Exhibit 10.2
Human Resources Department
500 Water Street
Speed Code J-120
Jacksonville, FL 32202
ROBERT J. HAULTER Telephone (904) 366-5603
SENIOR VICE PRESIDENT HUMAN RESOURCES Fax (904) 359-1859
February 4, 2004
HAND DELIVERED
P. Michael Giftos
RETIREMENT AND SEPARATION AGREEMENT
Dear Mike:
As used in this Agreement, the "Companies" will mean CSX
Transportation, Inc. ("CSXT") and CSX Corporation ("CSX") and each reference to
"the Companies" will include CSXT, CSX and their respective affiliates. This
Agreement sets forth the agreement between you and the Companies with respect to
your retirement and separation from employment with the Companies.
1. SEPARATION. Your resignation from your position as Executive Vice
President and Chief Commercial Officer of CSXT is effective March 31, 2004 (the
"Resignation Date").
2. SEPARATION PAY AND BENEFITS AND PERQUISITES. In exchange for your
commitments and undertakings in this Agreement, the Companies will pay you the
amounts set forth in this Section 2.
a. SEPARATION PAYMENT. The Companies will pay you separation
payments in the amount of one year of your base salary of
$375,000 per year in effect as of November 10, 2003, payable
in (a) monthly installments for twelve (12) months beginning
on April 1, 2004 and ending on March 31, 2005, or (b) a single
lump sum as soon as practicable after the Resignation Date, at
your election. These payments, referred to as "Separation Pay"
are in lieu of severance pay under the CSX Corporation
Severance Pay Plan or any other severance or similar plan or
program. You agree that you will not make any claim for
separation payments under any such plan or program.
b. BONUSES. You will not be eligible for any bonuses under the
MICP Plan.
P. Michael Giftos
February 4, 2004
Page 2
c. BENEFITS AND PERQUISITES.
(i) PENSION BENEFITS.In addition to tax-qualified
benefits under the CSX Pension Plan (the "Pension Plan"), you
will receive a Special Retirement Allowance under the Special
Retirement Plan of CSX Corporation and Affiliated
Corporations, which calculation is to include constructive
service of an additional 2 years, for a total of 44 years
thereunder. In addition, the reduction of your Special
Retirement Allowance for commencement prior to your attainment
of normal retirement age under the Pension Plan shall be
calculated as though you had attained 58 years and two months
of age at the time of such commencement. Your Special
Retirement Allowance benefits shall be payable in a lump sum.
(ii) RETIREE MEDICAL BENEFITS. If you elect to
commence receiving your benefits under the Pension Plan as of
the Resignation Date, you and your dependent spouse, Mary,
will be eligible for retiree medical benefits pursuant to the
terms of the CSX Corporation Comprehensive Medical Plan (the
"Medical Plan"). With respect to medical benefits for your
spouse, Mary, in the event that certain medical services or
expenses are determined by the plan fiduciary, Aetna, not to
qualify as covered medical expenses under the Medical Plan,
the Company will pay, or provide you with reimbursement, as
applicable, for such uncovered medical expenses from the
Company's general assets, provided that medical services and
expenses are medically necessary as determined by physicians
chosen by Mrs. Giftos. You agree that in the event the Company
requires any additional information from you or Mrs. Giftos in
order to comply with this provision, that you will provide
such information as necessary.
(iii) OUTPLACEMENT. You will be eligible if you so
elect for a 6-month outplacement assistance program to be
provided by Lee Hecht Harrison. This outplacement assistance
must be completed within one year of the effective date of
this Agreement.
(iv) PERQUISITES. You will be eligible for the
financial counseling by Ayco for 2004 and reimbursement for
tax preparation for tax years 2003 and 2004, pursuant to the
Company's tax preparation program. In addition, the Company
will continue to pay for the automobile insurance on your
leased car until the earlier of the end of the lease term in
September 2004 or the date that you otherwise dispose of the
car. Other than as stated in the previous sentences, you will
not be eligible for any perquisites after March 31, 2004.
