SUPPLEMENTARY SAVINGS AND INCENTIVE AWARD DEFERRAL PLAN
FOR ELIGIBLE EXECUTIVES OF
CSX CORPORATION AND AFFILIATED COMPANIES
As Amended and Restated January 1, 1995
(As Amended through December 9, 1998)
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS..................................................... 1
1.1 Account...................................................... 1
1.2 Administrator................................................ 1
1.3 Affiliated Company........................................... 1
1.4 Award........................................................ 1
1.5 Award Deferral Agreement..................................... 1
1.6 Benefits Trust Committee..................................... 2
1.7 Board of Directors........................................... 2
1.8 Change of Control............................................ 2
1.9 Code......................................................... 3
1.10 Committee.................................................... 3
1.11 Compensation................................................. 3
1.12 Corporation.................................................. 3
1.13 Deferral Agreement........................................... 3
1.14 Distribution Option(s)....................................... 4
1.15 Divisive Transaction......................................... 4
1.16 Effective Date............................................... 4
1.17 Eligible Executive........................................... 4
1.18 Independent Accountant....................................... 4
1.19 Matching Credits............................................. 4
1.20 Member....................................................... 4
1.21 MICP......................................................... 4
1.22 Participating Company........................................ 4
1.23 Plan......................................................... 5
1.24 Salary Deferrals............................................. 5
1.25 Salary Deferral Agreement.................................... 5
1.26 Salary Deferral Percentage................................... 5
1.27 SMICP........................................................ 5
1.28 Subsidiary................................................... 5
1.29 Tax Savings Thrift Plan...................................... 5
1.30 Trust........................................................ 5
1.31 Valuation Date............................................... 5
ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS.............................. 5
2.1 In General................................................... 5
2.2 Modification of Initial Deferral Agreement................... 6
2.3 Termination of Membership; Re-employment..................... 6
2.4 Change in Status............................................. 7
2.5 Membership Following a Change in Control..................... 7
ARTICLE 3. AWARD DEFERRAL PROGRAM.......................................... 7
3.1 Filing Requirements.......................................... 7
3.2 Amount of Deferral........................................... 8
3.3 Crediting to Account......................................... 8
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ARTICLE 4. SALARY DEFERRAL PROGRAM......................................... 9
4.1 Filing Requirements.......................................... 9
4.2 Salary Deferral Agreement.................................... 9
4.3 Amount of Salary Deferrals................................... 9
4.4 Changing Salary Deferrals.................................... 10
4.5 Certain Additional Credits................................... 10
ARTICLE 5. MAINTENANCE OF ACCOUNTS......................................... 11
5.1 Adjustment of Account........................................ 11
5.2 Investment Performance Elections............................. 12
5.3 Changing Investment Elections................................ 12
5.4 Vesting of Account........................................... 12
5.5 Individual Accounts.......................................... 13
5.6 Action Following a Change of Control..........................13
ARTICLE 6. PAYMENT OF BENEFITS............................................. 13
6.1 Commencement of Payment...................................... 13
6.2 Method of Payment............................................ 15
6.3 Applicability................................................ 16
6.4 Hardship Withdrawal.......................................... 16
6.5 Designation of Beneficiary................................... 16
6.6 Special Distribution Rules................................... 17
6.7 Status of Account Pending Distribution....................... 17
6.8 Installments and Withdrawals Pro-Rata........................ 17
6.9 Change of Control............................................ 18
ARTICLE 7. AMENDMENT OR TERMINATION........................................ 19
7.1 Right to Terminate........................................... 19
7.2 Right to Amend............................................... 19
7.3 Uniform Action............................................... 20
ARTICLE 8. GENERAL PROVISIONS.............................................. 20
8.1 No Funding................................................... 20
8.2 Obligation....................................................20
8.3 No Contract of Employment.................................... 20
8.4 Withholding Taxes............................................ 20
8.5 Nonalienation................................................ 20
8.6 Administration............................................... 20
8.7 Construction................................................. 21
ARTICLE 9. POST-SECONDARY EDUCATION SUB-ACCOUNTS........................... 21
9.1 Post-Secondary Education Sub-accounts........................ 21
9.2 Distribution of Post-Secondary Education Sub-accounts........ 22
9.3 Construction................................................. 23
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INTRODUCTION
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This Supplementary Savings and Incentive Award Deferral Plan for
Eligible Executives of CSX Corporation and Affiliated Companies (the "Plan") was
adopted October 1, 1987 and has been subsequently amended from time to time.
This restatement of the Plan is effective January 1, 1995. This Plan is
generally intended to provide certain executives eligible to participate in the
Tax Savings Thrift Plan for Employees of CSX Corporation and Affiliated
Companies (the "Savings Plan") with an opportunity to defer a portion of their
salary, and/or award(s) under the Management Incentive Compensation Program
("MICP") and/or the Senior Management Incentive Compensation Program ("SMICP")
until their retirement or other termination of employment and to restore
employer matching contributions lost under the Savings Plan because of the
application of Sections 401(a)(17), 401(k), 401(m) and 415 of the Internal
Revenue Code of 1986, as amended. Commencing with respect to MICP awards paid
and salary earned after 1990, eligible executives may, if they so elect,
designate all or a portion of such deferrals to be used for payment of education
expenses for one or more members of their families. The Plan is unfunded and is
maintained by CSX Corporation and Affiliated Companies primarily for the purpose
of providing deferred compensation for a select group of management or
highly-compensated employees. The Plan as restated effective January 1, 1995
(and amended through December 31, 1997) reads as hereinafter set forth.
ARTICLE I. DEFINITIONS
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1.1 "Account" means the bookkeeping account maintained for each Member
to record his Salary Deferrals, Matching Credits and the amount of Awards he has
elected to defer, as adjusted pursuant to Article 5. The Account shall consist
of the "Education Sub-accounts", if any, established pursuant to Article 9 and
all amounts not in those accounts shall be allocated to one or more "Retirement
Sub-accounts". The Administrator may establish a maximum number of "Retirement
Sub-accounts" which a Member may have at any time. In addition to any Retirement
Sub-accounts established by the Administrator, an additional Retirement
Sub-account known as the Cash Plan Retirement Sub-account shall be established
for deferrals of payments from the CSX Market Value Cash Plan. The Administrator
also may establish such other sub-accounts within a Member's Account as it deems
necessary to implement the provisions of the Plan.
1.2 "Administrator" means the Corporation. The duties of the
Administrator shall be performed by a person or persons designated by the Chief
Executive Officer of the Corporation to perform such duties.
1.3 "Affiliated Company" means the Corporation and any company or
corporation directly or indirectly controlled by the Corporation.
1.4 "Award" means for any year (i) the amount awarded to an employee of
an Affiliated Company for that year (including any special incentive award) and,
in the absence of an Award Deferral Agreement with respect to such amount,
payable in the succeeding year under the MICP and/or SMICP or other incentive
award otherwise payable in cash as determined by the Committee; and (ii) the
amount paid from the CSX Market Value Cash Plan with respect to such year and,
in the absence of an Award Deferral Agreement with respect to such amount and
with respect to such year, payable in cash under the CSX Market Value Cash Plan.
1.5 "Award Deferral Agreement" means a Deferral Agreement filed in
accordance with the award deferral program described in Article 3.
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1.6 "Benefits Trust Committee" means the committee created pursuant to
the CSX Corporation and Affiliated Companies Benefits Assurance Trust Agreement.
1.7 "Board of Directors" or "Board" means the Board of Directors of the
Corporation.
