Exhibit 10.4

CSX Corporation

Section 16 Officer Severance Plan

and

Summary Plan Description

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TABLE OF CONTENTS

 

 

 

Page

      

Introduction and Highlights

     1  

Eligibility to Participate

     1  

Eligibility for Severance Benefits

     1  

Severance Payments and Benefits

     2  

Employee Benefits/Special Benefits

     4  

Amendment and Plan Termination

     4  

Additional Plan Information

     4  

Code Section 409A

     6  

Administrative Information About Your Plan

     7  

Your Rights and Privileges Under ERISA

     8  

Other Administrative Facts

     9  

Glossary

     10  

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Introduction and Highlights

CSX Corporation (the “Company”) adopted the CSX Corporation Section 16 Officer
Severance Plan (the “Plan”) effective as of February 22, 2017 (the “Effective
Date”) for eligible executive level employees of the Company. The purpose of the
Plan is to provide severance protections to a critical class of Company
employees during a transitional period for the Company and thereby promote the
retention and focus of these employees to assist the Company in this important
transition.

You are eligible to receive Severance Pay and other benefits under the Plan if
(i) you meet the applicable eligibility criteria, (ii) your employment
terminates under circumstances which entitle you to benefits, (iii) you timely
sign and return an Employment Separation Agreement and Release Form, and
(iv) the Employment Separation Agreement and Release Form has become effective
upon satisfaction of the Release Requirement, all as described below.

Eligibility to Participate

(A) You are eligible to participate in the Plan only if, as of the Effective
Date, you are actively employed by the Company in a position described below
under “Severance Pay”, and

(B) you have executed a Participation Agreement and returned it to the Company
pursuant to the Company’s instructions.

Who Is Not Eligible to Participate

Notwithstanding any other Plan provision, you are not eligible to participate in
the Plan and will be excluded from coverage under the Plan if,

(A) as of the Effective Date, you are not actively employed by the Company in a
position described below under “Severance Pay”, or

(B) you have not executed a Participation Agreement and returned it to the
Company pursuant to the Company’s instructions.

Eligibility for Severance Benefits

Right to Severance Payments and Benefits

You will be eligible to receive severance payments and benefits from the Company
as set forth in the “Severance Payments and Benefits” section of this Plan if
you meet the participation requirements set forth above and your Termination
Date occurs for any one or more of the following reasons:

 

  (A) Your employment is terminated involuntarily by the Company, other than for
Cause; or

 

  (B) You voluntarily terminate your employment for Good Reason, and

(1) in either case your Termination Date occurs prior to February 22, 2018 or,
as applicable, (2) (i) the Company has notified you of your involuntarily
termination by the Company, other than for Cause prior to February 22, 2018 or
(ii) you have provided the Company notice of your election to terminate for Good
Reason prior to February 22, 2018 and the Company has subsequently waived its
right to cure or the 30-day period in which the Company may cure has
subsequently elapsed without cure, as provided below.

To qualify for severance payments and benefits under the Plan upon voluntary
termination for Good Reason, you must notify the Company in writing of your
election to terminate for Good Reason, specifying the event constituting Good
Reason, within 10 business days after the occurrence of the event that you
believe constitutes Good Reason. Failure for any reason to give written notice
of termination of employment for Good Reason in accordance with the foregoing
will be deemed a waiver of the right to voluntarily terminate your employment
for that Good Reason event. The Company will have a period of 30 days after
receipt of your notice in which to cure the Good Reason. If the Good Reason is
cured within this period, you will not be entitled to severance payments and
benefits under the Plan. If the Company waives its right to cure or does not,
within the 30-day period, cure the Good Reason, you will be entitled to
severance payments and benefits under the Plan subject to the terms and
conditions hereof, and your actual Termination Date will be determined in the
sole discretion of the Company, but in no event will it be later than 30
calendar days from the date the Company waives its right to cure or the end of
the 30-day period in which to cure the Good Reason, whichever is earlier.

 

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Ineligibility for Severance Benefits

Notwithstanding any other provision of the Plan, you will not be eligible for
severance payments and benefits under the Plan if your Termination Date occurs
by reason of any of the following:

 

  •   Voluntary termination or voluntary retirement other than for Good Reason;

 

  •   Disability (as defined in the Company’s long-term disability plan);

 

  •   For Cause; or

 

  •   Refusal to accept a transfer to a position with the Company for which you
are qualified, as determined by the Company, by reason of your knowledge,
training, and experience, provided that the transfer would not constitute Good
Reason for a voluntary termination.

