Document:

<PAGE>  PAGE 111

                                             EXHIBIT 10(i), Page 1 of 44

                                AGREEMENT
                                ---------

THIS AGREEMENT (hereinafter "Agreement" or "Master Agreement") dated the
27th day of July, 1999, by and between NORTH CAROLINA RAILROAD COMPANY
(hereinafter "NCRR"), a North Carolina corporation, and NORFOLK SOUTHERN
RAILWAY COMPANY (hereinafter "NSR"), a Virginia corporation:

WHEREAS, NCRR and Southern Railway Company (hereinafter "Southern")
entered into a lease dated August 16, 1895 ("the 1895 agreement");

WHEREAS, NCRR and Southern entered into certain supplements or
amendments to the 1895 agreement;

WHEREAS, Atlantic and North Carolina Railroad Company (hereinafter
"ANC"), as lessor, a North Carolina corporation, and Atlantic & East
Carolina Railway Company ("A&EC"), now a wholly owned subsidiary of NSR,
as lessee, entered into a Lease and Indenture dated August 30, 1939
("the 1939 agreement");

WHEREAS, ANC and A&EC entered into certain supplements or amendments to
the 1939 agreement, the last of which supplements provided A&EC the
option to continue the 1939 agreement through the end of 1994, and that
option was properly exercised;

WHEREAS, effective September 29, 1989, ANC was merged into NCRR;

WHEREAS, effective December 31, 1990, Southern changed its name to NSR;

WHEREAS, the 1895 agreement and the 1939 agreement (together, as
supplemented and amended, referred to herein as the "Old Leases") were
to expire on January 1, 1995 and December 31, 1994, respectively, and
have not been and will not be renewed and NSR has continued to operate
the property of NCRR under the provisions of federal and/or state law;

WHEREAS, while the parties had negotiated an agreement to extend the Old
Leases (the Lease Extension Agreement or "LEA"), the LEA was declared to
be invalid by the U.S. District Court for the Eastern District of North
Carolina for want of a quorum at the NCRR shareholders meeting called
for the purpose of approving the LEA on December 15, 1995 and the Court
entered an order enjoining the LEA.  Before the LEA had been enjoined,
NSR made certain payments to NCRR under the terms of the LEA consisting
of payments as consideration for a release of certain claims for return
of personalty (the "Release Payment"), and payments of rental under the
LEA (the "Rental Payments"), and NSR has made additional payments to
NCRR pursuant to an order of the U.S. Surface Transportation Board (the
"Interim Payments");

WHEREAS, NCRR and NSR desire by these terms to provide for NSR's
continued use of the property of NCRR which was the subject of the Old
Leases for the operation of freight rail services thereon;

<PAGE>  PAGE 112

                                             EXHIBIT 10(i), Page 2 of 44

NOW THEREFORE, in consideration of the commitments and undertakings
recited below, the parties hereto do hereby covenant and agree as
follows:

Section 1. INDEX OF TERMS

           TERM                                          SECTION
           ----                                          -------
           (a) NCRR-inclusive                            Preamble
           (b) NSR-inclusive                             Preamble
           (c) CSXT                                         2
           (d) Old Leases                                   6
           (e) Release Payment                              6
           (f) Rental Payments                              6
           (g) Interim Payments                             6
           (h) Cap                                          4
           (i) Line of Road                                24
           (j) High Speed Passenger Trains                 13
           (k) Amtrak/NSR Direct Service Agreement          2
           (l) Effective Date                              27
           (m) Period of Continued Occupancy                4
           (n) Right of Way                                15
           (o) Return Date                                 18
           (p) Designated Returned Property                18
           (q) Designated NSR Facility Property            18
           (r) Environmental Occurrence                    24
           (s) Contaminating Substance                     24
           (t) Leased Properties                           24
           (u) Trackage Rights Agreement                    2

GENERAL PRINCIPLES OF INTERPRETATION

The following general principles will apply throughout this Agreement
unless specifically stated to the contrary:

(a)  Safety considerations will be paramount;

(b)  For any operating scenario, NCRR and NSR intend to jointly work to
     make changes in a manner that will:  (1) minimize capital and
     operating costs, and (2) minimize disruption to existing service so
     as to maximize the value of both freight and passenger services;

(c)  Cross subsidization of costs will not occur between passenger and
     freight operations or between NSR freight and third-party freight
     operations, including but not limited to operating and maintenance
     expenses and capital expenditures;

(d)  All costs, including but not limited to operating and maintenance
     expenses and capital expenditures, will be borne by the party
     hereto who requests the expenditure or the addition to capacity;
     and

(e)  "Costs" or "expenses" will be defined by the PPC/Dispute Resolution
     provisions hereof.

<PAGE>  PAGE 113

                                             EXHIBIT 10(i), Page 3 of 44

Section 2. RIGHTS GRANTED BY NCRR

(a)  Subject to any applicable regulatory approval, NCRR hereby grants
     to NSR, under the terms set forth in the attached Trackage Rights
     Agreement of even date herewith, exclusive freight trackage rights
     over the lines and properties of NCRR owned by NCRR as of the date
     hereof, thereby extending to NSR the exclusive right to conduct
     freight operations over the NCRR lines and properties, including
     performance of local freight service on those lines and properties.
     NCRR hereby also grants to NSR such operating rights over the lines
     of NCRR as will permit continuation of the existing operations of
     National Railroad Passenger Corporation ("Amtrak") over the lines
     of NCRR pursuant to the "Basic Agreement" between Southern Railway
     Company and The Alabama Great Southern Railroad Company and
     National Railroad Passenger Corporation dated January 2, 1979, as
     amended (hereinafter referred to as the "Amtrak/NSR Direct Service
     Agreement" or the "Basic Agreement"), together with such additional
     operating rights over lines of NCRR operated by NSR as may from
     time to time during the term of this Agreement be required for the
     continuation or modification of Amtrak's intercity rail passenger
     service over the NCRR lines pursuant to the Basic Agreement and
     Amtrak's franchise under federal law.  It is the intent of the
     parties, with respect to the operational facilities of NCRR
     operated by NSR, that Amtrak and NSR shall continue to enjoy and be
     able to fulfill their respective rights and obligations to each
     other under the Basic Agreement (including the duty to make and the
     right to receive payments thereunder) and under federal law for the
     term of this Agreement.  NCRR shall be consulted in advance of any
     proposed extensions or modifications to the Basic Agreement that
     could have a material effect upon the dispatching or maintenance of
     the lines of NCRR operated by NSR or upon the facilities of NCRR
     operated by NSR.

(b)  NSR will fulfill freight common carrier duties of NCRR on the NCRR
     segments for which NSR holds the exclusive freight trackage rights
     from NCRR until such time as NSR's exclusive freight trackage
     rights over the line or any segment thereof are terminated, and
     until the federal Surface Transportation Board or any successor
     agency has granted any approval that may be required by law for any
     cessation of NSR's common carrier duties pursuant to Section 17
     hereof.

(c)  The exclusive freight trackage rights shall continue unless and
     until there is initiation of service by a qualified third-party
     freight operator on segments over which NSR ceases operations
     pursuant to the terms and provisions set forth in Section 17
     hereof.

(d)  That interest in the portion of the "R" Line in Charlotte, North
     Carolina which lies between the point of connection between said
     "R" Line and CSX Transportation, Inc. ("CSXT") near 12th Street and
     the easterly line of Second Street which remained a part of the Old
     Leases upon their expiration will not be operated by NSR.  Either
     NSR or NCRR may seek discontinuance of its common carrier
     obligation imposed by federal and state laws regulating the

<PAGE>  PAGE 114

                                             EXHIBIT 10(i), Page 4 of 44

     operation of a railroad on such portion and each party will
     cooperate with the other in any such proceedings.  Nothing in this
     Agreement shall be construed to affect the terms and obligations of
     the agreement dated December 31, 1968 between NCRR and Southern
     regarding certain property in Charlotte, North Carolina.

(e)  The rights granted to NSR do not eliminate, modify or diminish the
     rights of CSXT to operate and to serve customers between Fetner and
     Raleigh (Boylan) or NSR's and CSXT's reciprocal operating rights
     and obligations to each other relating thereto.

(f)  Except as provided in Section 2(a), NCRR does not grant to NSR the
     right to grant trackage or other rights to any carrier not at the
     time of grant affiliated with NSR over the lines or property of
     NCRR, and NCRR will not grant to others such rights on lines or
     property over which NSR maintains the status of exclusive freight
     operator without NSR's approval.  Any grant of trackage or other
     rights by NSR to a carrier affiliated with NSR shall not be
     effective beyond the expiration of this Agreement, including
     extensions or renewals, or with respect to segments over which NSR
     ceases freight services hereunder the date of any cessation of NSR
     service pursuant to Section 17 hereof.  NSR will provide NCRR with
     copies of any such proposed trackage or other rights documents not
     less than 15 days prior to execution by NSR and its affiliate.

Section 3. TERM

(a)  The term of the Agreement shall commence on the Effective Date and
     end on December 31, 2014.

(b)  NSR shall have the option to renew the Agreement for two additional
     fifteen-year terms, provided NSR notifies NCRR in writing of its
     intention to renew at least two years prior to the expiration of
     the Agreement or, with respect to the second renewal period, two
     years prior to the expiration of the first renewal period.

Section 4. COMPENSATION

(a)  Beginning on January 1, 2000, and during the term of this Agreement
     and any renewal thereof, or during any Period of Continued
     Occupancy (as defined in this Section), NSR shall pay to NCRR an
     "Annual Trackage Rights Fee."  For the period January 1, 2000,
     through December 31, 2000, the Annual Trackage Rights Fee payable
     to NCRR shall be ELEVEN MILLION DOLLARS ($11,000,000).

(b)  For each calendar year thereafter the Agreement continues in effect
     and during any Period of Continued  Occupancy, the Annual Trackage
     Rights Fee shall be adjusted in accordance with the following
     formula except that in no event will any increase or decrease in
     such Annual Trackage Rights Fee for any year exceed an amount equal

<PAGE>  PAGE 115

                                             EXHIBIT 10(i), Page 5 of 44

     to four-and-one-half percent (4-1/2%) of the Annual Trackage Rights
     Fee applicable to the previous year (hereinafter the "Cap").  The
     formula is:

     For 2001 and subsequent calendar years the Annual Trackage Rights
     Fee shall be an amount calculated by multiplying the prior year's
     Annual Trackage Rights Fee by the "Factor" obtained by dividing the
     Implicit Price Deflator for Gross Domestic Product ("IPD-GDP") for
     the calendar year preceding the prior calendar year by the IPD-GDP
     for the calendar year preceding that calendar year.  For any given
     calendar year, the denominator of the fraction used to calculate
     the Factor will be the same as the numerator of the fraction used
     to calculate the immediately prior year's Factor.  The calculation
     of the Factor to be applied to the immediately prior year's Annual
     Trackage Rights Fee shall be carried out to five places to the
     right of the decimal and rounded.  Presently, IPD-GDP is developed
     by the United States Department of Commerce, Bureau of Economic
     Analysis and is reported in the publication of ECONOMIC INDICATORS
     prepared for the Joint Economic Committee by the Council of
     Economic Advisors.  The denominator of the initial Factor will
     utilize the IPD-GDP for 1998, as published in the December 1999
     issue of ECONOMIC INDICATORS.  The numerator will be the IPD-GDP
     for 1999 as published in the December 2000 issue of ECONOMIC
     INDICATORS.

(c)  If during the term of this Agreement, including any renewal period,
     the IPD-GDP is no longer published, the parties will attempt in
     good faith to agree upon a replacement index, using the PPC/Dispute
     Resolution procedures herein if necessary.

(d)  The parties will renegotiate the Cap if over any seven consecutive
     year period the average rate of inflation as measured by the IPD-
     GDP exceeds four and one-half percent (4-1/2%) with the matter to
     be resolved through the PPC/Dispute Resolution procedures herein if
     the parties are unable to agree on a new cap.

(e)  In no event will the Annual Trackage Rights Fee, through
     deflationary adjusters, as applicable to the entirety of the NCRR,
     go below ELEVEN MILLION DOLLARS ($11,000,000).  In the event that
     the Annual Trackage Rights Fee is adjusted under the provisions of
     Section 17(d) of this Agreement, the $11,000,000 minimum Annual
     Trackage Rights Fee set forth in the preceding sentence will be
     adjusted by the same percentage used to adjust the Annual Trackage
     Rights Fee pursuant to Section 17(d) hereof.

(f)  In the event NSR does not extend the Agreement or at the end of the
     extended terms, the payment provisions of the Agreement at that
     time will continue to apply and payments may not be withheld by NSR
     so long as NSR continues to operate over any portion of the NCRR
     lines (other than the line between Pomona and Elm described in
     Section 21(b) hereof) (referred to herein as a "Period of Continued
     Occupancy").

<PAGE>  PAGE 116

                                             EXHIBIT 10(i), Page 6 of 44

(g)  The Annual Trackage Rights Fee will be paid by NSR to NCRR, without
     set-off or reduction, in monthly installments not later than the
     15th day of each month.  If any such payment is not paid within a
     grace period of seven (7) days after such due date, a late payment
     penalty charge shall be charged to NSR.  The late payment penalty
     charge shall be in the amount of one and one-half percent (1-1/2%)
     per month (simple interest) for each month, or part thereof, after
     such grace period as the Annual Trackage Rights Fee shall remain
     unpaid.  If owed, NSR will pay such late payment penalty charge
     together with the Annual Trackage Rights Fee due.  Nothing in this
     Section 4 pertaining to or calling for the payment of the late
     payment penalty charge or for an overdue payment of the Annual
     Trackage Rights Fee shall be construed to be a waiver or acceptance
     by NCRR for such payment to be overdue, and NCRR retains all rights
     it has for payment of trackage rights fees.