1.8 "Change of Control" means any of the following:
(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 Corporation (the
"Outstanding Corporation Common Stock"), or (ii) the combined voting
power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
"Outstanding Corporation 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 Corporation; (ii) any acquisition by the Corporation; (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the
Corporation; 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 1.8; 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 director subsequent to
the date hereof whose election or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors;
or
(c) Business Combination. Approval by the shareholders of the
---------------------
Corporation of a reorganization, merger, consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation
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 Corporation
Common Stock and Outstanding Corporation 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 Corporation or its
principal subsidiary or all or substantially all
of the assets of the Corporation or its
principal subsidiary either directly or
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through one or more subsidiaries) in substantially
the same proportions as their ownership,
immediately prior to such Business Combination
of the Outstanding Corporation Common Stock and
Outstanding Corporation 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 Corporation
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
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of the Corporation 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 1.8; or
(e) Liquidation or Dissolution. Approval by the shareholders of
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the Corporation of a complete liquidation or dissolution of the
Corporation or its principal subsidiary.
1.9 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
1.10 "Committee" means the Compensation Committee of the Board of
Directors of CSX Corporation.
1.11 "Compensation" means the "Base Compensation" of an Eligible
Executive as defined in the Tax Savings Thrift Plan, determined prior to: (a)
any Salary Deferrals under Article 4; and (b) any limit on compensation imposed
by Section 401(a)(17) of the Code.
1.12 "Corporation" means CSX Corporation, a Virginia corporation, and
any successor thereto by merger, purchase or otherwise.
1.13 "Deferral Agreement" means either an Award Deferral Agreement or a
Salary Deferral Agreement, or both if the context so requires. A Deferral
Agreement shall be a completed agreement between an Eligible Executive and a
Participating Company of which he is an employee under which the Eligible
Executive agrees to defer an Award or make Salary Deferrals under the Plan, as
the case may be. The Deferral Agreement shall be on a form prescribed by the
Administrator and shall include any amendments, attachments or appendices.
1.14 "Distribution Option(s)" means, with respect to each sub-account
under the Plan, the election by the Member of (i) the event triggering the
commencement of distribution, and (ii) the form of payment. Distribution Option
elections are made on the initial Deferral Agreement with respect to any
sub-account.
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1.15 "Divisive Transaction" means a transaction in which the Eligible
Executive's employer ceases to be a Subsidiary or there is a sale of
substantially all of the assets of the Subsidiary.
1.16 "Effective Date" means October 1, 1987 or with respect to the
Eligible Executives of a company which adopts the Plan, it means the date such
company becomes a Participating Company.
1.17 "Eligible Executive" means an employee of a Participating Company,
provided that:
(a) prior to January 1, 1995, for purposes of the award deferral
described in Article 3, such employee is employed by a Participating
Company in salary grades 21 through 40 inclusive, as of December 30 of
the calendar year in question; or
(b) on and after January 1, 1995, for purposes of the award
deferral program described in Article 3, such employee: (i) is employed
by a Participating Company and is receiving Compensation of one hundred
thousand dollars ($100,000) or more per year; or (ii) retired from the
Participating Companies or terminated employment with the Participating
Companies on account of disability, as determined by the Administrator,
and was receiving Compensation of one hundred thousand dollars
($100,000) or more per year at the time of such retirement or
termination; or
(c) prior to January 1, 1995, for purposes of the salary deferral
program described in Article 4, such employee is eligible for membership
in the Tax Savings Thrift Plan and is employed in salary grades 21
through 40 inclusive; or
(d) on and after January 1, 1995 for purposes of the salary
deferral program described in Article 4, such employee is eligible for
membership in the Tax Savings Thrift Plan and is receiving Compensation
of one hundred thousand dollars ($100,000) or more per year; or
(e) the Chief Executive Officer of the Corporation or his
designee may designate any other employee or former employee of an
Affiliated Company as an Eligible Executive; provided, however, only
those employees or former employees considered to be a select group of
management or highly compensated may be designated as Eligible
Executives under this Plan. Notwithstanding the preceding, following a
Change of Control, such designations are subject to the approval of the
Benefits Trust Committee.
1.18 "Independent Accountant" means the independent accountants engaged
by the Corporation and, if selected or changed following a Change of Control,
approved by the Benefits Trust Committee.
1.19 "Matching Credits" means amounts credited to the Account of a
Member pursuant to Section 4.5.
1.20 "Member" means, except as otherwise provided in Article 2, each
Eligible Executive who has executed an initial Deferral Agreement as described
in Section 2.1.
1.21 "MICP" means the Participating Companies' Management Incentive
Compensation Program.
1.22 "Participating Company" means the Corporation and any company or
corporation directly or indirectly controlled by the Corporation, which the
Committee designates as eligible to participate in the Plan in accordance with
Section 8.6(e).
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1.23 "Plan" means this Supplementary Savings and Incentive Award
Deferral Plan for Eligible Executives of CSX Corporation and Affiliated
Companies, as amended from time to time.
1.24 "Salary Deferrals" means the amounts credited to a Member's Account
under Section 4.3.
1.25 "Salary Deferral Agreement" means a Deferral Agreement filed in
accordance with the salary deferral program described in Article 4.
1.26 "Salary Deferral Percentage" means a percentage of an Eligible
Executive's Base Compensation elected in a Salary Deferral Agreement, pursuant
to Section 4.1 hereof, and shall be an integral percentage not in excess of
fifty (50%) percent.
1.27 "SMICP" means the Participating Companies' Senior Management
Incentive Compensation Program.
1.28 "Subsidiary" means a corporation more than 50% of the voting shares
of which are owned directly or indirectly by the Corporation.
1.29 "Tax Savings Thrift Plan" means the Tax Savings Thrift Plan for
Employees of CSX Corporation and Affiliated Companies, as amended from time to
time.
1.30 "Trust" means the CSX Corporation and Affiliated Companies Benefits
Assurance Trust.
1.31 "Valuation Date" means the last business day of each calendar month
following the Effective Date.
ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS
---------------------------------------------
2.1 In General:
(a) An Eligible Executive shall become a Member as of the date he
files his initial Deferral Agreement with the Administrator. However,
such Deferral Agreement shall be effective for purposes of deferring an
Award or making Salary Deferrals only as provided in Articles 3 and 4.
(b) A Deferral Agreement shall be in writing and properly
completed upon a form approved by the Administrator, which shall be the
sole judge of the proper completion thereof. Except as provided in
Section 4.1(d), such Agreement shall provide for the deferral of an
Award or for Salary Deferrals, shall specify the Distribution Options,
and may include such other provisions as the Administrator deems
appropriate. A Deferral Agreement shall not be revoked or modified with
respect to the allocation of prior deferrals except pursuant to the
establishment of an Education Sub-account as provided in Article 9.
Distribution Options elected may not be modified or revoked except as
provided in Section 6.1 or 6.2.
(c) As a condition of membership, the Administrator may require
such other information as it deems appropriate.
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2.2 Modification of Initial Deferral Agreement:
(a) A Member may elect to change, modify or revoke a Deferral
Agreement as follows:
(i) A Member may change the amount of Award he elects
to defer on an Award Deferral Agreement prior to
the Agreement's effective date as provided in
Article 3.
(ii) A Member may change the rate of his Salary
Deferrals, or suspend his Salary Deferrals on
account of severe financial hardship, as provided
in Article 4.
(iii) A Member may change the event entitling him to
distribution, as designated on his election of
Distribution Options, as provided in Section
6.1(c)(i).
(iv) A Member may change the event entitling him to
distribution as designated on his election of
Distribution Options, subject to the five percent
(5%) penalty described in Section 6.1(c)(ii).