Cause

“Cause” means the following:

 

  (A) Willful and continued failure or refusal to substantially perform duties
with the Company or any of its affiliates (except where the failure results from
incapacity due to physical or mental illness);

 

  (B) Willfully engaging in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company; or

 

  (C) Violation of any Company policy, or the commission of an act involving
moral turpitude, in each case, that adversely affects the reputation or business
of the Company or any affiliate.

Good Reason

“Good Reason” means the occurrence of any one or more of the following events
which occur without your express written consent:

 

  (A) A material reduction in your Base Salary;

 

  (B) A reduction in your job grade or title constituting a demotion;

 

  (C) A substantial reduction in your authority or substantial detrimental
change in your duties which, in either case, represents a material demotion,
regardless of whether the reduction or change is accompanied by an actual
diminution of your title or grade level; or

 

  (C) A change in the principal location of your job or office, such that you
will be based at a location that is 50 miles or more further from your principal
job or office location immediately prior to the proposed change in your job or
office.

Severance Payments and Benefits

Under the Plan, you are eligible to receive the following severance benefits,
provided you meet the eligibility criteria for severance payments and benefits
described in the previous Section and this Section—(A) Severance Pay, (B) Pro
Rata Bonus, (C) Pension Enhancement, and (D) Prorated Equity Award Vesting, each
as described below.

Severance Pay

If you are a Company Section 16 Officer as of the Effective Date, your Severance
Pay will be an amount equal to the sum of: (i) two times Base Salary and
(ii) one times Target Bonus.

Payment of your Severance Pay will be paid in a lump sum on the date that is 60
days after your Termination Date provided that the Release Requirement has been
satisfied as of such date.

 

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Pro Rata Bonus

Your Pro Rata Bonus will be determined by (A) multiplying the original target
amount of your Bonus by a fraction, the numerator of which is the number of days
that have elapsed from the first day of the fiscal year in which your
Termination Date occurs through your Termination Date and the denominator of
which is 365 and (B) multiplying the product of (A) by the multiplier derived
from the performance criteria applicable to the MICP for the year in which your
Termination Date occurs, without the application of any personal performance
metrics in a manner that would reduce your Pro Rata Bonus. Payment of your Pro
Rata Bonus will be made in a lump sum at the time that annual incentive bonuses
are paid under the MICP to similarly-situated employees of the Company who have
not terminated employment; provided that the Release Requirement has been
satisfied as of such date or, if the 60-day period for your satisfaction of the
Release Requirement has not expired as of such date, on the date that is 60 days
after your Termination Date provided that the Release Requirement has been
satisfied as of such date.

Pension Enhancement

Your Pension Enhancement will be provided by crediting you with three additional
years of age and two additional years of service for all purposes under the
Pension Plan in which you participate as of the Effective Date, including
vesting, eligibility for early retirement and normal retirement benefits,
computation of all such benefits, and all other purposes under the Pension Plan.

Prorated Equity Award Vesting

Your Prorated Equity Award Vesting will be provided by the vesting of a portion
of each of your Equity Awards equal to the total number of Company shares
covered by the Equity Award times a fraction, the numerator of which is the
number of months in the vesting or performance period applicable to such Equity
Award that have elapsed from the commencement of the applicable vesting or
performance period through your Termination Date and the denominator of which is
the total number of months in the applicable vesting or performance period. In
the case any Equity Awards consisting of Performance Share Units, this formula
will be applied to the target number of Performance Share Units and the product
number of Performance Share Units will be eligible for vesting based on the
performance criteria and performance multiplier applicable to the Performance
Share Unit award. Your Prorated Equity Awards will, in the case of Performance
Share Units and Restricted Stock Units, be settled in accordance with their
original schedule and, in the case of stock options, will remain outstanding
until the end of their originally scheduled term.

