CSX CORPORATION 401(k) PLAN. (CSXtra) SUMMARY PLAN DESCRIPTION

Transcription

1 CSX CORPORATION 401(k) PLAN (CSXtra) SUMMARY PLAN DESCRIPTION This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of January 1, 2014

2 401(k) Plan (CSXtra) Summary Plan Description Table of Contents 1. Your CSX 401(k) Plan Who Is Eligible? Access to Plan Information Contributing to Your Account Company Contributions to Your Account Managing Your Investments How Your Account Can Grow Withdrawals From Your Account Plan Loans Receiving Distributions from Your Account Circumstances That Could Affect Your Benefits Taxes on Your Account Plan Administration & Your ERISA Rights Prospectus Information and Documents Incorporated by Reference CSXtra Page i

3 1. Your CSX 401(k) Plan The CSX 401(k) Plan, known as CSXtra, is designed to help you build financial security for the future. Saving for your future can be challenging. But if you are going to be financially secure, especially in retirement, it is necessary. CSX Corporation ( CSX or the Company ) wants to help you save for retirement. To assist you, CSX sponsors the 401(k) Plan ( CSXtra or the Plan ), which allows you to save on both a pre-tax and after-tax basis. Saving through pre-tax contributions allows you to reduce your current income taxes at the same time. Unless you choose the Roth contribution feature (which will be available as of January 1, 2015), your savings are deducted from your paycheck before income taxes are withheld, reducing your taxable income and your taxes. See the example under the Contributing to Your Account section of this Summary. Earnings and gains on your and CSX s contributions also accumulate tax free until withdrawn. If you contribute on a Roth basis, your savings will be deducted after income taxes are withheld, but the distribution including earnings will be tax-free when withdrawn, if you wait 5 years to withdraw those amounts and certain other requirements are met. CSXtra also offers a loan feature that essentially allows you to borrow money from yourself and pay it back into your account over time. In addition, regular in-service withdrawals permitted under the Plan may be withdrawn twice a year. Hardship withdrawals are also available for certain expenses including the purchase of a home, education costs, or medical expenses that insurance will not cover. See the sections entitled Plan Loans and Withdrawals From Your Account. This document reflects the major provisions of CSXtra, as amended and restated effective January 1, The Plan initially was effective December 1, Although CSX expects to maintain the Plan indefinitely, CSX retains the right to make additional amendments to CSXtra or to terminate CSXtra at any time. Such actions may be taken at any time for any reason in any manner not prohibited by law. This document summarizes in non-technical terms how CSXtra works and how you become eligible to receive benefits under CSXtra, and is referred to herein as the Summary Plan Description or the Summary. This Summary Plan Description is only a summary of the main provisions of CSXtra. It does not take the place of the Plan document. If there is a conflict between the provisions of the Plan document and this Summary, the Plan document provisions will control in all cases. In particular, the explanations in this Summary Plan Description cannot alter, modify, or otherwise change the controlling Plan document nor can any rights accrue by reason of any statements or omissions herein. Any amendment to CSXtra to comply with a change in the law, and any provisions in this Summary describing those changes, is subject to the approval of the Internal Revenue Service. CSXtra Page 1

4 The Plan Administrator has delegated the authority for the day-to-day administration of the Plan to the CSX Benefits Department. Certain administrative responsibilities relating to the Plan have also been outsourced to Empower Retirement.* *IMPORTANT NOTICE EFFECTIVE August 30, 2014, Empower Retirement has acquired J.P. Morgan Retirement Plan Services, LLC. Please note that J.P. Morgan Retirement Plan Services is no longer affiliated with JP Morgan Chase & Co. and now operated under the name Empower Retirement. The Plan document is available for your review upon request. If you would like to see a copy of the Plan document, contact CSX Benefits at (904) or csxconnect@csx.com. For more information about CSXtra, you may log onto the 401(k) Savings Plan website from the link on the Employee Gateway ( and select Health, Pay & Benefits > Benefits > Management Benefits > Savings & Retirement > 401(k) Savings Plan, or you may log on directly at or call an Empower Retirement Customer Service Representative at CSX-401k ( ) weekdays between the hours of 8 a.m. and 9 p.m. ET. The TDD number for members with a hearing impairment is Who Is Eligible? Generally, all non-union employees are eligible to become members. All non-union employees of CSX, or of an adopting affiliated company, are eligible to participate in the Plan. If you are eligible, you become a member when you are enrolled. You are not eligible to become a member in the Plan if: you are a leased employee; you are covered by a collectively bargained agreement; you are classified by CSX or an adopting affiliated company as an independent contractor (regardless of whether such classification is ultimately determined to be correct as a matter of law); or you are a non-resident alien (with respect to the United States) without U.S. source income, within the meaning of Sections 911(d)(2) and 861(a)(3) of the Internal Revenue Code. CSXtra Page 2

