Document:

<PAGE>
                                                                     EXHIBIT 4.9

                                 [Face of Note]
--------------------------------------------------------------------------------

                                                         CUSIP/CINS
                                                                    ------------

                    7.500% Senior Subordinated Notes due 2014

No.                                                                $
    ---                                                             ------------

                              Carmike Cinemas, Inc.

promises to pay to [______] or registered assigns,

the principal sum of __________________________________________________________
DOLLARS on _____________, 2014.

Interest Payment Dates:  February 15 and August 15

Record Dates:  February 1 and August 1

Dated:  February 4, 2004

                              CARMIKE CINEMAS, INC.

                              By:
                                    --------------------------------------------
                                    Name:  Martin A. Durant
                                    Title: Senior Vice President - Finance,
                                           Treasurer and Chief Financial Officer

This is one of the Notes referred to
in the within-mentioned Indenture:

Wells Fargo Bank Minnesota, National Association
  as Trustee

By:
     --------------------------------------------
                Authorized Signatory

<PAGE>

                                 [Back of Note]
                    7.500% Senior Subordinated Notes due 2014

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

                  (1) INTEREST. Carmike Cinemas, Inc., a Delaware corporation
         (the "Company"), promises to pay interest on the principal amount of
         this Note at 7.500% per annum from February 4, 2004 until maturity and
         shall pay the Special Interest, if any, payable pursuant to Section 2
         of the Registration Rights Agreement referred to below. The Company
         will pay interest and Special Interest, if any, semi-annually in
         arrears on February 15 and August 15 of each year, or if any such day
         is not a Business Day, on the next succeeding Business Day (each, an
         "Interest Payment Date"). Interest on the Notes will accrue from the
         most recent date to which interest has been paid or, if no interest has
         been paid, from the date of issuance; provided that if there is no
         existing Default in the payment of interest, and if this Note is
         authenticated between a record date referred to on the face hereof and
         the next succeeding Interest Payment Date, interest shall accrue from
         such next succeeding Interest Payment Date; provided further that the
         first Interest Payment Date shall be August 15, 2004. The Company will
         pay interest (including post-petition interest in any proceeding under
         any Bankruptcy Law) on overdue principal and premium, if any, from time
         to time on demand at a rate that is 1% per annum in excess of

<PAGE>

         the rate then in effect to the extent lawful; it will pay interest
         (including post-petition interest in any proceeding under any
         Bankruptcy Law) on overdue installments of interest and Special
         Interest, if any, (without regard to any applicable grace periods) from
         time to time on demand at the same rate to the extent lawful. Interest
         will be computed on the basis of a 360-day year of twelve 30-day
         months.

                  (2) METHOD OF PAYMENT. The Company will pay interest on the
         Notes (except defaulted interest) and Special Interest, if any, to the
         Persons who are registered Holders of Notes at the close of business on
         the February 1 or August 1 next preceding the Interest Payment Date,
         even if such Notes are canceled after such record date and on or before
         such Interest Payment Date, except as provided in Section 2.12 of this
         Indenture with respect to defaulted interest. The Notes will be payable
         as to principal, premium and Special Interest, if any, and interest at
         the office or agency of the Company maintained for such purpose within
         or without the City and State of New York, or, at the option of the
         Company, payment of interest and Special Interest, if any, may be made
         by check mailed to the Holders at their addresses set forth in the
         register of Holders; provided that payment by wire transfer of
         immediately available funds will be required with respect to principal
         of and interest, premium and Special Interest, if any, on, all Global
         Notes and all other Notes the Holders of which will have provided wire
         transfer instructions to the Company or the Paying Agent. Such payment
         will be in such coin or currency of the United States of America as at
         the time of payment is legal tender for payment of public and private
         debts.

                  (3) PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank
         Minnesota, National Association, the Trustee under the Indenture, will
         act as Paying Agent and Registrar. The Company may change any Paying
         Agent or Registrar without notice to any Holder. The Company or any of
         its Subsidiaries may act in any such capacity.

                  (4) INDENTURE. The Company issued the Notes under an Indenture
         dated as of February 4, 2004 (the "Indenture") among the Company, the
         Guarantors and the Trustee. The terms of the Notes include those stated
         in the Indenture and those made part of the Indenture by reference to
         the TIA. The Notes are subject to all such terms, and Holders are
         referred to the Indenture and the TIA for a statement of such terms. To
         the extent any provision of this Note conflicts with the express
         provisions of the Indenture, the provisions of the Indenture shall
         govern and be controlling. The Notes are unsecured obligations of the
         Company limited to $150 million in aggregate principal amount, plus
         amounts, if any, issued to pay Special Interest on outstanding Notes as
         set forth in Paragraph 2 hereof. The Indenture does not limit the
         aggregate principal amount of Notes that may be issued thereunder.

                  (5) OPTIONAL REDEMPTION.