No Duplication of Benefits/No Substitution

Nothing in the Plan, a change in control plan or agreement, an offer letter or
letter agreement from the Company or any of its affiliates, a prevailing
practice of the Company or any of its affiliates, or any oral statement made by
or on behalf of the Company or any of its affiliates will entitle you to receive
duplicate payments or benefits in connection with a voluntary or involuntary
termination of employment. The Company’s obligation to make payments or provide
benefits under the Plan will be expressly conditioned upon you not receiving
duplicate payments or benefits. In addition, if you are entitled to Severance
Pay under the Plan, you will not receive payment of your Bonus for the year in
which your Termination Date occurs (other than your Pro Rata Bonus and Target
Bonus) and the treatment of your Equity Awards with respect to a termination of
your employment will be governed by the “Prorated Equity Award Vesting” section
above and not any provisions relating to the treatment of your Equity Awards
upon a voluntary or involuntary termination of your employment under the Equity
Incentive Plans (including upon retirement).

To the extent that any amounts would otherwise be payable (or benefits would
otherwise be provided) to you under another plan of the Company (or its
affiliates) or an agreement with you and the Company (or its affiliates),
including a change in control plan or agreement, an offer letter or letter
agreement, or to the extent that you are an eligible employee for purposes of
the Plan and you experience a change in position that would alter the benefits
to which you are entitled under the Plan, and to the extent that such other
payments or benefits or the severance payments and benefits provided under this
Plan are subject to Code Section 409A, the Plan shall be administered to ensure
that no payment or benefit under the Plan will be (i) accelerated in violation
of Code Section 409A or (ii) further deferred in violation of Code Section 409A.

 

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Debt owed to the Company

If you owe the Company money for any reason, the Company may offset the amount
of the debt from your Pro Rata Bonus, Target Bonus and/or Severance Pay to the
extent permitted by law; provided, however, that, any such offset shall be
applied in a manner consistent with Code Section 409A to the extent that the
Severance Pay is subject to Code Section 409A.

Employee Benefits/Special Benefits

From and after your Termination Date, you will not be considered an employee of
the Company or any of their affiliates for any purpose – including eligibility
under any Company employee benefit plans, including, without limitation,
(i) further contributions under CSXtra, (ii) accrual of further benefits under
the Pension Plan (except as expressly provided above), (iii) dependent care
reimbursement benefits, (iv) the Company’s disability plan, (v) the Company’s
travel accident plan, (vi) sick leave or vacation days, or (vii) any form of
incentive compensation. You will, however, be eligible to continue participating
in the Company’s medical and dental plan (in accordance with the requirements of
COBRA and applicable law), including contributions to the health care
reimbursement account providing you meet IRS regulations for participation;
however, there will be no corresponding employer contributions. You will also be
eligible for coverage under various life insurance plans subject to the terms of
the applicable plans.

Outplacement Services

From and after your termination, you will be eligible for outplacement services
through organizations designated by the Company. You must initiate these
outplacement services within six (6) months after your termination date.

Financial and Tax Planning Assistance

From and after your Termination date, you will be eligible to receive financial
and tax planning assistance through organizations designated by the Company.

Other Benefits

Except as provided herein with respect to the treatment of your Pro Rata Bonus
and Equity Awards, accrued and unused vacation days (including banked vacation),
long-term performance awards, vesting and exercising of stock options, vesting
of restricted stock and restricted stock units, and bonus payments will be
determined in accordance with the applicable plans, programs and/or policies of
the Company (and its affiliates). All other benefits coverage and eligibility to
participate in the benefit plans of the Company (and its affiliates) will end as
of your Termination Date except as otherwise expressly provided by the terms of
the applicable benefit plans

Notwithstanding the foregoing, if you are entitled to receive benefits under the
Plan, you will not receive payment of any portion of your Bonus for the year in
which your Termination Date occurs (other than your Pro Rata Bonus and Target
Bonus).

Amendment and Plan Termination

The Company may not terminate or amend the Plan, except to make amendments which
increase benefits payable hereunder or which designate additional classes of
senior executives eligible to participate under the Plan. The Plan will
terminate automatically on February 22, 2018 except any benefits herein provided
at such time will continue to be provided in accord with the terms of the Plan.

Additional Plan Information

Employment Status

The Plan does not constitute a contract of employment, and nothing in the Plan
provides or may be construed to provide that participation in the Plan is a
guarantee of continued employment with the Company or any of its affiliates.

 

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Withholding of Taxes

The Company or your employer will withhold from any amounts payable under the
Plan all Federal, state, local or other taxes that are legally required to be
withheld from your severance payments.

