Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report HTML 1.03M
2: 10-K Annual Report -- nsc10k02 PDF 364K
14: EX-1 Underwriting Agreement 8± 32K
9: EX-2 Plan of Acquisition, Reorganization, Arrangement, 112± 417K
Liquidation or Succession
6: EX-3 Articles of Incorporation/Organization or By-Laws 7± 28K
7: EX-4 Instrument Defining the Rights of Security Holders 3 20K
8: EX-5 Opinion re: Legality 17± 65K
3: EX-6 Opinion re: Discount on Capital Shares 3± 14K
4: EX-7 Opinion re: Liquidation Preference 4 26K
5: EX-8 Opinion re: Tax Matters 6± 27K
10: EX-9 Voting Trust Agreement HTML 23K
11: EX-10 Material Contract HTML 17K
12: EX-11 Statement re: Computation of Earnings Per Share HTML 10K
13: EX-12 Statement re: Computation of Ratios HTML 11K
15: EX-13 Annual or Quarterly Report to Security Holders HTML 11K
16: EX-14 Material Foreign Patent 21± 85K
EX-5 — Opinion re: Legality
EXHIBIT 10(p)
NORFOLK SOUTHERN CORPORATION
LONG-TERM INCENTIVE PLAN
AS AMENDED EFFECTIVE JANUARY 28, 2003
Section 1. PURPOSE
The purpose of the Long-Term Incentive Plan, as amended (the "Plan"),
is to promote the success of Norfolk Southern Corporation (the
"Corporation") and to provide an opportunity for officers and other
key employees of the Corporation and its Subsidiary Companies (as
hereinafter defined) to acquire or increase a proprietary interest
in the Corporation and thereby to provide an additional incentive
to officers and other key employees to devote their maximum efforts
and skills to the advancement, betterment, and prosperity of the
Corporation and its shareholders. The Plan provides for the grant
of incentive stock options, non-qualified stock options, stock
appreciation rights, performance share units, performance shares,
and shares of the Corporation's common stock (restricted pursuant
to the provisions of Section 9 of the Plan), in accordance with
the terms and conditions set forth below.
Section 2. DEFINITIONS
The terms used herein shall have the following meanings unless
otherwise specified or unless a different meaning is clearly
required by the context:
Award Any one or more of the following: Incentive Stock
Option; Non-qualified Stock Option; Stock Appreciation
Right; Restricted Shares; Performance Share Units;
and Performance Shares.
Beneficiary The person or persons designated in writing by the
Participant as his Beneficiary in respect of Awards or,
in the absence of such a designation or if the
designated person or persons predecease the Participant,
the person or persons who shall acquire the Participant's
rights in respect of Awards by bequest or inheritance
in accordance with the applicable laws of descent and
distribution. In order to be effective, a Participant's
designation of a Beneficiary must be on file with the
Corporation before the Participant's death. Any such
designation may be revoked and a new designation
substituted therefor by the Participant at any time
before his death without the consent of the previously
designated Beneficiary.
Board of The Board of Directors of the Corporation.
Directors
Code The Internal Revenue Code of 1986, as amended from time
to time.
Committee The Compensation and Nominating Committee or any other
committee of the Board of Directors which is authorized
to grant Awards under this Plan.
Common The Common Stock of the Corporation.
Stock
Disability A disability that enables the Participant to be eligible
for and receive a disability benefit under the Long-Term
Disability Plan of the Corporation or a long-term
disability plan of a Subsidiary Company (whichever is
applicable), as amended from time to time.
Exercise With respect to a Stock Appreciation Right, all of the shares
Gain of Common Stock received upon exercise of the Stock
Shares Appreciation Right.
With respect to an Option, the portion of the shares of
Common Stock received upon exercise of the Option equal
to the excess of the Fair Market Value, as of the
exercise date, over the Option price, multiplied by the
number of shares purchased under the Option on the
exercise date, divided by such Fair Market Value, and
rounded down to the nearest whole number of shares.
Fair Market The value of Common Stock on a particular date as measured
Value by the mean of the high and low prices at which it is
traded on such date as reported in the Composite
Transactions for such date by Bloomberg L.P., or its
successor, on its internet-based service, or, if
Common Stock was not traded on such date, on the next
preceding day on which Common Stock was traded.
Incentive An Option that complies with the terms and conditions set
Stock forth in Section 422(b) of the Code and is designated by
Option the Committee as an Incentive Stock Option.
Non- An Option granted under the Plan other than an Incentive
Qualified Stock Option.
Stock Option
Option Any option to purchase Common Stock granted pursuant to
the provisions of Section 6 or Section 7 of the Plan.
Optionee A Participant who is the holder of an Option.
