exv10w2






Exhibit 10.2




CSX Long Term Incentive Plan




2010-2012 Cycle



Purpose and Objective



The CSX Long Term Incentive Plan (“LTIP” or “the “Plan”) is the vehicle pursuant to which CSX
Corporation (“CSX”) awards 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 2010-2012 LTIP Cycle (the “2010-2012 Cycle” or “Cycle”) is the period during which performance
is measured. The Cycle commences May 5, 2010 (“the Effective Date”) and ends December 28, 2012.




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
2010-2012 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 2010-2012 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
2010-2012 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 2010-2012 Cycle, the average stock price equaled $50.21,
representing the months of February, March and April 2010. 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 2010-2012 Cycle and is
defined as consolidated CSX Corporation operating expenses divided by operating revenue.
It is calculated excluding nonrecurring items disclosed in the financial statements.
Performance achievement for the Cycle is based on Operating Ratio as measured in the third
and final year of the Cycle (2012).




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 chart in
Exhibit A reflects the Operating Ratio targets and related Performance Awards at various
WTI per barrel oil prices and provides payout examples.



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 2012 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.



2









 






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 made 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 2010-2012 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 2010-2012 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




	 	(i)	 	not, 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)	 	not, without written Company consent, solicit employees to work for a
competitor in a capacity similar to such solicited employee’s capacity;




3









 












	 	(iii)	 	not, without written Company consent, solicit the Companies’ customers on
behalf of a competitor;
	 
	 	(iv)	 	not, 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)	 	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 2010-2012 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 2010-2012 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 2010-2012 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.







4









 








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.







5









 








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.





6