5 3. Access to Plan Information You can inquire about your account and perform most transactions using the website or by calling the CSX Savings Line and using the automated options or by speaking with an Empower Retirement Customer Service Representative. Once you are eligible for membership in CSXtra, you may start making contributions by accessing your account, as described below. How Do You Access Your Account? You can access your account through the 401(k) Savings Plan link on the Employee Gateway ( by selecting Health, Pay & Benefits > Benefits > Management Benefits > Savings & Retirement > 401(k) Savings Plan, or by using a computer with Internet access to log on at or by calling the CSX Savings Line 888-CSX-401k ( ) and speaking with an Empower Retirement Customer Service Representative. The first time you access your account by phone or Web use your Social Security Number as your User ID and a temporary access code consisting of the last four digits of your Social Security Number and the MMDD of your date of birth (e.g., 0720 for July 20). The system will instruct you to establish security access information and a permanent personal access code. The personal access code you establish can be used for both the website and the CSX Savings Line. If you forget your existing personal access code, go to and click on Forgot your Personal Access Code or call the CSX Savings Line and use the automated options to request a reset of your Personal Access Code or speak with an Empower Retirement Customer Service Representative to create a new one. You will be advised when you can access your account. If you do not have access to a pushbutton phone or a computer with Internet access, contact an Empower Retirement Customer Service Representative. You will be asked to register the primary computer you use to access your account. If you log onto your account from a different computer, you will be asked to provide additional security information and send an access code for that computer. CSXtra Page 3

6 To make contributions, you must indicate the: Amount of your contributions; Type of contributions (pre-tax, Roth (on and after January 1, 2015), or combination); and Investment fund elections. You must also designate a beneficiary either on-line at or by completing a beneficiary designation form. If you are married, your spouse must be your beneficiary unless he or she consents in writing to your choice of a different beneficiary. For this purpose, your spouse is the person to whom you are legally married, determined based on the applicable laws of the state where you were married or the ceremony was performed. If you die without naming a beneficiary, the deemed beneficiary will be determined in the following order: your surviving spouse, children, parents, brothers and sisters, or estate. If you do not have access to the Company Intranet, or the Internet, call the CSX Savings Line and hit # 0 twice to speak with an Empower Retirement Customer Service Representative. If you do not affirmatively elect whether or not to contribute to the Plan, and if you are subject to the Plan s automatic enrollment provisions, you will be automatically enrolled in the Plan at an initial default contribution rate of 6%. You may stop or change your deferral rate at any time through the website or the CSX Savings Line. See section 4 below under Automatic Enrollment and Automatic Contribution Rates for an explanation of whether these rules apply to you and how they work. Please see the following chart for sample transactions and related access methods. WHAT YOU CAN DO BY INTERNET BY PHONE BY REP (Please note: a representative can issue a new password on-the-spot; if you request a password via the automated phone system, it will be mailed to your address of record.) Enroll in the Plan Create, reset, or change personal access code Set or change contribution rate Set or change investment elections Reallocate or transfer existing account balances among the investment funds in percentages CSXtra Page 4

7 WHAT YOU CAN DO BY INTERNET BY PHONE BY REP Obtain information on fund performance Obtain up-to-date account balances Request a statement on demand Access account transaction detail Determine how much you may borrow and the amount of repayment for your repayment period Request a General Purpose Loan Request a Primary Residence Loan application Request early loan payoff information Request a Regular Withdrawal (must speak with an Empower Retirement Customer Service Representative if Pre-1987 After-Tax) Request a distribution upon severance from employment. Update beneficiary information by Internet or form Request a hardship withdrawal form Plan information Elect to receive dividends in cash 4. Contributing to Your Account You may make contributions from your base pay on a pre-tax basis or, after January 1, 2015, on a Roth after-tax basis. Base Pay Your contributions are based on your base pay, which includes your regular salary, wages, overtime pay, commissions and salary continuance during a short-term disability. Base pay also includes any differential wage payments made by the Company during your active military duty of more than 30 days in the uniformed services. Base pay excludes awards, bonuses, severance CSXtra Page 5