         (a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to February 15, 2009.
On or after February 15, 2009, the Company will have the option to redeem all or
a part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, on the Notes
redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on February 15 of the years indicated below, subject to the
rights of Holders on the relevant record date to receive interest on the
relevant interest payment date:

<PAGE>

<TABLE>
<CAPTION>
        Year                                                         Percentage
        ----                                                         ----------
<S>                                                                  <C>
        2009..................................................        103.750%
        2010..................................................        102.500%
        2011..................................................        101.250%
        2012 and thereafter...................................        100.000%
</TABLE>

         Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.

         (b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to February 15, 2007, the Company may at its
option on any one or more occasions redeem up to 35% of the aggregate principal
amount of Notes issued under the Indenture with the net cash proceeds of one or
more Equity Offerings at a redemption price equal to 107.500% of the aggregate
principal amount thereof, plus accrued and unpaid interest and Special Interest,
if any to the redemption date; provided that at least 65% in aggregate principal
amount of the Notes originally issued under the Indenture (excluding Notes held
by the Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 90 days of
the date of the closing of such Equity Offering.

         (c) At any time prior to February 15, 2009, the Company may also, on
one or more occasions, redeem all or a part of the Notes, upon not less than 30
nor more than 60 days prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest, if any, to the applicable date of redemption,
subject to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date. The Applicable Premium will be
determined by the Company.

                  (6) MANDATORY REDEMPTION.

         The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.

                  (7) REPURCHASE AT THE OPTION OF HOLDER.

                        (a) If there is a Change of Control, the Company will be
         required to make an offer (a "Change of Control Offer") to each Holder
         to repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of each Holder's Notes at a purchase price in cash equal to
         101% of the aggregate principal amount thereof plus accrued and unpaid
         interest and Special Interest, if any, thereon to the date of purchase,
         subject to the rights of Holders on the relevant record date to receive
         interest due on the relevant interest payment date (the "Change of
         Control Payment"). Within 30 days following any Change of Control, the
         Company will mail a notice to each Holder setting forth the procedures
         governing the Change of Control Offer as required by the Indenture.

                        (b) If the Company or a Restricted Subsidiary of the
         Company consummates any Asset Sales, within 30 business days of each
         date on which the aggregate amount of Excess Proceeds exceeds $15.0
         million, the Company will make an offer to all Holders of Notes and all
         holders of other Indebtedness that is pari passu with the Notes
         containing provisions similar to those set forth in the Indenture with
         respect to offers to purchase or redeem with the proceeds of sales of
         assets (an "Asset Sale Offer")

<PAGE>

         pursuant to Section 3.09 of the Indenture to purchase the maximum
         principal amount of Notes and such other pari passu Indebtedness that
         may be purchased out of the Excess Proceeds at an offer price in cash
         in an amount equal to 100% of the principal amount of the Notes being
         purchased plus accrued and unpaid interest and Special Interest, if
         any, thereon to the date of purchase in accordance with the procedures
         set forth in the Indenture. To the extent that the aggregate amount of
         Notes and other pari passu Indebtedness tendered pursuant to an Asset
         Sale Offer is less than the Excess Proceeds, the Company (or such
         Restricted Subsidiary) may use such deficiency for any purpose not
         otherwise prohibited by the Indenture. If the aggregate principal
         amount of Notes and other pari passu Indebtedness tendered into such
         Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
         shall select the Notes and such other pari passu Indebtedness to be
         purchased on a pro rata basis. Upon completion of each Asset Sale
         Offer, the amount of Excess Proceeds will be set at zero. Holders of
         Notes that are the subject of an offer to purchase will receive an
         Asset Sale Offer from the Company prior to any related purchase date
         and may elect to have such Notes purchased by completing the form
         entitled "Option of Holder to Elect Purchase" attached to the Notes.

                  (8) NOTICE OF REDEMPTION. Notice of redemption will be mailed
         at least 30 days but not more than 60 days before the redemption date
         to each Holder whose Notes are to be redeemed at its registered
         address, except that redemption notices may be mailed more than 60 days
         prior to a redemption date if the notice is issued in connection with a
         defeasance of the Notes or a satisfaction or discharge of the
         Indenture. Notes in denominations larger than $1,000 may be redeemed in
         part but only in whole multiples of $1,000, unless all of the Notes
         held by a Holder are to be redeemed.

                  (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
         registered form without coupons in denominations of $1,000 and integral
         multiples of $1,000. The transfer of Notes may be registered and Notes
         may be exchanged as provided in the Indenture. The Registrar and the
         Trustee may require a Holder, among other things, to furnish
         appropriate endorsements and transfer documents and the Company may
         require a Holder to pay any taxes and fees required by law or permitted
         by the Indenture. The Company need not exchange or register the
         transfer of any Note or portion of a Note selected for redemption,
         except for the unredeemed portion of any Note being redeemed in part.
         Also, neither the Company nor the Trustee need exchange or register the
         transfer of any Notes for a period of 15 days before a selection of
         Notes to be redeemed or during the period between a record date and the
         corresponding Interest Payment Date.

