<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Norfolk Southern Railway Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF NS NORFOLK SOUTHERN (R) APPEARS HERE]
- -------------------------------------------------------------------------------
NOTICE AND PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NORFOLK SOUTHERN RAILWAY COMPANY
THREE COMMERCIAL PLACE, NORFOLK, VIRGINIA 23510-2191
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON
TUESDAY, MAY 26, 1998
- -------------------------------------------------------------------------------
The Annual Meeting of Stockholders of Norfolk Southern Railway Company will
be held on the 19th Floor of Norfolk Southern Tower, Three Commercial Place,
Norfolk, Virginia, on Tuesday, May 26, 1998, at 11 o'clock A.M., Eastern
Daylight Time, for the following purposes:
1. Election of two directors to the class whose term will expire in
2001.
2. Transaction of such other business as properly may come before the
meeting.
Stockholders of record at the close of business on March 26, 1998, will be
entitled to vote at such meeting.
By order of the Board of
Directors,
SANDRA T. PIERCE,
Corporate Secretary.
Dated: April 14, 1998
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE.
<PAGE>
Norfolk Southern Railway Company
Three Commercial Place
Norfolk, Virginia 23510-2191
April 14, 1998
PROXY STATEMENT
This statement and the accompanying proxy will be mailed to stockholders of
Norfolk Southern Railway Company ("Company") on or about April 14, 1998. The
Company's Annual Report for 1997 was mailed under separate cover beginning
about March 13, 1998. The proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders to be held May 26, 1998.
The cost of soliciting proxies will be paid by the Company, including the
reimbursement, upon request, of brokerage firms, banks and other institutions,
nominees and trustees for their reasonable expenses in forwarding proxy
material to beneficial owners. In addition to solicitation by mail, officers
and regular employees of the Company may solicit proxies by telephone,
facsimile, telegram or personal interview at no additional compensation.
Policies are in place to safeguard the confidentiality of proxies and
ballots. The Bank of New York, New York, N.Y., which has been retained at an
estimated cost of $2,000 to assist in soliciting proxies directly or through
others and to tabulate all proxies and ballots cast at the Annual Meeting, is
contractually bound to maintain the confidentiality of the voting process.
Each Inspector of Election will have taken the oath required by Virginia law
to execute duties faithfully and impartially. Members of the Board of
Directors and employees of the Company do not have access to the proxies or
ballots and therefore do not know how individual stockholders vote on any
matter. However, when a stockholder writes a question or comment on the proxy
card or ballot, or when there is need to determine the validity of a proxy or
ballot, Management and/or its representatives may be involved in providing the
answer to the question or in determining such validity.
If the enclosed proxy is properly signed and returned to The Bank of New
York, the shares represented thereby will be voted in accordance with its
terms. Any stockholder who has executed and returned a proxy and for any
reason wishes to revoke it may do so at any time before the proxy is voted by
giving prior notice of revocation in any manner to the Company, or by
executing and delivering a subsequent proxy or by attending the meeting and
voting in person.
The record date for stockholders entitled to vote at the Annual Meeting is
March 26, 1998. As of February 28, 1998, the Company had issued and
outstanding 1,197,027 shares of $2.60 Cumulative Preferred Stock, Series A
("Preferred Stock"), and 16,668,997 shares of Common Stock. Of these shares,
1,096,907 shares of Preferred Stock (which excludes 100,120 shares held by
Company subsidiaries and/or in a fiduciary capacity) and all shares of Common
Stock are entitled to one vote per share. All the Common Stock of the Company
is owned directly by Norfolk Southern Corporation ("NS").
<PAGE>
ELECTION OF DIRECTORS
The terms of David R. Goode and Stephen C. Tobias, members of the Class of
1998, expire at the Annual Meeting, and the Board of Directors has nominated
them as candidates for election to the Class of 2001. Unless otherwise
instructed on the enclosed proxy, it will be voted in favor of such election.
If any nominee becomes unable to serve, an event that is not anticipated,
the proxy will be voted for a substitute nominee to be designated by the Board
of Directors, or the number of directors will be reduced.
Under Virginia law and under the Company's Restated Articles of
Incorporation and Bylaws, directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting at which a
quorum is present. Votes that are withheld or shares that are not voted, such
as those held by a broker or other nominee who does not vote in person or
return a proxy, are not "cast" for this purpose.
The following information relates to the nominees and the directors whose
terms of office will continue after the annual meeting. There are no family
relationships among any of the nominees or directors -- or among any of the
nominees or directors and any officer -- nor is there any arrangement or
understanding between any nominee or director and any other person pursuant to
which the nominee or director was selected.
<TABLE>
<CAPTION>
SHARES OF NORFOLK
SOUTHERN CORPORATION
NAME, AGE, BUSINESS EXPERIENCE CURRENT COMMON STOCK
DURING PAST 5 YEARS, DIRECTORSHIPS TERM EXPIRES/ BENEFICIALLY OWNED
IN OTHER PUBLIC CORPORATIONS A DIRECTOR SINCE AS OF FEBRUARY 28, 1998/1/,/2/,/3/
- ---------------------------------- ---------------- ----------------------------------
<S> <C> <C>
NOMINEES (FOR TERM EXPIRING
IN 2001)
DAVID R. GOODE, 57,
Norfolk, Va.; Chairman,
President and Chief
Executive Officer of
Norfolk Southern
Corporation and President
and Chief Executive
Officer of Norfolk
Southern Railway Company
since September 1, 1992.
