exv10w1






EXHIBIT 10.1




CSX Stock and Incentive Award Plan




Effective May 5, 2010




	1.	 	Purpose. The primary purpose of the CSX Stock and Incentive Award Plan (the “Plan”) is to
further the long term stability and financial success of CSX, its Subsidiaries, and Affiliates
by providing a program to reward selected employees with Company Stock and Incentive Awards.
The CSX Board believes that such awards incentivize employees to remain with CSX, encourage
superior quality work and further align the interests of CSX employees, Directors and
shareholders. The Plan also provides a source of shares of Company Stock that may be used to
compensate individuals serving on the CSX Board.
	 
	2.	 	Definitions. As used in the Plan, the following terms have the indicated meanings:






	 	(a)	 	“Affiliate” means a corporation, partnership or entity other than a Subsidiary
in which CSX or a Subsidiary directly or indirectly owns an interest.
	 
	 	(b)	 	“Applicable Withholding Taxes” means the aggregate minimum amount of federal,
state, local and foreign income, payroll and other taxes that an Employer is required
to withhold in connection with any Incentive Award.
	 
	 	(c)	 	“Board” means the Board of Directors of CSX Corporation.
	 
	 	(d)	 	“Cause” means: (i) an act of personal dishonesty by a Participant resulting in
substantial personal enrichment of the Participant at the expense of CSX, a Subsidiary
or Affiliate; (ii) a violation of a Participant’s management responsibilities which is
demonstrably willful and deliberate on the Participant’s part and which is not remedied
in a reasonable period of time after receipt of written notice from the Employer; (iii)
the conviction of the Participant of, or a plea of guilty or nolo contendre to, a
felony involving moral turpitude; (iv) a significant act involving moral turpitude that
adversely affects the reputation or business of CSX, a Subsidiary or Affiliate; or (v)
a violation of CSX’s code of ethics.
	 
	 	(e)	 	“Change in Control” means the occurrence of any of the following:






	 	(i)	 	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 (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20 percent or more of either (A) the then outstanding shares
of common stock of CSX (the “Outstanding Company Common Stock”), or (B) the
combined voting power of the then outstanding voting securities of CSX entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a change in control: (A) any
acquisition directly from CSX; (B) any acquisition by CSX; (C) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by CSX
or any corporation controlled by CSX; or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 2(e); or
	 
	 	(ii)	 	Board Composition. Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a Director after such




 









 






	 	 	 	date whose election or nomination for election by CSX’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
individuals 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; or






	 	(iii)	 	Business Combination. An actual change in ownership
of Outstanding Company Common Stock, Outstanding Company Voting Securities,
and/or assets of CSX or CSX Transportation, Inc. by reason of a reorganization,
merger, consolidation, or sale or other disposition of all or substantially all
of the assets of CSX or CSX Transportation, Inc. that is not subject, as a
matter of law or contract, to approval by the Surface Transportation Board or
any successor agency or regulatory body having jurisdiction over such
transactions (the “STB”) (a “Business Combination”), in each case, unless,
following such Business Combination:






	 	(A)	 	all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50 percent 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
CSX or CSX Transportation, Inc. or all or substantially all of the
assets of CSX or CSX Transportation, Inc. 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 Company Common Stock and Outstanding Company Voting
Securities, as the case may be;
	 
	 	(B)	 	no Person (excluding a corporation resulting
from such Business Combination or an employee benefit plan (or related
trust) of CSX or the corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20 percent 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
	 
	 	(C)	 	at least a majority of the members of the board
of directors of the corporation 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
providing for such Business Combination; or






	 	(iv)	 	Regulated Business Combination. An actual change in
ownership of Outstanding Company Common Stock, Outstanding Company Voting
Securities, and/or assets of CSX or CSX Transportation, Inc. by reason of a
Business Combination that is subject, as a matter of law or contract, to
approval by the STB (a “Regulated Business Combination”) unless such Business
Combination complies with clauses (A), (B) and (C) of subsection (iii) of this
Section 2(e); or




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	 	(v)	 	Liquidation or Dissolution. Approval by the
shareholders of CSX of a complete liquidation or dissolution of CSX or CSX
Transportation, Inc.






	 	(f)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(g)	 	“Committee” means the Compensation Committee of the Board or its successor,
provided that, if any member of the Compensation Committee does not qualify as both an
outside director for purposes of Code Section 162(m) and a non-employee director for
purposes of Rule 16b-3, the remaining members of the Compensation Committee (but not
less than two members) shall constitute a subcommittee of the Compensation Committee to
act as the Committee under the Plan. With respect to Stock Awards to be granted to
Directors, the term “Committee” means the Governance Committee of the Board.
	 
