Document:

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Exhibit 10.4

Form Restricted Stock Award for Directors

PRIDE INTERNATIONAL, INC.

2004 DIRECTORS’ STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

     This Restricted Stock Agreement (“Agreement”) between PRIDE INTERNATIONAL, INC. (the
“Company”) and ___ (the “Grantee”), a nonemployee Director of the Company or one of its
Subsidiaries, regarding an award (“Award”) of
___ shares of Common Stock (as defined in the Pride
International, Inc. 2004 Directors’ Stock Incentive Plan (the “Plan”), such Common Stock comprising
this Award referred to herein as “Restricted Stock”)
awarded to the Grantee on ___ (the
“Award Date”), such number of shares subject to adjustment as provided in the Plan, and further
subject to the following terms and conditions:

     1. Relationship to Plan

     This Award is subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by the Committee
thereunder and are in effect on the date hereof. Except as defined herein, capitalized terms shall
have the same meanings ascribed to them under the Plan. For purposes of this Agreement:

     (a) “Disability” means a permanent or total disability as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.

     (b) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (c) “Mandatory Resignation” means a Grantee’s resignation in compliance with the terms of the
Company’s Corporate Governance Guidelines, as determined by the Committee.

     (d) “Retirement” means the Grantee’s termination of his or her position after attaining age
75.

 

 

     Vesting Schedule

     (a) This Award shall vest in installments in accordance with the following schedule:

	 	 	 	 	 
	 	 	Additional Percentage of
	Date Vested	 	Award Vested
	____________
	 	 	25	%
	____________
	 	 	25	%
	____________
	 	 	25	%
	____________
	 	 	25	%
	 
	 	 	 	 
	 
	 	 	100	%

     (b) All shares of Restricted Stock subject to this Award shall vest, irrespective of the
limitations set forth in subparagraph (a) above, provided that the Grantee has been in continuous
service as a Director since the Award Date, upon the occurrence of:

     (i) a Change in Control or

     (ii) the Grantee’s termination of his or her position by reason of
death, Disability, Retirement or Mandatory Resignation.

     3. Forfeiture of Award

     Except as provided in any other agreement between the Grantee and the Company, if the
Grantee’s service as a Director is terminated by the Company for Cause, all unvested Restricted
Stock as of the termination date shall be forfeited. Except as provided in any other agreement
between the Grantee and the Company or as otherwise determined by the Committee, if the Grantee’s
service as a Director terminates other than for Cause or for any reason identified in Section 2(b),
all unvested Restricted Stock as of the termination date shall be forfeited.

     4. Escrow of Shares

     During the period of time between the Award Date and the earlier of the date the Restricted
Stock vests or is forfeited (the “Restriction Period”), the Restricted Stock shall be registered in
the name of the Grantee and held in escrow by the Company, and the Grantee agrees, upon the
Company’s written request, to provide a stock power endorsed by the Grantee in blank. Any
certificate shall bear a legend as provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in this Agreement. Upon termination of the Restriction
Period, a certificate representing such shares shall be delivered upon written request to the
Grantee as promptly as is reasonably practicable following such termination.

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     5. Code Section 83(b) Election

     The Grantee shall be permitted to make an election under Code Section 83(b), to include an
amount in income in respect of the Award of Restricted Stock in accordance with the requirements of
Code Section 83(b).

     6. Dividends and Voting Rights

     The Grantee is entitled to receive all dividends and other distributions made with respect to
Restricted Stock registered in his name and is entitled to vote or execute proxies with respect to
such registered Restricted Stock, unless and until the Restricted Stock is forfeited.

     7. Delivery of Shares

     The Company shall not be obligated to deliver any shares of Common Stock if counsel to the
Company determines that such sale or delivery would violate any applicable law or any rule or
regulation of any governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Common Stock is listed or quoted. The
Company shall in no event be obligated to take any affirmative action in order to cause the
delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.

