NORFOLK SOUTHERN CORPORATION
ARTICLES OF RESTATEMENT
The following restatement of the Corporation's Articles of Incorporation, which contains as an amendment not requiring shareholder approval a new Article 111, was adopted by the Corporation's Board of Directors at a meeting held on July 22, 1997.
RESTATED ARTICLES OF INCORPORATION
OF
NORFOLK SOUTHERN CORPORATION
ARTICLE I
The name of the Corporation is NORFOLK SOUTHERN CORPORATION.
ARTICLE II
The purpose for which the Corporation is organized is to transact any lawful business not required to be specifically stated in the Articles of Incorporation.
ARTICLE III
The Corporation shall have authority to issue one billion, three hundred fifty million (1,350,000,000) shares of Common Stock, par value $1 per share, and twenty-five million (25,000,000) shares of Serial Preferred Stock, without par value.
A. Serial Preferred Stock
1. Issuance in Series. The Board of Directors is hereby empowered to cause the Serial Preferred Stock of the Corporation to be issued in series with such of the variations permitted by clauses (a)-(h), both inclusive, of this Section 1 as shall have been fixed and determined by the Board of Directors with respect to any series prior to the issue of any shares of such series.
The shares of the Serial Preferred Stock of different series may vary as to:
(a) the number of shares constituting such series and the designation of such series, which shall be such as to distinguish the shares thereof from the shares of all other series and classes:
(b) the rate of dividend, the time of payment and, if cumulative, the dates from which dividends shall be cumulative, and the extent of participation rights, if any;
(c) any right to vote with holders of shares of any other series or class and any right to vote as a class, either generally or as a condition to specified corporate action;
(d) the price at and the terms and conditions on which shares may be redeemed;
(e) the amount payable upon shares in event of involuntary liquidation;
(f) the amount payable upon shares in event of voluntary liquidation;
(g) any sinking fund provisions for the redemption or purchase of shares; and
(h) the terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion.
The shares of all series of Serial Preferred Stock shall be identical except as, within the limitations set forth above in this Section 1, shall have been fixed and determined by the Board of Directors prior to the issuance thereof.
2. Dividends. The holders of the Serial Preferred Stock of each series shall be entitled to receive, if and when declared payable by the Board of Directors, dividends in lawful money of the United States of America, at the dividend rate for such series, and not exceeding such rate except to the extent of any participation right. Such dividends shall be payable on such dates as shall be fixed for such series. Dividends, if cumulative and in arrears, shall not bear interest.
No dividends shall be declared or paid upon or set apart for the Common Stock or for stock of any other class hereafter created ranking junior to the Serial Preferred Stock in respect of dividends or assets (hereinafter called Junior Stock), and no shares of Serial Preferred Stock, Common Stock or Junior Stock shall be purchased, redeemed or otherwise reacquired for a consideration, nor shall any funds be set aside for or paid to any sinking fund therefor, unless and until (i) full dividends on the outstanding Serial Preferred Stock at the dividend rate or rates therefor, together with the full additional amount required by any participation right, shall have been paid or declared and set apart for payment with respect to all past dividend periods, to the extent that the holders
of the Serial Preferred Stock are entitled to dividends with respect to any past dividend period, and the current dividend period, and (ii) all mandatory sinking fund payments that shall have become due in respect of any series of the Serial Preferred Stock shall have been made. Unless full dividends with respect to all past dividend periods on the outstanding Serial Preferred Stock at the dividend rate or rates therefor, to the extent that holders of the Serial Preferred Stock are entitled to dividends with respect to any particular past dividend period, together with the full additional amount required by any participation right, shall have been paid or declared and set apart for payment and all mandatory sinking fund payments that shall have become due in respect of any series of the Serial Preferred Stock shall have been made, no distributions shall be made to the holders of the Serial Preferred Stock of any series unless distributions are made to the holders of the Serial Preferred Stock of all series then outstanding in proportion to the aggregate amounts of the deficiencies in payments due to the respective series, and all payments shall be applied, first, to dividends accrued and in arrears, next, to any amount required by any participation right, and, finally, to mandatory sinking fund payments. The terms "current dividend period" and "past dividend period" mean, if two or more series of Serial Preferred Stock having different dividend periods are at the time outstanding, the current dividend period or any past dividend period, as the case may be, with respect to each such series.
3. Preference on Liquidation. In the event of any liquidation, dissolution or winding up of the Corporation, the holders of the Serial Preferred Stock of each series shall be entitled to receive, for each share thereof, the fixed liquidation price for such series, plus, in case such liquidation, dissolution or winding up shall have been voluntary, the fixed liquidation premium for such series, if any, together in all cases with a sum equal to all dividends accrued or in arrears thereon and the full additional amount required by any participation right, before any distribution of the assets shall be made to holders of the Common Stock or Junior Stock; but the holders of the Serial Preferred Stock shall be entitled to no further participation in such distribution. If, upon any such liquidation, dissolution or winding up, the assets distributable among the holders of the Serial Preferred Stock shall be insufficient to permit the payment of the full preferential amounts aforesaid, then such assets shall be distributed among the holders of the Serial Preferred Stock then outstanding ratably in proportion to the full preferential amounts to which they are respectively entitled. For the purposes of this Section 3, the expression "dividends accrued or in arrears" means, in respect of each share of the Serial Preferred Stock of any series at a particular time, an amount equal to the product of the rate of dividend per annum applicable to the shares of such series multiplied by the number of years and any fractional part of a year that shall have elapsed from the date when dividends on such shares became cumulative to the particular time in question less the total amount of dividends actually paid on the shares of such series or declared and set apart for payment thereon; provided, however, that, if the dividends on such shares shall not be fully cumulative, such expression shall mean the dividends, if any, cumulative in respect of such shares for the period stated in the articles of serial designation creating such shares less all dividends paid in or with respect to such period.
B. Common Stock
1. Subject to the provisions of law and the rights of holders of shares at the time outstanding of all classes of stock having prior rights as to dividends, the holders of Common Stock at the time outstanding shall be entitled to receive such dividends at such times and in such amounts as the Board of Directors may deem advisable.
2. In the event of any liquidation, dissolution or winding up (whether voluntary or involuntary) of the Corporation, after the payment or provision for payment in full of all debts and other liabilities of the Corporation and all preferential amounts to which the holders of shares at the time outstanding of all classes of stock having prior rights thereto shall be entitled, the remaining net assets of the Corporation shall be distributed ratably among the holders of the shares at the time outstanding of Common Stock.
3. The holders of Common Stock shall be entitled to one vote per share on all matters.
ARTICLE IV
No holder of capital stock of the Corporation of any class shall have any preemptive right to subscribe to or purchase (i) any shares of capital stock of the Corporation, (ii) any securities convertible into such shares or (iii) any options, warrants or rights to purchase such shares or securities convertible into such shares.
ARTICLE V
The number of directors, unless otherwise fixed by the bylaws, shall be sixteen. The directors shall be divided into three classes, one of which shall be composed of six directors and two of which shall be composed of five directors. At each annual meeting of stockholders, the number of directors to be elected shall be equal to the number of directors whose terms of office then expire, except that, if the total number of directors shall have been increased or decreased, the number of directors then to be elected shall be as nearly as possible one third of the total number of directors, and each director shall hold office until the third succeeding annual meeting after his election; provided, however, that at no election shall a greater number of directors be elected than the number of vacancies then existing, and provided further that, upon any increase in the total number of directors, the additional vacancies shall be so assigned by the Board of Directors to classes that the number of directors of each class shall be as nearly equal as possible and the vacancies shall be filled for terms corresponding to the classes to which the vacancies are so assigned. Each director shall hold office until his successor shall have been elected, and the terms of office of directors elected by the Board of Directors to succeed former directors shall expire at the next stockholders' meeting at which directors are elected.
ARTICLE VI
1. in this Article:
"expenses" includes, without limitation, counsel fees.
"liability" means the obligation to pay a judgment, settlement, penalty, fine (including any excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.
"party" includes, without limitation, an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
"proceeding" means any threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, or investigative and whether formal or informal.
2. To the full extent that the Virginia Stock Corporation Act, as it exists on the date hereof or as hereafter amended, permits the limitation or elimination of the liability of directors and officers, no director or officer of the Corporation made a party to any proceeding shall be liable to the Corporation or its stockholders for monetary damages arising out of any transaction, occurrence or course of conduct, whether occurring prior or subsequent to the effective date of this Article.
3. To the full extent permitted by the Virginia Stock Corporation Act, as it exists on the date hereof or as hereafter amended, the Corporation shall indemnify any person who was or is a party to any proceeding, including a proceeding brought by or in the right of the Corporation, by reason of the fact that he is or was a director or officer of the Corporation, or while serving as such director or officer, is or was serving at the request of the Corporation as a director, trustee, partner or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability incurred by him in connection with such proceeding. A person shall be considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. To the same extent, the Board of Directors is hereby empowered, by a majority vote of a quorum of disinterested directors, to enter into a contract to indemnify any director or officer against liability and/or to advance or reimburse his expenses in respect of any proceedings arising from any act of omission, whether occurring before or after the execution of such contract.
4. The provisions of this Article shall be applicable to all proceedings commenced after it becomes effective, arising from any act or omission, whether occurring before or after such effective date. No amendment or repeal of this Article shall impair or otherwise diminish the rights provided under this Article (including those created by contract) with respect to any act or omission occurring prior to such
amendment or repeal. The Corporation shall promptly take all such actions and make all such determinations and authorizations as shall be necessary or appropriate to comply with its obligation to make any indemnity against liability, or to advance any expenses, under this Article and shall promptly pay or reimburse all reasonable expenses, including attorneys' fees, incurred by any such director or officer in connection with such actions and determinations or proceedings of any kind arising therefrom.
5. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the director or officer did not meet any standard of conduct that is a prerequisite to the limitation or elimination of liability provided in Section 2 or to his entitlement to indemnification under Section 3 of this Article.
6. Any indemnification under Section 3 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the proposed indemnitee has met any standard of conduct that is a prerequisite to his entitlement to indemnification under Section 3 of this Article.
The determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(b) If a quorum cannot be obtained under subsection (a) of this section, by majority vote of a committee duly designated by the Board of Directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(c) By special legal counsel:
(i) Selected by the Board of Directors or its committee in the manner prescribed in subsection (a) or (b) of this section; or
(ii) If a quorum of the Board of Directors cannot be obtained under subsection (a) or this section and a committee cannot be designated under subsection (b) of this section, selected by a majority vote of the full Board of Directors, in which selection directors who are parties may participate; or
(d) By the stockholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.
Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is appropriate, except that if the determination is made by special legal counsel, such authorizations and evaluations shall be made by those entitled under subsection (c) of this section to select counsel.
Notwithstanding the foregoing, in the event there has been a change in the composition of a majority of the Board of Directors after the date of the alleged act or omission with respect to which indemnification, an advance or reimbursement is claimed, any determination as to such indemnification, advance or reimbursement shall be made by special legal counsel agreed upon by the Board of Directors and the proposed indemnitee, If the Board of Directors and the proposed indemnitee are unable to agree upon such special legal counsel, the Board of Directors and the proposed indemnitee each shall select a nominee, and the nominees shall select such special legal counsel.
7. (a) The Corporation shall pay for or reimburse the reasonable expenses incurred by a director or officer (and may do so for a person referred to in Section 8 of this Article) who is a party to a proceeding in advance of final disposition of the proceeding or the making of any determination under Section 3 if the director, officer or person furnishes the Corporation:
(i) a written statement, executed personally, of his good faith belief that he has met any standard of conduct that is a prerequisite to his entitlement to indemnification under Section 3 of this Article; and
(ii) a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet such standard of conduct.
(b) The undertaking required by paragraph (ii) of subsection (a) of this section shall be an unlimited general obligation but need not be secured and may be accepted without reference to financial ability to make repayment.
(c) Authorizations of payments under this section shall be made by the persons specified in Section 6.
8. The Board of Directors is hereby empowered, by majority vote of a quorum consisting of disinterested directors, to cause the Corporation to indemnify or contract to indemnify any person not specified in Section 3 of this Article who was, is or may become a party to any proceeding, by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, to the same or a lesser extent as if such person were specified as one to whom indemnification is granted in Section 3. The
provisions of Sections 4 through 6 of this Article shall be applicable to any indemnification provided hereafter pursuant to this section.
9. The Corporation may purchase and maintain insurance to indemnify it against the whole or any portion of the liability assumed by it in accordance with this Article and may also procure insurance, in such amounts as the Board of Directors may determine, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against or incurred by him in any such capacity or arising from his status as such, whether or not the Corporation would have power to indemnify him against such liability under the provisions of this Article.
10. Every reference herein to directors, officers, employees or agents shall include former directors, officers, employees and agents and their respective heirs, executors and administrators. The indemnification hereby provided and provided hereafter pursuant to the power hereby conferred by this Article on the Board of Directors shall not be exclusive of any other rights to which any person may be entitled, including any right under policies of insurance that may be purchased and maintained by the Corporation or others, with respect to claims, issues or matters in relation to which the Corporation would not have the power to indemnify such person under the provisions of this Article. Nothing herein shall prevent or restrict the power of the Corporation to make or provide for any further indemnity, or provisions for determining entitlement to indemnity, pursuant to one or more indemnification agreements, bylaws, or other, arrangements (including, without limitation, creation of trust funds or security interests funded by letters of credit or other means) approved by the Board of Directors (whether or not any of the directors of the Corporation shall be a party to or beneficiary of any such agreements, bylaws or arrangements); provided, however, that any provision of such agreements, bylaws or other arrangements shall not be effective if and to the extent that it is determined to be contrary to this Article or applicable laws of the Commonwealth of Virginia, but other provisions of any such agreements, bylaws or other arrangements shall not be affected by any such determination.
11. Each provision of this Article shall be severable, and an adverse determination as to any such provision shall in no way affect the validity of any other provision.
ARTICLE VII
The shareholder vote required, of each voting group entitled to vote thereon, to approve an amendment to the Corporation's Articles of Incorporation is a majority of all votes entitled to be cast by that voting group, unless the Board of Directors conditions approval of such an amendment upon a greater vote.
Dated: September 5, 1997
NORFOLK SOUTHERN CORPORATION
By /s/ David R. Goode
David R. Goode
Chairman of the Board, President
and Chief Executive Officer
[SEAL] Attest /s/ Sandra T. Pierce
Sandra T. Pierce
Assistant Corporate Secretary
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
of
NORFOLK SOUTHERN CORPORATION
September 26, 2000
Pursuant to Section 13.1-369 of the Virginia Stock Corporation Act and the authority conferred upon the Board of Directors by the Restated Articles of Incorporation of the Corporation, the Restated Articles of Incorporation of the Corporation are hereby amended to create a new series of 600,000 shares of Preferred Stock, designated as "Series A Junior Participating Preferred Stock" by adding the following as Section C to Article III of such Restated Articles of Incorporation:
C. Series A Junior Participating Preferred Stock
1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall be 600,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cashon the first day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after September 26, 2000 (the "Rights Declaration Date"), (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation.
(i)If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a "Default Period") that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each Default Period, all holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) directors.
(ii) During any Default Period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(b) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders; provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing Default Period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such right is exercised at an annual meeting, to elect two (2) directors. If the number that may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect directors in any Default Period and during the continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing Default Period, have previously exercised their right to elect directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice President or the Corporate Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Paragraph (a)(i ii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this Paragraph (a)(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of the shareholders.
(iv) In any Default Period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two (2) directors voting, as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the Default Period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (a)(iii) of this Section 3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director whose office shall have become vacant. References in this Paragraph (a) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a Default Period, (x) the right of the holders of Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Preferred Stock as a class shall terminate and (z) the number of directors shall be such number as may be provided for in the Restated Articles of Incorporation or Bylaws irrespective of any increase made pursuant to the provisions of Paragraph (a)(i) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Restated Articles of Incorporation or Bylaws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.
(c) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights, and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors. after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.
6. Liquidation Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 1000 (as appropriately adjusted as set forth in subparagraph (c) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one with respect to such Preferred Stock and Common Stock. on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, that rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the Outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock Outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.
9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.
10. Amendment. At any time when any shares of Series A Junior Participating Preferred Stock are outstanding, the Restated Articles of Incorporation of the Corporation, as amended hereby, shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
of
NORFOLK SOUTHERN CORPORATION
June 4, 2010
The Restated Articles of Incorporation of Norfolk Southern Corporation are amended to declassify the Board of Directors by replacing Article V with the following:
ARTICLE V
The number of directors, unless otherwise fixed by the bylaws, shall be sixteen. At the 2011 Annual Meeting of Stockholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2012 Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. At the 2012 Annual Meeting of Stockholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2013 Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. At the Annual Meeting of Stockholders in 2013 and thereafter, the successors of the directors whose terms expire at that meeting shall be elected for a one year term expiring at the next Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. Each director shall hold office until his successor shall have been elected, and the terms of office of directors elected by the Board of Directors to succeed former directors shall expire at the next stockholders' meeting at which directors are elected.
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
of
NORFOLK SOUTHERN CORPORATION
June 12, 2020
The Restated Articles of Incorporation of Norfolk Southern Corporation are amended to (a) change the voting standard required to amend the Articles, (b) adopt a simple majority voting standard to approve a merger, share exchange, conversion, sale, or dissolution of the Corporation, and (c) adopt a majority voting standard to approve re-domestication of the corporation and affiliated transactions by replacing Article VII and adding a new Article VIII as follows:
ARTICLE VII
The shareholder vote required, of each voting group entitled to vote thereon, to approve an amendment to the Corporation’s Articles of Incorporation is a majority of all votes entitled to be cast by that voting group, unless the Virginia Stock Corporation Act (the “VSCA”) conditions approval of such an amendment upon a greater vote.
ARTICLE VIII
Any action on a matter involving:
(a)a plan of merger or acquisition for which the VSCA requires shareholder approval;
(b)a share exchange for which the VSCA requires shareholder approval;
(c)the conversion of the Corporation;
(d)a sale of all or substantially all the Corporation’s property for which the VSCA requires shareholder approval; or
(e)the dissolution of the Corporation
shall require the approval, by the affirmative vote, of a majority of the votes cast thereon.
Any action on a matter involving:
(a)the re-domestication of the Corporation; or
(b)an affiliated transaction for which the VSCA requires shareholder approval
shall require the approval, by the affirmative vote, of a majority of the votes entitled to be cast thereon.
NORFOLK SOUTHERN
EXECUTIVE SEVERANCE PLAN
1. Introduction
1.1. Purpose. The purpose of the Plan is to ensure that the Company will have the continued dedication of its key employees by providing severance protection to selected individuals. The Plan is intended to be an unfunded welfare plan maintained primarily for the purpose of providing severance benefits to a select group of key management employees.
1.2. Effective Date. The Plan is effective as of May 14, 2020, and was amended effective July 28, 2020, to clarify the application of Section 409A to certain benefits under the Plan.
2. Definitions and Construction
2.1. Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless the context clearly indicates that a different meaning is intended:
(a) “Administrator” means the Compensation Committee.
(b) “Board” means the Board of Directors of Norfolk Southern Corporation.
(c) “Cause” has the meaning provided in Section 4.4(c).
(d) “Claim Reviewer” means a person or entity designated in writing by the Administrator as the Claim Reviewer for this Plan.
(e) “Code” means the Internal Revenue Code of 1986, as amended.
(f) “Company” means Norfolk Southern Corporation.
(g) “Compensation Committee” means the Compensation Committee of the Board.
(h) “Eligible Employee” means any employee of the Company who, on the date of a Qualifying Termination, is either: (1) employed at the level of Executive Vice President, or (2) employed at the level of Senior Vice President but only if the Board or its designee has designated such Participant as eligible to participate in the Plan. Notwithstanding the foregoing, employees who reach mandatory retirement age shall not be eligible to participate in the Plan.
(i) “Entity” means a corporation, partnership, limited liability company or other entity.
(j) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(k) “Good Reason” has the meaning provided in Section 4.4(b).
(l) “Participant” means an Eligible Employee who participates in the Plan under Section 3.
(m) “Plan” means the Norfolk Southern Executive Severance Plan as set forth in this document.
(n) “Qualifying Termination” has the meaning provided in Section 4.4(a).
(o) “Section 409A” means section 409A of the Code.
(q) “Severance Benefit” has the meaning provided in Section 4.
2.2. Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders, where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and vice versa.
2.3. Section 409A. Payments under the Plan are intended to be exempt from, or comply with, Section 409A, and the Plan will be interpreted to achieve this result. However, in no event is the Company responsible for any tax or penalty owed by a Participant with respect to the payments under the Plan.
3. Participation. An Eligible Employee of the Company shall become a Participant in the Plan on the date on which the Company adopts the Plan or the date the Eligible Employee is employed at the level of Executive Vice President, whichever is later. An employee who is employed at the level of Senior Vice President shall become a Participant on the date the Board designates that he or she is eligible.