Director of Norfolk
Southern Corporation and
of several Norfolk
Southern Railway Company
subsidiaries, including
Norfolk and Western
Railway Company. Director
of Aeroquip-Vickers, Inc.
(formerly, TRINOVA
Corporation), Caterpillar,
Inc., Georgia-Pacific
Corpora- tion and Texas
Instruments Incorporated. 1998/1992 1,013,869
</TABLE>
- --------
Notes begin on page 4.
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF NORFOLK
SOUTHERN CORPORATION
NAME, AGE, BUSINESS EXPERIENCE CURRENT COMMON STOCK
DURING PAST 5 YEARS, DIRECTORSHIPS TERM EXPIRES/ BENEFICIALLY OWNED
IN OTHER PUBLIC CORPORATIONS A DIRECTOR SINCE AS OF FEBRUARY 28, 1998/1/,/2/,/3/
- ---------------------------------- ---------------- ----------------------------------
<S> <C> <C>
NOMINEES (FOR TERM EXPIRING
IN 2001)
STEPHEN C. TOBIAS, 53,
Norfolk, Va.; Executive
Vice President -
Operations of Norfolk
Southern Corporation and
Vice President -
Operations of Norfolk
Southern Railway Company
since July 1, 1994, having
previously become Senior
Vice President -
Operations of Norfolk
Southern Corporation and
Vice President of Norfolk
Southern Railway Company
on October 1, 1993, and
having served prior
thereto as Vice
President - Strategic
Planning of both Norfolk
Southern Corporation and
Norfolk Southern Railway
Company. Director of
several Norfolk Southern
Railway Company
subsidiaries, includ-ing
Norfolk and Western
Railway Company. 1998/1994 264,934
OTHER DIRECTORS
JON L. MANETTA, 59,
Norfolk, Va.; Vice
President -
Transportation &
Mechanical of both Norfolk
Southern Corporation and
Norfolk Southern Railway
Company since December 1,
1995, having served prior
thereto as Vice
President - Transportation
of both Norfolk Southern
Corporation and Norfolk
Southern Railway Company.
Director of several
Norfolk Southern Railway
Company subsidiaries,
including Norfolk and
Western Railway Company. 1999/1997 67,384
HENRY C. WOLF, 55, Norfolk,
Va.; Executive Vice
President - Finance of
Norfolk Southern
Corporation and Vice
President - Finance of
Norfolk Southern Railway
Company since June 1,
1993, having served prior
thereto as Vice
President - Taxation of
both Norfolk Southern
Corporation and Norfolk
Southern Railway Company.
Director of several
Norfolk Southern Railway
Company subsidiaries,
including Norfolk and
Western Railway Company. 1999/1994 288,460
</TABLE>
- --------
Notes begin on page 4.
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF NORFOLK
SOUTHERN CORPORATION
NAME, AGE, BUSINESS EXPERIENCE CURRENT COMMON STOCK
DURING PAST 5 YEARS, DIRECTORSHIPS TERM EXPIRES/ BENEFICIALLY OWNED
IN OTHER PUBLIC CORPORATIONS A DIRECTOR SINCE AS OF FEBRUARY 28, 1998/1/,/2/,/3/
- ---------------------------------- ---------------- ----------------------------------
<S> <C> <C>
OTHER DIRECTORS
JAMES C. BISHOP, JR., 61,
Norfolk, Va.; Executive
Vice President - Law of
Norfolk Southern
Corporation and Vice
President - Law of
Norfolk Southern Railway
Company since March 1,
1996, having served prior
thereto as Vice
President - Law of
Norfolk Southern
Corporation. Director of
several Norfolk Southern
Railway Company
subsidiaries, including
Norfolk and Western
Railway Company. 2000//1996 189,054
L. I. PRILLAMAN, 54,
Norfolk, Va.; Executive
Vice President -
Marketing of Norfolk
Southern Corporation and
Vice President and Chief
Traffic Officer of
Norfolk Southern Railway
Company since October 1,
1995, having served prior
thereto as Vice
President - Properties
of both Norfolk Southern
Corporation and Norfolk
Southern Railway Company.
Director of several
Norfolk Southern Railway
Company subsidiaries,
includ-
ing Norfolk and Western
Railway Company. 2000/1996 272,679
</TABLE>
- --------
/1/For each named individual, the shares owned are less than 1% of the total
shares outstanding. No director or nominee owns shares of the Company's
Preferred Stock.
/2/Unless otherwise indicated by footnote, all shares are held by the named
individuals with sole voting and investment powers.