8 payments, and all other incentives or special payments, and it excludes earnings paid to you prior to the date you become a member in the Plan or after you cease being an eligible member. Automatic Enrollment and Automatic Contribution Rates To encourage savings and increase participation, the Plan has an automatic enrollment feature. This feature is described in an information packet mailed to your home address. This is how auto enrollment works: You will be given 30 days to either (i) opt out of a 6% pre-tax auto enrollment contribution rate, (ii) elect another contribution rate or (iii) elect to contribute on a Roth after-tax basis (after January 1, 2015). If you do not opt out, or elect another contribution rate, your contribution for the initial period will be at a 6% pre-tax contribution rate. Your initial period begins on your pay date on which your automatic contributions are first withheld and ends on the one year anniversary. Beginning on the one-year anniversary and each year thereafter, your automatic contributions increase by 1% of pay to an annual default maximum of 10% of pay. You may opt out of automatic deferrals, the automatic rate increase program, or select an alternative deferral percentage at any time through the website or by calling the CSX Savings Line. Optional Contribution Rates You are not limited to the default contribution rates described above. Instead, you may elect to contribute on a pre-tax basis or on a Roth after-tax basis (or on some combination of the pre-tax basis and the after-tax basis) from 1% to 50% of your base pay, in 1% multiples, up to the elective deferral limit described below. Changing Your Contributions You may increase, decrease or suspend your pre-tax contributions at any time. You may increase decrease, or suspend your Roth after-tax contributions at any time on or after January 1, You may also elect to have your contribution rate automatically increased by the percentage of your choice in any future month. If you do not make any changes, the contribution rate increases will occur automatically at the same time each year until you reach the Plan s automatic contribution limits or you turn off the feature. To enroll, change your contribution rate, change from pre-tax contributions to Roth contributions or vice versa, or turn the automatic increase feature on or off, use the website or call the CSX Savings Line. If you do not have access to a pushbutton phone or a computer with Internet access, contact an Empower Retirement Customer Service Representative for assistance. Enrollments and changes become effective as soon as administratively practicable after entry. CSXtra Page 6

9 Changes in your base pay automatically change the dollar amount of your contributions. For example, if you save 6% and your annual base pay increases from $75,000 to $80,000, your annual contributions will increase from $4,500 to $4,800. Pre-Tax Elective Deferral Contributions When you make pre-tax contributions (also commonly known as elective deferrals) the money goes into the Plan before federal income taxes (and, in most cases, where applicable, state and local income taxes) are withheld. In effect, your contributions reduce the amount of your earnings subject to current income taxes. You do, however, pay Social Security or Railroad Retirement taxes on your contributions. Income taxes are paid on the remaining portion of your pay, not on your total pay. As long as these contributions and any associated earnings remain in the Plan, they will not be subject to income taxes. For example, if you earn $80,000 and contribute 6%, or $4,800, to the Plan, the $4,800 goes into the Plan before federal taxes are withheld. As a result, you pay federal income taxes currently on only $75,200 ($80,000 minus $4,800), not $80,000. When you receive a distribution of your contributions and any earnings from the Plan, you will be taxed as described in the Taxes on Your Account section of this Summary. Roth (After-Tax) Contributions If you choose to make all or part of your contributions after January 1, 2015 on the Roth basis, then those contributions are made after-tax. Consequently, when you make such contributions after January 1, 2015, the money goes into the plan after federal, state and local income taxes (if any) are withheld. Your contributions (unlike the pre-tax contribution described above) do not reduce the amount of your earnings subject to current income taxes, and you also pay Social Security or Railroad Retirement taxes on your contributions. However, having paid the tax on the contributions up front, you are not taxed on those amounts again or on investment earnings when you withdraw them from the Plan (often at retirement age). For example, if you earn $80,000 and contribute 6%, or $4,800, to the Plan, the $4,800 goes in to the Plan after federal taxes are withheld. As a result, you pay federal income taxes currently on the full $80,000, not $75,200 as in the example above for pre-tax contributions. When you receive a distribution of your contributions and any earnings from the Plan, you will be taxed as described in the Taxes on Your Account section of this Summary. Because the pre-tax contributions and the Roth contributions are treated the same way under the Plan and under the law (except for the tax treatment), in the rest of this summary, the words elective deferrals and elective deferral contributions refer to both types of contributions, unless we specifically say otherwise. Catch-Up Contributions If you have attained (or will attain) age 50 before the end of the calendar year, you will be eligible to make Catch-Up Contributions that year and each year thereafter. Catch-Up Contributions are additional pre-tax contributions and/or Roth contributions (starting in 2015) that are permitted to exceed otherwise applicable limits under the Plan. Even if you have contributed the maximum contribution you can make based on other Plan limitations, you may CSXtra Page 7