(v) A Member may change the form of payment, as
designated on his election of Distribution Options,
as provided in Section 6.2(c)(i).
(vi) A Member may change the form of payment as
designated on his election of Distribution Options,
subject to the five percent (5%) penalty described
in Section 6.2(c)(ii).
(b) Notwithstanding any provision in Section 2.2(a) to the
contrary, the establishment of an Education Sub-account with respect to
future Salary Deferrals and Awards as provided in Article 9 shall not be
deemed a change for the purposes of Section 2.2(a).
2.3 Termination of Membership; Re-employment:
(a) Membership shall cease, subject to Section 2.4, upon a
Member's termination of employment; provided that if a former Eligible
Executive is receiving severance payments under a Participating
Company's severance pay program or is eligible to defer an Award under
Article 3, he shall not be deemed to have terminated employment until
the later of the date the severance payments cease or the date the Award
would have been paid. Membership shall be continued during a leave of
absence approved by the Participating Companies.
(b) Upon re-employment as an Eligible Executive, a former Member
may become a Member again as follows:
(i) in the case of a former Member who prior to
re-employment received the balance in his Account,
by executing a Deferral Agreement under Section 2.1
as though for all purposes of the Plan the
Affiliated Companies had never employed the former
Member;
(ii) in the case of a former Member who prior to
re-employment did not receive the balance in his
Account, by executing a Deferral Agreement
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under Section 2.1; provided his Distribution
Options and beneficiary designation shall remain in
effect.
(c) If a former Member is reemployed as an Eligible Executive and
becomes a Member again pursuant to (b)(ii): (i) upon notice to the
Administrator by the Participant, distributions from a Retirement
Sub-account shall cease if the commencement of distribution was because
of the Member's termination of employment (including retirement); (ii)
distributions from a Retirement Sub-account shall continue if the
commencement of distribution was because the Member chose a specific age
for the commencement of benefits and that age has been attained. Except
for distributions which must continue pursuant to (c)(ii), a reemployed
Member may change Distribution Option elections with respect to his
Retirement Sub-accounts without penalty so long as such change does not
accelerate the timing of any payment to the Member.
: 2.4 Change in Status
(a) In the event that a Member ceases to be an Eligible Executive
with respect to Salary Deferrals but continues to be employed by an
Affiliated Company, his Salary Deferrals and Matching Credits shall
thereupon be suspended until such time as he shall once again become an
Eligible Executive. All other provisions of his Salary Deferral
Agreement shall remain in force and he shall continue to be a Member of
the Plan.
(b) In the event that a Member ceases to be an Eligible Executive
with respect to the deferral of Awards hereunder but continues to be
employed by an Affiliated Company, he shall continue to be a Member of
the Plan but shall not be eligible to defer any portion of any future
Awards until such time as he shall once again become an Eligible
Executive.
2.5 Membership Following a Change of Control: Following a Change of
Control, any membership determinations or discretionary actions pursuant to this
Article 2 shall be subject to the approval of the Benefits Trust Committee.
ARTICLE 3. AWARD DEFERRAL PROGRAM
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3.1 Filing Requirements:
(a) With respect to an Award identified in Section 1.4(i), at
such time as the Administrator may prescribe prior to the close of
business on December 30 in any calendar year, an Eligible Executive may
elect to defer all or a portion of his Award, if any, for that year.
Such Award is determined and paid in the following calendar year. Such
election shall be made by filing an Award Deferral Agreement with the
Administrator on or before the close of business on December 30 of the
calendar year for which the Award is made. In the event that December 30
does not fall on a weekday, such filing must be made by the close of
business on the last prior business day.
(b) With respect to an Award identified in Section 1.4(i),
notwithstanding Section 3.1(a), an individual who becomes an Eligible
Executive after the calendar year for which an Award is made, but prior
to the first day of the month in which such Award is determined
including required action by the Board, may elect to defer all or a
portion of that Award in accordance with this Section 3.1(b). Such
election shall be made by filing an Award Deferral Agreement during the
30 day or shorter period beginning on the date the individual becomes an
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Eligible Executive and ending no later than the last day of the month
preceding the month in which the Award is determined.
(c) With respect to an Award identified in Section 1.4(i), an
Eligible Executive's election to defer all or a portion of his Award
shall be effective on the last day that such deferral may be elected
under Section 3.1(a) or 3.1(b) and shall be effective only for the Award
in question. An Eligible Executive may revoke or change his election to
defer all or a portion of his Award at any time prior to the date the
election becomes effective, as described in the preceding sentence. Any
such revocation or change shall be made in a form and manner determined
by the Administrator.
(d) With respect to an Award identified in Section 1.4(ii), at
such time and in accordance with such rules as the Administrator may
prescribe prior to the close of business on December 30 in any calendar
year, an Eligible Executive may elect to defer all or a portion of any
such Award. Awards identified in Section 1.4(ii) may not be deferred
into Education Sub-accounts.
(e) An Eligible Executive shall not be entitled to defer an Award
on or after attaining the age, if any, which he has designated under
Section 6.1(c) or 6.1(d) for the purpose of commencing distribution of
his Account (or, if applicable, his Retirement Sub-account). In the
event a Member establishes an Education Sub-account pursuant to Article
9, he shall not be entitled to defer all or any portion of an Award into
such a Sub-account after attaining the age which he has designated for
the purpose of commencing distribution from that Sub-account.
(f) An Eligible Executive shall not be entitled to defer an Award
if he is eligible to defer his award under another nonqualified program
of deferred compensation maintained by an Affiliated Company.
3.2 Amount of Deferral:
(a) With respect to an Award identified in Section 1.4(i), prior
to a Change of Control, in its sole discretion, the Committee may
establish such maximum limit on the amount of Award an Eligible
Executive may defer for a calendar year as the Committee deems
appropriate. Such maximum limit shall appear on the Eligible Executive's
Award Deferral Agreement for the year. Following a Change of Control,
the Committee's decision is subject to the final approval of the
Benefits Trust Committee.
(b) With respect to an Award identified in Section 1.4(i), the
minimum amount which an Eligible Executive may defer in any year shall
be the lesser of $5,000 or the maximum amount determined under Section
3.2(a) above. If an Eligible Executive elects to defer less than this
amount, his election shall not be effective.
(c) With respect to an Award identified in Section 1.4(ii), there
shall be no minimum nor maximum amount of deferral allowed.
3.3 Crediting to Account:
(a) The amount of Award which an Eligible Executive has elected
to defer for a calendar year shall be credited to his Account as of the
Valuation Date coincident with or next following the date the Award
would have been paid to the Eligible Executive.
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(b) An additional credit shall be made to the Account as of the
Valuation Date described in Section 3.3(a) above, determined as if the
amount of Award deferred had earned the same rate of return as the CSX
Cash Pool Earnings Rate from the date the Award would have been paid
until the Valuation Date it is credited to the Eligible Executive's
Account. In lieu of the CSX Corporation Cash Pool Earnings Rate, the
Committee may designate, prior to a Change of Control, from time to
time, such other indices of investment performance or investment funds
as the measure of investment performance under this Section 3.3(b).
Following a Change of Control, the Committee's decision is subject to
final approval of the Benefits Trust Committee.
ARTICLE 4. SALARY DEFERRAL PROGRAM
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4.1 Filing Requirements:
(a) An individual who is an Eligible Executive immediately prior
to the Effective Date may file a Salary Deferral Agreement with the
Administrator, within such period prior to the Effective Date and in
such manner as the Administrator may prescribe.
