EXHIBIT 10(z)
NORFOLK SOUTHERN CORPORATION
THOROUGHBRED STOCK OPTION PLAN
AS AMENDED EFFECTIVE JANUARY 28, 2003
Section 1. PURPOSE
The purpose of the Thoroughbred Stock Option Plan (the "Plan") is to
promote the success of Norfolk Southern Corporation (the "Corporation")
and to provide an opportunity for nonagreement 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 nonagreement 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 non-qualified stock options, 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 Non-qualified Stock Option granted under the terms
of the Plan.
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 of the
Board of Directors.
Common Stock The Common Stock of the Corporation.
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.
Effective Date The effective date of the option, as determined
by the Committee and specified in the Stock Option
Notice.
Fair Market The value of Common Stock on a particular date as
Value measured 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.
Long-Term The Long-Term Disability Plan of Norfolk Southern
Disability Plan Corporation and Participating Subsidiary Companies.
Option Any non-qualified option to purchase Common Stock
granted pursuant to the provisions of Section 6
of the Plan.
Optionee A Participant who is the holder of an Option.
Participant Any nonagreement employee of the Corporation or
a Subsidiary Company, excluding any officer or
director of the Corporation, selected by the
Committee to participate in the Plan.
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.
Retirement The Retirement Plan of Norfolk Southern
Plan Corporation and Participating Subsidiary Companies.
Subsidiary A corporation of which at least eighty percent
(80%) of the total Company combined voting power
of all classes of stock entitled to vote is owned,
directly or indirectly, by the Corporation.
Section 3. ADMINISTRATION
The Committee shall have the full and complete authority and sole
discretion to select the nonagreement employees who shall be
granted Awards under the Plan; to determine the 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; and to give a Participant an election to surrender an Award
in exchange for the grant of a new Award. The Committee may
authorize the grant of 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 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 of
the Plan or granting of awards thereunder.
The Plan shall be administered by the Vice President Human Resources
of the Corporation, 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 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.
Section 4. ELIGIBILITY
To be eligible for selection by the Committee to participate in
the Plan, an individual must be an active full-time nonagreement
employee of the Corporation or of a Subsidiary Company, and must
reside in the United States or Canada, on the Effective Date on
which the Committee authorizes the grant to such individual of an
Award. An officer or director of the Corporation shall not be
eligible to participate in the Plan.
Section 5. SHARES AVAILABLE
Subject to the provisions of Section 7 of the Plan, no more than
an aggregate of 6,000,000 shares of Common Stock may be issued
pursuant to the Plan. 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 and which were not issued
prior to the expiration of the Award shall thereafter again be
available for award under the Plan.
Section 6. NON-QUALIFIED STOCK OPTIONS
(a) General - The Committee may authorize the grant of Options
subject to the terms and conditions set forth in this Section 6.
The grant of an Option shall be evidenced by a written notice
provided by the Corporation setting forth the number of shares of
Common Stock subject to the Option evidenced thereby and the terms,
conditions, and restrictions applicable thereto (Stock Option Notice).
Except for adjustments pursuant to Section 7 of the Plan, the
Option Price for any outstanding 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 7 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 Effective 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 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 later of:
(i) the first anniversary of the Effective 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.
(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 thirtieth day after 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 thirtieth day after the last day of employment with the
Corporation or a Subsidiary Company, or
(iii) with the Optionee's consent, the grant of a
new Award to replace the Option.
Section 7. 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 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 8. REGULATORY APPROVALS
The exercise of each Option 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 9. 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 written
action of its chief executive officer or 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.
Section 10. 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 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 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 and neither the
Corporation nor any Subsidiary Company shall be deemed to be
a trustee of any amounts to be paid under an Option. Any
liability of the Corporation or a Subsidiary Company to pay
any Participant or Beneficiary with respect to an Option 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.