     8. Notices

     Unless the Company notifies the Grantee in writing of a different procedure, any notice or
other communication to the Company with respect to this Award shall be in writing and shall be:

     (a) by registered or certified United States mail, postage prepaid, to Pride
International, Inc., Attn: Corporate Secretary, 5847 San Felipe, Suite 3300, Houston, Texas
77057; or

     (b) by hand delivery or otherwise to Pride International, Inc., Attn: Corporate
Secretary, 5847 San Felipe, Suite 3300, Houston, Texas 77057.

     Any notices provided for in this Agreement or in the Plan shall be given in writing and shall
be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the
Company to the Grantee, five days after deposit in the United States mail, postage prepaid,
addressed to the Grantee at the address specified at the end of this Agreement or at such other
address as the Grantee hereafter designates by written notice to the Company.

     9.  Assignment of Award

     Except as otherwise permitted by the Committee, the Grantee’s rights under the Plan and this
Agreement are personal; no assignment or transfer of the Grantee’s rights under and interest in
this Award may be made by the Grantee other than by will or by the laws of descent and
distribution.

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     Notwithstanding the foregoing, subject to the approval of the Committee, in its sole
discretion, the Award may be transferred by the Grantee to (i) the children or grandchildren of the
Grantee (“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members (“Immediate Family Member Trusts”) or (iii) a partnership or partnerships
in which such Immediate Family Members have at least 99% of the equity, profit and loss interests
(“Immediate Family Member Partnerships”). Subsequent transfers of a transferred Award shall be
prohibited except by will or the laws of descent and distribution, unless such transfers are made
to the original Grantee or a person to whom the original Grantee could have made a transfer in the
manner described herein. No transfer shall be effective unless and until written notice of such
transfer is provided to the Committee, in the form and manner prescribed by the Committee.
Following transfer, the Award shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, and except as otherwise provided herein, the term
“Grantee” shall be deemed to refer to the transferee. The consequences of termination of service
shall continue to be applied with respect to the original Grantee, following which the Awards shall
vest only to the extent specified in the Plan and this Agreement.

     10. Withholding

     At the time of delivery or vesting of Restricted Stock, the amount of all federal, state and
other governmental withholding tax requirements imposed upon the Company with respect to the
delivery or vesting of such shares of Restricted Stock shall be remitted to the Company or
provisions to pay such withholding requirements shall have been made to the satisfaction of the
Committee. The Committee may make such provisions as it may deem appropriate for the withholding
of any taxes, if any, which it determines is required in connection with this Award. The Grantee
may pay all or any portion of the taxes required to be withheld by the Company or paid by the
Grantee in connection with the all or any portion of this Award by delivering cash, or, with the
Committee’s approval, by electing to have the Company withhold shares of Common Stock, or by
delivering previously owned shares of Common Stock, having a Fair Market Value equal to the amount
required to be withheld or paid. The Grantee may only request withholding Restricted Stock having
a Fair Market Value equal to the statutory minimum withholding amount. The Grantee must make the
foregoing election on or before the date that the amount of tax to be withheld is determined. If
the Grantee is subject to the short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to such other restrictions as may be established
by the Committee in order that satisfaction of withholding tax obligations with shares of Common
Stock might be exempt from the operation of Section 16(b) of the Exchange Act in whole or in part.

     11. Stock Certificates

     Certificates representing the Common Stock issued pursuant to the Award will bear all legends
required by law and necessary or advisable to effectuate the provisions of the Plan and this Award.
The Company may place a “stop transfer” order against shares of the Common Stock issued pursuant
to this Award until all restrictions and conditions set forth in the Plan or this Agreement and in
the legends referred to in this paragraph 11 have been complied with.

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     12. Successors and Assigns

     This Agreement shall bind and inure to the benefit of and be enforceable by the Grantee, the
Company and their respective permitted successors and assigns (including personal representatives,
heirs and legatees), except that the Grantee may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.

