Document:

Exhibit 10.1

 

AMENDMENT NO. 3

TO

CHRISTOPHER & BANKS
CORPORATION

2005 STOCK INCENTIVE PLAN

 

This Amendment No. 3 to the Christopher & Banks
Corporation 2005 Stock Incentive Plan (the “Plan”) is hereby approved by the
Christopher & Banks Corporation Board of Directors (the “Board”) to be
effective April 18, 2007, subject to stockholder approval.

 

WHEREAS,  the Plan was approved by the Board on April 7, 2005 and by
the stockholders of the Company on July 27, 2005; and

 

WHEREAS, the
Board approved Amendment No. 1 to the Plan effective July 26, 2006; and

 

WHEREAS, the
Board approved Amendment No. 2 to the Plan effective September 21, 2006; and

 

WHEREAS,
pursuant to Section 13.2 of the Plan, which provides that the Board may at any
time and from time to time and in any respect, amend or modify the Plan and
seek the approval of any amendment or modification by the Company’s
stockholders to the extent the Board deems necessary or advisable, the Board,
on April 18, 2007, approved amending the Plan to increase the number of shares
reserved for issuance under the Plan from 800,000 to 1,800,000 and authorized
the seeking of stockholder approval of such amendment; and

 

WHEREAS, the
Stockholders of the Corporation, at the Annual Meeting of Stockholders held
August 1, 2007, approved an amendment increasing the number of shares reserved
for issuance under the Plan as authorized by the Board.

 

NOW, THEREFORE, BE IT RESOLVED,
that Section 4.1 of the Plan is hereby amended and restated in its entirety to
read as follows:

 

4.1                                 Maximum Share Limitations. Subject to adjustment pursuant to
Section 4.3 hereof, the maximum aggregate number of shares of Common Stock
that may be issued and sold under all Awards granted under the Plan shall be
1,800,000 shares. Of such aggregate Plan limit, the maximum number of shares of
Common Stock that may be issued as Incentive Stock Options under the Plan shall
be limited to 1,800,000 shares. Each of the foregoing numerical limitations
stated in this Section 4.1 shall be subject to adjustment in accordance with
the provisions of Section 4.3. Shares of Common Stock issued and sold
under the Plan may be either authorized but unissued shares or shares held in
the Company’s treasury. To the extent that any Award involving the issuance of
shares of Common Stock is forfeited, cancelled, returned to the Company for
failure to satisfy vesting requirements or other conditions of the Award, or
otherwise terminates without an issuance of shares of Common Stock being made
thereunder, the shares of Common Stock covered thereby will no longer be
counted against the foregoing maximum share limitations and may again be made
subject to Awards under the Plan pursuant to such limitations. Any Awards or
portions thereof that are settled in cash and not in shares of Common Stock
shall not be counted against the foregoing maximum share limitations.

 

FURTHER RESOLVED,
that all other terms of the Plan shall remain in full force and effect, except
to the extent inconsistent with the restated Section 4.1 set forth above.Exhibit 10.1

 

NATIONAL SEMICONDUCTOR CORPORATION

2007 EMPLOYEES EQUITY PLAN

 

1.                                      OBJECTIVE

 

The
National Semiconductor Corporation 2007 Employees Equity Plan is intended to
align the interests of eligible employees of the Company with the interests of
the stockholders of National Semiconductor Corporation and to provide
incentives for such employees to exert maximum efforts for the success of the
Company. By extending to eligible employees the opportunity to acquire
proprietary interests in National Semiconductor Corporation and to participate
in its success, the Plan may be expected to benefit National Semiconductor
Corporation and its stockholders by making it possible for the Company to
attract and retain the best available talent and by rewarding key personnel for
their part in increasing the value of the capital stock of National
Semiconductor Corporation.

 

2.                                      DEFINITIONS

 

Whenever
used in this Plan, the following terms shall have the meaning set forth below
unless the context clearly indicates to the contrary.

 

Award:   Restricted Stock Unit, Restricted Stock or Option awarded to a
Participant pursuant to the Plan

 

Award Agreement:      An
agreement, which may be written or in electronic form, between NSC and the
Participant that sets forth the terms, conditions, limitations and restrictions
applicable to an Award.