P. Michael Giftos
February 4, 2004
Page 3
(v) OPTIONS. All CSX options previously granted to
you will vest or be exercisable in accordance with their
terms.
d. TAX. The Companies will withhold applicable taxes,
including railroad retirement, federal, state and local with respect to
the Separation Pay described in Section 2.
e. PLAN AMENDMENTS. YOU ACKNOWLEDGE AND AGREE THAT IF ANY
BENEFIT OR PERQUISITE PLANS OR POLICIES ARE AMENDED OR TERMINATED, YOU
WILL BE SUBJECT TO SUCH AMENDED OR TERMINATED PLANS OR POLICIES.
f. DEATH. If you die prior receiving all payments contemplated
hereunder, your designated beneficiary will be entitled to the payments
contemplated by Section 2 of this Agreement when, and to the extent,
such payments would otherwise have been payable hereunder.
3. WAIVER AND RELEASE. In exchange for the Separation Pay and benefits
promised herein, you hereby waive and release the Companies from any and all
claims you may have against them, except for claims relating solely to the
performance of their obligations under this Agreement, and further agree to
execute the Waiver and Release attached hereto as EXHIBIT A at the time of
execution of this Agreement to more completely set forth the parties'
understanding. You are not waiving any claims you might have under the Age
Discrimination in Employment Act that arise after the effective date of this
Agreement. Notwithstanding any failure by you to deliver such additional Waiver
and Release, your obligations under this Agreement, including those under this
Section 4, will remain in full force and effect.
4. CONFIDENTIAL INFORMATION.
a. CONFIDENTIAL INFORMATION DEFINED. The parties recognize
that during your employment, you have learned trade secrets and other
information confidential to the Companies and that the Companies would
be substantially injured if the confidentiality of such information
were not maintained. For the purposes of this Section 4, "Confidential
Information" means and includes every item of and all the contents of
any discussions, documents, information, technology, procedures,
customer lists, business plans, employee compensation data, pricing
information, strategies, software, financial data, ideas and
assumptions and all other material relating to or in connection with
your employment with the Companies and their property, business methods
and practices, suppliers and customers, other than that which is
generally known to the public. To the
P. Michael Giftos
February 4, 2004
Page 4
extent that the Confidential Information comprises any written material
or other material in a reproducible form by any means whatsoever,
whether manual, mechanical or electronic, you will not copy, extract or
reproduce the same by any means whatsoever, nor provide nor otherwise
make such material available to any third party, nor use such
Confidential Information for your own purposes.
b. RESTRICTION ON USE. You agree not to disclose to third
persons such documents or Confidential Information without the prior
consent of the Companies, whether for compensation or otherwise. You
further agree not to use such documents or Confidential Information for
any purpose detrimental to the Companies. You will at all times use
your best possible reasonable efforts to ensure that any person to whom
the Confidential Information is disclosed pursuant to this Agreement
keeps the same secret and confidential and observes an obligation of
confidentiality in relation thereto.
c. NOTICE TO PROSPECTIVE EMPLOYERS. You specifically agree
that for one year after the Resignation Date, you will notify in
writing any prospective employer or client of yours that meets any of
the following criteria of these confidentiality restrictions and your
obligations under this Agreement and state that your provision of
services to such prospective employer or client will not violate this
Agreement, and you will deliver a copy of such notice to the Companies.
Any such notice shall be required for any prospective employer or
client that is (i) engaged in the railroad or intermodal transportation
business; (ii) a customer representing more than 1% of the revenues of
either CSXT or CSX Intermodal, Inc.; (iii) affiliated with the Norfolk
Southern Corporation; or (iv) a labor union or organization or any law
firm or other company, association, or person representing or seeking
to represent employees of the Companies.
d. NON-SOLICITATION. You will not, at any time before April 1,
2005, without the prior written consent of the Companies, directly or
indirectly employ, or solicit the employment of (whether as an
employee, officer, director, agent, consultant or independent
contractor), any person who was or is at any time during the previous
twelve (12) months an employee, representative, officer or director of
the Companies or their affiliates; PROVIDED, HOWEVER, that a public
advertisement not specifically targeted at the employees of the
Companies shall not be deemed to be a solicitation for purposes of this
provision.
e. NO WAIVER OF LEGAL RIGHTS. You hereby acknowledge that none
of the provisions of this Agreement will be deemed or construed to
reduce the protections afforded the Companies by common law, statute or
regulation.