Section 5. INTERIM COMPENSATION

Within three business days of the execution of this Agreement, NSR will
pay to NCRR one-half of the remaining compensation to be paid to NCRR as
back rental for the period ending December 31, 1999, pursuant to the
Memorandum of Understanding dated April 27, 1999, and shall pay the
remainder of such back rental not later than December 31, 1999.

Section 6. RELEASE

(a)  For and in consideration of the receipt and retention of the
     Release Payment by NCRR, NCRR hereby agrees that each and every
     obligation NSR or A&EC may have under the Old Leases with respect
     to or in any manner connected with the use, depreciation,
     maintenance, repair, renewal, replacement or return to NCRR of (i)
     locomotives and railroad cars and (ii) any other items of personal
     property which are not customarily located or used on property
     owned or determined to be owned by NCRR during any part of at least
     10 months of any consecutive 12 month period during the 10 years
     preceding the termination of this Agreement and any renewal will be
     of no further force or effect, and NCRR hereby releases and
     discharges NSR from all such claims relating to such property.

(b)  For and in consideration of the receipt and retention of the Rental
     Payments, the Interim Payments and the payments by NSR set forth in
     this Agreement, NCRR hereby agrees that each and every obligation
     NSR or A&EC may have to pay rent or other forms of periodic
     compensation to NCRR for the use of NCRR's property under the Old
     Leases and from January 1, 1995 through December 31, 1999 has been
     fully satisfied and paid, and NCRR hereby releases and discharges NSR
     from all claims for the payment of rent or other forms of periodic
     compensation under the Old Leases.

<PAGE>  PAGE 117

                                             EXHIBIT 10(i), Page 7 of 44

Section 7. DISPATCHING

(a)  NSR will dispatch all NCRR lines except for the segment between
     Boylan and Fetner presently dispatched by CSXT and any segments for
     which NCRR and NSR subsequently agree in writing that NSR will not
     dispatch.  NSR will dispatch the NCRR lines with the same diligence
     and safety considerations as it dispatches lines of its ownership
     with similar train densities and operating characteristics.

(b)  NSR will exercise operational control over NCRR line segments which
     NSR dispatches, including controlling all access to the property
     within 25 feet of the tracks over which it has trackage rights.  In
     accessing such property, NCRR and those accessing such property
     with permission from NCRR will be required by NCRR to comply with
     all NSR safety, access, and insurance processes and procedures.
     Except with respect to any access by NCRR in the ordinary course of
     the management of its property, NSR may charge reasonable costs to
     accommodate requests for such access.

(c)  NSR will not dispatch any NCRR line segment on which a third-party
     operator begins operations in accordance with the provisions of
     this Agreement.

(d)  NSR will not provide dispatching services on lines where passenger
     speeds exceed 90 mph.

(e)  NSR will give priority to scheduled passenger trains over freight
     trains, and will establish priority protocols to be applied between
     scheduled passenger trains as requested by NCRR.

(f)  Should any dispute arise over NSR's dispatching of passenger
     trains, or the priority they are given, NCRR will describe in
     writing the method by which it seeks to have the passenger trains,
     or freight trains affecting passenger trains, dispatched.  If NSR
     does not agree with the proposed method requested by NCRR, any
     unresolved issues shall be resolved pursuant to PPC/Dispute
     Resolution procedure herein.

(g)  NCRR reserves the right to terminate NSR's contract hereunder to
     perform dispatching for failure by NSR to abide by the PPC/Dispute
     Resolution procedures herein or any decision made pursuant to such
     procedures.  NSR shall have 30 days from the date of any final
     decision or award made pursuant to the PPC/Dispute Resolution
     procedure to remedy such dispatching deficiencies and to document
     such remedy to NCRR in writing.  If the time periods are not
     adequate for NSR to make the changes, such schedule shall be
     reviewed and addressed pursuant to the PPC/Dispute Resolution
     procedure herein.

<PAGE>  PAGE 118

                                             EXHIBIT 10(i), Page 8 of 44

Section 8. MAINTENANCE

(a)  NSR will maintain the lines of NCRR over which it serves as the
     exclusive freight operator.

(b)  The standard of maintenance of any line segment shall be the FRA
     track classifications as of July 1, 1999, consistent with timetable
     and track profile speed restrictions and any other restrictions
     therein that affect the speed of operation.  The effective
     timetables and track profiles are attached hereto as EXHIBIT A.

(c)  Any routine slow orders in effect on January 1, 2000 will be
     eliminated by October 1, 2000, and any routine slow orders
     subsequently imposed will be eliminated within 90 days of
     imposition.  A list of show orders in effect will be provided on or
     about January 1, 2000.

(d)  In the event of slow orders necessitated by unusual events or
     requiring major construction or capital expenditure, the
     PPC/Dispute Resolution procedure will be employed to establish a
     reasonable time frame for NSR to make the necessary repairs.

(e)  NCRR will bear all initial and future costs for any upgrades it
     requests.

(f)  NSR will not maintain any NCRR line segment on which a third-party
     operator begins operations under the provisions of the Agreement.

(g)  NSR will not maintain any line on which passenger speeds exceed
     90 mph.

(h)  NSR will submit to NCRR in writing not less than 30 days in advance
     a description of any changes it intends to make to the maintenance
     levels affecting the lines of NCRR; if NCRR objects to such changes
     the PPC/Dispute Resolution procedure described herein will be
     utilized to review such proposed changes wherein such changes may
     be approved as submitted by NSR or modified.

(i)  NCRR reserves the right to terminate NSR's contract hereunder to
     perform maintenance for failure by NSR to abide by the PPC/Dispute
     Resolution procedures herein or any decision made pursuant to such
     procedures.  NSR shall have 270 days from the date of any final
     decision or award made pursuant to the PPC/Dispute Resolution
     procedure set forth herein to remedy such maintenance deficiencies
     and to document such remedy to NCRR in writing.  If the time
     periods are not adequate for NSR to make the changes, such schedule
     shall be reviewed and addressed pursuant to the PPC/Dispute
     Resolution procedure herein.

<PAGE>  PAGE 119

                                             EXHIBIT 10(i), Page 9 of 44

Section 9. CAPITAL IMPROVEMENTS

(a)  Capital Improvements at the Request of NSR:

     (i)  NSR may, at its sole cost, make capital improvements to the
          property of NCRR to render the property more amenable to its
          freight railroad operations.

     (ii) Such improvements will not be made without the prior approval
          of NCRR, which approval will not be unreasonably withheld.

     (iii) NCRR shall own all capital improvements made by NSR to
          the property of NCRR hereunder upon expiration or termination
          of the Agreement, or with regard to improvements made to any
          segment which NSR ceases to operate, upon the cessation of
          service by NSR on such segment pursuant to Section 17 hereof.

(b)  Capital Improvements at the Request of NCRR:

     (i)  NCRR (or NCRR on behalf of passenger operators) may, at its
          sole cost, make capital improvements to the NCRR property.

     (ii) All such capital improvements on lines over which NSR operates
          or will operate shall be performed by NSR unless NSR has
          expressly agreed to the contrary.  However, if a shortage of
          available manpower would delay implementation beyond a
          reasonable completion date, NSR and NCRR agree to cooperate to
          jointly seek concurrence from the appropriate labor
          organizations representing NSR's employees, if such
          concurrence is required, for such work to be done by qualified
          contractors selected in accordance with the PPC/Dispute
          Resolution procedure and to be engaged by NSR.

     (iii) Payments required of NCRR under the terms of this
          Agreement may be paid by NCDOT or by other passenger service
          operators.

     (iv) NSR will not be required to begin construction on any such
          project(s) until all necessary capital funds are set aside for
          the project, and mechanisms are in place to pay other costs or
          expenses associated with the project identified in the
          separate agreement required by the provisions of paragraph (f)
          below.

(c)  Any track, signal, bridge, or structure constructed on the lines of
     NCRR, whether by NCRR (on its own behalf or on behalf of a
     passenger operator) or NSR, must be built, maintained and operated
     consistent with the following goals:

     (i)  Such construction must not interfere with or disadvantage NSR
          freight operations or the utility or capacity of the line for
          freight operations;

<PAGE>  PAGE 120

                                            EXHIBIT 10(i), Page 10 of 44

     (ii) Such construction must not preclude eventual double-tracking
          of the line between Greensboro and Raleigh;

     (iii) Such construction must not preclude capacity expansion to
          accommodate growth of intercity/regional passenger and freight
          traffic; and

     (iv) Access by NSR to its present and future customers on both
          sides of the tracks on which NSR has or will have trackage
          rights will be maintained at no cost to NSR.

(d)  Should one party determine it has a need for additional capacity,
     the additional capacity shall be added in consultation with the
     other party utilizing the PPC/Dispute Resolution procedure, at the
     cost and expense of the party that needs the capacity.

(e)  Should NSR and NCRR mutually determine that each needs additional
     capacity, the parties shall jointly plan, through the PPC/Dispute
     Resolution procedure, for the necessary additional capacity to meet
     the needs.  The costs of such additional joint capacity will be
     prorated on the relative additional capacity needs of the parties.
     Best efforts shall be made in the planning process to achieve
     economies of scale in the addition of such improvements, such that
     both parties receive maximum value for their capacity investments
     through capacity sharing.

(f)  If NCRR adds shared trackage under the provisions hereof, or if
     NCRR approves, makes or funds any other improvements which increase
     freight or passenger utility/capacity or passenger speeds,
     including but not limited to improvements to track, signals,
     structures or the adding of super-elevation under provisions hereof
     and including but not limited to the "Rail Impact" program
     described in Section 12 hereof, NCRR, NSR (and any other
     appropriate parties, including NCDOT) will enter into a separate
     written agreement prior to the commencement of any construction.
     NSR will dispatch and maintain the line segment as improved and
     NCRR will reimburse NSR for any and all additional dispatching and
     maintenance costs, including but not limited to costs of additional
     employees required to dispatch and maintain the line on account of
     such improvements, incurred by NSR, except as provided in Section
     10 hereof.  Any disputes over the causal relationship between such
     construction projects and such additional dispatching and
     maintenance costs billed to NCRR by NSR will be referred to the
     PPC/Dispute Resolution procedure.

(g)  NCRR and NSR will develop the design and phasing of double-tracking
     and other investments for the line between Greensboro and
     Charlotte, the cost of preparing such plans to be at NCRR expense,
     so that freight and passenger services can both be accommodated and
     so that any intermediate investments made will conform with a long-
     term infrastructure plan.

<PAGE>  PAGE 121

                                            EXHIBIT 10(i), Page 11 of 44

(h)  In advance of installing double track or other investments made by
     NCRR, NCRR and NSR, at NCRR expense, will jointly conduct a study
     to determine the additional capacity provided by such investments.
     Should NCRR determine that additional passenger trains and/or
     increased train speeds are desirable and that the funds are
     available to make the necessary investments to increase passenger
     train speed or capacity, NCRR will plan for the additional capacity
     necessary to support more passenger service and/or greater speeds,
     in conjunction with NSR through the PPC/Dispute Resolution
     procedure.

(i)  If NCRR adds dedicated separate infrastructure on the right-of-way
     for passenger operations above 90 mph as required by Section 13
     hereof, NCRR shall have such dedicated separate facilities
     dispatched and maintained by a party other than NSR.

(j)  NCRR and NSR will each keep the other informed of matters involving
     present and prospective passenger and freight traffic on the line,
     the operation of the line, or any other matter relating to the NCRR
     lines with which they may be involved during the term of the
     Agreement.  In all matters involving NCDOT or regulatory bodies
     where the parties' interests are in common, the parties shall work
     cooperatively to accomplish the purposes of this Agreement in a
     timely fashion.

(k)  Any capital expenses or other improvements will abide by and be
     subject to the principle of no cross subsidization between the
     services operated on the lines.

Section 10. EASTERN SEGMENT TRACK IMPROVEMENTS

In order to promote economic development along the NCRR corridor and
greatly improve the current track condition of the line, the parties
agree to implement a project to upgrade the Raleigh to Morehead City
line segment in order to improve the condition of the segment closer to
the condition of other segments of the NCRR line.

NSR (under contract to NCDOT utilizing NCRR dividend proceeds from NCRR
interim compensation), agrees to perform work, such as a timber and
surfacing project, of up to $10 million on such segments of the NCRR
line between Boylan (Raleigh) to the Port Terminal (at Morehead City,
including the tracks maintained by NSR at the Port Terminal) as are
determined by NCRR to be most effective.  Notwithstanding the provisions
of Section 9(f) hereof, to the extent that such work increases the FRA
classification of the following NCRR track segments, NCRR shall not be
responsible for reimbursing NSR for any additional dispatching or
maintenance costs, including any costs of any additional employees
required on account of such work:

<PAGE>  PAGE 122

                                            EXHIBIT 10(i), Page 12 of 44

           Milepost EC 1.5 to EC 9.0;
           Milepost EC 71.0 to EC 94.0;
           Milepost H 119.7 to H 120.0;
           Milepost H 126.0 to H 126.8.

NSR will begin implementation of the project within 60 days of the
finalization of the project scope and the availability of funding and
will complete the project as expeditiously as possible, with a date
certain for completion to be established by the PPC/Dispute Resolution
provisions herein.

Section 11. PROCESS FOR REVIEWING ADDITIONAL PASSENGER CAPACITY
            ON NCRR LINES

(a)  The NCRR trackage will be operated on a shared-use basis with
     passenger operations for passenger or commuter trains with speeds
     of 90 mph or less.  NSR will present to NCRR its analysis of the
     number of additional freight trains that could be operated on the
     line as of January 1, 2000, without adding capacity to the NCRR
     line.  If NCRR does not concur, the issue will be resolved pursuant
     to the PPC/Dispute Resolution procedure herein.

(b)  NSR will have use of the freight capacity as determined above.

