RETIREMENT BENEFIT AGREEMENT
Exhibit 10.5
Amended and Restated September 21, 2006
THIS AGREEMENT dated this 19th day of April, 2002, as amended and restated on September 21, 2006, 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, Vested Rights, 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,
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. If the requirements of all of the following paragraphs (a) through (c) are satisfied:
| (a) | a Change in Control occurs while Xx. Xxxx is employed by the Company; |
| (b) | after the Change in Control, Xx. Xxxx’x employment with the Company terminates for any reason prior to his attainment of age 55; and |
| (c) | such termination of employment occurs not later than the twenty-four (24) month anniversary of the last day of the calendar month in which the Change in Control occurs or, if later, the twelve (12) month anniversary of the consummation of the Change in Control; |
then (I) Xx. Xxxx shall be vested in his Retirement Supplement and the forfeiture provisions of paragraph 1(c) above shall not apply; and (II) for purposes of computing the amount described in Section 1(b)(i) above, Xx. Xxxx’x Benefit Service shall be determined by adding to the Benefit Service as defined in Section 4.02 of the Plan the lesser of 36 months or the number of months remaining until Xx. Xxxx’x 55th birthday. For purposes of this Agreement, the term “Change in Control” shall have the meaning ascribed to it in BNSF’s trust agreement relating to BNSF’s obligations under certain deferred compensation, retirement commitments, and supplemental retirement plans.
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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.
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 Xxxxxxxxx | |
| [Corporate Seal] |
| ATTEST: |
| /s/ Xxxxxxx X. Xxxxxxxx |
| Assistant Secretary |
| /s/ Xxxxxxx X. Xxxx |
| XXXXXXX X. XXXX |
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