10 still make Catch-Up Contributions for the applicable calendar year up to the Catch-Up Contribution limit described below under Contribution Limits. Subject to any otherwise applicable Plan limitations, Catch-Up Contributions are eligible for matching contributions made by the Company. Adjustment to Your Contributions If you are eligible to make Catch-Up Contributions, and if you reach the annual elective deferral limits described below before the end of the year, your pre-tax and Roth contributions will automatically be treated as Catch-Up Contributions. If you do not want your contributions automatically treated as Catch-Up Contributions upon reaching your annual elective deferral limit, go to the website or call the CSX Savings Line and suspend your contributions. If you do suspend your contributions, be sure to reactivate your contributions in the following year if you wish to continue contributing to the Plan. Limit on Compensation Taken Into Account for Contributions The law sets limits on the amount of your compensation that can be taken into account in accruing benefits under the Plan in any Plan Year. It is periodically adjusted by the Internal Revenue Service for changes in the cost-of-living. For 2015, the statutory compensation limit is $265,000. Contribution Limits Elective Deferral Limit. The Internal Revenue Code limits the amount of elective deferrals (pre-tax and Roth contributions) you may make each year. The 2015 elective deferral limit is $18,000. This limit is updated periodically for changes in the cost-ofliving index. The elective deferral limit is an aggregate limit that applies to all pre-tax contributions and all Roth contributions you make during the tax year to any 401(k) plan maintained by CSX or another employer. So, for 2015 you may be able to contribute $9,000 on a pre-tax basis and $9,000 on a Roth basis, and still stay within the legal limit. However, the $18,000 limit does not include Catch-Up Contributions. If your total elective deferrals exceed the elective deferral limit, the excess amount for the Plan Year is known as excess elective deferrals and cannot remain in the Plan. To avoid excess elective deferrals, you should notify the Plan Administrator of any year-todate pre-tax contributions made to another plan in which you participated. If excess elective deferrals have to be returned to you to avoid paying excise tax, you may want to designate from which plan any excess elective deferrals and any related earnings are to be returned. You should provide the Plan Administrator notice of any excess elective deferrals as early as possible in order to ensure return of such amounts before April 15 th of the year following the Plan Year such contributions were made. Corrections after that date will have adverse tax consequences. Catch-Up Contribution Limit. The Internal Revenue Code limits the amount of Catch- Up Contributions you may make each year. In 2015, the Catch-Up Contribution limit is CSXtra Page 8

11 $6,000. This limit is also updated periodically for changes in the cost-of-living index. The annual Catch-Up Contribution limit applies to all Catch-Up Contributions (both pretax contributions and Roth contributions) you make during the tax year to any 401(k) plans maintained by CSX or another employer. Contribution Testing Limit. The Internal Revenue Code ordinarily requires a plan to be tested annually to ensure that contributions to the plan do not discriminate in favor of highly compensated employees, unless the plan s design and operation satisfy certain safe harbor requirements. Since January 1, 2011, the Plan has been designed to satisfy the safe harbor requirements by virtue of the Company s matching contributions made on behalf of all eligible employees who make contributions, as described in the section entitled Company Contributions to Your Account. In the unlikely event the Plan does not satisfy the safe harbor for a Plan Year, the Plan will have to be tested to ensure that contributions for highly compensated employees do not exceed certain limits relative to contributions for non-highly compensated employees. In that event, CSX will provide you with additional information if any such limits apply to you. Rollover and Transferred Contributions Rollover Contributions. Subject to certain limitations, you may roll over pre-tax amounts from another plan qualified under Section 401(a) of the Internal Revenue Code ( Code ), an individual retirement account ( IRA ), a Code Section 457 governmental plan or a Code Section 403(b) tax deferred annuity plan into this Plan and thereby further postpone income taxes. The Plan will also accept a rollover of Roth contributions that you receive from another employer s qualified plan. The Plan will not accept a rollover of after-tax contributions from a Roth IRA. Special rules and time limits are imposed by the government on rollover contributions. For instance, an indirect rollover contribution must be paid to the Plan s trustee no later than 60 days after the day it was received by you. If you are considering making a rollover contribution, access the website or call the CSX Savings Line. Transferred Contributions. If you previously participated in the CSX Corporation Capital Builder Plan and you subsequently become eligible for CSXtra, your accounts. including any outstanding loan, will automatically be transferred to CSXtra within 30 days after your eligibility unless you initiate an earlier transfer date. If necessary, any loan will be re-amortized to match payroll timing differences. The maturity date for any loan, however, will not change. USERRA Contributions If your employment with CSX is interrupted by a period of military service that lasts less than 5 years and you return to service with CSX in accordance with the Uniformed Services Employment and Reemployment Rights Act of 1994 ( USERRA ), you will have the right to make pre-tax and/or Roth contributions (for periods of absence after January 1, 2015) and, if applicable, catch-up restoration contributions for the period of your military leave. If this situation applies to you, contact an Empower Retirement Customer Service Representative for more information about the contributions that you can make to the Plan during your account restoration period. CSXtra Page 9

12 5. Company Contributions to Your Account CSX adds to your savings through matching contributions. CSX adds to your savings through Company matching contributions. Earnings on matching contributions are sheltered from taxes until you actually withdraw them. Each payroll period, CSX adds $1.00 to each $1.00 of the first 1% of your contributions plus 50 to each $1.00 greater than 1% and not more than 6% of your contributions. The match applies to the base pay you contribute (including Catch-Up Contributions). That means if you contribute 6% of your base pay, your Company Matching Contribution will equal 3.5% of your base pay. Assume, for example, your annual base pay is $80,000 and you save 6%, or $4,800 a year. CSX matches: 100% on 1% of your base pay contributed: $800 50% on the next 2 to 6% of your base pay contributed: $2,000 Total matching contributions: $2,800 Although Company matching contributions are made on a payroll basis, after the end of each Plan Year, the Plan Recordkeeper performs a test to verify that you have received a Company matching contribution on your contributions of up to 6% of total base pay for the Plan Year. You will be notified if you are due an additional Company matching contribution, or if you received more than the maximum Company matching contribution, and the corrective action to be taken. Company matching contributions, described above, will be considered safe harbor contributions that are deemed to satisfy certain annual non-discrimination tests otherwise required under the Internal Revenue Code. You will be provided a safe harbor notice prior to the beginning of each Plan Year in which the Company intends to satisfy the safe harbor. You may direct how matching contributions allocated to your account are invested. See the section entitled Managing Your Investments. USERRA Contributions If your employment with CSX is interrupted by a period of military service that lasts less than 5 years and you return to service with CSX in accordance with USERRA, CSX will make matching contributions on any pre-tax or Roth restoration contributions, including Catch-Up contributions, you make for the period of your military leave. If this situation applies to you, contact an Empower Retirement Customer Service Representative by going to website or by calling the CSX Savings Line. CSXtra Page 10

