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Exhibit 10.13
SUPPLEMENTARY SAVINGS AND INCENTIVE AWARD DEFERRAL PLAN
FOR ELIGIBLE EXECUTIVES OF
CSX CORPORATION AND AFFILIATED COMPANIES
As Amended and Restated January 1, 1995
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 Board of Directors . . . . . . . . . . . . . . . . . . . 1
1.7 Change of Control. . . . . . . . . . . . . . . . . . . . 1
1.8 Code . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Committee. . . . . . . . . . . . . . . . . . . . . . . . 4
1.10 Compensation . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Corporation. . . . . . . . . . . . . . . . . . . . . . . 4
1.12 Deferral Agreement . . . . . . . . . . . . . . . . . . . 4
1.13 Distribution Option(s) . . . . . . . . . . . . . . . . . 5
1.14 Effective Date . . . . . . . . . . . . . . . . . . . . . 5
1.15 Eligible Executive . . . . . . . . . . . . . . . . . . . 5
1.16 Matching Credits . . . . . . . . . . . . . . . . . . . . 6
1.17 Member . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.18 MICP . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.19 Participating Company. . . . . . . . . . . . . . . . . . 6
1.20 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.21 Salary Deferrals . . . . . . . . . . . . . . . . . . . . 6
1.22 Salary Deferral Agreement. . . . . . . . . . . . . . . . 6
1.23 Salary Deferral Percentage . . . . . . . . . . . . . . . 6
1.24 SMICP. . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.25 Tax Savings Thrift Plan. . . . . . . . . . . . . . . . . 6
1.27 Valuation Date . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS. . . . . . . . . . 8
2.1 In General . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Modification of Initial Deferral Agreement . . . . . . . 8
2.3 Termination of Membership; Re-employment . . . . . . . . 9
2.4 Change in Status . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3. AWARD DEFERRAL PROGRAM. . . . . . . . . . . . . . . . 11
3.1 Filing Requirements. . . . . . . . . . . . . . . . . . . 11
3.2 Amount of Deferral . . . . . . . . . . . . . . . . . . . 12
3.3 Crediting to Account . . . . . . . . . . . . . . . . . . 12
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ARTICLE 4. SALARY DEFERRAL PROGRAM . . . . . . . . . . . . . . . 13
4.1 Filing Requirements. . . . . . . . . . . . . . . . . . . 13
4.2 Salary Deferral Agreement. . . . . . . . . . . . . . . . 13
4.3 Amount of Salary Deferrals . . . . . . . . . . . . . . . 13
4.4 Changing Salary Deferrals. . . . . . . . . . . . . . . . 15
4.5 Certain Additional Credits . . . . . . . . . . . . . . . 15
ARTICLE 5. MAINTENANCE OF ACCOUNTS . . . . . . . . . . . . . . . 17
5.1 Adjustment of Account. . . . . . . . . . . . . . . . . . 17
5.2 Investment Performance Elections . . . . . . . . . . . . 18
5.3 Changing Investment Elections. . . . . . . . . . . . . . 18
5.4 Vesting of Account . . . . . . . . . . . . . . . . . . . 19
5.5 Individual Accounts. . . . . . . . . . . . . . . . . . . 19
ARTICLE 6. PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . 20
6.1 Commencement of Payment. . . . . . . . . . . . . . . . . 20
6.2 Method of Payment. . . . . . . . . . . . . . . . . . . . 22
6.3 Applicability. . . . . . . . . . . . . . . . . . . . . . 25
6.4 Hardship Withdrawal. . . . . . . . . . . . . . . . . . . 25
6.5 Designation of Beneficiary . . . . . . . . . . . . . . . 25
6.6 Special Distribution Rules . . . . . . . . . . . . . . . 26
6.7 Status of Account Pending Distribution . . . . . . . . . 26
6.8 Installments and Withdrawals Pro-Rata. . . . . . . . . . 27
6.9 Change of Control. . . . . . . . . . . . . . . . . . . . 27
ARTICLE 7. AMENDMENT OR TERMINATION. . . . . . . . . . . . . . . 30
7.1 Right to Terminate . . . . . . . . . . . . . . . . . . . 30
7.2 Right to Amend . . . . . . . . . . . . . . . . . . . . . 30
7.3 Uniform Action . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 8. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . 31
8.1 No Funding . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 No Contract of Employment. . . . . . . . . . . . . . . . 31
8.3 Withholding Taxes. . . . . . . . . . . . . . . . . . . . 31
8.4 Nonalienation. . . . . . . . . . . . . . . . . . . . . . 31
8.5 Administration . . . . . . . . . . . . . . . . . . . . . 31
8.6 Construction . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 9. POST-SECONDARY EDUCATION SUB-ACCOUNTS . . . . . . . . 34
9.1 Post-Secondary Education Sub-accounts. . . . . . . . . . 34