                  (10) PERSONS DEEMED OWNERS. The registered Holder of a Note
         may be treated as its owner for all purposes.

                  (11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
         exceptions, the Indenture or the Notes or the Note Guarantees may be
         amended or supplemented with the consent of the Holders of at least a
         majority in aggregate principal amount of the then outstanding Notes
         including Additional Notes, if any, voting as a single class, and any
         existing Default or Event or Default or compliance with any provision
         of the Indenture or the Notes or the Note Guarantees may be waived with
         the consent of the Holders of a majority in aggregate principal amount
         of the then outstanding Notes including Additional Notes, if any,
         voting as a single class. Without the consent of any Holder of a Note,
         the Indenture or the Notes or the Note Guarantees may be amended or
         supplemented to cure any ambiguity, defect or inconsistency; to provide
         for uncertificated Notes in addition to or in place of certificated
         Notes; to provide for the

<PAGE>

         assumption of the Company's or a Guarantor's obligations to Holders of
         the Notes and Note Guarantees in case of a merger or consolidation or
         sale of all or substantially all of the Company's or such Guarantor's
         assets; to make any change that would provide any additional rights or
         benefits to the Holders of the Notes or that does not adversely affect
         the legal rights under the Indenture of any such Holder; to comply with
         the requirements of the SEC in order to effect or maintain the
         qualification of the Indenture under the TIA; to conform the text of
         the Indenture, or the Notes to any provision of the "Description of
         Notes" section of the Company's Offering Circular dated January 29,
         2004, relating to the initial offering of the Notes, to the extent that
         such provision in that "Description of Notes" was intended to be a
         verbatim recitation of a provision of the Indenture, the Note
         Guarantees or the Notes; to provide for the issuance of Additional
         Notes in accordance with the limitations set forth in the Indenture; to
         allow any Guarantor to execute a supplemental indenture to the
         Indenture and/or a Note Guarantee with respect to the Notes; or to
         evidence and provide for the acceptance of the appointment under the
         Indenture of a successor trustee.

                  (12) DEFAULTS AND REMEDIES. Events of Default include: (i)
         default for 30 days in the payment when due of interest on, or Special
         Interest, if any, with respect to the Notes, whether or not prohibited
         by the subordination provisions of the Indenture; (ii) default in the
         payment when due of the principal of, or premium, if any, on, the
         Notes, whether or not prohibited by the subordination provisions of the
         Indenture, (iii) failure by the Company or any of its Restricted
         Subsidiaries to comply with Sections 4.10, 4.14 or 5.01 of the
         Indenture; (iv) failure by the Company or any of its Restricted
         Subsidiaries for 60 days after notice to the Company by the Trustee or
         the Holders of at least 25% in aggregate principal amount of the Notes,
         including Additional Notes, if any, then outstanding to comply with any
         of the other agreements in the Indenture; (v) default under certain
         other agreements relating to Indebtedness of the Company which default
         results in the acceleration of such Indebtedness prior to its express
         maturity; (vi) certain final judgments for the payment of money that
         remain undischarged for a period of 60 days; (vii) certain events of
         bankruptcy or insolvency with respect to the Company or any of its
         Restricted Subsidiaries that is a Significant Subsidiary or any group
         of Restricted Subsidiaries that, taken together, would constitute a
         Significant Subsidiary; and (ix) except as permitted by the Indenture,
         any Note Guarantee is held in any judicial proceeding to be
         unenforceable or invalid or ceases for any reason to be in full force
         and effect or any Guarantor or any Person acting on its behalf denies
         or disaffirms its obligations under such Guarantor's Note Guarantee. If
         any Event of Default occurs and is continuing, the Trustee or the
         Holders of at least 25% in aggregate principal amount of the then
         outstanding Notes may declare all the Notes to be due and payable
         immediately. Notwithstanding the foregoing, in the case of an Event of
         Default arising from certain events of bankruptcy or insolvency, all
         outstanding Notes will become due and payable immediately without
         further action or notice. Holders may not enforce the Indenture or the
         Notes except as provided in the Indenture. Subject to certain
         limitations, Holders of a majority in aggregate principal amount of the
         then outstanding Notes may direct the Trustee in its exercise of any
         trust or power. The Trustee may withhold from Holders of the Notes
         notice of any continuing Default or Event of Default (except a Default
         or Event of Default relating to the payment of principal or interest or
         premium or Special Interest, if any,) if it determines that withholding
         notice is in their interest. The Holders of a majority in aggregate
         principal amount of the then outstanding Notes by written notice to the
         Trustee may, on behalf of the Holders of all of the Notes, rescind an
         acceleration or waive any existing Default or Event of Default and its
         consequences under the Indenture except a continuing Default or Event
         of Default in the payment of interest or premium or

<PAGE>

         Special Interest, if any, on, or the principal of, the Notes. The
         Company is required to deliver to the Trustee annually a statement
         regarding compliance with the Indenture, and the Company is required,
         upon becoming aware of any Default or Event of Default, to deliver to
         the Trustee a statement specifying such Default or Event of Default.