13 6. Managing Your Investments You may choose to invest your accounts, your contributions and Company matching contributions among eight core funds or a pre-mixed targeted retirement fund based on your assumed retirement age. Investment Choices The Plan is designed to comply with Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). Generally, this means that you are responsible for the investment choices you make under the Plan. Thus, it is important to consider your investment decisions carefully. When planning your investment strategy, there are two elections you make first, the investment mix for your future contributions, and second, your investment mix for your existing account balance. Keep in mind that you can choose an investment mix for future contributions to the Plan that is the same or different from your existing account balance. The investment mix you choose for future pre-tax, Roth and Company matching contributions must, however, be the same. You may invest in any or all of the funds set forth below, but the allocation to any fund must be in 1% increments. Core funds allow you to customize your portfolio using a mix of specific investment options representing different asset classes and different classifications within each asset class. Pre-mixed targeted funds are designed to reflect asset allocations based on your age at any given point in your career and an assumed retirement age of 65. For information on changing your investment choices for future contributions, or reallocating your existing account, see Changes in Your Investments below. Investment Funds For information on changing your investment choices for future contributions, or reallocating your existing account, see Changes in Your Investments below. The most current fund descriptions and performance information for the Core Investment Funds and T. Rowe Price Pre-Mixed Targeted Retirement Funds listed below are available on the Website. Or call the CSX Savings Line 888-CSX-401k ( ) and to speak with an Empower Retirement Customer Service Representative. CSXtra Page 11

14 Investment Funds Stable Value Fund. The money in this fund is invested in synthetic Guaranteed Interest Contracts ( GICs ). A synthetic GIC is a professionally managed alternative to GICs and can best be described as the unbundling of a traditional GIC. GICs consist of two basic components: a diversified portfolio of high quality, marketable, fixed income securities managed within plan approved investment guidelines, and owned by the plan, and a contract issued by an insurance company or bank called a wrap contract to absorb market fluctuation and provide a stable rate of return. This fund s investment objective is to protect the member s principal and provide a stable rate of return over a long period of time. Balanced Fund (Vanguard Wellington Fund). This fund is a balanced fund that seeks to conserve capital and to provide moderate long-term growth in capital and income. Fund assets are divided between common stocks and bonds. The fund invests 60% to 70% of its assets in dividend paying stocks of established large and medium-size companies. In choosing these companies, the fund seeks those that appear to be undervalued but have improving prospects. These stocks are commonly referred to as value stocks. The remaining 30% to 40% of assets are invested primarily in high-quality, long-term corporate bonds, with some exposure to U.S. Treasury, government agency and mortgage-backed bonds. Large Cap Value Fund (Dodge & Cox Managed Account Fund). The objective of this fund is to seek long-term growth of principal and income. A secondary objective is to achieve a reasonable current income. The diversified portfolio is invested primarily in common stocks. In selecting investments, the portfolio invests in companies that, in Dodge & Cox s opinion, appear to be temporarily undervalued by the stock market but have a favorable outlook for long-term growth. The portfolio focuses on the underlying financial condition and prospects of individual companies, including future earnings, cash flow and dividends. Various other factors, including financial strength, economic condition, competitive advantage, quality of the business franchise and the reputation, experience and competence of a company s management are weighted against valuation in selecting individual securities. Its shares are not publicly traded on the stock exchange. S&P 500 Index Fund (Vanguard Institutional Index Fund). This fund consists of common stock issued by corporations. Its investment objective is to duplicate the performance of the stock market as a whole, as measured by the Standard & Poor s 500 Stock Index. This index is frequently cited as representative of the equity markets as a whole, since the S&P 500 companies make up about 75% of the equity value of all listed companies in the United States. Large Cap Growth Fund (Loomis Sayles Managed Account Fund). This fund is a domestic equity fund that invests in large U.S. companies whose share prices are expected to increase. Stocks held in these funds typically have a market cap greater than $5 billion and a combined Price/Earnings ratio plus Price/Book value greater than This fund seeks long-term capital appreciation using a multimanager approach that provides exposure to a broad universe of large- CSXtra Page 12