(c)  NCRR will pay for any increased costs for operations, maintenance
     or capital expenditures necessary to accommodate increasing the
     number of passenger trains above that currently operated on NCRR
     tracks, or to permit increased passenger speeds above the present
     passenger train speeds, except for the additional passenger train
     set permitted pursuant to Section 12(e) hereof.

(d)  If any passenger service or any third-party passenger operations
     are added to the NCRR line, the passenger service operator or other
     third-party passenger operator will be required to make and pay for
     capital improvements on the line adequate to assure that none of
     NSR's capacity, either the capacity NSR is currently using or
     unused capacity that is available to NSR, determined as described
     above, is diminished or disadvantaged.

(e)  All FRA regulations must be complied with in advance of initiating
     any passenger operations in excess of 79 mph.  The administrative
     costs of obtaining such regulatory approval, including but not
     limited to any expense of performing an environmental impact
     statement or environmental assessment, if required to comply with
     environmental regulations, shall be borne by NCRR.

(f)  NCRR and NSR agree to cooperate in the following long range
     planning studies, at NCRR's expense, to determine whether
     additional capacity would be required to handle additional
     passenger or commuter trains proposed on segments of NCRR:

<PAGE>  PAGE 123

                                            EXHIBIT 10(i), Page 13 of 44

     (i)  Passenger Train Studies:

          NCRR and NSR agree to several studies that are designed to
          allow NCRR to plan more effectively for the long-term
          utilization of the valuable asset NCRR has in the NCRR right-
          of-way:

          (A)  Passenger Train Transit Time Improvement:

               These studies will include the following considerations
               in its analysis of potential passenger service related
               expenditures:

               (I)    Reduced passenger train stops and reduced duration
                      of stops;

               (II)   Reduced highway grade crossings, whether equipped
                      with active or passive warning devices;

               (III)  Increased speeds through towns and localities with
                      speed restriction ordinances;

               (IV)   Improvements to increase speed at various
                      restrictions, such as crossings with railroads at
                      grade;

               (V)    Improvements to reduce the required safety margins
                      or clearing times for passenger/freight and
                      passenger/passenger meets or passes;

               (VI)   Revisions to passenger train and freight train
                      schedules;

               (VII)  Reductions in transit times by using FRA-approved
                      tilt train equipment;

               (VIII) Improvements to dispatching systems;

               (IX)   Improvements to signal systems; and

               (X)    Track improvements such as adding double track,
                      sidings, double power crossovers, turnouts and
                      curve improvements including super elevation of
                      curves.

                      NCRR will request NCDOT, not at NSR's expense, to
                      jointly work with appropriate NSR operations and
                      engineering staff to determine which investments
                      yield the highest returns in terms of speed and
                      capacity.

<PAGE>  PAGE 124

                                            EXHIBIT 10(i), Page 14 of 44

          (B)  Passenger Train Operating Speed Study (79 to 90 mph):

               The study will address the safety and other issues
               related to increasing maximum passenger speeds from 79
               mph to 90 mph and the economic issues related to
               installing cab signals and operating trains in cab signal
               territory.

          (C)  High Speed Study (maximum speeds in excess of 90 mph):

               The study will address what will be needed to safely and
               economically transition toward separate freight and
               passenger operations at the point when passenger train
               speeds exceed 90 mph; the study will address interim
               capital investments to assure that the investments are
               made in conjunction with a long-term transition plan and
               will continue to be useful in the ultimate plan; the
               study will address safety issues related to migrating
               from shared-use operations to separate operations for
               passenger services operated in excess of 90 mph.

               The study will also investigate whether it is possible
               and desirable that incremental improvements may proceed
               in such a way that portions of the Raleigh - Charlotte
               route may achieve greater than 90 mph, with the required
               separate track structure, while other segments remain at
               less than 90 mph and continue as shared-use segments.

     (ii) Alternative Routing Study:

          NCRR and NSR will perform a joint study of the operational and
          economic considerations involved in operating through freight
          trains between Greensboro and Raleigh over other NSR routes
          rather than over the NCRR route.  NCRR will study, at NCRR
          expense, the differences in the investment required, the
          maintenance expenses, and the operations if the NCRR line
          between Greensboro and Raleigh were operated with or without
          through freight trains.  NSR will determine, at NSR expense,
          the capital investment required to upgrade any alternate route
          to  accommodate the through freight trains operated on the
          NCRR route between Greensboro and Raleigh.  Any decision by
          NCRR or NCDOT to cooperate and/or participate in the cost of
          NSR's use of the alternative route would be based on producing
          the lowest net capital cost to the NCDOT and Triangle Transit
          Authority (TTA) run passenger trains while still affording to
          NSR existing levels of freight service capacity, and would
          take into account community impacts on both lines.  It is
          understood that in the event that through freight trains are
          operated over an alternate route, NSR will need to be able to
          continue to serve present and future customers on the NCRR
          line, including those which might be accessible only by

<PAGE>  PAGE 125

                                            EXHIBIT 10(i), Page 15 of 44

          crossing TTA tracks.  However, nothing in the Agreement will
          serve to cause any delay in TTA and NSR continuing to work
          together in making final plans and implementation of TTA
          facilities and service.

(g)  In connection with the studies referred to herein, NCRR and NSR
     will employ analytical techniques to:  (1) determine the impact of
     passenger trains on the operations and capacity of NSR, and (2) to
     determine the capital improvements that would be necessary to avoid
     adverse impacts on NSR's freight operations or capacity.  Any
     capital improvements or other costs or expenses will abide by and
     be subject to the principle of no cross subsidization between the
     services operated on the lines.

(h)  NCRR and NSR may engage consultants and outside experts to analyze
     construction, maintenance or dispatching issues.  Consultants may
     be involved in data gathering, data analysis, and presentation of
     recommendations, but NSR agrees that senior level NSR officers will
     be involved in the decision-making process.

(i)  Intercity passenger operations may use equipment such as tilt-train
     equipment as long as the use of such equipment on NCRR commingled
     with NSR operations is approved by FRA or FRA grants a specific
     waiver or approval allowing operation of such equipment commingled
     with NSR operations on the NCRR.

Section 12. IMPLEMENTATION OF THE NCDOT'S UPDATED "RAIL IMPACT" PROGRAM

(a)  NSR agrees to implement the NCDOT's updated "Rail IMPACT" program.

(b)  NSR and NCRR will reevaluate with NCDOT the elements included in
     NCDOT's original Rail Impact program, to develop an updated program
     of rail improvements totaling $20 million which will provide
     increased passenger speeds while at the same time not adversely
     impacting the freight operations of NSR.

(c)  When funds for the updated Rail Impact program are available to
     NCRR or NCDOT, NSR agrees to then implement as expeditiously as
     possible.

(d)  If a shortage of available manpower would delay implementation
     beyond a reasonable completion date, NSR and NCRR agree to
     cooperate to jointly seek concurrence from the appropriate labor
     organizations representing NSR's employees, if such concurrence is
     required, for such work to be done by qualified contractors
     selected in accordance with the PPC/Dispute Resolution procedure
     and to be engaged by NSR.

(e)  NCDOT may add one daily passenger train set to operate at or below
     a maximum speed of 79 mph to the line between Raleigh and Charlotte
     subsequent to the completion of the construction of the updated
     Rail Impact program.

<PAGE>  PAGE 126

                                            EXHIBIT 10(i), Page 16 of 44

Section 13. HIGH SPEED PASSENGER OPERATIONS

(a)  NCRR may grant operating authority within the NCRR corridor for
     intercity passenger trains to be operated in excess of 90 miles per
     hour  ("high speed passenger trains") only if such trains or
     systems are operated on a dedicated separate new infrastructure.

(b)  After approval by FRA, high speed passenger trains may use the
     shared-use tracks for low speed access to and from stations and/or
     for operations at conventional passenger train speeds in areas in
     which adequate right-of-way for separate tracks is not available.

Section 14. OTHER PASSENGER OPERATIONS OVER NSR LINES

NSR will negotiate in good faith with NCDOT regarding passenger service
to Asheville, N.C., it being understood that NSR will not be responsible
for any capital and operating costs and/or expenses associated with or
related to such operations, and the addition of passenger trains to the
line will be accompanied by sufficient State investment to maintain
NSR's current or future freight capacity/utility and service standards
on the route, as determined by NSR.

Section 15. REGIONAL RAIL OPERATIONS WITHIN NCRR RIGHT OF WAY

(a)  NCRR reserves the right to allow rail service such as that proposed
     by the Triangle Transit Authority or other light rail operations on
     separately dedicated infrastructure within NCRR's right-of-way,
     consistent with the terms of this Agreement.

(b)  If any FRA approvals or plan reviews are necessary, the passenger
     operator would be responsible for obtaining such approvals or
     reviews.

(c)  NCRR will require the service provider to assure that reasonable
     and efficient access by NSR to its present and future customers on
     both sides of the track(s) over which NSR has trackage rights is
     maintained at no cost to NSR.

(d)  NCRR will require the service provider to have in place before
     beginning operations, and to maintain at all times while such
     operations are conducted, indemnity agreements and liability
     insurance as described in Section 23 hereof.

(e)  The proximity of light rail operations to NCRR tracks and the
     related maintenance and operation issues shall be addressed under
     the PPC/Dispute Resolution provisions herein and in conformity
     with all federal regulations.

<PAGE>  PAGE 127

                                            EXHIBIT 10(i), Page 17 of 44

Section 16. TRAFFIC INFORMATION AND FORECASTS

Subject to the confidentiality provisions of Section 34 hereof, NSR and
NCRR will jointly examine traffic information and develop and share near-
and long-term traffic forecasts of freight and passenger traffic volumes
to evaluate safety, capacity and speed issues relating to the use of the
various segments for freight and passenger operations.

Section 17. CESSATION OF FREIGHT SERVICE ON ANY SEGMENT

(a)  At any time during the term of this Agreement or any renewal
     period, NSR may seek to abandon its operation over the segment
     between Charlotte and Greensboro, or the segment between Greensboro
     and Raleigh, or the segment between Raleigh and Morehead City, or
     any two of those segments, or all three of those segments.

(b)  No subdivision of the segments will be permitted, i.e., NSR may
     seek to abandon its operations on the entire segment between
     Charlotte and Greensboro or on the entire segment between
     Greensboro and Raleigh or the entire segment between Raleigh and
     Morehead City, or combinations of those segments, but it cannot
     abandon service on any sub-segments of those segments unless agreed
     to by NCRR, in NCRR's sole discretion.

(c)  In the event of such abandonment of service on such segment or
     segments, the following transition provisions shall apply to the
     segment or segments being abandoned by NSR:

     (i)   NSR will continue to operate, dispatch, and maintain the line
           until initiation of service by a qualified operator.  A
           qualified operator is one with demonstrated successful
           experience in operation of railroad lines previously operated
           by Class I railroads.

     (ii)  NSR will assure that if operation of the line is handed over
           to a third-party operator, the line must retain for at least
           a six-month period its maintenance level to then-current FRA
           track classifications consistent with current timetable and
           current track profile speed restrictions and any other
           restrictions therein that affect the speed of operation,
           consistent with any FRA track classification increases and/or
           elimination of timetable or track profile speed restrictions
           or other restrictions that affect the speed of operation
           resulting from work performed pursuant to Section 10 hereof.

     (iii) All conditions requiring routine slow orders will be
           corrected in advance of the line being handed over to a third-
           party operator.  In the event of slow orders necessitated by
           unusual events or requiring major construction or capital
           expenditures which occur prior to the line being handed over

<PAGE>  PAGE 128

                                            EXHIBIT 10(i), Page 18 of 44

           to a third-party operator, the PPC/Dispute Resolution process
           will be employed to establish a reasonable time frame for NSR
           to make the necessary repairs.

     (iv)  NSR will not be responsible for correcting slow orders
           resulting from unusual events that occur subsequent to the
           line being handed over to a third-party operator.

     (v)   NSR will assist NCRR in securing a qualified third party
           operator.  NSR's assistance to NCRR shall include but shall
           not be limited to the following:  (1) identify qualified
           operators from previous experience with other operators,
           (2) assist in preparation and review of the Request for
           Proposal, and (3) assist in preparation of an operating
           agreement with the third party.

     (vi)  Any business package offered to potential third-party
           operators will be developed in consultation with significant
           customers on the line and significant customers not on the
           NCRR line which would be substantially affected (positively
           or negatively) by a change in operators.

     (vii) The third party operator will provide all service on the
           line.  NSR shall be entitled to negotiate haulage rights with
           such third party for all or portions of the line at standard
           eastern region haulage agreement rates and conditions
           applicable at the time of haulage.

     (viii) NSR will assist in seeking shipper satisfaction for any
           transition to third party operation.  NSR will provide
           railroad cars to customers of the third-party operator on the
           same basis it does for other third-party operators connected
           to its line.

     (ix)  Prior to initiation of service by a third-party operator, NSR
           will operate a rail flaw detector car over the line and will
           replace any rails or rail segments determined to have
           defects.

     (ix)  Each party shall cooperate with the other in obtaining any
           necessary regulatory approval to accomplish any termination
           of NSR trackage rights and initiation of trackage rights by a
           third party operator.

(d)  Should NSR cease operations over either the Charlotte/Greensboro
     segment or the Greensboro/Raleigh segment, the annual trackage
     rights fee will be subject to adjustment through the PPC/Dispute
     Resolution procedures.  The adjustment will be based on the
     percentage of total car miles operated on each of the two segments.

<PAGE>  PAGE 129

                                            EXHIBIT 10(i), Page 19 of 44

Section 18. RETURN OF REAL PROPERTY

(a)  Non-operating Property

     (i)   NCRR and NSR hereby agree that the term "Designated Returned
           Property" as used herein means those non-operating properties
           owned by NCRR and described on EXHIBIT B attached hereto and
           incorporated herein by reference.