No Effect on Other Benefits

Neither the provisions of this Plan nor the severance payments and benefits
provided for under the Plan will reduce any amounts otherwise payable to you
under any short-term or long-term incentive plan, retirement plan, group
insurance or other benefit plan; provided, however, that if you are entitled to
Severance Pay or other benefits under the Plan, you will not be entitled to
severance pay or benefits under any employment, severance, change in control or
similar agreement or any other severance or termination pay plan of the Company
or any of its affiliates and you will not receive payment of your Bonus for the
year in which your Termination Date occurs (other than your Pro Rata Bonus and
Target Bonus) and the treatment of your Equity Awards with respect to a
termination of your employment will be governed by the “Prorated Equity Award
Vesting” section above and not any provisions relating to the treatment of your
Equity Awards upon a voluntary or involuntary termination of your employment
under the Equity Incentive Plans (including upon retirement).

Validity and Severability

The invalidity or unenforceability of any provision of the Plan will not affect
the validity or enforceability of any other provision of the Plan, which will
remain in full force and effect, and any prohibition or unenforceability in any
jurisdiction will not invalidate that provision, or render it unenforceable, in
any other jurisdiction.

Unfunded Obligation

All severance payments and benefits under the Plan constitute unfunded
obligations of the Company. Severance payments will be made, as due, from the
general funds of the Company. The Plan constitutes solely an unsecured promise
by the Company to provide severance benefits to you to the extent provided in
the Plan. For avoidance of doubt, any medical, dental or life insurance coverage
to which you may be entitled under the Plan will be provided under other
applicable employee benefit plans of the Company.

Type of Plan and Governing Law

This plan is designed to qualify as a severance pay arrangement within the
meaning of Section 3(2)(B)(i) of ERISA and is intended to be excepted from the
definitions of “employee pension benefit plan” and “pension plan” set forth
under Section 3(2) of ERISA and is intended to meet the descriptive requirements
of a plan constituting a “severance pay plan” within the meaning of the
regulations published by the Secretary of Labor. The Plan and all rights under
it will be governed and construed in accordance with ERISA and, to the extent
not preempted by Federal law, with the laws of the State of Florida.

Assignment

The Plan will inure to the benefit of and will be enforceable by your personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amount is still
payable to you under the Plan had you continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
the Plan to your estate. Your rights under the Plan will not otherwise be
transferable or subject to lien or attachment.

Other Benefits

Nothing in this document is intended to guarantee that benefit levels or costs
will remain unchanged in the future in any other plan, program or arrangement of
the Company (or any of its affiliates). The Company and its affiliates and
subsidiaries reserve the right to terminate, amend, modify, suspend, or
discontinue any other plan, program or arrangement of the Company or its
subsidiaries or affiliates in accordance with the terms of that plan, program or
arrangement and applicable law.

 

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Oral Statements

The provisions of this document supersede any oral statements made by any
employee, officer, or member of the CSX Board regarding eligibility, severance
payments and benefits.

Successors and Assigns

This Plan will be binding upon and inure to the benefit of the Company and its
successors and assigns and will be binding upon and inure to the benefit of you
and your legal representatives, heirs and legatees.

Code Section 409A

Exemption

It is intended that payments of your Pro Rata Bonus, Target Bonus and Severance
Pay under the Plan will be exempt from Code Section 409A as “short term
deferrals” or, to the extent payments (i) do not exceed two times the lesser of
(1) the employee’s total annual compensation based on the employee’s annual rate
of pay for the prior taxable year (adjusted for any increase that was expected
to continue indefinitely) or (2) the limitation under Code Section 401(a)(17)
for the year in which the employee has a separation from service within the
meaning of Code Section 409A and Treasury regulation Section 1.409A-1(h)
($270,000 in 2017 (2x = $540,000)), and (ii) are paid in full no later than
December 31st of the second year following a separation from service or to the
extent that such payments otherwise fit within an exemption provided by Code
Section 409A or applicable guidance. Similarly, other benefits provided under
the Plan are intended to be exempt from Code Section 409A to the extent an
exemption is applicable.