 

Board:      The
Board of Directors of National Semiconductor Corporation.

 

Code:      Internal
Revenue Code of 1986, as amended.

 

Committee:      The
Compensation Committee of the Board. Unless otherwise determined by the Board,
the Committee shall be comprised solely of directors who are (a) “nonemployee
directors” under Rule 166-3 of the Securities Exchange Act of 1934, (b) “outside
directors” under Section 162(m) of the Code and (c) “independent directors”
pursuant to New York Stock Exchange requirements.

 

Common Stock:      National
Semiconductor Corporation’s common stock, par value $ .50 per share.

 

Company:      National
Semiconductor Corporation (“NSC”), a Delaware corporation, and any corporation
in which NSC controls directly or indirectly more than fifty percent (50%) of
the combined voting power of voting securities.

 

Disability:      Inability
to perform any services for the Company and

 

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eligible to receive
disability benefits under the standards used by the Company’s applicable
disability benefit plans or any successor plan thereto.

 

Effective Date:      The
date this Plan is approved by NSC’s stockholders.

 

Employee:      An
individual in the regular employ of the Company at any time.

 

Executive Officer:      An
officer of NSC identified as an executive officer of NSC in NSC’s annual report
on Form 10-K filed with the Securities and Exchange Commission.

 

Exercise Price:      Price
at which a share of Common Stock may be purchased pursuant to an exercise of an
Option.

 

Grant Date:      With
respect to an Award, the date that the Award was granted.

 

Fiscal Year:      The
fiscal year of the Company.

 

Immediate Family:      Parents
(including step-parents), spouses, children (including step-children and
adopted children) and siblings (including step-siblings).

 

Non-Qualified Stock Option:      Option
to purchase shares of Common Stock that is not intended to be an incentive
stock option, as that term is defined in the Code.

 

Participant:      An
Employee who has been granted an Award pursuant to the Plan.

 

Plan:      This
National Semiconductor Corporation 2007 Employees Equity Plan.

 

Option:      Non-Qualified
Stock Option.

 

Restricted Stock:      Common
Stock issued pursuant to the terms of this Plan that is subject to certain
restrictions and may be subject to the risk of forfeiture.

 

Restricted Stock Unit:      An
Award issued pursuant to Section 8 of the Plan.

 

Retirement:      Permanent
termination of employment with the Company and (a) age is either sixty-five
(65) or age is at least fifty-five (55) and years of service in the employ of
the Company is then (10) or more, and (b) the terminating employee has
confirmed to the Company that he or she does not intend to engage in a
full-time vocation.

 

Secretary:      The
Secretary of National Semiconductor Corporation.

 

Termination of Employment:      The
time when the employee-employer relationship between the Participant and the
Participant’s employer is terminated for any reason, with or without cause,
including, but not

 

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by way of limitation, a
termination upon the sale, merger or other disposition of Participant’s
employer; by reduction in force; resignation; discharge; death; Disability; or
Retirement, but excluding (i) terminations where there is a simultaneous
reemployment by the Company, or (ii) terminations where the Participant
continues a relationship (e.g., as a director or as a consultant) with the
Company.

 

3.                                       ADMINISTRATION

 

3.1           The Committee. The Plan shall be administered
by the Committee.

 

3.2           Authority of the Committee. It shall be the
duty of the Committee to administer the Plan in accordance with the Plan’s
provisions. The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but
not limited to, the power to (a) approve which Employees shall be granted
Awards, (b) prescribe the terms and conditions of the Awards, (c) interpret the
Plan and the Awards, (d) adopt such procedures and subplans as are necessary or
appropriate to permit participation in the Plan by Employees who are foreign
nationals or employed outside of the United States, (e) adopt rules for the
administration, interpretation and application of the Plan as are consistent
therewith and (f) interpret, amend or revoke any such rules. The Committee may
delegate any of its rights and duties under this Plan to the Chief Executive
Officer of NSC provided the Chief Executive Officer is also a member of the
Board.

 

3.3           Decisions Binding. All determinations and
decisions made by the Committee and the Board pursuant to the provisions of the
Plan shall be final, conclusive, and binding on all persons, and shall be given
the maximum deference permitted by law. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or an Award.