9.2 Distribution of Post-Secondary Education Sub-
accounts . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Construction . . . . . . . . . . . . . . . . . . . . . . 36
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INTRODUCTION
This Supplementary Savings and Incentive Award Deferral Plan for
Eligible Executives of CSX Corporation and Affiliated Companies (the "Plan")
is effective October 1, 1987. 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 post-secondary 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 reads
as hereinafter set forth.
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ARTICLE 1. DEFINITIONS
1.1 Account shall mean the book-keeping 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 "Post-Secondary 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 Committee may
determine the maximum number of "Retirement Sub-accounts" which a Member may
have at any time. The Administrator 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 shall mean 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 shall mean the Corporation and any
company or corporation directly or indirectly controlled by the Corporation.
1.4 Award shall mean, for any year, 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 to him in the succeeding year under the MICP
and/or SMICP or other incentive award otherwise payable in cash as determined
by the Committee.
1.5 Award Deferral Agreement shall mean a Deferral Agreement
filed in accordance with the award deferral program described in Article 3.
1.6 Board of Directors or "Board" shall mean the Board of
Directors of the Corporation.
1.7 Change of Control shall mean any of the following:
(a) Stock Acquisition. The acquisition, by any
individual, entity or group [within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")] (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% 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 XI(5); or
(b) Board Composition. Individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director
subsequent to the date hereof whose election or nomination for
election by the Corporation's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
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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 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
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(d) Regulated Business Combination. Approval by the
shareholders 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 XI(5); or
(e) Liquidation or Dissolution. Approval by the shareholders of
the Corporation of a complete liquidation or dissolution of the
Corporation or its principal subsidiary.
1.8 Code shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.9 Committee shall mean the Compensation Committee of the Board
of Directors of CSX Corporation.
1.10 Compensation shall mean 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.
1.11 Corporation shall mean CSX Corporation, a Virginia
corporation, and any successor thereto by merger, purchase or otherwise.
1.12 Deferral Agreement shall mean 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 Committee and shall include any amendments, attachments or
appendices.
1.13 Distribution Option(s) shall mean, 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.
1.14 Effective Date shall mean October 1, 1987 or with respect to
the Eligible Executives of a company which adopts the Plan, the date such
company becomes a Participating Company.
1.15 Eligible Executive shall mean 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 Committee, 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
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(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.
1.16 Matching Credits shall mean amounts credited to the Account
of a Member pursuant to Section 4.5.
1.17 Member shall mean, except as otherwise provided in Article
2, each Eligible Executive who has executed an initial Deferral Agreement as
described in Section 2.1.
1.18 MICP shall mean the Participating Companies' Management
Incentive Compensation Program.
1.19 Participating Company shall mean the Corporation and any
company or corporation directly or indirectly controlled by the Corporation,
which the Board designates for participation in the Plan in accordance with
Section 8.5(b).
1.20 Plan shall mean this Supplementary Savings and Incentive
Award Deferral Plan for Eligible Executives of CSX Corporation and Affiliated
Companies, as amended from time to time.