4. Severance Benefits
4.1. Cash Severance Benefits. A Participant who has a Qualifying Termination is eligible for a Severance Benefit in the amount described in subsection (a). The Severance Benefit shall be paid in the time and form specified in Section 4.3 and shall be conditioned upon the Participant’s timely execution of a release as provided in Section 6 and such release becoming irrevocable.
(a) Amount.
(1) Base Salary. The Participant’s Severance Benefit includes an amount equal to two times (2) the Participant’s base salary, at the rate in effect immediately prior to the Participant’s Qualifying Termination. Notwithstanding the foregoing, in the event the Participant experienced a material reduction in base salary prior to his or her Qualifying Termination that would give rise to a Good Reason, then the base salary rate used in the preceding sentence shall, if greater, be the rate in effect immediately prior to such material reduction in base salary.
(2) Bonus Award.
(i) The Participant’s Severance Benefit includes an amount equal to the Participant’s total salary paid up to the date of the Qualifying Termination during the incentive year in which the Qualifying Termination occurs multiplied by the Participant’s bonus level multiplied by the payout percentage for the Corporate Performance Factor accrued on the books of the Company as of the quarter coincident with or immediately preceding the quarter in which the Qualifying Termination occurs. Notwithstanding the foregoing, for a Participant whose Qualifying Termination occurs in the first quarter of the calendar year, the Participant’s Severance Benefit shall include an amount equal to the Participant’s total salary paid up to the date of the Qualifying Termination during the incentive year in which the Qualifying Termination occurs multiplied by the Participant’s bonus level multiplied by the payout percentage for the Corporate Performance Factor as budgeted for the incentive year.
(ii) Notwithstanding the foregoing, for Participants who are eligible to retire, the date of the Qualifying Termination shall be established as the last day of a month so that they can retire under the terms of the Retirement Plan of Norfolk Southern Corporation and Participating Subsidiary Companies and consequently be eligible for a bonus award in accordance with the terms of the Executive Management Incentive Plan. Such Participants shall not be eligible for an amount described under the previous paragraph. In addition, Participants who are eligible for a bonus award in accordance with the terms of the Executive Management Incentive Plan for reasons other than retirement shall receive a bonus award under the terms of that plan and shall not be eligible for an amount described under the previous paragraph.
(3) Outplacement Services. The Participant shall be entitled to a lump sum of $30,000 for outplacement services.
(4) Health Coverage. The Participant shall be entitled to a lump sum of $36,000 for health coverage.
4.2. Equity Awards.
(a) In General. Provided that the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, then notwithstanding anything in the applicable stock incentive plan and/or award agreement to the contrary, upon a Participant’s Qualifying Termination, the Participant’s stock options and restricted stock unit awards will be paid in cash using the closing price per share of stock or equivalent on the New York Stock Exchange (or if unavailable, on another U.S. stock exchange) on the date of the Qualifying Termination, or, if a stock is not traded on the date of the Qualifying Termination, on the most recent trading day immediately preceding such date. Furthermore, provided that the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, then the Participant shall be entitled to the pro-rata value of Performance Share Units, paid in cash upon the Participant’s Qualifying Termination, in accordance with the following formula: For each
Performance Share Unit award, the number of units granted shall be multiplied by the total earnout percentage as reflected on the books of the company for the prior quarter, multiplied by a fraction, the numerator of which is the number of months worked in the 3-year award period and the denominator of which is 36 and using the closing price per share of stock or equivalent on the New York Stock Exchange (or if unavailable, on another U.S. stock exchange) on the date of the Qualifying Termination, or, if a stock is not traded on the date of the Qualifying Termination, on the most recent trading day immediately preceding such date. If a Participant is entitled to continued or accelerated vesting of stock options, continued vesting of restricted stock units, or payout of performance share units based on the full performance period in accordance with the terms of the Norfolk Southern Long-Term Incentive Plan, then the terms of the awards under the Norfolk Southern Long-Term Incentive Plan shall govern and the Participant shall not be entitled to the payout of equity awards under this section 4.2(a).
(b) Participants Eligible to Retire. Notwithstanding section 4.2(a), for a Participant who is eligible to retire, and who properly executes a release as provided in Section 6 and such release becomes irrevocable, then the date of the Qualifying Termination shall be established as the last day of a month so that the Participant can retire under the terms of the Retirement Plan of Norfolk Southern Corporation and Participating Subsidiary Companies. Thereafter, provided that the Participant properly applies for retirement pursuant to the Retirement Plan, the Participant shall be entitled to favorable treatment of long-term incentive awards as provided upon retirement in accordance with the terms of such awards under the Norfolk Southern Long-Term Incentive Plan. A Participant who is eligible to retire as described in this section 4.2(b) shall not be entitled to the payout of equity awards as described under section 4.2(a) of this Plan.
(c) Notwithstanding the foregoing, if the Participant’s Qualifying Termination occurs before October 1 of the calendar year, the restricted stock units and performance share units granted in the year of the Qualifying Termination shall be forfeited in accordance with the terms of the awards. Therefore, no amount will be payable under section 4.2(a) with respect to such awards, and such awards shall be forfeited for purposes of section 4.2(b).
4.3. Time and Form of Payment. If a Participant is entitled to a Severance Benefit, the Severance Benefit and any benefit payable under Sections 4.1 or 4.2(a) will be paid as follows:
(a) In General. Except as otherwise provided below, the Participant’s Severance Benefit and any benefit payable under Sections 4.1 or 4.2(a) will be paid in a lump sum within thirty days following the expiration of the 7-day rescission period unless a delay is required by subsection (b)(2) or (b)(3) below.
(b) Time of Payment under Section 409A. To comply with Section 409A of the Code:
(1) Any payment under the Plan that is subject to Section 409A and that is contingent on a termination of employment is contingent on a “separation from service” within the meaning of Section 409A.
(2) If, upon separation from service, the Participant is a “specified employee” within the meaning of Section 409A, any payment under the Plan that is subject to Section 409A and would otherwise be paid within six months after the Participant’s separation from service will instead be paid in the seventh month following the Participant’s separation from service.
(3) If the payment or distribution of any amount or award as provided in Section 4.3(a) would violate Section 409A of the Code, then if the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, the amount or award will be paid at the earliest possible time it can be paid without violating Section 409A of the Code.
4.4. Qualifying Termination.
(a) A Participant has a Qualifying Termination if his or her employment with the Company is terminated:
(1) by the Participant for Good Reason; or
(2) by the Company for any reason other than for Cause or for disability under the Company’s long-term disability plan.
(b) Good Reason. “Good Reason” means the existence or occurrence of one or more of the following conditions or events without the Participant’s prior written consent: (i) a material reduction of the Participant’s base salary or target bonus opportunity (other than as part of an across-the-board, proportional salary reduction applicable to all officers employed at the level of Executive Vice President); (ii) a sustained and material reduction in the Participant’s job title or responsibilities, it being agreed that “Good Reason” shall not exist solely because the Company reorganizes one or more units of its business, its functional organization, or its reporting relationships; or (iii) a material breach by the Company of any term of the Participant’s written employment agreement with the Company or of the Participant’s other agreements with the Company, if any; provided, however, that, in each case under sub-clauses (i) to (iii) above, any termination of employment by the Participant will be for “Good Reason” only if: (1) the Participant gives the Company written notice, within ninety (90) days following the first occurrence of the condition(s) that the Participant believes constitute(s) “Good Reason,” which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (such 30-day period, the “Company Cure Period”); and (3) the Participant voluntarily terminates the Participant’s employment with the Company within thirty (30) days following the end of the Company Cure Period.
(c) Cause. “Cause” means, with respect to a Participant, the occurrence of any of the following events, as reasonably determined by the Administrator in its discretion: (i) the Participant’s conviction of, or plea of nolo contendere to, any felony (other than a vehicular-related felony); (ii) the Participant’s commission of, or participation in, intentional acts of fraud or dishonesty that in either case results in material harm to the reputation or business of the Company; (iii) the Participant’s intentional, material violation of any term of the Participant’s employment agreement with the Company or any other contract or agreement between the Participant and the Company, if any, or any statutory duty the Participant owes to the Company that in either case results in material harm to the business of the Company; (iv) the Participant’s conduct that constitutes gross insubordination or habitual neglect of duties and that in either case results in material harm to the business of the Company; (v) the Participant’s intentional, material refusal to follow the lawful directions of the Board of Directors, Norfolk Southern’s Chief Executive Officer, or his or her direct manager (other than as a result of physical or mental illness); or (vi) the Participant’s intentional, material failure to follow, or intentional conduct that violates (or would have violated, if such conduct occurred within ten (10) years prior to the date the Participant entered this Agreement and has not been previously disclosed to the Company), the Company’s written policies that are generally applicable to all employees or all officers of the Company and that results in material harm to the reputation or business of the Company; provided, however, (1) that willful bad faith disregard will be deemed to constitute intentionality for purposes of this definition and (2) that, in each case under sub-clauses (i) through (vi) above, any termination of employment by the Company will be for “Cause” only if: (1) the Company gives the Participant written notice, within ninety (90) days following the date on which the Company first becomes aware of the action or conduct that it alleges constitutes Cause (or, in the case of clauses (ii), (iii), or (vi), when the Company first becomes aware that the action or conduct has resulted in material harm to the reputation or business of the Company), which notice shall describe such action or conduct; (2) in the case of clauses (iii) through (vi), except in circumstances where the Participant’s actions are deemed by the Company not subject to cure, the Participant fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (such 30-day period, the “Employee Cure Period”); and (3) except if a reasonable period is needed to investigate the conduct at issue in (vi) (which investigation, for the avoidance of doubt, shall not constitute Good Reason), the Company terminates the Participant’s employment within thirty (30) days following the end of the Employee Cure Period (or, in the case of clauses (i) and (ii), the Company terminates the Participant’s employment within sixty (60) days following the Participant’s receipt of the written notice).
5. Covenants
5.1. Generally. In consideration for the benefits provided under the Plan, each Participant will agree to the covenants as set forth in the release described in section 6, which shall include the items set forth in sections 5.2 through 5.5.
5.2. Non-disparagement. The Participant will at no time make any derogatory, misleading or otherwise negative statement about the actions, performance or behavior of the Company or its officers, directors, employees and agents.
5.3. Cooperation. The Participant will cooperate with the Company in order to ensure an orderly transfer of his or her duties and responsibilities. In addition, the Participant will at all times, both before and after termination of
employment, (a) provide reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during the Participant’s employment hereunder, provided that such cooperation does not materially interfere with the Participant’s then current employment, and (b) cooperate with the Company in executing and delivering documents requested by the Company, and taking any other actions, that are necessary or requested by the Company to assist the Company in patenting, copyrighting, or registering any programs, ideas, inventions, discoveries, patented or copyrighted material, or trademarks, and to vest title thereto in the Company.