	 	(h)	 	“Company Stock” means common stock, $1.00 par value, of CSX. In the event of a
change in the capital structure of CSX affecting the common stock (as provided in
Section 18), the shares resulting from such a change in the common stock shall be
deemed to be Company Stock within the meaning of the Plan.
	 
	 	(i)	 	“Covered Employee” means a Participant who the Committee determines is or may
become a covered employee within the meaning of Code Section 162(m) during the
performance period for a Performance Grant.
	 
	 	(j)	 	“CSX” means CSX Corporation.
	 
	 	(k)	 	“Date of Grant” means the date on which the Committee grants an Incentive
Award.
	 
	 	(l)	 	“Director” means a member of the Board.
	 
	 	(m)	 	Dividend Equivalent” means a right awarded under Section 11.
	 
	 	(n)	 	“Divisive Transaction” means a transaction other than a Change in Control in
which the Participant’s Employer (other than CSX) ceases to be a Subsidiary, or
Affiliate or a sale of substantially all of the assets of a Subsidiary or Affiliate.
	 
	 	(o)	 	“Employer” means CSX and each Subsidiary or Affiliate that employs one or more
Participants.
	 
	 	(p)	 	“Fair Market Value or FMV” means the closing price of a share of a publicly
traded security on any recognized exchange on the date of reference.
	 
	 	(q)	 	“Good Reason,” as to any Participant, means (i) a material reduction in the
Participant’s compensation or employment related benefits (other than across-the-board
reductions that affect management employees generally); (ii) a material diminution of
the Participant’s status, title(s), office(s), working conditions, or management
responsibilities (other than changes in reporting or management responsibilities
required by applicable federal or state law); or (iii) a change in the location of
Participant’s place of employment of more than 30 miles without the Participant’s
consent. A Participant’s resignation shall not be with Good Reason unless the
Participant gives the Employer written notice of the purported existence of Good Reason
and the Employer fails to cure or remedy the condition within thirty (30) days after
the Participant’s notice.
	 
	 	(r)	 	“Incentive Award” means, a Stock Award, Performance Grant or the award of
Restricted Stock, an Option, a Restricted Stock Unit, a Stock Appreciation Right, or a
Dividend Equivalent under the Plan.




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	 	(s)	 	“Incentive Stock Option” means an Option that qualifies for favorable federal
income tax treatment under Code Section 422.
	 
	 	(t)	 	“Initial Value” means the amount prescribed by the Committee for purposes of
determining the amount payable upon the exercise of a Stock Appreciation Right. The
Initial Value cannot be less than 100% of the FMV of the underlying Company Stock on
the Date of Grant. If the Committee does not prescribe an Initial Value for a Stock
Appreciation Right, the Initial Value shall be 100% of the FMV of the underlying
Company Stock on the Date of Grant of the Stock Appreciation Right.
	 
	 	(u)	 	“Nonqualified Stock Option” means an Option that is not an Incentive Stock
Option.
	 
	 	(v)	 	“Option” means a right to purchase Company Stock granted under the Plan, at a
price determined in accordance with the Plan.
	 
	 	(w)	 	“Participant” means any employee of CSX, a Subsidiary or an Affiliate or a
Director who receives an Incentive Award under the Plan.
	 
	 	(x)	 	“Performance Criteria” means any of the following performance measures of CSX,
a Subsidiary or Affiliate:
	 
	 	 	 	Return on invested capital (ROIC); free cash flow; value added (ROIC less cost of
capital multiplied by capital); total shareholder return; economic value added (net
operating profit after tax less cost of capital); operating ratio (including or
excluding nonrecurring items); cost reduction (or limits on cost increases); debt to
capitalization; debt to equity; earnings; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; earnings per share
(including or excluding nonrecurring items); earnings per share before extraordinary
items; income from operations (including or excluding nonrecurring items); income
from operations compared to capital spending; net income (including or excluding
nonrecurring items, extraordinary items and/or the accumulative effect of accounting
changes); net sales; price per share of Company Stock; return on assets; return on
capital employed; return on equity; return on investment; return on sales; and sales
volume.
	 
	 	 	 	Any Performance Criteria may be used to measure the performance of CSX as a whole or
any Subsidiary, Affiliate or business unit of CSX. As determined by the Committee,
Performance Criteria shall be derived from the financial statements of CSX, a
Subsidiary or Affiliate prepared in accordance with generally accepted accounting
principles applied on a consistent basis, or, for Performance Criteria that cannot
be so derived, under a methodology established by the Committee prior to the
issuance of a Performance Grant that is consistently applied.
	 
