CSX Long Term Incentive Plan

2011-2013 Cycle

Purpose and Objective

The CSX Long Term Incentive Plan (“LTIP” or “the “Plan”) is the vehicle pursuant
to which CSX Corporation (“CSX”) issues Performance Grants, as described in the
CSX Stock and Incentive Award Plan. The purpose of the LTIP is to reward
eligible employees for their contribution to the attainment of improved
operating performance which is intended to result in CSX share price
appreciation. Grant amounts, approved by the Compensation Committee of CSX’s
Board of Directors (the “Committee”), are based on an employee’s job position,
accountability, and the potential to impact CSX’s financial results.

 
The Plan seeks to motivate and reward employees through the issuance of
Performance Grants, represented in the form of Performance Units. Grants are
payable upon achievement of certain levels of Operating Ratio (as defined
herein) during a given performance period and are referred to as Performance
Awards at the time of payment.  Performance Awards are payable in the form of
CSX common stock.

Effective Date and Term

The 2011-2013 LTIP Cycle (the “2011-2013 Cycle” or “Cycle”) is the period during
which performance is measured.  The Cycle commences May 3, 2011 (“the Effective
Date”) and ends December 27, 2013.

Eligibility and Participation

Active employees of CSX or a participating affiliate (the “Company” or
collectively, the “Companies”) in salary Band 06 and above as of the Effective
Date shall participate in the 2011-2013 LTIP Cycle (“Participants”) and shall
receive Performance Grants in accordance with the dollar value schedule approved
by the Committee. The CSX Compensation and Benefits Department calculates the
Performance Grants for each salary band level. The Performance Grant schedule is
maintained in the office of the Plan Administrator.

 
Employees hired or promoted into Band 06 and above after the Effective Date and
before the end of the 2011-2013 Cycle will receive a pro rata allocation of
Performance Grants based on their participation (and status as full time or
part-time).  Participants who are moved to a higher or lower Band during the
Cycle will receive a pro rata reallocation of Performance Grants pertaining to
each applicable Band based upon the number of months of participation in each
Band relative to the number of months in the Cycle.  The same pro rata method
will be used for employees who transfer between union and non-union employment.
For purposes of the pro rata calculation, participation begins on the first day
of the month following the date the Participant was hired, promoted, demoted or
transferred.  Notwithstanding the preceding sentence, any Participant who is
hired at or promoted to a salary level making such Participant a “covered
employee” under Internal Revenue Code Section 162(m) must have had a period of
service of at least 3 months to qualify for a Performance Grant at that level.
In such cases, the pro rata calculation shall be made as of the first day of the
month following the date the Participant was hired or promoted.

Plan Design

Performance Grant Value

Under the long-term incentive compensation program design, the Committee
approves the annual competitive dollar value of long-term incentive compensation
for each Band. For the 2011-2013 Cycle, Performance Grants comprise 75% of the
value approved by the Committee and restricted stock units comprise the other
25% which is provided in a separate grant.

 
Performance Units are calculated by dividing 75% of the annual grant value for
each Band by the average closing price of CSX common stock during the most
recent three months preceding the Effective Date.  For the 2011-2013 Cycle, the
average stock price equaled $75.27, representing the months of February, March
and April 2011.  This price is used solely to determine the number of
Performance Units granted to each Participant at the commencement of the Cycle.

Performance Measure

Operating Ratio is the single performance measure used in the 2011-2013 Cycle
and is defined as consolidated CSX Corporation operating expenses divided by
operating revenue. It is calculated excluding nonrecurring items as disclosed in
the financial statements.  Performance achievement for the Cycle is based on the
full year Operating Ratio as measured in the third and final year of the Cycle
(2013).

 
Using this measure to determine payout levels reinforces the correlation between
an improving Operating Ratio and an increasing stock price.  Efforts to improve
the Operating Ratio align CSX’s business objectives in a way that allows
individuals to equate personal actions to desired performance outcomes.  Each
Plan Participant should be motivated to grow revenue, reduce expense, improve
service, increase productivity, improve safety, and increase asset utilization
and rationalization.

As the price of fuel has a significant impact on this particular performance
measure, the Operating Ratio targets vary based on the average cost of oil per
barrel outside of a pre-determined range (“fuel collar”) established at the
beginning of the Cycle based on the average price per barrel of oil according to
West Texas Intermediate (WTI).  The charts in Exhibit A reflect the Operating
Ratio targets and related Performance Awards at various WTI per barrel oil
prices and provide payout examples.

 
 
 

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Performance Awards

As shown in the Performance Measure Table in Exhibit A, Performance Awards are
paid as a percentage of a Participant’s Performance Grant based upon the
applicable CSX 2013 Operating Ratio discussed above.  All Performance Awards
will be paid in CSX common stock.

 
A Participant who commits an act involving moral turpitude that adversely
affects the reputation or business of the Companies shall forfeit any
Performance Grant.  Examples of acts of moral turpitude include dishonesty or
fraud involving the Companies, their employees, vendors, or customers and
violations of CSX’s Code of Ethics.

Participants subject to the Claw Back Provision contained herein, who violate
the conditions (i) through (v) of the Claw Back Provision, shall forfeit any
Performance Grant.
 
No Performance Award is considered earned under the Plan until the Compensation
Committee approves the Operating Ratio level of achievement for the Cycle and
approves the payment of awards.

Impact of Change in Employment Status

 
Performance Awards will be paid only to Participants who are actively employed
by the Companies at the end of the applicable three-year performance cycle.
Except as provided below, all other Participants whose employment terminates
prior to the end of the Cycle shall forfeit any and all Performance Grants and
thus receive no Performance Award. All Performance Awards will be payable no
later than March 15 following the end of the Cycle.