Participant Any officer or key employee of the Corporation or a
Subsidiary Company selected by the Committee to
participate in the Plan and any non-employee director
of the Corporation, subject to approval of the Plan,
as hereby amended, by the vote of the holders of a
majority of the shares of Common Stock present or
represented and entitled to vote at a meeting of the
stockholders of the Corporation at which a quorum is
present.
Performance The period of time, designated by the Committee, over
Cycle which Performance Shares may be earned.
Performance Shares of Common Stock granted pursuant to Section 10 of
Shares the Plan, which may be made subject to the restrictions
and other terms and conditions prescribed in Section
11 of the Plan.
Performance Contingent rights to receive Performance Shares pursuant
Share Units to Section 10 of the Plan.
Restricted Shares of Common Stock granted pursuant to Section 9 of
Shares the Plan and subject to the restrictions and other
terms and conditions set forth therein.
Restriction A period of time not less than twenty-four (24) nor
Period more than sixty (60) months, to be determined within
those limits by the Committee in its sole discretion,
commencing on the date as of which Restricted Shares
are granted, during which the restrictions imposed by
paragraph (b) of Section 9 of the Plan shall apply.
The Committee shall determine the length of the
Restriction Period at the time that the Restricted
Shares are granted.
Retirement Retirement from the Corporation or a Subsidiary Company
pursuant to the provisions of the Retirement Plan of the
Corporation or a retirement plan of a Subsidiary Company
(whichever is applicable), as amended from time to time.
Share An agreement entered into pursuant to Section 11 of the Plan.
Retention
Agreement
Stock The right, granted pursuant to the provisions of Section
Appreciation 8 of the Plan, to receive a payment equal to the excess
Right of the Fair Market Value of Common Stock over the Option
price of such Common Stock, as specified in Section 8
of the Plan.
Subsidiary A corporation of which at least eighty percent (80%)
Company of the total combined voting power of all classes of
stock entitled to vote is owned, directly or
indirectly, by the Corporation.
Section 3. ADMINISTRATION
The Plan shall be administered by the Committee, which, subject to
the limitations set forth herein, shall have the full and complete
authority and sole discretion from time to time to construe and
interpret the Plan; to select the officers and other key employees
who shall be granted Awards under the Plan; to determine the type,
size, terms, and conditions of the Award or Awards to be granted
to each such Participant; to authorize the grant of such Awards
pursuant to the Plan; in connection with the merger or
consolidation of the Corporation, to give a Participant an
election to surrender an Award in exchange for the grant of a
new Award; to adopt, amend and rescind rules and regulations
relating to the Plan; and to make all other determinations and
take all other action it may deem necessary or advisable for the
implementation and administration of the Plan. The Committee
may authorize the grant of more than one type of Award, and
Awards subject to differing terms and conditions, to any
eligible employee. The Committee's decision to authorize the
grant of an Award to an employee at any time shall not require
the Committee to authorize the grant of an Award to that employee
at any other time or to any other employee at any time; nor shall
its determination with respect to the size, type, or terms and
conditions of the Award to be granted to an employee at any time
require it to authorize the grant of an Award of the same type
or size or with the same terms and conditions to that employee
at any other time or to any other employee at any time. The
Committee shall not be precluded from authorizing the grant of
an Award to any eligible employee solely because the employee
previously may have been granted an Award of any kind under the
Plan.
All determinations of the Committee shall be by a majority of its
members and shall be final, conclusive and binding. Each member of
the Committee, while serving as such, shall be considered to be
acting in his capacity as a director of the Corporation, and no
member of the Committee shall be liable for any action taken or
decision made in good faith with respect to the implementation
or administration of the Plan.
Section 4. ELIGIBILITY
To be eligible for selection by the Committee to participate in the
Plan, an individual must be a full-time salaried officer or key
employee of the Corporation, or of a Subsidiary Company, and must
reside in the United States or Canada, on the date on which the
Committee authorizes the grant to such individual of an Award.
Subject to approval of the Plan, as hereby amended, by the vote
of the holders of a majority of the shares of Common Stock present
or represented and entitled to vote at a meeting of the
stockholders of the Corporation at which a quorum is present,
a non-employee director shall be eligible to participate in the
Plan if he or she is a director of the Corporation and is not
a full-time salaried employee of the Corporation or a Subsidiary
Company on the date on which the Committee authorizes the grant of an
Award to non-employee directors.
Section 5. SHARES AVAILABLE
Subject to the provisions of Section 13 of the Plan, no more than
an aggregate of 39,878,604 shares of Common Stock may be issued
pursuant to the Plan. Effective January 23, 2001, an additional
5,000,000 shares of Common Stock (an aggregate of 44,878,604) may
be issued to Participants who are not officers of the Corporation.