/3/Includes shares credited to individual accounts under the NS Thrift and
Investment Plan and shares held by NS under share retention agreements
pursuant to the NS Long-Term Incentive Plan (for Mr. Goode, this amounts,
respectively, to 9,830 and 184,950 shares; for Mr. Tobias, 11,881 and 38,745
shares; for Mr. Manetta, 71 and 7,671 shares; for Mr. Wolf, 9,614 and 47,679
shares; for Mr. Bishop, 4,824 and 31,425 shares; and for Mr. Prillaman, 18,885
and 31,767 shares). The individual possesses voting power over shares held
under share retention agreements but has no investment power until the shares
are distributed. Also includes shares subject to stock options granted
pursuant to the NS Long-Term Incentive Plan and with respect to which the
optionee has the right to acquire beneficial ownership within 60 days (for Mr.
Goode, this amounts to 742,593 shares; for Mr. Tobias, 182,868 shares; for Mr.
Manetta, 58,500 shares; for Mr. Wolf, 200,424 shares; for Mr. Bishop, 138,939
4
<PAGE>
shares; and for Mr. Prillaman, 165,766 shares); and includes Deferred Stock
Units credited to officers pursuant to the NS Long-Term Incentive Plan (for
Mr. Goode, this amounts to 9,141 shares; for Mr. Tobias, 2,742 shares; for Mr.
Manetta, 1,142 shares; for Mr. Wolf, 2,742 shares; for Mr. Bishop, 1,667
shares; and for Mr. Prillaman, 2,742 shares).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and any persons beneficially owning more
than 10 percent of a class of the Company's stock, to file certain reports of
beneficial ownership and changes in beneficial ownership (Forms 3, 4 and 5)
with the Securities and Exchange Commission and the New York Stock Exchange.
For 1997, based solely on its review of copies of Forms 3, 4 and 5 available
to it, or written representations that no Forms 5 were required, the Company
believes that all required Forms were filed on time.
BENEFICIAL OWNERSHIP OF NS AND COMPANY STOCK
As of February 28, 1998, 100,120 shares, or approximately 8.4%, of the
Company's Preferred Stock were held by Company subsidiaries and/or in a
fiduciary capacity. NS held 176,703 shares, or approximately 15%, of the
Company's Preferred Stock.
To the knowledge of the Company, no other person beneficially owns more than
5% of the Company's Preferred Stock. NS held 16,668,997 shares, or 100%, of
the Company's Common Stock on February 28, 1998.
As of February 28, 1998, all officers and directors of the Company as a
group beneficially owned 1,079,609 shares of NS Common Stock and 70 shares (in
which beneficial ownership is disclaimed) of the Company's Preferred Stock, or
less than 1% of the total shares of each class of stock outstanding. Also
included in the NS Common Stock figure are: 193,157 shares credited to
individual accounts under the NS Thrift and Investment Plan; 700,586 shares
held by NS under share retention agreements pursuant to the NS Long-Term
Incentive Plan over which the individual possesses voting power but has no
investment power until the shares are distributed; 3,368,002 shares subject to
stock options granted pursuant to the NS Long-Term Incentive Plan with respect
to which optionees have the right to acquire beneficial ownership within 60
days; and 44,163 Deferred Stock Units credited to officers pursuant to the NS
Long-Term Incentive Plan. Also included are 12,606 shares in which officers
disclaim beneficial ownership. The shares held individually by directors whose
terms of office will continue after the Annual Meeting and nominees are
reported under the caption "Election of Directors," beginning on page 2.
5
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company consists of six members and is divided
into three classes elected for a term of three years, with each class
containing one third of the total number of directors. The Board of Directors
has no audit, nominating or compensation committees. In 1997, the Board of
Directors acted by unanimous written consent on ten separate occasions.
Each year the Board of Directors appoints an Executive Committee, which is
empowered to exercise all the authority of the Board of Directors to the
extent permitted by Virginia law when the Board is not in session. All such
actions taken by the Committee are to be reported to the Board at its meeting
next succeeding the action and are subject to revision or alteration by the
Board. Executive Committee members are David R. Goode, James C. Bishop, Jr.
and Henry C. Wolf. The Committee took no action in 1997.
COMPENSATION OF DIRECTORS
Each incumbent director is also an officer of the Company and an officer of
NS; no such director is paid a retainer, meeting fees or other compensation
for service as a director.