 

4.                                       SHARES SUBJECT TO THE PLAN

 

4.1           Number of Shares. Subject to adjustment as
provided in Section 4.3, the total number of shares available for issuance
under the Plan shall not exceed 14,000,000 which may be unissued shares, or
shares acquired by the Company, either on the market or otherwise. Of the total
number of shares of Common Stock that can be issued under the Plan, up to
1,000,000 shares may be issued in connection with Restricted Stock and
Restricted Stock Units and the balance remaining may be delivered upon exercise
of Options that may be granted under this Plan. The aggregate number of shares
of Common Stock made subject to Awards granted during the Fiscal Year to any
single Participant shall not exceed 250,000. No shares from any of NSC’s other
equity plans shall be available for Awards under this Plan and no Awards may be
made under this Plan until after the Effective Date.

 

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4.2           Expired Awards. If an Award is forfeited, cancelled, terminates,
expires, or lapses for any reason, any shares of Common Stock subject to such
Award shall again be available to be the subject of an Award. Notwithstanding
the foregoing, any shares of Common Stock that are exchanged by a Participant
or withheld by the Company as full or partial payment in connection with any
Awards under the Plan, as well as any shares exchanged by a Participant or
withheld by the Company or a Participant’s employing Company to satisfy the tax
withholding obligations related to any Award under the Plan, shall not be available
for subsequent Awards under the Plan.

 

4.2           Adjustments in Awards and Authorized Shares.
In the event that there is any change in the shares of NSC through any dividend
or other distribution (whether in the form of cash, shares of Common Stock,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of shares of Common Stock or other
securities of NSC, then the number of shares of Common Stock that may be
delivered under the Plan, the number, class, and price of shares of Common
Stock subject to outstanding Awards, and the numerical limits of Section 4.1
shall be appropriately adjusted. Notwithstanding the preceding, the number of
shares of Common Stock subject to any Award shall always be a whole number.

 

5.                                       ELIGIBILITY

 

Awards
may be granted under the Plan only to Employees of the Company who are not
Executive Officers. No Employee shall have the automatic right to receive an
Award under this Plan. Once having been selected to receive an Award, an
Employee has no right to be selected to receive a future Award.

 

6.                                       STOCK OPTIONS

 

6.1           Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as
determined by the Committee in its sole discretion. Subject to the limitations
provided in Section 4.1, the Committee shall determine the number of shares of
Common Stock subject to each Option.

 

6.2           Award Agreement. Each Option shall be
evidenced by an Award Agreement that shall specify the Exercise Price, the
expiration date of the Option, the number of shares of Common Stock to which
the Option pertains, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Committee may provide that Options become
exercisable in installments. The terms of the Award Agreement need not be
identical for all Participants or for each Option granted.

 

6.3           Exercise Price. The Exercise Price for each
Option shall be the closing price of the Common Stock on the New York Stock

 

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Exchange on the date the Option grant was approved by the Committee. If
there is no trading on such date, the Grant Date shall be the next date on
which the New York Stock Exchange is open for trading and the Exercise Price
shall be the closing price of the Common Stock on the New York Stock Exchange
on such Grant Date.

 

6.4           Term. The maximum term of any Option shall be
six years and one day from the Grant Date. The minimum full vesting period for
any Option shall be three years from the Grant Date. Subject to these limits,
the Committee shall provide in each Award Agreement when each Option expires
and becomes unexercisable.

 

6.5           Exercisability of Options.

 

6.5.1                                                Except as provided in Section 9.1.1, an
Option may not be exercised to any extent, either by the person to whom it was
granted, the grantee’s transferee, the grantee’s guardian or legal
representative or by any person after the grantee’s death, unless the person to
whom the Option was granted has remained in the continuous employ of the
Company for not less than six months from the date when the Option was granted.
Otherwise, each Option shall be exercisable as determined by the Committee.
Subject to the foregoing, Options shall be exercisable only after the vesting
requirements specified in the Option grant have been satisfied.