Subject to approval of the Plan, as hereby amended, by the vote of
the holders of a majority of the shares of Common Stock present
or represented and entitled to vote at a meeting of the stockholders
of the Corporation, at which a quorum is present, an additional
30,000,000 shares of Common Stock (an aggregate of 74,878,604) may
be issued pursuant to the Plan, and no more than 6,000,000 of such
additional shares shall be awarded as Restricted Shares or
Performance Shares. Such shares shall be provided from shares
of Common Stock authorized but not issued. Any shares of Common
Stock which were subject to an Option, a Stock Appreciation Right,
or a Performance Share Unit, and which were not issued prior to
the expiration of the Award shall thereafter again be available
for award under the Plan. Upon the forfeiture of any Restricted
Shares, the forfeited shares of Common Stock shall thereafter be
available for award under the Plan. Notwithstanding any other
provision to the contrary, no Participant may be awarded a grant
in any one year, which, when added to any other grant of Options,
Restricted Shares, and Performance Share Units in the same year,
shall exceed 750,000 shares of Common Stock. Subject to approval
of the Plan, as hereby amended, by the vote of the holders of a
majority of the shares of Common Stock present or represented and
entitled to vote at a meeting of the stockholders of the Corporation,
at which a quorum is present, notwithstanding any other provision
to the contrary, no Participant may be awarded a grant in any one
year, which, when added to any other grant of Options, Restricted
Shares, and Performance Share Units in the same year, shall exceed
1,500,000 shares of Common Stock. If an Option is canceled, the
canceled Option continues to count against the maximum number of
shares for which Options may be granted to a Participant in any
year.
Section 6. INCENTIVE STOCK OPTIONS
(a) General - The Committee may authorize the grant of
Incentive Stock Options subject to the terms and conditions set
forth in this Section 6. The grant of an Incentive Stock Option
shall be evidenced by a written Stock Option Agreement between
the Corporation and the Optionee, setting forth the number of
shares of Common Stock subject to the Incentive Stock Option
evidenced thereby and the terms, conditions, and restrictions
applicable thereto. The issuance of shares of Common Stock
pursuant to an Incentive Stock Option also shall be subject to
the provisions of any Share Retention Agreement that may be
required by the Committee under Section 11 of the Plan.
Except for adjustments pursuant to Section 13 of the
Plan, the Option Price for any outstanding Incentive Stock Option
granted under the Plan may not be decreased after the date the
Option is granted, nor may an outstanding Option be modified or
replaced if the effect would be to reduce the Option Price,
unless such repricing, modification or replacement is approved
by the vote of a majority of the shares of Common Stock present
or represented and entitled to vote at a meeting of the
stockholders of the Corporation at which a quorum is present.
(b) Option Price - The Committee shall determine the Option
price for each share of Common Stock purchased under an Option,
but, subject to the provisions of Section 13 of the Plan, in no
event shall the Option price be less than one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date
the Option is granted.
(c) Duration of Options - The Committee shall fix the
term or duration of Options, provided that such term shall not
exceed ten (10) years from the date the Option is granted, and
that such term shall be subject to earlier termination pursuant
to the provisions of paragraph (g) of this Section 6 or paragraph
(e) of Section 8 of the Plan.
(d) Non-transferability of Options - Options are not
transferable other than by will or the applicable laws of descent
and distribution following the death of the Optionee. Options may
be exercised during the lifetime of the Optionee only by him, and
following his death only by his Beneficiary.
(e) Exercise of Options - The Committee shall determine the
time or times at which Options may be exercised; provided that such
time or times shall not occur before the latest of:
(i) the first anniversary of the date on which the
Option was granted; and
(ii) the effectiveness of any registration statement
required to be filed under the Securities Act of 1933 for the
registration of the Common Stock to be issued upon exercise of the
Option.
(f) Payment of Option Price - The purchase price of Common
Stock upon exercise of an Option shall be paid in full to the
Corporation at the time of the exercise of the Option in cash or,
at the discretion of the Committee and subject to any limitations
or requirements that the Committee may adopt, by the surrender to
the Corporation of shares of previously acquired Common Stock, which
have been held by the Optionee for at least twelve (12) months and
which shall be valued at Fair Market Value on the date that the Option
is exercised, or, at the discretion of the Committee, by a combination
of cash and such Common Stock.
