Exhibit 10.22
SUPPLEMENTARY SAVINGS AND INCENTIVE AWARD DEFERRAL PLAN
FOR ELIGIBLE EXECUTIVES OF
CSX CORPORATION AND AFFILIATED COMPANIES
As Amended through February 14, 2001
TABLE OF CONTENTS
Page
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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 Benefits Trust Committee ..................................... 2
1.7 Board of Directors ........................................... 2
1.8 Change of Control ............................................ 2
1.9 Code ......................................................... 3
1.10 Committee .................................................... 3
1.11 Compensation ................................................. 3
1.12 Corporation .................................................. 3
1.13 Deferral Agreement ........................................... 3
1.14 Distribution Option(s) ....................................... 4
1.15 Divisive Transaction ......................................... 4
1.16 Effective Date ............................................... 4
1.17 Eligible Executive ........................................... 4
1.18 Independent Accountant ....................................... 4
1.19 Matching Credits ............................................. 4
1.20 Member ....................................................... 4
1.21 MICP ......................................................... 4
1.22 Participating Company ........................................ 4
1.23 Plan ......................................................... 5
1.24 Salary Deferrals ............................................. 5
1.25 Salary Deferral Agreement .................................... 5
1.26 Salary Deferral Percentage ................................... 5
1.27 SMICP ........................................................ 5
1.28 Subsidiary ................................................... 5
1.29 Tax Savings Thrift Plan ...................................... 5
1.30 Trust ........................................................ 5
1.31 Valuation Date ............................................... 5
ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS .............................. 5
2.1 In General ................................................... 5
2.2 Modification of Initial Deferral Agreement ................... 6
2.3 Termination of Membership; Re-employment ..................... 6
2.4 Change in Status ............................................. 7
2.5 Membership Following a Change in Control ..................... 7
ARTICLE 3. AWARD DEFERRAL PROGRAM .......................................... 7
3.1 Filing Requirements .......................................... 7
3.2 Amount of Deferral ........................................... 8
3.3 Crediting to Account ......................................... 8
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ARTICLE 4. SALARY DEFERRAL PROGRAM ............................................ 9
4.1 Filing Requirements .............................................. 9
4.2 Salary Deferral Agreement ........................................ 9
4.3 Amount of Salary Deferrals ....................................... 9
4.4 Changing Salary Deferrals ........................................ 10
4.5 Certain Additional Credits ....................................... 10
ARTICLE 5. MAINTENANCE OF ACCOUNTS ............................................ 11
5.1 Adjustment of Account ............................................ 11
5.2 Investment Performance Elections ................................. 12
5.3 Changing Investment Elections .................................... 12
5.4 Vesting of Account ............................................... 12
5.5 Individual Accounts .............................................. 13
5.6 Action Following a Change of Control ............................. 13
ARTICLE 6. PAYMENT OF BENEFITS ................................................ 13
6.1 Commencement of Payment .......................................... 13
6.2 Method of Payment ................................................ 15
6.3 Applicability .................................................... 16
6.4 Hardship Withdrawal .............................................. 16
6.5 Designation of Beneficiary ....................................... 16
6.6 Special Distribution Rules ....................................... 17
6.7 Status of Account Pending Distribution ........................... 17
6.8 Installments and Withdrawals Pro-Rata ............................ 17
6.9 Change of Control ................................................ 18
ARTICLE 7. AMENDMENT OR TERMINATION ........................................... 19
7.1 Right to Terminate ............................................... 19
7.2 Right to Amend ................................................... 19
7.3 Uniform Action ................................................... 20
ARTICLE 8. GENERAL PROVISIONS ................................................. 20
8.1 No Funding ....................................................... 20
8.2 Obligation ....................................................... 20
8.3 No Contract of Employment ........................................ 20
8.4 Withholding Taxes ................................................ 20
8.5 Nonalienation .................................................... 20
8.6 Administration ................................................... 20
8.7 Construction ..................................................... 21
ARTICLE 9. POST-SECONDARY EDUCATION SUB-ACCOUNTS .............................. 21
9.1 Post-Secondary Education Sub-accounts ............................ 21
9.2 Distribution of Post-Secondary Education Sub-accounts ............ 22
9.3 Construction ..................................................... 23
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INTRODUCTION
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This Supplementary Savings and Incentive Award Deferral Plan for Eligible
Executives of CSX Corporation and Affiliated Companies (the "Plan") was adopted
October 1, 1987 and has been subsequently amended from time to time. 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 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 (and amended through
December 31, 1997) reads as hereinafter set forth.