Specified Employees

In general, Code Section 409A prohibits certain payments of nonqualified
deferred compensation (within the meaning of Code Section 409A) to “Specified
Employees” (generally defined as Vice Presidents or higher) within six months
following the Specified Employee’s separation from service. This rule does not
apply to amounts which are exempt from the requirements of Code Section 409A. To
comply with this rule and notwithstanding any other provision of the Plan to the
contrary, if any payment or benefit under the Plan is subject to Code
Section 409A, and if such payment or benefit is to be paid or provided on
account of the employee’s Termination Date and if the employee is a Specified
Employee (within the meaning of Code Section 409A(a)(2)(B)) and if any such
payment or benefit is required to be made or provided prior to the first day of
the seventh month following the employee’s Termination Date, such payment or
benefit shall be delayed until the first day of the seventh month following the
employee’s separation from service and shall at that time be paid in a lump sum
(or, in the case of a non-cash benefit, shall be provided in a manner that is
consistent with Code Section 409A). Any amount that would have been paid or
provided during this six-month period will be paid on the first business day of
the seventh month following the separation from service, or, if earlier, the
date of the individual’s death.

Statement of Intent

To the fullest extent possible, amounts and other benefits payable under the
Plan are intended to be exempt from the definition of “nonqualified deferred
compensation” under Code Section 409A in accordance with one or more exemptions
available under the final Treasury regulations promulgated under Code
Section 409A. To the extent that any such amount or benefit is or becomes
subject to Code Section 409A, this Plan is intended to comply with the
applicable requirements of Code Section 409A with respect to those amounts or
benefits so as to avoid the imposition of taxes and penalties. This Plan will be
interpreted and administered to the extent possible in a manner consistent with
the foregoing statement of intent.

If you notify the Company (specifying the reasons for your position) that you
believe that any provision of this Plan or of any payment to be made or benefit
granted under this Plan would cause you to incur any additional tax, penalty or
interest under Code Section 409A, and if the Company concurs, or if the Company
(without any obligation whatsoever to do so) independently makes such a
determination, the Company will, after consulting with you and to the extent
permitted by law, reform the provision to try to comply with Code Section 409A
or to be exempt from Code Section 409A to the extent possible without thereby
creating other liability, including liability for any other Plan participant.
The Company in its sole discretion may modify, or cause to be modified, the
timing of payments and benefits under the Plan for the sole purpose of exempting
those payments and benefits from Code

 

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Section 409A. To the extent that any payment or benefit under the Plan is
modified to comply with Code Section 409A or to be exempt from Code
Section 409A, the modification or exemption will be made in good faith and will,
to the maximum extent reasonably possible, maintain the original intent and
economic benefit to you and the Company and its affiliates of the applicable
payment or benefit without violating the provisions of Code Section 409A.

In no event whatsoever will the Company or any of its affiliates be liable for
any additional tax, interest or penalties that may be imposed on you by Code
Section 409A or any damages for failing to comply with Code Section 409A.

Administrative Information About Your Plan

Employer Identification Number

The Company’s employer identification number is 62-1051971.

Claim for Benefits

If you believe that you are entitled to payments and benefits under the Plan
that are not provided to you, or you disagree with any other action taken by the
Plan Administrator with respect to the Plan, then you may submit a claim to the
Plan Administrator in writing. A claim must be made in writing and submitted
within 6 months of your Termination Date. In the event you make a claim for
benefits beyond six months of your Termination Date, then you are expressly
precluded from receiving any severance payments and/or benefits under the Plan.

Claims Review Procedures

You will be notified in writing by the Plan Administrator if your claim under
the Plan is denied.

If a claim for benefits under the Plan is denied in full or in part, you* may
appeal the decision to the Plan Administrator.

To appeal a decision, you* must submit a written document through the U.S.
Postal Service or other courier service appealing the denial of the claim within
60 days after you receive notice of the claim denial described above. You* may
also include information or other documentation in support of your claim.

You* will be notified of a decision within 90 days (which may be extended to 180
days, if required) of the date your appeal is received. This notice will include
the reasons for the denial and the specific provision(s) on which the denial is
based, a description of any additional information needed to resubmit the claim,
and an explanation of the claims review procedure. If the Plan Administrator
requires an extension of time to respond to your appeal, you* will receive
notice of the reason for the extension within the initial 90-day period and a
date by which you can expect a decision.

If the original denial is upheld on first appeal, you* may request a review of
this decision. You* may submit a written request for reconsideration to the Plan
Administrator (as listed below) within 60 days after receiving the denial.

You* can review all plan documents in preparing your appeal and you* may have a
qualified person represent you* during the appeal process. Any documents or
records that support your position must be submitted with your appeal letter.

The case will be reviewed, and you* will receive written notice of the decision
within 60 days (which may be extended to 120 days, if required). The written
notice will include the specific reasons for the decision and specific reference
to the Plan provision(s) on which the decision is based.