     13. No Continued Service Guaranteed

     No provision of this Agreement, and no action of the Company or the Committee with respect
hereto, shall confer or be construed to confer any right upon the Grantee to continue as a Director
the Company or any Subsidiary.

     14. Governing Law

     This Agreement shall be governed by, construed, and enforced in accordance with the laws of
the State of Delaware.

     15. Amendment

     This Agreement cannot be modified, altered or amended except by an agreement, in writing,
signed by both the Company and the Grantee.

	 	 	 	 	 
	

	 	 	 	PRIDE INTERNATIONAL, INC.
	 
	 	 	 	 
	Date:

	 	 	 	By:
	

	 	

	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

     The Grantee hereby accepts the foregoing Restricted Stock Agreement, subject to the terms and
provisions of the Plan and administrative interpretations thereof referred to above.

	 	 	 	 	 
	

	 	 	 	GRANTEE:
	 
	 	 	 	 
	Date:
	 	 	 	 
	

	 	

	 	

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EXHIBIT 10.1

FORM OF EMPLOYMENT AGREEMENT

          AGREEMENT by and between CSX CORPORATION, a Virginia corporation (the “Company”), and
                                         (the “Executive”), dated as of the             day of                     , 200     .

          The Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions.

     a. “Effective Date” means the first date during the Term (as defined in Section
l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs, and (i) the
Executive’s employment with the Company is terminated by the Company without Cause or (ii)
the Executive ceases to be an officer of the Company in either case prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment or cessation of status as an officer (i) was at the
request of a third party who has taken steps reasonably calculated to effect such Change of
Control or (ii) otherwise arose in connection with or anticipation of such Change of
Control, then, in each such case, for all purposes of this Agreement “Effective Date” shall
mean the date immediately prior to the date of such termination of employment or cessation
of status as an officer.

     b. The “Term” means the period commencing on the date hereof and ending on the
earlier to occur of (i) the third anniversary of such date or (ii) the first day of the
month next following the Employee’s normal retirement date (“Normal Retirement Date”) under
the principal pension plan in which the Executive participates (the “Pension Plan”);
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the
Term shall be automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice to the
Executive that the Term shall not be
so extended; and

 

 

provided, further, that the Term shall end on an earlier
date if the Company gives the Executive at least one year’s advance written notice thereof.

          2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall
mean:

     a. 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% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”)
or (ii) the combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or

     b. 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 subsequent
to such date whose election, or nomination for election by the Company’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 individual 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

     c. Business Combination. Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the assets of the
Company or its principal subsidiary (a “Business Combination”) 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 “Agency”), in each
case, unless, following such Business Combination:

     (i) 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% 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

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as a
result of such transaction owns the Company or its principal subsidiary or all or
substantially all of the assets of the Company or its principal subsidiary 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;

     (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% 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

     (iii) 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

     d. Regulated Business Combination. Consummation of a Business Combination that
is subject, as a matter of law or contract, to approval by the Agency (a “Regulated Business
Combination”) unless such Business Combination complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; or

     e. Liquidation or Dissolution. Consummation of a complete liquidation or
dissolution of the Company or its principal subsidiary approved by the Company’s
shareholders.

If any Change of Control is a Regulated Business Combination, but its implementation involves
another “Change of Control” that is not a Regulated Business Combination within the meaning of this
Section 2, then for all purposes of this Agreement, such Change of Control shall not be deemed to
be a Regulated Business Combination, the provisions governing a Regulated Business Combination
shall not apply, and the provisions governing such other Change in Control shall apply.

