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Exhibit 10.3
CSX CORPORATION
CORPORATE DIRECTOR DEFERRED COMPENSATION PLAN
EFFECTIVE NOVEMBER 1, 1990
As Amended and Restated Effective January 1, 1995
1. Purpose
The purpose of this Plan is to permit members of the Board of
Directors of CSX Corporation to elect deferred receipt of director's fees.
This Plan is intended to constitute a deferred compensation plan for corporate
director's fees in accordance with Revenue Ruling 71-419, Cumulative Bulletin
1971-2, page 220.
2. Definitions
The following words or terms used herein shall have the following
meanings:
(a) "Administrator" -- means CSX Corporation
(b) "Board" -- Board of Directors of CSX
(c) "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 Corporation (the "Outstanding Corporation
Common Stock"), or (B) 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 (i), the following acquisitions shall
not constitute a Change of Control: (A) any acquisition directly
from the Corporation; (B) any acquisition by the Corporation; (C)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any corporation
controlled by the Corporation; or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii) of this Section 2(c); 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 Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
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comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors; or
(iii) Business Combination. Approval by the 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:
(A) 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;
(B) 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
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(C) at least a majority of the members of the board
of directors resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action
of the Board of Directors, providing for such Business
Combination; or
(iv) Regulated Business Combination. Approval by the
shareholders of the 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 (A), (B) and
(C) of subsection (iii) of this Section 2(c); or
(v) Liquidation or Dissolution. Approval by the
shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation or its principal subsidiary.
(d) "CSX" or "Corporation" -- CSX Corporation
(e) "Director's Fees" -- any compensation, whether for Board
meetings or for Committee meetings or otherwise, earned by a
Member for services rendered as a Member during a particular
calendar year in which he has elected to be a Participant
(f) "Member" -- any person duly elected to the Board
(g) "Participant" -- any Member who elects to participate in the
Plan
(h) "Plan" -- Corporate Director Deferred Compensation Plan
(i) "Secretary" -- the Corporate Secretary of CSX
(j) "Trust" -- shall mean a grantor trust established by CSX
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. Except as provided in
Section 10, CSX is not obligated to make any contribution to
the Trust
(k) "Valuation Date" -- the last day of each calendar quarter
and such other dates as the Administrator deems necessary or
appropriate to value the Participants' benefits under this
Plan
(l) In any instance in which the male gender is used herein, it
shall also include persons of the female gender in
appropriate circumstances.
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3. Merger Provisions
Any person who was a Participant under the Chessie System, Inc.
Corporate Director Deferred Compensation Plan or who was a director and had
made an election under the Seaboard Coast Line Industries, Inc. Nonfunded
Deferred Compensation Plan for Directors shall automatically become a
Participant under this Plan effective upon the merger of Chessie System, Inc.
and Seaboard Coast Line Industries, Inc. into the Corporation, provided that
such a person shall be a Member as defined in this Plan.
Director's Fees deferred previously under the terms of the aforesaid
director deferred compensation plans of Chessie System, Inc. and Seaboard
Coast Line Industries, Inc. shall remain subject to the terms and conditions
respectively provided therein, and the terms of this Plan shall only govern as
to Director's Fees earned on and after the date of merger into the
Corporation.
4. Participation
A Member may become a Participant for any calendar year by filing a
written Election to Participate in the Plan with the Secretary not later than
December 31 immediately prior to the year in which Director's Fees are to be
earned.
An Election to Participate may be made with respect to all or any
part of Director's Fees to be earned for any year or years to which such
Election to Participate may relate.
An Election to Participate, once filed, shall apply to Director's
Fees earned in subsequent years in which a Participant shall serve as a
Member, unless amended or revoked by written request to the Secretary.
Any person who becomes a Member and who was not a Member on the
preceding December 31 may file an Election to Participate before his term as a
Member begins.
5. Deferral of Director's Fees
CSX shall, during any year in which a Participant has an Election to
Participate on file with the Secretary, withhold and defer payment of all or
any specified part of Participant's Director's Fees in accordance with his
Election to Participate. Prior to the beginning of any year, a Participant
can elect to have all or any portion of the amounts withheld, including all
earnings thereon, or to be withheld, credited to an interest-accruing account
("Interest Account") and/or to an enhanced interest-accruing account for
calendar years 1986, 1987, 1989 and 1990 ("Enhanced Interest Account"), and/or
to a CSX phantom stock account ("Stock Account"). Such deferral election can
be made or changed before the beginning of any year.
Interest shall accrue on the Interest Account from the date the
deferred Director's Fee would otherwise have been paid to the Participant
until it is actually paid, such interest to be credited to the Participant's
account and compounded quarterly at the end of each calendar quarter. The
rate of interest will be reviewed periodically.