(g) Termination of Options - No Option shall be exercisable
after it expires. Each Option shall expire upon the earliest of:
(i) the expiration of the term for which the Option
was granted;
(ii) (A) Except as otherwise provided by the Committee,
in the case of an Optionee whose employment with the Corporation or
a Subsidiary Company is terminated due to Retirement, Disability or
death, the expiration of thirty-six (36) months after such
termination of employment, or
(B) in the case of an Optionee whose employment
with the Corporation or a Subsidiary Company is terminated for any
reason other than Retirement, Disability, or death, at the close
of business on the last day of active service by the Optionee
with the Corporation or a Subsidiary Company, or
(C) in the case of an Optionee who is granted a
leave of absence, if the Optionee's employment with the Corporation
or a Subsidiary Company terminates at any time during or at the
end of the leave of absence, at the close of business on the last
day of employment with the Corporation or a Subsidiary Company, or
(iii) in connection with a merger or consolidation
of the Corporation, with the Optionee's consent, the grant of a new
Award to replace the Option.
(h) Limitation on Exercisability - The aggregate Fair Market
Value (determined as of the time the Incentive Stock Option is granted)
of the Common Stock with respect to which Incentive Stock Options
(granted on or after January 1, 1987) are exercisable for the first
time by the Optionee during any calendar year shall not exceed
$100,000.
(i) Order of Exercise - An Incentive Stock Option granted
prior to January 1, 1987, shall not be exercisable while there is
outstanding any Incentive Stock Option which was granted to the
Optionee before the grant of the first-mentioned Incentive Stock
Option. For this purpose, an Incentive Stock Option shall be
treated as outstanding until it is exercised in full or expires
in accordance with paragraph (c) of this Section 6.
As used in paragraphs (h) and (i) of this Section 6, the term
Incentive Stock Option shall mean an option to purchase stock
which is granted pursuant to the provisions of this Plan or of
any other plan of the Corporation or of a parent or subsidiary
corporation (as defined by Section 424(f) of the Code) and which
complies with the terms and conditions set forth in Section 422(b)
of the Code.
Section 7. NON-QUALIFIED STOCK OPTIONS
The Committee may authorize the grant of Non-qualified Stock Options
subject to the terms and conditions specified in this Section 7.
The grant of a Non-qualified Stock Option shall be evidenced by
a written Non-qualified Stock Option Agreement between the
Corporation and the Optionee, setting forth the number of shares
of Common Stock subject to the Non-qualified Stock Option evidenced
thereby and the terms, conditions, and restrictions applicable
thereto. Non-qualified Stock Options granted pursuant to the
provisions of this Section 7 shall be subject to the terms,
conditions, and restrictions set forth in paragraphs (a), (b) and
(d) through (g) of Section 6 of the Plan. The limitations set forth
in paragraphs (c), (h) and (i) of Section 6 of the Plan shall not
apply to Non-qualified Stock Options. The issuance of shares of
Common Stock pursuant to a Non-qualified Stock Option also shall
be subject to the provisions of any Share Retention Agreement that
may be required by the Committee under Section 11 of the Plan.
Section 8. STOCK APPRECIATION RIGHTS
(a) General - The Committee may grant a Stock Appreciation
Right to a Participant in connection with an Option, or portion
thereof as determined by the Committee, subject to the terms and
conditions set forth in this Section 8. The Stock Appreciation Right
may be granted at the time of grant of the related Option and shall
be subject to the same terms and conditions as the related Option,
except as this Section 8 may otherwise provide. The grant of a Stock
Appreciation Right shall be evidenced either by provisions in the
Option agreement evidencing the related Option or by a written Stock
Appreciation Right Agreement between the Corporation and the Optionee,
identifying the related Option, specifying the number of shares of
Common Stock subject thereto, and setting forth the terms and
conditions applicable to the Stock Appreciation Right.
(b) Exercise - A Stock Appreciation Right shall be exercisable
only at such time or times, to such extent, and by such persons, as
the Option to which it relates shall be exercisable; provided that:
(i) if the Committee determines that all or part of
a payment in respect of a Stock Appreciation Right shall be made in
cash, the Stock Appreciation Right shall not be exercised before
the expiration of one (1) year from the date on which it was granted;
provided, however, that this subparagraph (i) shall not apply if
the death or Disability of the Optionee occurs within one (1) year
after the grant of the Stock Appreciation Right;
(ii) if the Committee determines that all or part of
a payment in respect of a Stock Appreciation Right shall be made
in cash, such exercise may occur only on a day that is at least
three (3) and no more than twelve (12) business days after the
date on which the Corporation first made publicly available its
most recent regular quarterly or annual financial statements; and
(iii) a Stock Appreciation Right granted in connection
with an Incentive Stock Option may not be exercised on any date
on which the Fair Market Value of a share of Common Stock is
less than or equal to the Option price per share under the
related Incentive Stock Option.