	 	(y)	 	“Performance Goal” means an objectively determinable performance goal
established by the Committee with respect to a given Performance Grant that relates to
one or more Performance Criteria.
	 
	 	(z)	 	“Performance Grant” means a type of Incentive Award payable in Company Stock,
cash, or a combination of Company Stock and cash that is made pursuant to Section 8.
	 
	 	(aa)	 	“Restricted Stock” means Company Stock awarded under Section 6.
	 
	 	(bb)	 	“Restricted Stock Unit” means a right granted to a Participant to receive
Company Stock or cash awarded under Section 7.




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	 	(cc)	 	“Rule 16b-3” means Rule 16b-3 of the Securities and Exchange Commission
promulgated under the Exchange Act. A reference in the Plan to Rule 16b-3 shall
include a reference to any corresponding rule (or number redesignation) of any
amendments to Rule 16b-3 enacted after the effective date of the Plan’s adoption.
	 
	 	(dd)	 	“Stock Appreciation Right” means a right to receive amounts awarded under
Section 10.
	 
	 	(ee)	 	“Stock Award” means an award granted under Section 9.
	 
	 	(ff)	 	“Subsidiary” means any corporation in which CSX owns stock possessing more than
50 percent of the combined voting power of all classes of stock or which is in a chain
of corporations with CSX in which stock possessing more than 50 percent of the combined
voting power of all classes of stock is owned by one or more other corporations in the
chain.
	 
	 	(gg)	 	“Substitute Award” means an award granted in connection with a Change in
Control that replaces an Incentive Award and that the Committee determines (i) has
comparable value to the Incentive Award on the date of replacement, (ii) has comparable
terms, conditions, goals and criteria as the Incentive Award, and (iii) comparable
liquidity.
	 
	 	(hh)	 	“Target Payout Level” means the payout level defined as “target” under the
terms of the Incentive Award.






	3.	 	Stock.






	 	(a)	 	Subject to Section 18 of the Plan, there shall be reserved for issuance under
the Plan an aggregate of 14 million (14,000,000) shares of Company Stock, which shall
be authorized, but unissued shares. To the extent that a Stock Appreciation Right is
settled in shares of Company Stock, the Plan’s share authorization shall be reduced by
the number of share-settled Stock Appreciation Rights that were exercised (rather than
the number of shares issued in settlement of the Stock Appreciation Right). Shares
allocable to Incentive Awards granted under the Plan that expire, are forfeited,
otherwise terminate unexercised, or are settled in cash may again be awarded as an
Incentive Award under the Plan. Shares surrendered by a Participant (actually or by
attestation) in connection with an Incentive Award or retained by CSX in payment of
Applicable Withholding Taxes shall not increase the number of shares that are available
for Incentive Awards under the Plan. Shares of Company Stock may be issued under the
Plan and Incentive Awards may be granted under the Plan in settlement, substitution or
assumption of stock options, stock appreciation rights, stock awards, performance
shares, phantom stock or similar equity or equity-based awards (or the right to receive
such awards in the future) in connection with the acquisition of an entity by an
Employer. Any shares of Company Stock issued or issuable under such Incentive Awards
will not reduce the number of shares of Company Stock authorized for issuance under the
Plan.
	 
	 	(b)	 	No more than 1,200,000 shares may be granted as Incentive Awards (other than
Options and Stock Appreciation Rights), or paid thereunder to an individual Participant
during any 36-month period. No Participant may be granted Options and Stock
Appreciation Rights in any calendar year exceeding 1,000,000 shares. Related Options
and Stock Appreciation Rights shall be treated as a single Incentive Award for purposes
of the preceding sentence.




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	4.	 	Eligibility.






	 	(a)	 	All employees of CSX, a Subsidiary, or Affiliate, shall be eligible to receive
Incentive Awards under the Plan. Directors shall be eligible to receive Company Stock
under the Plan as compensation for service on the Board and its committees. The
Committee shall have the power and complete discretion to select eligible employees and
Directors to receive Incentive Awards.
	 
	 	(b)	 	The grant of an Incentive Award shall not obligate an Employer to pay an
employee or Director any particular amount of remuneration, to continue the employment
of the employee or the service of the Director after the grant or to make further
grants to the employee or Director at any time thereafter.