5.4. Confidentiality and Non-Compete. The Participant covenants and agrees that any confidential or proprietary information and any corporate policies, procedures and documents acquired during his or her employment with the Company is the exclusive property of the Company. The Participant acknowledges that he or she has no ownership interest or right of any kind to said property. Except as otherwise required by law, the Participant agrees that he or she will not use or directly or indirectly, disclose or divulge to any unauthorized party for his or her own benefit or to the detriment of the Company, any such information that was acquired during his or her employment with the Company, whether or not developed or compiled by the Company and whether or not the Participant was authorized to have access to such information. The Participant covenants that he or she has returned all such information to the Company.
The Participant further covenants that he or she will not seek or accept employment with a direct competitor of the Company for one (1) year from date of Qualifying Termination, unless Participant seeks, and is granted, a waiver from the Chief Executive Officer of the Company. The Participant will not disclose any trade secrets, customer lists, vendor and contractor rates, designs, information regarding product development, names of vendors and contractors, phone numbers or contact information of vendors and contractors, operating plans, strategic plans, marketing plans, sales plans, projected acquisitions or dispositions of properties, assets, or management agreements, management information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, purchasing agreements, financial records, or other financial, commercial, business or technical information relating to Company or information designated as confidential or proprietary that Company may receive belonging to suppliers, customers, or others who do business with Company. Notwithstanding the foregoing, this Release does not prohibit the Participant from: (i) providing truthful testimony in response to compulsory legal process; (ii) participating in any government investigation; (iii) providing truthful statements in conjunction with any claim permitted to be brought by the employee; or (iv) providing information to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency.
5.5. Recoupment. If the Participant breaches any of the covenants set forth in this Section 5, as specified in the release, then the Participant will be obligated to repay to the Company all benefits previously paid to, or on behalf of, the Participant under the Plan.
6. Release
6.1. Generally. A Participant will not be entitled to any benefits under the Plan unless, at the time of the Participant’s Qualifying Termination, he or she executes and does not subsequently revoke the release provided in Exhibit A, releasing the Company, its affiliates, subsidiaries, shareholders, directors, officers, employees, representatives, and agents and their successors and assigns from any and all employment-related claims the Participant or his or her successors and beneficiaries might then have against them (excluding any claims the Participant might then have under the Plan or any employee benefit plan sponsored by the Company). The release will be substantially in the form that is attached as Exhibit A to the Plan.
6.2. Time Limit for Providing Release. A Participant will execute and submit the release to the Company within 21 days after the date the release is presented to the Participant. With respect to any payment under the Plan that is subject to Section 409A, if payment is otherwise due prior to the latest date on which the release may become irrevocable and the period between separation from service and such date spans two calendar years, payment shall be made in the second of those two years.
7. Nature of Participant’s Interest in the Plan
7.1. No Right to Assets. Participation in the Plan does not create, in favor of any Participant, any right or lien in or against any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company’s promise to pay benefits under the Plan will at all times remain unfunded as to each Participant, whose rights under the Plan are limited to those of a general and unsecured creditor of the Company.
7.2. No Right to Transfer Interest. Rights to benefits payable under the Plan are not subject in any manner to alienation, sale, transfer, assignment, pledge, or encumbrance, except as required by law.
7.3. No Employment Rights. No provisions of the Plan and no action taken by the Company or the Administrator will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant for any reason or no reason and at any time.
7.4. Withholding and Tax Liabilities. All payments under the Plan will be subject to tax withholding or other withholding required or permitted by applicable law to the extent deemed necessary by the Administrator. The Participant will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required.
7.5. Change in Control. Notwithstanding the provisions of this Agreement, Participants who have entered into a Change in Control Agreement with the Company who are terminated following a Change in Control (as defined in such Agreement) will be entitled to benefits under that Agreement and shall not be entitled to benefits under this Plan.
8. Administration, Interpretation, and Modification of Plan
8.1. Plan Administrator. The Administrator will administer the Plan.
8.2. Powers of the Administrator. The Administrator’s powers include, but are not limited to, the power to adopt rules consistent with the Plan; the power to decide all questions relating to the interpretation of the terms and provisions of the Plan; and the power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision). The Administrator has full discretionary authority to exercise each of the foregoing powers.
8.3. Death of Participant. If a Participant dies after having a Qualifying Termination, any payment of the Participant’s Severance Benefit or benefit under Section 4 remaining due to the Participant will be paid to the Participant’s estate at the time such payment would otherwise be paid to the Participant but no later than 90 days after the Participant’s death.
8.4. Amendment, Suspension, and Termination. The Compensation Committee has the right by written resolution to amend, suspend, or terminate the Plan at any time, subject to the terms of this Section 8.4. Notwithstanding the foregoing, the Compensation Committee may amend the Plan at any time to the extent necessary to comply with Section 409A, provided that, to the extent possible, such amendment does not reduce the benefits of an employee who is already a Participant.
8.5. Power to Delegate Authority. The Administrator may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan.
8.6. Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan.
8.7. Severability. If an arbitrator or court of competent jurisdiction determines that any term, provision, or portion of the Plan is void, illegal, or unenforceable, the other terms, provisions, and portions of the Plan will remain in full force and effect, and the terms, provisions, and portions that are determined to be void, illegal, or unenforceable will either be limited so that they will remain in effect to the extent permissible by law, or such
arbitrator or court will substitute, to the extent enforceable, provisions similar thereto or other provisions, so as to provide to the Company, to the fullest extent permitted by applicable law, the benefits intended by the Plan.
8.8. Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of Virginia (excluding any conflicts or choice of law rule or principle), except to the extent that those laws are preempted by federal law.
8.9. Complete Statement of Plan. The Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated only in writing and then only as provided in Section 8.4 or 8.5. A Participant’s right to any benefit of a type provided under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral, will be taken into account in interpreting the provisions of the Plan. Notwithstanding the preceding provisions of this Section 8.9, for purposes of determining benefits with respect to a Participant, the Plan will be deemed to include the provisions of any other written agreement between the Company and the Participant to the extent such other agreement explicitly provides for the incorporation of some or all of its terms into the Plan. Nothing in the Plan shall supersede any Change in Control Agreement the Participant has or will enter into, and in the event of a Change in Control (as defined under that policy), benefits shall be paid under that policy in lieu of any benefits described hereunder.
9. Claims and Appeals
9.1. Application of Claims and Appeals Procedures.
(a) If a Participant believes that he or she did not receive the full amount of benefits under the Plan to which he or she is entitled, the Participant may file a claim under the provisions of this Section 9.
(b) No claim for non-payment or underpayment of benefits allegedly owed under the Plan may be filed in court until the claimant has exhausted the claims review procedures established in accordance with this Section 9.
9.2. Initial Claims.
(a) Any claim for benefits will be in writing (which may be electronic if permitted by the Administrator) and will be delivered to the Claim Reviewer.
(b) Each claim for benefits will be decided by the Claim Reviewer within a reasonable period of time, but not later than 90 days after such claim is received by the Claim Reviewer (without regard to whether the claim submission includes sufficient information to make a determination), unless the Claim Reviewer determines that special circumstances require an extension of time for processing the claim. If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify the claimant in writing before the end of the initial 90-day period of the circumstances requiring an extension of time and the date by which a decision is expected.
(c) If any claim is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by the end of the period prescribed by subsection (b), above, that includes the following information:
(1) The specific reason or reasons for denial of the claim;
(2) References to the specific Plan provisions upon which such denial is based;
(3) A description of any additional material or information necessary to perfect the claim, and an explanation of why such material or information is necessary;
(4) An explanation of the appeal procedures Plan’s and the applicable time limits; and
(5) A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA, if his or her claim is denied upon review.
9.3. Appeals.
(a) If a claim for benefits is denied in whole or in part, the claimant may appeal the denial to the Claim Reviewer. Such appeal will be in writing (which may be electronic, if permitted by the Claim Reviewer), may include any written comments, documents, records, or other information relating to the claim for benefits, and will
be delivered to the Claim Reviewer within 60 days after the claimant receives written notice that his or her claim has been denied.
(b) The Claim Reviewer will decide each appeal within a reasonable period of time, but not later than 60 days after such claim is received by the Claim Reviewer, unless the Claim Reviewer determines that special circumstances require an extension of time for processing the appeal.
(1) If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify the claimant in writing before the end of the initial 60-day period of the circumstances requiring an extension of time and the date by which the Claim Reviewer expects to render a decision.
(2) If an extension of time pursuant to paragraph (1), above, is due to the claimant’s failure to submit information necessary to decide the appeal, the period for deciding the appeal will be tolled from the date on which the notification of extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
(c) In connection with any appeal, the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits. A document, record, or other information will be considered relevant to a claim for benefits if such document, record, or other information:
(1) Was relied upon in making the benefit determination;
(2) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; or
(3) Demonstrates compliance with processes and safeguards designed to ensure and to verify that the benefit determination was made in accordance with the terms of the Plan and that such terms of the Plan have been applied consistently with respect to similarly situated claimants.
(d) The Claim Reviewer review on appeal will take into account all comments, documents, records and other information submitted by the claimant, without regard to whether such information was considered in the initial benefit determination.
(e) If any appeal is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by the end of the period prescribed by subsection (b), above, that includes the following information:
(1) The specific reason or reasons for the decision;
(2) References to the specific Plan provisions upon which the decision is based;
(3) An explanation of the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits (as determined pursuant to subsection (c), above); and
(4) A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA.
9.4. Other Rules and Rights Regarding Claims and Appeals.
(a) A claimant may authorize a representative to pursue any claim or appeal on his or her behalf. The Claim Reviewer may establish reasonable procedures for verifying that any representative has in fact been authorized to act on his or her behalf.
(b) Notwithstanding the deadlines prescribed by this Section 9.4, the Claim Reviewer and any claimant may agree to a longer period for deciding a claim or appeal or for filing an appeal, provided that the Claim Reviewer will not extend any deadline for filing an appeal unless imposition of the deadline prescribed by Section 9.3(a) would be unreasonable under the applicable circumstances.
9.5. Interpretation. The provisions of this Section 9 are intended to comply with section 503 of ERISA and will be administered and interpreted in a manner consistent with such intent.
EXHIBIT A – FORM OF RELEASE AGREEMENT
SEPARATION AGREEMENT
This Separation Agreement (“Agreement” or “Release”) is entered into by and between Norfolk Southern Corporation (“Company”) and _____________________(“Executive” or “I”).