A Stock Appreciation Right shall be exercised by surrendering
the related Option, or the portion thereof pertaining to the shares
with respect to which the Stock Appreciation Right is exercised,
and providing the Corporation with a written notice in such form
and containing such information (including the number of shares
of Common Stock with respect to which the Stock Appreciation
Right is being exercised) as the Committee may specify. The date
on which the Corporation receives such notice shall be the date
on which the related Option, or portion thereof, shall be deemed
surrendered and the Stock Appreciation Right shall be deemed
exercised.
(c) Payment - Upon exercise of a Stock Appreciation Right
in the manner provided in paragraph (b) of this Section 8, the
Optionee shall be entitled to receive Exercise Gain Shares equal
to the number of shares of Common Stock that have an aggregate
Fair Market Value on the exercise date equal to the amount by
which the Fair Market Value of a share of Common Stock on the
exercise date exceeds the Option price per share of the related
Option, multiplied by the number of shares covered by the related
Option, or portion thereof, surrendered in connection with the
exercise of the Stock Appreciation Right. The Exercise Gain
Shares shall be subject to the provisions of any Share Retention
Agreement that may be required by the Committee under Section 11
of the Plan. In the sole discretion of the Committee, all or
part of the payment in respect of a Stock Appreciation Right
may be made in cash in lieu of Exercise Gain Shares.
(d) Termination of Right - A Stock Appreciation Right
shall expire, unless previously exercised or canceled, upon the
expiration of the Option to which it relates.
(e) Effect of Exercise - A Stock Appreciation Right shall
be canceled when, and to the extent that, the related Option is
exercised, and an Option shall be canceled when, and to the extent
that, the Option is surrendered to the Corporation upon the exercise
of a related Stock Appreciation Right.
Section 9. RESTRICTED SHARES
(a) General - The Committee, in its sole discretion, may
from time to time authorize the grant of Restricted Shares to a
Participant. A certificate or certificates representing the number
of Restricted Shares granted shall be registered in the name of
the Participant. Until the expiration of the Restriction Period
or the lapse of restrictions in the manner provided in paragraph
(d) or paragraph (e) of this Section 9, the certificate or
certificates shall be held by the Corporation for the account of
the Participant, and the Participant shall have beneficial ownership
of the Restricted Shares, including the right to receive dividends
on, and the right to vote, the Restricted Shares.
(b) Restrictions - Until the expiration of the Restriction
Period or the lapse of restrictions in the manner provided in
paragraph (d) or paragraph (e) of this Section 9, Restricted Shares
shall be subject to the following restrictions and any additional
restrictions that the Committee, in its sole discretion, may from
time to time deem desirable in furtherance of the objectives of
the Plan:
(i) the Participant shall not be entitled to receive
the certificate or certificates representing the Restricted Shares;
(ii) the Restricted Shares may not be sold, transferred,
assigned, pledged, conveyed, hypothecated, or otherwise disposed of;
and
(iii) the Restricted Shares may be forfeited immediately
as provided in paragraph (d) of this Section 9.
(c) Distribution of Restricted Shares - If a Participant to whom
Restricted Shares 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 Shares shall lapse, and
the certificate or certificates representing the shares of Common
Stock that were granted to the Participant in the form of Restricted
Shares shall be delivered to the Participant.
(d) Termination of Employment - If the employment of a
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 Shares shall
be forfeited immediately and all rights of the Participant to such
shares 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 number of Restricted
Shares held by the Corporation for the Participant's account shall
be reduced by the proportion of the Restriction Period remaining
after the Participant's termination of employment; the restrictions
on the balance of such Restricted Shares shall lapse on the date
the Participant's employment terminated; and the certificate or
certificates representing the shares of Common Stock upon which the
restrictions have lapsed shall be delivered to the Participant
(or, in the event of the Participant's death, to his Beneficiary).
(e) Waiver of Restrictions - The Committee, in its sole
discretion, may waive any or all restrictions with respect to
Restricted Shares.
Section 10. PERFORMANCE SHARES
The Committee, in its sole discretion, may from time to time authorize
the grant of Performance Share Units to a Participant. Performance
Share Units shall entitle the Participant to Performance Shares
(or cash in lieu thereof) upon the achievement of such performance
goals as may be established by the Committee at the time of grant
for three equally weighted performance criteria: (a) the
Corporation's total stockholder return as compared to the S&P 500
Index; (b) the Corporation's operating ratio; and (c) the Corporation's
return on average capital invested. At such time as it is certified
by the Committee that the performance goals established by the
Committee have been attained or otherwise satisfied, the Committee
shall authorize the payment of cash in lieu of Performance Shares
or the issuance of Performance Shares registered in the name of the
Participant, subject to the provisions of any Share Retention
Agreement that may be required by the Committee under Section 11
of the Plan, or both.