	5.	 	Stock Options.






	 	(a)	 	The Committee may grant Options to eligible employees. The Committee shall
determine the number of shares for which Options are granted, the per share Option
exercise price, whether the Options are Incentive Stock Options or Nonqualified Stock
Options, and any other terms and conditions to which the Options are subject. The
agreement evidencing an Option shall provide that if the Participant is a Named
Executive Officer on the date the Option is exercised, then shares acquired on the
exercise of the Option cannot be transferred prior to the first anniversary of the
exercise of the Option. However, the one-year restriction on transferability shall not
apply (i) after the Participant’s termination of employment from CSX and its
Affiliates, (ii) to the surrender or exchange (actually or by attestation) of shares to
exercise the Option, (iii) to the sale of shares in connection with the exercise of the
Option in a “cashless” exercise and “hold” transaction, (iv) to the surrender (actually
or by attestation), withholding or sale of shares to satisfy Applicable Withholding
Taxes arising on the exercise of the Option, (v) to the sale of such shares in a Change
in Control transaction or (vi) to a person or entity that acquires the shares from the
Participant by will or the laws of descent and distribution. The term “Named Executive
Officer” means an executive officer of CSX for whom disclosure was required in CSX’s
most recent filing with the Securities and Exchange Commission that required disclosure
pursuant to Item 402(c) of Regulation S-K promulgated by the Securities and Exchange
Commission.
	 
	 	(b)	 	The exercise price of shares of Company Stock covered by an Option shall be at
least 100 percent of its FMV on the Date of Grant. Except as provided in Section 18,
the exercise price of an Option may not be decreased after the Date of Grant. Except
as provided in Section 18, a Participant may not surrender an Option in consideration
for cash, another Incentive Award, or the grant of a new Option with a lower exercise
price. If a Participant’s Option is cancelled before its expiration date, the
Participant may not receive another Option within 6 months of the cancellation unless
the exercise price of such Option is no less than the exercise price of the cancelled
Option.
	 
	 	(c)	 	Except in the event of the Participant’s disability, retirement (as defined in
the agreement evidencing the Option), death, or a Change in Control, no Option may vest
before the third anniversary of the Date of Grant. An Option shall not be exercisable
more than 10 years after the Date of Grant. The aggregate FMV, determined at the Date
of Grant, of shares of Company Stock for which Incentive Stock Options first become
exercisable by a Participant during any calendar year shall not exceed $100,000.






	6.	 	Restricted Stock.






	 	(a)	 	The Committee may grant Restricted Stock to eligible employees. The Committee
shall establish as to each award of Restricted Stock the terms and conditions to which
the




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	 	 	 	Restricted Stock is subject, including the period of time before restrictions lapse
and the Participant owns the Company Stock (the “Restriction Period”).






	 	(b)	 	The minimum Restriction Period applicable to any award of Restricted Stock that
is not subject to performance standards restricting transfer shall be three years from
the Date of Grant. The minimum Restriction Period applicable to any award of
Restricted Stock that is subject to performance standards shall be one year from the
Date of Grant.
	 
	 	(c)	 	Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated,
or otherwise encumbered or disposed of until the restrictions have lapsed or been
removed. The agreement evidencing an award of Restricted Stock shall provide that if
the Participant is a Named Executive Officer (as previously defined) on the date the
Participant’s interest in the Restricted Stock becomes nonforfeitable, then the shares
of Restricted Stock cannot be transferred prior to the first anniversary of the date
the Participant’s interest in such Restricted Stock became nonforfeitable. However,
the one-year restriction on transferability shall not apply (i) after the Participant’s
termination of employment from CSX and its Affiliates, (ii) to the surrender (actually
or by attestation), withholding or sale of such shares to satisfy Applicable
Withholding Taxes arising on the grant or vesting of the Restricted Stock, (iii) to the
sale of such shares in a Change in Control transaction or (iv) to a person or entity
that acquires the shares from the Participant by will or the laws of descent and
distribution.






	7.	 	Restricted Stock Units.






	 	(a)	 	The Committee may grant Restricted Stock Units to eligible employees. The
Committee shall establish as to each award of Restricted Stock Units the terms and
conditions to which the Restricted Stock Units are subject. Upon lapse of the
restrictions, a Restricted Stock Unit shall entitle the Participant to receive from CSX
a share of Company Stock or a cash amount equal to the FMV of the Company Stock on the
date that the restrictions lapse.
	 
	 	(b)	 	The minimum Restriction Period applicable to any award of Restricted Stock
Units that is not subject to performance standards restricting transfer shall be three
years from the Date of Grant. The minimum Restriction Period applicable to any award
of Restricted Stock Units that is subject to performance standards shall be one year
from the Date of Grant.






