Exhibit 10.2
SPECIAL RETIREMENT PLAN
FOR
CSX DIRECTORS
As Amended and Restated January 1, 1995
(As Amended through December 11, 1996)
1. Purpose. In order to attract and retain the services of
Directors of the highest caliber, to reward them for their services to the
Company when they cease to be active Directors, and to retain for the Company
the value of their advice and consultation, the Board of Directors adopted a
special retirement plan for Directors on April 21, 1981. The Plan, as amended
November 14, 1984, is further amended and restated to provide as follows:
2. Definitions. Whenever used in the Plan, the following terms
shall have the meanings set forth below unless the context clearly requires a
different meaning:
(a) Board. The Company's Board of Directors.
(b) Change of Control. A "Change of Control" means any of the
following:
(i) Stock Acquisition. The acquisition by any
individual, entity or group [within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")] (A
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock"), or (B)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (i), the following acquisitions shall not constitute a Change
of Control: (A) any acquisition directly from the Company; (B) any acquisition
by the Company; (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company; or (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(b); or
(ii) Board Composition. Individuals who, as of the date
hereof, constitute the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election or nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors; or
(iii) Business Combination. Approval by the
shareholders of the Company of a reorganization, merger, consolidation or sale
or other disposition of all or substantially all of the assets of the Company or
its principal subsidiary that is not subject, as a matter of law or contract, to
approval by the Interstate Commerce Commission or any successor agency or
regulatory body having jurisdiction over such transactions (the "Agency") (a
"Business Combination"), in each case, unless, following such Business
Combination:
(A) all or substantially all of the individuals
and entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the
corporation resulting from such Business
Combination (including, without limitation, a
corporation which as a result of such
transaction owns the Company or its principal
subsidiary or all or substantially all of the
assets of the Company or its principal
subsidiary either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately
prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be;
(B) no Person (excluding any corporation
resulting from such Business Combination or any
employee benefit plan (or related trust) of the
Company or such corporation resulting from such
Business Combination) beneficially owns,
directly or indirectly, 20% or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such Business Combination or the combined voting
power of the then outstanding voting securities
of such corporation except to the extent that
such ownership existed prior to the Business
Combination; and
(C) at least a majority of the members of the
board of directors resulting from such Business
Combination were members of the Incumbent Board
at the time of the execution of the initial
agreement, or of the action of the Board of
Directors, providing for such Business
Combination; or
(iv) Regulated Business Combination. Approval by the
shareholders of the Company of a Business Combination that is subject, as a
matter of law or contract, to approval by the Agency (a "Regulated Business
Combination") unless such Business Combination complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 2(b); or
(v) Liquidation or Dissolution. Approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company or its principal subsidiary.
(c) Committee. The Executive Committee of the Board.
(d) Company. CSX Corporation.
(e) Director. A person duly elected or appointed to, and
serving as an active member of, the Board.
(f) Director's Fees. The basic annual retainer fee paid to an
active Outside Director for his services, plus meeting fees, special fees for
serving as Chairman of a committee, but excluding travel expenses or any other
extraordinary form of compensation.
(g) Effective Date. April 21, 1981. The effective date of the
amendment and restatement is January 1, 1995. A Participant receiving Retirement
Payments on the date of the restatement will continue to receive payments in
accordance with the terms of the Plan as restated to the extent not inconsistent
with the terms of the Plan prior to the date of the restatement.
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(h) Eligible Service. The period of service with the Company
or any of its predecessor companies as an active Outside Director, measured in
years and months beginning with the day of the month in which the person first
becomes or performs services as an Outside Director and ending with the month in
which he ceases to be, or no longer performs services as, an Outside Director.
Service which need not be continuous.
(i) Employee Director. A person who serves or has served as an
active Director during a period when he or she is a salaried employee of the
Company or a subsidiary company.
(j) Outside Director. A Director who, with respect to any
period of service as an active Director taken into account under the Plan, is
not an Employee Director.
(k) Participant. An Outside Director or former Outside
Director who has met or can be expected to meet the requirements for and become
eligible for Retirement Payments under the Plan as determined under Section 3.
The term includes Outside Directors who on the Effective Date of the amendment
and restatement are receiving Retirement Payments under the Plan. An Employee
Director shall not be entitled to become a Participant in the Plan with respect
to any period of service as a Director while an employee of the Company or a
predecessor company.
(l) Plan. The Special Retirement Plan for CSX Directors.
(m) Payment Date. The last day of each calendar quarter
beginning with the last day of the calendar quarter in which the Participant
becomes entitled to receive Retirement Payments and ending with the payment for
the last calendar quarter for the calendar year in which the Participant ceases
to be eligible for Retirement Payments under Section 3.
(n) Retirement Payment. An annual amount equal to 50% of the
Director's Fees paid during the Outside Director's final twelve months of
service as a Director with the Company payable in quarterly installments on each
Payment Date.
(o) Rule of 75. Any combination of age and years of Eligible
Service that totals 75 or more.
(p) Trust. A grantor trust established by the Company which
will substantially conform to the terms of the Internal Revenue Service model
trust as described in Revenue Procedure 92-64, 1992-2 D.B. 422. Except as
provided in Section 4, the Company is not obligated to make any contribution to
the Trust.
(q) Valuation Date. The last day of each calendar year and
such other dates as the Committee deems necessary or appropriate to value the
Participants' benefits under this Plan.