                  (13) SUBORDINATION. Payment of principal, interest and premium
         and Special Interest, if any, on the Notes is subordinated to the prior
         payment of Senior Debt on the terms provided in the Indenture.

                  (14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
         individual or any other capacity, may make loans to, accept deposits
         from, and perform services for the Company or its Affiliates, and may
         otherwise deal with the Company or its Affiliates, as if it were not
         the Trustee.

                  (15) NO RECOURSE AGAINST OTHERS. A director, officer,
         employee, incorporator or stockholder of the Company or any of the
         Guarantors, as such, will not have any liability for any obligations of
         the Company or the Guarantors under the Notes, the Note Guarantees or
         the Indenture or for any claim based on, in respect of, or by reason
         of, such obligations or their creation. Each Holder by accepting a Note
         waives and releases all such liability. The waiver and release are part
         of the consideration for the issuance of the Notes.

                  (16) AUTHENTICATION. This Note will not be valid until
         authenticated by the manual signature of the Trustee or an
         authenticating agent.

                  (17) ABBREVIATIONS. Customary abbreviations may be used in the
         name of a Holder or an assignee, such as: TEN COM (= tenants in
         common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
         with right of survivorship and not as tenants in common), CUST (=
         Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                  (18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
         AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
         Holders of Notes under the Indenture, Holders of Restricted Global
         Notes and Restricted Definitive Notes will have all the rights set
         forth in the Registration Rights Agreement dated as of February 4,
         2004, among the Company, the Guarantors and the other parties named on
         the signature pages thereof or, in the case of Additional Notes,
         Holders of Restricted Global Notes and Restricted Definitive Notes will
         have the rights set forth in one or more registration rights
         agreements, if any, among the Company, the Guarantors and the other
         parties thereto, relating to rights given by the Company and the
         Guarantors to the purchasers of any Additional Notes (collectively, the
         "Registration Rights Agreement").

                  (19) CUSIP NUMBERS. Pursuant to a recommendation promulgated
         by the Committee on Uniform Security Identification Procedures, the
         Company has caused CUSIP numbers to be printed on the Notes, and the
         Trustee may use CUSIP numbers in notices of redemption as a convenience
         to Holders. No representation is made as to the accuracy of such
         numbers either as printed on the Notes or as contained in any notice of
         redemption, and reliance may be placed only on the other identification
         numbers placed thereon.

                  (20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
         WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS

<PAGE>

         NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE
         PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
         THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

Carmike Cinemas, Inc.
1301 First Avenue
Columbus, Georgia  31901
Attention:  Chief Financial Officer

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                               ---------------------------------
                                                 (Insert assignee's legal name)

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:
      -----------------
                                 Your Signature:
                                                --------------------------------
                                 (Sign exactly as your name appears on the face
                                                                   of this Note)

Signature Guarantee*:
                      --------------------------

*        Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:

                          --Section 4.10    --Section 4.14

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:

                                                 $---------------

Date:
      ----------------

                                Your Signature:
                                                 -------------------------------
                                  (Sign exactly as your name appears on the face
                                                                   of this Note)

                                Tax Identification No.:
                                                      -------------------------

Signature Guarantee*:
                     ---------------------------

*        Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:

<TABLE>
<CAPTION>
                                                                           Principal Amount
                                                                           [at maturity] of
                           Amount of decrease    Amount of increase in     this Global Note         Signature of
                           in Principal Amount      Principal Amount        following such       authorized officer
                            [at maturity] of        [at maturity] of           decrease             of Trustee or
    Date of Exchange        this Global Note        this Global Note         (or increase)            Custodian
    ----------------        ----------------        ----------------         -------------            ---------
<S>                        <C>                   <C>                       <C>                   <C>

</TABLE>

* This schedule should be included only if the Note is issued in global form.Reitrement and Separation Agreement

 

Exhibit 10.1    

	 	 	 
	

	 	Human Resources Department
	

	 	500 Water Street
	

	 	Speed Code J-120
	

	 	Jacksonville, FL 32202
	ROBERT J. HAULTER

	 	Telephone (904) 366-5603
	SENIOR VICE PRESIDENT HUMAN RESOURCES

	 	Fax (904) 359-1859

February 4, 2004

Hand Delivered

P. Michael Giftos

Retirement and Separation Agreement

Dear Mike:

     As used in this Agreement, the “Companies” will mean CSX Transportation,
Inc. (“CSXT”) and CSX Corporation (“CSX”) and each reference to “the Companies”
will include CSXT, CSX and their respective affiliates. This Agreement sets
forth the agreement between you and the Companies with respect to your
retirement and separation from employment with the Companies.

     1. Separation. Your resignation from your position as Executive Vice
President and Chief Commercial Officer of CSXT is effective March 31, 2004 (the
“Resignation Date”).