          3. Employment Period.

     a. Generally. Subject to Section 3(b), the Company hereby agrees to continue
the Executive in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the third anniversary of such
date (the “Employment Period”).

     b. Regulated Business Combination. Notwithstanding the foregoing, in the case
of a Change of Control that is a Regulated Business Combination, then for all

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purposes of
this Agreement, the “Employment Period” shall mean the longer of (i) the period commencing
on the Effective Date and ending on the third anniversary of such date or (ii) the period
commencing on the Effective Date and ending thirteen months from the effective date of a
final decision by the Agency on the proposed Regulated Business Combination (“Final
Regulatory Action”), provided, however, that (x) if the Final Regulatory
Action is a denial of the Regulated Business Combination then for all purposes of this
Agreement the “Employment Period” shall end upon the sixtieth (60th) day following such
Final Regulatory Action and (y) if the Final Regulatory Action is an approval of the
Regulated Business Combination, but the Regulated Business Combination is not consummated by
the first anniversary of the Final Regulatory Action, then for all purposes of this
Agreement the “Employment Period” shall end upon such first anniversary, of the Final
Regulatory Action.

          4. Terms of Employment.

     a. Position and Duties. (i) During the Employment Period: (A) the Executive’s
position (including status, offices, titles and reporting requirements), authority, duties
and responsibilities shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date, and (B) the Executive’s services shall be
performed at the location where the Executive was employed immediately preceding the
Effective Date or any office or location less than 35 miles from such location.

     (ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, Executive agrees during normal
business hours to diligently discharge the business and affairs of the Company and,
to the extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive’s reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of the Executive’s responsibilities to
the Company.

     b. Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at
a monthly rate, at least equal to twelve times the highest monthly base salary

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paid or
payable, including any base salary which has been earned but deferred, to the Executive by
the Company and its affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced after any such
increase, and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. Notwithstanding the preceding, an across-the-board
reduction in Annual Base Salary applicable to all similarly situated peer executives
implemented out of extreme business necessity and unrelated to a contemplated or anticipated
Change of Control shall not be a violation of this section. As used in this Agreement, the
term “affiliated companies” shall include any company controlled by, controlling or under
common control with the Company.

     (ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be eligible to earn, for each calendar year ending during the Employment
Period, an annual bonus (the “Annual Bonus”) in cash, at a minimum, target and
maximum level not less favorable (in terms both of dollar amounts and difficulty of
achievement) to the Executive than the Executive’s opportunity to earn such annual
cash bonuses under the Company’s annual incentive plans, or any comparable bonus
under any predecessor or successor plan, for the last three full calendar years
prior to the Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such calendar year). Notwithstanding the
preceding, an across-the-board reduction of minimum, target and maximum Annual Bonus
opportunities applicable to all similarly situated peer executives implemented out
of extreme business necessity and unrelated to a contemplated or anticipated Change
of Control shall not be a violation of this section. (The highest of the actual
amounts of such bonuses, as so annualized, for each of such three full calendar
years is hereafter referred to as the “Recent Annual Bonus”.) Each such Annual
Bonus shall be paid no later than the end of the third month of the calendar year
next following the calendar year for which the Annual Bonus is awarded, unless
deferred pursuant to the terms of a deferred compensation plan maintained by the
Company.

     (iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most

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favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.

     (iv) Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of the Company
and its affiliated companies, but in no event shall such plans practices, policies
and programs provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies and programs
its effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer executives of the
Company and its affiliated companies.

     (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices and procedures
of the Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

     (vi) Fringe Benefits. During the Employment Period, the Executive shall
be entitled to fringe benefits, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

     (vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and other assistance,
at least equal to the most favorable of the foregoing provided to the Executive by
the Company and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable

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to the Executive, as
provided generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

     (viii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies as in effect for
the Executive at any time during the 120-day period immediately preceding the
Effective Date or, it more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies.

          Notwithstanding Sections 4.b.(iii)-(viii), benefits payable under a plan, practice, policy, or
program that has been amended to reduce benefits or terminated within the 120-day period
immediately preceding the Effective Date for reasons unrelated to affecting benefits due hereunder
shall not be taken into account under such provisions. In the case of a plan, practice, policy or
program amended to reduce benefits, only the higher pre-amendment benefit shall be disregarded.

