NORFOLK SOUTHERN CORPORATION


RESTRICTED STOCK UNIT PLAN


 

(Effective January 28, 2003)


Last Amended January 1, 2009




Section 1.        PURPOSE 


The Restricted Stock Unit Plan was
adopted January 28, 2003, to promote the success of Norfolk Southern
Corporation (the "Corporation") by providing compensation to officers and other
key employees of the Corporation and its Subsidiary Companies (as hereinafter
defined) which is tied to the performance of the common stock of the
Corporation, thereby providing an additional incentive to officers and other
key employees to devote their maximum efforts and skills to the success of the
Corporation and further aligning their interests with those of the
shareholders. The Plan provides for the grant of restricted stock units whose
value is measured by the fair market value of the Corporation's common stock
and which will be payable in cash upon satisfaction of the applicable
restrictions, in accordance with the terms and conditions set forth below.  The
Plan was amended on January 1, 2009, to comply with section 409A of the Code,
effective with respect to Awards vesting on or after January 1, 2005.




Section 2.        DEFINITIONS




            The
terms used herein shall have the following meanings unless otherwise specified
or unless a different meaning is clearly required by the context:




	
  Award
   

  	
  A
  grant of Restricted Stock Units.

	 


  
	
  Beneficiary

  	
  The person or
  persons designated in writing by the Participant as his Beneficiary in
  respect to Awards under the Corporation's Long-Term Incentive Plan or, in the
  absence of such a designation or if the designated person or persons
  predecease the Participant, the person or persons who shall acquire the
  Participant's rights in respect to Awards by bequest or inheritance in
  accordance with the applicable laws of descent and distribution. In order to
  be effective, a Participant's designation of a Beneficiary must be on file
  with the Corporation before the Participant's death.

	 


  
	
  Board
  of Directors

  	
  The
  Board of Directors of the Corporation.

	 


  
	
  Code

  	
  The
  Internal Revenue Code of 1986, as amended from time to time.

	 


  
	
  Committee

  	
  The
  Compensation Committee, or any other committee of the Board of Directors
  which is authorized to grant Awards under this Plan.

	 


  
	
  Common
  Stock

  	
  The
  Common Stock of the Corporation.

	 


  
	
  Disability

  	
  A Participant is disabled when he
  either 

	 

  (i) is unable to engage in any
  substantial gainful activity, or 

	 

  (ii) is receiving income replacement
  benefits for a period of not less than three (3) months under the Long-Term
  Disability Plan of the Corporation or a long-term disability plan of a
  Subsidiary Company (whichever is applicable),

	 

  by
  reason of any medically determinable physical or mental impairment that can
  be expected to result in death or can be expected to last for a continuous
  period of not less than 12 months.

	 


  
	
  Fair
  Market Value

  	
  The
  value of Common Stock on a particular date as measured by the mean of the
  high and low prices at which it is traded on such date as reported in the
  Composite Transactions for such date by Bloomberg L.P., or its successor, on
  its internet based service, or, if Common Stock was not traded on such date,
  on the next preceding day on which Common Stock was traded.

	 


  
	
  Participant

  	
  Any
  officer or key employee of the Corporation or a Subsidiary Company selected
  by the Committee to participate in the Plan.

	 



  
	
  Plan

  	
  The
  Norfolk Southern Corporation Restricted Stock Unit Plan.

	 


  
	
  Restricted
  Stock Units

  	
  Contingent
  rights to receive cash payment for the Fair Market Value of shares of Common
  Stock granted pursuant to Section 5 of the Plan and subject to the
  restrictions and other terms and conditions set forth therein. Each
  Restricted Stock Unit shall equal the Fair Market Value of one share of
  Common Stock.

	 


  
	
  Restriction
  Period

  	
  A
  period of time not less than twelve (12) nor more than sixty (60) months, to
  be determined by the Committee in its sole discretion, commencing on the
  effective date as of which Restricted Stock Units are granted, during which
  the restrictions imposed by paragraph (b) of Section   5 of the Plan shall
  apply. The Committee shall determine the length of the Restriction Period at
  the time that the Restricted Stock Units are granted.

	 


  
	
  Retirement

  	
  Retirement
  from the Corporation or a Subsidiary Company pursuant to the provisions of
  the Retirement Plan of the Corporation or a retirement plan of a Subsidiary
  Company (whichever is applicable), as amended from time to time.