	8.	 	Performance Grants.






	 	(a)	 	The Committee may make Performance Grants to eligible employees. Each
Performance Grant shall contain the Performance Goals for the award, including the
Performance Criteria, the target and maximum amounts payable and the other terms and
conditions of the Performance Grant. As to each Covered Employee, each Performance
Grant shall be granted and administered to comply with the requirements of Code Section
162(m).
	 
	 	(b)	 	The Committee shall establish the Performance Goals for Performance Grants.
The Committee shall determine the extent to which any Performance Criteria shall be
used and weighted in determining Performance Grants. The Committee may increase, but
not decrease, Performance Goals during a performance period for a Covered Employee.
The Performance Goals for any Performance Grant for a Covered Employee shall be
established no later than 90 days after the start of the period for which the
Performance Grant relates and shall be made prior to the completion of 25 percent of
such period.




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	 	(c)	 	The Committee shall establish for each Performance Grant the amount of Company
Stock or cash payable at specified levels of performance, based on the Performance Goal
for each Performance Criteria. The Committee shall make all determinations regarding
the achievement of any Performance Goal. The Committee may not increase the amount of
cash or Common Stock that would otherwise be payable upon achievement of the
Performance Goal or Goals but may reduce or eliminate the payments except as provided
in a Performance Grant.
	 
	 	(d)	 	The actual payments to a Participant under a Performance Grant will be
calculated by applying the achievement of Performance Criteria to the Performance Goal.
The Committee shall make all calculations of actual payments and shall certify in
writing the extent, if any, to which the Performance Goals have been met.






	9.	 	Stock Awards. The Committee may make Stock Awards to eligible employees and Directors. The
Committee shall establish the number of shares of Common Stock to be awarded and the terms and
conditions applicable to each Stock Award. The Committee will make all determinations
regarding the achievement of any performance restriction on a Stock Award. The Common Stock
under a Stock Award shall be issued by CSX upon the satisfaction of the terms and conditions
of a Stock Award.
	 
	10.	 	Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights to eligible
employees. The Committee shall establish as to each Stock Appreciation Right the terms and
conditions to which the Stock Appreciation Right are subject. The following provisions apply
to all Stock Appreciation Rights:






	 	(a)	 	A Stock Appreciation Right shall entitle the Participant, upon its exercise, to
receive in exchange for each share of Company Stock represented by the exercise of the
Stock Appreciation Right, an amount equal to the excess of (x) the FMV of the
underlying Company Stock on the date of exercise over (y) the Initial Value of the
Stock Appreciation Right.






	 	(b)	 	Except in the event of the Participant’s disability, retirement (as defined in
the agreement evidencing the Stock Appreciation Right), death, or a Change in Control,
no Stock Appreciation Right may vest before the third anniversary of the Date of Grant.
A Stock Appreciation Right may not be exercised more than 10 years after the Date of
Grant. A Stock Appreciation Right may only be exercised at a time when the FMV of the
Company Stock covered by the Stock Appreciation Right exceeds its FMV on the Date of
Grant. The amount payable upon the exercise of a Stock Appreciation Right may be paid
in Company Stock, cash, or a combination of Company Stock or cash as determined by the
Committee either at the time of grant or the time of exercise of the Stock Appreciation
Right. The agreement evidencing a Stock Appreciation Right shall provide that if the
Participant is a Named Executive Officer (as previously defined) on the date the Stock
Appreciation Right is exercised, then shares acquired on the exercise of the Stock
Appreciation Right cannot be transferred prior to the first anniversary of the exercise
of such Stock Appreciation Right. However, the one-year holding restriction shall not
apply (i) after the Participant’s termination of employment from CSX and its
Affiliates, (ii) to the surrender (actually or by attestation), withholding or sale of
shares to satisfy Applicable Withholding Taxes arising on exercise of the Stock
Appreciation Right, (iii) to the sale of such shares in a Change in Control
transaction, or (iv) to a person or entity that acquires the shares from the
Participant by will or the laws of descent and distribution.






	 	(c)	 	Except as provided in Section 18, the Initial Value of a Stock Appreciation
Right may not be decreased after the Date of Grant. Except as provided in Section 18,
a Participant may not surrender a Stock Appreciation Right in consideration for the
grant of cash, another Incentive Award, or a new Stock Appreciation Right with a lower
Initial Value. If a Participant’s Stock Appreciation Right is cancelled before its
termination date, the




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	 	 	 	Participant may not receive another Stock Appreciation Right within 6 months of the
cancellation unless the Initial Value of such Stock Appreciation Right is no less
than the Initial Value of the cancelled Stock Appreciation Right.






