Exhibit 10.27
2002 Deferred Compensation Plan
Of CSX Corporation and Affiliated Corporations
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 ........................................ 1
1.7 Board of Directors .............................................. 1
1.8 Change of Control ............................................... 1
1.9 Code ............................................................ 3
1.10 Committee ....................................................... 3
1.11 Company Stock ................................................... 3
1.12 Compensation .................................................... 3
1.13 Corporation ..................................................... 3
1.14 Deferral Agreement .............................................. 3
1.15 Distribution Election ........................................... 3
1.16 Distribution Event .............................................. 3
1.17 Divisive Transaction ............................................ 4
1.18 Effective Date .................................................. 4
1.19 Eligible Executive .............................................. 4
1.20 Enrollment Form ................................................. 5
1.21 Executive Stock Account ......................................... 5
1.22 Form of Payment Election ........................................ 5
1.23 ICP Award ....................................................... 5
1.24 Independent Accountant .......................................... 5
1.25 Matching Credits ................................................ 5
1.26 Member .......................................................... 5
1.27 Partial Distribution Election ................................... 5
1.28 Participating Company ........................................... 5
1.29 Plan ............................................................ 5
1.30 Salary Deferrals ................................................ 5
1.31 Salary Deferral Agreement ....................................... 5
1.32 Stock Award ..................................................... 6
1.33 Subsidiary ...................................................... 6
1.34 Tax Savings Thrift Plan ......................................... 6
1.35 Trust ........................................................... 6
1.36 Valuation Date .................................................. 6
ARTICLE 2. MEMBERSHIP ....................................................... 6
2.1 In General ...................................................... 6
2.2 Termination of Membership; Re-employment ........................ 6
2.3 Change in Status ................................................ 7
2.4 Membership Following a Change in Control ........................ 7
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ARTICLE 3. DEFERRAL AGREEMENTS .............................................. 7
3.1 Deferral Agreements ............................................. 7
3.2 Modification of Deferral Agreement .............................. 7
ARTICLE 4. AWARD DEFERRAL PROGRAM ........................................... 8
4.1 Filing Requirements ............................................. 8
4.2 Amount of Deferral .............................................. 8
4.3 Crediting to Account ............................................ 9
ARTICLE 5. SALARY DEFERRAL PROGRAM .......................................... 9
5.1 Filing Requirements ............................................. 9
5.2 Salary Deferral Agreement ....................................... 9
5.3 Amount of Salary Deferrals ...................................... 10
5.4 Effect of Hardship Withdrawal ................................... 10
5.5 Certain Additional Credits ...................................... 10
ARTICLE 6. EXECUTIVE STOCK DEFERRAL PROGRAM ................................. 11
6.1 Stock Awards .................................................... 11
6.2 Executive Stock Account ......................................... 11
6.3 Dividend Reinvestment ........................................... 12
ARTICLE 7. MAINTENANCE OF ACCOUNTS .......................................... 12
7.1 Creation of Account ............................................. 12
7.2 Adjustment of Account ........................................... 13
7.3 Investment Performance Elections ................................ 13
7.4 Changing Investment Performance Elections ....................... 13
7.5 Vesting of Account .............................................. 14
7.6 Action Following a Change of Control ............................ 14
ARTICLE 8. DISTRIBUTION OF BENEFITS ......................................... 14
8.1 Commencement of Distribution .................................... 14
8.2 Distribution Election ........................................... 15
8.3 Delay of Payment ................................................ 15
8.4 Account Adjustment .............................................. 15
8.5 Hardship Withdrawal, Forfeiture ................................. 15
8.6 Designation of Beneficiary ...................................... 16
8.7 Special Distribution Rules ...................................... 17
8.8 Status of Account Pending Distribution .......................... 17
8.9 One-time Re-deferral Election ................................... 17
8.10 Change of Control ............................................... 17
ARTICLE 9. FORM OF PAYMENT .................................................. 19
9.1 Timing of Distribution .......................................... 19
9.2 Form of Payment Election ........................................ 19
9.3 Installments and Withdrawals Pro-Rata ........................... 19
ARTICLE 10. AMENDMENT OR TERMINATION ........................................ 20
10.1 Right to Terminate .............................................. 20
10.2 Right to Amend .................................................. 20
10.3 Uniform Action .................................................. 20
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ARTICLE 11. GENERAL PROVISIONS .............................................. 21
11.1 No Funding ...................................................... 21
11.2 Obligation ...................................................... 21
11.3 No Contract of Employment ....................................... 21
11.4 Withholding Taxes ............................................... 21
11.5 Nonalienation ................................................... 21
11.6 Administration .................................................. 21
11.7 Impact of Future Legislation or Regulation ...................... 22
11.8 Construction .................................................... 23
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INTRODUCTION
This 2002 Deferred Compensation Plan of CSX Corporation and Affiliated
Companies (the "Plan") was adopted July 9, 2002. 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 the receipt of a portion of their salary,
and/or award(s) under the various incentive compensation plans and programs of
CSX that may be offered from time to time 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. 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.