15 and mid-capitalization U.S. growth stocks. The fund s three investment advisors use distinct approaches one is fundamental and two are quantitative to manage independent subportfolios. The multi-manager structure provides broad diversification and the potential for less volatility than in similar single-manager funds, while allowing individual managers the opportunity to strive to generate superior returns for the asset class. Vanguard may invest the fund s cash flows in equity index futures and exchange-traded funds to manage liquidity needs while ensuring that the fund remains fully invested. Small Cap Value Institutional Fund (Wellington Managed Account Fund). Fund assets are invested primarily in conservatively valued securities of high qualify, small cap companies. These companies generally have strong cash flow that can be used to build the value of the business or be used in other ways to bring value to shareholders. This fund focuses on the investment fundamentals of companies, rather than reacting to market events. The portfolio can be expected to hold between 60 to 90 stocks. The portfolio holdings will be structured in accordance with industry and economic sector guidelines in order to further diversity individual security risks. The fund seeks long-term total returns in excess of the Russell 2000 Value Index. This is a private investment account managed by Wellington for CSX Corporation. Its shares are not publicly traded on the stock exchange. International Equity Fund (Morgan Stanley & Vontobel International Equity Fund). This fund consists exclusively of stocks of foreign companies. The objective of this fund is long-term growth over time by participating in the growth of various worldwide companies. CSX Stock Fund. This fund is invested in CSX Corporation common stock. The value of this fund will fluctuate with the value of CSX common stock. Purchase and sale requests based on fund-to-fund transfers, dividends, contributions, distributions, or other transactions are aggregated by the Plan Recordkeeper and orders are sent to the trustee for execution. Orders are typically sent to the trustee at the end of the business day the requests are received. The price of the shares purchased or sold will be based on the closing market price on the business day the transaction occurs. Because the fund invests in a single stock, it should be considered more volatile and a high risk. Dividends on CSX stock that you do not elect to have paid to you are reinvested in additional CSX shares. You may confidentially instruct the Plan trustee how to vote the CSX shares allocated to your account. Before each shareholders meeting, you will receive all the necessary voting materials. Shares for which no voting instructions are received will be voted proportionally based on the shares on which voting instructions are received. In addition, if a tender offer is made to the trustee (i.e., an offer is made to purchase CSX stock from the Plan), you may instruct the trustee to tender any or all CSX shares allocated to your account. If you do not provide tender instructions to the trustee, no shares from your account will be tendered. You should carefully and objectively evaluate the CSX Stock Fund as an investment option and not allow your relationship with CSX or knowledge about the Company gained through the performance of your job responsibilities to unduly influence your investment decision. The Board and management of CSX may have information affecting its businesses that has not yet been made public. Such information cannot be made available to Plan members before it is CSXtra Page 13

16 made public. You should take this into account in deciding whether to invest in CSX common stock. T. Rowe Price Pre-Mixed Targeted Retirement Funds The investment strategy of each of the T. Rowe Price Targeted Retirement Funds assumes, as a guideline, retirement in the year in question at age 65. The funds all seek the highest total return over time by emphasizing capital growth and income based on each fund s investment horizon and assumed retirement at age 65. Each fund is made up of a diversified portfolio of up to 14 T. Rowe Price stock (domestic and international) and bond mutual funds which contain different percentages of stocks and bonds. As a result, each fund will have some exposure to risks in many different sectors of the market. Asset allocation is rebalanced to an increasingly conservative fund mix over time both prior to and after the targeted retirement date. The underlying funds are actively managed and are diversified as to investment style and market capitalization. The funds offer a convenient diversified and rebalanced portfolio of stocks and bonds with a general age appropriate asset mix. Because the fund contains stocks, there is a risk of principal loss, but the stock portion of the fund declines over time and is replaced with fixed income. T. Rowe Price Retirement 2005 Fund T. Rowe Price Retirement 2035 Fund T. Rowe Price Retirement 2010 Fund T. Rowe Price Retirement 2040 Fund T. Rowe Price Retirement 2015 Fund T. Rowe Price Retirement 2045 Fund T. Rowe Price Retirement 2020 Fund T. Rowe Price Retirement 2050 Fund T. Rowe Price Retirement 2025 Fund T. Rowe Price Retirement 2055 Fund T. Rowe Price Retirement 2030 Fund Retirement Income Fund. (T. Rowe Price). The Retirement Income Fund is a no-load portfolio of funds designed to satisfy the current income needs of investors who have already retired. The exposure to equities has been reduced and replaced with an increased weighting in fixed-income investments and short-term cash equivalents. A small weighting in equities remains in order to help retirement savings keep pace with inflation. For information on quarterly and annual investment returns for the Core Investment Funds, refer to Appendix B at the end of this Summary Plan Description. You may also obtain up-to-date information on fund performance by using the website or calling the CSX Savings Line 888-CSX-401k ( ) and using the automated options or speaking with an Empower Retirement Customer Service Representative. Default Investment Provisions You are strongly encouraged to make investment elections with respect to your Plan accounts. If you fail to do so, you will be deemed to have elected to have your accounts invested in the T. Rowe Price Targeted Retirement Fund which is closest to your assumed retirement age of 65. If a fund for the year in which you will reach age 65 has not been established, the then existing fund with the longest investment time horizon will be used, e.g., currently the T. Rowe Price Retirement 2055 Fund. CSXtra Page 14