	11.	 	Dividend Equivalents. The Committee may grant Dividend Equivalents to any Participant. The
Committee shall establish the terms and conditions to which Dividend Equivalents are subject.
Dividend Equivalents may be granted in connection with other Incentive Awards or separately.
Under a Dividend Equivalent, a Participant shall be entitled to receive, currently or in the
future, payments equivalent to the amount of dividends paid by CSX to holders of Company Stock
with respect to the number of Dividend Equivalents held by the Participant; provided, however,
that if Dividend Equivalents are granted with another Incentive Award that becomes exercisable
or vested or is earned only upon satisfaction of performance restrictions, any amount payable
under the Dividend Equivalents shall be paid only when, and to the extent that, the
performance restrictions of the related Incentive Award are satisfied (but in no event later
than March 15 of the year following the year in which the performance restrictions are
satisfied). The Committee may decide to pay a Dividend Equivalent in Company Stock, cash, or a
combination thereof at the time a Dividend Equivalent is granted or payable.
	 
	12.	 	Method of Exercise of Options. Options may be exercised by the Participant (or his guardian
or personal representative) under procedures established by CSX. Options may be exercised by
(i) paying cash, (ii) executing a “cashless” exercise, or (iii) executing a “cashless”
exercise and “hold” transaction.
	 
	13.	 	Tax Withholding. Whenever payment under an Incentive Award is made in cash, the Employer
will withhold an amount sufficient to satisfy any Applicable Withholding Taxes. If an
Incentive Award is payable in Company Stock, the Employer shall withhold the number of shares
of Company Stock (valued at their FMV), necessary to pay the Applicable Withholding Taxes.
	 
	14.	 	Transferability of Incentive Awards. Incentive Awards other than Incentive Stock Options
shall not be transferable by a Participant or exercisable by a person other than the
Participant, except as expressly provided in the Incentive Award. Incentive Stock Options, by
their terms, shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable, during the Participant’s lifetime, only by the
Participant or authorized representative.
	 
	15.	 	Deferral Elections. No deferrals may be made under the Plan. The Committee may permit
Participants to elect to defer, under the CSX Executives’ Deferred Compensation Plan or any
successor plan, any gains realized or the issuance or right to Company Stock relating to
Incentive Awards, other than Options or Stock Appreciation Rights.
	 
	16.	 	Effective Date of the Plan. The effective date of the Plan is May 5, 2010.
	 
	17.	 	Amendments and Termination.






	 	(a)	 	Plan amendments: The Board or Compensation Committee may amend the Plan as it
deems advisable, provided however, that no amendment shall be adopted that (i)
increases the total number of shares of Company Stock reserved for issuance (except
pursuant to Section 18), or (ii) amends the Plan provisions relating to the minimum
exercise price for Options or the minimum Initial Value for Stock Appreciation Rights.
However, with respect to outstanding Incentive Awards other than Performance Grants,
the Plan may not be amended in a manner that adversely affects such awards without
Participant consent.
	 
	 	(b)	 	Incentive Award Amendments: The Committee may also amend as it deems advisable
the terms of a Performance Grant, except as provided under Section 20(e) “Change in
Control”. However, with respect to Incentive Awards other than Performance Grants, the




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	 	 	 	Committee may not amend the terms of such awards in a manner that adversely impacts
such awards without Participant consent, except as required under Sections 18,
19(f), and 20(a).






	 	(c)	 	Termination: This Plan shall terminate at the close of business on May 4, 2020,
and no Incentive Stock Option may be granted under this Plan after February 9, 2020.
Additionally, the Board, at its sole discretion, may terminate the Plan at any other
time, except (i) as prohibited under Section 20(e) “Change in Control, and (ii) with
respect to outstanding Incentive Awards other than Performance Grants, the Committee
may not terminate the Plan in a manner that adversely impacts such awards without the
affected Participant’s consent.






	18.	 	Change in Capital Structure.






	 	(a)	 	The Compensation Committee shall make commensurate adjustments to the Plan and
to outstanding Incentive Awards to reflect any stock dividend, stock split or
combination of shares, share exchange, recapitalization or merger or other change in
CSX capital stock (including, but not limited to, the creation or issuance to
shareholders generally of rights, options or warrants for the purchase of common stock
or preferred stock of CSX). The Compensation Committee’s determination of the number
and kind of shares of stock or securities to be subject to the Plan and to Incentive
Awards then outstanding or to be granted, the maximum number of shares or securities
which may be delivered under the Plan under Sections 3(a) or 3(b), the Option exercise
price, the Initial Value, the terms of outstanding Incentive Awards and other relevant
provisions after any such transaction shall be binding on all persons. If the
adjustment would produce a fractional share with respect to any unexercised Option, the
fractional share shall be disregarded.
	 