     (ii)  The Designated Returned Property will be released by NSR and
           A&EC to NCRR as of January 1, 2000 or the date such property
           is accepted by NCRR, whichever date is later, or a date as
           otherwise agreed between the parties (the "Return Date").
           NSR shall continue to have use of the Designated Returned
           Property until the Return Date.

     (iii) For each such parcel the Return Date of which is within
           9 months of the date NSR provides NCRR with the information
           described in Section 19 (e) hereof, NSR shall pay to NCRR
           within thirty business days of the Return Date one-half (1/2)
           of all rents received by NSR or A&EC for such parcel of
           Designated Returned Property from January 1, 1995, through
           the Return Date, subtracting any property taxes, assessments
           of any type and normal maintenance paid or to be paid by NSR,
           its parents or any affiliate and/or A&EC with respect to
           Designated Returned Property applicable to the period from
           January 1, 1995 to the Return Date.

     (iv)  Any parcel of Designated Returned Property that is released
           by NSR or A&EC to NCRR shall be returned to NCRR free of any
           obligation of NCRR, NSR or A&EC to operate that parcel as a
           part of its or their line(s) of railroad unless otherwise
           agreed between the parties.

(b)  Operating Property:

     (i)   Operating property will be considered by the parties to have
           been released from the leasehold or other interest of NSR or
           A&EC to NCRR and to be subject to this Agreement and the
           Trackage Rights Agreement as of the Effective Date.

     (ii)  From and after the Effective Date, NSR and A&EC will have no
           ownership or leasehold interest in the properties of NCRR or
           the right-of-way of NCRR, and will look solely to this
           Agreement and to its rights and obligations under federal
           and/or state law for its authority to operate upon or to
           enter or remain upon the properties of NCRR.

     (iii) On or before October 1, 2000, NCRR and NSR, through the ad
           hoc property committee described in Section 19 hereof, shall
           determine the properties (except the property discussed in
           Section 7(b) hereof) which are necessary for NSR, by itself

<PAGE>  PAGE 130

                                            EXHIBIT 10(i), Page 20 of 44

           or through an affiliate of NSR, to fulfill NSR's obligations
           as operator of exclusive freight trackage rights under this
           Agreement (the "Designated NSR Facility Property").  Upon
           such determination, NSR shall provide to NCRR drawings of
           Designated NSR Facility Property that depict the shape and
           dimensions in feet of each such parcel of Designated NSR
           Facility Property, and shall note, in feet, the distance of
           the parcel to the nearest railroad milepost and also to the
           center line of the main track.  NCRR and NSR shall then enter
           into a non-assignable (except as provided in Section 31)
           license or other written agreement for the continued NSR
           possession of such property for so long as (a) NSR has
           exclusive freight trackage rights under this Agreement or
           any renewal thereof, and (b) such property continues to be
           needed by NSR for its identified purpose.  Such license or
           other written agreement shall be entered into consistent with
           and subject to the terms and conditions of this Agreement and
           the Trackage Rights Agreement as consideration for this
           Agreement and without additional consideration to be paid to
           NCRR by NSR.  NSR shall be responsible for the management and
           condition of such property and any ad valorem taxes,
           assessments, and any other costs related directly or
           indirectly to such property.

     (iv)  The parties acknowledge that there may be parcels which are
           subject to leases to third parties which are located within
           the limits of the right of way ( "3PL Parcels").  The parties
           intend that 3PL Parcels be treated in a manner similar to the
           Designated Returned Properties with respect to the allocation
           of rentals, both those received between January 1, 1995 and
           the date such parcels are returned to NCRR and those received
           after such parcels are returned to NCRR, and with respect to
           the duties of the parties regarding the return of such
           parcels to the management of NCRR and the obligations to pay
           property taxes and assume environmental responsibility,
           except that the parties agree that the indemnity provisions
           of Section 24(c) will not apply to such parcels.

Section 19. AGREEMENTS WITH USERS, LICENSEES AND/OR THIRD
            PARTIES REGARDING THE RIGHT OF WAY

(a)  NSR and NCRR shall cooperate with each other in the transition of
     responsibility to NCRR, or shared responsibility between NCRR and
     NSR, as outlined herein and in EXHIBIT C, of the management,
     administration, and control of new and existing third party
     license, lease and other agreements that concern NCRR-owned
     property or right of way previously subject to the Old Leases.

(b)  NCRR and NSR shall appoint an ad hoc property committee (the
     "Committee" for purposes of this section) to address the orderly
     transition of the management of such agreements, with a target date
     of October 1, 2000 for completion of such transition.

<PAGE>  PAGE 131

                                            EXHIBIT 10(i), Page 21 of 44

(c)  The Committee shall address the following types of existing NSR
     agreements and any other agreements the parties agree must be
     addressed:

     (i)   leases, licenses, wire line agreements, pipeline agreements,
           and other longitudinal or perpendicular encroachments;

     (ii)  private and public grade crossing agreements and agreements
           concerning public projects;

     (iii) track lease agreements;

     (iv)  spur tracks owned by third parties;

     (v)   real property matters relating to trackage rights and other
           operating agreements with other railroad companies (other
           than with Amtrak and the agreement covering CSXT's operations
           between Fetner and Raleigh (Boylan)), including operations
           between Goldsboro and the CP&L lead;

     (vi)  agreements with Amtrak for stations, parking, or other
           passenger facilities and related properties (other than
           tracks, platforms, and signals).

(d)  Within nine (9) months of receipt of the information from NSR
     described in section (e) below, NCRR will request an assignment
     from NSR of management of any active third party agreement,
     terminate any such agreement, request NSR or A&EC to terminate such
     agreement, substitute new agreements for existing agreements, or
     request that NSR retain management responsibility for such
     agreement for the remaining term of such agreement.  If NSR
     declines to accept such responsibility for a particular matter at a
     particular time, the matter shall be addressed by the PPC/Dispute
     Resolution procedure herein.  It is the intention of the parties
     that NCRR will assume responsibility for the management of all
     properties of NCRR not needed by NSR in its freight operations, but
     that the timing of such assumption will be subject to the agreement
     of the parties on a case by case basis.

     It is understood that it may be that parties to certain agreements
     can no longer be readily located, and that such agreements may be
     terminated by NSR by mailing notice to the last known address, if
     any, of the party.  The parties shall work cooperatively and in
     good faith in reviewing the existing agreements.  Rentals from
     third party agreements other than rentals of Designated Returned
     Properties or 3PL Parcels received by NSR from January 1, 1995
     shall be divided as agreed by the Committee or if the Committee
     fails to agree, the matter shall be resolved pursuant to the
     PPC/Dispute Resolution procedure herein.  As a general rule, the
     parties agree that the party entitled to the rental of Designated
     Returned Properties or 3PL Parcels shall from the date of such
     entitlement be responsible for the management of such property, for

<PAGE>  PAGE 132

                                            EXHIBIT 10(i), Page 22 of 44

     payment of any ad valorem taxes (if taxed as non-system property or
     separately assessed as set forth in Section 26 hereof) and, as
     between the parties, for any environmental harm to such property
     not caused by the other party occurring after the Return Date and
     any environmental reporting, if any, for such property.

(e)  NSR shall be responsible for providing to NCRR file documents or
     copies of the following records, if any, relating to Designated
     Returned Property and 3PL parcels:  (1) photocopies of all
     applicable leases, licenses, or agreements relating to such
     property, including supplements and assignments, correspondence,
     and indexes or lists relating thereto; (2) the status of the rental
     for any such property, including billing statements or rental
     notice records for such rent; (3) the status of property taxes and
     all other expenses for such property, (4) photocopies of non-
     privileged materials found in the paper files of NSR's
     Environmental Protection Department; and (5) photocopies of non-
     privileged materials found in the paper files of the NSR Real
     Estate and Contract Services Department for all such property.  NSR
     shall be responsible for providing to NCRR file documents or copies
     of the above described records to the extent they are available for
     all other agreements under Section 19(c) above.  NSR shall use its
     best efforts not to destroy such records of third party agreements
     and records relating to any agreements.  Neither NCRR nor NSR,
     including their affiliates, shall be required to provide any
     proprietary or licensed application software, including without
     limitation any such software dealing with real estate.

(f)  With respect to properties used by Amtrak, NSR and NCRR will work
     together to seek Amtrak's acquiescence in any change of management
     and control.  Amtrak passenger station platforms shall be included
     in Designated NSR Facility Property as set forth above unless
     otherwise agreed between NCRR and NSR.

(g)  Any dispute arising under this section if not resolved within
     60 days of first being raised by either party shall be addressed
     pursuant to the PPC/Dispute Resolution provision of this Agreement.

(h)  If any agreement covers both NCRR property and properties owned by
     NSR and/or A&EC, and NCRR determines that the agreement is to be
     assigned, terminated or substituted with respect to the NCRR
     portion of the property, the action taken by NCRR will only cover
     the portion of the property owned by NCRR and rents, taxes and
     other costs or services will be prorated appropriately.

(i)  NSR and NCRR in contacts with third parties will make referrals to
     the other party in a manner that is consistent with this Section 19
     and in such a manner as to encourage timely and efficient handling.

<PAGE>  PAGE 133

                                            EXHIBIT 10(i), Page 23 of 44

Section 20. VERTICAL AND LATERAL CLEARANCES AND SUPPORT

During the term of this Agreement and any extension or renewals, NCRR
will not impair vertical and horizontal clearances and the structural
support of the track structures and other railroad facilities and
appurtenances thereto needed by NSR to conduct its freight operations,
consistent with the then current system-wide practices of NSR.  Any
proposal by NCRR or those claiming rights through NCRR which will have
the effect of reducing any clearances or support present on the date
hereof will be submitted to the PPC/Dispute Resolution procedure for
resolution.

Section 21. OTHER PROPERTY ISSUES

(a)  NCRR hereby releases all claims to Linwood Yard on the Effective
     Date hereof.

(b)  Upon termination of this Agreement, as an equal value exchange, NSR
     will be granted by NCRR a permanent exclusive easement over a
     continuous main track, satisfactory to both parties, with
     connections, between Pomona and Elm and NCRR will be granted by NSR
     a one-half interest, with connections, in Pomona Yard, the terms of
     which shall be addressed according to the PPC/Dispute Resolution
     provisions.

(c)  All other property issues shall be deferred until the expiration or
     termination of the Agreement.  If a cessation of service by NSR
     occurs on a segment pursuant to Section 17 hereof, all property
     issues relating to such segment shall be resolved in connection
     with such cessation.  Each party agrees that in advance of
     termination of the Agreement, or any proposed cessation of service
     on a segment pursuant to Section 17 hereof, the parties will
     negotiate in good faith regarding any interim access agreements
     necessary for efficient operation of each party's terminal,
     interchange, or yard facilities until the deferred property issues
     are finally resolved.

Section 22. INDUSTRIAL DEVELOPMENT

NSR and NCRR will work cooperatively with the North Carolina Departments
of Commerce and Transportation and with regional economic development
interests to enhance economic development in the areas served by NSR on
the NCRR track segments.  NSR will make special efforts on the eastern
segment of the line and will cooperate with industrial development
efforts to identify and secure long term railroad users to locate
adjacent to such NCRR line.

<PAGE>  PAGE 134

                                            EXHIBIT 10(i), Page 24 of 44

Section 23. LIABILITY

NCRR and NSR hereby establish or provide for future consideration of
certain criteria for liability, indemnity and insurance provisions and
other related financial considerations which will apply to the several
types of passenger operations which are currently or may in the future
be conducted on or near the tracks over which NSR has trackage rights,
and to establish a mechanism for handling future negotiations pertaining
to liability issues as contemplated herein, and for resolving any future
disagreements between the parties concerning such provisions.  The term
"financial consideration" as used in this Section 23 relates to
financial agreements with Amtrak relating only to liability and
indemnity concerns.  For example, the term "financial consideration"
shall not be deemed to include incentive payments provided to NSR for
performance of Amtrak passenger trains.  The types of passenger
operations contemplated by the parties, and the criteria applicable to
each, are set forth below.

(a)  Current or expanded Amtrak intercity passenger operations at
     scheduled speeds at or below 90 mph.

     Amtrak currently operates intercity passenger service on NCRR
     tracks over which NSR has trackage rights, and in connection
     therewith, Amtrak provides to NSR certain indemnities and financial
     considerations related to those indemnities under its Basic
     Agreement with NSR.  (The "Basic Agreement" between Amtrak and NSR
     shall be defined as the Agreement between Southern Railway Company
     and The Alabama Great Southern Railroad Company and National
     Railroad Passenger Corporation, dated January 2, 1979, as revised
     effective June 1, 1999.)  To the extent Amtrak operates intercity
     passenger service on such tracks at scheduled speeds of 90 mph or
     less, whether under a contract with NSR or a contract with NCRR,
     and whether at its current or at some expanded future level, NSR's
     rights and obligations pertaining to indemnity and related
     financial considerations shall be those provided by Amtrak to NSR
     under its Basic Agreement.

(b)  High speed passenger operations

     Passenger operations of any type at scheduled speeds in excess of
     90 mph ("high speed" operations) will not be undertaken by NCRR or
     any other operator on or in close proximity to the tracks on which
     NSR has trackage rights, unless an appropriate type and level of
     liability, indemnity and insurance protection covering such
     operations has been agreed upon and implemented.  Upon notice by
     NCRR to NSR that NCRR proposes such high speed passenger
     operations, NCRR and NSR shall, for a period not longer than six
     months, attempt to agree on what constitutes "close proximity," and
     on appropriate liability, indemnity and insurance protections for
     the proposed high speed passenger operations.  Upon failure to
     agree within that six month period upon what constitutes "close
     proximity" or upon types and levels of liability, indemnity and
     insurance protection, the unresolved issues shall then be resolved

<PAGE>  PAGE 135

                                            EXHIBIT 10(i), Page 25 of 44

     pursuant to the PPC/Dispute Resolution provisions of this Agreement.
     NCRR and NSR agree that high speed passenger operations will require
     different types and levels of liability and indemnity protection,
     and that the liability, indemnity and insurance provisions of the
     1998 Amended and Restated Operating Access Agreement Between
     Norfolk Southern Railway Company and Northern Virginia Transportation
     Commission & Potomac and Rappahannock Transportation Commission
     (VRE Agreement) is one example of the types and levels of liability,
     indemnity and insurance protection appropriate for high speed
     operations.