NS COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Nominating Committee of the NS Board of
Directors during 1997 were Messrs. Leisenring, Coleman and Hahn. There were no
reportable business relationships between NS and such individuals.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Kathryn B. McQuade is Vice President-Internal Audit of NS. Ms. McQuade's
spouse is one of approximately 6,250 partners worldwide in KPMG Peat Marwick
LLP ("KPMG"), a firm of independent public accountants that has acted as
auditors for NS. Ms. McQuade's spouse does not participate in, or have access
to, KPMG's work for NS, the Company or the subsidiaries of either. NS paid
KPMG approximately $4.8 million for all services rendered during 1997.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the cash compensation paid, as well as
certain other compensation accrued or paid, to the Chief Executive Officer and
to each of the other four most highly compensated executive officers of NS in
1997, for service in all capacities to both NS and its subsidiaries (including
the Company) for the fiscal years ending December 31, 1997, 1996 and 1995.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ---------------------
AWARDS PAYOUTS
---------- ----------
OTHER SECURITIES
ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY/1/ BONUS/1/ COMPENSATION/2/ OPTIONS/3/ PAYOUTS/4/ COMPENSATION/5/
POSITION YEAR ($) ($) ($) (#) ($) ($)
- ------------------ ---- --------- -------- --------------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
David R. Goode 1997 850,000 850,000 287,972/6/ 120,000 2,472,690 85,304
Chairman, President 1996 800,000 800,000 1,615,682 120,000 1,778,687 73,149
and Chief Executive Of-
ficer 1995 685,000 616,500 1,349,379 150,000 1,511,034 63,796
R. Alan Brogan 1997 300,000 225,000 143,093 36,000 772,715 51,926
Executive Vice 1996 285,000 213,750 515,321 36,000 555,770 40,224
President - Trans. Lo-
gistics 1995 250,000 187,500 435,548 37,500 472,134 38,416
L. I. Prillaman 1997 320,000 240,000 24,411 36,000 309,086 25,619
Executive Vice 1996 285,000 173,437 193,314 36,000 222,289 33,793
President - Marketing 1995 231,250 161,250 153,430 15,000 188,836 17,948
Stephen C. Tobias 1997 400,000 320,000 68,611 36,000 772,715 37,788
Executive Vice 1996 365,000 273,750 233,858 36,000 222,289 31,391
President - Operations 1995 305,000 228,750 183,723 37,500 188,836 26,304
Henry C. Wolf 1997 400,000 320,000 130,907/7/ 36,000 772,715 40,636
Executive Vice 1996 365,000 273,750 483,026 36,000 555,770 34,753
President - Finance 1995 305,000 228,750 188,856 37,500 188,836 29,693
</TABLE>
- --------
/1/Includes portion of any salary or bonus award elected to be received on a
deferred basis.
/2/Includes amounts reimbursed for the payment of taxes on personal
benefits. Also includes the amount by which the interest accrued on salary and
bonuses deferred under the NS Officers' Deferred Compensation Plan exceeds
120% of the applicable Federal long-term rate provided under Section 1274(d)
of the Internal Revenue Code; for 1997, these amounts were: for Mr. Goode,
$69,354; Mr. Brogan, $131,247; Mr. Prillaman, $8,898; Mr. Tobias, $44,771; and
Mr. Wolf, $48,732. Includes for 1995 and 1996 a tax absorption payment on the
"earn out" of performance shares.
/3/Options were granted without tandem SARs.
/4/Represents the value of the "earn out" pursuant to the performance share
feature of the NS Long-Term Incentive Plan for periods ended December 31,
1997, 1996 and 1995 (for 1997, performance shares were earned for achievements
in the three-year period 1995-1997; for 1996, for achievements in the three-
year period 1994-1996; and for 1995, for achievements in the three-year period
1993-1995).
/5/Includes for 1997 (i) contributions of $4,750 to NS' 401(k) plan on
behalf of Messrs. Goode, Brogan, Tobias and Wolf, and $4,350 on behalf of Mr.
Prillaman; and (ii) total premium payments (out-of-pocket cash cost) on "split
dollar" life insurance policies for Mr. Goode, $80,554; Mr. Brogan, $47,176;
Mr. Prillaman, $21,269; Mr. Tobias, $33,038; and Mr. Wolf, $35,886.
/6/Includes personal use, as directed by resolution of the Board of
Directors, of NS' aircraft valued at approximately $140,500 -- calculated on
the basis of the aggregate incremental cost of such use to NS.
/7/Includes a tax absorption payment made under the NS Long-Term Incentive
Plan attributable to the gain realized upon exercise of stock options.
7
<PAGE>
LONG-TERM INCENTIVE PLAN
The NS Long-Term Incentive Plan, as last approved by stockholders in 1995,
provides for the award of incentive stock options, non-qualified stock
options, stock appreciation rights, restricted stock and performance share
units to officers and other key employees of both NS and certain of its
subsidiaries (including the Company). The Compensation and Nominating
Committee of the NS Board of Directors ("Committee") is charged with
administration of the Plan and has the sole discretion, subject to certain
limitations, to interpret the Plan; to select Plan participants; to determine
the type, size, terms and conditions of awards under the Plan; to authorize
the grant of such awards; and to adopt, amend and rescind rules relating to
the Plan.
STOCK OPTIONS
The following table sets forth certain information concerning the grant in
1997 of stock options under the NS Long-Term Incentive Plan to each named
executive officer:
OPTION/SAR* GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
- ----------------------------------------------------------------- ----------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANT DATE
OPTIONS GRANTED TO EXERCISE OR PRESENT
GRANTED/1/ EMPLOYEES IN BASE PRICE/2/ EXPIRATION VALUE/3/
NAME (#) FISCAL YEAR ($ PER SHARE) DATE ($)
- ---- ---------- ------------ ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
D. R. Goode 120,000 6.04% 29.4583 02/02/2007 810,000
R. A. Brogan 36,000 1.81% 29.4583 02/02/2007 243,000
L. I. Prillaman 36,000 1.81% 29.4583 02/02/2007 243,000
S. C. Tobias 36,000 1.81% 29.4583 02/02/2007 243,000
H. C. Wolf 36,000 1.81% 29.4583 02/02/2007 243,000
</TABLE>
*No SARs were granted in 1997.