	 	(b)	 	Notwithstanding anything in the Plan to the contrary, the Committee may take
the foregoing actions without the consent of any Participant, and the Committee’s
determination shall be conclusive and binding on all persons for all purposes.






	19.	 	Administration of the Plan.






	 	(a)	 	The Committee shall administer the Plan. The Committee shall have authority to
determine the nature of, and impose any term, limitation or condition upon an Incentive
Award that the Committee deems appropriate to achieve the objectives of the Incentive
Award. The Committee may adopt rules and regulations for carrying out the Plan with
respect to Participants. The interpretation and construction of any provision of the
Plan by the Committee shall be final and conclusive as to any Participant.
	 
	 	(b)	 	The Committee shall have the power and complete discretion to delegate to any
individual, or to any group of individuals employed by CSX or a Subsidiary, the
authority to grant Incentive Awards under the Plan to any employee of CSX, a Subsidiary
or Affiliate, who is not considered an officer of CSX under Securities Exchange Act
Rule 16a-1. No Incentive Award granted under this authority may exceed $500,000 in
value on the Date of Grant.
	 
	 	(c)	 	If the Participant’s Employer is involved in a Divisive Transaction, the
Committee may take such actions with respect to outstanding Incentive Awards as the
Committee deems appropriate.
	 
	 	(d)	 	If a Participant or former Participant (1) becomes associated with, recruits or
solicits customers or other employees of CSX, a Subsidiary or Affiliate, is employed
by, renders services to, or owns any interest in (other than any nonsubstantial
interest, as determined by the Committee) any business that is in competition with CSX,
its Subsidiaries or




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	 	 	 	Affiliates, (2) has his employment terminated by his Employer on account of actions
by the Participant which are detrimental to the interests of CSX, a Subsidiary or
Affiliate, or (3) engages in conduct which the Committee determines to be
detrimental to the interests of CSX, a Subsidiary or Affiliate, the Committee may,
in its sole discretion, cancel all outstanding Incentive Awards, including
immediately terminating any Options held by the Participant, regardless of whether
then exercisable.






	 	(e)	 	In the event of the death of a Participant, (i) any outstanding Incentive Award
that is otherwise exercisable may be exercised by the administrator or executor, as
applicable, of the Participant’s estate, and (ii) any amount payable under an
outstanding Incentive Award shall be paid to the Participant’s estate.






	 	(f)	 	The Committee shall administer the Plan and prescribe the terms and conditions
of Incentive Awards so that Options and Stock Appreciation Rights shall be exempt from
Code Section 409A pursuant to Treasury Regulation § 1.409A-1(b)(4) or (5) and so that
all other Incentive Awards shall be exempt from Code Section 409A pursuant to Treasury
Regulation § 1.409A-1(b)(4). If an Incentive Award is subject to Code Section 409A
notwithstanding the preceding sentence, the Committee, without the consent of any
Participant, may take any action that the Committee determines is necessary or
appropriate so that such Incentive Award shall be exempt from, or in compliance with,
the requirements of Code Section 409A.






	20.	 	Change in Control. The following shall apply in the event of a Change in Control.






	 	(a)	 	Continuation of Incentive Awards: Effective as of a Change in Control, each
outstanding Incentive Award must be continued in accordance with its terms and
conditions in effect on the date of the Change in Control, except for adjustments in
its terms and conditions as are required to equitably reflect the change in capital
structure resulting from the Change in Control. If Company Stock is no longer publicly
traded on a recognized exchange, Incentive Awards outstanding at the time of the Change
in Control must be replaced with a Substitute Award as soon as practicable.






	 	(b)	 	Termination of Employment After Change in Control: Each Incentive Award or
Substitute Award held by a Participant (A) who resigns within three months after an
event constituting Good Reason or (B) whose employment is terminated without Cause by
the Company, a Subsidiary or an Affiliate, in either case after a Change in Control and
on or before the third anniversary of the Change in Control, is subject to the
following:






	 	(i)	 	If the Incentive Award or Substitute Award is an Option or
Stock Appreciation Right, the Incentive Award or Substitute Award shall be
cancelled on the date the Participant’s employment terminates in exchange for a
single sum cash payment. The payment shall equal the FMV of Company Stock or
other security subject to the Option or Stock Appreciation Right, on the date
the Participant’s employment terminates, in excess of the option price or the
Initial Value, as applicable, multiplied by the number of shares of Company
Stock or other security subject to the Option or Stock Appreciation Right on
the date of the termination of employment.
	 
