PAGE 77
EXHIBIT 10(l), Page 1 of 3
NORFOLK SOUTHERN CORPORATION
Outside Directors' Deferred Stock Unit Program
I. Effective Date: May 9, 1996 (effective at the Organization
Meeting of the Board of Directors).
II. Purpose: To align further each outside director's
ownership interest in Norfolk Southern
Corporation ("Corporation") with that of
stockholders generally.
III. Eligibility: Each outside director of the Corporation serving
on the Effective Date and any such outside
director whose term as director begins after the
Effective Date ("Eligible Director"). For
purposes of this Program, an "outside director"
is a director who is not an officer of the
Corporation or any of its subsidiaries.
IV. Benefits: (1) Each Eligible Director shall be granted
from time to time such deferred stock units
(each such stock unit representing at the time
of grant the value of one share of Norfolk
Southern Corporation Common Stock) ("Stock
Units"), as the Board of Directors may
authorize. Each Eligible Director's Stock Units
will be recorded in an individual memorandum
account ("Account") maintained by the Corporate
Secretary or designated agent. On each dividend
payment date, an amount equivalent to the
dividend paid on the Common Stock ("Dividend
Equivalent") will be credited for each Stock
Unit and each fraction thereof in the Account
and converted into additional Stock Units and
fractions thereof (rounded to four decimal
places) based on the Fair Market Value of the
Common Stock on the dividend payment date.
For purposes of this Program, "Fair Market
Value" on a particular date is the mean of the
high and low prices at which the Common Stock is
traded on such date as reported in the Composite
Transactions for such date by The Wall Street
Journal or, if Common Stock was not traded on
such date, on the next preceding day on which
the Common Stock was traded.
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NORFOLK SOUTHERN CORPORATION EXHIBIT 10(l), Page 2 of 3
Outside Directors' Deferred
Stock Unit Program
(2) Each outside director of the Corporation
serving on June 1, 1996, also shall have
credited to the Account the number of Stock
Units, including fractions thereof to which such
director is entitled under the Norfolk Southern
Corporation Directors' Pension Plan. Such Stock
Units will be accounted for separately from any
Stock Units credited under paragraph (1) above
but will be treated the same in all other
respects.
(3) Each Eligible Director will have a one-time
irrevocable election for 60 days after the
Effective Date, or, if later, 60 days after
first becoming an Eligible Director to receive
in cash any Stock Units in the Account either in
a lump sum or in 10 annual installments upon
leaving the Board of Directors for any reason.
Failure to make a valid election will result in
the Account being distributed in a lump sum.
Separate elections will be made for Stock Units
credited under paragraphs (1) and (2) above. A
lump-sum payment will be valued based on the
Fair Market Value of Common Stock on the last
market day of the month following a director's
termination of service and will be paid to an
Eligible Director or beneficiary as soon as
practicable thereafter. The first distribution
under an election to receive installment
payments will be made in January following the
year in which the Eligible Director terminates
service; Stock Units at any time remaining in
the Account will be credited with Dividend
Equivalents until the final installment has been
paid. Each annual distribution will be valued
based on the Fair Market Value of the Common
Stock on the third business day after the date
in January that the Corporation first makes
publicly available its most recent regular
annual financial statements. The first such
installment will be an amount equal to one tenth
of the total value of the Stock Units in the
Account at that time; the second installment,
one ninth of the remaining total value; the
third installment, one eighth; and so forth,
until the Account is depleted with payment of
the tenth installment.
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NORFOLK SOUTHERN CORPORATION EXHIBIT 10(l), Page 3 of 3
Outside Directors' Deferred
Stock Unit Program
(4) The Board of Directors may make such
adjustments in the number of Stock Units as may
be required by any change in the corporate
structure or shares of the Corporation,
including but not limited to, recapitalization,
stock splits, stock dividends, combination or
exchange of shares, mergers, consolidations,
rights offerings, separations, reorganizations
and liquidations.
V. Miscellaneous: (1) Each Eligible Director may designate in
writing the person or persons ("Beneficiary")
who shall acquire the rights of the Eligible
Director to the Account in the event of the
Eligible Director's death before final
distribution. In order to be effective, an
Eligible Director's designation of a Beneficiary
must be on file with the Corporate Secretary
before the Eligible Director's death. Any such
designation may be revoked and a new designation
substituted therefor by the Eligible Director at
any time before death.
If the named Beneficiary does not survive the
Eligible Director, or if there is no named
Beneficiary, then the rights with respect to an
Eligible Director's Account shall be acquired by
the person or persons who shall acquire the
Eligible Director's rights to the Account by
bequest or inheritance in accordance with the
applicable laws of descent and distribution.
(2) This Program may be amended or terminated by
the Board of Directors of the Corporation at any
time; however, no such amendment or termination
shall deprive an Eligible Director of any Stock
Units previously credited to his or her Account.