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Form of
Norfolk Southern Corporation Long-Term
Incentive Plan
2007 Award Agreement
AGREEMENT dated as of January 25, 2007 (Award Date), between
NORFOLK SOUTHERN CORPORATION (Corporation), a Virginia corporation,
and <Full Name> (Participant), Employee ID No.
<EMP_ID>.
1. Agreement Contingent Upon
Execution this Agreement and of Non-Compete . This Award
made to the Participant on the Award Date is contingent upon the
Participant's execution and return to the Corporate Secretary of
this Agreement and a non-compete agreement, a copy of which is
attached hereto as Appendix A. This Award shall be void,
and the Participant shall not be entitled to any rights hereunder,
unless the Participant executes and returns this Agreement and the
non-compete agreement to the Corporate Secretary.
2. Terms of Plan Govern
. Each Award made hereunder is made pursuant to the Norfolk
Southern Corporation Long-Term Incentive Plan (Plan), all the terms
and conditions of which are deemed to be incorporated in this
Agreement and which forms a part of this Agreement. The
Participant agrees to be bound by all the terms and provisions of
the Plan and by all determinations of the Committee
thereunder. Capitalized terms used in this Agreement but not
defined herein shall have the same meanings as in the
Plan.
3. Award of Incentive Stock
Option and Non-Qualified Stock Option . The Corporation
hereby grants to the Participant on Award Date an Incentive Stock
Option to purchase <ISO> (ISOs) shares of the Corporation's
Common Stock and a Non-Qualified Stock Option to purchase
<NQSO> (NQSOs) shares of the Corporation's Common Stock, both
at a price of $<Share Price> per share, which is equal to the
higher of (i) the Fair Market Value or (ii) the Closing Market
Price of the Corporation's Common Stock on the Award Date.
For purposes of this Agreement, the term "Closing Market Price"
means the price at which the Corporation's Common Stock was last
sold in the principal United States market for such Common Stock as
of the Award Date. The Non-Qualified Stock Option shall not be
treated as an Incentive Stock Option.
(a) Duration of Option . This Option
(to the extent not earlier exercised) will expire at 11:59 p.m. on
January 24, 2017, being ten (10) years from the Award Date, except
that the term of the Option is subject to earlier termination if
the Participant's employment with the Corporation or a Subsidiary
Company is terminated for any reason other than Retirement,
Disability, or death, in which case the Option shall expire at the
close of business on the last day of active service by the
Participant with the Corporation or a Subsidiary Company. If
the Participant is granted a leave of absence and his or her
employment with the Corporation or a Subsidiary Company terminates
at any time during or at the end of the leave of absence, the
Option grant shall expire at the close of business on the last day
of employment with the Corporation or a Subsidiary Company.
In addition, the term of the Option is subject to earlier
termination upon the grant of a new Award, with the Participant's
consent, to replace the Option in connection with the merger or
consolidation of the Corporation. Notwithstanding this
provision, the term of the Option shall terminate immediately upon
violation of the Non-Compete Covenant set forth in Section 7 of
this Agreement.
(b) Exercise of Option . This Option
may be exercised in whole or in part at any time or times prior to
its expiration; provided that any purchase of less than all of the
shares of Common Stock then subject to exercise shall be for 50
shares or a multiple thereof; and provided further that the first
exercise of this Option shall not occur before the third
anniversary of the date on which the Option was granted.
Notwithstanding the foregoing, if the Participant's employment with
the Corporation or a Subsidiary Company is terminated by reason of
the Participant's Retirement before the third anniversary of the
date on which the Option was granted, the Participant may first
exercise this Option on the later of the first anniversary of the
date on which this Option was granted or the effective date of the
Participant's Retirement. Written notice of the exercise of
all or any part of this Option shall be given to the Secretary of
the Corporation and shall be deemed to have been received either
when delivered personally to the office of the Secretary or on the
date of any U.S. Postal Service (or other independent express mail
company) postmark on the notice. Such notice shall be
irrevocable, shall specify the number of shares to be purchased and
the purchase price to be paid therefore, and must be accompanied by
the payment of the purchase price as provided in paragraph 3(c)
herein. Upon the exercise of such Option, the Corporation
will issue or cause to be issued a certificate or certificates for
the Common Stock being purchased as soon as practicable.
(c) Payment of Option Price . The
purchase price of Common Stock upon exercise of this Option shall
be paid in full to the Corporation at the time of the exercise of
the Option in cash (including check) or by the surrender to the
Corporation of shares of previously acquired Common Stock which
shall have been held by the Participant for at least twelve (12)
months and which shall be valued at Fair Market Value on the date
the Option is exercised, or by a combination of cash and such
Common Stock.