ARTICLE I. DEFINITIONS
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 7.
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 the amount other than salary awarded to an employee of an
Affiliated Company under the various incentive compensation plans and programs
of CSX that may be offered from time to time, and which has been designated by
the Administrator as eligible for deferral under the Plan, including but not
limited to ICP Awards, stock awards, stock options and special incentive awards.
1.5 Award Deferral Agreement means a Deferral Agreement filed in
accordance with the Award deferral program described in Article 4.
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
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
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(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (i) the then outstanding shares of common stock of
the Corporation (the "Outstanding Corporation Common Stock"), or (ii) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the
Corporation; (ii) any acquisition by the Corporation; (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any corporation controlled by the Corporation; or (iv)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 1.8; or
(b) Board Composition. Individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors;
provided, however, that any individual becoming a director subsequent to
the date hereof whose election or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board of Directors; or
(c) Business Combination. Approval by the shareholders of the
Corporation of a reorganization, merger, consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation or
its principal subsidiary that is not subject, as a matter of law or
contract, to approval by the Interstate Commerce Commission or any
successor agency or regulatory body having jurisdiction over such
transactions (the "Agency") (a "Business Combination"), in each case,
unless, following such Business Combination:
(i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns
the Corporation or its principal subsidiary or all or substantially
all of the assets of the Corporation or its principal subsidiary
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be;
(ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust)
of the
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Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination; and
(iii) at least a majority of the members of the board of
directors resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board of Directors, providing for such
Business Combination; or
(d) Regulated Business Combination. Approval by the shareholders of
the Corporation of a Business Combination that is subject, as a matter of
law or 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
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 Company Stock means the common stock of the Corporation.
1.12 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 5; and (b) any limit on compensation imposed by Section
401(a)(17) of the Code.
1.13 Corporation means CSX Corporation, a Virginia corporation, and any
successor thereto by merger, purchase or otherwise.
1.14 Deferral Agreement means an 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.
1.15 Distribution Election means the election by the Member of the event
triggering the commencement of distribution under Section 8.2.
1.16 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 1.16 with the words,
"Consummation of, i.e., actual
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change in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of the Corporation or its principal
subsidiary by reason of,".
1.17 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.
1.18 Effective Date means November 30, 2002 or with respect to the Eligible
Executives of a company which adopts the Plan, it means the date such company
becomes a Participating Company.
1.19 Eligible Executive means an employee of a Participating Company,
provided that:
(a) For purposes of the award deferral program described in
Article 4:
(i) Such employee is employed by a Participating Company in
salary band 6 or above as of December 30 of the calendar year for
which the Award is made (or in the case of a multiple-year Award,
December 30 of the last calendar year for which the Award is made);
and
(ii) (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.
(b) For purposes of the salary deferral program described in Article
5, such employee is:
(i) eligible for membership in the Tax Savings Thrift Plan; and
(ii) employed in salary band 6 or above; and
(iii) receiving Compensation of one hundred thousand dollars
($100,000) or more per year.
(c) The Compensation amount set forth in subsections (a)(ii) and
(b)(ii) shall be adjusted no more frequently than annually, based on (i)
changes in the Consumer Price Index ("CPI"), such adjustment to be made in
increments of ten thousand dollars ($10,000) only, rounded to next lowest
increment as indicated by the CPI, or (ii) in the discretion of the Chief
Executive Officer, a review of data regarding eligibility to participate in
this type of program. An employee who is eligible to participate because
his Compensation satisfies the requirements of subsection (a)(ii) or
(b)(iii) above, and is excluded from participation only because of a
subsequent increase in the Compensation requirement shall continue to be
eligible to participate.
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(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, including an employee or former employee
who has previously made deferrals under a prior Company deferral plan;
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.
1.20 Enrollment Form means the form prescribed by the Administrator that an
Eligible Executive who has previously made deferrals under a prior Company
deferral plan may file pursuant to Section 2.1 in order to become a Member and
participate in the Plan.
1.21 Executive Stock Account means the bookkeeping account maintained for
each Member to record his deferral of Stock Awards pursuant to Article 6.
1.22 Form of Payment Election means the election by the Member of the form
of distribution he will receive from his Account or Executive Stock Account
pursuant to Section 9.2.
1.23 ICP Award means the Participating Companies' Incentive Compensation
Program, including but not limited to the Management Incentive Compensation
Program ("MICP") and the Senior Management Incentive Compensation Program
("SMICP").
1.24 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.
1.25 Matching Credits means amounts credited to the Account of a Member
pursuant to Section 5.5.
1.26 Member means, except as otherwise provided in Article 2, each Eligible
Executive who has executed an initial Deferral Agreement or Enrollment Form as
described in Section 2.1.
1.27 Partial Distribution Election means a Distribution Election for a
portion of a Member's Account under Section 8.2(d).