ARTICLE I. DEFINITIONS
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1.1 Account means the bookkeeping 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 "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 Administrator may establish a maximum number of "Retirement
Sub-accounts" which a Member may have at any time. In addition to any Retirement
Sub-accounts established by the Administrator, an additional Retirement
Sub-account known as the Cash Plan Retirement Sub-account shall be established
for deferrals of payments from the CSX Market Value Cash Plan. The Administrator
also 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 means 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 means the Corporation and any company or corporation
directly or indirectly controlled by the Corporation.
1.4 Award means for any year (i) 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
in the succeeding year under the MICP and/or SMICP or other incentive award
otherwise payable in cash as determined by the Committee; and (ii) the amount
paid from the CSX Market Value Cash Plan with respect to such year and, in the
absence of an Award Deferral Agreement with respect to such amount and with
respect to such year, payable in cash under the CSX Market Value Cash Plan.
1.5 Award Deferral Agreement means a Deferral Agreement filed in accordance
with the award deferral program described in Article 3.
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1.6 Benefits Trust Committee means the committee created pursuant to the
CSX Corporation and Affiliated Companies Benefits Assurance Trust Agreement.
1.7 Board of Directors or "Board" means the Board of Directors of the
Corporation.
1.8 Change of Control means any of the following:
(a) Stock Acquisition. The acquisition, by any individual, entity or
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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,
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however, that for purposes of this subsection (a), the following
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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 1.8; or
(b) Board Composition. Individuals who, as of the date hereof,
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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
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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:
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(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
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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
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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 (i),
(ii) and (iii) of subsection (c) of this Section 1.8; or
(e) Liquidation or Dissolution. Approval by the shareholders of the
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Corporation of a complete liquidation or dissolution of the Corporation or
its principal subsidiary.
1.9 Code means the Internal Revenue Code of 1986, as amended from time to
time.
1.10 Committee means the Compensation Committee of the Board of Directors
of CSX Corporation.
1.11 Compensation means 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.
1.12 Corporation means CSX Corporation, a Virginia corporation, and any
successor thereto by merger, purchase or otherwise.
1.13 Deferral Agreement means 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
Administrator and shall include any amendments, attachments or appendices.
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1.14. Distribution Event means any of the events listed in Section 1.8,
"Change of Control," with the following modification: the words, "Approval by
the shareholders of the Corporation of," in the first line of Sections 1.8(c)
and 1.8(d) are replaced for purposes of this Section 1.14 with the words,
"Consummation of, i.e., actual change in ownership of Outstanding Corporation
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Common Stock, Outstanding Corporation Voting Stock, and/or assets of the
Corporation or its principal subsidiary by reason of,".
1.15 Distribution Option(s) means, 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.
1.16 Divisive Transaction means a transaction in which the Eligible
Executive's employer ceases to be a Subsidiary or there is a sale of
substantially all of the assets of the Subsidiary.
1.17 Effective Date means October 1, 1987 or with respect to the Eligible
Executives of a company which adopts the Plan, it means the date such company
becomes a Participating Company.
1.18 Eligible Executive means an employee of a Participating Company,
provided that:
(a) For purposes of the award deferral program described in Article
3:
(i) prior to January 1, 1995, 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
(ii) on and after January 1, 1995 and before January 1, 1999,
such employee: (A) is employed by a Participating Company
and is receiving Compensation of one hundred thousand
dollars ($100,000) or more per year; or (B) retired from
the Participating Companies or terminated employment with
the Participating Companies on account of disability as
determined by the Administrator, and was receiving
compensation of one hundred thousand dollars ($100,000) or
more per year at the time of such retirement or
termination; or
(iii) on and after January 1, 1999, such employee: (A) is
employed by a Participating Company and is receiving
compensation of one hundred twenty five thousand dollars
($125,000) or more per year; or (B) retired from the
Participating Companies or terminated employment with the
Participating Companies on account of disability as
determined by the Administrator, and was receiving
Compensation of one hundred twenty five thousand dollars
($125,000) or more per year at the time of such retirement
or termination. An employee who, in 1998, was eligible to
participate because his Compensation satisfied the
requirements of subsection (ii), and is excluded from
participation only because of the increase in the
Compensation requirement in this subsection (iii), shall
continue to be eligible to participate.
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(b) For purposes of the salary deferral program described in Article
4, such employee is eligible for membership in the Tax Savings
Thrift Plan, and;
(i) Prior to January 1, 1995, such employee is employed in
salary grades 21 through 40 inclusive; or
(ii) Compensation of one hundred thousand dollars ($100,000)
or more per year; or
(iii) on and after January 1, 1999, is receiving Compensation
of one hundred twenty five thousand dollars ($125,000) or
more per year. An employee who, in 1998, was eligible to
participate because his Compensation satisfied the
requirements of subsection (ii), but is excluded from
participation only because of the increase in the
Compensation requirement in this subsection (iii), shall
continue to be eligible to participate.