Any decision on final appeal will be final, conclusive and binding upon all
parties. If the final appeal is denied, however, you will be advised of your
right to file a claim in court. It is the Company’s intent that in any challenge
to a denial of benefits on final appeal under these procedures, the court of law
or a professional arbitrator conducting the review will apply to a deferential
(“arbitrary and capricious”) standard and not a de novo review.

 

*  Or your duly authorized representative.

*  Or your duly authorized representative.

 

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Legal Action

You may not bring a lawsuit to recover benefits under the Plan until you have
exhausted the internal administrative process described above. No legal action
may be commenced at all unless commenced no later than one year following the
issuance of a final decision on the claim for benefits, or the expiration of the
appeal decision period if no decision is issued. This one-year statute of
limitations on suits for all benefits will apply in any forum where you may
initiate such a suit.

Plan Administrator

The administration of the Plan is the responsibility of the Plan Administrator.
The Plan Administrator has the discretionary authority and responsibility for,
among other things, determining eligibility for benefits and construing and
interpreting the terms of the Plan. In addition, the Plan Administrator has the
authority, at its discretion, to delegate its responsibility to others. The
chart at the end of this Section contains the name and address of the Plan
Administrator. Notwithstanding the foregoing, if and to the extent required by
applicable law, the rules of any applicable securities exchange on which the
shares of the Company common stock is traded or the Company’s by-laws or
articles of incorporation, the Plan will be administered by the Senior Vice
President and Chief Administrative Officer.

Your Rights and Privileges Under ERISA

As a participant in the Plan, you are entitled to certain rights and protection
under ERISA. ERISA provides that you shall be entitled to:

Receive Information About Your Plan and Benefits

Examine, without charge, at the Company’s offices and at other specified
locations all documents governing the plan filed by the plan with the U.S.
Department of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration.

Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan and updated Summary Plan Description. The
administrator may make a reasonable charge for the copies.

Prudent Actions by Plan Fiduciaries

In addition to creating certain rights for you, ERISA imposes duties upon the
people who are responsible for the operation of the employee benefit plan. The
people who operate your plan, called “fiduciaries” of the plan, have a duty to
do so prudently and in the interest of you and other plan participants and
beneficiaries. No one, including your employer, or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a welfare benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a welfare benefit is denied or ignored, in whole or in part,
you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the administrator.

If you have a claim for benefits which is denied or ignored, in whole or in
part, you may file suit in a state or Federal court. In addition, if you
disagree with the Plan’s decision or lack thereof concerning the qualified
status of a medical child support order, you may file suit in a Federal court.

 

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If it should happen that plan fiduciaries misuse the plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
Plan Administrator, you should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210.

You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration at 1-866-444-EBSA (3272) or accessing their website at
http://www.dol.gov/ebsa.

Other Administrative Facts

 

Name of Plan    CSX Corporation Executive Severance Plan and Summary Plan
Description Type of Plan    “Welfare” plan Plan Records    Kept on a
calendar-year basis Plan Year    January 1— December 31 Plan Funding    Company
provides severance benefits from general assets. Plan Sponsor    CSX Corporation
Plan Number    531 Plan Administrator and Named Fiduciary   

Senior Vice President and Chief Administrative

Officer

500 Water Street

Jacksonville, FL 32202

Agent for Service of Legal Process on the Plan   

CSX Corporation

Corporate Secretary

500 Water Street

Jacksonville, FL 32202

Trustee    Not applicable Insurance Company    Not applicable

 

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Glossary

It is important to know about the following terms as they apply to the Plan.

 