	 


  
	
  Specified
  Employee

  	
  An
  officer of the Corporation with annual compensation greater than $130,000
  (indexed), a five percent (5%) owner of the Corporation, or a one percent
  (1%) owner of the Corporation with annual compensation greater
  than $150,000 (not indexed), determined in each case in accordance with Code
  section 409A.  If the Corporation has 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." 
  If an individual meets the definition of "Specified Employee" on December 31,
  the individual shall be a "Specified Employee" during the 12-month period
  commencing on the following April 1.  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.

	 


  
	
  Subsidiary
  Company

  	
  A
  corporation of which more than fifty percent (50%) of the total combined
  voting power of all classes of stock entitled to vote is owned, directly or
  indirectly, by the Corporation.

	 

  





Section 3.        ADMINISTRATION




            The
Plan shall be administered by the Committee, which, subject to the limitations
set forth herein, shall have the full and complete authority and sole
discretion from time to time to construe and interpret the Plan; to select the
officers and other key employees who shall be granted Awards under the Plan; to
determine the type, size, terms, and conditions of the Award or Awards to be
granted to each such Participant; to authorize the grant of such Awards
pursuant to the Plan; in connection with the merger or consolidation of the
Corporation (and subject to any applicable requirements of Code section 409A),
to give a Participant an election to surrender an Award in exchange for the
grant of a new Award; to adopt, amend and rescind rules and regulations
relating to the Plan; and to make all other determinations and take all other
action it may deem necessary or advisable for the implementation and
administration of the Plan. The Committee may authorize the grant of Awards
subject to differing terms and conditions to any eligible employee. The
Committee's decision to authorize the grant of an Award to an employee at any
time shall not require the Committee to authorize the grant of an Award to that
employee at any other time or to any other employee at any time; nor shall its
determination with respect to the size or terms and conditions of the Award to
be granted to an employee at any time require it to authorize the grant of an
Award of the same size or with the same terms and conditions to that employee
at any other time or to any other employee at any time. The Committee shall not
be precluded from authorizing the grant of an Award to any eligible employee
solely because the employee previously may have been granted an Award of any
kind under the Plan.




            All
determinations of the Committee shall be by a majority of its members and shall
be final, conclusive and binding. Each member of the Committee, while serving
as such, shall be considered to be acting in his capacity as a director of the
Corporation, and no member of the Committee shall be liable for any action
taken or decision made in good faith with respect to the implementation or
administration of the Plan.




Section 4.        ELIGIBILITY




            To
be eligible for selection by the Committee to participate in the Plan, an
individual must be a full-time salaried officer or key employee of the
Corporation, or of a Subsidiary Company, and must reside in the United States or Canada, on the date on which the Committee authorizes the grant to such individual
of an Award.




Section 5.        RESTRICTED STOCK UNITS




            (a)
       Type of Award - The Committee, in its sole discretion, may from
time to time authorize the grant of Restricted Stock Units to a Participant.
Such Restricted Stock Units will be recorded in individual memorandum accounts
maintained by the Committee or its agent. The Participant shall have no
beneficial ownership interest in the Common Stock represented by the Restricted
Stock Units and no right to receive a certificate representing such shares of
Common Stock. Further, the Participant shall have no right to vote the Common
Stock represented by the Restricted Stock Units or to receive dividends (except
for any equivalent payments which may be awarded by the Committee in connection
with such Restricted Stock Units) on the Common Stock represented by the
Restricted Stock Units.




            (b)
       Restrictions - Until the expiration of the Restriction Period or
the lapse of restrictions
in the manner provided in paragraphs (d), (e), or (f) of this Section 5,
Restricted Stock Units shall be subject to the following restrictions and any
additional restrictions that the Committee, in its sole discretion, may from
time to time deem desirable in furtherance of the objectives of the Plan:




                        (i)
the Participant shall not be entitled to receive cash payment for the
Restricted Stock Units which the Participant may have a contingent right to
receive in the future;




                        (ii)
the Restricted Stock Units may not be sold, transferred, assigned, pledged,
conveyed, hypothecated, or otherwise disposed of; and




                        (iii)
all or a portion of the Restricted Stock Units may be forfeited immediately as
provided in paragraph (d), (e), or (f) of this Section 5.




            (c)
       Distribution of Restricted Stock Units - If a Participant to whom
Restricted Stock Units have been granted remains in the continuous employment of
the Corporation or a Subsidiary Company during the entire Restriction Period,
upon the expiration of the Restriction Period all restrictions applicable to
the Restricted Stock Units shall lapse, and the Restricted Stock Units shall be
settled in cash, not in shares of Common Stock, based on Fair Market Value on
the date all applicable restrictions lapse.  The cash settlement representing
the Restricted Stock Units upon which the restrictions have lapsed shall be
delivered to the Participant in a lump sum on the first business day following
the day on which the Restriction Period expires.




