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NORFOLK SOUTHERN CORPORATION
DIRECTORS' CHARITABLE AWARD PROGRAM
Purpose To promote the interests of Norfolk Southern
Corporation and its Directors in supporting
charitable and educational organizations, and
to provide an additional source of funding for
the Norfolk Southern Foundation (Foundation).
Eligibility All Directors serving on, or elected after,
February 1, 1996.
Contribution Directors serving on February 1, 1996:
Amount $500,000
Directors elected after February 1, 1996:
vest in 20% increments over a 5 year period
in accordance with the attached table.
Eligible Educational, scientific, literary, cultural
Organizations and other organizations with similar non-
religious purposes, contributions to which are
deductible for Federal income tax purposes
(excluding a private foundation founded,
maintained or operated by a Director or a member
of the Directors' immediate family).
The Corporation reserves the right to decline to
make a contribution to any organization, if (1)
the contribution will not be deductible for
Federal income tax purposes at the time it will
be made, or (2) the Corporation in its sole
discretion, exercised in good faith by persons
other than Directors, determines that making
a contribution to such organization will not be
in the Corporation's best interest.
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Number of Each Director may nominate, on forms provided by
Charities the Corporation or its agent, up to five (5)
Eligible Organizations to receive an aggregate
amount up to the Contribution Amount following
that Director's death. The Director may revoke
any such nomination(s), make a new nomination
or nominations, or modify the amount designated
for any nominee at any time.
Payments Following a Director's death, the Corporation will
make ratable payments, in an aggregate annual
amount not to exceed one fifth of the Contribution
Amount, to each of the Eligible Organizations that,
according to records maintained by the Corporation
or its agent, were the deceased Director's
nominees immediately prior to death. Amounts
unpaid for reason of ineligibility will be paid
prorata to the Director's other nominees, or if
there are no other qualified nominees, then to
the Foundation.
Funding The Corporation will be the beneficiary of a
$1 million, corporate-owned joint-life insurance
policy on each Director. Death benefits will be
paid to the Corporation, and the Corporation
will donate up to the Contribution Amount to no
more than five Eligible Organizations nominated
by the Director and the balance to the Foundation.
Termination The Corporation reserves the right, in its sole
discretion, to alter, amend, modify or terminate
the program at any time. However, in the event
of a change in Control of the Corporation (as
defined on Attachment A), the Corporation
immediately will donate in a lump sum the
Contribution Amount in accordance with the then
current nominations of each living Director and
the amount of any unpaid Contribution Amount to
eligible nominees of a deceased Director.
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Administration The program will be administered by the
Corporation's Corporate Secretary (or designated
agent) whose interpretations and decisions will
be final and binding on the Corporation and the
Director.
DIRECTORS ELECTED
AFTER 2/1/96
Full Contribution
Months of Service Amount
Less than 12 $ 0
12-23 100,000
24-35 200,000
36-47 300,000
48-59 400,000
60 or more 500,000
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Attachment A
For purposes of the Directors' Charitable Award Program, a Change in
Control shall occur if:
(i) any person, other than the Corporation or a Subsidiary
Company* or any employee benefit plan sponsored by the
Corporation or a Subsidiary Company, shall become the
beneficial owner of, or obtain voting control over,
20% or more of the Corporation's outstanding Common Stock;
(ii) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation in which the
Corporation is not the continuing or surviving corporation
or pursuant to which shares of Common Stock would be
converted into cash, securities, or other property, other
than a merger of the Corporation in which holders of
Common Stock immediately prior to the merger have the
same proportionate ownership of common stock of the
surviving corporation immediately after the merger as
immediately before, or (B) any sale, lease, exchange,
or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the
assets of the Corporation; or
(iii) there shall have been a change in the composition of the
Board of Directors such that within any period of two (2)
consecutive years or less individuals who at the beginning
of such period constituted such Board, together with any
new directors whose election, or nomination for election
by the Corporation's stockholders, was approved by a vote
of at least two-thirds of the directors then in office who
were directors at the beginning of such period, shall for
any reason no longer constitute a majority of the
directors of the Corporation.
* "Subsidiary Company" means a corporation of which at least
eighty percent (80%) of the total combined voting power of
all classes of stock entitled to vote is owned, directly
or indirectly, by the Corporation.