(c)  Additional passenger operations

     No passenger operations other than those described in Sections 23
     (a) and (b) above (for example, non-Amtrak intercity passenger
     operations, commuter or light rail passenger operations) shall be
     operated, whether by NCRR or any other party, on or in close
     proximity to the tracks on which NSR has trackage rights, unless an
     appropriate type and level of liability, indemnity and insurance
     protection covering such operations has been agreed upon by all
     parties.  Upon notice by NCRR to NSR that such passenger operations
     are proposed, NCRR and NSR shall, for a period not longer than six
     months, attempt to agree, if necessary, on what constitutes "close
     proximity," and on appropriate liability, indemnity and insurance
     protection for the proposed passenger operations.  Upon failure to
     agree within that six month period upon what constitutes "close
     proximity" or upon types and levels of liability, indemnity and
     insurance protection, the unresolved issues shall then be resolved
     pursuant to the PPC/Dispute Resolution provisions of this
     Agreement.  The principles set forth in subparagraphs (i) through
     (iv) below shall be applied in determining liability, indemnity and
     insurance obligations for such passenger operations, and to the
     extent lawful under the laws of the State of North Carolina, shall
     be applied without regard to the fault or negligence of any party:

     (i)   In case of an accident involving only the trains or equipment
           of the operator of such passenger service, the operator shall
           be solely responsible for all injuries to its employees and
           passengers, all damages to track, equipment, lading or other
           property, and for all liability to third parties.

     (ii)  In the case of an accident involving only the trains or
           equipment of NSR, NSR shall be responsible for all injuries
           to its employees, all damages to track, equipment, lading or
           other property, and for all liability to third parties.

     (iii) In case of an accident involving the trains of both NSR and
           the operator of such passenger service:

           1.  NSR and the operator shall be separately responsible for,
               and each shall separately bear, all liability for injuries

<PAGE>  PAGE 136

                                            EXHIBIT 10(i), Page 26 of 44

               to its own passengers and employees, and for damages to
               its own property, including property and lading in its
               possession.

           2.  NSR and the operator shall be jointly responsible for and
               shall equally bear all liability for injuries and damages
               not covered in subparagraph (iii) 1 above.

     (iv)  Except as provided in Sections 23 (a) and (b) above, all
           passenger operators shall provide and maintain commercial
           liability insurance or equivalent protection sufficient to
           cover the risks to which they are subjected by the provisions
           of this Section 23 (c).

(d)  Passenger operator qualifications

     No passenger service of any type shall be operated unless the
     proposed operator is fully qualified pursuant to federal law to
     operate such passenger service.  Amtrak will not be permitted by
     NCRR to operate additional intercity passenger service trains on
     the trackage over which NSR has trackage rights hereunder unless
     NSR is first consulted regarding any such plans.

(e)  Notice regarding matters in this section

     Any notice given by NCRR to NSR with respect to new passenger
     operations shall be in writing and shall specify that such notice
     is being given pursuant to Section 23 of this Agreement.

(f)  Cooperation in securing legislation

     NCRR and NSR acknowledge and agree that the types and levels of
     liability, indemnification and insurance protection the parties may
     deem appropriate as they pertain to certain passenger operations
     may not be possible without legislation.  The parties agree that
     should legislation be necessary to accomplish their goals, they
     shall cooperate in seeking such legislation.

Section 24. ENVIRONMENTAL PROVISIONS

(a)  Environmental Definitions

     (i)   "Environmental Occurrence" means (1) any violation of
           applicable federal, state or local environmental laws,
           regulations, administrative orders or judicial decrees, as
           they apply to any part of the Leased Properties; (2) any
           noise, vibration or the deposit, spill, discharge, or other
           release of a Contaminating Substance on or from any part of
           the Leased Properties; or (3) any failure to provide

<PAGE>  PAGE 137

                                            EXHIBIT 10(i), Page 27 of 44

           information, make all appropriate submissions, and fulfill
           all applicable legal obligations of the owner and/or operator
           of the Leased Properties.

     (ii)  "Contaminating Substance" means oil, petroleum or any
           substance declared to be hazardous or toxic or treated as a
           pollutant or contaminant under any law or regulation now or
           hereafter enacted or promulgated by any governmental
           authority.

     (iii) "Designated Returned Property" means those parcels identified
           in EXHIBIT B.

     (iv)  "Leased Properties" means the properties leased to NSR and/or
           A&EC that (1) were included within the leaseholds as of
           December 31, 1994, under the 1895 Lease or the 1939 Lease
           (including the Designated Returned Property and the Line of
           Road); or (2) which then or thereafter became additions to
           the properties leased under the 1895 Lease or the 1939 Lease
           before the Effective Date.

     (v)   "Line of Road" means the property over which NSR is the
           exclusive freight operator under the Trackage Rights
           Agreement and this Agreement, as well as Designated NSR
           Facility Property as determined pursuant to Section 18 of
           this Agreement.

(b)  Responsibility for Environmental Occurrences on the Leased
     Properties During the Leasehold Period and Until the Effective
     Date.

     (i)   NSR agrees to indemnify, defend and hold harmless NCRR and
           its respective officers, directors, beneficiaries,
           shareholders, partners, agents, and employees from all fines,
           suits, procedures, claims, liabilities, damages (including
           without limitation diminution in property value and other
           economic loss) and actions of every kind, and all reasonable
           costs and expenses associated therewith (including attorneys'
           and consultants' fees) if NCRR is a named or charged party
           arising from any Environmental Occurrence that occurred on
           the Leased Properties during the leasehold period and until
           the Effective Date.

     (ii)  If NSR's responsibility with respect to a specific parcel is
           triggered by Section 24(b)(i), NSR reserves the right upon
           written notice to NCRR to undertake site investigation,
           cleanup and remediation itself in a reasonable and prompt
           manner.

     (iii) NCRR will provide NSR with reasonable access to any properties
           of NCRR on which NSR takes action under Section 24(b)(ii) to
           investigate, clean up or remediate environmental harm, or on
           which NSR desires to undertake any other related action the
           performance of which is rendered more efficient or less costly
           when performed on such property, or which is needed by NSR to
           access any such properties.

<PAGE>  PAGE 138

                                            EXHIBIT 10(i), Page 28 of 44

(c)  Responsibility for Environmental Occurrences on the Designated
     Returned Property On and After the Effective Date or Return Date

     (i)   NCRR agrees to indemnify, defend, and hold harmless NSR and
           its officers, directors, beneficiaries, shareholders,
           partners, agents, and employees from all fines, suits,
           procedures, claims, liabilities, damages and actions of every
           kind, and all reasonable costs and expenses associated
           therewith (including attorneys' and consultants' fees) if NSR
           is a named or charged party arising from any Environmental
           Occurrence, other than an Environmental Occurrence for which
           NSR is responsible under Section 24(d)(i) below, that occurs
           on any Designated Returned Property after the Effective Date
           or the Return Date, whichever comes later.

     (ii)  If an Environmental Occurrence for which NCRR is responsible
           under Section 24(c)(i) is related to any Environmental
           Occurrence for which NSR is responsible under Section
           24(b)(i), NCRR will be responsible only to the extent that
           contamination that was present prior to the Effective Date or
           Return Date is exacerbated by the later Environmental
           Occurrence.

     (iii) If NCRR's responsibility with respect to a specific parcel is
           triggered by Section 24(c)(i), NCRR reserves the right upon
           written notice to NSR to undertake site investigation,
           cleanup and remediation itself in a reasonable and prompt
           manner.

     (iv)  NSR will provide NCRR, at no charge to NCRR, with reasonable
           access to any property controlled by NSR on which NCRR takes
           action under Section 24(c)(i) to investigate, clean up or
           remediate environmental harm, or on which NCRR desires to
           undertake any other related action the performance of which
           is rendered more efficient or less costly when performed on
           such property, or which is needed by NCRR to access any such
           properties.

(d)  Responsibility for Environmental Occurrences Resulting From NSR
     Operations On and After the Effective Date

     (i)   NSR agrees to indemnify, defend, and hold harmless NCRR and
           its officers, directors, beneficiaries, shareholders,
           partners, agents, and employees from all fines, suits,
           procedures, claims, liabilities, damages (including without
           limitation diminution in property value and other economic
           loss) and actions of every kind, and all reasonable costs and
           expenses associated therewith (including attorneys' and
           consultants' fees) if NCRR is a named or charged party
           arising from any Environmental Occurrence that occurs on
           property owned by NCRR on or after the Effective Date, but
           only to the extent such Environmental Occurrence results from

<PAGE>  PAGE 139

                                            EXHIBIT 10(i), Page 29 of 44

           the operations of NSR, its agents or any party with a direct
           contractual relationship with NSR relating to NSR's operations,
           including Amtrak under an Amtrak/NSR Direct Service Agreement.

     (ii)  NSR will be responsible for (1) overseeing its own
           environmental operations, (2) responding to notices, claims,
           lawsuits, or orders pertaining to environmental issues or
           incidents arising out of its freight operations or Amtrak/NSR
           Direct Services and occurring on or adjacent to the Line of
           Road or adjacent properties, and (3) complying with and
           performing all environmental obligations of the freight
           operator of the Line of Road during the term of the Trackage
           Rights Agreement and any renewals.  NSR will not allow the
           release, discharge or disposal of any wastes of any kind,
           whether hazardous or not, on the properties of NCRR.  For
           purposes of the preceding sentence only, the agreement of NSR
           not to allow the release, discharge or disposal of any wastes
           on the properties of NCRR will not apply to the temporary
           storage of wastes in tanks or containers or to the discharge
           of waste water or other effluent subject to a valid permit
           in accordance with all applicable environmental laws and
           regulations. Should NSR inadequately perform any action
           required under applicable environmental laws, rules,
           regulations, ordinances or judgments, NCRR or its represen-
           tative shall have the right to take whatever reasonable
           corrective action NCRR deems necessary to perform the work,
           at the sole expense of NSR.

     (iii) NCRR will provide NSR with reasonable access to any
           properties of NCRR on which NSR is required by this Section
           24(d) to take action to investigate or remediate
           environmental harm, or on which NSR is required hereunder to
           take any other related action the performance of which is
           rendered more efficient or less costly when performed on such
           property, or which is needed by NSR to access any such
           properties.

     (iv)  To the extent permitted by applicable laws and regulations,
           the following will be provided to NCRR or to NSR within
           30 days of the receipt or submission thereof by NSR or by
           NCRR, as the case may be:

           (A) Any administrative or judicial investigation, complaint,
               order or demand filed, served on or delivered to NCRR or
               NSR by any governmental agency at any time during the
               term of this Agreement because of or arising from the
               deposit, spill, discharge or other release of a
               Contaminating Substance which occurred on any part of the
               Leased Properties before the Effective Date, or the Line
               of Road, or any parcel in which the other party has an
               interest on and after the Effective Date;

<PAGE>  PAGE 140

                                            EXHIBIT 10(i), Page 30 of 44

           (B) Notice of any claims, lawsuits or other actions against
               NCRR or NSR at any time during the term of this Agreement
               for injunctive relief or recovery of losses sustained
               because of or arising from the deposit, spill, discharge
               or other release of a Contaminating Substance which
               occurred on any part of the Leased Properties before the
               Effective Date, or the Line of Road, or any parcel in
               which the other party has an interest on and after the
               Effective Date;

           (C) A copy of any analytical results, correspondence or
               report pertaining to underground storage tanks, above
               ground storage tanks, wetlands or any environmental
               investigation of any part of the Line of Road, which is
               submitted to NCRR or NSR by any third party (excluding
               NCRR's or NSR's contractors and consultants, but
               including governmental agencies) or submitted by NCRR or
               NSR to any governmental agency at any time during the
               term of this Agreement;

           (D) A copy of the results of environmental tests performed by
               or on behalf of a governmental agency at any time during
               the term of this Agreement because of or related to any
               deposit, spill, discharge or other release of a
               Contaminating Substance occurring on any part of the Line
               of Road; and

           (E) A copy of all environmental reports, notices and
               correspondence  submitted by NCRR or NSR to any
               governmental agency after the effective date of this
               Agreement pursuant to any applicable federal, state, or
               local law, ordinance or regulation pertaining to the Line
               of Road at any time during the term of this Agreement.

     (v)   If there is an Environmental Occurrence which NCRR has a
           reasonable good faith belief may constitute a risk of
           liability, expense or criminal exposure to NCRR, NCRR will be
           given full access to and opportunity to copy any relevant
           environmental reports, studies or data pertaining to such
           Environmental Occurrence in the possession of NSR (excepting
           privileged communications with counsel for NSR), upon 30 days
           prior written notice to NSR.

(d)  Remediation Standards

     No cleanup or remediation will be required pursuant to this
     Agreement unless Contaminating Substances are present in amounts
     requiring reporting to state or federal environmental agencies and
     in amounts requiring cleanup or remediation under applicable
     environmental laws and regulations.  If a cleanup or remediation
     work is required on any parcel of Leased Properties that is used
     for non-residential purposes as of July 1, 1999, the indemnifying
     party under Sections 24(b), (c) or (d) will not be required to meet
     more stringent standards due to existing or possible future

<PAGE>  PAGE 141

                                            EXHIBIT 10(i), Page 31 of 44

     development of the parcel for residential uses.  The obligation to
     indemnify for cleanup and remediation expenses or the undertaking
     of such work shall not be increased based upon any development
     requiring excavation of the surface or subsurface of the given
     parcel for the construction of underground garages, basements, or
     subsurface occupation.  The parties agree that the cleanup standard
     applicable to such parcel may be based upon a site specific risk
     assessment, if such approach complies with applicable environmental
     laws and regulations or is accepted by the environmental agency
     having jurisdiction over the parcel.