1.28 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 11.6(e).
1.29 Plan means this 2002 Deferred Compensation Plan of CSX Corporation and
Affiliated Companies, as amended from time to time.
1.30 Salary Deferrals means the amounts credited to a Member's Account
under Section 5.3.
1.31 Salary Deferral Agreement means a Deferral Agreement filed in
accordance with the salary deferral program described in Article 5.
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1.32 Stock Award means an Award that is or will be payable in Company Stock
issued pursuant to the CSX Omnibus Incentive Plan ("COIP") or another of the
Corporation's stock incentive plans, including but not limited to Performance
Shares, nonqualified stock options, Incentive Stock Options, restricted stock
and stock appreciation rights.
1.33 Subsidiary means a corporation more than 50% of the voting shares of
which are owned directly or indirectly by the Corporation.
1.34 Tax Savings Thrift Plan means the Tax Savings Thrift Plan for
Employees of CSX Corporation and Affiliated Companies, as amended from time to
time.
1.35 Trust means the CSX Corporation and Affiliated Companies Benefits
Assurance Trust.
1.36 Valuation Date means the last business day of each calendar month
following the Effective Date.
ARTICLE 2. MEMBERSHIP
2.1 In General:
(a) An Eligible Executive shall become a Member as of the date he
files his initial Deferral Agreement or an Enrollment Form with the
Administrator. Such Deferral Agreement shall be effective for purposes of
deferring an Award or making Salary Deferrals only as provided in Articles
4 and 5. Such Enrollment Form shall be effective for purposes of
transferring balances previously deferred under a prior Company deferral
plan to the Member's Account or Executive Stock Account only as provided in
Articles 6 and 7.
(b) As a condition of membership, the Administrator may require such
other information as it deems appropriate.
2.2 Termination of Employment; Re-employment:
(a) Subject to Section 2.4, membership shall not cease upon a
Member's termination of employment. In the event that a Member ceases to be
employed by an Affiliated Company, his Salary Deferrals and Matching
Credits shall thereupon be suspended until such time as he shall be
re-employed as an Eligible Executive by an Affiliated Company.
(b) In the event that a Member ceases 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 be re-employed as an Eligible Executive by an Affiliated Company.
(c) Upon re-employment as an Eligible Executive a Member may
participate in the Plan as follows:
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(i) in the case of a Member who prior to re-employment received
the balance in his Account or Executive Stock Account, by executing a
Deferral Agreement or Enrollment Form as provided in Section 2.1 as
though for all purposes of the Plan the Affiliated Companies had never
employed the Member;
(ii) in the case of a Member who prior to re-employment did not
receive the balance in his Account or Executive Stock Account, by
executing a Deferral Agreement or Enrollment Form as provided in
Section 2.1, provided his Distribution Elections and beneficiary
designation shall remain in effect.
(iii) distributions shall cease if the commencement of
distribution was because of the Member's termination of employment
(including retirement);
(iv) distributions shall continue if the commencement of
distribution was because the Member chose a specific date or age for
the commencement of benefits and that date or age has been attained.
2.3 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.
2.4 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. DEFERRAL AGREEMENTS
3.1 Deferral Agreement: A Deferral Agreement shall be in a form, including
electronic form approved by the Administrator, which shall be the sole judge of
the proper completion thereof. Such Agreement shall provide for the deferral of
an Award or for Salary Deferrals and may include such other provisions as the
Administrator deems appropriate.
3.2 Modification of Deferral Agreement: A Member may elect to change,
modify or revoke a Deferral Agreement as follows by filing a new Deferral
Agreement:
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(a) 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 4.
(b) A Member may change the rate of his Salary Deferrals or suspend
his Salary Deferrals as provided in Article 5.
ARTICLE 4. AWARD DEFERRAL PROGRAM
4.1 Filing Requirements:
(a) With respect to an ICP Award made for a calendar year or multiple
years and determined and paid in the following calendar year, an Eligible
Executive may elect, subject to Section 4.2(a) to defer all or a portion of
his Award, if any, for that year. Such election shall be made by filing an
Award Deferral Agreement with the Administrator on or before the close of
business on November 15 of the calendar year (or, in the case of a
multiple-year Award, the last calendar year) for which the Award is earned.
An election to defer a portion of an Award shall be an integral percentage
of such Award.
(b) With respect to an ICP Award, notwithstanding Section 4.1(a), an
individual who becomes an Eligible Executive after November 15 of 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, subject to Section 4.2(a) to defer all or a portion of
that Award in accordance with this Section 4.1(b). Such election shall be
made by filing an Award Deferral Agreement during the 30 day or shorter
period beginning on the date the individual becomes an Eligible Executive
and ending no later than the last day of the month preceding the month in
which the Award is determined.