(b) An individual who becomes an Eligible Executive on or after
the Effective Date may file a Salary Deferral Agreement with the
Administrator during the calendar month he becomes an Eligible
Executive, in such manner as the Administrator may prescribe.
(c) An Eligible Executive who fails to file a Salary Deferral
Agreement with the Administrator as provided in Sections 4.1(a) and
4.1(b) may file a Salary Deferral Agreement in any subsequent month of
December.
(d) An Eligible Executive who has not otherwise filed a Deferral
Agreement shall file a Salary Deferral Agreement under Sections 4.1(a)
or 4.1(b), whichever applies, in order to receive the Matching Credits
described in Section 4.5, provided that such agreement need not provide
for Salary Deferrals.
4.2 Salary Deferral Agreement: An Eligible Executive's Salary Deferral
Agreement shall authorize a reduction in his base pay with respect to his Salary
Deferrals under the Plan. The Agreement shall be effective for payroll periods
beginning on or after the later of: (a) the Effective Date; or (b) the first day
of the month following the date the Salary Deferral Agreement is filed with the
Administrator in accordance with Section 4.1. Paychecks applicable to said
payroll periods shall be reduced accordingly.
4.3 Amount of Salary Deferrals:
(a) On each Valuation Date following the effective date of an
Eligible Executive's Salary Deferral Agreement, his Sub-accounts shall
be credited with an amount of Salary Deferral, if any, for the payroll
period ending thereon, as he elects in his Salary Deferral Agreement.
Such Salary Deferral for any payroll period shall be determined as the
sum of his Basic Salary Deferral for such payroll period determined
under subparagraph (i) and his Additional Salary Deferral for such
month, determined under subparagraph (ii) as follows:
(i) An Eligible Executive's Basic Salary Deferral shall
be determined by multiplying his Compensation for a
payroll period by the excess of his
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Salary Deferral Percentage over the percentage
determined in subparagraph (ii) below
(ii) An Eligible Executive's Additional Salary Deferral
shall be determined by multiplying his Compensation
for a payroll period by a percentage determined as
(A) the excess of his Salary Deferral Percentage
over 15%, divided by (B) .85.
provided, however, that no Basic Salary Deferral shall be made under
this Plan for any payroll period unless the Eligible Executive is
prevented from making elective deferrals under the Tax Savings Thrift
Plan for such payroll period as a result of Section 402(g) and/or
401(k)(3) of the Code, and provided further that, for the payroll period
in which such Basic Salary Deferral is first made, it shall be limited
to the excess of the amount otherwise determined for such payroll period
under Section 4.3(a)(i) over the Eligible Executive's elective deferrals
under the Tax Savings Thrift Plan for such payroll period. If
applicable, Additional Salary Deferrals shall be made for each payroll
period of the year to which the Salary Deferral Agreement applies,
without regard to whether the Eligible Executive makes elective
deferrals under the Tax Savings Thrift Plan and without regard to any
Basic Salary Deferrals under this Plan.
(b) An Eligible Executive shall not be entitled to make Salary
Deferrals on or after attaining the age, if any, which he has designated
under Section 6.1(c) or 6.1(d) for the purpose of commencing
distribution of his Account (or, if applicable, his Retirement
Sub-account). In the event a Member establishes an Education Sub-account
pursuant to Article 9, he shall not be entitled to make Salary Deferrals
into such Sub-account after attaining the age which he has designated
for the purpose of commencing distribution from that Sub-account.
4.4 Changing Salary Deferrals:
(a) An Eligible Executive's election on his Salary Deferral
Agreement of the rate at which he authorizes Salary Deferrals under the
Plan shall remain in effect in subsequent calendar years unless he files
with the Administrator an amendment to his Salary Deferral Agreement
modifying or revoking such election. The amendment shall be filed by
December 30 and shall be effective for payroll periods beginning on or
after the following January 1.
(b) Notwithstanding Section 4.4(a), an Eligible Executive may, in
the event of a severe financial hardship, request a suspension of his
Salary Deferrals under the Plan. The request shall be made at a time and
in a manner determined by the Administrator, and shall be effective as
of such date as the Administrator prescribes. The Administrator shall
apply standards, to the extent applicable, identical to those described
in Section 6.3 in making its determination. The Eligible Executive may
apply to the Administrator to resume his Salary Deferrals with respect
to payroll periods beginning on or after the January 1 following the
date of suspension, at a time and in a manner determined by the
Administrator; provided, that the Administrator shall approve such
resumption only if the Administrator determines that the Eligible
Executive is no longer incurring such hardship. Notwithstanding the
preceding, following a Change of Control, such action by the
Administrator is subject to approval by the Benefits Trust Committee.
4.5 Certain Additional Credits:
On each Valuation Date, there shall be credited Matching Credits to the
Retirement Sub-account(s) of an Eligible Executive determined as follows:
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(a) For payroll periods prior to the inception of Basic Salary
Deferrals hereunder, the greater of (b)(i) or (ii)
(b) For payroll periods during which Basic Salary Deferrals are
effective, the greater of (i) or (iii), minus (iv), where
(i) is the employer matching contributions the Eligible
Executive would have received under the Tax Savings
Thrift Plan if the provisions of Sections
401(k)(3), 401(m)(9) and 415 of the Code had not
applied to the Tax Savings Thrift Plan; and
(ii) is an amount determined as 3% of the Eligible
Executive's additional Salary Deferrals; and
(iii) is the employer matching contributions the Eligible
Executive would have received under the Tax Savings
Thrift Plan if his deferrals under this Plan had
been contributed to the Tax Savings Thrift Plan
(in addition to those amounts actually contributed
to that Plan), based on "Compensation" as defined
in this Plan and as if the provisions of Sections
401(a)(17), 401(k)(3), 401(m)(2), 401(m)(9) and
415 of the Code had not applied to the Tax Savings
Thrift Plan; and
(iv) is the employer matching contributions made on his
behalf for the applicable period to the Tax Savings
Thrift Plan.
No Matching Credits shall be credited to a Member's Education
Sub-account.
ARTICLE 5. MAINTENANCE OF ACCOUNTS
----------------------------------
5.1 Adjustment of Account:
(a) As of each Valuation Date each Account (and, if applicable,
each Sub-account) shall be credited or debited with the amount of
earnings or losses with which such Sub-account would have been credited
or debited, assuming it had been invested in one or more investment
funds, or earned the rate of return of one or more indices of investment
performance, designated by the Administrator and, if applicable, elected
by the Member or former Member, for purposes of measuring the investment
performance of his Sub-accounts.
(b) The Administrator shall designate at least one investment
fund or index of investment performance and may designate other
investment funds or investment indices to be used to measure the
investment performance of Accounts. The designation of any such
investment funds or indices shall not require the Affiliated Companies
to invest or earmark their general assets in any specific manner. The
Administrator may change the designation of investment funds or indices
from time to time, in its sole discretion, and any such change shall not
be deemed to be an amendment affecting Members' or former Members'
rights under Section 7.2.
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(c) For purposes of Section 5.1(a), the portion of a Member's
Retirement Sub-accounts attributable to Matching Credits shall be
credited or debited with earnings or losses based upon the performance
of "Fund E" (CSX Stock Fund) under the Tax Savings Thrift Plan.
(d) As of February 1, 1989, there shall be credited to the
Account of each Eligible Executive who participated in the Supplemental
Benefit Plan of Sea-Land Corporation and Affiliated Companies the amount
of deferred compensation under that plan as of January 31, 1989
attributable to amounts credited under that plan for the purpose of
restoring contributions to a defined contribution plan which were
limited by Section 415 of the Code. Such amounts shall be treated as
Salary Deferrals under the Plan, and unless transferred pursuant to
Section 5.3(a), shall earn the same rate of return as the CSX Cash Pool
Earnings Rate.