(c) After January 1, 1999, the compensation amount set forth in
subsections (a)(iii) and (b)(iii) may, in the discretion of the
Chief Executive Officer, be adjusted no more frequently than
annually, based on a review of data regarding eligibility to
participate in this type of program.
(d) 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.
Notwithstanding the preceding, following a Change of Control,
such designations are subject to the approval of the Benefits
Trust Committee.
1.19 Independent Accountant means the independent accountants engaged by
the Corporation and, if selected or changed following a Change of Control,
approved by the Benefits Trust Committee.
1.20 Matching Credits means amounts credited to the Account of a Member
pursuant to Section 4.5.
1.21 Member means, except as otherwise provided in Article 2, each Eligible
Executive who has executed an initial Deferral Agreement as described in Section
2.1.
1.22 MICP means the Participating Companies' Management Incentive
Compensation Program.
1.23 Participating Company means the Corporation and any company or
corporation directly or indirectly controlled by the Corporation, which the
Committee designates as eligible to participate in the Plan in accordance with
Section 8.6(e).
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1.24 Plan means this Supplementary Savings and Incentive Award Deferral
Plan for Eligible Executives of CSX Corporation and Affiliated Companies, as
amended from time to time.
1.25 Salary Deferrals means the amounts credited to a Member's Account
under Section 4.3.
1.26 Salary Deferral Agreement means a Deferral Agreement filed in
accordance with the salary deferral program described in Article 4.
1.27 Salary Deferral Percentage means 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.
1.28 SMICP means the Participating Companies' Senior Management Incentive
Compensation Program.
1.29 Subsidiary means a corporation more than 50% of the voting shares of
which are owned directly or indirectly by the Corporation.
1.30 Tax Savings Thrift Plan means the Tax Savings Thrift Plan for
Employees of CSX Corporation and Affiliated Companies, as amended from time to
time.
1.31 Trust means the CSX Corporation and Affiliated Companies Benefits
Assurance Trust.
1.32 Valuation Date means the last business day of each calendar month
following the Effective Date.
ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS
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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 an 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 of membership, the Administrator may require such
other information as it deems appropriate.
2.2 Modification of Initial Deferral Agreement:
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(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).
(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 an 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.
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(c) If a former Member is reemployed as an Eligible Executive and
becomes a Member again pursuant to (b)(ii): (i) upon notice to the
Administrator by the Participant, distributions from a Retirement
Sub-account shall cease if the commencement of distribution was because of
the Member's termination of employment (including retirement); (ii)
distributions from a Retirement Sub-account shall continue if the
commencement of distribution was because the Member chose a specific age
for the commencement of benefits and that age has been attained. Except for
distributions which must continue pursuant to (c)(ii), a reemployed Member
may change Distribution Option elections with respect to his Retirement
Sub-accounts without penalty so long as such change does not accelerate the
timing of any payment to the Member.
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.
2.5 Membership Following a Change of Control: Following a Change of
Control, any membership determinations or discretionary actions pursuant to this
Article 2 shall be subject to the approval of the Benefits Trust Committee.
ARTICLE 3. AWARD DEFERRAL PROGRAM
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3.1 Filing Requirements:
(a) With respect to an Award identified in Section 1.4(i), 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 Award is
determined and paid in the following calendar 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) With respect to an Award identified in Section 1.4(i),
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.
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(c) With respect to an Award identified in Section 1.4(i), 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) With respect to an Award identified in Section 1.4(ii), at
such time and in accordance with such rules 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 any
such Award. Awards identified in Section 1.4(ii) may not be deferred
into Education Sub-accounts.
(e) 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 an 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.
(f) 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.
3.2 Amount of Deferral:
(a) With respect to an Award identified in Section 1.4(i),
prior to a Change of Control, 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. Following a Change
of Control, the Committee's decision is subject to the final approval
of the Benefits Trust Committee.
(b) With respect to an Award identified in Section 1.4(i), 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.
(c) With respect to an Award identified in Section 1.4(ii),
there shall be no minimum nor maximum amount of deferral allowed.
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
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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, prior to a
Change of Control, 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). Following a Change of Control,
the Committee's decision is subject to final approval of the Benefits
Trust Committee.
ARTICLE 4. SALARY DEFERRAL PROGRAM
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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 Administrator 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.
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
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(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) and/or
401(k)(3) 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 an 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.