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Interest shall accrue on the Enhanced Interest Account from the first
day of the month following the deferral and shall compound thereafter at an
annual rate of 16% until all amounts are finally paid to the Participant.
Credits to the Stock Account shall be in full and fractional units
based on the closing price for CSX common stock as reported on the New York
Stock Exchange - Composite Listing ("NYSE") on the date the fees would
otherwise have been paid to the Participant. Dividends shall be credited in
full and fractional units to the account based on the number of units in the
account on the record date and calculated based on the closing price for CSX
common stock on the dividend payment date.
A Participant, while a Member, may elect prior to the beginning of
any year to transfer all or any portion of amounts deferred, including all
earnings thereon, to an Enhanced Interest Account, an Interest Account and/or
a Stock Account, provided, however, that no transfer may be made out of an
Enhanced Interest Account.
6. Distribution of Deferred Director's Fees
Amounts deferred under the Plan and credited to an Interest Account
or Stock Account shall be distributed to a Participant from the account(s)
maintained in respect of his account in a lump sum at the beginning of the
year following the year in which a Participant ceases to be a Member, unless
he shall elect installments as provided below. Amounts deferred and credited
to an Enhanced Interest Account shall be distributed over an installment
period elected by the Participant.
The value of a Participant's Interest Account shall be the sum of
amounts deferred and all interest accrued thereon. The value of an Enhanced
Interest Account shall be the sum of amounts deferred and all interest accrued
thereon. The value of a Stock Account shall be the value of the units in a
Participant's account based on the closing price for CSX common stock as
reported on the NYSE on the last business day of the year in which a
Participant ceases to be a Member, unless he shall elect annual or quarterly
installments as provided below. The value of a Stock Account will fluctuate
in value in line with the fluctuation in the price of CSX common stock. There
can be no assurance on the market value of the phantom units either at the
time of acquisition or at any time during the distribution period, nor can
there be any assurance as to the continuation of dividends.
Distribution of Deferred amounts shall begin with either the first
day of the calendar year immediately following the year in which a Participant
shall cease to be a Member for any reason other than death, or the first day
of the calendar year immediately following the year in which a Participant
shall cease to be a Member and shall have attained age 65, as the Member may
elect.
If installment payments are elected for Interest or Stock Accounts,
payments shall be made, as the Participant may elect, for either (a) five
years, (b) ten years, or (c) any other designated period which shall be not
less than the period he was a Participant nor exceed ten years. For Enhanced
Interest Accounts, the Participant may elect to receive payments over (a) five
years, (b) ten years, or (c) fifteen years.
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For Interest Accounts and Stock Accounts, installments shall be on an
annual or quarterly basis as the member may elect. The amount of each
installment shall be determined by multiplying the value of the Participant's
account at the end of the calendar quarter immediately preceding the
installment date by a fraction, the numerator of which shall be one (1) and
the denominator of which shall be the number of installment payments over
which payment of such amount is to be made, less the number of installment
payments theretofore made.
For Enhanced Interest Accounts, payments shall be in level
installments on a monthly basis over the number of years (five, ten, or
fifteen) as elected by the Member.
The elections provided in this Section 6 shall be made in writing in
a Participant's Election to Participate and shall be subject to all other
provisions of the Plan relating thereto and to the deferral of receipt of
Director's Fees.
In the event a Participant shall die while he is a Member, the amount
appearing as the credit balance of his account, or the value of the units in
his Stock Account, shall be paid in either a lump sum or installments
(consistent with the election made by the Participant as described in this
Section 6) to his Designated Beneficiary. Each Participant may file with the
Secretary a Designation of Beneficiary for this purpose.
In the event a Participant shall die after he ceases to be a Member
and before he has received complete distribution from his account, any credit
balance of his account, including interest, or the value of the units in his
Stock Account, shall be paid to his Designated Beneficiary consistent with the
election made by the Participant as described in this Section 6.
In the event a Participant shall not file a Designation of
Beneficiary, or his Designated Beneficiary is not living at the Participant's
death, the balance credited to his account, including interest, shall be paid
in full to his estate not later than the tenth day of the calendar year
following his date of death.
7. Death Benefit
For Participants electing to have deferred Director's Fees credited
to an Enhanced Interest Account who die while a Member, a death benefit equal
to the greater of three times the amount of Director's Fees deferred or the
amount of Director's Fees deferred plus accumulated interest will be paid to
the Member's Designated Beneficiary. For Participants in an Enhanced Interest
Account who die after ceasing to be a Member, a lump sum death benefit of
$10,000 will be paid to the Designated Beneficiary. This death benefit shall
apply only to Director's Fees deferred after December 31, 1985 and which have
been credited to an Enhanced Interest Account. This death benefit shall not
apply to any amounts credited to an Enhanced Interest Account by reason of
transfer from an Interest Account and/or a Stock Account.