- --------
/1/These options were granted as of February 3, 1997, and are exercisable
one year after the date of grant. They earn dividend equivalents -- in an
amount equal to, and commensurate with, dividends as paid on the Common
Stock -- which are converted into Deferred Stock Units, the aggregate fair
market value of which is payable in cash to the officer on the earliest of (a)
the five-year anniversary of the date of option grant; (b) the exercise of the
option (exercises of less than the full option grant result in a prorated cash
payment); and (c) the officer's death, disability or retirement.
/2/The exercise price (fair market value on the date of grant) may be paid
in cash or in shares of NS Common Stock (previously owned by the optionee for
at least one year next preceding the date of exercise) valued at fair market
value on the date of exercise.
/3/In accordance with regulations of the Securities and Exchange Commission,
the present value of the option grant on the date of grant was determined
using the Black-Scholes statistical model. The actual amount, if any, an
executive officer may realize upon exercise depends on the stock price on the
exercise date; consequently, there is no assurance the amount realized by an
executive officer will be at or near the monetary value determined by using
this statistical model.
8
<PAGE>
In the case of Common Stock, the Black-Scholes model used the following
measures and assumptions:
(a) a stock volatility factor of 0.1194: volatility was determined by an
independent compensation consultant using monthly data averaged over the
60-month period January 1, 1992, through December 31, 1996;
(b) a dividend yield of 2.92%: yield was determined monthly and averaged
over the 60-month period January 1, 1992, through December 31, 1996;
(c) a 1996 risk-free rate of return of 6.2%: this represents the monthly
average 10-year Treasury strip rate during 1996, the year prior to the
issuance of these options; and
(d) that the option will be exercised during its ten-year term.
The foregoing measures and assumptions produce a Black-Scholes factor of
0.229 and a resulting present value of $6.75 for each share of NS Common Stock
subject to the 1997 option grant; that factor and resulting present value have
not been adjusted to reflect that options cannot be exercised during the first
year of their 10-year term, the payment of dividend equivalents on unexercised
options or the conversion of dividend equivalents into Deferred Stock Units.
The following table sets forth certain information concerning the exercise
of options by each named executive officer during 1997 and the number of
unexercised options and SARs held by each as of December 31, 1997:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES FY-END/1/ AT FY-END/2/
ACQUIRED ON VALUE (#) ($)
EXERCISE REALIZED ------------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ------------------------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. R. Goode 0 0 637,563 120,000 5,792,766 136,260
R. A. Brogan 0 0 204,597 36,000 2,035,560 40,878
L. I. Prillaman 0 0 139,566 36,000 1,506,900 40,878
S. C. Tobias 0 0 154,641 36,000 1,582,580 40,878
H. C. Wolf 3,000/3/ 75,655/3/ 169,581 36,000 1,583,560 40,878
</TABLE>
- --------
/1/Adjusted for the three-for-one stock split in September 1997.
/2/Equal to the mean ($30.5938) of the high and low trading prices on the
New York Stock Exchange-Composite Transactions of NS Common Stock on December
31, 1997, less the exercise prices of the options, multiplied by the number of
options.
/3/Mr. Wolf surrendered 900 shares of stock already owned in full
satisfaction of the exercise price of options to acquire 3,000 shares.
9
<PAGE>
PERFORMANCE SHARE UNITS ("PSUS")
The following table sets forth certain information concerning the grant in
1997 of PSUs under the NS Long-Term Incentive Plan to each named executive
officer. These PSU grants entitle a recipient to "earn out" or receive
performance shares at the end of a three-year performance cycle (1997-1999)
based on NS' performance during that three-year period. Under the 1997 award,
corporate performance will be measured using three predetermined and equally
weighted standards; that is, each of the following performance areas will
serve as the basis for "earning out" up to one third of the total number of
PSUs granted: (1) three-year average return on average invested capital
("ROAIC"), (2) three-year average NS operating ratio and (3) three-year total
return to NS stockholders. A more detailed discussion of these performance
criteria can be found in the Compensation and Nominating Committee Report,
beginning on page 12.
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
(PERFORMANCE SHARE UNITS)
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
SHARES, OR OTHER NON-STOCK PRICE-BASED PLANS
UNITS OR PERIOD UNTIL -------------------------------------
OTHER RIGHTS/1/ MATURATION THRESHOLD TARGET/2/ MAXIMUM
NAME (#) OR PAYOUT (#) (#) (#)
- ---- --------------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
D. R. Goode 75,000 01/01/97- 0 71,625 75,000
12/31/99
R. A. Brogan 24,000 01/01/97- 0 22,920 24,000
12/31/99
L. I. 24,000 01/01/97- 0 22,920 24,000
Prillaman 12/31/99
S. C. Tobias 24,000 01/01/97- 0 22,920 24,000
12/31/99
H. C. Wolf 24,000 01/01/97- 0 22,920 24,000
12/31/99
</TABLE>
- --------
/1/"Earn outs" will be satisfied one half in cash and one half in NS Common
Stock, with the stock portion being held by NS for up to 60 months pursuant to
a share retention agreement, unless such requirement is waived by the
Committee in its sole discretion. Withholding taxes due on the "earn outs"
will be withheld from the cash portion.