 

6.5.2                                                The Committee has the discretion to determine
whether Options granted shall be transferable without consideration to the
Participant’s Immediate Family members or family trusts for the benefit of the
Participant’s Immediate Family members. Options shall otherwise not be
transferable, either with or without consideration.

 

6.6                                 Payment of Purchase Price.

 

6.6.1                                                Options shall be exercised by the Participant’s
delivery of a notice of exercise (which may be in electronic form) to the
Company’s Stock Administration department (or such other designee as the
Company may identify), setting forth the number of shares with respect to which
the Option is to be exercised, accompanied by full payment for the shares. The
notice shall be given in the form and manner specified by the Company from time
to time.

 

6.6.2                                                Upon the exercise of any Option, the Exercise
Price shall be payable to the Company in full in cash or its equivalent.
Previously acquired

 

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shares of Common Stock that have been held by the
Participant for at least six months or a combination of cash and Common Stock
held by the Participant for at least six months may also be tendered to pay the
Exercise Price. Common Stock tendered in full or partial payment of the
Exercise Price shall be valued on the date of exercise at the opening price of
the Common Stock on the New York Stock Exchange on the date of exercise or, if
there shall be no trading on such date, then on the first previous date on
which there was such trading. As soon as practicable after receipt of a
notification of exercise and full payment for the shares of Common Stock
purchased, the Company shall deliver to the Participant (or to one of the
Company’s preferred brokers that is designated by the Participant), share
certificates (which may be in book entry form) representing such shares.

 

6.7           Termination Employment. An Option shall
terminate and may not be exercised if the Participant to whom it is granted
ceases to be continuously employed by the Company, except (subject nevertheless
to the last sentence of this Section 6.7): (a) if the Participant’s continuous
employment is terminated for any reason other than (i) Retirement, (ii)
Disability, or (iii) death, the Participant or the Participant’s transferee may
exercise the Option to the extent that the Participant was entitled to exercise
such Option at the date of such termination at any time within a period of
three (3) months following the date of such termination, or if the Participant
shall die within the period of three (3) months following the date of such
termination without having exercised such Option, the Option may be exercised
within a period of one year following the Participant’s death by the
Participant’s transferee or the person or persons to whom the Participant’s
rights under the Option otherwise pass by will or by the laws of descent or
distribution but only to the extent exercisable at the date of such
termination; (b) if the Participant’s continuous employment is terminated by
(i) Retirement, (ii) Disability, or (iii) death, the Option may be exercised in
accordance with its terms and conditions at any time within a period of five
(5) years following the date of such termination by the Participant or the
Participant’s transferee, or in the event of the Participant’s death, by the
persons to whom the Participant’s rights under the Option shall pass by will or
by the laws of descent or distribution; (c) if the Participant’s continuous
employment is terminated and within a period of ninety (90) days thereafter the
Participant returns to the active payroll as an Employee of the Company, the
Committee may reinstate any portion of the Option previously granted but not
exercised. Nothing contained in this Section 6.7 is intended to extend the
stated term of the Option and in no event may an Option be exercised by anyone
after the expiration of its stated term.

 

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7.                                       RESTRICTED STOCK.

 

7.1           Award Agreement. Restricted Stock shall be
issued only pursuant to a Restricted Stock Award Agreement entered into between
the Participant and the Company, which shall contain such terms and conditions
as the Committee shall determine, consistent with the Plan.

 

7.2           Consideration. The consideration for the
issuance of Restricted Stock shall be set by the Committee; provided, however, that such price shall not be less than
the par value of a share of Common Stock on the Grant Date, unless otherwise
permitted by applicable state law.

 

7.3           Restricted Stockholder Rights. Upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 7.6, the Participant
awarded Restricted Stock shall have all the rights of a stockholder with
respect to said shares, subject to the restrictions in his or her Restricted
Stock Award Agreement, including the right to vote the shares and to receive
all dividends or other distributions paid or made with respect to the shares.