(e)  Retention of Rights

     In addition to the rights conveyed by this Section 24, NCRR and NSR
     each retains all statutory and common law rights and causes of
     action against the other, including but not limited to its rights
     under federal and state environmental laws, arising out of
     Environmental Occurrences.

(f)  Termination of Indemnification Obligations

     (i)   The parties' indemnification and defense obligations under
           Sections 24(b), (c) and (d) of this Agreement arising out of
           an Environmental Occurrence will terminate seven (7) years
           after the party seeking indemnification has actual knowledge
           or receives proper notice from the other party or a third
           party of the Environmental Occurrence, and in any event such
           obligations will terminate seven (7) years after the
           termination of this Agreement and any extensions thereof.  If
           the party seeking indemnification for an Environmental
           Occurrence submits a valid claim in writing to the other
           party within this time period, the indemnifying party's
           obligations under this Agreement will continue indefinitely
           with respect to that Environmental Occurrence until the
           matter is resolved.  For purposes of this Section 24(f)(i),
           any notice or claim must meet the following additional
           requirements:

           (1) In the case of a notice by either NSR or NCRR to each
               other, it must refer to this Section 24(f)(i) and must be
               delivered either by hand; by registered or certified
               mail, return receipt requested; by next-day delivery,
               with written evidence of receipt; or by fax, with
               confirmation by registered or certified mail, return
               receipt requested.

           (2) It must specifically describe the suspected Environmental
               Occurrence, the nature and scope of the contamination,
               the property affected, any claims that have been made and
               plans for investigation or remediation, to the extent
               such information is available.

<PAGE>  PAGE 142

                                            EXHIBIT 10(i), Page 32 of 44

     (ii)  Unless the parties' obligations have terminated under
           Section 24(f)(i), NCRR and NSR each agrees to waive and not
           to assert as a defense to its indemnification obligations
           under this Section 24 any statute of limitations, statute of
           repose, laches or other time related defense with respect to
           any Environmental Occurrence.

(g)  Environmental Information for Designated Returned Property

     With respect to the Designated Returned Properties, on or before
     October 1, 1999, NSR will identify any contamination of which it
     has knowledge and will provide to NCRR all information and reports
     pertaining thereto, and NCRR will have the right to inspect such
     properties before their return.  Such right of inspection will
     include the right to perform an environmental site assessment.

(h)  Dispute Resolution

     Any dispute arising under this Section 24, if not resolved within
     90 days of being raised by either party, shall be addressed
     pursuant to the PPC/Dispute Resolution provision of this Agreement.

Section 25. "REIT" COOPERATION

(a)  NSR will cooperate with NCRR in maintaining NCRR's status as a Real
     Estate Investment Trust ("REIT") for income tax purposes.

(b)  NCRR and NSR intend that, to the extent permitted by law, the
     payments by NSR for trackage rights be treated as rents from real
     property for purposes of NCRR's continued qualification as a REIT.

Section 26. PROPERTY TAXES

(a)  NSR shall continue to pay property (ad valorem) taxes assessed
     against NSR as a result of the allocation of a portion of its
     system value to the taxing jurisdiction in which NCRR owns property
     over which NSR serves as the exclusive freight operator pursuant to
     the Agreement.

(b)  NSR:  (i) shall be responsible for property (ad valorem) taxes, if
     any, determined pursuant to the North Carolina General Statutes and
     related rules and regulations of the North Carolina Department of
     Revenue on Non-operating Property that is owned by NCRR and which
     NSR has the exclusive right to use under the Agreement and
     (ii) shall be responsible for any property taxes, assessments, or
     liens with respect to Designated Returned Property not paid by NSR
     or any of its subtenants/licensees for all periods prior to the
     Return Date.  NCRR shall be responsible for property (ad valorem)
     taxes on all other Non-operating Property; provided, however, where
     NSR has the non-exclusive right to use Non-operating Property under

<PAGE>  PAGE 143

                                            EXHIBIT 10(i), Page 33 of 44

     the Agreement, then NSR shall be responsible for its pro rata share
     of the property taxes on such property based on NSR's usage of such
     property.  For purposes of this Section 26, Non-operating Property
     shall mean property that is appraised as non-system property by the
     North Carolina Department of Revenue or separately assessed by the
     local assessor as non-public service company property.

(c)  NSR or NCRR will not be required to pay any tax it is obligated to
     pay under the provisions of this Section during the time it shall
     reasonably and in good faith and by appropriate legal or
     administrative proceedings contest the validity or the amount
     thereof.

(d)  NSR and NCRR and their respective assignees and designees shall
     have the right to control and defend at their expense any audit or
     examination by any taxing authority, or any judicial proceeding,
     relating to any taxes required to be paid by them respectively
     under this Section.

(e)  If during the term of the Agreement, including any renewal period,
     the manner in which property (ad valorem) taxes are assessed
     against railroads is changed, or if improvements are made by NCRR
     or any other party hereunder that are not used by NSR and that
     affect the amount of property taxes assessed against NSR, the
     parties will attempt in good faith to agree upon any changes which
     may be necessary to this Section 26, using the PPC/Dispute
     Resolution procedures herein if necessary; it being the parties'
     understanding that the amount of property taxes payable by NSR
     under this Section 26 shall not be increased by property taxes
     attributable:  (i) to the portion of property owned by NCRR that is
     not used by NSR or (ii) to expenditures or additions to capacity
     that are not used by NSR.

Section 27. REGULATORY APPROVAL AND EFFECTIVE DATE

(a)  The grant of trackage rights hereunder and any renewals are subject
     to prior approval or exemption from prior approval by the Surface
     Transportation Board ("STB") or any successor agency of the
     undertakings of NSR herein, as may be required or appropriate under
     49 U.S.C. Section 11323, or any successor federal legislation and
     such approval or exemption action becoming final.

(b)  After (i) all requisite governmental and corporate approvals for
     this grant of rights have become effective or have been satisfied;
     (ii) this Agreement and all associated documents have been fully
     executed and delivered; and (iii) any court orders enjoining the
     implementation of this Agreement have expired or are no longer in
     effect, this Agreement and the Trackage Rights Agreement shall be
     effective contemporaneously (the "Effective Date").

<PAGE>  PAGE 144

                                            EXHIBIT 10(i), Page 34 of 44

Section 28. RESOLUTION OF LITIGATION

NCRR and NSR agree that the STB compensation and federal court
proceedings will be voluntarily dismissed by the parties without
prejudice within twenty days of execution of this Agreement and all
necessary approvals have been obtained.

(a)  NCRR and NSR agree that the STB compensation and federal court
     proceedings will be voluntarily dismissed by the parties without
     prejudice within twenty days of execution of this Agreement and all
     necessary approvals have been obtained.

(b)  Except with respect to (i) personal property claims released as set
     forth in Section 6, "Release" and (ii) property claims resolved as
     set forth in Section 21, "Other Property Issues," none of NCRR's
     claims for improvements, additions, betterments, improvements to
     real property, property rights, franchises or privileges under the
     Old Leases are waived or affected by virtue of the execution and
     delivery of this Agreement.

(c)  The terms of the Old Leases create potential claims that NSR and/or
     A&EC would owe and be obligated to deliver to NCRR additional
     properties (hereinafter "Claims for Additions").  The parties
     acknowledge that to the extent Claims for Additions exist, the
     circumstance that such additional properties and/or rights may have
     been acquired or now be held in the name of a company affiliated
     with NSR or A&EC will not, of itself, be determinative of the issue
     of whether the Claims for Additions are valid.

(d)  No claim or demand contemplated by the Old Leases for the return of
     real property and related railroad facilities otherwise to be
     determined at the expiration or termination thereof may be made
     until, and therefore each of them is postponed to, the termination
     of this Agreement or any renewal (or any cessation of service over
     a segment pursuant to Section 17 hereof with respect to such
     segment).  NCRR and NSR agree that nothing in this Agreement shall
     abridge, estop, compromise, release or waive any such claims
     deferred under this Agreement and that no defense of waiver,
     latches, acquiescence, release, estoppel, or the like arising on or
     after December 31, 1994 with respect to any such claims existing on
     that date may be asserted by reason of NCRR's agreement not to
     assert such claims at this time.

Section 29. POLICY PLANNING COMMITTEE/DISPUTE RESOLUTION

NCRR and NSR will establish a joint senior-level Policy Planning
Committee ("PPC" or "Committee").

The PPC will serve as a planning resource to the various issues which
are properly before it, including but not limited to dispatching
matters, maintenance levels and the implementation of third-party
operations on NCRR lines.

<PAGE>  PAGE 145

                                            EXHIBIT 10(i), Page 35 of 44

There will be three representatives from each of NSR and NCRR on the
committee.  Those appointed shall be empowered to act within the
parameters of the committee's area of concern, subject to necessary
management approvals of expenditures.

The PPC will meet not less than twice a year on a scheduled basis.  If
either party desires an additional meeting or meetings, it shall provide
a proposed agenda and a thirty-day notice to the other party.  The other
party may either agree to the proposed meeting date or request a
fifteen-day extension, at which time the meeting will take place.  The
parties will alternate sites of the scheduled meetings or may agree to
meet at a site convenient to both parties.  The party requesting the
special meeting will travel to the other party's headquarters location.
Any special meeting may be held via telephone conference.

DISPUTE RESOLUTION - PPC

The PPC shall also address and attempt to resolve Disputes.  As used in
this section, a "Dispute" is any controversy, claim, issue, or other
dispute between NCRR and NSR that arises out of, in connection with, or
in relation to this Agreement or the Trackage Rights Agreement, whether
it arises in contract, in tort, by statute, or otherwise.  "Dispute"
includes, but is not limited to:  (a) any failure to agree on matters as
to which this Agreement expressly or implicitly contemplates subsequent
agreement by the parties (except for any matters left to the sole
discretion of a party); (b) any question about the parties' relationship
under this Agreement or the Trackage Rights Agreement; (c) any question
about the interpretation, performance, breach, validity, scope,
duration, enforceability or termination of the provisions in this
Agreement or the Trackage Rights Agreement; and (d) any question of
arbitrability that arises under this Agreement or the Trackage Rights
Agreement.

If a Dispute between the parties cannot be resolved by the parties in
the ordinary course of business, that Dispute shall be resolved as
follows:

(a)  The Dispute shall be submitted to the PPC for resolution.  Either
     party shall have the right to submit the Dispute to the PPC by
     providing the other party with written notice to that effect in the
     manner set forth later in this Agreement for the giving of notices.
     The notice (the "Notice") shall describe the Dispute and indicate
     that the party providing the Notice wishes to resolve the Dispute
     pursuant to the dispute resolution provisions in this section.  The
     submitted Dispute shall be addressed at the next regularly
     scheduled meeting of the PPC unless the party providing the Notice
     declares that the Dispute is urgent and requests that a special
     meeting be held to address the submitted Dispute, provided that the
     party exercising that right has complied with the Notice
     requirements for meetings and agenda items described above.

(b)  If the PPC fails to resolve a Dispute properly submitted to it
     pursuant to the provisions set forth above at the meeting scheduled
     pursuant to the Notice (or if such meeting is not held, on or

<PAGE>  PAGE 146

                                            EXHIBIT 10(i), Page 36 of 44

     before the date such meeting is scheduled to be held), the Dispute
     shall then be submitted to  NSR's Chief Operating Officer and NCRR's
     President for resolution.

(c)  If NSR's Chief Operating Officer and  NCRR's President fail to
     resolve a Dispute properly submitted to them pursuant to the
     provisions set forth above within 90 days following the date the
     meeting scheduled pursuant to the Notice is held (or, if such
     meeting is not held, the date such meeting is scheduled to be
     held), the Dispute shall then be arbitrated as set forth below.

DISPUTE RESOLUTION - ARBITRATION

Notice of Arbitration.  Either NCRR or NSR shall have the right to
initiate arbitration of any Dispute not resolved as provided above by
providing a notice of arbitration to the other party in the manner set
forth later in this Agreement for the giving of notices.  This notice
shall clearly describe the Dispute to be arbitrated and indicate whether
the party initiating arbitration wishes to submit the dispute to one
arbitrator or to three arbitrators.

Number of Arbitrators.  If the party initiating the arbitration
indicates a desire to submit the Dispute to only one arbitrator, and the
party receiving the notice gives notice of its consent to the use of a
single arbitrator within ten business days in the manner set forth later
in this Agreement for the giving of notices, then one-arbitrator
arbitration shall be used.  Otherwise, three-arbitrator arbitration
shall be used.

Arbitration Site.  The arbitration hearing shall be conducted at a
neutral location of the arbitrator's or arbitrators' choosing.

Arbitration Rules.  The arbitration shall be conducted pursuant to the
American Arbitration Association's Commercial Arbitration Rules (or
their successor) (the "Arbitration Rules").  The use of the Commercial
Arbitration Rules shall not require the actual submission of the Dispute
to the American Arbitration Association.  The Arbitration Rules shall
apply except to the extent they are inconsistent with the requirements
of this Agreement.  Other arbitration rules or any arbitration forum may
be used if agreed to by the parties.

Three-Arbitrator Arbitration.  Under this procedure, the Dispute shall
be resolved by a panel of three arbitrators.  These arbitrators shall be
knowledgeable about the subject matter of the Dispute.  For example,
with regard to railroad operational matters, arbitrators knowledgeable
in Class I railroad operations and rail passenger operations shall be
selected.  These arbitrators shall comply with the Code of Ethics for
Arbitrators in Commercial Disputes issued by the American Bar
Association and the American Arbitration Association.  These arbitrators
shall not be current or previous employees of the parties, nor shall
they within the past ten years have received regular remuneration from
either party other than for arbitration services.