/2/The NS Long-Term Incentive Plan does not provide a performance target for
the "earn out" of PSUs; consequently, this column represents 95.5% of the
maximum "earn out," which, in accordance with applicable rules of the
Securities and Exchange Commission, is based on the percentage of the previous
fiscal year's actual "earn out" under the Plan.
10
<PAGE>
PENSION PLANS
The following table sets forth the estimated annual retirement benefits
payable on a qualified joint-and-survivor-annuity basis in specified
remuneration and years of creditable service classifications under NS'
qualified defined benefit pension plans, as well as nonqualified supplemental
pension plans that provide benefits otherwise denied participants because of
certain Internal Revenue Code limitations on qualified plan benefits. It is
assumed, for purposes of the table, that an individual retired in 1997 at age
65 (normal retirement age) with the maximum allowable Railroad Retirement Act
annuity. The benefits shown are in addition to amounts payable under the
Railroad Retirement Act.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITABLE SERVICE
---------------------------------------------------------------------------
REMUNERATION 25 30 35 40
- ------------ -------- -------- ---------- ----------
<S> <C> <C> <C> <C>
$ 300,000 $ 94,536 $115,691 $ 136,845 $ 158,000
400,000 132,036 160,691 189,345 218,000
500,000 169,536 205,691 241,845 278,000
600,000 207,036 250,691 294,345 338,000
700,000 244,536 295,691 346,845 398,000
800,000 282,036 340,691 399,345 458,000
900,000 319,536 385,691 451,845 518,000
1,000,000 357,036 430,691 504,345 578,000
1,100,000 394,536 475,691 556,845 638,000
1,200,000 432,036 520,691 609,345 698,000
1,300,000 469,536 565,691 661,845 758,000
1,400,000 507,036 610,691 714,345 818,000
1,500,000 544,536 655,691 766,845 878,000
1,600,000 582,036 700,691 819,345 938,000
1,700,000 619,536 745,691 871,845 998,000
1,800,000 657,036 790,691 924,345 1,058,000
1,900,000 694,536 835,691 976,845 1,118,000
2,000,000 732,036 880,691 1,029,345 1,178,000
</TABLE>
Under the pension plans, covered compensation includes salary and bonus;
each officer can expect to receive an annual retirement benefit equal to
average annual compensation for the five most highly compensated consecutive
years out of the last ten years of creditable service multiplied by the number
that is equal to 1.5% times total years of creditable service, but not in
excess of 60% of such average compensation, less an offset for the annual
Railroad Retirement Act annuity.
The respective last five-year average compensation and approximate years of
creditable service, as of January 1, 1998, for each executive officer named in
the Summary Compensation Table were: Mr. Goode, $1,208,573 and 32 years; Mr.
Brogan, $429,622 and 34 years; Mr. Prillaman, $411,763 and 28 years; Mr.
Tobias, $510,294 and 28 years; and Mr. Wolf, $498,070 and 25 years.
11
<PAGE>
CHANGE-IN-CONTROL ARRANGEMENTS
In May 1996, the Compensation and Nominating Committee recommended, and the
NS Board of Directors approved, NS' entering into new change-in-control
compensation agreements ("Agreements") with each of the individuals named in
the Summary Compensation Table and with certain other key employees. The new
Agreements, the terms of which were reviewed by outside counsel, were filed as
an exhibit to NS' Report on Form 10-Q for the period ended June 30, 1996, and
provide certain economic protections in the event of an involuntary or other
specified Termination (each term with an initial capital letter is defined in
the new Agreements) of a covered individual during a period of twenty-four
months next following a Change in Control of NS. As consideration for these
new Agreements and to help encourage management continuity, covered
individuals agreed not to engage in Competing Employment for a period of (a)
three years, in most cases, from the date they execute a new Agreement and (b)
one year from their Termination Date, if they accept benefits payable or
provided under the new Agreements.
These Agreements are terminable by either NS or a covered employee on
twenty-four months' notice; however, the term of the prohibition on engaging
in Competing Employment is not affected by the new Agreements' being
terminated.
Generally, these Agreements provide for (a) severance compensation payments
(not continued employment) equal, in the case of individuals named in the
Summary Compensation Table, to three times the sum of their Base Pay and
Incentive Pay (most other covered employees are entitled to receive a lower
multiple of Base Pay and Incentive Pay); (b) redemption of outstanding
Performance Share Units and of outstanding, exercisable options (subject to
restrictions, if any, in the case of persons, such as each officer named in
the Summary Compensation Table, imposed under Section 16 of the Securities
Exchange Act of 1934) and payment of dividend equivalents foregone as a result
of the redemption of such options; (c) payment of an amount equal to the
present value of the projected value of amounts deferred under the NS
Officers' Deferred Compensation Plan; (d) eligibility for certain Benefits
(principally medical, insurance and death benefits) for up to three years
following Termination; and (e) certain additional service credit under NS'
retirement plans (in the case of any NS Board-elected officer, such service
credit may not exceed the creditable service that officer would have had upon
reaching mandatory retirement age). The Agreements also provide for payment of
any Federal excise tax that may be imposed on payments made pursuant to these
Agreements.