17 Prospectuses You will be provided with a copy of a prospectus or specific fund literature relating to each of the investment funds. This Summary Plan Description constitutes part of the prospectus for CSX Corporation common stock that is held in the CSX Stock Fund. See the Prospectus Information and Documents Incorporated by Reference in this Summary for more information. The offer to invest in those funds is made only pursuant to such materials, not by this Summary, and you are urged to read such materials carefully before electing to have any portion of your account invested in any such fund. Personalized Advice Services If you like managing investments in your Plan account, but want some help, the Personal Online Advisor, powered by Financial Engines, offers a step-by-step action plan for selecting investments and how much to invest in each. The education and advice is objective, clear and customized to your CSXtra Account and the financial goals you identify. This advice is available at no cost to you. When the Personal Online Advisor believes there is something you should consider concerning your CSXtra Account, you will receive for your consideration, an Advice Light alert by with a link to the updated advice. Empower Retirement Personal Asset Manager* If you want professional advice and would like to have someone manage your CSXtra Account, you may be interested in purchasing the Empower Retirement Personal Asset Manager program. A team of investment professionals will develop a customized strategy just for you with the core funds. The Empower Retirement Personal Asset Manager will choose your investments and manage your accounts to keep your investments in line with your investment strategy. Current fees for the program are: Account Balance Annual Fee Up to $100, % Next $150, % Amounts over $250, % Fees will be deducted quarterly from your account *Provided by Advised Assets Group, LLC, an Empower Retirement Company. Making Your Investment Decision Before making your investment decision, you should carefully consider your financial goals, time horizon, and risk tolerance level. The investment decision is yours. No employee or officer of CSX is authorized to give investment advice, nor is the information contained in this Summary or the updated performance information you receive from time to time intended as investment advice. More specifically, the availability of the CSX Stock Fund as an investment CSXtra Page 15

18 alternative under the Plan does not constitute a recommendation to invest in the CSX Stock Fund by CSX or its affiliates, or any committee, employee, officer or director of CSX or an affiliate. Asset Classes Successful investing requires selecting investments whose risk and reward characteristics fit your financial goals and time horizon. Appropriate asset allocation can help you reduce your portfolio s overall risk, given your individual investment objectives. Generally, there are three basic asset classes: Cash equivalents, fixed-income and equity. Each one has different advantages and disadvantages. Cash equivalents provide stability of principal but low yield opportunity. Fixed-income investments, like bonds, provide the opportunity for a higher yield than cash but don t give you stability of principal. Equity investments, like stocks, are subject to dramatic short-term value fluctuations but in the long term have historically grown faster than inflation. Diversification How you allocate your investments among asset classes may be the most important investment decision you make and may have the biggest effect on achieving your financial goals. Diversification is an investment strategy to help manage portfolio risk and protect you against a single, devastating loss. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well at any point in time often cause another asset category, or another particular security, to perform poorly. For example, if you were to invest more than 20% of your retirement savings in any one company, industry or fund, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. Diversification also lets you take advantage of the different investment objectives of the investment options you select. A successful diversification program balances a mix of investments with your long-term financial goals and personal tolerance for risk. When you decide how to diversify your retirement portfolio, consider all your investments, not just those in your accounts under the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. Therefore, you should carefully consider the investment options available under the Plan and how they can be used to accomplish your objectives. As noted above, there are special issues for you to consider when investing in the CSX Stock Fund. As an employee of CSX, you may be familiar with CSX and its operations, which might make you feel comfortable in investing a significant portion of your account balance in the CSX Stock Fund. You should note that the CSX Stock Fund is an investment option in the equity asset class that is essentially comprised solely of CSX stock. As an investment in a single company s performance, the CSX Stock Fund is not a diversified investment, and therefore, the market risk of the CSX Stock Fund is greater than investing in a diversified portfolio. By itself, the CSX Stock Fund is the riskiest investment in the Plan. When making a decision to invest in CSXtra Page 16