 

7.4           Restriction Period. No shares of Restricted
Stock issued under this Plan may be sold, assigned or otherwise transferred
until a period of at least six months has elapsed from the date the Restricted
Stock was issued. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof as a result of stock
dividends, stock splits or any other forms of recapitalization) shall be
subject to such other restrictions, including performance based restrictions,
as the Committee shall provide in the terms of each individual Restricted Stock
Agreement. All restrictions imposed pursuant to this Section 7.4 shall expire
within six years and one day of the date of issuance. Notwithstanding the
foregoing, the minimum total period for restrictions based exclusively on the
passage of time and continued employment shall be no less than three years.
Restricted Stock may not be sold or encumbered until all restrictions are
terminated or expire.

 

7.5           Termination of Employment. Each individual
Restricted Stock Award Agreement shall provide that Restricted Stock subject to
restrictions under the Restricted Stock Agreement shall be reacquired by NSC
immediately upon a Termination of Employment for any reason; provided, however,
that the Committee may provide that no such reacquisition shall occur in the
event of a Termination of Employment because of the Restricted Stockholder’s
Retirement or Disability or death. If the Committee has determined that no such
reacquisition shall occur in the event of a Termination of Employment because
of a Restricted Stockholder’s Disability or death, the restrictions imposed
under the Restricted Stock Agreement shall immediately expire and the shares of
the Common Stock shall become available without restriction to the Restricted
Stockholder or to the Restricted Stockholder’s estate, as applicable. In cases
where the Committee

 

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has determined that no such reacquisition shall occur in the event of a
Termination of Employment because of a Restricted Stockholder’s Retirement: (i)
any time-based restrictions imposed under the Restricted Stock Agreement shall
immediately expire and the shares of Common Stock will become available to the
Restricted Stockholder without restriction; (ii) any performance-based
restrictions imposed under the Restricted Stock Agreement shall not expire and
shares of Common Stock will not become available without restriction to the
Restricted Stockholder until the applicable performance period has been
completed, the performance has been measured, and the final number of shares of
Common Stock earned by the Restricted Stockholder has been determined. Except
as provided herein, the Committee shall have the discretion to determine the
effect of all matters and questions relating to Termination of Employment,
including but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for cause, the question of whether a
Termination of Employment has occurred upon the sale, merger or other
disposition of the Participant’s employing company, and all questions of
whether particular leaves of absence constitute Termination of Employment.

 

7.6           Escrow Holder. The Secretary or such other
escrow holder as the Committee may appoint shall retain physical custody of the
certificates, which may be in book entry form, representing Restricted Stock
until all of the restrictions imposed under the Restricted Stock Award
Agreement expire or are removed. In no event shall any Participant awarded
Restricted Stock retain physical custody of any certificates representing
Restricted Stock issued to him or her.

 

7.7           Restrictive Legends. The Committee shall
cause a legend or legends to be placed on certificates representing all shares
of Restricted Stock that are still subject to restrictions under Restricted
Stock Agreements, which legend or legends shall make appropriate reference to
the conditions imposed thereby. If shares of Restricted Stock are in book entry
form, the Committee shall adopt such procedures and processes as are necessary
to ensure that the shares of Restricted Stock are not transferred until the
applicable restriction period has lapsed.

 

8.                                       RESTRICTED STOCK UNITS

 

8.1           Awards. The Committee is authorized to make
Awards of Restricted Stock Units to any Employee selected by the Committee in
such amounts and subject to such terms and conditions as determined by the
Committee. At the time of grant, the Committee shall specify the date or dates
on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting, including
performance conditions, as it deems appropriate. On the date established for
vesting, NSC shall transfer to the Participant one unrestricted, fully
transferable share of Common Stock, which may be in book entry form, for each
Restricted Stock Unit scheduled to be paid out on such date and not previously
forfeited.

 

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8.2           Term. The minimum vesting term for any
Restricted Stock Units shall be no less than six months. Otherwise, the term of
any Restricted Stock Units shall be set by the Committee in its discretion but
shall not be longer than six years and one day and the minimum term for full
vesting of any Restricted Stock Units where vesting is based solely on the
passage of time and continued employment shall be not less than three years.

 

8.3           Purchase Price. The Committee may establish
the purchase price, if any, of any Restricted Stock Units; provided,
however, that such price shall not be less than the par value of a
share of Common Stock on the Grant Date, unless otherwise permitted by
applicable state law.