P. Michael Giftos
February 4, 2004
Page 5
f. PERPETUAL RESTRICTION. Notwithstanding the expiration of
the provisions of this Agreement, you acknowledge that your obligations
with respect to Confidential Information are perpetual.
5. PRIVATE AGREEMENT. It is the desire and in the interest of all
parties affected by this Agreement that the terms hereof be maintained in
strictest confidence. To that end, you and the Companies covenant and agree to
maintain each and every term of this Agreement in the strictest confidence, and
to neither release nor divulge either orally or in writing any term, covenant or
condition hereof to any person, firm or entity PROVIDED, HOWEVER:
a. that the Companies or you may disclose as required by law,
including pursuant to a lawful subpoena or court order;
b. that the Companies or you may disclose in accordance with a
prepared written statement approved in advance by the Companies;
c. that the Companies may disclose to employees or advisors,
including counsel, determined to have a need to know; or
d. that you may disclose to your spouse, counsel, tax advisor,
and estate planner, whom you will instruct to preserve confidentiality.
6. GOVERNING LAW. This Agreement will be governed, construed and
interpreted under the laws of the Commonwealth of Virginia.
7. INJUNCTIVE REMEDY. You acknowledge that any breach or threatened
breach of the covenants set forth in this Agreement would cause irreparable
injury to the Companies and that money damages alone would not provide an
adequate remedy to the Companies. The parties agree that any reviewing court
will have the authority to reform this provision to conform to applicable law,
provided that it is the intent of the parties that this Section 7 be given full
effect in all respects.
8. ADEQUATE CONSIDERATION. You acknowledge and agree that the
compensation and benefits reflected herein and which you have already received
fully satisfy all obligations of the Companies arising from your employment or
the termination thereof and that the Companies are not required to provide the
special separation pay and other termination benefits reflected in this
Agreement under the terms of any personnel policy or benefit plan or contract.
You further acknowledge that you have signed this Agreement in exchange for
consideration in excess of any to which you were otherwise entitled and that
such consideration is satisfactory and adequate for the covenants made by you
herein.
P. Michael Giftos
February 4, 2004
Page 6
9. PARTIES' INTENT; MUTUAL COOPERATION. The parties mutually agree to
conduct themselves with a spirit of harmony and mutual cooperation, and to
refrain from and avoid any disparaging or defamatory comments or statements to
any third parties after execution hereof that would reflect negatively on the
business, person or professional reputation of any parties hereto. You
acknowledge and agree that the foregoing applies only to the executive officers
of the Companies and that your remedy with respect to any breach of the
foregoing shall be solely to seek an injunction.
10. LITIGATION. Notwithstanding the termination of your employment you
agree that to the extent required at any time in the future, you will cooperate
and provide information and assistance to the Companies in any dispute,
proceeding, arbitration, investigation or litigation involving the Companies or
their affiliates of which you have knowledge or involvement as a result of your
employment with the Companies. You acknowledge that the demands of such
proceedings are not necessarily within the control of the Companies and agree
that notwithstanding any other provision of this Agreement, you will make
yourself available to the extent possible and will advise the Companies
immediately and in writing of any contacts from third-parties to you in
connection with such proceedings. During any such activity, you will be
reimbursed for reasonable and customary expenses in accordance with the
Companies' Travel and Expense Reimbursement policies and procedures.
11. DISPUTE RESOLUTION. Any dispute, controversy or claim arising out
of or relating to this Agreement, or the breach, termination or validity hereof,
except an injunction proceeding under either Section 4 or 7, shall be finally
settled through binding arbitration by a sole, disinterested arbitrator in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be jointly selected by you and the Companies but, if you and
the Companies do not agree on an arbitrator within thirty days after a party
makes demand for arbitration, the arbitrator shall be designated by the American
Arbitration Association. The award of the arbitrator shall be final and
conclusive, and the arbitration shall be concluded within six months of its
commencement. Each party to the arbitration shall pay the compensation, costs,
fees and expenses of its own witnesses, experts and counsel, and the
compensation and any costs and expenses of the arbitrator shall be borne equally
by the parties.