If the Participant's employment with the Corporation or a Subsidiary
Company is terminated before the end of a Performance Cycle for any
reason other than Retirement, Disability, or death, the Participant
shall forfeit all rights with respect to any Performance Shares
that were being earned during the Performance Cycle. If the
Participant is granted a leave of absence before the end of a
Performance Cycle, the Participant shall not forfeit all rights
with respect to any Performance Shares that were being earned
during the Performance Cycle, 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 the
Participant shall forfeit all rights with respect to any Performance
Shares that were being earned during the Performance Cycle. The
Committee, in its sole discretion, may establish guidelines
providing that if a Participant's employment is terminated before
the end of a Performance Cycle by reason of Disability, or death,
the Participant shall be entitled to a prorated payment with
respect to any Performance Shares that were being earned during
the Performance Cycle. If the Participant's employment is
terminated before the end of a Performance Cycle by reason of
Retirement, the Participant's rights with respect to any Performance
Shares being earned during the Performance Cycle shall, subject to
the other provisions of this Section 10, continue as if the
Participant's employment had continued through the end of the
Performance Cycle.
Section 11. SHARE RETENTION AGREEMENTS
(a) General - The Committee, in its sole discretion, may
require as a condition of an Award of an Option, Stock Appreciation
Right, or Performance Share Unit that the Participant and the
Corporation enter into a Share Retention Agreement, which shall
provide that the certificate or certificates representing any Exercise
Gain Shares or Performance Shares, when issued, shall be held by the
Secretary of the Corporation for the benefit of the Participant
until such time as the retention period specified by the Share
Retention Agreement has expired or has been waived by the Committee,
whichever occurs first. Each Share Retention Agreement may include
some or all of the terms, conditions and restrictions set forth in
paragraphs (b) through (g) of this Section 11.
(b) Retention Period - Exercise Gain Shares and Performance
Shares that are subject to the Share Retention Agreement may not be
sold, transferred, assigned, pledged, conveyed, hypothecated or
otherwise disposed of within such period of time, of not less than
twenty-four (24) months and not more than sixty (60) months following
the date of exercise (in the case of Exercise Gain Shares) or the
date of issuance (in the case of Performance Shares), as shall be
prescribed by the Committee.
(c) Tax Absorption Payment - The Corporation may make a
cash payment, either directly to the Participant or on the
Participant's behalf, in an amount that the Committee estimates
to be equal (after taking into account any Federal and state
taxes that the Committee estimates to be applicable to such cash
payment) to any additional Federal and state income taxes that
are imposed upon the Participant as a result of the issuance of
the Exercise Gain Shares or Performance Shares that are subject
to the Share Retention Agreement. In determining the amount to
be paid pursuant to this paragraph (c), the Committee may adopt
such methods and assumptions as it considers appropriate, and
it shall not be required to examine the individual tax liability
of each Participant who has entered into a Share Retention
Agreement.
(d) Termination of Employment - If a Participant's employment
with the Corporation or a Subsidiary Company is terminated for any
reason other than Retirement, Disability, or death, Exercise Gain
Shares or Performance Shares subject to the Share Retention
Agreement shall continue to be held, following the Participant's
termination of employment, until the expiration of the retention
period specified by the Share Retention Agreement. If the
Participant's employment is terminated by reason of Retirement
or Disability, Exercise Gain Shares and Performance Shares then
held subject to the Share Retention Agreement shall continue to
be held until the expiration of the applicable retention period
following termination of employment, but any such retention
period shall cease upon the earlier of the Participant's attainment
of age 65 or the expiration of two (2) years after the
Participant's Retirement or Disability, if either of those
events occurs before the expiration of the applicable retention
period. If the Participant dies while Exercise Gain Shares or
Performance Shares are subject to a retention period under the
Share Retention Agreement, such retention period shall expire
immediately at the time of death.
(e) Change in Control - Upon a Change in Control, the
retention periods specified by all Share Retention Agreements
shall immediately expire.
A Change in Control shall occur if:
(i) any person, other than the Corporation or a
Subsidiary Company or any employee benefit plan sponsored by the
Corporation or a Subsidiary Company, shall become the beneficial
owner of, or obtain voting control over, 20% or more of the
Corporation's outstanding Common Stock;
(ii) the stockholders of the Corporation shall
approve (A) any consolidation or merger of the Corporation in
which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of Common Stock would
be converted into cash, securities, or other property, other
than a merger of the Corporation in which holders of Common
Stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger as immediately before, or (B) any sale, lease,
exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of
the Corporation; or
(iii) there shall have been a change in the composition
of the Board of Directors such that within any period of two (2)
consecutive years or less individuals who at the beginning of such
period constituted such Board, together with any new directors
whose election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least two-thirds of
the directors then in office who were directors at the beginning
of such period, shall for any reason no longer constitute a
majority of the directors of the Corporation.