WITNESSETH:
WHEREAS, Executive is an at-will employee and as such, Executive’s employment can be terminated at any time.
WHEREAS, Executive will be separated by the Company effective ________________, _____ (“Separation Date”) for reasons unrelated to sexual harassment or sexual abuse, as a result of which Executive would be eligible to receive certain severance benefits under the Norfolk Southern Executive Severance Plan (“Severance Plan”), and desires to receive the benefits under the Executive Severance Plan and to relinquish and waive any rights and benefits provided under the NS Severance Pay Plan;
WHEREAS, a condition to receipt of benefits under the Severance Plan is for the Executive to execute a Settlement Agreement and Release satisfactory to the Company;
NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:
The foregoing WHEREAS clauses are incorporated and made a part of this Agreement.
1. Separation of Employment.
A.I understand that my employment with Company shall terminate or was terminated effective as of the above-referenced Separation Date.
B.I understand that Company has paid or will timely pay me, in accordance with its normal payroll and other procedures, for: (i) my work from the date this Release was received through the Separation Date; (ii) my properly reported and reimbursable business expenses that remain unpaid, provided that I submit any such claims for reimbursement together with this Release; and (iii) my accrued but unused vacation for the current year, less all required tax withholdings and other deductions.
C.I understand that, for benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA), benefits following the Separation Date, if any, will be determined in accordance with the terms of the applicable plan or other governing documents.
D.I understand that the foregoing payments and benefits, other than benefits provided under the Severance Plan, have been or will be provided to me regardless of whether I sign or revoke this Release.
2. Payment and Other Benefits.
I acknowledge that, in consideration for signing this Release within 21 days after I receive it and provided that I do not revoke the Release during the seven-day revocation period described in Section 8, I will receive the following:
A.Payment in the gross amount of $[ ], equal to two (2) times Executive’s base salary, paid in a lump sum.
B.Payment in the gross amount of $[ ] for the Bonus portion of the severance benefit under the Severance Plan; provided, however, that if my Separation Date is on or after the date on which a deferral election under the Norfolk Southern Corporation Executives’ Deferred Compensation Plan (“EDCP”) becomes irrevocable (generally July 1), any portion of my Bonus for which I had made an election to defer under the EDCP will be paid under the terms of the EDCP and not under the Severance Plan.
C.Payment in the gross amount of $[ ], equal to full value of stock options, paid in a lump sum.
D.Payment in the gross amount of $36,000 for health coverage, paid in a lump sum.
E.Payment in the gross amount of $30,000 for outplacement services, paid in a lump sum.
F.Payment in the gross amount of $[ ], equal to full value of restricted share units, payable in separate installments at the time each underlying restricted stock unit award would have been distributed if I had continued in employment through each applicable distribution date.
G.Payment in the gross amount of $[ ], equal to Pro-rated value of Performance Share Units, payable in installments at the time each underlying Performance Share Unit award would have been distributed if I had continued in employment through December 31 of each Performance Cycle.
H.The payments provided in this Section 2A through 2E will be paid by direct deposit or, if not possible, by check sent by regular mail to my last known address, within 30 calendar days after the date on which Company receives an executed copy of this Release from me; provided, however, that if I am a “specified employee” within the meaning of Section 409A, any payment that is subject to Section 409A that is to be made under this Agreement that would otherwise be paid within six months after my separation from service will instead be paid in the seventh month following my separation from service Each installment payment provided in Section 2F and Section 2G will be paid by direct deposit or, if not possible, by check sent by regular mail to my last known address at the time provided in the underlying restricted stock unit award or following the conclusion of the Performance Cycle. All payments made under this Section 2 shall be net of all taxes, withholdings and any other amount required by law to be withheld from such payments. Furthermore, debts owed to the Company may also be deducted from the payments.
3.Release of COMPANY.
In consideration of the Payment and Benefits provided for in Section 2:
A.On behalf of myself and my heirs and personal representatives, I hereby surrender any right to employment with Company and its predecessors, successors, and assigns, as well as its subsidiaries, affiliates, and parents (cumulatively referred to as the “Affiliates”), and release and forever discharge Company and the Affiliates, and their respective past, present and future partners, principals, managers, directors, officers, employees, agents, attorneys, employee benefit plans, trustees and all others acting in concert with them, from any and all claims, actions, suits, proceedings, complaints, causes of action, grievances, debts, costs and expenses (including attorney’s fees), at law or in equity, known or unknown, that I: (i) have or may have through the date I sign this Release, arising out of, based on, or relating in any way to any acts or omissions that occurred, in whole or in part, prior to the time that I sign this Release, including, but not limited to: claims for breach of any express or implied contract, wrongful termination, retaliation, defamation of character, personal injury, intentional or negligent infliction of emotional distress, discrimination or harassment based on race, religion, sex, age, color, handicap and/or disability, national origin, or any other protected class, and any other claim based on or related to my employment with Company or my departure therefrom, including but not limited to claims under ERISA, Title VII of the Civil Rights Act of 1964, Section 1981 of Title 42 of the United States Code, the Civil Rights Act of 1866, Executive Order 11246, the Equal Pay Act, the Americans with Disabilities Act, the Rehabilitation Act of 1973, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Uniformed Services Employment and Reemployment Rights Act, the Occupational Safety and Health Act, the Federal Railroad Safety Act, the Federal Employers Liability Act, the Georgia Fair Employment Practices Act, the Virginia Human Rights Act, and any other federal, state or local statute or regulation, all as amended; and (ii) have or may have at any time before or after I sign this Release arising under, based on, or related to the Worker Adjustment and Retraining Notification Act. Nothing in this Release is intended to or shall be construed as an admission by Company or any of its Affiliates that any of them violated any law, interfered with any right, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to me or otherwise. Company and its Affiliates expressly deny any such illegal or wrongful conduct.
B.I do not waive, nor has Company asked me to waive, any rights or claims that cannot be released by law, such as any vested retirement benefits that I may have.
C.I agree that I will not provide any information, advice, or services to, and will not serve as a consulting or testifying expert witness for, any person, law firm, or entity in connection with any claim of any type or nature by that person, law firm, or entity against the Company or any of the Affiliates. Notwithstanding the foregoing, this Release does not and is not intended to prevent, restrict, or otherwise interfere with my right to: (i) provide information to any appropriate federal, state, or local governmental agency or court, including the Securities and Exchange Commission (“SEC”); (ii) testify, assist, participate in, or cooperate with the investigation of any charge or complaint pending before or being investigated by such governmental agency or court, or make any disclosures that are protected under the whistleblower provisions of federal law or regulation; (iii) receive a monetary award from the SEC related to my participation in an SEC investigation or proceeding; or (iv) enforce this Agreement.
4. Participant’s Covenants.
In consideration of the Payment and other benefits provided for in Section 2, I also covenant and agree that:
A.Confidentiality of Release.
Subject to Section 3(C) above, I shall hold this Release confidential, and not disclose its terms to anyone, except for my immediate family, legal counsel, and tax advisor, and that I will inform them of this confidentiality provision upon any such disclosure. I understand that this confidentiality provision is a material provision of this Release.
B.Confidentiality of Company Information.
Executive covenants and agrees that any confidential or proprietary information and any corporate policies, procedures and documents acquired by Executive during his employment with the Company is the exclusive property of the Company, and Executive acknowledges that he has no ownership interest or right of any kind to said property. Except as otherwise required by law, Executive agrees that he will not use or directly or indirectly, disclose or divulge to any unauthorized party for his own benefit or to the detriment of the Company, any such information that he may have acquired during his employment with the Company, whether or not developed or compiled by the Company and whether or not Executive was authorized to have access to such information. Executive covenants that he has returned all such information (as referenced in this section B) to the Company.
Executive further covenants that he will not disclose any trade secrets, customer lists, vendor and contractor rates, designs, information regarding product development, names of vendors and contractors, phone numbers or contact information of vendors and contractors, operating plans, strategic plans, marketing plans, sales plans, projected acquisitions or dispositions of properties, assets, or management agreements, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, purchasing agreements, financial records, or other financial, commercial, business or technical information relating to Company or any of the Affiliates or information designated as confidential or proprietary that Company or any of the Affiliates may receive belonging to suppliers, customers, or others who do business with Company or any of the Affiliates.
Notwithstanding the foregoing, this Release does not prohibit me from: (i) providing truthful testimony in response to compulsory legal process; (ii) participating in any government investigation; (iii) providing truthful statements in conjunction with any claim permitted to be brought by the employee; or (iv) providing information to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency.
C.Non-Disparagement Clause.
Subject to Section 3(C) above, I shall not make any disparaging comments, whether oral or written, regarding Company, its officers, directors, employees, agents, leadership, partners, owners, stockholders, predecessors, successors, assigns or any of the Affiliates and their respective agents, directors, officers, employees, representatives or attorneys. Such disparaging
comments include, but are not limited to, comments containing false or misleading information, or potentially having the effect of damaging the reputation of Company or its leadership.
D.Cooperation.
I agree that I will fully cooperate and assist in the transition of my work, files, and pending matters to other Company representatives as directed by Company. In addition, I will at all times, both before and after termination of employment, (a) provide reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during my employment with the Company, provided that such cooperation does not materially interfere with my then current employment, and (b) cooperate with the Company in executing and delivering documents requested by the Company, and taking any other actions, that are necessary or requested by the Company to assist the Company in patenting, copyrighting, or registering any programs, ideas, inventions, discoveries, patented or copyrighted material, or trademarks, and to vest title thereto in the Company.
E.Non-Compete.
I will not seek or accept employment with, or provide services to or on behalf of (including, but not limited to, as a consultant, independent contractor, director, owner, partner, joint venturer, or employee), a direct competitor of the Company for one (1) year from my Separation Date, unless I seek a waiver from the Chief Executive Officer of the Company, and the waiver is granted in writing.
For this purpose, a “direct competitor of the Company” is (i) any North American Class I freight rail carrier (including, without limitation, a holding or other company that controls or operates, or is controlled by or under common control with, any North American Class I rail carrier), or (ii) any short line or other rail carrier that is competing with the Company in North American markets in which the Company competes.
Nothing contained in this subsection will operate or be construed to restrict a lawyer in the practice of law in contravention of Rule 5.6 of the Virginia Rules of Professional Conduct or a similar professional conduct rule applicable to a lawyer who is an active member of any other state bar.