	 	(ii)	 	If the Incentive Award or Substitute Award is Restricted Stock,
all terms and conditions on the Restricted Stock shall be deemed satisfied on
the date the Participant’s employment terminates and the Restricted Stock shall
be fully vested and immediately transferable.
	 
	 	(iii)	 	If the Incentive Award or Substitute Award is a Performance
Grant or Stock Award, the Incentive Award or Substitute Award shall be
considered earned at the Target Payout Level and shall be cancelled on the date
the Participant’s




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	 	 	 	employment terminates in exchange for a single sum cash payment. The
payment shall equal the FMV of Company Stock or other security subject to
the Performance Grant or Stock Award multiplied by the number of shares of
Company Stock or other security subject to the Performance Grant or Stock
Award at the Target Payout Level.






	 	(iv)	 	If the Incentive Award or Substitute Award is Restricted Stock
Units, all terms and conditions on the Restricted Stock Units shall be
considered satisfied on the date the Participant’s employment terminates and
shall be cancelled on such date in exchange for a single sum cash payment. The
payment shall equal the FMV of Company Stock or other security subject to the
award, multiplied by the number of Restricted Stock Units subject to the award
on the date the Participant’s employment terminates.
	 
	 	(v)	 	If the Incentive Award or Substitute Award is Dividend
Equivalents, all terms and conditions of the Dividend Equivalents shall be
considered satisfied on the date the Participant’s employment terminates and
shall be cancelled on such date in exchange for a single sum cash payment. The
payment shall equal the balance, if any, that has been credited but not yet
paid with respect to the Dividend Equivalents.






	 	(c)	 	Termination of Employment before a Change in Control in Certain Circumstances:
Each Incentive Award of a Participant (A) who resigns within three months after an
event constituting Good Reason or (B) whose employment is terminated without Cause by
the Company, a Subsidiary or an Affiliate, in either case upon or after shareholder
approval of a Business Combination or Regulated Business Combination and prior to the
applicable Change in Control is subject to the following upon the consummation of such
Change in Control:






	 	(i)	 	all Options and Stock Appreciation Rights shall be cancelled,
on the date of the event described in Section 2(e)(iii) or 2(e)(iv), as
applicable, in exchange for a single sum cash payment. The payment shall equal
the FMV of Company Stock on such date in excess of the option price or the
Initial Value, as applicable, multiplied by the number of shares of Company
Stock subject to the Option or Stock Appreciation Right on the date of the
Change in Control.
	 
	 	(ii)	 	all terms and conditions of Restricted Stock and Restricted
Stock Units shall be considered satisfied upon the date of the event described
in Section 2(e)(iii) or 2(e)(iv), as applicable (and the Restricted Stock shall
be entirely vested and transferable and the amount payable for the Restricted
Stock Units shall be immediately payable as of such date).
	 
	 	(iii)	 	all Performance Grants, Stock Awards and Dividend Equivalents
shall be considered earned at Target Payout Level and immediately payable in
cash upon the date of the event described in Section 2(e)(iii) or 2(e)(iv), as
applicable.






	 	(d)	 	Additional Participant Rights: If Section 20(a) is not satisfied, then the
following shall occur: (i) with respect to Performance Grants, Stock Awards, Restricted
Stock, Restricted Stock Units or Dividend Equivalents, the Participant shall be
entitled to receive the value of the Incentive Award, based upon FMV of the Company
Stock and at the Target Payout Level, where applicable, determined on the date of the
Change in Control and paid as soon as practicable thereafter, and (ii) with respect to
Options or Stock Appreciation Rights, the Participant shall be entitled to receive an
amount equal to the FMV of the shares covered by the Option or Stock Appreciation Right
on the date of the Change in Control in excess of the Option price or Initial Value, as
applicable, multiplied by the




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	 	 	 	number of shares covered by the Option or Stock Appreciation Right and paid as soon
as practicable thereafter.






	 	(e)	 	Amendments and Termination: On and after a Change in Control, the Committee may
not amend or terminate the Plan or the terms of any Performance Grant in a manner that
adversely impacts such Performance Grant without the affected Participant’s consent
except as required or provided under Sections 18, 19(f), and 20 (a) above.






	21.	 	Interpretation. The terms of this Plan shall be governed by the laws of the State of Florida
without regard to its conflict of laws rules.






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