If the expiration of a Share Retention Agreement pursuant
to this paragraph (e) causes a Participant to be subject to an
excise tax under Section 4999 of the Code, or any successor
provision thereto (the "Excise Tax"), the Corporation shall make
a cash payment, either directly to the Participant or on the
Participant's behalf, in an amount that the Committee estimates
to be equal (after taking into account any Federal and state
taxes, including interest and penalties, that the Committee
estimates to be applicable to the additional cash payment) to
the additional Excise Tax imposed on the Participant as a result
of the expiration of the Share Retention Agreement. In
determining the amount to be paid pursuant to this subparagraph,
the Committee may adopt such methods and assumptions as it
considers appropriate, and it shall not be required to examine
the individual tax liability of each Participant to whom this
subparagraph applies.
(f) Waiver of Requirements - The Committee, in its sole
discretion, may waive any or all retention periods or other
restrictions in the Share Retention Agreement.
(g) Distribution of Shares - The Secretary of the
Corporation shall promptly distribute the certificate or
certificates representing the Exercise Gain Shares or Performance
Shares subject to a Share Retention Agreement upon expiration of
the retention period or other termination or waiver of the
restrictions under this Section 11.
Section 12. DIVIDEND EQUIVALENT PAYMENTS
The Committee may authorize the immediate or deferred payment
of dividend equivalents on some or all of the shares of Common
Stock covered by Options or Performance Share Units granted
after January 1, 1989, in an amount equal to, and commensurate
with, dividends declared by the Board of Directors and paid on
Common Stock. Dividend equivalents payable on Option shares or
on Performance Share Units under this Section 12 may be paid
in cash or in Common Stock at the discretion of the Committee.
The Committee may authorize the immediate payment of dividend
equivalents under this Section 12 with respect to any Option
for all or some portion of its term by including a specific
provision, authorizing such immediate payment, in the Incentive
Stock Option Agreement required under Section 6(a) of the Plan
or the Non-qualified Stock Option Agreement required under
Section 7 of the Plan. The Committee may authorize the immediate
payment of dividend equivalents under this Section 12 with
respect to any Performance Share Unit for all or some portion
of its term as a term and condition of the Performance Share
Unit grant. The Committee also may authorize the deferred payment
of dividend equivalents under this Section 12 with respect to any
Option for all or some portion of its term by including a specific
provision authorizing such deferred payment (including the manner
in which such payment will be credited to Optionees and
subsequently paid) in the Incentive Stock Option Agreement
required under Section 6(a) of the Plan or the Non-qualified
Stock Option Agreement required under Section 7 of the Plan.
The Committee may authorize the deferred payment of dividend
equivalents under this Section 12 with respect to any Performance
Share Unit for all or some portion of its term by including a
specific provision authorizing such deferred payment (including
the manner in which such deferred payment will be credited to
Optionees and subsequently paid) as a term and condition of the
Performance Share Unit grant.
Section 13. CAPITAL ADJUSTMENTS
In the event of a recapitalization, stock split, stock dividend,
exchange, combination, or reclassification of shares, merger,
consolidation, reorganization, or other change in or affecting
the capital structure or capital stock of the Corporation, the
Board of Directors, upon the recommendation of the Committee,
may make appropriate adjustments in the number of shares of Common
Stock authorized for the Plan and in the annual limitation imposed
by Section 5 of this Plan; and the Committee may make appropriate
adjustments in the number of shares subject to outstanding Options,
Stock Appreciation Rights, Restricted Stock, or Performance Share
Unit grants, and in the Option price of any then outstanding
Options, as it deems equitable, in its absolute discretion, to
prevent dilution or enlargement of the rights of Participants.
Section 14. REGULATORY APPROVALS
The exercise of each Option and Stock Appreciation Right, and
the grant or distribution of Restricted Shares and Performance
Shares, shall be subject to the condition that if at any time
the Corporation shall determine in its discretion that the
satisfaction of withholding tax or other tax liabilities, or the
listing, registration, or qualification of any shares of Common
Stock upon any securities exchange or under any Federal or state
law, or the consent or approval of any regulatory body, is
necessary or desirable as a condition of, or in connection with,
such exercise, grant, or distribution, then in any such event
such exercise, grant, or distribution shall not be effective
unless such liabilities have been satisfied or such listing,
registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to
the Corporation.