            (d)
       Termination of Employment - If the employment of a Participant is
terminated for any reason other than the Retirement, Disability or death of the
Participant in service before the expiration of the Restriction Period, the
Restricted Stock Units shall be forfeited immediately and all rights of the
Participant to such units shall terminate immediately without further
obligation on the part of the Corporation or any Subsidiary Company. 




            (e)        Disability
or Death - If the employment of a Participant is terminated by reason of
Disability or death of the Participant in service before expiration of the
Restriction Period, the number of Restricted Stock Units held by the Corporation
for the Participant's account shall be reduced by the proportion of the
Restriction Period remaining after the Participant's termination of employment;
the restrictions on the balance of such Restricted Stock Units shall lapse on
the date the Participant's employment terminated; and the cash settlement
representing the Restricted Stock Units upon which the restrictions have lapsed
shall be delivered to the Participant (or, in the event of the Participant's
death, to his Beneficiary) in a lump sum on the first business day following
the day the Participant's employment terminated.  




            (f)         Retirement
- If the employment of a Participant is terminated by reason of the Retirement
of the Participant before the end of the Restriction Period, the number of
Restricted Stock Units held by the Corporation for the Participant's account
shall be reduced by the proportion of the Restriction Period remaining after
Participant's Retirement; the restrictions on the balance of such Restricted
Stock Units shall lapse on the date of Retirement; and the cash settlement
representing the Restricted Stock Units upon which the restrictions have lapsed
shall be delivered to the Participant as provided below.




                        (i)         The
cash settlement shall be delivered to the Participant in a lump sum on the
first business day following the Participant's Retirement, unless the
Participant is a Specified Employee on the Participant's Retirement date.




                        (ii)        If
the Participant is a Specified Employee on the Participant's Retirement date,
the cash settlement shall be delivered to the Participant in a lump sum,
without interest, on the first day of the seventh month following the
Participant's Retirement.




            (g)
       Waiver of Restrictions - The Committee, in its sole discretion,
may waive any or all restrictions with respect to Restricted Stock Units,
provided that the waiver of restrictions does not accelerate the payment of the
Restricted Stock Units in a manner that would violate the requirements of Code
section 409A.




             (h)       Administrative
Adjustments in Payment Date - A payment is treated as being made on the
date when it is due under the Plan if the payment is made on the due date
specified by the Plan, or on a later date that is either (i) in the same
calendar year (for a payment whose specified due date is on or before September
30), or (ii) by the 15th day of the third calendar month following the date
specified by the Plan (for a payment whose specified due date is on or after
October 1).  A payment also is treated as being made on the date when it is due
under the Plan if the payment is made not more than 30 days before the due date
specified by the Plan, provided that a payment under paragraph (f)(ii) of this
Section 5 shall not be made earlier than six months after a Specified
Employee's retirement, and no payment shall be made earlier than the date on
which the applicable restrictions lapse.  A Participant or Beneficiary may not,
directly or indirectly, designate the taxable year of a payment made in
reliance on the administrative rules in this paragraph. 


Section 6.        DIVIDEND EQUIVALENT PAYMENTS




            The
Committee may authorize the payment of dividend equivalents on some or all of
the Restricted Stock Units representing shares of Common Stock, in an amount
equal to, and commensurate with, dividends declared by the Board of Directors
and paid on Common Stock. Dividend equivalents payable on Restricted Stock
Units under this Section 6 shall be paid immediately in cash or converted to
additional Restricted Stock Units based on the Fair Market Value of Common
Stock on the date dividends are paid, as may be determined by the Committee and
specified in the Award when the Restricted Stock Units are granted.  If the
dividend equivalents are paid immediately in cash, the settlement thereof will
be paid in cash on the date declared by the Board of Directors for the payment
of dividends on Common Stock. If the dividend equivalents are converted to
additional Restricted Stock Units, the additional Restricted Stock Units shall
be recorded in the Participant's individual memorandum account and subject to
any remaining Restriction Period applicable to the Restricted Stock Units on
which the dividend equivalents were paid. Upon cash settlement of the
Restricted Stock Units on which the dividend equivalents were paid, the
additional Restricted Stock Units representing dividend equivalents will be
paid in cash. The Committee may authorize the payment of dividend equivalents
under this Section 6 with respect to any Restricted Stock Unit for all or some
portion of its term, provided that the Committee designates the period for
which dividend equivalents are granted and the manner in which they will be
paid at the time when the Restricted Stock Unit is granted. 