(d) Non-transferability . The Option is
not transferable other than by will or the applicable laws of
descent and distribution following the death of the
Participant. This Option may be exercised during the lifetime
of the Participant only by the Participant, and following death
only by the Participant's Beneficiary.
4. Award of Restricted Stock
Units . The Corporation hereby grants to the Participant
on Award Date <Restricted Stock Units> Restricted Stock
Units. Each Restricted Stock Unit is a contingent right to
receive a Restricted Stock Unit Share, granted pursuant to Section
5 of the Plan, subject to the restrictions and other terms and
conditions set forth in the Plan and this Agreement. Each
Restricted Stock Unit shall equal the Fair Market Value, as that
term is defined in the Plan, of one share of the Common Stock of
the Corporation on the date all applicable restrictions
lapse.
The Participant's Award of Restricted Stock Units shall be
recorded in a memorandum account. The Participant shall have no
beneficial ownership interest in the Common Stock of the
Corporation represented by the Restricted Stock Units awarded and
no right to receive a certificate representing such shares of
Common Stock. The Participant shall have no right to vote the
Common Stock represented by the Restricted Stock Units awarded or
to receive dividends, except for Dividend Equivalent payments as
set forth below.
(a) Restriction Period . The Restricted
Stock Units are subject to a five-year Restriction
Period.
(b) Restrictions . Until the expiration
of the Restriction Period or the lapse of restrictions in the
manner provided in paragraph 4(c) of this Agreement, Restricted
Stock Units shall be subject to the following restrictions:
i. the Participant shall
not be entitled to receive the certificate or certificates
representing the Restricted Stock Unit Shares to which the
Participant may have a contingent right to receive in the
future;
ii. the Restricted Stock
Units may not be sold, transferred, assigned, pledged, conveyed,
hypothecated, used to exercise options or otherwise disposed of;
and
iii. the Restricted Stock
Units may be forfeited immediately as provided in this Agreement
and in the Plan.
(c) Distribution of Restricted Stock Units .
i. If the Participant to
whom Restricted Stock Units have been granted remains in the
continuous employment of the Corporation or a Subsidiary Company
during the entire Restriction Period, upon the expiration of the
Restriction Period all restrictions applicable to the Restricted
Stock Units shall lapse and the certificate or certificates
representing shares of Common Stock equal to the Fair Market Value
on the date all applicable restrictions of the awarded Restricted
Stock Units have lapsed shall be delivered to the Participant, in
accordance with the Plan.
ii. If the employment of
the Participant is terminated for any reason other than the
Retirement, Disability, or death of the Participant in service
before the expiration of the Restriction Period, the Restricted
Stock Units shall be forfeited immediately and all rights of the
Participant with respect to such Restricted Stock Units shall
terminate immediately without further obligation on the part of the
Corporation or any Subsidiary Company.
If the Participant is granted a leave of absence before the
expiration of the Restriction Period, the Participant shall not
forfeit any rights with respect to any Restricted Stock Units
subject to the Restriction Period, except for Dividend Equivalent
Payments as provided in Section 5 of this Agreement, unless the
Participant's employment with the Corporation or a Subsidiary
Company terminates at any time during or at the end of the leave of
absence, at which time all rights of the Participant with respect
to such Restricted Stock Units shall terminate immediately without
further obligation on the part of the Corporation or any Subsidiary
Company.
If the Participant's employment is terminated by reason of the
Retirement, Disability or death of the Participant in service
before the expiration of the Restriction Period, the restrictions
on the Restricted Stock Units shall lapse upon the expiration of
the Restriction Period. At such time, the certificate or
certificates representing the shares of Common Stock equal to the
Fair Market Value on the date all applicable restrictions of the
Restricted Stock Units have lapsed shall be delivered to the
Participant, or the Participant's Beneficiary in the event of the
Participant's death, in accordance with the Plan.
Notwithstanding the foregoing, if a Participant is a "Specified
Employee," as defined in section 409A(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended, the certificate or certificates
representing the shares of Common Stock with respect to the
Restricted Stock Units shall not be delivered until the later of
six months after the Participant's Retirement or the expiration of
the Restriction Period.
iii. The Committee, in
its sole discretion, may waive any or all restrictions with respect
to Restricted Stock Units. Notwithstanding any waiver, any
delivery of Restricted Stock Units to the Participant may not be
made earlier than delivery would have been made absent such waiver
of restrictions.
5. Dividend Equivalent
Payments . Except as otherwise provided herein, for a
period of five (5) years from the date of this Agreement, the
Corporation shall make to the Participant who holds an option under
this Agreement on the declared record date a cash payment on the
outstanding shares of Common Stock covered by this Option, payable
on the tenth (10th) day of March, June, September and December, in
an amount equal to dividends declared
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