1.21 Salary Deferrals shall mean the amounts credited to a
Member's Account under Section 4.3.
1.22 Salary Deferral Agreement shall mean a Deferral Agreement
filed in accordance with the salary deferral program described in Article 4.
1.23 Salary Deferral Percentage shall mean 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.
1.24 SMICP shall mean the Participating Companies' Senior
Management Incentive Compensation Program.
1.25 Tax Savings Thrift Plan shall mean the Tax Savings Thrift
Plan for Employees of CSX Corporation and Affiliated Companies, as amended
from time to time.
1.26 Trust shall mean the CSX Corporation Nonqualified Plan Trust
or such other trust which will substantially conform to the terms of the
Internal Revenue Service model trust as described in Revenue Procedure 92-64,
1992-2 C.B.422.
1.27 Valuation Date shall mean 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.
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(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 a Post-Secondary 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 for membership the Administrator may
require such other information as it deems appropriate.
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 a Post-Secondary 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.
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(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 under
Section 2.1; provided his Distribution Options
and beneficiary designation shall remain in
effect.
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.
ARTICLE 3. AWARD DEFERRAL PROGRAM
3.1 Filing Requirements:
(a) 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 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) 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 Eligible Executive and ending no
later than the last day of the month preceding the month in which the
Award is determined.
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(c) 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) 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 a Post-
Secondary 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.
(e) 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) 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.
(b) 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.
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.
(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, 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).
ARTICLE 4. SALARY DEFERRAL PROGRAM
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.
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(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 Committee 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 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) 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.
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PAGE 12
(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 a Post-
Secondary 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 in a time and 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,
in a time and 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.
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:
(a) For payroll periods prior to the inception of Basic
Salary Deferrals hereunder, the greater of (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
'(iv)' 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
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PAGE 13
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; and
No Matching Credits shall be credited to a Member's Post-Secondary
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 Committee and,
if applicable, elected by the Member or former Member, for purposes
of measuring the investment performance of his Sub-accounts.
(b) The Committee 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 Committee 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.
(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 Committee 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
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PAGE 14
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 Committee 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 Post-
Secondary 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 Post-Secondary 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.
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.
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,
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PAGE 15
(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 (3) years subsequent to his current age.
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.
(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 one-time
request to the Administrator to defer the
Member's designated distribution event under
Section 6.1(a). The requests must be filed in
writing 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 id 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
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PAGE 16
requirements for a one-time deferral request
under 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. A forfeiture under this Section
6.1(c)(ii) shall be in addition to a forfeiture
incurred by the Member, if any, under Section
6.2(c)(ii).
(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 Post-Secondary
Education Sub-accounts, except that a Member may transfer the entire
amount in any Post-Secondary Education Sub-account to one or more
other Post-Secondary Education Sub-accounts and one or more of his
Retirement Sub-accounts, or any combination thereof, subject to
forfeiture of five percent (5%) of the Sub-account so transferred, as
provided in Article 9.
(f) Notwithstanding the foregoing, 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.
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.
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PAGE 17
(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
Seciton 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.
(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
paragraph 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. A forfeiture under
this Section 6.2(c)(ii) shall be in addition to
a forfeiture incurred by the Member, if any,
under Section 6.1(c)(ii).
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PAGE 18
(d) In the event the Member's Account consists of one or
more Retirement Sub-accounts and one or more Post-Secondary 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 Post-Secondary Education Sub-
accounts are distributed, except that a Member may transfer the
entire amount in any Post-Secondary Education Sub-account to one or
more other Post-Secondary Education Sub-accounts and one or more
Retirement Sub-accounts, or any combination thereof, subject to
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 Post-Secondary
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 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 6.3 financial hardship
shall include:
(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.
6.5 Designation of Beneficiary: A Member or former Member may,
in a time and 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 fails to designate a
beneficiary or contingent beneficiary, or if the beneficiary and the
contingent beneficiaries fail to 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 6.4
in a time and manner determined by the Administrator.