<PAGE>  PAGE 147

                                            EXHIBIT 10(i), Page 37 of 44

The party who submits the Dispute to arbitration shall select and
identify the first of these arbitrators in the notice of arbitration.
The other party shall identify the second in a notice to be given not
more than 45 days after it receives the notice of arbitration.  Within
30 days of the second arbitrator's selection, the two arbitrators shall
select a third, from nominations by the parties or otherwise, and notify
the parties of the selection.  If the two selected arbitrators cannot
agree on a third within 90 days of the notice of arbitration, the
parties shall submit the Dispute to the American Arbitration Association
and the third arbitrator shall be chosen in accordance with the
Arbitration Rules or, if those Rules provide no means to make the
selection, pursuant to the Federal Arbitration Act, currently codified
as 9 U.S.C. Sec. 1 et seq.

The decision of the majority of the arbitrators shall constitute their
award.  Their award shall be rendered in writing within 90 days of the
selection of the third arbitrator unless otherwise agreed between the
parties, and it shall contain a brief description of the rationale for
the award.  The award shall be final and binding on the parties.

One-Arbitrator Arbitration.  Under this procedure, the Dispute shall be
resolved by a single arbitrator.  The arbitrator shall be knowledgeable
about the subject matter of the Dispute.  For example, with regard to
railroad operational matters, an arbitrator knowledgeable in Class I
railroad operations and rail passenger operations shall be selected.
The arbitrator shall comply with the Code of Ethics for Arbitrators in
Commercial Disputes issued by the American Bar Association and the
American Arbitration Association.  The arbitrator shall not be a current
or previous employee of the parties, nor shall he or she within the past
ten (10) years have received regular remuneration from either party
other than for arbitration services.

The parties will meet by telephone within ten days of receipt of the
notice of arbitration and seek agreement on the identity of the
arbitrator.  If the parties are unable to reach agreement on the
identity of the arbitrator within 30 days of the notice of arbitration,
either (i) the parties shall submit the Dispute to the American
Arbitration Association and the arbitrator shall be chosen in accordance
with the Arbitration Rules or, if those rules provide no means to make
the selection, pursuant to the Federal Arbitration Act, currently
codified as 9 U.S.C. Sec. 1 et seq., or (ii) either party may initiate
three-arbitrator arbitration to resolve the Dispute by resubmitting an
appropriate notice of arbitration.

The award shall be rendered in writing within 45 days of the selection
of the arbitrator unless otherwise agreed between the parties, and it
shall contain a brief description of the rationale for the award.  The
award shall be final and binding on the parties.

<PAGE>  PAGE 148

                                            EXHIBIT 10(i), Page 38 of 44

General Provisions.

The decision of the arbitrator(s) shall be final and binding.  Judgment
to enforce the decision or award of the arbitrator(s) may be entered in
any court having jurisdiction, and the Parties shall not object to the
jurisdiction of the North Carolina General Court of Justice for that
purpose.

All proceedings relating to any such arbitration, and all testimony,
written submissions and awards of the Arbitrator(s) therein, shall be
private and confidential as among the parties and shall not be disclosed
to any other person, except that NCRR or NSR may disclose them to third
parties if (1) the information is publicly available; (2) disclosure is
recommended or required under applicable laws, rules, or regulations,
including, without limitation, securities laws; or (3) disclosure is
reasonably necessary to prosecute or defend any judicial action to
enforce, vacate, or modify such arbitration award.

The arbitrator(s) shall resolve all questions of state law by application
of the substantive law of North Carolina.  They shall not apply North
Carolina's choice of law rules.

The arbitrator(s) shall not be authorized to award punitive damages,
regardless of the otherwise applicable substantive law they apply to
resolve the Dispute.  The Arbitrator(s) shall have the power to require
the performance of acts found to be required by this Agreement, and to
require the cessation or non-performance of acts found to be prohibited
by this Agreement.

In an appropriate case, either party (or both) may request a temporary
restraining order, preliminary injunction, declaratory judgment or other
interim measure from a court or administrative body of competent
jurisdiction while arbitration proceedings are pending.  Such a request
shall not be deemed incompatible with an agreement to arbitrate or a
waiver of the right to arbitrate.

Each party shall pay the compensation, costs, fees and expenses of its
own witnesses, experts and counsel.  The compensation and any costs and
expenses of the arbitrator(s) and all other costs of the arbitration
shall be equally divided between the parties.

In any judicial proceeding to enforce this Agreement to arbitrate, the
only issues to be determined shall be the existence (but not the scope)
of an agreement to arbitrate or the failure of NCRR or NSR to comply
with that agreement.  All other issues shall be decided by the
Arbitrator(s), whose decision thereon shall be final and binding.  There
may be no appeal of an order compelling arbitration except as part of an
appeal concerning confirmation of the decision of the Arbitrator(s).

<PAGE>  PAGE 149

                                            EXHIBIT 10(i), Page 39 of 44

No party to this Agreement shall initiate a lawsuit or any
administrative proceeding (a "lawsuit") against another party to this
Agreement if that lawsuit involves a Dispute that could otherwise be
arbitrated under this section, except to the extent that the lawsuit
seeks (i) to compel an arbitration permitted by this section; (ii) to
confirm (and have judgment entered on) or to vacate an arbitration award
made pursuant to this section; (iii) to stay the running of any statute
of limitations; or (iv) to prevent any other occurrence (including,
without limitation, the passing of time) that would give rise to a
defense such as laches, estoppel, or waiver that initiating a lawsuit
may be necessary to avoid.  If a lawsuit is brought for the purposes
described in (iii) or (iv), no party shall pursue such litigation beyond
such action as is necessary to prevent prejudice to its cause of action
pending ultimate resolution by arbitration under this section.

If a third party initiates a lawsuit against a party to this Agreement
(the "Defendant"), and this gives rise to a Dispute, neither party to
this Agreement shall pursue a claim in the lawsuit against the other
without the other's consent except as provided in the preceding
paragraph.

The parties acknowledge that this Agreement is a "contract evidencing a
transaction involving commerce" as that phrase is used in the Federal
Arbitration Act at 9 U.S.C. Sec. 2.  The parties agree that the
arbitrators shall be guided by the terms of the Agreement and the
General Principles set forth herein.

Section 30. NOTICES

Any notices given hereunder shall be effective if sent by registered or
certified mail (United States Mail) and addressed as follows:

          If to NSR:
          Senior Vice President-Operations
          Norfolk Southern Corporation
          Three Commercial Place
          Norfolk, Virginia  23510

          If to NCRR:
          President
          North Carolina Railroad Company
          3200 Atlantic Avenue, Suite 110
          Raleigh, North Carolina  27604

or to such other official and/or address as any of the parties hereto
may specify in a written notice to the other parties hereto, sent as
stated above.

<PAGE>  PAGE 150

                                            EXHIBIT 10(i), Page 40 of 44

Section 31. SUCCESSORS AND ASSIGNS

Neither party hereto shall transfer or assign this Agreement, or any of
its rights, interests or obligations hereunder, to any person, firm, or
corporation which is not affiliated with such party without obtaining
the prior written consent of the other party to this Agreement;
provided, however, that neither party shall be required to obtain the
prior approval of the other party in connection with any assignment
effected by a merger, consolidation or corporate reorganization or other
transaction where substantially all of the rail assets and liabilities
of such party are brought under common control with the assets of
another party.

Section 32. MISCELLANEOUS

(a)  Except to the extent controlled by federal laws and regulations,
     this Agreement shall in all respects be governed by the laws of the
     State of North Carolina.

(b)  This Agreement, together with its attachments and exhibits,
     contains all the agreements of the parties hereto and supersedes
     any previous negotiations.

(c)  There have been no representations made by or on behalf of the NCRR
     or NSR or understandings made between or among the parties hereto
     other than those set forth in this Agreement.  This Agreement may
     not be modified except by a written instrument signed by the
     parties hereto.

(d)  All obligations of the parties hereunder not fully performed as of
     the expiration or earlier termination of the term of this Agreement
     and any renewal shall survive such expiration or earlier
     termination of the term hereof and any renewal.

(e)  If any clause, phrase, provision or portion of this Agreement or
     the application thereof to any party or circumstance shall be
     invalid or unenforceable under applicable law, such event shall not
     affect, impair or render invalid or unenforceable the remainder of
     this Agreement or any other clause, phrase, provision or portion
     hereof, nor shall it affect the application of any other clause,
     phrase, provision or portion hereof to other parties or
     circumstances.

(f)  The section headings herein are for convenience of reference and
     shall in no way define, increase, limit, or describe the scope or
     intent of any provision of this Agreement.

(g)  Neither party shall be liable to the other in damages nor shall
     this Agreement be terminated nor a default be deemed to have
     occurred because of any failure to perform hereunder caused by a
     "Force Majeure."  Each party will be excused from performance of
     any of its obligations hereunder, except obligations involving the
     payment hereunder of money to the other party or to a third party,

<PAGE>  PAGE 151

                                            EXHIBIT 10(i), Page 41 of 44

     where such non-performance is occasioned by Force Majeure.
     Force Majeure shall mean fire not caused by NSR operations,
     earthquake, flood, explosion, a wreck not involving NSR trains,
     strike, riot, insurrection, civil disturbance, act of public enemy,
     embargo, war, act of God, inability to obtain labor, materials or
     supplies, any governmental regulation, restriction or prohibition,
     or any other similar cause beyond the party's reasonable control.

Section 33. INSPECTIONS AND RECORDS; AUDIT

(a)  Audit and reporting records (including but not limited to payment
     amounts, cost and payment calculations, real estate records,
     engineering data, freight and passenger traffic data, etc.) will be
     exchanged by the parties on a periodic basis.

(b)  NSR will maintain written records of the delays to passenger and,
     if any, commuter trains and NSR shall provide those records to NCRR
     on a monthly basis.  These records will include the length and
     cause of delay, including those which are caused by circumstances
     which are beyond the NSR control.  NSR shall provide any
     information in its possession on circumstances that cause delay
     outside of NSR control.

(c)  NSR will provide NCRR with the following annual reports, records or
     documents on or before June 1 of the following year:

     (i)   Rail, signal, and bridge program maintenance improvements
           reports showing improvements made on the NCRR lines during
           the previous calendar year, including, without limitation,
           the number of new ties installed, miles surfaced, and length
           of new or used rail installed, by line segment;

     (ii)  Updated track profiles;

     (iii) Previous calendar year's car loads originated and terminated
           by station, and number of car miles by line segment (Raleigh-
           Morehead City, Raleigh-Greensboro, and Greensboro-Charlotte)
           as available in NSR's records or systems in use;

     (iv)  Scheduled program maintenance for the then-current calendar
           year.

     (v)   Copies of the previous calendar year's annual reports filed
           with the North Carolina Utilities Commission and the Surface
           Transportation Board ("STB") or its successor (currently
           designated as Form R1 for the STB);

(d)  By January 1, 2000, and not less than every three years thereafter,
     NSR will furnish to NCRR copies of the following records then in
     use by NSR:  (i) changes to valuation or similar maps of NCRR

<PAGE>  PAGE 152

                                            EXHIBIT 10(i), Page 42 of 44

     including intersection points with other lines, and (ii) a bridge
     inventory (including but not limited to date of construction, type,
     and condition on the NCRR lines operated and/or maintained by NSR).

(e)  Up to two NCRR designated inspectors may inspect NCRR trackage
     operated by NSR not less than every two years, traveling by high
     rail vehicle with NSR supervisors or other NSR-designated personnel
     during their regular inspection trips, and over the track sections
     routinely scheduled by NSR for inspection.  It is the intention of
     the parties that NCRR have the opportunity to inspect its lines in
     their entirety annually, subject however, to NSR's availability to
     schedule such inspection trips over a reasonable period of time in
     order to minimize disruption of NSR operations and use of NSR
     personnel.

(f)  If NSR incurs costs or expenses associated with providing the
     information required in this Section 33 other than for copies of
     records and reports ordinarily maintained by NSR in the course of
     its business, the allocation of such costs between the parties
     shall be addressed by the PPC/Dispute Resolution provision of this
     Agreement.

Section 34. CONFIDENTIALITY

(a)  Except as may be otherwise agreed between NCRR and NSR, any
     documents and records (the "information") shared between the
     parties pursuant to this Agreement shall not be disclosed to third
     parties without first obtaining the written consent of the party
     providing the information to the other party hereto.

(b)  NCRR or NSR may disclose the information to third parties if the
     information is publicly available or if disclosure is recommended
     or required under applicable laws, rules, or regulations,
     including, without limitation, securities laws.

<PAGE>  PAGE 153

                                            EXHIBIT 10(i), Page 43 of 44

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

WITNESS                  NORFOLK SOUTHERN RAILWAY COMPANY

/s/ Henry D. Light       By:    /s/ R. A. Brogan
                                ----------------------------------
                         Title:
                                ----------------------------------

WITNESS                  NORTH CAROLINA RAILROAD COMPANY

/s/ Najla J. Silek       By:    /s/ Sam Hunt
                                ----------------------------------
                         Title:
                                ----------------------------------

     Subject to necessary corporate and governmental approvals.

