Committee may
terminate the Supplemental Plan upon the termination of one or more of the
Pension Plans. Prior to a Change of Control the Board of Directors of CSX
Corporation may terminate the Plan at any time for any reason in any manner not
prohibited by law. Following a Change of Control, this Supplemental Plan may not
be terminated without the approval of the Benefits Trust Committee.
(b) Prior to a Change of Control, the Board of Directors of the
Company may terminate an affiliated corporation's participation as a
participating employer in this Supplemental Plan for any reason at any time.
Following a Change of Control, an affiliated corporation may not be terminated
from participation as a participating employer without the consent of the
Benefits Trust Company.
(c) Prior to a Change of Control, an affiliated corporation's
board of directors may terminate that affiliated corporation's participation as
a participating employer for any reason at any time. Following a Change of
Control, an affiliated corporation's participation as a participating employer
may not be terminated without the consent of the Benefits Trust Committee.
2. The participating employers agree in the event that the
Supplemental Plan is terminated:
(a) Each retired Participant, surviving spouse of a retired
Participant or surviving designated beneficiary of a retired
Participant shall be entitled to receive the Supplemental Benefit
they would have received had the Supplemental Plan not been
terminated, and each surviving spouse or surviving designated
beneficiary of a deceased Participant shall become entitled to
receive for life the Supplemental Benefit that such surviving
spouse or surviving designated beneficiary would have received
had the Supplemental Plan not been terminated; and
(b) Each active Participant shall be entitled to receive for life the
Supplemental Benefit he or she would have received had the
Supplemental Plan not been terminated, calculated on the basis of
the Supplemental Benefit which had accrued at the time of
termination; provided, however, that the Participant shall become
entitled to such Supplemental Benefit only at the time and in
accordance with the provisions of the Supplemental Plan had it
continued in effect.
(c) In lieu of paying a Supplemental Benefit in accordance with the
foregoing provisions, the Plan Administrator, at its election,
may direct the discharge of all obligations to retired
Participants, surviving spouses or surviving designated
beneficiaries of deceased Participants, and active Participants
by cash payment of equivalent actuarial value or through the
provision of immediate or deferred annuities or such other
periodic payments of equivalent actuarial value, as it shall
in its sole discretion determine. Notwithstanding the
preceding, any such action taken by the Plan Administrator
following a Change of Control is subject to the approval
of the Benefits Trust Committee.
3. Anything in the Supplemental Plan to the contrary notwithstanding, if
the Plan Administrator finds that any Participant, retired Participant or spouse
is engaged in acts detrimental to the Company or any of its affiliated
corporations, and if after due notice such Participant, the retired Participant
or spouse continues to be so engaged or employed, the Plan Administrator shall
suspend the Supplemental Benefit 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 Supplemental Benefit.
Furthermore, if the Plan Administrator finds that any Participant had been
discharged for having performed acts detrimental to the Company or any of its
affiliated corporations, then regardless of any other provision in the Pension
Plan or the Supplemental Plan, no benefit shall be payable to or on account of
any such Participant's coverage under this Supplemental Plan. Notwithstanding
the preceding, following a Change of Control, the Plan Administrator shall not
implement such action without the consent of the Benefits Trust Committee.
4. The establishment of the Supplemental 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 an employing corporation 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 Supplemental Plan.
Section VIII - NON-ALIENATION OF BENEFITS
To the extent permitted by applicable law, no benefit under the
Supplemental Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt so
to do shall be void, except as specifically provided in the Supplemental Plan,
nor shall any benefit be in any manner liable for or subject to the debts,
contracts, liabilities, engagements, or torts of the person entitled to such
benefits; and in the event that the Plan Administrator shall find that any
active or retired Participant, surviving spouse or surviving designated
beneficiary under the Supplemental 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 Supplemental Plan, expect as
specifically provided in the Supplemental Plan, then such benefits shall cease,
and in that event, the Plan Administrator shall hold or apply the same to or for
the benefit of such active or retired Participant, surviving spouse or surviving
designated beneficiary, in such manner as the Plan Administrator may deem
proper. 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 IX - AMENDMENTS
The Supplemental Plan represents a contractual obligation entered into
by a participating employer in consideration of services rendered and to be
rendered by Participants covered under the Supplemental Plan, and
1. Any Participant in this Supplemental Plan who remains in the active
service of a participating employer shall not be deprived of his or her
participation or benefit which shall accrue under the Supplemental Plan except
as provided hereunder.