(c) With respect to an ICP Award, 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 4.1(a) or 4.1(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 other than an ICP Award, an Eligible
Executive shall be entitled to defer an Award by filing an Award Deferral
Agreement with the Administrator on or before the close of business on
November 15 of the calendar year immediately prior to the year in which the
Award is paid or made available to the Eligible Executive. Such Award
Deferral Agreement shall be effective only for the Award in question.
(e) The Committee in its sole discretion may require that certain
Awards must be deferred, in which case no Award Deferral Agreement shall be
required to be filed.
4.2 Amount of Deferral:
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(a) With respect to an ICP Award, prior to a Change of Control, the
Committee in its sole discretion, 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 ICP Award there shall be no minimum amount of
deferral allowed unless otherwise designated by the Administrator.
(c) With respect to an Award other than an ICP Award there shall be
neither minimum nor maximum amount of deferral allowed unless otherwise
designated by the Administrator.
4.3 Crediting to Account: The amount of Award which an Eligible Executive
has elected to defer shall be credited to his Account on the date coincident
with or as soon as reasonably practicable following the date the Award would
have been paid to the Eligible Executive.
ARTICLE 5. SALARY DEFERRAL PROGRAM
5.1 Filing Requirements:
(a) An individual who is an Eligible Executive immediately prior to
the Effective Date may file a Salary Deferral Agreement or an Enrollment
Form 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 5.1(a) and 5.1(b)
may file a Salary Deferral Agreement in any subsequent month of December.
5.2 Salary Deferral Agreement:
(a) A Member's Salary Deferral Agreement shall authorize a reduction
in his base pay with respect to his Salary Deferrals under the Plan. Such
salary reduction shall be an integral percentage not in excess of fifty
(50%) percent. The Agreement shall be effective for payroll periods
beginning on or after the later of: (i) the Effective Date; or (ii) the
first day of the month following the date the Salary Deferral Agreement is
filed with the Administrator in accordance with Section 5.1. Paychecks
applicable to said payroll periods shall be reduced accordingly.
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(b) A Salary Deferral Agreement shall not be revoked or modified with
respect to prior deferrals and shall remain in effect until such time as
the Member files with the Administrator a new Salary Deferral Agreement.
(c) A Member who is a participant in the Tax Savings Thrift Plan will
have his salary deferral election under the Tax Savings Thrift Plan serve
as his Salary Deferral Agreement under this Plan, and will not file a
separate Salary Deferral Agreement.
5.3 Amount of Salary Deferrals: On each pay date, or as soon as reasonably
practicable thereafter, following the effective date of an Eligible Executive's
Salary Deferral Agreement, his Account 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, provided, however, that no 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 Salary Deferral
is first made, it shall be limited to the excess of the amount otherwise
determined for such payroll period under this Section 5.3 over the Eligible
Executive's elective deferrals under the Tax Savings Thrift Plan for such
payroll period.
5.4 Effect of Hardship Withdrawal: In the event a Member makes a Hardship
Withdrawal under Section 8.5 of the Plan, his Salary Deferrals under the Plan
will be automatically suspended. The Member 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 Member 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.
5.5 Certain Additional Credits:
On each pay date, or as soon as reasonably practicable thereafter, there
shall be credited Matching Credits to the Account of a Member determined as
follows: the greater of (a) or (b), minus (c), where
(a) is the employer matching contributions the Member 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
(b) is the employer matching contributions the Member 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
(c) is the employer matching contributions made on his behalf for the
applicable period to the Tax Savings Thrift Plan.
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ARTICLE 6. EXECUTIVE STOCK DEFERRAL PROGRAM
6.1 Stock Awards: An Eligible Executive who is eligible to receive a Stock
Award, the terms of which permit its deferral, may file with the Administrator
an Award Deferral Agreement with respect to a Stock Award, pursuant to Article
4.
6.2 Executive Stock Account:
(a) A Member's Executive Stock Account will be created when he files
his initial Award Deferral Agreement with respect to a Stock Award. An
Executive Stock Account will be credited based upon the performance of
Company Stock. No Member shall make an Investment Performance Election with
respect to his Executive Stock Account.
(b) A Member shall be eligible to file Distribution Elections
pursuant to Article 8 and Form of Payment Elections pursuant to Article 9
with respect to his Executive Stock Account. If a Member has not filed a
Distribution Election distribution of his Executive Stock Account will be
made pursuant to Section 8.1. If a Member has not filed a Form of Payment
Election distribution of his Executive Stock Account will be made pursuant
to Section 9.1. Distributions from a Member's Executive Stock Account shall
be made only in shares of Company Stock.
(c) An Eligible Executive who has previously deferred shares of
Company Stock granted pursuant to the CSX Omnibus Incentive Plan ("COIP")
or another of the Corporation's stock incentive plans may elect to have an
Executive Stock Account created for him in the Plan on the Effective Date
by filing an Enrollment Form with the Administrator on or before the
Effective Date. Filing the Enrollment Form will cause the transfer of such
previously deferred share balances to the Member's Executive Stock Account
on the Effective Date, and the Member will enjoy all rights and privileges
of a Member including the ability to file initial Distribution Elections
and Form of Payment Elections. A properly filed Enrollment Form will cause
all prior elections made with respect to such previously deferred shares to
be void immediately, unless otherwise stated in this Section 6.2.