 

8.4           Termination of Employment. An Award of
Restricted Stock Units shall only be payable while the Participant is an
Employee; provided, however, that the Committee in
its sole and absolute discretion may provide that an Award of Restricted Stock
Units may be paid subsequent to a Termination of Employment as a result of the
Participant’s Retirement, death or Disability. If the Committee has determined
that an Award of Restricted Stock Units may be paid subsequent to a Termination
of Employment as a result of the Participant’s death or Disability, the Award
shall be paid to the Participant (or the Participant’s estate, as applicable)
immediately upon the Participant’s Termination of Employment by reason of the
Participant’s death or Disability. If the Committee has determined that an
Award of Restricted Stock Units may be paid subsequent to a Termination of
Employment as a result of the Participant’s Retirement: (i) in cases of
time-based vesting conditions, the Award will be paid immediately upon
Retirement; (ii) in cases of performance-based vesting conditions, the Award
will be paid only after the applicable performance period has been completed,
the performance has been measured, and the final Award amount has been
determined. Except as provided herein, the Committee shall have the discretion
to determine the effect of all matters and questions relating to Termination of
Employment, including but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for cause, the question of
whether a Termination of Employment has occurred upon the sale, merger or
disposition of the Participant’s employing company, and all questions of
whether particular leaves of absence constitute Termination of Employment.

 

8.5           Additional Conditions. Any Award granted
pursuant to this Section 8 shall be subject to such additional terms and
conditions as determined by the Committee and shall be evidenced by an Award
Agreement.

 

9.                                       CHANGE-OF-CONTROL PROVISIONS

 

9.1           Impact. Notwithstanding any other provision
of the Plan to the contrary, in the event of a Change-of-Control:

 

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9.1.1        any Options outstanding as of the date such Change-of-Control occurs,
and which are not then exercisable and vested, shall become fully exercisable
and vested;

 

9.1.2        the restrictions imposed under each
Restricted Stock Award Agreement shall lapse, and each Participant shall be
entitled to receive the shares of Common Stock subject to the Restricted Stock
Award Agreement without restrictions;

 

9.1.3        all outstanding Restricted Stock Units shall
become fully vested and nonforfeitable and each Participant shall be entitled
to receive one share of Common Stock for each outstanding Restricted Stock
Unit.

 

Notwithstanding
any other provision of the Plan, in the event of a Change-in-Control in which
the consideration paid to the holders of shares of Common Stock is solely cash,
each Award shall, upon the occurrence of a Change-of-Control, be cancelled in
exchange for a payment in an amount equal to (i) the excess of the
consideration paid per share of Common Stock in the Change-of-Control over the
Exercise Price or other applicable purchase price per share of Common Stock
subject to the Award multiplied by (ii) the number of shares of Common Stock
granted under the Award.

 

9.2           Definition of Change-of-Control. For purposes
of the Plan, a “Change-of-Control” shall mean the happening of any of the
following events:

 

9.2.1        the acquisition by any individual, entity or
group (within the meaning of Section 13(d) (3) or 14(d) (2) of the Exchange
Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of either (x) the then
outstanding shares of NSC’s Common Stock (the “Outstanding Company Common Stock”)
or (y) the combined voting power of the then outstanding voting securities of
NSC entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this Section
9.2.1, the following acquisitions shall not be deemed to result in a
Change-of-Control: (i) any acquisition directly from NSC, (ii) any acquisition
by NSC, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by NSC or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of Section 9.2.3 below; or

 

9.2.2        individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by NSC’s stockholders, was approved by a vote of at

 

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least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or

 

9.2.3        the approval by the stockholders of NSC of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of NSC or the acquisition of assets of another
corporation (“Business Combination”) or, if consummation of such Business
Combination is subject, at the time of such approval by stockholders, to the
consent of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation) unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60%,
respectively, of the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns NSC or all or
substantially all of NSC’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of NSC or any
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then outstanding
shares of Common Stock resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business Combination
and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

9.2.4        approval by the stockholders of NSC of a
complete liquidation or dissolution of NSC.

 

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9.3           Notwithstanding the foregoing, a
Change-of-Control shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated transactions
immediately following which the record holders of the Common Stock immediately
prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of NSC immediately following such transaction
or series of transactions.