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 at a
time and in a 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, at a time
and in a 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. Notwithstanding the preceding, following a Change of Control,
such action by the Administrator is subject to approval by the Benefits
Trust Committee.
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 (b)(i) or (ii)
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(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.
No Matching Credits shall be credited to a Member's Education
Sub-account.
ARTICLE 5. MAINTENANCE OF ACCOUNTS
----------------------------------
5.1 Adjustment of Account:
(a) As of each Valuation Date each Account (and, if
applicable, each Sub-account) 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 Administrator and, if
applicable, elected by the Member or former Member, for purposes of
measuring the investment performance of his Sub-accounts.
(b) The Administrator 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
Administrator 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 Sub-accounts 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
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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 Administrator 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%.
(b) In the event the Administrator 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 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 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.
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5.6 Action Following a Change of Control: Following a Change of Control,
any action taken by the Administrator pursuant to this Article 5 is subject to
the approval of the Benefits Trust Committee.
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,
(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 years subsequent to his current age. If a
Member elects to defer an Award identified in Section 1.4(ii) (a payment
from the CSX Market Value Cash Plan), such deferral must extend the
commencement of distribution beyond December 31, 2004. 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; provided, however, no change in
Distribution Option election shall be allowed if it results in changing the
deferral of commencement of distribution of an Award identified in Section
1.4(ii) to a time before January 1, 2005. For purposes of this Plan and
particularly this Section 6.1(a), if the Member's employer is involved in a
Divisive Transaction, the Member will not be considered to have terminated
his employment with an Affiliated Company until his employment with his
employer terminates.
(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 request in writing to
the Administrator to defer the Member's designated
distribution event under Section 6.1(a). The requests must
be filed 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
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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 of Section 6.1(c)(i), or unless the 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. If the Member or former Member changes the form
in which his Account is to be distributed under Section
6.2(c)(ii) at the same time as he changes his designated
distribution event under this Section 6.1(c)(ii), the
combined forfeitures will be five percent (5%) of the
Member's or former Member's Account, determined as of the
Valuation Date upon which the election is effective.
(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 Education Sub-accounts, except
that a Member may transfer the entire amount in any Education Sub-account
to one or more other Education Sub-accounts and one or more of his
Retirement Sub-accounts, or any combination thereof, subject to a possible
forfeiture of five percent (5%) of the Sub-account so transferred, as
provided in Article 9.
(f) Notwithstanding the foregoing, prior to a Change of Control, 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.
(g) Notwithstanding the preceding, following a Change of Control, the
authority to delay payment of a Member's or former Member's Account rests
solely with the Benefits Trust Committee.
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
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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 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
Section 6.2(a), shall be subject to approval of the
Administrator and, if approved, shall be effective as of the
-16-
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. If the Member or former Member
changes his designated distribution event under this Section
6.2(c)(ii) at the same time as he changes the form in which
his Account is to be distributed under Section 6.1(c)(ii),
the combined forfeiture will be five percent (5%) of the
Member's or former Member's Account, determined as of the
Valuation Date upon which the election is effective.
(d) In the event the Member's Account consists of one or more
Retirement Sub-accounts and one or more 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
Education Sub-accounts are distributed, except that a Member may transfer
the entire amount in any Education Sub-account to one or more other
Education Sub-accounts and one or more Retirement Sub-accounts, or any
combination thereof, subject to a possible 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 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 Account Adjustment: The obligations of the Corporation or any of its
affiliated corporations and the benefits due any Member, former
Member, surviving spouse or beneficiary hereunder shall be reduced by
any amount received in regard thereto under the Benefits Assurance
Trust or any similar trust or other vehicle.
6.5 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 6.5 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;
-17-
(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.
(c) Notwithstanding the preceding, following a Change of Control, any
decisions or determinations by the Administrator under this Section 6.5
shall be subject to the approval of the Benefits Trust Committee.
6.6 Designation of Beneficiary: A Member or former Member may, at a time
and in a 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 do not designate a beneficiary or
contingent beneficiary, or if the beneficiary and the contingent beneficiaries
do not 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 6.6 in a time and manner
determined by the Administrator.
6.7 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 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.
6.8 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 6.5 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 Administrator, the rate of
return of such other index of investment performance or investment fund which
may be designated by the Administrator 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.
6.9 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
-18-
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.
6.10 Change of Control:
(a) If a Change of Control has occurred, the Corporation and
Participating Companies shall contribute to the Trust within 7 days of
such Change of Control, a lump sum payment equal to the greater of (i) 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
or (ii) the amount determined under Section 1(h) of the Trust attributable
to liabilities relating to the Plan 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 6.10 shall be
determined by the Independent 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 Independent 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 Independent Accountants, the Corporation and
Participating Companies shall make a lump sum contribution to the Trust
equal to the difference.