(i) No initial Distribution Election made pursuant to this
Section 6.2 with respect to such previously deferred shares which
designates distribution upon attainment of a designated age under
Section 8.2(a)(i) that is within one year after the Effective Date
shall be filed.
(ii) No initial Distribution Election made pursuant to this
Section 6.2 with respect to such previously deferred shares which
designates distribution upon the Member's termination of employment
with the Affiliated Companies under Section 8.2(a)(ii) shall be
effective if distribution would occur within one year after the
Effective Date.
(iii) Any prior election made with respect to such previously
deferred shares which designates distribution upon the Member's
termination of employment with the Affiliated Companies shall remain
in effect until one year after the Effective Date, and shall be void
thereafter.
11
6.3 Dividend Reinvestment: A Member may elect annually, at such
time as the Administrator may prescribe prior to the close of business on
November 15 in any calendar year, in the form and manner prescribed by the
Administrator to receive credit in his Executive Stock Account for dividends
paid on Company Stock, in the amount with which such Executive Stock Account
would have been credited assuming it had been invested in Company Stock
("Dividend Equivalents"). Absent such an election, Dividend Equivalents will be
paid currently to the Member by the Company.
ARTICLE 7. MAINTENANCE OF ACCOUNTS
7.1 Creation of Account:
(a) A Member's Account will be created when he files his
initial Deferral Agreement.
(b) An Eligible Executive who is a Member of the
Supplementary Savings And Incentive Award Deferral Plan For Eligible
Executives Of CSX Corporation And Affiliated Companies (the "SSP") may
elect to have an Account created for him in the Plan on the Effective
Date by filing an Enrollment Form with the Administrator on or before
the Effective Date. Filing the Enrollment Form will cause the transfer
of balances previously deferred under the SSP to the Member's Account
on the Effective Date, and the Member will enjoy all rights and
privileges of a Member including the ability to file initial
Investment Performance Elections, Distribution Elections and Form of
Payment Elections. A properly filed Enrollment Form will cause all
prior elections made under the SSP to be void immediately, unless
otherwise stated in this Section 7.1, however the Member's investment
fund allocations under the SSP shall remain in effect for transferred
balances until such time as the Member reallocates the current balance
of his Account pursuant to section 7.4(b).
(i) No initial Distribution Election made pursuant to
this Section 7.1 with respect to such previously deferred
amounts which designates distribution upon attainment of a
designated age under Section 8.2(a)(i) that is within one year
after the Effective Date shall be filed.
(ii) No initial Distribution Election made pursuant to
this Section 7.1 with respect to such previously deferred
amounts which designates distribution upon the Member's
termination of employment with the Affiliated Companies under
Section 8.2(a)(ii) shall be effective if distribution would
occur within one year after the Effective Date.
(iii) Any prior election made under the SSP which
designates distribution upon the Member's termination of
employment with the Affiliated Companies shall remain in effect
until one year after the Effective Date, and shall be void
thereafter.
(c) A Member shall be eligible to file Distribution
Elections pursuant to Article 8 and Form of Payment Elections pursuant
to Article 9 with respect to his Account. If a Member has not filed a
Distribution Election distribution of his Account will be made
pursuant to Section 8.1. If a Member has not filed a Form
12
of Payment Election distribution of his Account will be made pursuant
to Section 9.1.
7.2 Adjustment of Account:
(a) As of each pay date, or as soon as reasonably
practicable thereafter, each Account shall be credited or debited with
the amount of earnings or losses with which such 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 elected
by the Member, for purposes of measuring the investment performance of
his Account.
(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' rights under
Section 10.2.
(c) For purposes of Section 7.2(a), the portion of a
Member's Account attributable to Matching Credits shall initially be
credited based upon the performance of "Fund E" (CSX Stock Fund) under
the Tax Savings Thrift Plan.
7.3 Investment Performance Elections: In the event the
Administrator designates more than one investment fund or index of investment
performance under Section 7.2, each Member shall file an initial investment
performance election with the Administrator with respect to the investment of
his Account. 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 Account. The election shall be made
within such time period and on such form as the Administrator may prescribe and
shall be in integral percentages of the Member's Account balance or deferral.
The election shall be effective as of the beginning of the payroll period next
following the date the election is filed. In the event a Member does not file an
investment performance election, his Account shall be credited with earnings and
losses as if the Account had earned the same rate of return as the Stable Value
Fund under the Tax Savings Thrift Plan.
7.4 Changing Investment Performance Elections:
(a) A Member may change his election in Section 7.3 with
respect to his Account 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 may reallocate the current balance of his
Account, 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 notice with the Administrator. Such notice shall be
effective as soon as administratively practicable following its
receipt by the
13
Administrator. A Member may not reallocate the balance of his
Executive Stock Account to any investment other than Company Stock.