P. Michael Giftos
February 4, 2004
Page 7
12. ENTIRE AGREEMENT. This Agreement, together with the Waiver and
Release Agreement, reflects the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior discussions,
understandings and agreements between the parties with respect to such matters.
For the avoidance of doubt, this Agreement renders null and void in all respects
the Employment Agreement between you and the Companies dated November 1, 2000.
13. TIME FOR CONSIDERATION. You have a period of twenty-one (21) days
to review and consider this Agreement and you are encouraged to consult an
attorney before signing it. You may use as much or all of this 21-day period as
you wish prior to signing and you acknowledge that you have done so. You have
seven (7) days after you sign this Agreement to revoke it in writing to Robert
J. Haulter, Senior Vice President - Human Resources, CSX Transportation, Inc.,
500 Water Street, Jacksonville, Florida 32202. This Agreement shall not become
effective until the seven days have expired without Mr. Haulter's having
received such a revocation.
14. AMENDMENT. The terms of this Agreement may not be amended, deleted
or modified except by prior written agreement signed by you and the Companies.
15. SUCCESSORS AND ASSIGNS. You and the Companies have read this
Agreement and understand its contents. You and the Companies further acknowledge
satisfaction with the terms of this Agreement and agree that the Agreement will
be binding upon your and the Companies' respective attorneys, heirs, personal
representatives, successors and assigns.
Very truly yours,
CSX TRANSPORTATION, INC.
By: /s/ Robert J. Haulter
-------------------------------------
Robert J. Haulter
Reviewed, approved and
agreed as of the _____ day of
February, 2004
/s/ P. Michael Giftos
- ------------------------------
P. Michael Giftos
P. Michael Giftos
February 4, 2004
Page 8
EXHIBIT A
WAIVER AND RELEASE
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In exchange for CSX Transportation, Inc. (the "Company") entering into
the Retirement and Separation Agreement with me:
1. I hereby release the Company and its affiliates, their respective
employee benefit plans and programs and all present and former employees,
officers, directors and other agents (hereinafter "Released Parties") from all
claims, demands and legal proceedings I may have based in any way on my
employment in any capacity with the Company, except as provided in Paragraph 5
hereof. This includes a release of any rights or claims if any, which I may have
under the Age Discrimination in Employment Act, as amended ("ADEA"), which
prohibits age discrimination in employment; Title VII of the Civil Rights Act of
1964, as amended by the Civil Rights Act of 1991, which prohibits discrimination
in employment based on race, color, national origin, religion or sex; the Civil
Rights Act of 1866, as amended by the Civil Rights Act of 1991, which requires
equality in contractual relations without regard to race or national origin; the
Equal Pay Act, which prohibits paying men and women unequal pay for equal work;
the Americans with Disabilities Act of 1990 which prohibits discrimination
against qualified individuals with disabilities; the Rehabilitation Act of 1973
which prohibits discrimination against the handicapped; the Employee Retirement
Income Security Act; the Fair Labor Standards Act; Executive Order 11246; the
Family and Medical Leave Act; or any other federal, state or local laws or
regulations prohibiting employment discrimination or regulating any aspect of
employment. This also includes a release of any rights or claims I may have
under the Worker Adjustment and Retraining Notification Act or any similar law
which requires, among other things, that advance notice be given of certain work
force reductions. This also includes a release of any rights or claims I may
have for wrongful discharge; breach of contract, whether express or implied or
breach of any collective bargaining agreement; termination of employment in
violation of any public policy; any other tort or contract claim; the implied
covenant of good faith and fair dealing; negligent or intentional infliction of
emotional distress; fraud or negligent misrepresentation; defamation; any claim
for labor protection, including but not limited to conditions imposed by the
Surface Transportation Board, its predecessor, or any labor agreement; any claim
under any workers' compensation law; and any other claim for relief of any
nature.
2. I agree to withdraw all lawsuits, if any, against the Released
Parties and I represent that I will not file any lawsuit against the Released
Parties based on the claims released under this Waiver and Release. I promise
not to seek any damages, remedies or other relief for myself personally by
filing or prosecuting a charge with any administrative agency with respect
P. Michael Giftos
February 4, 2004
Page 9
to any claim purportedly released by this Agreement. I promise to request any
administrative agency or other body assuming jurisdiction of any such lawsuit,
complaint, or charge to withdraw from the matter or dismiss the matter with
prejudice. However, I understand that nothing contained in this paragraph 2
precludes me from challenging the validity of this Waiver and Release under the
ADEA.
