Exhibit 10.2
CSX CORPORATION
CORPORATE DIRECTOR DEFERRED COMPENSATION PLAN
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EFFECTIVE NOVEMBER 1, 1980
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As Amended through May 1, 2001
1. Purpose
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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
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The following words or terms used herein shall have the following
meanings:
(a) "Administrator: -- means CSX Corporation
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(i) Prior to a Change of Control, the Administrator shall
be responsible for the general administration of the Plan,
claims review, and for carrying out its provisions.
Administration of the Plan shall be carried out consistent
with the terms of the Plan.
(ii) Following a Change of Control, the Benefits Trust
Committee may remove and/or replace the Administrator.
(iii) The Administrator shall have sole and absolute
discretion to interpret the Plan and determine eligibility
for and benefits hereunder. Decisions of the Administrator
regarding participation in and the calculation of benefits
under the Plan shall at all times be binding and conclusive
on Participants, their beneficiaries, heirs and assigns.
(iv) Notwithstanding subsection (iii) above, following a
Change of Control, final benefit determinations for
Participants, their beneficiaries, heirs and assigns and
decisions regarding benefit claims under the Plan shall rest
with the Benefits Trust Committee or its delegate in its
sole judgment and absolute discretion.
(b) "Benefits Trust Committee" -- means the committee
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established pursuant to the CSX Corporation and Affiliated
Companies Benefits Assurance Trust document.
(c) "Board" -- means the Board of Directors of CSX
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(d) "Change of Control" -- means any of the following:
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(i) Stock Acquisition. The acquisition, by any individual,
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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
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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(d); or
(ii) Board Composition. Individuals who, as of the date
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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
(iii) Business Combination. Approval by the shareholders of
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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;
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(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
(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
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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(d); or
v) Liquidation or Dissolution. Approval by the
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shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation or its principal subsidiary.
(e) "CSX" or "Corporation" -- means CSX Corporation
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(f) "CSX's Accountants" -- means the independent accountants,
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actuaries, benefits consulting firm or other entity engaged
by CSX to provide Participant's accounting services for the
Plan and, if selected or changed following a Change of
Control, approved by the Benefits Trust Committee.
(g) "Director's Fees" -- means any compensation, whether for
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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.
(h) "Distribution Event" -- means any of the events listed in
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Section 2(d), "Change of Control," with the following
modification: the words "Approval by the shareholders of the
Corporation of," in the first line of Sections 2(d)(iii) and
2(d)(iv) are replaced for purposes of this Section 2(h) with the
words, "Consummation of, i.e., actual change in ownership of
Outstanding Corporation Common Stock, Outstanding Corporation
Voting Securities, and/or assets of the Corporation or its
principal subsidiary by reason of,".
(i) "Member" -- means any person duly elected to the Board.
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(j) "Participant" -- means any Member who elects to participate
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in the Plan.
(k) "Plan" -- means Corporate Director Deferred Compensation
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Plan.
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(l) "Secretary" -- means the Corporate Secretary of CSX.
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(m) "Trust" -- means the trust created under the CSX and
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Affiliated Companies Benefits Assurance Trust Agreement or a
grantor trust or trusts 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.
(n) "Valuation Date" -- means the last day of each calendar
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quarter and such other dates as the Administrator deems necessary
or appropriate to value the Participants' benefits under this
Plan. However, following a Change of Control, the selection of a
Valuation Date other than the last day of each calendar quarter
shall be subject to the approval of the Benefits Trust Committee.
In any instance in which the male gender is used herein, it shall
also include persons of the female gender in appropriate circumstances.
3. Merger Provisions
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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
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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. Following a Change of Control, all Elections to Participate are subject
to the approval of the Benefits Trust Committee.
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
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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, provided, however, following a Change of
Control, any change in the rate of interest is subject to the approval of the
Benefits Trust Committee.
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
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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.
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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.
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
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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
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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.
8. Amendment or Termination of Election to Participate
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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
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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
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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 unfunded aggregate
value of the amount each Participant would be eligible to receive
under 10.2 below (but calculated with respect to the Valuation Date
described in this sentence, rather than the date of the applicable
Distribution Event) 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 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
Distribution Event 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. In no event, however, shall the Company's
contribution to the Trust be less than the amount that would have been
contributed thereto with respect to liabilities relating to the Plan
(including related administrative and investment expenses), pursuant
to and at the time and in the manner provided under Section 1(h) of
the Trust.
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10.2 In the event a Distribution Event has occurred, the trustee
of the Trust shall, within 45days of such Distribution Event, pay to
each Participant not making an election under 10.3 below, 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.
10.3 Each Participant may elect in a time and manner determined
by the Administrator but in no event later than December 31, 1996 to
have amounts and benefits determined and payable under the terms of
the Plan as if a Distribution Event 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 90 days after becoming a
Participant, to have amounts and benefits determined and payable under
the terms of the Plan as if a Distribution Event 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 Distribution Event shall be invalid.
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 Distribution Event, 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 Distribution Event has occurred, give written
notification to each Participant eligible to make an election under
this Section 10.4, that a Distribution Event has occurred and
informing such Participant of the availability of the election.
11. Claims Against Participant's Account
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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
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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, if prior to a Change of Control, may, if directed by
the Board in its sole discretion, be paid immediately to him in a lump sum.
Following a Change of Control, such a decision by the Board is subject to the
approval of the Benefits Trust Committee.
13. Payment of Credit Balance to Participant's Account
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Notwithstanding anything herein to the contrary, prior to a
Change of Control, 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.
Following a Change of Control, such action by the Board is subject to the
approval of the Benefits Trust Committee.
Further, the obligations of CSX and the benefit due any
Participant or Designated Beneficiary under the Plan shall be reduced by any
amount received in regard thereto under the Trust or any similar trust or other
vehicle.
14. Joint and Several Obligation
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To the extent reflected by resolutions of the applicable boards
of directors, obligations for benefits under this Plan shall be joint and
several.
15. Amendment or Termination
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Prior to a Change of Control, this Plan may be altered, amended,
suspended, or terminated at any time by the Board, on the recommendation of the
Compensation Committee of 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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