2. No modification or amendment may be made which shall deprive any
Participant, the surviving spouse of a Participant or the surviving designated
beneficiary of a Participant, without the consent of such Participant, surviving
spouse of a Participant or the surviving designated beneficiary of a
Participant, of any Supplemental Benefit under the Supplemental Plan to which he
or she would otherwise be entitled by reason of the Supplemental Benefit
standing to his or her credit to the date of such modification or amendment, and
in the event of any modification or amendment which adversely affects such
Supplemental Benefit, the amount of all reserves required to be accrued on the
books of a participating employer shall thereupon be determined and accrued, if
the same has not already been done, and such Supplemental Benefit shall become
and remain a fixed liability of the participating employers for the payment of
such benefits accrued to the date of such modification or amendments.
3. Subject to the foregoing, prior to a Change of Control, the Board of
Directors of the Company on the recommendation of the Compensation Committee,
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 Supplemental Plan. Following a Change of Control,
all amendments to this Supplemental Plan are subject to the approval of the
Benefits Trust Committee.
Section X - CHANGE OF CONTROL
1. If a Change of Control has occurred, the Company and its
participating affiliates shall contribute to the Benefits Assurance 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 the 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 Benefits Assurance Trust. The
aggregate value of the amount of the lump sum to be contributed
to the Benefits Assurance Trust pursuant to this Section X
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
Benefits Assurance Trust relating to this Supplemental
Plan does not equal the amount described in the preceding
sentence, (and the value of other liabilities held in the
applicable segregated account of the Benefits Assurance
Trust), at the time of the valuation, the Company shall
make a lump sum contribution to the Benefits Assurance
Trust equal to the difference.
(c) the amount determined under Section 1(h) of the Benefits
Assurance Trust attributable to liabilities relating to this
Supplemental 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 supplemental benefit each
Participant (or any beneficiary of a Participant) has accrued as of the
Valuation Date preceding the date of such Change of Control. 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 of
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 Supplemental 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, (or, after a Change of
Control, the Benefits Trust 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 Supplemental 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 Supplemental 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 Benefits Trust 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 or the applicable
participating employer by the Participant. Furthermore, as a result of such
election, the Participant shall no longer be eligible to participate or
otherwise benefit under the Supplemental Plan. Payments under this subsection
(4) shall be made not later than 7 days following receipt by the Benefits Trust
Committee of the Participant's election. The Benefits Trust 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 Section X, a 'Change of Control' shall mean:
(a) Stock Acquisition. The acquisition by any individual, entity
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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, however, that for purposes of this
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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
X(5); or
(b) Board Composition. Individuals who, as of the date hereof,
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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
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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 individuals whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than
the Board of Directors; or
(c) Business Combination. Approval by the shareholders of the Company
of a reorganization, merger or 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 X(5); or
(e) Liquidation or Dissolution. Approval by the shareholders of
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the Company of a complete liquidation or dissolution of the
Company or its principal subsidiary.
6. For purposes of this Section X, 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 Participants' benefits under this
Supplemental Plan. Following a Change of Control, the selection of a date other
than the last day of the calendar year is subject to the approval of the
Benefits Trust Committee.
Section XI - CONSTRUCTION
The Supplemental Plan and the rights and obligations of the parties
hereunder shall be construed in accordance with the laws of the Commonwealth of
Virginia.
Section XII - EFFECTIVE DATE
The Effective Date of this Supplemental Benefit Plan shall be January 1,
1989.
Supplemental Retirement Benefit Plan - CSX Corp.
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