Exhibit 10.17
SUPPLEMENTARY SAVINGS AND INCENTIVE AWARD DEFERRAL PLAN
FOR ELIGIBLE EXECUTIVES OF
CSX CORPORATION AND AFFILIATED COMPANIES
As Amended and Restated January 1, 1995
(As Amended through December 11, 1996)
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
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.
ARTICLE I. 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 "PostSecondary 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 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
(d) Regulated Business Combination. Approval by the shareholders of
the Corporation of a Business Combination that is subject, as a matter of
law or
2
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
3
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
(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
4
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.
(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 PostSecondary
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).
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(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.
(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.
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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.
(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.
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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.
(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.
8
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.
(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.
9
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
(iii) is the employer matching contributions the Eligible
Executive would have received under the Tax Savings
Thrift Plan if his deferrals under this Plan had been
contributed to the Tax Savings Thrift Plan (in addition
to those amounts actually contributed to that Plan),
based on "Compensation" as defined in this Plan and as
if the provisions of Sections 401(a)(17), 401(k)(3),
401(m)(2), 401(m)(9) and 415 of the Code had not applied
to the Tax Savings Thrift Plan; and
(iv) is the employer matching contributions made on his
behalf for the applicable period to the Tax Savings
Thrift Plan; and
10
No Matching Credits shall be credited to a Member's Post-Secondary
Education Subaccount.
ARTICLE 5. MAINTENANCE OF ACCOUNTS
5.1 Adjustment of Account:
(a) As of each Valuation Date each Account (and, if applicable, each
Subaccount) 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 Subaccounts 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 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%.
11
(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,
12
(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 if December 30 is not a weekday). The
change shall be limited to those events entitling a
Member to a distribution that are described in Section
6.1(a), shall be subject to approval of the
Administrator and, if approved, shall be effective as of
the last Valuation Date of the calendar year in which
the change is filed. Unless the election complies with
the requirements for a one-time deferral request under
Section 6.1(c)(i), or unless the
13
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.
(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
14
of payment of his Account in the event of a Change of Control.
(c) Notwithstanding Section 6.2(a) and Section 6.2(b), a Member or
former Member may change the Distribution Option election of the form in
which his Account is distributed, as follows:
(i) A Member or former Member may make a one-time request to
the Administrator to change the form in which his
Account is to be distributed under Section 6.2(a). A
Member or former Member may also make a one-time request
to change the form in which his Account is to be
distributed under Section 6.2(b). The request must be
filed in writing with the Administrator at least one
year prior to when distribution would commence based on
the current designation. The requests must specify a
form of distribution described in Section 6.2(a), shall
be subject to approval of the Administrator and, if
approved, shall be effective as of the date that is one
year after the request is filed with the Administrator.
If the Member's distribution event will occur upon his
termination of employment and the Member's employment
terminates within one year after the request is filed,
the request shall not be effective. A request under this
Section 6.2(c)(i) shall not result in a forfeiture of
the Member's or former Member's Account.
(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).
(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 Subaccounts and one or more Retirement Sub-accounts, or any
combination thereof,
15
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.
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
16
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. 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 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.
17
(b) In the event a Change of Control has occurred, the trustee of
the Trust shall, within 45 days of such Change of Control, pay to each
Member or former Member not making an election under (c) below, a lump sum
payment equal to the value of the Member's or former Member's Accounts
(determined under Article 5) as of the Valuation Date coinciding with or
next preceding the date of such Change of Control. The amount of each
Member's or former Member's lump sum payment shall be determined by the
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 December 31, 1996,
or the occurrence of a Change of Control, if earlier, to have amounts and
benefits determined and payable under the terms of the Plan as if a Change
of Control had not occurred. New Members of the Plan may elect in a time
and manner determined by the Committee, but in no event later than 90 days
after becoming a Member, to have amounts and benefits determined and
payable under the terms of the Plan as if a Change of Control had not
occurred. A Member or former Member who has made an election, as set forth
in the two preceding sentences, may, at any time and from time to time,
change that election; provided, however, a change of election that is made
within one year of a Change of Control shall be invalid.
(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.
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.
18
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.
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
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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.
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
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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 Subaccount."
(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 Subaccounts established pursuant to Section
9.1(a).
(c) A Member may instruct the Administrator to allocate all or any
portion of the amount he defers for periods commencing after December 31,
1990 pursuant to his Salary Deferral Agreement to one or more of the
Post-Secondary Education Subaccounts 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 PostSecondary Education Sub-accounts. Except as
provided in this Section 9.2(b) or 9.2(c) below, a Member or former Member
may not change the time or form of distribution of his Post-Secondary
Education Sub-accounts.
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(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 Subaccounts, 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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