     5. Termination of Employment.

     a. Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set forth below), it may give to
the Executive written notice in accordance with Section 13(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of
the Executive from the Executive’s duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s legal representative. Executive
agrees to cooperate with the Company and the selected physician so that such determination
can be made.

     b. Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

     (i) the willful and continued failure of the Executive to perform substantially
the Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the

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Executive by the
Board [or the Chief Executive Officer of the Company]* which specifically
identifies the manner in which the Board [or Chief Executive
officer]*  believes that the Executive has not substantially
performed the Executive’s duties, or

     (ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive,
shall be considered “willful” unless it is done, or omitted to be done, by the Executive in
bad faith or without reasonable belief that the Executive’s action or omission was in the
best interests of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of counsel for
the Company shall he conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

     c. Good Reason. The Executive’s employment may be terminated by the Executive
during the Employment Period for Good Reason. For purposes of this Section 5(c), any good
faith determination of “Good Reason” made by the Executive shall be conclusive. For
purposes of this Agreement, “Good Reason” shall mean:

     (i) the assignment to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 4(a)
of this Agreement, or any other diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

     (ii) any failure by the Company to comply with any of the provisions of Section
4(b) of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive;

	* This language is excluded from Mr.
Ward’s Agreement only.

-8-

 

     (iii) the Company’s requiring the Executive to be based at any office or
location other than as provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a materially greater extent
than required immediately prior to the Effective Date, in either case without the
Executive’s prior consent.

     (iv) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or

     (v) any failure by the Company to comply with and satisfy Section 12(c) of this
Agreement.

Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any
reason shall be deemed to be a termination for Good Reason for all purposes of this Agreement if
such termination occurs (i) in the case of a Change of Control that is a Business Combination but
not a Regulated Business Combination, during the 30-day period beginning on the 180th
day following the day on which the Business Combination is consummated, (ii) in the case of any
other Change of Control that is not a Regulated Business Combination, during the 30-day period
beginning on the 180th day following the Effective Date, and (iii) in the case of a
Change of Control that is a Regulated Business Combination consummated pursuant to Final Regulatory
Action, during the 30-day period immediately following the first anniversary of the Final
Regulatory Action (it being understood that the Executive will have no rights under this paragraph
in the case of a Change of Control that is a Regulated Business Combination denied by the Agency).

     d. Regulated Business Combination. Notwithstanding the foregoing, in the case
of a Change of Control that is a Regulated Business Combination, then for all purposes of
this Agreement, during that portion of the Employment Period prior to Final Regulatory
Action, the Executive may not exercise his rights to terminate his employment under this
Agreement for “Good Reason.” The Executive may only terminate his employment under this
Agreement if he is “Constructively Terminated” by the Company. Moreover, except to the
extent expressly set forth in the definition of “Constructive Termination,” the Executive
shall have no remedy for any breach by the Company of the provisions of Section 4;
provided, however, that any failure of the Company to comply in any material
respect with the provisions of Section 4 shall create a rebuttable presumption that a
Constructive Termination has occurred.

For purposes of this Agreement, a “Constructive Termination” shall mean:

     (i) substantial diminution of the Executive’s duties or responsibilities as
contemplated by Section 4(a) of this Agreement, excluding for
this purpose an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive;

     (ii) a reduction in the Executive’s Annual Base Salary;

-9-

 

     (iii) a failure by the Company to comply with Section 4(b)(ii) regarding the
Annual Bonus;

     (iv) a reduction in the Executive’s other incentive opportunities, benefits or
perquisites described in Section 4(b) unless the Executive’s peer executives suffer
a comparable reduction;

     (v) the Company’s requiring the Executive to be based at any office or location
other than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring the
Executive to travel on Company business to a materially greater extent than required
immediately prior to the Effective Date, in either case without the Executive’s
prior consent.