 
A Participant whose employment terminates due to death, disability, or
retirement shall be eligible to receive a pro rata Performance Award under the
LTIP if the Participant would have received a Performance Award had there been
no death, disability or retirement.  The pro rata Performance Award will be
determined based upon the number of months of participation relative to the
number of months in the Cycle.  Retirement shall mean (i) the attainment of age
55 and 10 years of Company service, or (ii) the attainment of age 65. Disability
shall mean long-term disability as defined in the CSX Corporation Long-Term
Disability Plan.  In the case of death, such Performance Awards shall be paid to
the Participant’s estate, or as otherwise directed by law.

Participants whose hours are reduced so that they are no longer full time active
employees during the 2011-2013 LTIP Cycle, as a result of a phased retirement or
similar program at the request of or with the consent of CSX, shall be entitled
to a pro rata Performance Award to the date of such change, and a pro rata
reduced Performance Award for the remaining portion of such 2011-2013 Cycle
worked based on the reduced hours.

 
Taxation of Performance Awards
 
Performance Awards will be paid in shares of CSX common stock.  The value
received by the Participant is taxable income, therefore CSX is required to
withhold income taxes at the prescribed rates for both supplemental income and
employment taxes at the time the Performance Awards are paid.  CSX will withhold
the minimum number of shares (in whole shares) equal in value to such required
amount.  No additional voluntary withholding amount is permitted.  Participants
in the CSX Executive Deferred Compensation Plan may defer receipt of Performance
Awards.

Plan Administration

The Senior Vice President - Human Resources and Labor Relations of CSX shall be
the Plan Administrator and shall interpret and construe the provisions of the
Plan subject to the terms of the CSX Stock and Incentive Award Plan and the
Compensation Committee’s authority and responsibility thereunder.

Plan Amendments and Termination

The Compensation Committee reserves the right to terminate, adjust, amend or
suspend the Plan at any time and at its sole discretion.

Claw Back Provision

The Claw Back Provision discussed herein applies only to Participants in Band 10
and above.

If such Participant receives a Performance Award, the following terms and
conditions shall apply for the subsequent two-year period from the payout
(whether or not such Participant continues to be employed by the Company).

Noncompetition:  Such Participant shall not

(i)  
without written Company consent, work for a Class I railroad in a capacity
similar to the function performed over the 5 years prior to termination; or for
a customer or supplier for whom the Participant has had direct work
responsibility in the prior 12 months in a capacity similar to the functions
performed over the 5 years prior to termination;

(ii)  
without written Company consent, solicit employees to work for a competitor in a
capacity similar to such solicited employee’s capacity;

(iii)  
without written Company consent, solicit the Companies’ customers on behalf of a
competitor;

(iv)  
without written Company consent, act in a manner adversarial or in any way
contrary to the best interests of the Company; (for example, testifying as an
expert witness or becoming associated with a union or law firm that takes
positions adverse to the Companies);

(v)  
fail to provide the Company with information or documentation showing compliance
with conditions (i), (ii), (iii) and (iv) stated above, if requested by the Plan
Administrator.

If a Participant breaches any of the conditions set forth above in this Claw
Back Provision, the Participant shall repay to the Company an amount equal to
the value of the Performance Award.  The value of the Performance Award is
measured by the amount reported on Form W-2 for tax purposes.  Any amount due
hereunder shall be paid by the Participant within thirty (30) days of notice by
the Company to the Participant that the Participant has breached a condition
stated above.
 
The Claw Back provision for noncompetition shall not survive any change in
control event as defined in the CSX Stock Incentive Award Plan occurring during
the Cycle.

Company Financial Irregularities:  
 
In the event of Company accounting irregularities discovered within two years
after receipt of Performance Awards, which requires the Company to materially
restate its financial statements, the Participant shall repay all amounts in
excess of the proper Award as determined under the restated financial
statements.

In cases where all or part of the Performance Award is deferred under the CSX
Executive Deferred Compensation Plan, breach of these conditions shall result in
an immediate forfeiture of the portion deferred—including any earnings thereon
from the date of deferral.

Consideration for Noncompete Agreement

In consideration for eligibility under this 2011-2013 LTIP Cycle, Employees in
Band 10 and above  must enter into a noncompete agreement, if not already in
effect, as prescribed and agreed to by CSX.  Eligibility in the 2011-2013 LTIP
Cycle for Employees in Band 10 and above is conditioned upon the existence of
such noncompete agreement.

Miscellaneous

By accepting a Performance Award, the Participant authorizes the Company to
withhold, to the extent permitted by law, any amount the Participant may
otherwise owe to the Company in any other capacity whatsoever.

 
The adoption of the 2011-2013 Cycle of the LTIP does not imply any commitment to
continue the Plan or any other long-term incentive compensation plan or program
for any succeeding year or period. Neither the Plan, nor any Performance Grant
or Performance Award made under the Plan shall create any employment contract or
relationship between the Companies and any Participant.

Committee  Discretion

The Compensation Committee, in its sole discretion, may also reduce any payout
otherwise earned by Executive Team Participants by up to 30% based upon
accomplishment of certain company initiatives set forth in Exhibit B.

 
 

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Exhibit A

 
Exhibit A contains specific quantitative or qualitative performance-related
factors considered by the Compensation Committee of the Board of Directors, or
other factors or criteria involving confidential trade secrets or confidential
commercial or financial information, the disclosure of which would result in
competitive harm for CSX.

 
 

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Exhibit B

Exhibit B contains specific quantitative or qualitative performance-related
factors considered by the Compensation Committee of the Board of Directors, or
other factors or criteria involving confidential trade secrets or confidential
commercial or financial information, the disclosure of which would result in
competitive harm for CSX.