F. Remedies with Respect to Covenants.
I understand and agree that if I breach or threaten to breach the covenants and obligations contained in Section 4 of this Release, Company shall be entitled to the following remedies, which shall be cumulative and are not mutually exclusive:
i.I acknowledge and agree that my covenants and obligations with respect to Section 4 of this Release relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Company irreparable injury for which adequate remedies are not available at law. Therefore, I understand and agree that if I breach or threaten to breach the covenants and obligations of Section 4 of this Release, in any respect, Company shall be entitled to an injunction, restraining order or other equitable relief (without the requirement to post bond) to restrain such breach or threatened breach or otherwise specifically enforce the covenants and obligations set forth therein.
ii.I acknowledge and agree that the damages resulting from my breach of the covenants and obligations contained in Section 4 of this Release would be uncertain and difficult to ascertain.
5. Company Property.
As soon as practicable, but in no event later than the Effective Date of this Release, I shall return to Company: (A) any and all business equipment, credit cards, and other Company property made available for my use while an employee of Company; and (B) any files, data, or other copies of information (whether in hard copy or in electronic form) pertaining to Company or any of the Affiliates, or the business or operation thereof.
6. Agreement Not To Seek Reemployment
In consideration of the Payment and Benefits provided for in Section 2, I further agree that I will not reapply for work with Company or the Affiliates. I understand that if I apply for work with Company or the Affiliates, Company or the Affiliates will have the right to refuse to hire, rehire or otherwise engage me. I further agree that it will not constitute discrimination or retaliation if, in the future, Company declines to hire me or terminates me after inadvertently hiring, reinstating or engaging me.
7. Miscellaneous Other Terms.
A.I acknowledge that in executing this Release, I do not rely, and have not relied, upon any representation or statement made by Company, any of the Affiliates, or by any of its employees or representatives with regard to the subject matter hereof, other than documents specifically referenced in this Release.
B.I acknowledge that I was advised to consult with an attorney of my choice (at my expense) before I sign this Release. Company will rely on my signature on this Agreement as my representation that I have read this Release carefully before signing it, and that I have a full and complete understanding of its terms.
C.The language of all parts of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. To the extent there are any ambiguities in the terms of this Release, those ambiguities shall not be construed against one party or the other.
D.This Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Virginia, without regard to its choice of law rules. Employee consents to the personal jurisdiction of the federal and/or state courts serving the Commonwealth of Virginia and waives any defense of forum non conveniens. Employee agrees that any and all initial judicial actions related to this Agreement shall only be brought in the United States District Court for the Eastern District of Virginia, Norfolk Division, or the appropriate state court in the City of Norfolk, Virginia, regardless of Employee's place of residence or work location at the time of such action.
E.Should any provision of this Release be declared or be determined by any court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the
remaining parts, terms or provisions shall not be effected thereby, and said illegal, unenforceable, or invalid part, term or provision shall be deemed not to be a part of this Agreement.
F.This Release sets forth the entire agreement between the parties hereto and fully supersedes any and all prior agreements or understandings, written or oral, between the parties hereto pertaining to the subject matter hereof.
G.I agree that Company’s provision of the Payment and Benefits provided for in Section 2 does not constitute an acknowledgement that I have complied with this Release. I understand that Company specifically reserves the right to pursue legal remedies against me arising out of my noncompliance with this Agreement.
H.I represent and warrant that I have not incurred a work-related injury or occupational disease and that I am not suffering from any work-related injuries or occupational diseases and I further warrant that I am competent to execute this Release.
I.Section 409A Compliance. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), or an exemption or exclusion therefrom and, with respect to amounts that are subject to Code Section 409A, it is intended that this Agreement be administered in all respects in accordance with Code Section 409A. Each payment under this Agreement that constitutes nonqualified deferred compensation subject to Code Section 409A shall be treated as a separate payment for purposes of Code Section 409A. In no event may Executive (or Executive’s estate, in the event of Executive’s death), directly or indirectly, designate the taxable year of any payment to be made under the Agreement.
8. Time Limits, Revocation, and Effective Date.
A.I acknowledge and agree that I received this Release on _____________, _____. I understand that I have twenty-one (21) days from the date I received this Release to consider its terms. Any changes to this Release during that period, whether material or not, will not extend the 21-day period. If I sign this Release, I may still revoke my acceptance of the Release for up to seven (7) days after I sign it, by notifying Company in writing before the expiration of that seven-day period. If I decide to revoke the Release, the written revocation notice should be sent by email (with delivery confirmation notification) to Annie Adams at Annie.Adams@nscorp.com, with a copy to Vanessa Allen Sutherland at Vanessa.Sutherland@nscorp.com.
B.If not revoked, this Release will become effective on the eighth day after I sign it (“Effective Date”). If I do not sign this Release within the 21-day period, or if I timely revoke this Release during the seven-day revocation period, this Release will not become effective and I will not be entitled to the Payment and Benefits provided for in Section 2.
Norfolk Southern Corporation
By: ____________________________
____________________________________
(Executive Signature – DO NOT PRINT)
________________________________
Date Signed
AGREEMENT
This agreement, dated as of [DATE](Agreement) between Norfolk Southern Corporation (Corporation) and [NAME], Employee ID No. [##] memorializes your entitlement to certain rights and benefits that would mature upon, and only upon, your Termination (this and other terms not defined in the text are defined in Attachment A hereto) following a Change in Control and your commitment not to engage in Competing Employment for certain periods; (2) absent such Termination, is not intended to affect, and shall not be construed as affecting, the compensation and benefits you are entitled to receive, except as otherwise provided in Article III, subparagraph (iii)(d) of the Agreement; and (3) is not under any circumstances a contract or guarantee of employment with the Corporation. Moreover, upon the happening of such conditions, your rights under any and all employee retirement income or welfare benefit policies, plans, programs or arrangements of the Corporation in which you participate shall be governed by the terms thereof and, except as herein expressly provided, shall not be enlarged hereunder or otherwise affected hereby.
The Agreement's terms and protections reflect the Corporation's beliefs that, in the event of a potential Change in Control, (1) the best interests of its stockholders require management focus and continuity; and (2) such focus and continuity will be enhanced by providing economic protection to officers and other key employees whose employment is most likely to be affected adversely by such a change.
As consideration for the Corporation's offer of this Agreement, and by your acceptance of it, you hereby covenant and agree as follows:
(i) in the event you (a) are Terminated following a Change in Control and (b) accept any benefits provided for in Article III of this Agreement, you will engage in no Competing Employment for the one-year period that begins on your Termination Date;
(ii) you waive, forgo and otherwise renounce, on your behalf and that of any individual or organization that does or may claim through you, any and all benefits (including without limitation any prior notice of agreement termination therein provided) to which you may or would be entitled under and by virtue of any other agreement, including amendments and supplements thereto, as in effect on the date hereof between you and the Corporation affording you benefits in the event of your Termination, with the result that all and any such agreements, from and after the date hereof, shall have no force and effect; and
(iii)if, prior to a Change in Control, a modification in the nature of your responsibilities with the Corporation (Reassignment) results in a change in the maximum percentage of your salary that may be earned as incentive compensation (Participation Level), upon the effective date of your Reassignment (Reassignment Date), you will become and be eligible to receive only those benefits following a Change in Control as are other individuals at the Participation Level applicable to your new position, the Corporation hereby undertakes to furnish you a new agreement or to furnish an amendment or supplement to this Agreement, to reflect your changed benefits, but its failure or omission to do so shall not affect the benefits to which, under this subparagraph (iii), you are entitled upon and after such Reassignment Date.
I. Effective Date and Term
This Agreement is effective and its term (Term) begins on the date hereof; its Term ends on the earliest of:
1.(i) the date, prior to a Change in Control, you cease to be an employee of the Corporation;
2.(ii) the date, prior to a Change in Control, you cease to be eligible to participate in the Corporation's Executive Management Incentive Plan or Management Incentive Plan, or any successor plan[s] or program[s]; and
(iii) the date, prior to a Change in Control, that is twenty-four (24) months after you or the Corporation gives notice to the other of the termination of this Agreement, provided, however, that if a Change in Control occurs during the Term hereof, this agreement shall terminate after a period of twenty-four (24) months, beginning on the first day of the month next following the month in which the Change in Control occurs (such period, plus the portion of the month following the Change in Control in which the Change in Control occurs, constituting "the Change in Control Period").
II. Binding on Successors
The Corporation shall require any successor (whether direct or in-direct, by purchase, merger, consolidation, reorganization, share exchange or otherwise) to all or substantially all of the business and/or assets of the Corporation (Successor; and such result, Succession) by agreement, in form and substance satisfactory to the Corporation's chief legal officer or his designee(s), serving immediately prior to the Change in Control, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Corporation would have been required to perform it had no such Succession occurred. This Agreement shall be binding upon and inure to the benefit of the Corporation and any Successor (and, from and after any such Succession, that Successor shall be deemed the
"Corporation" for purposes of this Agreement), but otherwise the Corporation shall not assign or transfer any of its rights, or delegate any of its duties or obligations, hereunder.
III. Protection Afforded by the Agreement During the Change in Control Period
Except as limited by subparagraph (ii) concerning retirement, in the event of your Termination during the Change in Control Period, the Corporation shall pay you within ten (10) business days after your Termination Date the Severance Pay indicated in subparagraph (i) herein:
(i) Severance Pay. In lieu of, and in full satisfaction of any and all claims you have or may have thereafter to receive severance pay or benefits under the Norfolk Southern Corporation Severance Pay Plan (or any successor severance pay plan), or to earn any base salary or incentive awards that you had not earned as of your Termination Date, you shall receive a lump-sum payment (Severance Pay) equal to 2.99 times the sum of:
(a) an amount equal to your Base Pay (determined in accordance with Item (B)(ii) in Attachment A); and
(b) an amount equal to your Incentive Pay (determined in accordance with Item (H) in Attachment A).
(ii) Special Proviso for Those Eligible to Retire. If on your Termination Date you are eligible to retire under the provisions of any of the Corporation's retirement plans (excluding any special, temporary early retirement amendment[s]), as in effect either on the day immediately preceding the Change in Control or on your Termination Date, you may elect to retire on your Termination Date by giving the Corporation written notice as provided in this subparagraph (ii). Not later than two (2) business days following, but not including, the date on which Notice of Termination is given (whether by you or by the Corporation), the Corporation shall advise you in writing of your right herein provided to elect to retire. If you wish to exercise that right, you must so advise the Corporation prior to your Termination Date on an election form it provides and in the manner prescribed under Article IX.
If and only if you make this election, your retirement will be deemed to have occurred simultaneously with your Termination Date (provided, however, that the "effective date" of such retirement for purposes of such retirement plans shall be as provided under such plans), and, instead of your having the rights provided in this Article III, your rights shall be governed by the retiree (or any specific change in control) provisions of the respective, applicable plans (as to each, on the terms most favorable to you under such plan [excluding any special, temporary early retirement amendment(s)] as in effect either immediately preceding the Change in Control or on your Termination Date), provided, however, that if you make the election herein afforded, you shall still receive the Severance Payments called for in subparagraph (i), and (2) any deferred compensation that you are eligible to receive under this subparagraph (ii) shall be paid in accordance with clause (b) or clause (c) of subparagraph (iii), as applicable, as if your retirement had been a Termination.