     (vi) any purported termination by the Company of the Executive’s employment
otherwise than for Cause.

During that portion of the Employment Period after Final Regulatory Action, the Executive may
terminate his Employment under this Agreement for “Good Reason.”

     e. Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason or Constructive Termination, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision
so indicated, and (iii) if the Date of Termination (as defined below) is other than the date
of receipt of such notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason, Cause or Constructive Termination shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.

     f. Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason or
Constructive Termination, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is terminated by
the Company other than for Cause or Disability, the Date
of Termination shall be the date on which the Company notifies the Executive of such
termination and (iii) if the Executive’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.

-10-

 

     6. Obligations of the Company upon Termination.

     a. Good Reason or Constructive Termination. If, during the Employment Period,
the Company shall terminate the Executive’s employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason or Constructive Termination, then
the Company shall provide the following payments and benefits:

     (i) The Company shall pay to the Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of (A), plus (B), plus (C) as follows:

     A. the sum of (1) the Executive’s Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of (x)
the higher of (I) the Recent Annual Bonus and (II) the Executive’s most
recently established target Annual Bonus (annualized for any calendar year
consisting of less than twelve full months or during which the Executive was
employed for less than twelve full months) (such higher amount being
referred to as the “Highest Annual Bonus”) and (y) a fraction, the numerator
of which is the number of days in the current calendar year through the Date
of Termination, and the denominator of which is 365 and (3) any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the “Accrued Obligations”); and

     B. an amount equal to the product of (1) three and (2) the sum of (x)
the Executive’s Annual Base Salary in effect on the date of Executive’s
termination of employment (or, if greater, the Executive’s Annual Base
Salary in effect immediately before any salary reduction therein triggering
the event leading to Executive’s termination) and (y) the Highest Annual
Bonus; and

     C. an amount equal to the excess of (a) the actuarial equivalent of the
benefit under the Pension Plan without regard to this provision (utilizing
actuarial assumptions no less favorable to the Executive than those in
effect under the Pension Plan immediately prior to the Effective Date), and
any excess or supplemental retirement plan in which the Executive
participates (together, the “SERP”) which the Executive would receive if the
Executive’s employment continued for three years after the Date of
Termination assuming for this purpose that
all accrued benefits are fully vested, and, assuming that the
Executive’s compensation in each of the three years is that required by
Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of
the Executive’s actual benefit (paid or payable), if any, under the Pension
Plan and the SERP as of the Date of Termination.

-11-

 

     (ii) for three years after the Executive’s Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the Executive and/or the Executive’s
family at least equal to those which would have been provided to them in accordance
with the plans, programs, practices and policies described in Section 4(b)(iv) of
this Agreement if the Executive’s employment had not been terminated or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies and
their families; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility; except as provided below, the period
during which the Executive and his family are eligible for health continuation
coverage under Section 4980B of the Code by reason of the Executive’s termination of
employment shall run from the end of such three year period. For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until three
years after the Date of Termination and to have retired on the last day of such
period. With respect to any self-insured medical benefits, the Company and Executive
agree to use their reasonable best efforts to replace such benefits with comparable
fully insured benefits, the cost of which shall be shared in the same manner as the
self-insured coverage. If the Company and Executive are unable to effect coverage
acceptable to Executive, coverage will be made available under the applicable
self-insured plan (but not through any plan or arrangement deemed to be a cafeteria
plan under Section 125 of the Code) of the Company and Executive may elect to pay
one hundred percent of the cost of such coverage on an after-tax basis. In the
event medical coverage is provided under the existing plan, the initial eighteen
months shall be deemed to be COBRA coverage and the additional three years of
coverage provided thereafter.

     (iii) The Company shall, at its sole expense as incurred, provide the Executive
with outplacement services the scope and provider of which shall be selected by the
Executive in his sole discretion, but at a cost not in excess of $20,000.