In the event a Participant shall not file a Designation of
Beneficiary, or the Designated Beneficiary is not living at the Participant's
death, the death benefit shall be paid to the Participant's estate.
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8. Amendment or Termination of Election to Participate
A Participant may amend or terminate his Election to Participate by
written request to the Secretary, which shall become effective for the
calendar year following the year in which his request is made; provided,
however, that no amendment shall be made to contravene the deferral of
Director's Fees previously made under the provisions of this Plan.
In the event a Participant amends or terminates his Election to
Participate and remains a Member, he shall not be entitled to receive any
distribution from his account until he ceases to be a Member, and
distributions shall be made only as provided in Section 6 of this Plan.
9. Obligation of CSX
This Plan shall be unfunded and credits to the memorandum account(s)
of each Participant shall not be set apart for him nor otherwise made
available so that he may draw upon it at any time, except as provided in this
Plan. Neither any Participant nor his Designated Beneficiary shall have any
right, title, or interest in such credits or any claim against them. Payments
may only be made at such times and in the manner expressly provided in this
Plan. CSX's contractual obligation is to make the payments when due. No
notes or security for the payment of any Participant's account shall be issued
by CSX.
10. Change of Control
10.1 If a Change of Control has occurred, the Administrator shall
cause CSX 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 Participant
would be eligible to receive (determined under 10.2 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 Participants who receive a lump sum payment under
10.2 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 10 shall be determined by CSX's accountants after
consultation with the entity then maintaining the Plan's records. Thereafter,
CSX's accountants shall annually determine as of a Valuation Date for each
Participant not receiving a lump sum payment pursuant to section 10.2, below,
the amounts which would be payable under such subsection were a Change of
Control to occur at the date of such determination. 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 CSX's accountants, CSX shall make a lump sum
contribution to the Trust equal to the difference.
10.2 In the event a Change of Control has occurred, each
Participant not making an election under section 10.3, below, shall receive,
and the Administrator shall cause CSX to pay, within 7 days of such Change of
Control, a lump sum payment equal to the amount the Participant would have
been entitled to receive determined under Section 6 had he ceased to be a
Member and selected an immediate lump sum payment. The amount of each
Participant's lump sum payment shall be determined by CSX's accountants after
consultation with the entity then maintaining the Plan's records.
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10.3 Each Participant may elect in a time and manner determined
by the Administrator 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 Participants in the Plan may elect in a time and manner
determined by the Administrator 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.
10.4 Notwithstanding anything in the Plan to the contrary, each
Participant who has made an election under section 10.3, above, may elect
within 90 days following a Change of Control, in a time and manner determined
by the Administrator, to receive a lump sum payment calculated under the
provisions of 10.3, 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 CSX by the Participant.
Furthermore, as a result of such election, the Participant shall no longer be
eligible to participate or otherwise benefit from the Plan. Payments under
this section 10.4 shall be made not later than 7 days following receipt by CSX
of the Participant's election. The Administrator shall, no later than 7 days
after a Change of Control has occurred, give written notification to each
Participant eligible to make an election under this section 10.4, that a
Change of Control has occurred and informing such Participant of the
availability of the election.
11. Claims Against Participant's Account
No credits to the account of any Participant under this Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to do so shall be void. Nor
shall any credit be subject to attachment or legal process for debts or other
obligations. Nothing contained in this Plan shall give any Participant any
interest, lien, or claim against any specific asset of CSX. No Participant or
his Designated Beneficiary shall have any rights other than as a general
creditor of CSX.
12. Competition by Participant
In the event a Participant ceases to be a Member and becomes a
proprietor, officer, partner, employee, director, or otherwise becomes
affiliated with any business that is in competition with the Corporation, the
entire balance credited to his account, including interest, or the value of
the units in his Stock Account, may, if directed by the Board in its sole
discretion, be paid immediately to him in a lump sum.
13. Payment of Credit Balance to Participant's Account
Notwithstanding anything herein to the contrary, the Board may, in
its sole discretion, direct payment in a lump sum, of any or all of the credit
balance appearing at the time in the account of a Participant, and/or of the
value of the units in his Stock Account.
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14. Amendment or Termination
This Plan may be altered, amended, suspended, or terminated at any
time by the Board; provided, however, that no alteration, amendment,
suspension, or termination shall be made to this Plan which would result in
the distribution of amounts credited to the accounts of all Participants in
any manner other than is provided in this Plan without the consent of all
Participants.
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