7.5 Vesting of Account: Each Member shall be fully vested in his
Account or Executive Stock Account.
7.6 Action Following a Change of Control: Following a Change of
Control, any action taken by the Administrator pursuant to this Article 7 is
subject to the approval of the Benefits Trust Committee.
ARTICLE 8. DISTRIBUTION OF BENEFITS
8.1 Commencement of Distribution: The distribution of the Member's
Account or Executive Stock Account shall commence on the date that is one year
following the Member's termination of employment with the Affiliated Companies,
or at such time as may be designated by the Member on a Distribution Election
pursuant to Section 8.2.
8.2 Distribution Election
(a) A Member may file with the Administrator a Distribution
Election for the distribution upon:
(i) attainment of a designated age not earlier than
age 50 nor later than age 70-1/2, however he shall not elect an
age less than one year subsequent to his current age; or
(ii) termination of employment with the Affiliated
Companies.
(b) A Member may file with the Administrator a Partial
Distribution Election for the distribution on attainment of a
designated age for the payment of the expenses directly or indirectly
arising from enrollment in a college, university, another
post-secondary institution of higher learning or a secondary
educational institution in the name of one or more of:
(i) each of the Member's children,
(ii) each of the Member's brothers, sisters, their
spouses, the Member's spouse, or
(iii) each of the foregoing's lineal descendants.
(c) A Member may file a Distribution Election or change a
Distribution Election at any time prior to:
(i) a date that is 30 days subsequent to the date of
his termination of employment in the case of his initial
Distribution Election; or
(ii) one year prior to the date distribution is to
commence under his Distribution Election then in effect,
14
after which time no Distribution Election shall be filed.
(d) A Member may make a Partial Distribution Election with
respect to any portion of his Account or Executive Stock Account,
provided no Distribution Election shall be made for a portion of an
Account or Executive Stock Account less than $2,000, as determined as
of the date the election is made. No Member shall have more than four
Distribution Elections in effect at any time.
(e) In no event may distribution made pursuant to a
Distribution Election commence prior to a date that is three years
subsequent to the date the Member first makes a Salary Deferral or
Award Deferral under either this Plan, the SSP, the COIP or another of
the Corporation's stock incentive plans for which an Executive Stock
Account has been established.
(f) For purposes of this Plan and particularly this Article
8, if the Member's employer is involved in a Divisive Transaction, the
Member will be considered to have terminated his employment with an
Affiliated Company on the closing date of the Divisive Transaction,
provide the Member's employment with his employer has not otherwise
terminated prior to that date.
(g) Notwithstanding anything in Section 8.1 or 8.2 to the
contrary, upon death of a Member, the balance of his Account or
Executive Stock Account shall be distributed to his beneficiary as
soon as administratively practicable following the January 1
coincident with or next following his date of death.
(h) Any Distribution Election made in proper form by a
Member shall be effective and distribution shall commence pursuant to
such Distribution Election. Any Distribution Election not made in
proper form shall be void.
8.3 Delay of Payment
(a) 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.
(b) Notwithstanding the preceding, following a Change of
Control, the authority to delay payment of a Member's Account or
Executive Stock Account rests solely with the Benefits Trust
Committee.
8.4 Account Adjustment: The obligations of the Corporation or any
of its affiliated corporations and the benefits due any 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.
8.5 Hardship Withdrawal, Forfeiture:
15
(a) While employed by the Participating Companies, a Member
may, in the event of a severe financial hardship, request a withdrawal
from his Account or Executive Stock Account without filing a
Distribution Election under Section 8.2. 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. The
Administrator shall consider any requests for payment under this
Section 8.5 on a uniform and nondiscriminatory basis and in accordance
with the standards of interpretation described in section 457 of the
Code and the regulations thereunder. The circumstances that will
constitute a severe financial hardship will depend upon the facts of
each case, but, in any case, no withdrawal may be made to the extent
that such hardship is or may be relieved: (i) through reimbursement or
compensation by available insurance or otherwise or (ii) by
liquidation of the Member's assets, to the extent the liquidation of
such assets would not itself cause severe financial hardship.
(b) For purposes of this Section 8.5 severe financial
hardship may include any of the following circumstances:
(i) illness or injury of the Member or his
dependents,
(ii) the loss of the Member's home or its contents due
to casualty, or
(iii) any other extraordinary and unforeseeable
circumstances of the Member approved by the Administrator,
as long as those circumstances result in a present or impending
critical financial need, including the inability to educate the
Member's dependent child(ren).
(c) Notwithstanding the preceding, a Member may request and
receive a withdrawal from his Account or Executive Stock Account at
any time without filing a Distribution Election under Section 8.2. Any
such withdrawal which is not determined by the Administrator to be a
hardship withdrawal under this Section 8.5 shall result in the
forfeiture of an amount equal to the portion of the Member's Account
or Executive Stock Account, as applicable, that is withdrawn,
multiplied by the Mid-term Applicable Federal Rate determined as of
the Valuation Date upon which the withdrawal is effective.