     (iv) To the extent not theretofore paid or provided, the Company shall timely
pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and its
affiliated companies, including earned but unpaid stock and similar compensation
(such other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”).

-12-

 

     b. Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate without
further obligations to the Executive’s legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect
to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer executives and
their beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s
beneficiaries, as in effect on the date of the Executive’s death with respect to other peer
executives of the Company and its affiliated companies and their beneficiaries.
Notwithstanding the preceding, benefits payable under a plan, practice, policy, or program
that has been amended to reduce benefits or terminated within the 120-day period immediately
preceding the Effective Date for reasons unrelated to affecting benefits due hereunder shall
not be taken into account. In the case of a plan, practice, policy or program amended to
reduce benefits, only the higher pre-amendment benefit shall be disregarded.

     c. Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without
further obligations to the Executive, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability Effective Date to
receive, disability and other benefits at least equal to the most favorable of those
generally provided by the Company and its affiliated companies to disabled executives and/or
their families in accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect at any time
thereafter generally with respect to other peer executives of the Company and its affiliated
companies and their families. Notwithstanding the preceding benefits payable under a plan,
practice, policy, or program that has been amended to reduce benefits or terminated within
the 120-day
period immediately preceding the Effective Date for reasons unrelated to affecting
benefits due hereunder shall not be taken into account. In the case of a plan, practice,
policy or program amended to reduce benefits, only the higher pre-amendment benefit shall be
disregarded.

-13-

 

     d. Cause; Other than for Good Reason or Constructive Termination. If the
Executive’s employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason or Constructive Termination, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations and the
timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

          7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company or any of its affiliated companies for which the Executive may qualify, nor, subject to
Section 13(f), shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except as explicitly modified
by this Agreement.

          8. Full Settlement. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not be reduced whether or not
the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result
of any contest regardless of the outcome thereof by the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this Agreement or any guarantee
of performance thereof (including as a result of any contest by the Executive about the amount of
any payment pursuant to this Agreement), plus in each case interest on any delayed payment, at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
as amended (the “Code”); provided, that the Executive shall repay to the Company all such amounts
paid by the Company, and shall not be entitled to any further payments hereunder, in connection
with a contest originated by the Executive if the trier of fact in such contest determines that the
Executive’s claim was not brought in good faith or was frivolous.

          9. Certain Additional Payments by the Company.

     a. Anything in this Agreement to the contrary notwithstanding and except as set forth
below, in the event it shall be determined that any payment or distribution

-14-

 

by the Company
to or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Executive, after taking into account the
Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000 (taking into account both income taxes and any Excise Tax) as compared to the net
after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment
and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such
that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment
shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.

     b. Subject to the provisions of Section 9(c), all determinations required to be made
under this Section 9, including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm, law firm, or other
advisor as may be designated by the Company (the “Advisor”) which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Advisor is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the Company
shall appoint another recognized firm to make the determinations required hereunder (which
firm shall then be referred to as the Advisor). All fees and expenses of the Advisor shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the receipt of
the Advisor’s determination. Any determination by the Advisor shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Advisor hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company should have
been made (“Underpayment”), consistent with the calculations required to be made hereunder.
In
the event that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the Advisor shall
determine the amount of the Underpayment that has occurred and any

-15-

 

such Underpayment shall
be promptly paid by the Company to or for the benefit of the Executive.

     c. The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than
ten business days after the Executive is informed in writing of such claim and shall apprise
the Company of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:

     (i) give the Company any information reasonably requested by the Company
relating to such claim,

     (ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order to effectively contest
such claim, and

     (iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and conferences with the taxing authority
in respect of such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the amount of
such payment to the Executive,
on an interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any imputed income
with

-16-

 

respect to such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

     d. If, after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 9(c), the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company’s complying with the requirements of
Section 9(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