5.2 Investment Performance Elections:
(a) In the event the Administrator designates more than one
investment fund or index of investment performance under Section 5.1,
each Member and, if applicable, former Member, shall file an initial
investment election with the Administrator with respect to the
investment of his Salary Deferrals within such time period and on such
form as the Administrator may prescribe. The election shall designate
the investment fund or funds or index or indices of investment
performance which shall be used to measure the investment performance of
the Member's Salary Deferrals. The election shall be effective as of the
beginning of the payroll period next following the date the election is
filed. The election shall be in increments of 1%.
(b) In the event the Administrator designates more than one
investment fund or index under Section 5.1, each Member shall file an
initial investment election each calendar year in which he defers an
Award with respect to the amount deferred. The election shall be made
within such time period and on such form as the Administrator prescribes
and shall be in increments of 1% of the amount deferred. The election
shall be effective on the Valuation Date on which the amount determined
is credited to the Member's Account.
(c) A Member may not elect separate investment funds or indices
of investment performance with respect to each Sub-account.
5.3 Changing Investment Elections:
(a) A Member may change his election in Section 5.2(a) with
respect to his future Salary Deferrals, no more than once each calendar
quarter, by filing an appropriate written notice with the Administrator.
The notice shall be effective as of the beginning of the first payroll
period following the date the notice is filed with the Administrator.
(b) A Member or, if applicable, former Member may reallocate the
current balance of his Retirement and/or Education Sub-accounts, thereby
changing the investment fund or funds or index or indices of investment
performance used to measure the future investment performance of his
existing Account balance, by filing an appropriate written notice with
the Administrator. Each Retirement or Education Sub-account may be
reallocated separately. The election shall be effective as of the last
business day of the calendar quarter following the month in which the
notice is filed. No election under this Section 5.3(b) shall apply to
the portion of a Member's Account attributable to Matching Credits.
5.4 Vesting of Account: Each Member shall be fully vested in his
Account.
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5.5 Individual Accounts: The Administrator shall maintain, or cause to
be maintained, records showing the individual balances of each Account and each
Sub-account. At least once a year, each Member and, if applicable, former Member
shall be furnished with a statement setting forth the value of his Account and
his Sub-accounts.
5.6 Action Following a Change of Control: Following a Change of Control,
any action taken by the Administrator pursuant to this Article 5 is subject to
the approval of the Benefits Trust Committee.
ARTICLE 6. PAYMENT OF BENEFITS
------------------------------
6.1 Commencement of Payment:
(a) The distribution of the Member's or former Member's Account
shall commence, pursuant to Section 6.2, on or after the occurrence of
(i), (ii), (iii) or (iv) below, as designated by the Member as a
Distribution Option election:
(i) the Member's termination of employment with the
Affiliated Companies,
(ii) attainment of a designated age not earlier than age
59-1/2 (on or after January 1, 1995 age 50) nor
later than age 70-1/2,
(iii) the earlier of (i) or (ii) above, or
(iv) the later of (i) or (ii) above.
In the event a Member elects either (ii) or (iii) above, he may
not elect an age less than three years subsequent to his current age. If
a Member elects to defer an Award identified in Section 1.4(ii) (a
payment from the CSX Market Value Cash Plan), such deferral must extend
the commencement of distribution beyond December 31, 2004. A Member or
former Member shall not change his Distribution Option election of the
designation of the event which entitles him to distribution of his
Account, except as provided in Section 6.1(c) below; provided, however,
no change in Distribution Option election shall be allowed if it results
in changing the deferral of commencement of distribution of an Award
identified in Section 1.4(ii) to a time before January 1, 2005. For
purposes of this Plan and particularly this Section 6.1(a), if the
Member's employer is involved in a Divisive Transaction, the Member will
not be considered to have terminated his employment with an Affiliated
Company until his employment with his employer terminates.
(b) Effective January 1, 1995, a Member or former Member shall,
pursuant to Section 6.9, be eligible to make a Distribution Option
election of the designation of the event which entitles him to
distribution of his Account in the event of a Change of Control.
(c) A Member or former Member may change his Distribution Option
election of the designation of the events which entitle him to
distribution of his Account under Section 6.1(a) and Section 6.1(b), as
follows:
(i) A Member or former Member may make a request in
writing to the Administrator to defer the Member's
designated distribution event under
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Section 6.1(a). The requests must be filed with the
Administrator at least one year prior to when
distribution would commence based on the current
designation. The deferral requests must specify a
distribution event described in Section 6.1(a),
shall be subject to approval of the Administrator
and, if approved, shall be effective as of the date
that is one year after the request is filed with
the Administrator. If the Member's current
distribution event will occur upon his termination
of employment and the Member's employment
terminates within one year after the deferral
request is made, the deferral request shall not be
effective. A deferral request under this Section
6.1(c)(i) shall not result in a forfeiture of the
Member's or former Member's Account.
(ii) Notwithstanding Section 6.1(c)(i), a Member or
former Member may change his designated
distribution event under Section 6.1(a) or 6.1(b),
no more frequently than once in any calendar year,
by filing with the Administrator an amendment
to his Distribution Option election on or before
December 30 (or the last preceding business day
if December 30 is not a weekday). The change shall
be limited to those events entitling a Member to
a distribution that are described in Section
6.1(a), shall be subject to approval of the
Administrator and, if approved, shall be
effective as of the last Valuation Date of the
calendar year in which the change is filed.
Unless the election complies with the requirements
of Section 6.1(c)(i), or unless the provisions of
Section 6.1(e) apply, an election under this
Section 6.1(c)(ii) shall result in the forfeiture
of five percent (5%) of the Member's or former
Member's Account, determined as of the Valuation
Date upon which the election is effective. If the
Member or former Member changes the form in which
his Account is to be distributed under Section
6.2(c)(ii) at the same time as he changes his
designated distribution event under this Section
6.1(c)(ii), the combined forfeitures will be five
percent (5%) of the Member's or former Member's
Account, determined as of the Valuation Date
upon which the election is effective.
(d) Notwithstanding anything in this Section 6.1 or Article 9 to
the contrary, a Member's Account shall be distributed upon his death.
(e) A Member may not change the designation of the event which
entitles him to distribution of one or more Education Sub-accounts,
except that a Member may transfer the entire amount in any Education
Sub-account to one or more other Education Sub-accounts and one or more
of his Retirement Sub-accounts, or any combination thereof, subject to a
possible forfeiture of five percent (5%) of the Sub-account so
transferred, as provided in Article 9.
(f) Notwithstanding the foregoing, prior to a Change of Control,
the Corporation may delay payment of a benefit under this Plan to any
Member who is determined to be among the top five most highly paid
executives for the year the benefit under this Plan would otherwise be
paid; provided, however, if a Member's payment is delayed, the benefit
to which he is entitled will not decrease after the date it would
otherwise be distributed.
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(g) Notwithstanding the preceding, following a Change of Control,
the authority to delay payment of a Member's or former Member's Account
rests solely with the Benefits Trust Committee.
