Restricted Stock Award Certificate



 






Exhibit 10.40




RESTRICTED STOCK AWARD AGREEMENT




     THIS
AGREEMENT is made and entered into as of October 4, 2002, by and between CSX CORPORATION
(“CSX”), a Virginia corporation, and Clarence W. Gooden (the “Recipient”).



     WHEREAS, CSX wishes to create a further incentive for Recipient to remain as an employee of
CSX.



     NOW,
THEREFORE, in consideration of their mutual promises and undertakings, CSX and Recipient
mutually agree as follows:



     1. In consideration for Recipient’s agreement to remain an active employ of CSX or an
Affiliate, continuously, through October 4, 2007 (the “Employment Period”), the Recipient shall, as
of October 4, 2002 (the “Grant Date”), receive a grant of 17,000 shares of restricted CSX
Corporation common stock, $1 par value (the “Restricted Stock”) under CSX’ s Omnibus Incentive Plan
(the “Plan”), the provisions of which are hereby incorporated by reference. (In the event of any
conflict between this Agreement and the Plan, this Agreement shall control.) All or a portion of
the Restricted Stock shall vest, and the restrictions applicable to such shares of Restricted Stock
hereunder shall be lifted, on the date that is the “Vesting Date,” as provided below in this
Agreement. Except as provided otherwise below, the Vesting Date for all of the Restricted Stock
shall be October 4, 2007. CSX shall pay to Recipient an amount equal to dividends declared and
payable on each of the shares of Restricted Stock from October 4, 2002, through the Vesting Date
for such shares or the date on which it is forfeited, as applicable, net of applicable withholding
taxes, as and when such dividends are paid to CSX shareholders generally.



     2. (a) Except as set forth below in this Section 2, if Recipient’s employment with CSX
terminates for any reason before the end of the Employment Period (“Date of Termination?’),
Recipient shall forfeit the Restricted Stock, this Agreement shall become null and void, and CSX
shall have no obligation as to vesting of any of the Restricted Stock and payment of any further
monies pursuant to Paragraph 1 of this Agreement.



          (b) In the event of a termination of Recipient’s employment before the end of the Employment
Period by reason of Recipient’s death or Disability, by CSX without Cause or by Recipient for Good
Reason, the Date of Termination shall be the Vesting Date with respect to a number of shares of
Restricted Stock determined by the following formula:




(number of completed months from the Grant Date through the Date of

Termination / 60) x 17,000



          For purposes of this Agreement, “Disability” shall mean the Recipient’s becoming disabled
within the meaning of the long-term disability plan of the Company covering the Recipient. “Cause”
means (i) the willful and continued failure of the Recipient substantially to perform the
Recipient’s duties under this Agreement (other than as a result of physical or mental illness or
injury), after the Board of Directors of the Company (the “Board”) or the Chief Executive Officer
or other senior executive of the



 









 







Company delivers to the Recipient a written demand for substantial performance that specifically
identifies the manner in which the Board, the Chief Executive Officer or such other executive
believes that the Recipient has not substantially performed the Recipient’s duties, or (ii) illegal
conduct or gross misconduct by the Recipient. “Good Reason” means termination by the Recipient
within 60 days after, and as a result of:




	 	i.	 	Any action by the Company that results in a
material diminution in the Recipient’s position, authority, duties or
responsibilities; provided, however, that minor changes in
Recipient’s job title or responsibilities will not constitute grounds
for a Good Reason termination under this Section 4(c)(i)(A).
	 
	 	ii.	 	any requirement by the Company that the
Recipient’s services be rendered primarily at a location or locations
other than Jacksonville Florida. unless such requested relocation is
made under the terms of the CSX executive relocation policy.





          The remainder of the Restricted Stock shall be forfeited as of the Date of Termination and CSX
shall have no obligation as to vesting of such forfeited Restricted Stock, nor any obligation to
pay further monies pursuant to Paragraph 1 of this Agreement with respect to any of the Restricted
Stock.



          (c) Recipient shall be solely responsible for any and all federal, state, and local taxes
which may be imposed on him as a result of his receipt of the Restricted Stock, the vesting thereof
and his receipt of dividends pursuant to Section 1.



     3. In the event of any change (such as recapitalization, merger, consolidation, stock
dividend, or otherwise) in the character or amount of CSX Corporation common stock, $1 par value,
prior to vesting of the Restricted Stock pursuant to Paragraph I of this Agreement, (a) the number
of shares of Restricted Stock to which Recipient shall be entitled shall be the same as if he had
actually owned the Restricted Stock without restriction at the time of such change, and (b) the
amount of the cash to be paid to Recipient shall be the amount of dividends paid on the Restricted
Stock following such change in the number of shares of Restricted Stock.



     4. Upon The occurrence of the date of a Vesting Event as defined in the Plan. the Vesting Date
will be deemed to have occurred.



     5. Nothing in this Agreement shall be interpreted or construed to create a contract of
employment between the Company and the Recipient. This Agreement is intended solely to provide
Recipient an incentive to continue his existing employment.



 









 





     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of October 4, 2002.



	 	 	 
	RECIPIENT:

	 	CSX CORPORATION
	 
	 	 
	/s/ Clarence W. Gooden

	 	By: /s/ Jeffrey McCutcheon
	 

	 	 
	 
	Social Security No.: _________________________

	 	Title: SVP, Human Resources