(d) Notwithstanding the preceding, following a Change of
Control, any decisions or determinations by the Administrator under
this Section 8.5 shall be subject to the approval of the Benefits
Trust Committee.
8.6 Designation of Beneficiary: A 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 estate) to receive any
benefits which may be payable under this Plan upon his death. If the Member does
not designate a beneficiary or contingent beneficiary, or if the beneficiary and
the contingent beneficiaries do not survive the Member, such benefits shall be
paid to the Member's estate. A Member may revoke or change any designation made
under this Section 8.6 in a time and manner determined by the Administrator.
16
8.7 Special Distribution Rules: Notwithstanding anything to the
contrary in this Plan, if (a) a 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 a single sum payment or, in the case of an Executive Stock Account, a
distribution in shares of Company Stock equal to the balance in his Account or
Executive Stock Account. The single sum payment or distribution of shares shall
be made as soon as practicable following the date the 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 under
this Plan.
8.8 Status of Account Pending Distribution:
(a) Pending distribution, a Member's Account shall continue
to be credited with earnings and losses as provided in Section 7.2.
The Member shall be entitled to change his investment elections under
Section 7.3 or apply for Hardship withdrawals under Section 8.5. In
the event of the death of a Member, his Account shall be credited with
earnings and losses as if the Account 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' Accounts commencing with the Valuation Date
coincident with or next following the Member's date of death.
(b) Pending distribution, a Member's Executive Stock Account
shall continue to be credited based on the performance of Company
Stock as provided in Section 6.2.
8.9 One-time Re-deferral Election: A Member may make one additional
election to defer (but not accelerate) commencement of payment under the Plan at
any time six months before payments are to have commenced pursuant to Section
8.1 or 8.2 ("Re-deferral Election). Such Re-deferral Election shall be made in a
form prescribed by the Administrator. If such Re-deferral Election is to a
designated age the re-deferral shall be for a period not less than one year from
the date the Re-deferral Election is made.
8.10 Change of Control:
(a) A Member shall be eligible to make a separate
Distribution Election which shall be effective only in the event of a
Change of Control.
(b) 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 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
17
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 8.10 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' Accounts or
Executive Stock Accounts for which information is readily available.
Thereafter, the Independent Accountants shall annually determine as of a
Valuation Date for each Member not receiving a lump sum payment pursuant to
subsection (c) below the value of each Member's Accounts or Executive Stock
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.
(c) 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
not making an election under (d) below, a lump sum payment or, in the case
of an Executive Stock Account, a distribution in shares of Company Stock
equal to the value of the Member's Account or Executive Stock Account
(determined under Article 6) as of the Valuation Date coinciding with or
next preceding the date of such Distribution Event. The amount of each
Member's lump sum payment or Company Stock distribution 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 Account or
Executive Stock Account for which information is readily available.
(d) Each Member may elect in a time and manner determined by the
Administrator, but in no event later than 90 days following the Effective
Date, 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 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.
(e) Notwithstanding anything in the Plan to the contrary, each Member
who has made an election under (d) 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 or, in the case of an Executive
Stock Account, a distribution in shares of Company Stock, 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 an amount equal to such calculated amount, multiplied by the Mid-term
Applicable Federal Rate determined as of the Valuation Date next preceding
such payment and such reduction shall be irrevocably forfeited by the
Member. Furthermore, as a result of such election, the Member shall no
longer be eligible to participate or otherwise benefit from the Plan.
Payments under this subsection (e) shall be made not later
18
than 7 days following receipt by the Corporation of a 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
eligible to make an election under this subsection (e), that a Distribution
Event has occurred and informing such Member of the availability of the
election.
ARTICLE 9. FORM OF PAYMENT
9.1 Timing of Distribution: Unless a Form of Payment Election is made
pursuant to Section 9.2 below,
(a) a Member's Account shall be distributed to him, or in the event of
his death to his Beneficiary, in a cash single sum payment as provided in
Section 8.1.
(b) a Member's Executive Stock Account shall be distributed to him, or
in the event of his death to his Beneficiary, in a single distribution of
shares as provided in Section 8.1.
9.2 Form of Payment Election
(a) A Member may make a Form of Payment Election to receive
distribution of his Account or Executive Stock Account in semi-annual
installments over a period not to exceed twenty (20) years. Installments
shall be determined as of each January 15 and July 15 (or in the case of an
Executive Stock Account, December 30 and June 30) and shall be paid as soon
as administratively practicable thereafter. The amount of each installment
shall equal the balance in the Account or Executive Stock Account as of the
Valuation Date of determination, divided by the number of remaining
installments (including the installment being determined). If a Member dies
before payment of the entire balance of his Account or Executive Stock
Account, the remaining balance shall be paid in a single sum to his
beneficiary as soon as administratively practicable following his date of
death. Lump sum payments shall be determined and paid as soon as
administratively practicable following the date the Member incurs the
distributable event elected on a Distribution Election under Section 8.2.