6.2 Method of Payment:
(a) A Member's or former Member's Retirement Sub-account(s) shall
be distributed to him, or in the event of his death to his Beneficiary,
in a cash single sum payment as soon as administratively practicable
following the January 1 coincident with or next following the date the
Member incurs the Distribution Option elected under Section 6.1 or his
date of death, as the case may be. Matching Credits earned in respect to
periods following the date of such distributable event shall be paid
directly to the Member in cash as soon as practical. Notwithstanding the
foregoing, a Member or former Member may make a Distribution Option
election to receive distribution of his Account in semi-annual
installments over a period not to exceed twenty (20) years. Installments
shall be determined as of each June 30 and December 31 and shall be paid
as soon as administratively practicable thereafter. Installments shall
commence as of the July 1 or January 1 coincident with or next following
the date the Member incurs the distributable event elected as a
Distribution Option under Section 6.1, or as soon as administratively
practicable thereafter. The amount of each installment shall equal the
balance in the Account as of the Valuation Date of determination,
divided by the number of remaining installments (including the
installment being determined). The Distribution Option election shall be
irrevocable except as provided in Section 6.2(c) below. If a Member or
former Member dies before payment of the entire balance of his Account,
the remaining balance shall be paid in a single sum to his Beneficiary
as soon as administratively practicable following the January 1
coincident with or next following his date of death.
(b) Effective January 1, 1995, a Member or former Member shall,
pursuant to Section 6.9, be eligible to make a separate Distribution
Option election of the form of payment of his Account in the event of a
Change of Control.
(c) Notwithstanding Section 6.2(a) and Section 6.2(b), a Member
or former Member may change the Distribution Option election of the form
in which his Account is distributed, as follows:
(i) A Member or former Member may make a one-time
request to the Administrator to change the form
in which his Account is to be distributed under
Section 6.2(a). A Member or former Member may
also make a one-time request to change the form
in which his Account is to be distributed under
Section 6.2(b). The request must be filed in
writing with the Administrator at least one year
prior to when distribution would commence based
on the current designation. The requests must
specify a form of distribution described in Section
6.2(a), shall be subject to approval of the
Administrator and, if approved, shall be effective
as of the date that is one year after the request
is filed with the Administrator. If the Member's
distribution event will occur upon his termination
of employment and the Member's employment
terminates within one year after the request is
filed, the request shall not be effective. A
request under this Section 6.2(c)(i) shall not
result in a forfeiture of the Member's or former
Member's Account.
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(ii) Notwithstanding Section 6.2(c)(i), a Member or
former Member may change the form in which his
Account is to be distributed under Section 6.2(a)
or 6.2(b), no more frequently than once in any
calendar year, by filing with the Administrator
an amendment to his Distribution Option election
on or before December 30 (or the last preceding
business day if December 30 is not a weekday). The
change shall be limited to those forms of
distribution described in Section 6.2(a), shall
be subject to approval of the Administrator and,
if approved, shall be effective as of the last
Valuation Date of the calendar year in which it
is filed. Unless the election complies with
the requirements for a one-time request under
Section 6.2(c)(i), or unless the provisions of
Section 6.2(d) apply, an election under this
Section 6.2(c)(ii) shall result in the forfeiture
of five percent (5%) of the Member's or former
Member's Account, determined as of the Valuation
Date upon which the election is effective. If the
Member or former Member changes his designated
distribution event under this Section 6.2(c)(ii) at
the same time as he changes the form in which his
Account is to be distributed under Section 6.1(c)
(ii), the combined forfeiture will be five percent
(5%) of the Member's or former Member's Account,
determined as of the Valuation Date upon which
the election is effective.
(d) In the event the Member's Account consists of one or more
Retirement Sub-accounts and one or more Education Sub-accounts, the
provisions of this Section 6.2 shall apply exclusively to the Member's
Retirement Sub-accounts. A Member may not change the form in which his
Education Sub-accounts are distributed, except that a Member may
transfer the entire amount in any Education Sub-account to one or more
other Education Sub-accounts and one or more Retirement Sub-accounts, or
any combination thereof, subject to a possible forfeiture of five
percent (5%) of the Sub-account so transferred, as provided in Article
9.
6.3 Applicability: In the event the Member's Account consists of one or
more Retirement Sub-accounts and one or more Education Sub-accounts, the
provisions of Sections 6.1(a) and 6.1(c) and 6.2 shall apply exclusively to the
Member's Retirement Sub-accounts.
6.4 Account Adjustment: The obligations of the Corporation or any of its
affiliated corporations and the benefits due any Member, former Member,
surviving spouse or beneficiary hereunder shall be reduced by any amount
received in regard thereto under the Benefits Assurance Trust or any similar
trust or other vehicle.
6.5 Hardship Withdrawal:
(a) While employed by the Participating Companies, a Member or
former Member may, in the event of a severe financial hardship, request
a withdrawal from his Account. The request shall be made in a time and
manner determined by the Administrator, shall not be for a greater
amount than the amount required to meet the financial hardship, and
shall be subject to approval by the Administrator.
(b) For purposes of this Section 6.5 financial hardship shall
include:
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(i) education of a dependent child where the Member
or former Member shows that without the
withdrawal under this Section the education
would be unavailable to the child;
(ii) illness of the Member or former Member or his
dependents, resulting in severe financial hardship
to the Member or former Member;
(iii) the loss of the Member's or former Member's home
or its contents, to the extent not reimbursable by
insurance or otherwise, if such loss results in a
severe financial hardship to the Member or former
Member;
(iv) any other extraordinary circumstances of
the Member or former Member approved by the
Administrator if such circumstances would result
in a present or impending critical financial need
which the Member or former Member is unable to
satisfy with funds reasonably available from other
sources.
(c) Notwithstanding the preceding, following a Change of Control,
any decisions or determinations by the Administrator under this Section
6.5 shall be subject to the approval of the Benefits Trust Committee.
6.6 Designation of Beneficiary: A Member or former Member may, at a time
and in a manner determined by the Administrator, designate a beneficiary and one
or more contingent beneficiaries (which may include the Member's or former
Member's estate) to receive any benefits which may be payable under this Plan
upon his death. If the Member or former Member do not designate a beneficiary or
contingent beneficiary, or if the beneficiary and the contingent beneficiaries
do not survive the Member or former Member, such benefits shall be paid to the
Member's or former Member's estate. A Member or former Member may revoke or
change any designation made under this Section 6.6 in a time and manner
determined by the Administrator.
6.7 Special Distribution Rules: Notwithstanding anything to the contrary
in this Plan, if (a) a Member or former Member becomes the owner, director or
employee of a competitor of the Affiliated Companies, (b) his employment is
terminated by an Affiliated Company on account of actions by the Member which
are detrimental to the interests of the Affiliated Company, or (c) he engages in
conduct subsequent to the termination of his employment with the Affiliated
Companies which the Administrator determines to be detrimental to the interests
of an Affiliated Company, then the Administrator may, in its sole discretion,
pay the Member or former Member a single sum payment equal to the balance in his
Account. The single sum payment shall be made as soon as practicable following
the date the Member or former Member becomes an owner, director or employee of a
competitor, his termination of employment or the Administrator's determination
of detrimental conduct, as the case may be, and shall be in lieu of all other
benefits which may be payable to the Member or former Member under this Plan.
6.8 Status of Account Pending Distribution: Pending distribution, a
former Member's Account (and, if applicable, a former Member's Sub-accounts)
shall continue to be credited with earnings and losses as provided in Section
5.1. The former Member shall be entitled to change his investment elections
under Section 5.3 or apply for Hardship withdrawals under Section 6.5 to the
same extent as if he were a Member of the Plan. In the event of the death of a
Member or former Member, his Sub-accounts shall be credited with earnings and
losses as if the Sub-accounts had earned the same rate of return as the CSX
Corporation Cash Pool Earnings Rate or, in the sole discretion of the
Administrator, the rate of return of such other index of investment performance
or investment fund which may be designated by the
-17-
Administrator as a measure for investment performance of Members' or former
Members' Accounts (and, if applicable, their Sub-accounts), commencing with the
Valuation Date coincident with or next following the Member's or former Member's
date of death.