COMPENSATION AND NOMINATING COMMITTEE REPORT CONCERNING
THE 1997 COMPENSATION OF CERTAIN EXECUTIVE OFFICERS
This Report describes Norfolk Southern Corporation's (the "Corporation")
officer compensation strategy, the components of its compensation program and
the manner in which 1997 compensation determinations were made for the
Corporation's Chairman, President and Chief Executive Officer, David R. Goode,
and for the other officers (collectively, including Mr. Goode, referred to as
the "Executive Officers") whose 1997 compensation is reported in the Summary
Compensation Table of this Proxy Statement.
12
<PAGE>
The Compensation and Nominating Committee of the Board of Directors
("Committee") is composed entirely of non-employee directors and met six times
during 1997. Among other things, the Committee is responsible for: (1)
recommending to the Board the salaries of corporate officers and (2)
administering the Corporation's Executive Management Incentive Plan, as
approved by the stockholders at their May 1995 Annual Meeting, its Management
Incentive Plan (applicable to non-officers) and its Long-Term Incentive Plan,
as amended and approved by stockholders at their May 1995 Annual Meeting,
which authorizes, as more particularly described below, awards of stock
options and performance share units.
BASE SALARY: While the Committee believes that a substantial portion of
each Executive Officer's total compensation should be "performance-based,"
the Committee also seeks to assure that the base salaries of Executive
Officers are competitive with those earned by individuals in comparable
positions.
Specifically, the Committee compares Mr. Goode's base salary with salaries
paid to chief executive officers of other holding companies of Class I
railroads (the same companies comprising the S&P Railroad Index included in
the Stock Performance Graph) and of other American corporations of
comparable revenue size. The base salaries of the other Executive Officers
-- as well as all Board-elected officers of the Corporation -- are
evaluated, principally by Mr. Goode, relative to survey data of base
salaries for comparable positions at a large number of American
corporations of comparable revenue size, including but not limited to those
identified in the Stock Performance Graph. These data are compiled by the
Corporation's Personnel Department and by an outside compensation
consultant. The Committee's general intention is to set the base salaries
of Executive Officers between the 50th and 75th percentiles of their peers
in the respective groups with which they are compared.
Mr. Goode discusses with the Committee the specific contributions and
performance of each of the Executive Officers. Based on such evaluations,
comparative salary data and each Executive Officer's length of service in
current position, Mr. Goode makes base salary recommendations which are
submitted for Committee and Board approval.
Mr. Goode makes no recommendation concerning, nor does he play any role in
determining, his base salary (or other compensation), which is set by the
Board. As noted, the Committee customarily seeks to set the NS Chairman,
President and CEO's base salary between the 50th and 75th percentiles of
the base salaries paid to CEOs of other American corporations of comparable
revenue size and competitively (within the mid-range of compensation
practice) with those of the chairmen of the other holding companies of
Class I railroads. Mr. Goode's base salary in 1997 approximated the 70th
percentile; and the average 1997 base salaries of other Executive Officers
approximated the 40th percentile, of the 1997 practices of corporations
with comparable revenues.
For 1997, Mr. Goode's annual base salary was increased by $50,000, or 6.3%.
This 1997 increase, not tied to or reflecting application of any specific
formula, reflects the Corporation's performance in 1996, including its
total operating revenues and record net income, as well as the Board's
confidence in Mr. Goode's leadership in general and in the Conrail
transaction in particular. The Committee recommended and the Board approved
average increases of 9.2% for the other Executive Officers as a group;
these increases were based on Mr. Goode's recommendations and the
Corporation's 1996 performance.
13
<PAGE>
EXECUTIVE MANAGEMENT INCENTIVE PLAN ("EMIP"): The Corporation's EMIP is
designed and administered to ensure that a significant portion of each
Executive Officer's total annual cash compensation is based on the
Corporation's annual financial performance. Awards to Executive Officers
and to participants in the Corporation's Management Incentive Plan (MIP)
are paid from an annual incentive fund equal to a percentage (from 0.75% to
1.5%) of the Corporation's adjusted pretax net income, provided the
Corporation's annual return on average invested capital ("ROAIC") equals or
exceeds 10%.
It is the Committee's philosophy that, when the Corporation achieves EMIP
goals, the total of the Executive Officers' base salaries and EMIP awards
should be competitive with the total annual cash compensation paid by
comparable organizations. In years in which those goals are not realized,
the Executive Officers will receive less (or no) incentive pay.
Specifically, incentive pay opportunities for Mr. Goode are determined
annually by the Committee by comparing Mr. Goode's total annual cash
compensation with that paid to the chief executive officers of all other
holding companies of Class I railroads (the same companies comprising the
S&P Railroad Index included in the Stock Performance Graph) and of other
American corporations of comparable revenue size. Incentive pay
opportunities for the other Executive Officers are determined annually by
the Committee based on its review of the annual cash compensation of
comparable positions at companies of comparable revenue size, including but
not limited to those identified in the Stock Performance Graph.