     2. Separation Pay and Benefits and Perquisites. In exchange for your
commitments and undertakings in this Agreement, the Companies will pay you the
amounts set forth in this Section 2.

a. Separation Payment. The Companies will pay you separation
payments in the amount of one year of your base salary of $375,000
per year in effect as of November 10, 2003, payable in (a) monthly
installments for twelve (12) months beginning on April 1, 2004 and
ending on March 31, 2005, or (b) a single lump sum as soon as
practicable after the Resignation Date, at your election. These
payments, referred to as “Separation Pay” are in lieu of severance
pay under the CSX Corporation Severance Pay Plan or any other
severance or similar plan or program. You agree that you will not
make any claim for separation payments under any such plan or
program.

b. Bonuses. You will not be eligible for any bonuses under the MICP
Plan.

 

 

P. Michael Giftos

February 4, 2004

Page 2

c. Benefits and Perquisites.

          (i) Pension Benefits. In addition to tax-qualified benefits
under the CSX Pension Plan (the “Pension Plan”), you will receive a
Special Retirement Allowance under the Special Retirement Plan of
CSX Corporation and Affiliated Corporations, which calculation is
to include constructive service of an additional 2 years, for a
total of 44 years thereunder. In addition, the reduction of your
Special Retirement Allowance for commencement prior to your
attainment of normal retirement age under the Pension Plan shall be
calculated as though you had attained 58 years and two months of
age at the time of such commencement. Your Special Retirement
Allowance benefits shall be payable in a lump sum.

          (ii) Retiree Medical Benefits. If you elect to commence
receiving your benefits under the Pension Plan as of the
Resignation Date, you and your dependent spouse, Mary, will be
eligible for retiree medical benefits pursuant to the terms of the
CSX Corporation Comprehensive Medical Plan (the “Medical Plan”).
With respect to medical benefits for your spouse, Mary, in the
event that certain medical services or expenses are determined by
the plan fiduciary, Aetna, not to qualify as covered medical
expenses under the Medical Plan, the Company will pay, or provide
you with reimbursement, as applicable, for such uncovered medical
expenses from the Company’s general assets, provided that medical
services and expenses are medically necessary as determined by
physicians chosen by Mrs. Giftos. You agree that in the event the
Company requires any additional information from you or Mrs. Giftos
in order to comply with this provision, that you will provide such
information as necessary.

          (iii) Outplacement. You will be eligible if you so elect for
a 6-month outplacement assistance program to be provided by Lee
Hecht Harrison. This outplacement assistance must be completed
within one year of the effective date of this Agreement.

          (iv) Perquisites. You will be eligible for the financial
counseling by Ayco for 2004 and reimbursement for tax preparation
for tax years 2003 and 2004, pursuant to the Company’s tax
preparation program. In addition, the Company will continue to pay
for the automobile insurance on your leased car until the earlier
of the end of the lease term in September 2004 or the date that you
otherwise dispose of the car. Other than as stated in the previous
sentences, you will not be eligible for any perquisites after March
31, 2004.

 

 

P. Michael Giftos

February 4, 2004

Page 3

          (v) Options. All CSX options previously granted to you will
vest or
be exercisable in accordance with their terms.

       d. Tax. The Companies will withhold applicable taxes, including
railroad retirement, federal, state and local with respect to the
Separation Pay described in Section 2.

       e. Plan Amendments. YOU ACKNOWLEDGE AND AGREE THAT IF ANY BENEFIT
OR PERQUISITE PLANS OR POLICIES ARE AMENDED OR TERMINATED, YOU WILL BE
SUBJECT TO SUCH AMENDED OR TERMINATED PLANS OR POLICIES.

       f. Death. If you die prior receiving all payments contemplated
hereunder, your designated beneficiary will be entitled to the payments
contemplated by Section 2 of this Agreement when, and to the extent, such
payments would otherwise have been payable hereunder.

     3. Waiver and Release. In exchange for the Separation Pay and benefits
promised herein, you hereby waive and release the Companies from any and all
claims you may have against them, except for claims relating solely to the
performance of their obligations under this Agreement, and further agree to
execute the Waiver and Release attached hereto as Exhibit A at the time of
execution of this Agreement to more completely set forth the parties’
understanding. You are not waiving any claims you might have under the Age
Discrimination in Employment Act that arise after the effective date of this
Agreement. Notwithstanding any failure by you to deliver such additional
Waiver and Release, your obligations under this Agreement, including those
under this Section 4, will remain in full force and effect.