6.9 Installments and Withdrawals Pro-Rata: In the event of an
installment payment or hardship withdrawal, such payment or withdrawal shall be
made on a pro-rata basis from the portions of the Member's or former Member's
existing Account balance which are subject to different measures of investment
performance. In the event of a hardship withdrawal, the withdrawal shall be made
on a pro-rata basis from all of the Member's or former Member's Sub-accounts.
6.10 Change of Control:
(a) If a Change of Control has occurred, the Corporation and
Participating Companies shall contribute to the Trust within 7 days of
such Change of Control, a lump sum payment equal to the greater of (i)
the aggregate value of the amount each Member or former Member would be
eligible to receive (determined under (b) below) as of the latest
Valuation Date coinciding with or preceding the date of Change of
Control or (ii) the amount determined under Section 1(h) of the Trust
attributable to liabilities relating to the Plan to the extent such
amounts are not already in the Trust. The aggregate value of the amount
of the lump sum to be contributed to the Trust pursuant to this Section
6.10 shall be determined by the Independent Accountants after
consultation with the entity then maintaining the Plan's records, and
shall be projected, if necessary, to such Valuation Date from the last
valuation of Members' or former Members' Accounts for which information
is readily available. Thereafter, the Independent Accountants shall
annually determine as of a Valuation Date for each Member or former
Member not receiving a lump sum payment pursuant to subsection (b) below
the value of each Member or former Member's Accounts. To the extent that
the value of the assets held in the Trust relating to this Plan do not
equal the aggregate amount described in the preceding sentence, at the
time of the valuation, as determined by the Independent Accountants, the
Corporation and Participating Companies shall make a lump sum
contribution to the Trust equal to the difference.
(b) In the event a Change of Control has occurred, the trustee of
the Trust shall, within 45 days of such Change of Control, pay to each
Member or former Member not making an election under (c) below, a lump
sum payment equal to the value of the Member's or former Member's
Accounts (determined under Article 5) as of the Valuation Date
coinciding with or next preceding the date of such Change of Control.
The amount of each Member's or former Member's lump sum payment shall be
determined by the Independent Accountants after consultation with the
entity then maintaining the Plan's records, and shall be projected, if
necessary, to such Valuation Date from the last valuation of Member's or
former Member's Accounts for which information is readily available.
(c) Each Member or former Member may elect in a time and manner
determined by the Administrator, 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 the Plan
as if a Change of Control had not occurred. New Members of the Plan may
elect in a time and manner determined by the Administrator, but in no
event later than 90 days after becoming a Member, to have amounts and
benefits determined and payable under the terms of the Plan as if a
Change of Control had not occurred. A Member or former Member 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.
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(d) Notwithstanding anything in the Plan to the contrary, each
Member or former Member who has made an election under (c) 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 (b) above determined as of
the Valuation Date next preceding such payment, except that such
calculated amount shall be reduced by 5% and such reduction shall be
irrevocably forfeited by the Member or former Member. Furthermore, as a
result of such election, the Member or former Member shall no longer be
eligible to participate or otherwise benefit from the Plan. Payments
under this subsection (d) shall be made not later than 7 days following
receipt by the Corporation of a Member's or former Member's election.
The Benefits Trust Committee shall, no later than 7 days after a Change
of Control has occurred, give written notification to each Member or
former Member eligible to make an election under this subsection (d),
that a Change of Control has occurred and informing such Member or
former Member of the availability of the election.
ARTICLE 7. AMENDMENT OR TERMINATION
-----------------------------------
7.1 Right to Terminate:
(a) Prior to a Change of Control, the Board may, in its sole
discretion, terminate this Plan and the related Deferral Agreements at
any time. Following a Change of Control, this Plan may not be terminated
without the approval of the Benefits Trust Committee.
(b) Prior to a Change of Control, the Committee may terminate an
Affiliated Company's participation as a Participating Company in this
Plan for any reason at any time. Following a Change of Control, an
Affiliated Company may not be terminated from participation as a
Participating Company without the consent of the Benefits Trust
Committee.
(c) Prior to a Change of Control, an Affiliated Company's board
of directors may terminate that Affiliated Company's participation as a
Participating Company for any reason at any time. Following a Change of
Control, an Affiliated Company's participation as a Participating
Company may not be terminated without the consent of the Benefits Trust
Committee.
(d) In the event the Plan and related Deferral Agreements are
terminated, each Member, former Member and Beneficiary shall receive a
single sum payment equal to the balance in his Account. The single sum
payment shall be made as soon as practicable following the date the Plan
is terminated and shall be in lieu of any other benefit which may be
payable to the Member, former Member or Beneficiary under this Plan.
7.2 Right to Amend: Prior to a Change of Control, the Board may, in its
sole discretion, amend this Plan and the related Deferral Agreements on 30 days
prior notice to the Members and, where applicable, former Members. Following a
Change of Control, all amendments to this Plan are subject to the approval of
the Benefits Trust Committee. If any amendment to this Plan or to the Deferral
Agreements shall adversely affect the rights of a Member or former Member, such
individual must consent in writing to such amendment prior to its effective
date. If such individual does not consent to the amendment, the Plan and related
Deferral Agreements shall be deemed to be terminated with respect to such
individual and he shall receive a single sum payment of his Account as soon
thereafter as is practicable. Notwithstanding the foregoing, the Administrator's
change in any investment funds or investment index under Section 5.1(b) or
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the restriction of future deferrals under the salary deferral program or
award deferral program shall not be deemed toadversely affect any Member's or
former Member's rights.
7.3 Uniform Action: Notwithstanding anything in the Plan to the
contrary, any action to amend or terminate the Plan or the Deferral Agreements
must be taken in a uniform and nondiscriminatory manner. Notwithstanding the
preceding, any such action taken by the Administrator following a Change of
Control is subject to the approval of the Benefits Trust Committee.
ARTICLE 8. GENERAL PROVISIONS
-----------------------------
8.1 No Funding: Nothing contained in this Plan or in a Deferral
Agreement shall cause this Plan to be a funded retirement plan. Neither the
Member, former Member, his beneficiary, contingent beneficiaries, heirs or
personal representatives shall have any right, title or interest in or to any
funds of the Trust or the Affiliated Companies on account of this Plan or on
account of having completed a Deferral Agreement. The assets held in the Trust
shall be subject to the claims of creditors of the Corporation, and the Trust's
assets shall be used to discharge said claims in the event of the Corporation's
insolvency. Each Member or former Member shall have the status of a general
unsecured creditor of the Affiliated Companies and this Plan constitutes a mere
promise by the Affiliated Companies to make benefit payments in the future.
8.2 Obligation: To the extent reflected by resolutions of the applicable
boards of directors, obligations for benefits under this Plan shall be joint and
several.
8.3 No Contract of Employment: The existence of this Plan or of a
Deferral Agreement does not constitute a contract for continued employment
between an Eligible Executive or a Member and an Affiliated Company. The
Affiliated Companies reserve the right to modify an Eligible Executive's or
Member's remuneration and to terminate an Eligible Executive or a Member for any
reason and at any time, notwithstanding the existence of this Plan or of a
Deferral Agreement.
8.4 Withholding Taxes: All payments under this Plan shall be net of an
amount sufficient to satisfy any federal, state or local withholding and payroll
tax requirements.