          10. Confidential Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all confidential or proprietary information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive’s employment by the Company or any
of its affiliated companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by it. In addition, to the extent that the Executive is a party to any other
agreement relating to confidential information, inventions or similar matters with the Company, the
Executive shall continue to comply with the provisions of such agreements. In no event shall an
asserted violation of the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

          11. Arbitration. The Company and the Executive agree that all disputes, controversies,
and claims arising between them concerning the subject matter of this Agreement, other than
Sections 9 and 10, shall be settled by arbitration in accordance with the rules and procedures of
the American Arbitration Association then in effect. The location of the arbitration will be
Richmond, Virginia or such other place as the parties may mutually agree. In rendering any award
or ruling, the arbitrator or arbitrators shall determine the rights
and obligations of the parties according to the substantive and procedural laws of the
Commonwealth of Virginia. The parties to any such dispute, controversy, or claim shall attempt to
agree upon the selection of a single arbitrator. If after a reasonable period of time

-17-

 

the parties
are unable to agree upon such a single arbitrator, then three arbitrators will be appointed with
each party selecting an arbitrator from the American Arbitration Association’s available panel of
arbitrators, and the parties agreeing upon the selection of a third arbitrator. If the parties
cannot agree upon the selection of a third arbitrator, then the two arbitrators selected by the
parties shall agree upon a third arbitrator from the panel of American Arbitration Association
arbitrators. If the two arbitrators are unable to so agree on a third arbitrator, the third
arbitrator shall be selected by the American Arbitration Association. Any arbitration pursuant to
this section shall be final and binding on the parties, and judgment upon any award rendered in
such arbitration may be entered in any court, state or federal, having jurisdiction. All fees and
expenses of the arbitration shall be born in accordance with Section 8. The arbitrator or
arbitrators shall have no authority to award provisional relief, injunctive remedies, or punitive
damages. The parties expressly acknowledge that they are waiving their right to seek remedies in
court, including without limitations the right if any to a jury trial.

          12. Successors.

     a. This Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives.

     b. This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

     c. The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

          13. Miscellaneous.

     a. This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without reference to principles of conflict of laws. The captions
of this Agreement are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written agreement executed
by the parties hereto or their respective successors and legal representatives;
provided, that the Company may unilaterally amend Exhibit A hereto from time to time,
but only to the extent it determines, upon the advice
of counsel, to be necessary to comply with the legal requirements to obtain a valid
release.

     b. All notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

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If to the Executive:

If to the Company:

CSX Corporation

500 Water Street

Jacksonville, FL 32202

     Attention: Senior Vice President, Human Resources and Labor Relations

or to such other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually received by
the addressee.

     c. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

     d. The Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to any applicable
law or regulation.

     e. The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the Executive to terminate
employment for Good Reason or Constructive Termination pursuant to Section 5 of this
Agreement, shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

     f. The Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the employment of
the Executive by the Company is “at will” and, subject to Section 1(a) hereof, prior to the
Effective Date, the Executive’s employment may be terminated by either the Executive or the
Company at any time prior to the Effective Date, in which case the Executive shall have no
further rights under this Agreement. From and after the Effective Date this Agreement shall
supersede any other agreement between the parties with respect to the subject matter hereof.

          14. Waiver and Release with Respect to Prior Agreement. In exchange for the
compensation and benefits promised herein, the Executive hereby waives and releases the Company and
its affiliates from any and all claims he ever had or may have arising from or in connection with
the Employment Agreement dated                     , between the Company and the Executive (the “Prior
Agreement”), and the Executive acknowledges that this Agreement supersedes and renders null and
void in all respects the Prior Agreement.

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          15. Other Agreements Unaffected. Except for the Prior Agreement, or as otherwise
expressly provided herein, this Agreement shall have no effect on any other agreement between the
Executive and the Company or any of its affiliates, and any such agreement is ratified and
confirmed in all respects and shall remain in full force and effect in accordance with its terms.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	 	

	 
	 	 	 	 
	 	 	CSX CORPORATION
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

-20-

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