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PAGE 19
6.6 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.
6.7 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 6.3 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 Committee, the rate of return of such other index of
investment performance or investment fund which may be designated by the
Committee 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.
6.8 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.
6.9 Change of Control:
(a) If a Change of Control has occurred, the Committee
shall cause the Corporation to contribute to the Trust within 7 days
of such Change of Control, a lump sum payment equal to 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 to the
extent such amounts are not already in the Trust; provided, however,
amounts relating to those Members who receive a lump sum payment
under (b) below shall be excluded from the aggregate value
determination. The aggregate value of the amount of the lump sum to
be contributed to the Trust pursuant to this Section 6.9 shall be
determined by the Corporation's 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 Corporation's
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PAGE 20
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 Corporation's accountants, the Corporation shall
make a lump sum contribution to the trust equal to the difference.
(b) In the event a Change of Control has occurred, each
Member or former Member not making an election under (c) below shall
receive, and the Committee shall cause the Corporation to pay within
7 days of such Change of Control, 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
Corporation's 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 Committee but in no event later than
September 1, 1995, 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 Committee but in no event later than a Change of Control to have
amounts and benefits determined and payable under the terms of the
Plan as if a Change of Control had not occurred.
(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 Committee, to receive a lump sum payment
calculated under the provisions of 3 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 to the Corporation 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 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.
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PAGE 21
ARTICLE 7. AMENDMENT OR TERMINATION
7.1 Right to Terminate: The Board may, in its sole discretion,
terminate this Plan and the related Deferral Agreements at any time. 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: 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. 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 Committee's change in any investment funds or investment
index under Section 5.1(b) or the restriction of future deferrals under the
salary deferral program or award deferral program shall not be deemed to
adversely 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.
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 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.
8.3 Withholding Taxes: All payments under this Plan shall be
net of an amount sufficient to satisfy any federal, state or local withholding
tax requirements.
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PAGE 22
8.4 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.
8.5 Administration:
(a) This Plan shall be administered by the Committee.
Certain administrative functions, as set forth in the Plan, shall be
the responsibility of the Administrator. The Administrator shall
interpret the Plan, establish regulations to further the purposes of
the Plan and take any other action necessary to the proper operation
of the Plan in accordance with guidelines established by the
Committee or, if there are no such guidelines, consistent with
furthering the purpose of the Plan.
(b) The Board, 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.
(c) Prior to paying any benefit under this Plan, the
Administrator may require the Member, 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.
(d) 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.
(e) 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.
8.6 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 shall mean 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.
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PAGE 23
ARTICLE 9. POST-SECONDARY EDUCATION SUB-ACCOUNTS
9.1 Post-Secondary 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
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, or any other post-secondary
institution of higher learning. Each sub-
account established pursuant to this Section
9.1(a) shall be referred to as a "Post-Secondary
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 Post-Secondary 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 December31, 1990 pursuant to his Salary Deferral Agreement to
one or more of the Post-Secondary 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 Post-
Secondary Education Sub-account.
9.2 Distribution of Post-Secondary Education Sub-accounts:
(a) Amounts allocated to one or more of a Member's Post-
Secondary 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 Post-Secondary Education
Sub-account to one or more other Post-Secondary 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 year in
which distribution of that Post-Secondary Education Sub-account was
to begin. A transfer under this Section 9.2(b) shall result in the
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
Post-Secondary Education Sub-accounts. Except as provided in this
Section 9.2(b) or 9.2(c) below, a Member or former Member may not
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PAGE 24
change the time or form of distribution of his Post-Secondary
Education Sub-accounts.
(c) In the event that the individual for whom a Post-
Secondary 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:
(i) to one or more existing Post-Secondary Education
Sub-accounts and/or a new Post-Secondary
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 Post-Secondary 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 Post-
Secondary 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 Post-Secondary
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 Post-Secondary
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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