Section 7.        CAPITAL ADJUSTMENTS


            In
the event of a recapitalization, stock split, stock dividend, exchange,
combination, or reclassification of shares, merger, consolidation,
reorganization, or other change in or affecting the capital structure or
capital stock of the Corporation, the Board of Directors, upon the recommendation
of the Committee, may make appropriate adjustments in the number of Restricted
Stock Units representing shares of Common Stock, as it deems equitable, in its
absolute discretion, to prevent dilution or enlargement of the rights of
Participants.


Section 8.        AMENDMENT OR TERMINATION OF THE PLAN


            The
Corporation may at any time and from time to time alter or amend, in whole or
in part, any or all of the provisions of the Plan, or may at any time suspend
or terminate the Plan, through written action of its chief executive officer or
resolution of its Board of Directors, provided that no change in any Awards
theretofore granted to any Participant may be made which would impair or
diminish the rights of the Participant without the Participant's consent, or
that would accelerate or defer the payment of the Awards in a manner that would
violate the requirements of Code section 409A.


Section 9.        MISCELLANEOUS


            (a)
       Withholding - The Corporation and its Subsidiary Companies shall have the
right, to the extent permitted by law, to withhold from any payment of any kind
otherwise due to a Participant any Federal, state, or local income or
employment tax that the Corporation reasonably determines to be due with
respect to the payment.  The Corporation may deduct from the value of the
Restricted Stock Units any employment tax that the Corporation reasonably
determines to be due with respect to the Restricted Stock Units under the
Federal Insurance Contributions Act (FICA) or the Railroad Retirement Tax Act (RRTA),
and to pay the income tax withholding related to such FICA or RRTA tax. 
Alternatively, the Corporation may require the Participant or
Beneficiary to remit to the Corporation or its designee an amount sufficient to
satisfy any applicable federal, state, and local income and employment tax with
respect to the Participant's Restricted Stock Units.  The Participant or Beneficiary shall
remain responsible at all times for paying any federal, state, or local income
or employment tax with respect to the Restricted Stock Units.  In
no event shall the Corporation or the Committee be liable for any interest
or penalty that a Participant or Beneficiary incurs by failing to make timely
payments of tax.




            (b)
       Stockholder Rights - No person shall have any rights of a
stockholder by virtue of a Restricted Stock Unit.




            (c)
       No Contract of Employment - This Plan shall not be deemed to be
an employment contract between the Corporation or any Subsidiary Company and
any Participant or other employee. Nothing contained herein, or in any
agreement, certificate or other document evidencing, providing for, or setting
forth the terms and conditions applicable to any Awards shall be deemed to
confer upon any Participant or other employee a right to continue in the
employment of the Corporation or any Subsidiary Company, or to interfere with
the right of the Corporation or any Subsidiary Company to terminate the
employment of such Participant or employee at any time.




            (d)
       Unfunded Plan - Except as may otherwise be provided in the Plan,
the Plan shall be unfunded. Neither the Corporation nor any Subsidiary Company
shall be required to segregate any assets that may be represented by Restricted
Stock Units, and neither the Corporation nor any Subsidiary Company shall be
deemed to be a trustee of any amounts to be paid under a Restricted Stock Unit.
Any liability of the Corporation to pay any Participant or Beneficiary with
respect to a Restricted Stock Unit shall be based solely upon any contractual
obligations created pursuant to the provisions of the Plan; no such obligation
shall be deemed to be secured by any pledge or encumbrance on any property of
the Corporation or a Subsidiary Company.




            (e)
       Applicable Law - The Plan, its validity, interpretation, and
administration, and the rights and obligations of all persons having an
interest therein, shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, except to the extent that such laws may
be preempted by Federal law.




            (f)
        Gender and Number - Wherever used in the Plan, words in the
masculine form shall be deemed to refer to females as well as to males, and
words in the singular or plural shall be deemed to refer also to the plural or
singular, respectively, as the context may require.




            (g)        Code Section 409A -The Plan is intended, and shall be
construed, to comply with the requirements of Code section 409A.  The
Corporation does not warrant that the Plan will comply with Code section 409A
with respect to any Participant or with respect to any payment, however.  In no
event shall the Corporation or the Committee be liable for any additional tax,
interest, or penalty incurred by a Participant or Beneficiary as a result of
the Plan's failure to satisfy the requirements of Code section 409A, or as a
result of the Plan's failure to satisfy any other applicable requirements for
the deferral of tax.