Base Salary    Your annual base rate of salary in effect as of your Termination
Date (determined without regard to any reduction in your rate of Base Salary
under circumstances that constitute Good Reason), including salary reductions
under Code Sections 132(f), 125, 137, or 401(k), and excluding overtime,
bonuses, income from stock options, stock grants, dividend equivalents,
benefits-in-kind, allowances (including, but not limited to, car values,
vacation bonuses, food coupons) or other incentives, and any other forms of
extra compensation. Bonus    The annual incentive bonus to which you would have
been entitled for the year in which your Termination Date occurs as determined
under the applicable MICP, had your Termination Date not occurred, based on
satisfaction of applicable performance criteria. Cause    Cause is defined in
the Eligibility For Severance Benefits Section, under the subheading, “Cause”.
COBRA    The continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended. It is a federal law allowing certain
individuals, under certain circumstances, to continue group health coverage that
would otherwise end due to certain qualifying events, including termination of
employment. Code    The Internal Revenue Code of 1986, as amended, which is the
Federal tax code. Code Section 409A    Section 409A of the Code, the Treasury
regulations promulgated thereunder and any other applicable IRS guidance with
respect thereto. Company or CSX    CSX Corporation. Compensation Committee   
The Compensation Committee of the Company Board. CSX Board    The Board of
Directors of CSX. CSXtra    The CSXtra 401(k) Plan. Disability    Disability is
defined in the Eligibility for Severance Benefits Section, under the subheading
“Ineligibility for Severance Benefits”. Effective Date    February 22, 2017.
Equity Award    Any equity or equity-based award granted under the Company’s
Equity Incentive Plans. Equity Incentive Plans    The CSX Stock and Incentive
Award Plan and any other shareholder-approved equity incentive plan maintained
by the Company.

 

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ERISA    The Employee Retirement Income Security Act of 1974, as amended, which
is a Federal employee benefits law. Executive Separation Agreement & General
Release    An Executive Separation Agreement & General Release in a form
determined by the Company which an employee is required to execute and which
must become effective as a condition of Severance Pay and benefits under the
Plan. The Agreement will include, but is not limited to: a confirmation of your
waiver of entitlements under any change in control agreement, a general release
of claims against the Company, its subsidiaries, its affiliates and their
respective officers, directors, employees and agents; certain restrictive
covenants and obligations including, but not be limited to, non-competition and
non-solicitation covenants for a period of one year following the Termination
Date; and agreements not to make use of confidential or proprietary information
of the Company, its subsidiaries or its affiliates, not to disparage or
encourage or induce others to disparage the Company, its subsidiaries, its
affiliates or their respective products, and to cooperate with the Company, its
subsidiaries and its affiliates concerning legal matters. Good Reason    Good
Reason is defined in the Eligibility for Severance Benefits Section, under the
subheading “Good Reason.” IRS    The Internal Revenue Service. MICP    The CSX
Management Incentive Compensation Plan in effect for the relevant year.
Participation Agreement    A Participation Agreement in a form provided by the
Company to you in connection with you becoming a participant in the Plan, which
(i) provides that you will be eligible to receive benefits under the Plan upon
the occurrence of a qualifying termination, and (ii) includes an agreement by
you to waive any rights to other severance you may have under any other plan
maintained by the Company or any of its affiliates or any agreement between you
and the Company or any of its affiliates, including an agreement by you that the
provisions of the Company’s form change in control agreement providing benefits
in connection with a termination of employment prior to a change in control
shall be null and void if your Termination Date occurs prior to February 22,
2018 and in that event you will be entitled solely to the severance benefits
under this Plan. Pension Enhancement    The additional age and years of service
credit under the Pension Plan described in the “Pension Enhancement” section.
Pension Plan    The CSX Pension Plan. Plan    The CSX Corporation Executive
Severance Plan, as set forth in this document. Plan Administrator    The Senior
Vice President and Chief Administrative Officer of the Company. Pro Rata Bonus
   Your Pro Rata Bonus as described in the “Severance Payments and Benefits”
section of the Plan, under the subheading “Pro Rata Bonus”. Prorated Equity
Award Vesting    The treatment of your Equity Awards described in the “Prorated
Equity Award Vesting” section. Release Requirement    The requirement to execute
an Executive Separation Agreement & General Release, and not revoke such
execution, within the time periods set forth in such Executive Separation
Agreement & General Release.

 

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Severance Pay    Severance Pay is the cash payment in respect of your Base
Salary and Target Bonus to which you are entitled under the Plan, as described
under the subheading “Severance Pay”. Specified Employee    Specified Employee
is defined in the Code Section 409A Section, under the subheading “Specified
Employees”. Target Bonus    The amount of your Target Bonus opportunity under
the MICP for the year in which your Termination Date occurs. Termination Date   
The date on which your employment with the Company and its affiliates terminates
for any reason. To the extent that any payments or benefits under the Plan are
subject to Code Section 409A, the determination of whether your Termination Date
has occurred (or whether you have otherwise had a termination of employment)
shall be made in accordance with the provisions of Code Section 409A and the
guidance issued thereunder without application of any alternative levels of
reductions of bona fide services permitted thereunder.

 

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