3. Eligibility for Retirement Payments.
(a) An Outside Director who no longer serves as a Director
(for any reason other than death) and has (i) attained the age of 68, or (ii)
has met the Rule of 75, shall be entitled to receive Retirement Payments. A
Participant who ceases to serve as a Director before attaining the age of 68
will be entitled to receive Retirement Payments when the Participant attains the
age of 68 or meets the Rule of 75, whichever event shall first occur. In
consideration of the receipt of Retirement Payments under the Plan, a
Participant agrees to be available for advice and consultation as requested by
the Board.
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(b) A Participant entitled to compensation under (a) shall
receive Retirement Payments on each Payment Date as hereinafter provided. A
Participant who has completed 10 or more years of Eligible Service or has met
the Rule of 75, will be entitled to Retirement Payments for life. A Participant
who has not completed 10 years of Eligible Service and has not met the Rule of
75, will be entitled to receive Retirement Payments for a period equal to the
lesser of (i) the Participant's life and (ii) the Participant's period of
Eligible Service. A Participant's right to compensation shall terminate as of
the last day of the calendar year in which his or her death occurs, or, if the
Participant has less than 10 years of Eligible Service and has not met the Rule
of 75, as of the end of the calendar year in which falls the date that is the
anniversary of the date the Participant's last period of Eligible Service began.
(c) Any retirement payment due after the death of a
Participant shall be paid to the Participant's surviving spouse, or, if no
spouse survives, to the Participant's personal representative.
4. Change of Control.
(a) If a Change of Control has occurred, the Committee shall
cause the Company to contribute to the Trust within 7 days of such Change of
Control, a lump sum contribution equal to the greater of:
(i) the aggregate value of the amount each Participant
would be eligible to receive, under (b), below; or
(ii) the present value of accumulated Plan benefits
based on the assumptions the Company's independent actuary deems reasonable for
this purpose, as of a Valuation Date coinciding with nor next 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 4 shall be determined by the Company's independent
actuaries. Thereafter, the Company's independent actuaries shall annually
determine as of a Valuation Date for such Participant not receiving a lump sum
payment pursuant to subsection (b), below, the greater of:
(A) the amount such Participant would have
received under subsection (b) had such
Participant not made the election under
subsection (c) below, if applicable; and
(B) the present value of accumulated benefits
based on assumptions the actuary deems
reasonable for this purpose. To the extent that
the value of the assets held in the Trust
relating to this Plan does not equal the amount
described in the preceding sentence, at the time
of the valuation, the Company shall make a lump
sum contribution to the Trust equal to the
difference.
(b) In the event a Change of Control has occurred, the trustee
of the Trust shall, within 45 days of such Change of Control, pay to each
Participant not making an election under subsection (c), a lump sum payment
equal to the present value of the Retirement Payments the Participant is
entitled to receive from the Company pursuant to the terms of the Plan assuming
when applicable for each Participant as of the date of Change of Control that
(i) the Participant will complete his current term as Director, (ii) the
Participant will survive during the period of his normal life expectancy, and
(iii) the age requirement for retirement and receipt of Retirement Payments is
the age of the Participant on the Change of Control date. Present value shall be
determined by using a discount rate equal to the applicable Federal rate
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provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as
amended. The amount of each Participant's lump sum payment shall be determined
by the Company's actuaries.
(c) Each Participant may elect in a time and manner determined
by the Committee, but 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 this 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 Committee, but in no event later than 90 days after becoming a
Participant, to have amounts and benefits determined and payable under the terms
of the Plan as if a Change of Control had not occurred. A Participant 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 this Plan to the contrary,
each Participant who has made an election under (c), above, may elect within 90
days following a Change of Control, in a time and manner determined by the
Committee, to receive a lump sum payment calculated under the provisions of
subsection (b), above, determined as of the Valuation Date next preceding such
payment, except that such amount shall be reduced by 5% and such reduction shall
be irrevocably forfeited to the Company by the Participant. Furthermore, as a
result of such election, the Participant shall no longer be eligible to
participate or otherwise benefit under the Plan. Payments under this subsection
(d) shall be made not later than seven (7) days following receipt by the Company
of the Participant's election. The Committee shall, no later than seven (7) days
after a Change of Control has occurred, cause written notification to be given
to each Participant eligible to make an election under this subsection (d), that
a Change of Control has occurred and informing such Participant of the
availability of the election.
5. Committee Powers. The Committee shall have full power and
authority to interpret, construe and administer this Plan, and all actions of
the Committee under the Plan shall be binding and conclusive on all persons for
all purposes.
6. Successors. The Plan shall be binding upon and inure to the
benefit of Participants. If the Company becomes a party to any merger,
consolidation, reorganization or in the event of a sale of substantially all the
assets of the Company, the Plan shall remain in full force and effect as an
obligation of the Company or its successor in interest.
7. Amendment and Termination. The Board reserves the right to
amend or terminate the Plan at any time without the consent of any Participant,
but no amendment or termination shall deprive any Participant of the right to
continue to receive payment under Section 3 once payments have begun.
Notwithstanding the foregoing, if a Change of Control occurs, each Participant,
regardless of age or Eligible Service shall be eligible for benefits under the
Plan, and the Plan may not be terminated and no amendment may be made that would
adversely affect the right of any such Participant to receive Retirement
Payments or Accelerated Retirement Payments under the Plan.
8. Construction. The Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia. The masculine pronoun
shall mean the feminine wherever appropriate. The captions inserted herein are
inserted as a matter of convenience and shall not affect the construction of the
Plan.
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