I agree to pay the reasonable attorneys' fees, costs, and
expenses and any damages the Released Parties may incur as a result of my filing
a lawsuit against the Released Parties based on the claims released under this
Waiver and Release. However, this paragraph 2 does not apply to lawsuits brought
solely to assert claims under the ADEA.
3. I acknowledge that the Company has advised me that in executing this
Waiver and Release, I will waive any rights which I may have against the Company
arising out of any claim under ADEA, including the amendments made by the Older
Worker Benefit Protection Act of 1990, and that the Company has advised me to
consult with an attorney prior to executing this Waiver and Release. I hereby
acknowledge that the terms of this Waiver and Release constitute adequate
consideration in addition to anything of value to which I already am entitled in
connection with my employment relationship with the Company for my waiver of
rights as aforesaid.
4. I understand and agree that the terms of this Waiver and Release
shall remain private between the Company and me, provided that I may disclose
the terms to my spouse, counsel, tax advisor and estate planner, or as otherwise
required by law.
5. It is understood that the consideration from the Company as
expressed herein and in the Retirement and Consulting Agreement shall not be
deemed or construed at any time for any purpose as an admission of liability or
violation of any applicable law by the Company. The Company expressly denies
liability for any and all claims.
6. I acknowledge that the provisions of this Waiver and Release shall
be binding upon my heirs, executors, administrators and assigns. By signing this
Waiver and Release I understand that I do not relinquish any rights I currently
have under the CSX Pension Plan or the Tax Savings Thrift Plan for Employees of
CSX Corporation and Affiliated Companies, nor am I waiving any rights or claims
which may arise after the date I sign this Waiver and Release.
7. This Waiver and Release shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
P. Michael Giftos
February 4, 2004
Page 10
8. This Waiver and Release may not be modified or amended except by an
instrument in writing signed by the parties hereto.
9. If, for any reason, any provision of this Waiver and Release is held
invalid, such invalidity shall not affect any other provision of this Waiver and
Release not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.
10. I acknowledge that I have been given a period of twenty-one (21)
days to review and consider this Waiver and Release, and that I have been
encouraged to consult an attorney before signing it. I understand that I may use
as much or all of this 21-day period as I wish prior to signing and have done
so.
11. I understand that I have seven (7) days after I sign this Waiver
and Release to revoke it by notice in writing to Robert J. Haulter, Senior Vice
President - Human Resources, 500 Water Street, 15th Floor J120, Jacksonville,
Florida 32202 and that this Waiver and Release shall not become effective until
the seven days have expired without Mr. Haulter's having received such a
revocation. This Waiver and Release shall become enforceable upon expiration of
this seven-day revocation period.
I HAVE CAREFULLY READ THIS WAIVER AND RELEASE. I FULLY UNDERSTAND THE
FINAL AND BINDING EFFECT OF THIS WAIVER AND RELEASE AND ACKNOWLEDGE THAT IT
CONTAINS AN UNCONDITIONAL, GENERAL, AND VOLUNTARY RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS RELATING TO, OR ARISING OUT OF, MY EMPLOYMENT WITH THE COMPANY
AND/OR MY RETIREMENT AND RESIGNATION FROM THE COMPANY. I ENTER INTO THIS WAIVER
AND RELEASE VOLUNTARILY, WITHOUT COERCION, AND BASED ON MY OWN JUDGMENT AND NOT
IN RELIANCE UPON ANY REPRESENTATIONS, SUGGESTIONS OR PROMISES BY THE COMPANY,
OTHER THAN THOSE CONTAINED HEREIN. I AM SIGNING THIS WAIVER AND RELEASE
VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL CLAIMS
RELATING TO, OR ARISING OUT OF, MY EMPLOYMENT AND THE RETIREMENT AND RESIGNATION
OF MY EMPLOYMENT.
/s/ P. Michael Giftos
-----------------------------------------
P. Michael Giftos
Dated:
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