(iii) Special Provisions for Deferred Compensation. To the extent that any amount payable under this Article III constitutes “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code, the amount shall be subject to the rules set forth below in this subparagraph (iii).
(a) No Revocation of Deferral Election. If you have elected to defer all or any portion of your base pay or incentive pay under the terms of the Executives' Deferred Compensation Plan (or any successor plan[s] or program[s]), and your deferral election has become irrevocable on or before your Termination Date, a corresponding portion of the Base Pay or Incentive Pay provided under subparagraph (i)(a) or (i)(b), above, shall not be paid in a lump sum within 10 days after your Termination Date, but instead shall be deferred and paid out solely under the terms of the Executives' Deferred Compensation Plan (or any successor plan[s] or program[s]), as modified (if applicable) by this subparagraph (iii). The special provision in this clause (a) is intended, and shall be applied, solely to
prevent your deferral election or an automatic deferral provision from being revocable or from providing an accelerated payment to the extent such revocation or accelerated payment would violate Section 409A of the Internal Revenue Code.
(b) Payment Following A Section 409A Change in Control. If the Change in Control is a Section 409A Change in Control, as defined in Item (J) in Attachment A, and your Termination Date occurs within 24 months after the Section 409A Change in Control, your entire benefit shall be paid as provided in this Agreement, including clause (a) and clause (e) of this subparagraph (iii).
(c) Payment Following Any Other Change in Control. If the Change in Control is not a Section 409A Change in Control, or if your Termination Date occurs within the Change in Control Period but more than 24 months after the Change in Control, your deferred compensation shall be paid as follows:
(1) Your Severance Pay shall be paid as provided in this Agreement, including clause (a) and clause (e) of this subparagraph (iii).
(2) Your deferred compensation under the Executives’ Deferred Compensation Plan or any successor plan[s] or program[s] shall be paid at the time and in the form provided under the applicable terms of the plan in which you earned the benefit, without any acceleration or other alteration in the time and form of payment as a result of the Change in Control.
(d)Voluntary Termination Following A Section 409A Change in Control. If your employment terminates voluntarily (without good reason) within 24 months following a Section 409A Change in Control, so that your termination is a “separation from service” within the meaning of Section 409A of the Internal Revenue Code but is not a “Termination” within the meaning of Item (L) in Attachment A, then your deferred compensation shall be paid at the time and in the form provided under the applicable terms of the plan in which you earned the benefit.
(e)Six-Month Delay for Specified Employees. If, on your Termination Date, you are a “Specified Employee” within the meaning of Item (K) in Attachment A, any portion of your deferred compensation shall be paid no earlier than six months after your Termination Date. During any period in which a payment to which you are otherwise entitled under this Agreement is delayed solely as a result of this clause (e), the payment shall be credited with interest during the period from your Termination Date until the benefit is distributed at 120% of the short term Applicable Federal Rate determined under Section 1274(d) of the Internal Revenue Code that is in effect on your Termination Date.
There shall be no right of setoff or counterclaim in respect of any claim, debt or obligation against any payment to, or benefit for, you provided for in this Agreement.
Without limiting your rights to arbitration, at law or in equity, if the Corporation fails on a timely basis to make any payment required to be made pursuant to provisions under this Article III, the Corporation shall pay interest on the amount thereof at an annualized rate of interest equal to three percent (3%) above the then-applicable Prime Rate ("Prime Rate" means the rate of interest publicly announced by JP Morgan Chase Bank in New York City, or its successor, from time to time as its prime rate), unless the payment is subject to a bona fide dispute between the parties that is being pursued in good faith and that has not been finally resolved.
IV. No Mitigation Obligation
You and the Corporation agree that payments made by the Corporation pursuant to this Agreement will be liquidated damages (and in lieu of any claims for any breach whatsoever of this Agreement by the Corporation) and that you will not be required to mitigate the amount of any such payment by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever, other than from Competing Employment, create any mitigation, offset reduction or other obligation on your part hereunder or otherwise.
V. Arbitration
Any controversy or claim between you and the Corporation arising out of or relating to the existence, enforceability, terms or application of this Agreement or any breach or alleged breach thereof, shall be settled by three (3) arbitrators, one of whom shall be appointed by the Corporation, one by you and the third of whom shall be appointed by the first two arbitrators. If the first two arbitrators cannot agree on the third arbitrator required to be appointed hereunder, then such arbitrator shall be appointed by the Chief Judge of the United States District Court for the district having jurisdiction of the city or other municipality in which the arbitration is to be held. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators, which shall be as hereinbefore provided. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitrators shall have no authority to award punitive, incidental or consequential damages, and they shall apply the substantive law of the Commonwealth of Virginia in reaching a decision.
If you determine in good faith to retain legal counsel and/or to incur other reasonable costs or expenses in connection with any such arbitration or to enforce any or all of your rights under this Agreement or under any arbitration award, the Corporation shall pay all such attorneys' fees, costs and expenses you incur during your lifetime or in the five-year period following your death in connection with non-frivolous applications to interpret or enforce your rights, including enforcement of any arbitration award in court, regardless of the final outcome. Taxable reimbursements shall be provided under this Article V subject to the following requirements: (A) all reimbursements shall be provided pursuant to a written policy that provides an objectively determinable nondiscretionary description of the reimbursements provided; (B) all reimbursements shall be paid no later than the end of the calendar year following the year in which the expense was incurred; (C) no reimbursement shall be subject to liquidation or exchange for another benefit; and (D) the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year. In addition, during the pendency of such arbitration, the Corporation will continue to pay you, with the customary frequency, the greater of your Base Pay as in effect immediately prior to the Change in Control or immediately prior to your Termination until the controversy or claim finally is resolved in accordance herewith.
These payments hereunder shall be in addition to, and not in derogation or mitigation of any other payment or benefit due you under this Agreement. If you are a Specified Employee on your Termination Date, the payments described in this paragraph shall be subject to the six-month delay as provided in the following paragraph.
If you are a Specified Employee on your Termination Date, the only taxable payments or reimbursements provided under this Article V during the first six months following your Termination Date shall be reimbursements that you could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income). After the end of the sixth month following your Termination Date, taxable reimbursements and Base Pay shall be provided as described in the preceding paragraph of this Article V. Any taxable reimbursements and Base Pay that otherwise would have been paid during the first six months following your Termination Date if you had not been a Specified Employee shall be paid or reimbursed in a lump sum, on the first regular payroll date after the end of the sixth month following your Termination Date, with interest payable on such amount at 120% of the short term Applicable Federal Rate determined under Section 1274(d) of the Internal Revenue Code that is in effect on your Termination Date.
Notwithstanding any other provision hereof, the parties' respective rights and obligations under this Article V will survive a termination or expiration of this Agreement or the termination of your employment for any reason whatsoever.
VI. Employment Rights
Nothing expressed or implied in this Agreement shall create any right or duty on your part or that of the Corporation to have you remain in the employment of the Corporation prior to or following any Change in Control.
VII. Withholding of Taxes and Liability for Taxes
The Corporation may withhold from any amounts payable under this Agreement all federal, state, city, local or other taxes as shall be required pursuant to any law or governmental regulation or ruling.
VIII. Personal Nature of Agreement
This Agreement is personal in nature, and neither you nor the Corporation (except as provided under the caption "Binding on Successors"), without the prior written consent of the other, shall assign or transfer any of its rights, or delegate any of its duties or obligations, except as expressly provided under this caption. Without limiting the generality and effect of the foregoing, your right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by will or by the laws of descent and distribution; in no event shall the Corporation have any obligation or liability to recognize or honor any attempted assignment or transfer that is contrary hereto.
IX. Notice
For all purposes of this Agreement, except as otherwise expressly provided in subparagraph (ii) of Article III, all communications, including without limitation, notices, consents, requests and approvals, provided for herein shall be in writing and shall be deemed to have been duly given when (1) actually
delivered or (2) if mailed, five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid,
(i) if to the Corporation, to the attention of its Corporate Secretary at its principal executive office at the time, and
(ii) if to you, at the address at the time on file with the Corporation as your principal residence address, or
(iii)in either case, to such other address as either the Corporation or you shall have furnished the other in writing and in accordance herewith, provided, however, that notices of change of address hereunder shall be effective only upon actual receipt.
X. Governing Law
The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Virginia, without giving effect to the Commonwealth's principles of conflicts of law, save those permitting the parties to an agreement to stipulate the substantive law applicable to the agreement and the procedural law applicable to suits, actions or proceeding relating to it.
XI. Validity/Severability
If any provision of this Agreement or the application of any provision hereof to any person (including a Person) or circumstance is held invalid, illegal or unenforceable, the remainder of this Agreement and the application of such provision to any other person (including a Person) shall not be affected, and the provision(s) so held to be invalid, illegal or unenforceable shall be reformed or excised in good faith by the Corporation, without the necessity of your agreeing thereto, to the extent (and only to the extent) necessary to make it or them valid, legal or enforceable.
XII. Miscellaneous
No provision of this Agreement may be amended, modified, waived or discharged unless such amendment, modification, waiver or discharge is agreed to in a writing signed by you and the Corporation. No waiver by either party hereto at any time of any breach or of compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
XIII. Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Board of Directors of the Corporation has directed that this Agreement be executed and delivered on its behalf by one or more officers of the Corporation thereunto duly
authorized, and you have indicated your acceptance of and intent to be bound by this Agreement in the space provided below.
NORFOLK SOUTHERN CORPORATION
By: __________________________________
Name:
Title:
Accepted:
By: ____________________________________
Being the same individual named
in the preamble hereto and referred
to as "You" in the text.
Date:____________________________________
Attachment A
CERTAIN DEFINITIONS
For purposes of this Agreement:
(A) Actual Incentive Pay Percentage means, in any given year, the percentage actually earned, as determined pursuant to the authority of the Board of Directors, of the maximum potential bonus amount potentially payable to participants in the Corporation's Executive Management Incentive Plan and its Management Incentive Plan, or any successor plan[s] or program[s] to either or both (respectively, EMIP and MIP).
(B) Base Pay means
(i) in determining whether a Termination has occurred, the gross amount of your annual salary in effect on the date of a Change in Control (the gross amount you actually were paid in the pay period coinciding with or immediately preceding the date of the Change in Control, multiplied by the number of pay periods in the year or otherwise determined and expressed as an annual amount).