Section 15. TERM OF THE PLAN
(a) Term of the Plan - Awards may be granted from time to
time under the terms and conditions of the Plan, but no Incentive
Stock Option may be granted after the expiration of ten (10)
years from the date of adoption of the Plan, as hereby amended,
by the Board of Directors; provided, that any future amendment
to the Plan that is approved by the stockholders of the Corporation
in the manner provided under paragraph (a) of this Section 15 shall
be regarded as creating a new Plan, and an Incentive Stock Option
may be granted under such new Plan until the expiration of ten (10)
years from the earlier of the approval by the Board of Directors,
or the approval by the stockholders of the Corporation, of such new
Plan. Incentive Stock Options theretofore granted may extend
beyond the expiration of that ten-year period, and the terms and
conditions of the Plan shall continue to apply thereto and to
shares of Common Stock acquired upon the subsequent exercise of an
Incentive Stock Option or related Stock Appreciation Right.
Section 16. AMENDMENT OR TERMINATION OF THE PLAN
The Corporation may at any time and from time to time alter or
amend, in whole or in part, any or all of the provisions of the Plan,
or may at any time suspend or terminate the Plan, through resolution
of its Board of Directors, provided that no change in any Awards
theretofore granted to any Participant may be made which would impair
or diminish the rights of the Participant without the Participant's
consent, and provided further, that no alteration or amendment may
be made without the approval of the holders of a majority of the
Common Stock then outstanding and entitled to vote if such stockholder
approval is necessary to comply with the requirements of any rules
promulgated under Section 16 of the Securities Exchange Act of 1934
or such other Federal or state laws or regulations as may be
applicable.
Section 17. MISCELLANEOUS
(a) Fractional Shares - The Corporation shall not be
required to issue or deliver any fractional share of Common Stock
upon the exercise of an Option or Stock Appreciation Right, the
award of Performance Shares, or the payment of a dividend equivalent
in Common Stock pursuant to Section 12 of the Plan, but may pay, in
lieu thereof, an amount in cash equal to the Fair Market Value of
such fractional share.
(b) Withholding - The Corporation and its Subsidiary Companies
shall have the right, to the extent permitted by law, to deduct from
any payment of any kind otherwise due to a Participant any Federal,
state or local taxes of any kind required by law to be withheld with
respect to Awards under the Plan, and to the extent any such
withholding requirements are not satisfied, each Participant shall
pay to the Corporation any Federal, state or local taxes of any kind
required by law to be withheld with respect to Awards under the Plan.
(c) Stockholder Rights - No person shall have any rights of
a stockholder by virtue of an Option, Stock Appreciation Right, or
Performance Share Unit except with respect to shares of Common Stock
actually issued to him, and the issuance of shares of Common Stock
shall confer no retroactive right to dividends.
(d) No Contract of Employment - This Plan shall not be deemed
to be an employment contract between the Corporation or any Subsidiary
Company and any Participant or other employee. Nothing contained
herein, or in any agreement, certificate or other document evidencing,
providing for, or setting forth the terms and conditions applicable
to any Awards shall be deemed to confer upon any Participant or other
employee a right to continue in the employment of the Corporation or
any Subsidiary Company, or to interfere with the right of the
Corporation or any Subsidiary Company to terminate the employment
of such Participant or employee at any time.
(e) Unfunded Plan - Except as may otherwise be provided in
the Plan, the Plan shall be unfunded. Neither the Corporation nor
any Subsidiary Company shall be required to segregate any assets
that may be represented by Options, Stock Appreciation Rights, or
Performance Share Units, and neither the Corporation nor any
Subsidiary Company shall be deemed to be a trustee of any amounts
to be paid under an Option, Stock Appreciation Right, or Performance
Share Unit. Any liability of the Corporation to pay any Participant
or Beneficiary with respect to an Option, Stock Appreciation Right,
or Performance Share Unit shall be based solely upon any contractual
obligations created pursuant to the provisions of the Plan; no such
obligation shall be deemed to be secured by any pledge or encumbrance
on any property of the Corporation or a Subsidiary Company.
(f) Applicable Law - The Plan, its validity, interpretation,
and administration, and the rights and obligations of all persons
having an interest therein, shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, except
to the extent that such laws may be preempted by Federal law.
(g) Gender and Number - Wherever used in the Plan, words in
the masculine form shall be deemed to refer to females as well as to
males, and words in the singular or plural shall be deemed to refer
also to the plural or singular, respectively, as the context may
require.
Dates Referenced Herein and Documents Incorporated by Reference
| This ‘10-K’ Filing | | Date | | Other Filings |
|---|
| |  |
| Filed as of: | | 2/24/03 |
| Filed on: | | 2/21/03 |
| | 1/28/03 |
| For Period End: | | 12/31/02 | | 4 |
| | 1/23/01 | | 8-K |
| List all Filings |
4 Subsequent Filings that Reference this Filing
↑Top
Filing Submission 0000702165-03-000077 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Tue., Apr. 30, 5:30:33.1am ET 