(b) In the event a Distribution Event has occurred, the trustee of
the Trust shall, within 45 days of such Distribution Event, 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 Distribution Event. The amount of each
Member's or former Member's lump sum payment shall be determined by the
Independent 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 Administrator, but in no event later than December 31,
1996, or the occurrence of a Distribution Event, if earlier, to have
amounts and benefits determined and payable under the terms of the Plan as
if a Distribution Event had not occurred. New Members of the Plan may
elect in a time and manner determined by the Administrator, 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
Distribution Event 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 Distribution Event
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 Distribution Event, in a time and manner determined by
the Benefits Trust Committee, to receive a lump sum payment calculated
under the provisions of (b) 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 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
-19-
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 Benefits Trust Committee shall,
no later than 7 days after a Distribution Event has occurred, give written
notification to each Member or former Member eligible to make an election
under this subsection (d), that a Distribution Event 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:
(a) Prior to a Change of Control, the Board may, in its sole
discretion, terminate this Plan and the related Deferral Agreements at any
time. Following a Change of Control, this Plan may not be terminated
without the approval of the Benefits Trust Committee.
(b) Prior to a Change of Control, the Committee may terminate an
Affiliated Company's participation as a Participating Company in this Plan
for any reason at any time. Following a Change of Control, an Affiliated
Company may not be terminated from participation as a Participating Company
without the consent of the Benefits Trust Committee.
(c) Prior to a Change of Control, an Affiliated Company's board of
directors may terminate that Affiliated Company's participation as a
Participating Company for any reason at any time. Following a Change of
Control, an Affiliated Company's participation as a Participating Company
may not be terminated without the consent of the Benefits Trust Committee.
(d) 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.
7.2 Right to Amend: Prior to a Change of Control, 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. Following a
Change of Control, all amendments to this Plan are subject to the approval of
the Benefits Trust Committee. 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 Administrator'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. Notwithstanding the preceding,
any such action taken by the Administrator following a Change of Control is
subject to the approval of the Benefits Trust Committee.
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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 Obligation: To the extent reflected by resolutions of the applicable
boards of directors, obligations for benefits under this Plan shall be joint and
several.
8.3 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.
8.4 Withholding Taxes: All payments under this Plan shall be net of an
amount sufficient to satisfy any federal, state or local withholding and payroll
tax requirements.
8.5 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. Notwithstanding the preceding, following a Change of
Control, the Administrator shall not implement such action without the consent
of the Benefits Trust Committee.
8.6 Administration:
(a) Prior to a Change of Control, the Administrator of the Plan 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 and conditions of the Plan.
(b) Following a Change of Control, the Benefits Trust Committee may
remove and/or replace the Administrator.
(c) The Administrator shall have sole and absolute discretion to
interpret the Plan, determine eligibility for and benefits due hereunder.
Decisions of the Administrator regarding benefits under the Plan shall at
all times be binding and conclusive on Members, their beneficiaries, heirs
and assigns. Notwithstanding the preceding, following a Change of Control,
final benefit determinations for Members, 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 and absolute
discretion.
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(d) Prior to paying any benefit under this Plan, the Administrator may
require the Member or 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.
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. 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. Notwithstanding the preceding, following a Change of Control,
any and all decisions by the Administrator are subject to the approval of
the Benefits Trust Committee.
(e) Prior to a Change of Control, the Committee 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. After a Change of Control, such permission must be
approved by the Benefits Trust Committee.
8.7 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 means 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. EDUCATION SUB-ACCOUNTS
9.1 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 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
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(iii) each of the foregoing's lineal descendants, for the payment
of their expenses directly or indirectly arising from
enrollment in a college, university, another post-secondary
institution of higher learning or a secondary educational
institution. Each sub-account established pursuant to this
Section 9.1(a) shall be referred to as an "Education
Sub-account."
(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 Education
Sub-accounts 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
Education Sub-accounts 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 Education
Sub-account.
9.2 Distribution of Education Sub-accounts:
(a) Amounts allocated to one or more of a Member's 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 Education Sub-account to one or more other
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
calendar year in which distribution of that Education Sub-account was to
begin; provided, however, if such transfer accelerates the timing of the
payment to the Member, there shall be a 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 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 Education Sub-accounts.
(c) In the event that the individual for whom an 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 Education Sub-accounts and/or a new
Education Sub-account established in accordance with the
provisions of Section 9.1 hereof; or
(ii) to a Retirement Sub-account.
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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 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
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
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 Education Sub-accounts, 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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