     4. Confidential Information.

       a. Confidential Information Defined. The parties recognize that
during your employment, you have learned trade secrets and other
information confidential to the Companies and that the Companies would be
substantially injured if the confidentiality of such information were not
maintained. For the purposes of this Section 4, “Confidential
Information” means and includes every item of and all the contents of any
discussions, documents, information, technology, procedures, customer
lists, business plans, employee compensation data, pricing information,
strategies, software, financial data, ideas and assumptions and all other
material relating to or in connection with your employment with the
Companies and their property, business methods and practices, suppliers
and customers, other than that which is generally known to the public.
To the

 

 

P. Michael Giftos

February 4, 2004

Page 4

extent that the Confidential Information comprises any written
material or other material in a reproducible form by any means
whatsoever, whether manual, mechanical or electronic, you will not copy,
extract or reproduce the same by any means whatsoever, nor provide nor
otherwise make such material available to any third party, nor use such
Confidential Information for your own purposes.

       b. Restriction on Use. You agree not to disclose to third persons
such documents or Confidential Information without the prior consent of
the Companies, whether for compensation or otherwise. You further agree
not to use such documents or Confidential Information for any purpose
detrimental to the Companies. You will at all times use your best
possible reasonable efforts to ensure that any person to whom the
Confidential Information is disclosed pursuant to this Agreement keeps
the same secret and confidential and observes an obligation of
confidentiality in relation thereto.

       c. Notice to Prospective Employers. You specifically agree that for
one year after the Resignation Date, you will notify in writing any
prospective employer or client of yours that meets any of the following
criteria of these confidentiality restrictions and your obligations under
this Agreement and state that your provision of services to such
prospective employer or client will not violate this Agreement, and you
will deliver a copy of such notice to the Companies. Any such notice
shall be required for any prospective employer or client that is (i)
engaged in the railroad or intermodal transportation business; (ii) a
customer representing more than 1% of the revenues of either CSXT or CSX
Intermodal, Inc.; (iii) affiliated with the Norfolk Southern Corporation;
or (iv) a labor union or organization or any law firm or other company,
association, or person representing or seeking to represent employees of
the Companies.

       d. Non-Solicitation. You will not, at any time before April 1,
2005, without the prior written consent of the Companies, directly or
indirectly employ, or solicit the employment of (whether as an employee,
officer, director, agent, consultant or independent contractor), any
person who was or is at any time during the previous twelve (12) months
an employee, representative, officer or director of the Companies or
their affiliates; provided, however, that a public advertisement not
specifically targeted at the employees of the Companies shall not be
deemed to be a solicitation for purposes of this provision.

       e. No Waiver of Legal Rights. You hereby acknowledge that none of
the provisions of this Agreement will be deemed or construed to reduce
the protections afforded the Companies by common law, statute or
regulation.

 

 

P. Michael Giftos

February 4, 2004

Page 5

       f. Perpetual Restriction. Notwithstanding the expiration of the
provisions of this Agreement, you acknowledge that your obligations with
respect to Confidential Information are perpetual.

     5. Private Agreement. It is the desire and in the interest of all parties
affected by this Agreement that the terms hereof be maintained in strictest
confidence. To that end, you and the Companies covenant and agree to maintain
each and every term of this Agreement in the strictest confidence, and to
neither release nor divulge either orally or in writing any term, covenant or
condition hereof to any person, firm or entity provided, however:

       a. that the Companies or you may disclose as required by law,
including pursuant to a lawful subpoena or court order;

       b. that the Companies or you may disclose in accordance with a
prepared written statement approved in advance by the Companies;

       c. that the Companies may disclose to employees or advisors,
including counsel, determined to have a need to know; or

       d. that you may disclose to your spouse, counsel, tax advisor, and
estate planner, whom you will instruct to preserve confidentiality.

     6. Governing Law. This Agreement will be governed, construed and
interpreted under the laws of the Commonwealth of Virginia.

     7. Injunctive Remedy. You acknowledge that any breach or threatened
breach of the covenants set forth in this Agreement would cause irreparable
injury to the Companies and that money damages alone would not provide an
adequate remedy to the Companies. The parties agree that any reviewing court
will have the authority to reform this provision to conform to applicable law,
provided that it is the intent of the parties that this Section 7 be given full
effect in all respects.

     8. Adequate Consideration. You acknowledge and agree that the
compensation and benefits reflected herein and which you have already received
fully satisfy all obligations of the Companies arising from your employment or
the termination thereof and that the Companies are not required to provide the
special separation pay and other termination benefits reflected in this
Agreement under the terms of any personnel policy or benefit plan or contract.
You further acknowledge that you have signed this Agreement in exchange for
consideration in excess of any to which you were otherwise entitled and that
such consideration is satisfactory and adequate for the covenants made by you
herein.

 

 

P. Michael Giftos

February 4, 2004

Page 6

     9. Parties’ Intent; Mutual Cooperation. The parties mutually agree to
conduct themselves with a spirit of harmony and mutual cooperation, and to
refrain from and avoid any disparaging or defamatory comments or statements to
any third parties after execution hereof that would reflect negatively on the
business, person or professional reputation of any parties hereto. You
acknowledge and agree that the foregoing applies only to the executive officers
of the Companies and that your remedy with respect to any breach of the
foregoing shall be solely to seek an injunction.