19 the CSX Stock Fund, you should be objective in analyzing the risk and return characteristics of CSX Stock and make your decisions as part of a carefully planned asset allocation plan, not just because you work for CSX. It is also important to periodically review (at least annually) your investment portfolio, your investment objectives, and the investment options you have selected under the Plan at any given time to help ensure that your objectives are consistent with any changes in your life or retirement goals. Over time investment returns may require rebalancing your account to maintain your asset allocation. You can elect to enroll in an automatic rebalancing feature that will rebalance your account quarterly to maintain your asset allocation consistent with your long-term goals. To enroll use the website or call the CSX Savings Line. Morningstar fund analyses describing most of the funds and their top ten holdings are available through the website or an Empower Retirement Customer Service Representative. Finally, you should consider going to the Department of Labor s website at for more information on investing and diversification. Trading by Certain Officers of CSX ( Insiders ) Before engaging in certain transactions in the Plan involving CSX common stock, members who are officers of CSX subject to Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act ) ( Insiders ) should carefully consider the short swing profit provisions of the Exchange Act. These provisions generally restrict an Insider s ability to engage in discretionary transactions under the Plan. Transactions in the Plan such as a cash withdrawal involving the liquidation of interests in the CSX Stock Fund or transfers between the CSX Stock Fund and the Plan s other investment funds may be deemed to be discretionary transactions under the short swing profit rules. The short swing profit rules are complex and all Insiders are strongly urged to consult with their legal advisors and the General Counsel of CSX before engaging in transactions involving CSX common stock and to contact the Manager of Savings Plans in the Benefits Department for assistance with executing your transaction. Changes in Your Investments Your Investment of Future Contributions to the Plan. You may make or change your investment elections applicable to future contributions to the Plan as often as you wish. Future contributions include both your elected future deferrals into the Plan and any Company contributions (like match) on such deferrals. To change how future contributions are invested, use the Website or call the CSX Savings Line. Such changes become effective as soon as administratively practicable. Reallocation of Your Existing Account Balances. Subject to certain restrictions, you may also reallocate your account balance as often as you want, in multiples of 1%, amongst the available investment funds. CSXtra Page 17

20 If a reallocation instruction is submitted before the close of the stock market, normally 4:00 p.m. (Eastern Time) on any business day, the funds will be reallocated by the close of business that day; otherwise, the funds will be reallocated by the next following close of business. Restrictions: With the exception of the Stable Value Fund, if you sell or exchange an amount out of investment options, you will not be permitted to repurchase shares of the same investment option through investment fund transfers for 30 calendar days. As for the Stable Value Fund you may transfer funds or repurchase shares at any time without restriction. The Plan s Investment Committee may from time to time, in its sole discretion, also impose additional restrictions on the number or timing of such transactions, impose suspension periods or transaction fees deemed appropriate to eliminate or discourage market timing or other trading practices deemed to have or which may have an adverse impact on other Plan members or otherwise violate, or possibly violate, the law or the policies of an investment option available under the Plan. How the Restrictions Work Restriction Period. The 30-day restriction period begins on the date you transfer money out of the fund. If you make an election to move out of a fund after the close of business, your restriction period begins the next business day. The restriction period is calculated in calendar days. This policy is not intended to restrict your ability to diversify your account. In fact, you are encouraged to periodically review your account to maintain a balanced portfolio that meets the needs of your age and circumstances. You are free to reinvest in a restricted fund after the 30 day restriction period has ended. In addition, the trading restriction does not apply to investments made through your payroll contributions, loan repayments, employer contributions or rollovers to your account. It also does not affect your ability to receive withdrawals, loans or distributions. The Plan Trustee The trustee of the trust fund holding all of the assets in the investment funds is an institutional trustee engaged by the Plan s Investment Committee. Although the trustee is independent, it is simply a directed trustee. This means that it acts solely on instructions from CSX employees authorized under the Plan to direct it and by the Plan s Investment Committee and does not make discretionary fiduciary decisions about the Plan or its investments. The trustee s responsibilities and obligations are set forth in a trust agreement. CSXtra Page 18

21 7. How Your Account Can Grow The value of your account at any time depends on a number of factors. Although no one can predict how the investment funds will perform in the future, the following example illustrates how your savings might grow based on various earnings assumptions. Factors that Influence Fund Growth The factors you should consider in order to determine the future value of your account are: How much and how long you plan to save; Company matching contributions made on your behalf; Investment gains (or losses); and Any loans or in-service withdrawals you make. Quarterly statements from the end of the most recent quarter through the quarter ending September 2007, are available through the website under the menu item, Account Statements, or by calling the CSX Savings Line. Quarterly statements will not be mailed to your home address unless you request the mailing through an Empower Retirement Customer Service Representative. Weekly, monthly, or daily statements for any period from one day up to 18 months are also available under the menu item, On-Demand Statements. In addition to the statements, you can review current activity including contributions, reallocations, withdrawals, loan payments, and so forth in your Plan account and your current balance in each investment fund as often as you choose. Convenient, continuous access is available online through a secure website to help you monitor your account and ensure your investment choices still reflect your personal financial objectives. Example of Fund Growth Assume that your annual base pay is $80,000 and that you decide to save 9% of that amount. This means that you will receive a matching contribution equal to 100% of the first 1% of your base pay plus 50% of the next 2% to 6% of your base pay for a maximum of 3.5% company matching contribution. Your annual contributions are $7,200 ($80,000 x 9%) Plus the company match of $2,800 (100% of $800) + (50% of $4,000) For a total annual investment of $10,000 CSXtra Page 19