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Exhibit 10.2
SPECIAL RETIREMENT PLAN
FOR
CSX DIRECTORS
[As amended and restated January 1, 1995]
1. Purpose. In order to attract and retain the services of Directors
of the highest caliber, to reward them for their services to the Company when
they cease to be active Directors, and to retain for the Company the value of
their advice and consultation, the Board of Directors adopted a special
retirement plan for Directors on April 21, 1981. The Plan, as amended
November 14, 1984, is further amended and restated to provide as follows:
2. Definitions. Whenever used in the Plan, the following terms shall
have the meanings set forth below unless the context clearly requires a
different meaning:
(a) Board. The Company's Board of Directors.
(b) Change of Control. A "Change of Control" shall mean any of
the following:
(i) 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 (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock"), or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the Company;
(B) any acquisition by the Company; (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company; or
(C) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii)
of this Section 2(b); or
(ii) Board Composition. Individuals who, as of the date
hereof, constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
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for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors; or
(iii) Business Combination. Approval by the shareholders of
the Company of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of the
Company or its principal subsidiary that is not subject, as a
matter of law or contract, to approval by the 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:
(A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common
stock and the combined voting power of the then
outstanding voting securities entitled to vote
generally in the election of directors, as the case
may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns
the Company or its principal subsidiary or all or
substantially all of the assets of the Company or its
principal subsidiary either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be;
(B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
Business Combination or the combined voting power of
the then outstanding voting securities of such
corporation except to the extent that such ownership
existed prior to the Business Combination; and
(C) at least a majority of the members of the board
of directors resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action
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of the Board of Directors, providing for such Business
Combination; or
(iv) Regulated Business Combination. Approval by the
shareholders of the Company of a Business Combination that is
subject, as a matter of law or contract, to approval by the Agency
(a "Regulated Business Combination") unless such Business
Combination complies with clauses (A), (B) and (C) of subsection
(iii) of this Section 2(b); or
(v) Liquidation or Dissolution. Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company or its principal subsidiary.
(c) Committee. The Executive Committee of the Board
(d) Company. CSX Corporation.
(e) Director. A person duly elected or appointed to, and
serving as an active member of, the Board.
(f) Director's Fees. The basic annual retainer fee paid to an
active Outside Director for his services, plus meeting fees, special fees for
serving as Chairman of a committee, but excluding travel expenses or any other
extraordinary form of compensation.
(g) Effective Date. April 21, 1981. The effective date of the
amendment and restatement is January 1, 1995. A Participant receiving
Retirement Payments on the date of the restatement will continue to receive
payments in accordance with the terms of the Plan as restated to the extent
not inconsistent with the terms of the Plan prior to the date of the
restatement.
(h) Eligible Service. The period of service with the Company or
any of its predecessor companies as an active Outside Director, measured in
years and months beginning with the day of the month in which the person first
becomes or performs services as an Outside Director and ending with the month
in which he ceases to be, or no longer performs services as, an Outside
Director. Service which need not be continuous.
(i) Employee Director. A person who serves or has served as an
active Director during a period when he or she is a salaried employee with the
Company or a subsidiary company.
(j) Outside Director. A Director who, with respect to any
period of service as an active Director taken into account under the Plan, is
not an Employee Director.
(k) Participant. An Outside Director or former Outside Director
who has met or can be expected to meet the requirements for and become
eligible for Retirement Payments under the Plan as determined under Section 3.
The term includes Outside Directors who on the Effective Date of the amendment
and restatement are receiving Retirement Payments under the Plan. An Employee
Director shall not be entitled to become a Participant in the Plan with
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respect to any period of service as a Director while an employee of the
Company or a predecessor company.
(l) Plan. The Special Retirement Plan for CSX Directors.
(m) Payment Date. The last day of each calendar quarter
beginning with the last day of the calendar quarter in which the Participant
becomes entitled to receive Retirement Payments and ending with the payment
for the last calendar quarter for the calendar year in which the Participant
ceases to be eligible for Retirement Payments under Section 3.
(n) Retirement Payment. An annual amount equal to 50% of the
Director's Fees paid during the Outside Director's final twelve months of
service as a Director with the Company payable in quarterly installments on
each Payment Date.
(o) Rule of 75. Any combination of age and year as of Eligible
Service that totals 75 or more.
(p) Trust. A grantor trust established by the Company which
will substantially conform to the terms of the Internal Revenue Service model
trust as described in Revenue Procedure
92-64, 1992-2 D.B. 422. Except as provided in Section 4, the Company is not
obligated to make any contribution to the Trust.
(q) Valuation Date. The last day of each calendar year and such
other dates as the Committee deems necessary or appropriate to value the
Participants' benefits under this Plan.
3. Eligibility for Retirement Payments.
(a) An Outside Director who no longer serves as a Director (for
any reason other than death) and has (i) attained the age of 68, or (ii) has
met the Rule of 75, shall be entitled to receive Retirement Payments. A
Participant who ceases to serve as a Director before attaining the age of 68
will be entitled to receive Retirement Payments when the Participant attains
the age of 68 or meets the Rule of 75, whichever event shall first occur. In
consideration of the receipt of Retirement Payments under the Plan, a
Participant agrees to be available for advice and consultation as requested by
the Board.