 

10.                                 FORFEITURE OF AWARDS

 

Notwithstanding
anything in the Plan to the contrary, the Committee may, in its sole
discretion, in the event of serious misconduct by a Participant (including,
without limitation, any misconduct prejudicial to or in conflict with the
Company) or any Termination of Employment for cause or in the event that a
Participant terminates employment for Retirement and subsequently engages in
full-time employment, or any activity of a Participant in competition with the
business of the Company, (a) cancel any outstanding Award granted to such
Participant, in whole or in part, whether or not vested or (b) following the
exercise or payment of an Award within a period specified by the Committee,
require such Participant to repay to the Company any gain realized or payment
received upon the exercise or payment of such Award (with such gain or payment
valued as of the date of exercise or payment). Such cancellation or repayment
obligation shall be effective as of the date specified by the Committee. Any
repayment obligation may be satisfied in Common Stock or cash or a combination
thereof (valued based upon the opening price of the Common Stock on the New
York Stock Exchange on the date of payment or if there is no trading on the New
York Stock Exchange on such date, the opening price on the immediately preceding
trading day on the New York Stock Exchange), and the Committee may provide for
an offset to any future payments owed by the Company to the Participant if
necessary to satisfy the repayment obligation. The determination of whether a
Participant has engaged in a serious breach of conduct or any activity in
competition with the business of the Company shall be determined by the
Committee in good faith and in its sole discretion. This Section 10 shall have
no application following a Change-of-Control.

 

11.                                 TERM; AMENDMENT AND TERMINATION

 

11.1         Term of the Plan. The Plan shall be effective
as of the Effective Date and shall remain in effect thereafter until terminated
by the Company. Awards outstanding on the Plan’s termination date shall not be
affected or impaired by the termination of the Plan, but no Award may be
granted or issued during any period of suspension or after termination of the
Plan.

 

11.2         Amendment. The Board may amend, alter,
suspend, discontinue or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, alteration, suspension,
discontinuation or termination (a) shall be made without stockholder approval
if such approval is required by applicable law, regulatory requirement or stock
exchange or

 

12

 

accounting rules, or if the Board deems it necessary or desirable to
qualify for or comply with any tax, applicable law, stock exchange, accounting
or regulatory requirement, and (b) except as required by applicable law or
stock exchange or accounting rules, shall be made without the consent of the
affected Participant, if such action would impair the rights of such
Participant under any outstanding Award. Notwithstanding anything to the
contrary herein, the Committee or Board may amend or alter the Plan in such
manner as may be necessary so as to have the Plan conform to local rules and
regulations in any jurisdiction outside the United States.

 

12.          GENERAL PROVISIONS

 

12.1         Conditions to NSC’s Obligation to Issue Stock.
Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, NSC shall not be required to issue or deliver any certificate or
certificates for shares of Common Stock under the Plan prior to fulfillment of
all of the following conditions:

 

12.1.1                                          Listing or approval for listing upon notice
of issuance, of such shares on the New York Stock Exchange, Inc., or such other
securities exchange as may at the time be the principal market for the Common
Stock;

 

12.1.2                                          Any registration or other qualification of
such shares of NSC under any state or federal law or regulation, or the
maintaining in effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of counsel, deem necessary
or advisable; and

 

12.1.3                                          Obtaining any other consent, approval, or
permit from any state or federal governmental agency which the Committee shall,
in its absolute discretion after receiving the advice of counsel, determine to
be necessary or advisable.

 

12.2         No
Repricings/Regrants/Exchanges/Modifications. The Committee may not grant new
Options, Restricted Stock or Restricted Stock Units in exchange for the
cancellation of any other Award made under this Plan or any other plan of the
Company. Other than in connection with a change in the Company’s capitalization
as provided in Section 4.3, the Exercise Price of an Option may not be reduced
without approval of the Company’s stockholders. No material amendments may be
made to the Plan without the approval of the Company’s stockholders.

 

12.3         No Contract of Employment. The Plan shall not
constitute a contract of employment, and adoption of the Plan shall not confer
upon any Participant or Employee any right to continued employment, nor shall
it interfere in any way with the right of

 

13

 

the Company to terminate the employment of any Participant or Employee
at any time.