<PAGE>  PAGE 154

                                            EXHIBIT 10(i), Page 44 of 44

                              EXHIBIT INDEX
                             --------------

      Exhibit No.        Document
      ----------         --------
          A              Timetable and Track Profiles as of July 1, 1999
          B              Designated Returned Properties
          C              Third Party Property/Agreement Request Chart

                               ATTACHMENT
                               -----------

                         Trackage Rights Agreement<PAGE>  PAGE 155

                                              EXHIBIT 10(k), Page 1 of 6

                      NORFOLK SOUTHERN CORPORATION
                        MANAGEMENT INCENTIVE PLAN

                  AS AMENDED EFFECTIVE JANUARY 25, 2000

Section I.     PURPOSE OF THE PLAN

     It is the purpose of the Norfolk Southern Corporation Management
Incentive Plan (Plan) to enhance increased profitability for Norfolk
Southern Corporation by rewarding executive personnel of Norfolk Southern
Corporation and its affiliates with a bonus for collectively striving to
attain and surpass financial objectives.

Section II.    ADMINISTRATION OF THE PLAN

     The Compensation and Nominating Committee or any other committee of
the Board of Directors of Norfolk Southern Corporation which is
authorized to determine bonus awards under the Plan (Committee) shall
administer and interpret this Plan and, from time to time, adopt such
rules and regulations and make such recommendations to the Board of
Directors concerning Plan changes as are deemed necessary to insure
effective implementation of this Plan.

     No executive may simultaneously participate in more than one Norfolk
Southern Corporation Incentive Group.  An executive must reside in the
United States or Canada in order to participate in the Plan.

Section III.   ESTABLISHMENT OF PERFORMANCE STANDARDS

     The Committee shall establish:

     A.        The Incentive Groups for the incentive year,

     B.        The bonus level for each Incentive Group for the incentive
               year, and

     C.        The performance standards for Pre-Tax Net Income and
               operating ratio with resultant Corporate Performance
               Factors (Corporate Performance Table).

Section IV.    TYPE OF INCENTIVE BONUS

     By December 22 of the year prior to the incentive year, each
participant must elect to receive any incentive bonus which may be
awarded to him or her for the incentive year either 100% cash or deferred
in whole or in part.  A participant shall be permitted to defer only 25%,
50%, 75% or 100% of the bonus for any incentive year.  If the participant
elects to receive 100% cash, the entire amount of the bonus for the
incentive year shall be distributed to the participant, or his or her

<PAGE>  PAGE 156

                                              EXHIBIT 10(k), Page 2 of 6

beneficiary, as hereinafter defined on or before March 1 of the year
following the incentive year.  If deferred in whole or in part, the
amount deferred shall be allocated to the participant's deferred
savings account on or before March 1 of the year following the
incentive year and the remainder, if any, shall be distributed in
cash to the participant or his or her beneficiary on or before March 2
of the year following the incentive year.  However, all amounts
deferred under this Plan shall be allocated to the Norfolk Southern
Corporation Officers' Deferred Compensation Plan and such deferrals
will be governed by the provisions of that plan.

     Failure on the part of the participant to elect a deferral by
December 22 of the year prior to the incentive year, either in whole or
in part for the incentive year, shall be deemed to constitute an election
by such participant to receive the entire incentive bonus for the
incentive year as a cash bonus.

     The Board of Directors shall have the right to reject all deferral
elections if, in its sole discretion, it shall determine prior to the
close of an incentive year that deferral has become inadvisable, and, if
such right shall be exercised, all incentive bonuses earned under the
Plan for such year shall be payable in cash, as provided for in the third
sentence of this Article IV.

Section V.     BONUS AWARDS

     At the end of the incentive year, the Committee shall determine the
Corporate Performance Factor from the Corporate Performance Table based
on the operating ratio and Pre-tax Net Income (Norfolk Southern's income
before state and federal income taxes as reported in the annual
consolidated financial statements for the incentive year).  In computing
Pre-tax Net Income and operating ratio, special charges and restructuring
charges, and unusual or infrequent accounting adjustments which are
significant, and restatements or reclassifications, all as determined in
accordance with Generally Accepted Accounting Principles, which would
have the effect of reducing Pre-tax Net Income or increasing the
operating ratio, shall be excluded, unless the Committee shall determine
otherwise.

     A participant's bonus award shall be determined by multiplying the
Corporate Performance Factor by the participant's bonus level, with the
result multiplied by the participant's total salary paid during the
incentive year. The Chief Executive Officer may review and adjust the
bonus award of any Incentive Group participant between 0% and 125% based
on the individual's performance.  In no event, however, may the total
bonus award to all Incentive Groups for an incentive year exceed the
maximum bonus levels for all Incentive Groups as determined by the
Committee.

     If the employment of a participant who is employed by Norfolk
Southern Corporation or its affiliates during the incentive year
terminates prior to the end of such year by reason of (1) death, or (2)
normal retirement, early retirement or total disability under applicable
Norfolk Southern Corporation plans and policies, then the phrase "total

<PAGE>  PAGE 157

                                              EXHIBIT 10(k), Page 3 of 6

salary paid during the incentive year" means base salary paid to the
participant during that portion of such year of employment prior to his
or her termination and through the end of the calendar month or payroll
period in which employment terminates but excludes any cash paid with
respect to such participant's unused vacation.  No incentive bonus for
any incentive year shall be awarded or paid to any participant whose
employment with Norfolk Southern Corporation and all its affiliates
terminates before the end of such incentive year for a reason other
than one of those specifically stated in the preceding sentence.

     If a participant becomes eligible for the Plan during the year or
becomes eligible for a different Incentive Group, then the amount of the
award shall be adjusted proportionally to reflect such changes.

Section VI.    CALCULATION OF CREDITS TO BE ALLOCATED

     The credit allocated to a participant's deferred savings account for
any incentive year is calculated by dividing the actual dollar value of
the deferred bonus for such year by the average of the closing prices for
Norfolk Southern Corporation Common Stock on the New York Stock Exchange
for all of the trading days in December of such year.  Such credits were
calculated to the nearest one hundredth of a credit.

     However, solely at the discretion of the Committee, the calculation
of all credits allocated to the deferred savings account of a participant
in active service on January 1, 1987, may be changed from a credit based
on the price of Norfolk Southern Corporation Common Stock to a cash
credit.  A one-time request for such a change in the method of
calculating credits may be made by the participant by March 16, 1987,
and, if approved by the Committee, the balance of the participant's
deferred savings account as of February 28, 1987, including amounts
deferred for incentive year 1986, shall be converted to a cash credit
based on the New York Stock Exchange closing price for Norfolk Southern
Corporation Common Stock on February 27, 1987, and shall thereafter
accrue an amount equivalent to interest (Interest), compounded annually,
at the rate of fifteen percent (15%).

     All amounts deferred under this Plan are allocated to the Norfolk
Southern Corporation Officers' Deferred Compensation Plan and are
governed by the provisions thereof.

Section VII.   NATURE OF DEFERRED SAVINGS ACCOUNT

     The deferred savings account is merely a bookkeeping account
maintained by Norfolk Southern Corporation for the express purpose of
recording a participant's deferred bonus credits and determining the
amounts payable by Norfolk Southern Corporation under this Plan.  The
deferred savings account for a participant shall not be deemed to
constitute either in whole or in part a trust fund for the benefit of
such participant.

<PAGE>  PAGE 158

                                              EXHIBIT 10(k), Page 4 of 6

Section VIII.  RESTRICTIONS ON DEFERRED SAVINGS ACCOUNT

     The credits allocated to a participant's deferred savings account
under this Plan are restricted in that they shall not be sold, assigned,
transferred or pledged as collateral for a loan or as security for the
performance of any other obligation or for any other purpose, or
exchanged or otherwise disposed of.

Section IX.    CHANGES IN CREDIT

     Unless the Committee has changed the calculation of credit under
Article VI to an amount equivalent to Interest, if at any time a cash
dividend is paid, or if a stock dividend, a stock split, a combination or
other change occurs with respect to Norfolk Southern Corporation Common
Stock, the number of credits in a participant's deferred savings account
shall be increased or decreased so as to give effect to such cash
dividend, stock dividend, stock split, combination or other change.  Any
such change shall be reflected in each such account during the calendar
year in which it occurs.  Any new or changed credits resulting therefrom
shall be calculated to the nearest one hundredth of a credit and shall be
subject to the restrictions and provisions set forth herein applicable
thereto.

Section X.     DISTRIBUTION WITH RESPECT TO DEFERRED CREDITS

     During the first 10 years following a participant's termination of
employment, the credits in his or her deferred savings account shall be
periodically converted into cash, as provided for below, and distributed
to that participant, or to his or her beneficiary as hereinafter defined,
pursuant to the following provisions.  In any event, distribution of such
cash to the participant shall be completed by the end of the 10-year
period.

     For the purpose of this Plan, a beneficiary shall be either (1) the
named beneficiary or beneficiaries designated as hereinafter provided for
by the participant, or (2) in the absence of any such designation,
including absence by revocation of any previous designation, a legal
representative of the participant, duly appointed in the case of
incompetency or death of the participant.  A participant may designate
both primary and contingent named beneficiaries.  A participant may
revoke or change any designation.  To be effective, the designation of a
named beneficiary or beneficiaries, or any change in or revocation of any
designation, must be on a form provided by Norfolk Southern Corporation
signed by the participant and filed with the Senior Vice President
Employee Relations, or an officer in a successor position, Norfolk
Southern Corporation, prior to the death of such participant.  Any such
designation, change or revocation shall be ineffective to invalidate any
cash payment made or other action taken by Norfolk Southern Corporation
pursuant to this Plan prior to the receipt of same by Norfolk Southern
Corporation.  The determination by Norfolk Southern Corporation of a
beneficiary or beneficiaries, or the identity thereof, or the rights of

<PAGE>  PAGE 159

                                              EXHIBIT 10(k), Page 5 of 6

same, based on proof by affidavit or other written evidence satisfactory
to Norfolk Southern Corporation shall be conclusive as to the liability
of Norfolk Southern Corporation and any payment made in accordance
therewith shall discharge Norfolk Southern Corporation of its obligation
under this Plan for such payment.

     Norfolk Southern Corporation shall make a payment each calendar
month within the 10-year period to the participant or his or her
beneficiary, computed as follows:

     Upon termination of employment, the number of credits in the
deferred savings account of such participant shall be ascertained.
Thereafter, there shall be added to such account the number of additional
credits, if any, due to be allocated thereto as a result of any incentive
bonus awarded such participant for any incentive year, or portion of such
year, preceding termination of employment.  Any change in credits
referred to in Article IX occurring between such participant's
termination of employment and the end of the 10-year period will be
reflected in such account.  Each monthly payment payable in any calendar
year shall be an amount equal to the number of credits in such account as
of January 1 that year, multiplied by the average of the closing prices
for Norfolk Southern Corporation Common Stock on the New York Stock
Exchange for all of the days in December of the previous calendar year
for which there is a closing price, multiplied by a fraction the
numerator of which is "1" and the denominator of which is the number of
monthly payments remaining to be paid in the 10-year period as of January
1 of the calendar year.  The number of credits in such account shall be
reduced effective January 1 of each year during the 10-year period by the
credit equivalent of the payments made during the previous year.
However, in the event the calculation of the credit allocated to the
deferred savings account of a participant is changed from a credit based
on the price of Norfolk Southern Corporation Common Stock to a cash
credit based on Interest, then the monthly payment shall be an amount
sufficient to amortize the participant's deferred savings account
together with Interest over the 10-year period.  If the deferred savings
account on January 1 of the year following termination contains a value
as calculated above of less than $10,000, the entire amount will be paid
in full within 45 days in lieu of payment over a 10-year period as
outlined in the preceding paragraph.

Section XI.    DISTRIBUTION IN CASE OF TERMINATION

     The Board of Directors, in its sole discretion, may authorize and
direct Norfolk Southern Corporation to make payments after termination of
employment of a participant to such participant or his or her beneficiary
in a lump sum or over a period other than that provided for in Article X,
and to charge such payments against the participant's deferred savings
account.  Such accelerated distribution may be made only (1) in the event
of a financial emergency which is beyond the control of the participant
if disallowance of the accelerated distribution would result in severe
financial hardship to the participant or beneficiary, and only in an
amount necessary to satisfy the financial emergency, or (2) if in the

<PAGE>  PAGE 160

                                              EXHIBIT 10(k), Page 6 of 6

written opinion of counsel, payment in accordance with Article X could
create a conflict of interest for the participant or beneficiary;
provided, that all amounts due to the participant or beneficiary under
this Plan shall in all events be paid to the participant or beneficiary
by the end of the 10-year period referred to in Article X.  No participant
or beneficiary who is also a member of the Board of Directors shall
participate in any decision of the Board to make accelerated payments
under this Article XI.

Section XII.   NO GUARANTEE OF CONTINUANCE OF EMPLOYMENT

     Nothing contained in this Plan or in any designation of a
participant hereunder shall constitute or be deemed to constitute any
evidence of an agreement or obligation on the part of Norfolk Southern
Corporation or its affiliates to continue to employ any such participant
for any period whatsoever.

Section XIII.  AMENDMENT TO AND TERMINATION OF PLAN

     Norfolk Southern Corporation reserves the right at any time by a
resolution duly adopted by its Board of Directors to amend this Plan in
any manner or to terminate it at any time, except that no such amendment
or termination shall deprive a participant or beneficiary of any rights
hereunder theretofore legally accrued, and no such termination shall be
effective for the year in which such resolution is adopted.

Section XIV.   RECALCULATION EVENTS

     Norfolk Southern Corporation's commitment to accrue and pay Interest
as provided in Article VI is facilitated by the purchase of
corporate-owned life insurance.  If the Committee, in its sole
discretion, determines that any change whatsoever in Federal, State or
local law, or in its application or interpretation, has materially
affected, or will materially affect, the ability of Norfolk Southern
Corporation to recover the cost of providing the benefits otherwise
payable under the Plan, then if the Committee so elects, a Recalculation
Event shall be deemed to have occurred.  If a Recalculation Event occurs,
then Interest shall be recalculated and restated using a lower rate of
Interest determined by the Committee, but which shall be not less than
seven and one-half percent (7-1/2%).

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