(b) A Participant entitled to compensation under (a) shall
receive Retirement Payments on each Payment Date as hereinafter provided. A
Participant who has completed 10 or more years of Eligible Service or has met
the Rule of 75, will be entitled to Retirement Payments for life. A
Participant who has not completed 10 years of Eligible Service and has not met
the Rule of 75, will be entitled to receive Retirement Payments for a period
equal to the lesser of (i) the Participant's life and (ii) the Participant's
period of Eligible Service. A Participant's right to compensation shall
terminate as of the last day of the calendar year in which his or her death
occurs, or, if the Participant has less than 10 years of Eligible Service and
has not met the Rule of 75, as of the end of the calendar year in which falls
the date that is the anniversary of the date the Participant's last period of
Eligible Service began.
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(c) Any retirement payment due after the death of a Participant
shall be paid to the Participant's surviving spouse, or, if no spouse
survives, to the Participant's personal representative.
4. Change of Control.
(a) If a Change of Control has occurred, the Committee shall
cause the Company to contribute to the Trust within seven (7) days of such
Change of Control, a lump sum contribution equal to the greater of:
(i) the aggregate value of the amount each Participant
would be eligible to receive under (b), below; or
(ii) the present value of accumulated Plan benefits based
on the assumptions the Company's independent actuary deems
reasonable for this purpose as of the Valuation Date,
coinciding with or next preceding the date of Change of
Control, to the extent such amounts are not already in the
Trust; provided, however, amounts relating to those
Participants who receive a lump sum payment under subsection
(b), below, shall be excluded from the aggregate value
determination under (i) or (ii). The aggregate value of the
amount of the lump sum to be contributed to the Trust
pursuant to this Section 4 shall be determined by the
Company's independent actuaries. Thereafter, the Company's
independent actuaries shall annually determine as of a
Valuation Date for each Participant not receiving a lump sum
payment pursuant to subsection (b), below, the greater of:
(A) the amount such Participant would have received
under subsection (b) had such Participant not made the
election under subsection (c) below, if applicable;
and
(B) the present value of accumulated benefits based
on assumptions the actuary deems reasonable for this
purpose. To the extent that the value of the assets
held in the Trust relating to this Plan does not equal
the amount described in the preceding sentence, at the
time of the valuation, the Company shall make a lump
sum contribution to the Trust equal to the difference.
(b) In the event a Change of Control has occurred, each
Participant not making an election under subsection (c), below, shall receive,
and the Committee shall cause the Company to pay within seven (7) days of such
Change of Control, a lump sum payment equal to the present value of the
Retirement Payments the Participant is entitled to receive from the Company
pursuant to the terms of the Plan assuming when applicable for each
Participant as of the date of Change of Control that (i) the Participant will
complete his current term as a Director, (ii) the Participant will survive
during the period of his normal life expectancy, and (iii) the age requirement
for retirement and receipt of Retirement Payments is the age of the
Participant on the Change of Control date. Present value shall be determined
by using a discount rate equal to the applicable Federal rate provided for in
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Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended. The
amount of each Participant's lump sum payment shall be determined by the
Company's actuaries.
(c) Each Participant may elect in a time and manner determined
by the Committee but, for current Participants, 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 this Plan
as if a Change of Control had not occurred.
(d) Notwithstanding anything in this Plan to the contrary, each
Participant 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
subsection (b), above, determined as of the Valuation Date next preceding such
payment, except that such amount shall be reduced by 5% and such reduction
shall be irrevocably forfeited to the Company by the Participant.
Furthermore, as a result of such election, the Participant shall no longer be
eligible to participate or otherwise benefit under the Plan. Payments under
this subsection (d) shall be made not later than seven (7) days following
receipt by the Company of the Participant's election. The Committee shall, no
later than seven (7) days after a Change of Control has occurred, cause
written notification to be given to each Participant eligible to make an
election under this subsection (d), that a Change of Control has occurred and
informing such Participant of the availability of the election.
5. Committee Powers. The Committee shall have full power and
authority to interpret, construe and administer this Plan, and all actions of
the Committee under the Plan shall be binding and conclusive on all persons
for all purposes.
6. Successors. The Plan shall be binding upon and inure to the
benefit of Participants. If the Company becomes a party to any merger,
consolidation, reorganization or in the event of a sale of substantially all
the assets of the Company, the Plan shall remain in full force and effect as
an obligation of the Company or its successor in interest.
7. Amendment and Termination. The Board reserves the right to amend
or terminate the Plan at any time without the consent of any Participant, but
no amendment or termination shall deprive any Participant of the right to
continue to receive payment under Section 3 once payments have begun.
Notwithstanding the foregoing, if a Change of Control occurs, each
Participant, regardless of age or Eligible Service shall be eligible for
benefits under the Plan, and the Plan may not be terminated and no amendment
may be made that would adversely affect the right of such any Participant to
receive Retirement Payments or Accelerated Retirement Payments under the Plan.
8. Construction. The Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia. The masculine
pronoun shall mean the feminine wherever appropriate. The captions inserted
herein are inserted as a matter of convenience and shall not affect the
construction of the Plan.
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