     10. Litigation. Notwithstanding the termination of your employment you
agree that to the extent required at any time in the future, you will cooperate
and provide information and assistance to the Companies in any dispute,
proceeding, arbitration, investigation or litigation involving the Companies or
their affiliates of which you have knowledge or involvement as a result of your
employment with the Companies. You acknowledge that the demands of such
proceedings are not necessarily within the control of the Companies and agree
that notwithstanding any other provision of this Agreement, you will make
yourself available to the extent possible and will advise the Companies
immediately and in writing of any contacts from third-parties to you in
connection with such proceedings. During any such activity, you will be
reimbursed for reasonable and customary expenses in accordance with the
Companies’ Travel and Expense Reimbursement policies and procedures.

     11. Dispute Resolution. Any dispute, controversy or claim arising out of
or relating to this Agreement, or the breach, termination or validity hereof,
except an injunction proceeding under either Section 4 or 7, shall be finally
settled through binding arbitration by a sole, disinterested arbitrator in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be jointly selected by you and the Companies but, if you and
the Companies do not agree on an arbitrator within thirty days after a party
makes demand for arbitration, the arbitrator shall be designated by the
American Arbitration Association. The award of the arbitrator shall be final
and conclusive, and the arbitration shall be concluded within six months of its
commencement. Each party to the arbitration shall pay the compensation, costs,
fees and expenses of its own witnesses, experts and counsel, and the
compensation and any costs and expenses of the arbitrator shall be borne
equally by the parties.

 

 

P. Michael Giftos

February 4, 2004

Page 7

     12. Entire Agreement. This Agreement, together with the Waiver and
Release Agreement, reflects the entire understanding of the parties with
respect to the subject matter hereof and supersedes all prior discussions,
understandings and agreements between the parties with respect to such matters.
For the avoidance of doubt, this Agreement renders null and void in all
respects the Employment Agreement between you and the Companies dated November
1, 2000.

     13. Time for Consideration. You have a period of twenty-one (21) days to
review and consider this Agreement and you are encouraged to consult an
attorney before signing it. You may use as much or all of this 21-day period
as you wish prior to signing and you acknowledge that you have done so. You
have seven (7) days after you sign this Agreement to revoke it in writing to
Robert J. Haulter, Senior Vice President – Human Resources, CSX Transportation,
Inc., 500 Water Street, Jacksonville, Florida 32202. This Agreement shall not
become effective until the seven days have expired without Mr. Haulter’s having
received such a revocation.

     14. Amendment. The terms of this Agreement may not be amended, deleted or
modified except by prior written agreement signed by you and the Companies.

     15. Successors and Assigns. You and the Companies have read this
Agreement and understand its contents. You and the Companies further
acknowledge satisfaction with the terms of this Agreement and agree that the
Agreement will be binding upon your and the Companies’ respective attorneys,
heirs, personal representatives, successors and assigns.

	 	 	 
	

	 	Very truly yours,
	 
	 	 
	

	 	CSX TRANSPORTATION, INC.
	 
	 	 
	

	 	By:
	

	 	

	

	 	        Robert J. Haulter

Reviewed, approved and

agreed as of the _____ day of

February, 2004

P. Michael Giftos

 

 

P. Michael Giftos

February 4, 2004

Page 8

EXHIBIT A

WAIVER AND RELEASE

     In exchange for CSX Transportation, Inc. (the “Company”) entering into the
Retirement and Separation Agreement with me:

     1. I hereby release the Company and its affiliates, their respective
employee benefit plans and programs and all present and former employees,
officers, directors and other agents (hereinafter “Released Parties”) from all
claims, demands and legal proceedings I may have based in any way on my
employment in any capacity with the Company, except as provided in Paragraph 5
hereof. This includes a release of any rights or claims if any, which I may
have under the Age Discrimination in Employment Act, as amended (“ADEA”), which
prohibits age discrimination in employment; Title VII of the Civil Rights Act
of 1964, as amended by the Civil Rights Act of 1991, which prohibits
discrimination in employment based on race, color, national origin, religion or
sex; the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991,
which requires equality in contractual relations without regard to race or
national origin; the Equal Pay Act, which prohibits paying men and women
unequal pay for equal work; the Americans with Disabilities Act of 1990 which
prohibits discrimination against qualified individuals with disabilities; the
Rehabilitation Act of 1973 which prohibits discrimination against the
handicapped; the Employee Retirement Income Security Act; the Fair Labor
Standards Act; Executive Order 11246; the Family and Medical Leave Act; or any
other federal, state or local laws or regulations prohibiting employment
discrimination or regulating any aspect of employment. This also includes a
release of any rights or claims I may have under the Worker Adjustment and
Retraining Notification Act or any similar law which requires, among other
things, that advance notice be given of certain work force reductions. This
also includes a release of any rights or claims I may have for wrongful
discharge; breach of contract, whether express or implied or breach of any
collective bargaining agreement; termination of employment in violation of any
public policy; any other tort or contract claim; the implied covenant of good
faith and fair dealing; negligent or intentional infliction of emotional
distress; fraud or negligent misrepresentation; defamation; any claim for labor
protection, including but not limited to conditions imposed by the Surface
Transportation Board, its predecessor, or any labor agreement; any claim under
any workers’ compensation law; and any other claim for relief of any nature.