8.5 Nonalienation: The right to receive any benefit under this Plan may
not be transferred, assigned, pledged or encumbered by a Member, former Member,
beneficiary or contingent beneficiary in any manner and any attempt to do so
shall be void. No such benefit shall be subject to garnishment, attachment or
other legal or equitable process without the prior written consent of the
Affiliated Companies. Notwithstanding the preceding, following a Change of
Control, the Administrator shall not implement such action without the consent
of the Benefits Trust Committee.
8.6 Administration:
(a) Prior to a Change of Control, the Administrator of the Plan
shall be responsible for the general administration of the Plan, claims
review, and for carrying out its provisions. Administration of the Plan
shall be carried out consistent with the terms and conditions of the
Plan.
(b) Following a Change of Control, the Benefits Trust Committee
may remove and/or replace the Administrator.
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(c) The Administrator shall have sole and absolute discretion to
interpret the Plan, determine eligibility for and benefits due
hereunder. Decisions of the Administrator regarding benefits under the
Plan shall at all times be binding and conclusive on Members, their
beneficiaries, heirs and assigns. Notwithstanding the preceding,
following a Change of Control, final benefit determinations for Members,
their beneficiaries, heirs and assigns and decisions regarding benefit
claims under the Plan shall rest with the Benefits Trust Committee or
its delegate in its sole and absolute discretion.
(d) Prior to paying any benefit under this Plan, the
Administrator may require the Member or former Member, beneficiary or
contingent beneficiary to provide such information or material as the
Administrator, in its sole discretion, shall deem necessary for it to
make any determination it may be required to make under this Plan. The
Administrator may withhold payment of any benefit under this Plan until
it receives all such information and material and is reasonably
satisfied of its correctness and genuineness. The Administrator shall
provide adequate notice in writing to any Member, former Member,
beneficiary or contingent beneficiary whose claim for benefits under
this Plan has been denied, setting forth the specific reasons for such
denial. A reasonable opportunity shall be afforded to any such Member,
former Member, beneficiary or contingent beneficiary for a full and fair
review by the Administrator of its decision denying the claim. The
Administrator's decision on any such review shall be final and binding
on the Member, former Member, beneficiary or contingent beneficiary and
all other interested persons. All acts and decisions of the
Administrator shall be final and binding upon all Members, former
Members, beneficiaries, contingent beneficiaries and employees of the
Affiliated Companies. Notwithstanding the preceding, following a Change
of Control, any and all decisions by the Administrator are subject to
the approval of the Benefits Trust Committee.
(e) Prior to a Change of Control, the Committee in its sole
discretion and upon such terms as it may prescribe, may permit any
company or corporation directly or indirectly controlled by the
Corporation to participate in the Plan. After a Change of Control, such
permission must be approved by the Benefits Trust Committee.
8.7 Construction:
(a) The Plan is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or highly
compensated employees and all rights hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia to
the extent not preempted by federal law.
(b) The masculine pronoun means the feminine wherever
appropriate.
(c) The captions inserted herein are inserted as a matter of
convenience and shall not affect the construction of the Plan.
ARTICLE 9. EDUCATION SUB-ACCOUNTS
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9.1 Education Sub-accounts:
(a) Notwithstanding any provision of this Plan to the contrary,
with respect to amounts deferred under Salary Deferral Agreements and
Award Deferral Agreements effective on or after
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December 31, 1990, a Member may direct the Administrator to establish
a separate sub-account in the name of one or more of:
(i) each of the Member's children,
(ii) each of the Member's brothers, sisters, their
spouses, the Member's spouse, or
(iii) each of the foregoing's lineal descendants, for the
payment of their expenses directly or indirectly
arising from enrollment in a college, university,
another post-secondary institution of higher
learning or a secondary educational institution.
Each sub-account established pursuant to this
Section 9.1(a) shall be referred to as an
"Education Sub-account."
(b) The Member may instruct the Administrator to allocate all or
a portion of any amount deferred under an Award Deferral Agreement in
respect to an Award granted after December 31, 1990 to one or more of
the Education Sub-accounts established pursuant to Section 9.1(a).
(c) A Member may instruct the Administrator to allocate all or
any portion of the amount he defers for periods commencing after
December 31, 1990 pursuant to his Salary Deferral Agreement to one or
more of the Education Sub-accounts established pursuant to Section
9.1(a).
(d) Any elections pursuant to Sections 9.1(a) and 9.1(b)
shall be made in whole percentages.
(e) No Matching Credits shall be allocated to any Education
Sub-account.
9.2 Distribution of Education Sub-accounts:
(a) Amounts allocated to one or more of a Member's Education
Sub-accounts shall be distributed to the Member upon the attainment of
the certain age of the Member, specifically designated by the Member for
this purpose with regard to that Sub-account.
(b) A Member or former Member may transfer the entire amount but
not less than that amount in any Education Sub-account to one or more
other Education Sub-accounts, a Retirement Sub-account, or any
combination thereof, by filing the appropriate form or forms with the
Administrator not later than the last business day of the calendar year
preceding the calendar year in which distribution of that Education
Sub-account was to begin; provided, however, if such transfer
accelerates the timing of the payment to the Member, there shall be a
forfeiture of five percent (5%) of the Member's or former Member's
Sub-account so transferred, determined as of the Valuation Date upon
which the transfer is effective. In no event may a Member transfer all
or any portion of the amount in a Retirement Sub-account to his
Education Sub-accounts. Except as provided in this Section 9.2(b) or
9.2(c) below, a Member or former Member may not change the time or form
of distribution of his Education Sub-accounts.
(c) In the event that the individual for whom an Education
Sub-account is established dies while funds remain in that Sub-account,
a Member or former Member may transfer without penalty the entire amount
but not less than that amount in that Sub-account in accordance with the
provisions of (i) or (ii) below:
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(i) to one or more existing Education Sub-accounts
and/or a new Education Sub-account established in
accordance with the provisions of Section 9.1
hereof; or
(ii) to a Retirement Sub-account.
If a Member or former Member elects to transfer funds in accordance with
(ii) and he has not previously established a Retirement Sub-account,
such a Sub-account shall be established automatically and the Member or
former Member promptly thereafter will be required to execute an
amendment to his Deferral Agreement which shall specify the option under
Section 6.1(a) which will entitle him to distribution of the Retirement
Sub-account and the form of distribution under Section 6.2(a).
(d) A Member's or former Member's Education Sub-accounts shall be
distributed to him, or in the event of his death to his Beneficiary, in
a cash single sum payment as soon as administratively practicable
following the January 1 coincident with or next following the date the
Member incurs the distributable event or events elected under Section
9.2(a) or his date of death, as the case may be. Notwithstanding the
foregoing, a Member or former Member may elect to receive distribution
of one or more of his Education Sub-accounts in semi-annual installments
over a period not to exceed six (6) years. Installments shall be
determined as of each June 30 and December 31 and shall be paid as soon
as administratively practicable thereafter. Installments shall commence
as of the June 30 or December 31 coincident with or next following the
date the Member incurs the distributable event elected under Section
9.2(a) with regard to a Sub-account, or as soon as administratively
practicable thereafter. The amount of each installment shall equal the
balance in the applicable Education Sub-account as of the Valuation Date
of determination, divided by the number of remaining installments
(including the installment being determined). If a Member or former
Member dies before payment of the entire balance of all of his Education
Sub-accounts, the remaining balance or balances, as the case may be,
shall be paid in a single sum to his Beneficiary as soon as
administratively practicable following the January 1 coincident with or
next following his date of death.
9.3 Construction: To the extent any provision in this Article 9 is
inconsistent with any other provision of this Plan, the provisions in Article 9
shall govern.
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Supplementary Savings and Incentive Award Deferral Plan - CSX Corp.
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