EXHIBIT 10.3
RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT dated this 19th day of April, 2002, between Burlington
Northern Santa Fe Corporation (hereinafter referred to as the "Company") and Xx.
Xxxxxxx X. Xxxx (hereinafter referred to as "Xx. Xxxx").
W I T N E S S E T H
WHEREAS, in consideration of Xx. Xxxx'x service, the Company desires to
provide Xx. Xxxx with benefits upon retirement to be calculated in the manner
and provided under the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Company and Xx. Xxxx agree as follows:
1. Upon retiring pursuant to the Normal Retirement or Early Retirement
provisions of the Burlington Northern Santa Fe Retirement Plan (hereinafter
referred to as the "Plan"), Xx. Xxxx will be entitled to the following
retirement benefits:
(a) A Normal Retirement Benefit, or reduced Early Retirement Benefit,
calculated in accordance with Plan provisions in effect on the date of
his termination, and payable out of Plan assets in accordance with the
Plan terms and, if entitled thereto by the provisions of the
Burlington Northern Santa Fe Supplemental Retirement Plan (the
"Supplemental Plan"), an additional benefit payable out of the general
assets of the Company; and
(b) An extra retirement benefit (hereinafter referred to as the
"Retirement Supplement") payable in the same form and on the same
dates and for the same period during which benefits are paid under the
Supplemental Plan out of the general assets of the Company equal to
the amount described in subparagraph (i) below minus the amount
described in subparagraph (ii) below, calculated as follows:
(i) 2.2% of Plan Compensation for each of the first 14 years of
Benefit Service, plus
2.5% of Plan Compensation for each of the next 3 years of Benefit
Service, plus
3.0% of Plan Compensation for each of the next 3 years of Benefit
Service, plus
3.5% of Plan Compensation for each of the next 4 years of Benefit
Service,
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subject to a maximum benefit equal to 61.3% of Plan Compensation,
which will be achieved after 24 years of Benefit Service.
For purposes of computing the benefit described above:
Plan Compensation shall mean Plan Compensation as defined in
Section 2.16 of the Plan, except that "36" shall be substituted
for "60" wherever such figure appears;
Plan Compensation shall be based on Compensation as defined in
Section 2.08 of the Plan, provided, however, that the
compensation limitations of Section 401(a)(17) of the Internal
Revenue Code shall not be taken into account and further provided
that Plan Compensation shall include any participant
contributions under a non-qualified deferred compensation
arrangement, compensation foregone in exchange for a Company
stock award as set forth in Schedule A to the Supplemental Plan
or any other such compensatory arrangement as may be established
by the company as set forth in Schedule A to the Supplemental
Plan; and
Benefit Service shall mean Benefit Service as defined in Section
4.02 of the Plan.
The benefit described above shall be calculated in accordance
with Plan provisions in effect on the date of Xx. Xxxx'x
retirement with regard to Forms of Retirement Benefits and Early
Retirement Reduction. For purposes of the Early Retirement
Reduction, Xx. Xxxx shall be treated as if he would have
completed 30 years of Benefit Service on his 62nd birthday.
minus
(ii) The sum of Xx. Xxxx'x Normal Retirement Benefit, or reduced Early
Retirement Benefit, as calculated in Section 1(a) of this
Agreement plus the Railroad Retirement Benefit Amount. The
Railroad Retirement Benefit Amount is the unreduced monthly
Railroad Retirement benefit for which Xx. Xxxx is eligible,
assuming he applied for and did not voluntarily disqualify
himself from receiving such benefit on the earliest date on which
he could receive such benefit, provided, however, that if Xx.
Xxxx retires at a time when he is not eligible for unreduced
Railroad Retirement benefits the Railroad Retirement Benefit
Amount shall be adjusted in the same manner as the Retirement
Supplement described in Section 1(b)(i) above.
(c) The Retirement Supplement to be provided to Xx. Xxxx pursuant to
Section 1(b) will be forfeited if Xx. Xxxx voluntarily terminates his
employment with the Company
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without the Company's consent prior to the completion of five years of
continuous employment after the date of this Agreement or if Xx. Xxxx
is terminated by the Company for Cause (defined below), but shall not
be forfeited if Xx. Xxxx voluntarily terminates his employment with
the Company after the completion of five years of continuous
employment after the date of this Agreement or if Xx. Xxxx'x
employment with the Company terminates by reason of his death or
disability or termination by the Company without Cause. For purposes
of this Section 1(c), "Cause" shall mean (i) the willful and continued
failure by Xx. Xxxx to substantially perform his duties with the
Company (other than any such failure resulting from his incapacity due
to physical or mental illness), or (ii) the willful engaging by Xx.
Xxxx in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of this definition, no
act, or failure to act, shall be deemed "willful" unless done, or
omitted to be done, by Xx. Xxxx not in good faith and without
reasonable belief that his action or omission was in the best interest
of the Company.
2. Nothing contained herein shall confer any right upon Xx. Xxxx for
continued employment by the Company, or any affiliate or subsidiary of the
Company.
3. In the event of a Change in Control, as defined in BNSF's trust
agreement relating to BNSF's obligations under certain deferred compensation,
retirement commitments and supplemental retirement plans, prior to Xx. Xxxx'x
attainment of age 55, then the forfeiture provisions of Section 1(c) above shall
not apply and, for purposes of computing the amount described in Section 1(b)(i)
above, Xx. Xxxx'x Benefit Service shall be determined by adding the lesser of
(i) 36 months or (ii) the number of months remaining until Xx. Xxxx'x 55th
birthday to the Benefit Service as defined in Section 4.02 of the Plan. If Xx.
Xxxx is entitled to and receives extra retirement benefits in the event of a
Change in Control (as defined above) pursuant to the terms of a severance or
change in control agreement other than this Agreement (hereinafter referred to
as "Change in Control Benefits") which are equal to or greater than the
Retirement Supplement in the event of a Change in Control under this Agreement,
then the first sentence of this paragraph shall have no force or effect. If Xx.
Xxxx is entitled to Change in Control Benefits which are less than the
Retirement Supplement in the event of a Change in Control described in this
Agreement, then Xx. Xxxx shall be entitled to the difference between the
Retirement Supplement in the event of a Change in Control described in this
Agreement and such Change in Control Benefits.
4. The Company retains the right to withhold from payments due hereunder
amounts deemed by the Company to be required to be withheld under income or
other tax laws of any jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BURLINGTON NORTHERN SANTA FE
CORPORATION
By: /s/ Xxxxxx Xxxxxx
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[Corporate Seal]
ATTEST:
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Secretary
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
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