(b) A Member may make a separate Form of Payment Election with respect
to any portion of his Account for which a Partial Distribution Election has
been made pursuant to Section 8.2(d).
(c) A Member may change his Form of Payment Election at any time prior
to a date that is six months prior to the date the distribution is to
commence, after which time the Form of Payment Election shall be
irrevocable.
9.3 Installments and Withdrawals Pro-Rata: In the event of any payment
other than a single lump-sum, such as installment payment, partial distribution
or hardship withdrawal, such payment or withdrawal shall be made on a pro-rata
basis from the portions of the Member's existing Account balance which are
subject to different measures of investment performance.
19
ARTICLE 10. AMENDMENT OR TERMINATION
10.1 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 and Beneficiary shall receive a single sum payment,
or, in the case of an Executive Stock Account, a distribution in shares of
Company Stock equal to the balance in his Account or Executive Stock
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 or beneficiary under this Plan.
10.2 Right to Amend: Prior to a Change of Control, the Board may, in its
sole discretion, amend this Plan and the related Deferral Agreements and
Enrollment Forms on 30 days prior notice to the 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 or
Enrollment Forms shall adversely affect the rights of a Member, such Member must
consent in writing to such amendment prior to its effective date. If such Member
does not consent to the amendment, the Plan and related Deferral Agreements and
Enrollment Forms shall be deemed to be terminated with respect to such Member
and he shall receive a single sum payment of his Account, or, in the case of an
Executive Stock Account, a distribution in shares of Company Stock, as soon
thereafter as is practicable. Notwithstanding the foregoing, the Administrator's
change in any investment funds or investment index under Section 7.2(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 rights.
10.3 Uniform Action: Notwithstanding anything in the Plan to the contrary,
any action to amend or terminate the Plan or the Deferral Agreements or
Enrollment Forms 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.
20
ARTICLE 11. GENERAL PROVISIONS
11.1 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, 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 or Enrollment Form. 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 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.
11.2 Obligation: To the extent reflected by resolutions of the applicable
boards of directors, obligations for benefits under this Plan shall be joint and
several.
11.3 No Contract of Employment: The existence of this Plan, a Deferral
Agreement or an Enrollment Form 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, a Deferral
Agreement or an Enrollment Form.
11.4 Withholding Taxes: All applicable FICA, RRTA or other employment taxes
due on deferrals under this Plan shall be withheld from non-deferred salary,
Awards or other earnings. All payments under this Plan shall be net of an amount
sufficient to satisfy any federal, state or local income tax withholding
requirements.
11.5 Nonalienation: The right to receive any benefit under this Plan may
not be transferred, assigned, pledged or encumbered by a 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.
11.6 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,
21
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.
(d) Prior to paying any benefit under this Plan, the Administrator may
require the 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, 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, 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, beneficiary or contingent beneficiary and
all other interested persons. All acts and decisions of the Administrator
shall be final and binding upon all 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.
11.7 Impact of Future Legislation or Regulation
(a) This Section 11.7 shall become operative upon the enactment of any
change in applicable statutory law or the promulgation by the Internal
Revenue Service of a final regulation or other pronouncement having the
force of law, which statutory law, as changed, or final regulation or
pronouncement, as promulgated, would cause any Member to include in his or
her federal gross income amounts accrued by the Member under the Plan on a
date (an "Early Taxation Event") prior to the date on which such amounts
are made available to him or her hereunder.
(b) Notwithstanding any other Section of this Plan to the contrary
(but subject to subsection (c), below), as of an Early Taxation Event, the
feature or features of this Plan, or the election by a Member that would
cause the Early Taxation Event shall be null and void, to the extent, and
only to the extent, required to prevent the Member from being required to
include in his federal gross income amounts accrued by the Member under the
Plan prior to the date on which such amounts are made available to him
hereunder. By way of example, but not by way of limiting the generality of
the foregoing, if a statute is enacted that would require a Member to
include in his or her federal gross income amounts accrued by the Member
under the Plan prior to the date on
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which such amounts are made available to him or her because of the Member's
right to receive a distribution of a portion of his Account under Section
8.5, the right of all Members to receive distributions under Section 8.5
shall be null and void as of the effective date of that statute. If only a
portion of a Member's Account is impacted by the change in the law, then
only such portion shall be subject to this Section, with the remainder of
the Account not so affected being subject to such rights and features as if
the law were not changed. If the law only impacts Members who have a
certain status with respect to the Company, then only such Members shall be
subject to this Section.
(c) Notwithstanding Section 11.7(b) above, if an Early Taxation Event
occurs (e.g., if a change in law is retroactive), the amounts that become
taxable on the Early Taxation Event shall be distributed to each
Participant as soon as practicable following such Early Taxation Event or
if later, the date or enactment or promulgation.
11.8 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.
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