     2. I agree to withdraw all lawsuits, if any, against the Released Parties
and I represent that I will not file any lawsuit against the Released Parties
based on the claims released under this Waiver and Release. I promise not to
seek any damages, remedies or other relief for myself personally by filing or
prosecuting a charge with any administrative agency with respect

 

 

P. Michael Giftos

February 4, 2004

Page 9

to any claim purportedly released by this Agreement. I promise to request any
administrative agency or other body assuming jurisdiction of any such lawsuit,
complaint, or charge to withdraw from the matter or dismiss the matter with
prejudice. However, I understand that nothing contained in this paragraph 2
precludes me from challenging the validity of this Waiver and Release under the
ADEA.

       I agree to pay the reasonable attorneys’ fees, costs, and expenses and any
damages the Released Parties may incur as a result of my filing a lawsuit
against the Released Parties based on the claims released under this Waiver and
Release. However, this paragraph 2 does not apply to lawsuits brought solely
to assert claims under the ADEA.

     3. I acknowledge that the Company has advised me that in executing this
Waiver and Release, I will waive any rights which I may have against the
Company arising out of any claim under ADEA, including the amendments made by
the Older Worker Benefit Protection Act of 1990, and that the Company has
advised me to consult with an attorney prior to executing this Waiver and
Release. I hereby acknowledge that the terms of this Waiver and Release
constitute adequate consideration in addition to anything of value to which I
already am entitled in connection with my employment relationship with the
Company for my waiver of rights as aforesaid.

     4. I understand and agree that the terms of this Waiver and Release shall
remain private between the Company and me, provided that I may disclose the
terms to my spouse, counsel, tax advisor and estate planner, or as otherwise
required by law.

     5. It is understood that the consideration from the Company as expressed
herein and in the Retirement and Consulting Agreement shall not be deemed or
construed at any time for any purpose as an admission of liability or violation
of any applicable law by the Company. The Company expressly denies liability
for any and all claims.

     6. I acknowledge that the provisions of this Waiver and Release shall be
binding upon my heirs, executors, administrators and assigns. By signing this
Waiver and Release I understand that I do not relinquish any rights I currently
have under the CSX Pension Plan or the Tax Savings Thrift Plan for Employees of
CSX Corporation and Affiliated Companies, nor am I waiving any rights or claims
which may arise after the date I sign this Waiver and Release.

     7. This Waiver and Release shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.

 

 

P. Michael Giftos

February 4, 2004

Page 10

     8. This Waiver and Release may not be modified or amended except by an
instrument in writing signed by the parties hereto.

     9. If, for any reason, any provision of this Waiver and Release is held
invalid, such invalidity shall not affect any other provision of this Waiver
and Release not held so invalid, and each such other provision shall to the
full extent consistent with law continue in full force and effect.

     10. I acknowledge that I have been given a period of twenty-one (21) days
to review and consider this Waiver and Release, and that I have been encouraged
to consult an attorney before signing it. I understand that I may use as much
or all of this 21-day period as I wish prior to signing and have done so.

     11. I understand that I have seven (7) days after I sign this Waiver and
Release to revoke it by notice in writing to Robert J. Haulter, Senior Vice
President – Human Resources, 500 Water Street, 15th Floor J120, Jacksonville,
Florida 32202 and that this Waiver and Release shall not become effective until
the seven days have expired without Mr. Haulter’s having received such a
revocation. This Waiver and Release shall become enforceable upon expiration
of this seven-day revocation period.

     I HAVE CAREFULLY READ THIS WAIVER AND RELEASE. I FULLY UNDERSTAND THE
FINAL AND BINDING EFFECT OF THIS WAIVER AND RELEASE AND ACKNOWLEDGE THAT IT
CONTAINS AN UNCONDITIONAL, GENERAL, AND VOLUNTARY RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS RELATING TO, OR ARISING OUT OF, MY EMPLOYMENT WITH THE COMPANY
AND/OR MY RETIREMENT AND RESIGNATION FROM THE COMPANY. I ENTER INTO THIS
WAIVER AND RELEASE VOLUNTARILY, WITHOUT COERCION, AND BASED ON MY OWN JUDGMENT
AND NOT IN RELIANCE UPON ANY REPRESENTATIONS, SUGGESTIONS OR PROMISES BY THE
COMPANY, OTHER THAN THOSE CONTAINED HEREIN. I AM SIGNING THIS WAIVER AND
RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL
CLAIMS RELATING TO, OR ARISING OUT OF, MY EMPLOYMENT AND THE RETIREMENT AND
RESIGNATION OF MY EMPLOYMENT.

	 	 	 
	

	 	

	

	 	P. Michael Giftos
	 
	 	 
	

	 	Dated:_______________________________________________

 

 

P. Michael Giftos

February 4, 2004

Page 11

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