(ii) in calculating the amount of Severance Pay, the larger of (a) or (b), in either case as limited by (c):
(a) the amount calculated under Item (B)(i); or
(b) the amount calculated as provided in Item (B)(i), but substituting "Termination Date" for "date of a Change in Control" wherever the latter term appears; and
(c) further provided that, Base Pay used in calculating the amount Severance Pay may not exceed 2.99 times the sum of your annual salary paid during the twelve-month period immediately preceding your Termination Date.
(C) Beneficial Owner means any Person who, under Rule 13d-3 (or successor rules or regulations thereto) promulgated under the Securities Exchange Act of 1934, would be deemed beneficially to own Voting Stock.
(D) Cause refers to your having engaged in any of the following if the result of the same is materially harmful to the Corporation:
(i) an intentional act of fraud, embezzlement or theft in connection with your duties or in the course of your employment with the Corporation;
(ii) intentional wrongful damage to property of the Corporation;
(iii) intentional wrongful disclosure of secret processes or of confidential information of the Corporation; or
(iv) intentional violation of the Corporation's Code of Conduct/Ethics (or any successor[s]) as in effect immediately prior to a Change in Control.
For these purposes, an act or failure to act on your part shall be deemed "intentional" only if you acted or omitted to act otherwise than in accordance with your good faith business judgment of the best interests of the Corporation; in determining whether this standard has been satisfied, you shall be afforded all the presumptions and be entitled to all the protections available to directors under Section 13.1-690 of the Virginia Stock Corporation Act.
(E) A Change in Control occurs upon any of the following circumstances or events:
(i) The Corporation consummates a merger or other similar control-type transaction or transactions (however denominated or effectuated) with another corporation or other Person (Combination), and immediately thereafter less than eighty percent (80%) of the combined voting power of the then-outstanding securities of such corporation or Person is held in the aggregate by the holders of securities entitled, immediately prior to such Combination, to vote generally in the election of directors of the Corporation (Voting Stock);
(ii) The Corporation consummates any stockholder-approved consolidation or dissolution (however denominated or effectuated) pursuant to a recommendation of the Board;
(iii) At any time, Continuing Directors (as herein defined) shall not constitute a majority of the members of the Board ("Continuing Director" means (i) each individual who has been a director of the Corporation for at least twenty-four (24) consecutive months before such time and (ii) each individual who was nominated or elected to be a director of the Corporation by at least two thirds of the Continuing Directors at the time of such nomination or election);
(iv) The Corporation sells all or substantially all of its assets to any other corporation or other Person, and less than eighty percent (80%) of the combined voting power of the then-outstanding securities of such corporation or Person immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such sale;
(v) A report is filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), pursuant to the Securities Exchange Act of 1934, as amended (Exchange Act), disclosing that any Person has become the Beneficial Owner of twenty (20) or more percent of the voting power of Voting Stock; or
(vi) The Board determines by a majority vote that, because of the occurrence, or the threat or imminence of the occurrence, of another event or situation with import or effects similar to the foregoing, those who have accepted an agreement of this type are entitled to its protections.
Notwithstanding the provisions of the foregoing subparagraph (v), unless otherwise determined in a specific case by majority vote of the Board, a Change in Control for purposes of this Agreement shall not be deemed to have occurred solely because (a) the Corporation, (b) an entity of which the Corporation is the direct or indirect Beneficial Owner of 50 or more percent of the voting securities or (c) any Corporation-sponsored employee stock ownership plan or any other employee benefit plan of the Corporation either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K, or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because the Corporation reports that a change in control of the Corporation has or may have occurred or will or may occur in the future by reason of such beneficial ownership.
(F) Competing Employment means the provision of services of any type, kind or nature and in any capacity (whether as a director, partner, officer, employee, independent contractor, consultant or otherwise), whether or not for compensation or other remuneration of any type, kind or nature (current or deferred and whether or not paid or payable to you, or at your direction), to any organization or person
(i) that is, or
(ii) that controls, or
(iii) that is controlled by, or
(iv) one of whose customers or clients which accounted for 5% or more of the organization's or person's gross revenues in the immediately preceding fiscal year or is likely to account for 5% or more of such gross revenues in the current or next succeeding fiscal year is:
(a) a Class I railroad operating in the United States, Canada or Mexico; or
(b) a provider or arranger (as to either - one incorporated under the laws of the United States or of any state or political subdivision of either or both) of intermodal services of any kind or nature, any portion of which services is provided or arranged in the United States,
provided, however, that the provision of services otherwise prohibited by the foregoing may be permitted if, in the sole judgment of the Corporation's chief legal officer at the time, in providing such services, you do not draw or rely extensively on, or use for a purpose contrary to the Corporation's business interests, the experience and expertise you acquired during and as a result of your employment with, or that you used or employed for the benefit of, the Corporation.
(G) Incentive Opportunity means the percentage of your salary or other fixed compensation that, in accordance with all applicable provisions of the EMIP and MIP – including, without limitation, earnings and return targets - in effect immediately prior to the Change in Control, could be earned as incentive pay.
(H) Incentive Pay means the product of (i) and (ii), as limited by (iii), where:
(i) is 100% of the larger of your Incentive Opportunity
(a) on your Termination Date; or
(b) immediately preceding the date of the Change in Control; and
(ii) is your Base Pay; and
(iii) Incentive Pay used in calculating the amount of your Severance Pay may not exceed 2.99 times the target incentive payment for which you are eligible for the entire current year under the terms of EMIP or MIP (or successor plan[s] or program[s]).
(I) Person means any "person" as that term is used in the Exchange Act or any rules and regulations promulgated thereunder, including any "affiliate" or "associate" of any person, as those terms are used in the Exchange Act or any rules and regulations promulgated thereunder.
(J) Section 409A Change in Control means any event that qualifies as a "Change in Control" (as defined in Item (H), above), and that also constitutes a "change in ownership," "change in effective control," or "change in the ownership of a substantial portion of the Corporation’s assets" with respect to you, as defined in regulations or other guidance under Section 409A of the Internal Revenue Code.
(K) Specified Employee means an officer of the Corporation or of any company controlled by or under common control with the Corporation within the meaning of Section 414(b) or (c) of the Internal Revenue Code (including the Corporation, an “NSC Company”) with annual compensation greater than $130,000 indexed), a five percent (5%) owner of an NSC Company, or a one percent (1%) owner of an NSC Company with annual compensation greater than $150,000 (not indexed), determined in each case in accordance with Section 409A of the Internal Revenue Code. If all NSC Companies have (in the aggregate) more than 50 officers whose annual compensation exceeds $130,000 (indexed), only the 50 officers with the greatest annual compensation shall be considered “Specified Employees.” For purposes of this definition, “annual compensation” shall be determined on the basis of Internal Revenue Service Form W-2, Wage and Tax Statement, excluding foreign compensation.
If an individual meets the definition of “Specified Employee” at any time during a calendar year, the individual shall be a “Specified Employee” during the 12-month period beginning on the following April 1.
(L) Termination means your “separation from service” within the meaning of Section 409A of the Internal Revenue Code and the regulations thereunder in the circumstances described in (i) or (ii) below.
(i) If a condition listed in any one or more of (a) through (h), below, occurs without your prior written consent during the Change in Control Period and results in a material negative change in your relationship with the Corporation, your “separation from service” within the meaning of Section 409A of the Internal Revenue Code, excluding a separation from service on account of disability or death, within two years after the initial existence of the condition:
(a) You are not elected or reelected to the office of the Corporation you held immediately prior to the Change in Control, or - if you were serving as a director of the Corporation immediately prior to the Change in Control - you are removed as a director;
(b) Your Base Pay is, or when annualized will be, materially less than the amount determined in accordance with (B)(i) herein;
(c) Your Incentive Opportunity is materially less than that provided for under Item (G) herein;
(d) The Corporation, except to meet the requirements of applicable federal or state law, (i) terminates, or (ii) materially reduces the value or scope of your rights to any benefits to which you are entitled, and which (before the reduction or termination) have substantial value;
(e) You determine in good faith that following a Change in Control, you have been rendered substantially unable to carry out or have suffered a substantial reduction in any of the substantial authorities, powers, functions, responsibilities or duties attached to the position you held immediately prior to the Change in Control;
(f) The liquidation, dissolution, merger, consolidation or reorganization of the Corporation or the transfer of all or a significant portion of its business and/or assets, unless the successor or
successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all the duties and obligations of the Corporation under this Agreement either by operation of law or pursuant to the provisions under the Agreement caption "Binding on Successors";
(g) The Corporation requires you to relocate your principal location of work outside a circle having (i) as its center your principal location of work immediately prior to the Change in Control and (ii) a radius of fifty (50) miles, or requires you to travel away from your office in the course of discharging your responsibilities or duties hereunder significantly more (in terms either of consecutive days or of aggregate days in any calendar year) than was required of you immediately prior to the Change in Control; or
(h) Without limiting the generality or the effect of the foregoing, any material breach of this Agreement by the Corporation or any successor thereto.
If a condition listed in (a) through (h) occurs, you must provide the Corporation with written notice of the condition within 90 calendar days after the initial existence of the condition, and you must allow the Corporation at least 30 calendar days in which to remedy the condition. If the Corporation remedies the condition within the 30-day period, the condition shall not provide a reason for your Termination.
OR
(ii) The termination of your employment by the Corporation, during the twenty-four months next succeeding a Change in Control, for any reason except:
(a) Your death;
(b) Your Total Disability, as defined in the Long Term Disability Plan of Norfolk Southern Corporation and Participating Subsidiary Companies (or any plan that is successor or in addition thereto), as then in effect, and you begin to receive disability benefits pursuant to that plan;
(c) Your retirement pursuant to any Board-approved policy or plan, on the terms in effect immediately prior to the Change in Control, providing for mandatory retirement of certain personnel; or
(d) Cause.
(M) Termination Date means the date on which your Termination becomes effective, as specified in the Notice of Termination (hereinafter defined) or as otherwise occurring.
For these purposes, any purported termination of your employment by the Corporation or by you shall be communicated by written Notice of Termination to the other party hereto, delivered in accordance with the caption concerning "Notice" in the Agreement. The Notice of Termination shall
(i) indicate the specific Termination provision relied upon;
(ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination under the provision(s) so indicated; and
(iii) shall specify the Termination Date, which:
(a) if the Termination is for Cause, shall be a date not less than thirty (30) days from the date the Notice of Termination is given; and
(b) if the Termination is not for Cause, shall be a date not less than fifteen (15) nor more than sixty (60) days after such Notice of Termination is given.