 

12.4         Tax Withholding. No later than the date on
which an amount first becomes includible in the gross income of the Participant
for income tax purposes with respect to any Award under the Plan, the
Participant shall pay to the Company, or make arrangements satisfactory to the
Company regarding the payment of, any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations may be settled
with Common Stock, including Common Stock that is part of the Award that gives
rise to the withholding requirement, cash, shares of Common Stock previously
owned by the Participant for at least six months duly enclosed for transfer to
the Company, or in any combination of the foregoing. If Common Stock that is
part of the Award is used to settle tax withholding obligations, the value of
such Common Stock may not exceed the maximum withholding rate applicable to the
Award. Common Stock used to satisfy tax withholding obligations shall be valued
at the opening price of the Common Stock on the New York Stock Exchange on the
date the Common Stock is used to satisfy the tax withholding obligation or, if
there is no trading on the New York Stock Exchange on such date, the opening
price on the immediately preceding trading day on the New York Stock Exchange.
The obligations of the Company under the Plan shall be conditional on such
payment or arrangements and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise due to the
Participant. The Committee may establish such procedures as it deems
appropriate for the settlement of withholding obligations with Common Stock.

 

12.5         Governing Law. The Plan, all Award Agreements
and all Awards made and actions taken thereunder shall be governed by and construed
in accordance with the laws of the State of Delaware, USA, without reference to
principles of conflict of laws.

 

12.6         Nontransferability. No Award, or interest or
right therein or part thereof, shall be liable for the debts, contracts or
engagements of the Participant or successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect. Any
transfer of Awards to independent third parties for cash consideration without
stockholder approval is prohibited. Notwithstanding the foregoing, nothing in
this Section 12.6 shall prevent transfers as provided by Section 6.5.2, or by
will or by the applicable laws of descent and distribution.

 

12.7         Rights as Stockholder. No Participant (nor
any beneficiary or transferee) shall have any of the rights or privileges of a
stockholder of the Company with respect to any shares of Common

 

14

 

Stock issuable pursuant to an Option or Restricted Stock Unit (or
exercise thereof), unless and until certificates (which may be in book entry
form) representing such shares shall have been issued, recorded on the records
of NSC or its transfer agents or registrars, and delivered to the Participant
(or beneficiary or transferee, as applicable.)

 

12.8         Gender and Number. Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include
the plural.

 

12.9         Severability. In the event any provision of
the Plan shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the Plan shall
be construed and enforced as if the illegal or invalid provision had not been
included.

 

12.10       No Limit on other Arrangements. This Plan
shall not affect any other compensation or incentive plans in effect for the
Company. Nothing in this Plan shall be construed to limit the right of the Company
to establish any other forms of incentives or compensation for Employees of the
Company, to issue restricted or unrestricted stock other than under this Plan
in connection with any proper corporate purpose, including, but not by way of
limitation, the issuance of restricted or unrestricted stock in connection with
the acquisition in any form of the business, stock or assets of any
corporation, firm or association.

 

12.11       Section 409A. This Plan is intended to comply
and shall be administered in a manner that is intended to comply with Section
409A of the Code and shall be construed and interpreted in accordance with such
intent. To the extent that an Award, issuance and/or payment is subject to 409A
of the Code, it shall be awarded and/or issued or paid in a manner that will
comply with Section 409A of the Code, including regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto. In particular, any payment of shares of Common
Stock due in connection with lapsing of restrictions on Restricted Stock or
Restricted Stock Units shall be made no later than sixty (60) days of the first
of the calendar year following the date that a Participant has been deemed to
have earned the shares. Any provision of this Plan that would cause an Award,
issuance and/or payment to fail to satisfy Section 409A of the Code shall have
no force or effect until amended to comply with Code Section 409A (which
amendment may be retroactive to the extent permitted by applicable law).

 

12.12       Acceleration of Awards. Except as provided in
Sections 6.7, 7.5, 8.4, and 9.1, acceleration of Awards and/or continued
vesting of Awards after Termination of Employment shall not be permitted
without the approval of stockholders.

 

15

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