Using those criteria, in November of 1996 the Committee set Mr. Goode's
maximum 1997 incentive opportunity at 100% of his 1997 base salary, Mr.
Tobias' and Mr. Wolf's at 80% of 1997 base salary and the other Executive
Officers' at 75% of 1997 base salary. Actual payments, if any, are based on
the total amount in the annual incentive fund. For 1997, all the Executive
Officers earned EMIP awards, and 303 other key employees earned MIP awards.
In light of the Corporation's 1997 performance, the related EMIP payments
earned by Mr. Goode and the other Executive Officers were equal to 100% of
their respective maximum incentive opportunities. As a consequence, total
1997 cash compensation (1997 salary plus 1997 bonus) earned by Mr. Goode
and the other Executive Officers approximated the 75th and 65th
percentiles, respectively, of total cash compensation (1997 salary plus
1996 bonus) relative to the practices of Corporations with comparable
revenues.
LONG-TERM INCENTIVE PLAN ("LTIP"): The Committee believes that a substantial
component of the Executive Officers' total compensation should be based on and
reflect the Corporation's efficient use of assets, its profitability and the
total returns (stock price appreciation and dividends) to its stockholders.
This is achieved by making annual grants of stock options and performance
share units and through share retention agreements entered into with the
Executive Officers. These LTIP arrangements are intended to ensure that the
longer-term financial interests of the Executive Officers are directly aligned
with those of the Corporation's stockholders and to provide the Executive
Officers with the opportunity to acquire a meaningful beneficial stock
ownership position in the Corporation.
In determining current LTIP awards, the size of prior grants is analyzed
within a current total compensation framework predicated on a review of both
the long-term awards and the total compensation (base salary, bonus and long-
term awards) of comparable positions in U.S. companies with comparable
revenues. The mix of options and performance share units may vary from year to
year
14
<PAGE>
to reflect an analysis of the relative value of each type of award and other
considerations. The number of stock options and performance share units
granted in any year is determined so as to place the total compensation of Mr.
Goode and the other Executive Officers, when corporate performance warrants,
above the 75th percentile of total compensation for their respective peer
groups.
At its January 1997 meeting, the Committee granted stock options to each of
the Executive Officers and to 299 other key employees with an exercise price
equal to the market value of the shares on the date of grant. These options
are exercisable during a ten-year period following the date of grant, after a
one-year period has elapsed.
At the same meeting, the Committee granted performance share units which
provide the Executive Officers and other recipients the opportunity to earn
awards (that will be paid one half in cash and one half in shares of the
Corporation's Common Stock) during the first quarter of 2000. The number of
performance share units actually earned by recipients is based on criteria
approved by stockholders at their May 1995 Annual Meeting -- specifically, the
Corporation's three-year (i.e., 1997-1999) average Return on Average Invested
Capital, three-year average Operating Ratio and three-year Total Return to
Stockholders, evaluated relative to performance measures established by the
Committee and set out in the schedules below. One third of the performance
share units granted in 1997 are available to be earned based on each of the
three following performance criteria.
TOTAL STOCKHOLDER RETURN
("TSR") VS. S&P 500
----------------------------------
PERCENTAGE OF
THREE-YEAR PERFORMANCE
AVERAGE TSR SHARE UNITS
VS. S&P 500 EARNED
----------------------------------
90th percentile 100%
80th 90%
70th 85%
60th 80%
50th 75%
40th 50%
30th 30%
25th and below 0%
-----------------------------------
RETURN ON AVERAGE INVESTED
CAPITAL ("ROAIC")
-----------------------------------
PERCENTAGE OF
THREE-YEAR PERFORMANCE
AVERAGE SHARE UNITS
ROAIC EARNED
-----------------------------------
20% 100%
19% 90%
18% 80%
17% 70%
16% 60%
15% 50%
14% 40%
13% 20%
Below 13% 0%
OPERATING RATIO ("OPR")
----------------------------------------
PERCENTAGE OF
THREE- PERFORMANCE
YEAR NS SHARE UNITS
AVERAGE OPR EARNED
-----------------------------------------
70% 100%
75% 75%
80% 50%
85% 25%
Above 85% 0%
15
<PAGE>
All stock options granted in 1997 to Executive Officers were subject to the
following terms: For the first five (5) years following the date stock
options are granted, the Corporation credits dividend equivalents on
unexercised options to a separate memorandum account maintained for each
Executive Officer, and -- based on the fair market value of the
Corporation's Common Stock on the dividend payment date -- the dollar
amount of that dividend equivalent is converted into Deferred Stock Units
(one such unit is equal in value to one share of Common Stock). The value
of such Deferred Stock Units is paid in cash to each Executive Officer
based on the then-fair market value of the Corporation's Common Stock on
the earliest to occur of (a) the five-year anniversary of the date of the
option grant; (b) the exercise of the option (exercises of less than the
full option grant result in a prorated cash payment); and (c) the officer's
death, disability or retirement.
All Executive Officers have entered into share retention agreements with
the Corporation whereby they have agreed to have the Corporation hold
shares of the Corporation's Common Stock actually earned pursuant to the
performance share feature of the LTIP for a period of five years following
the date such shares are earned.
For 1997, Mr. Goode was granted options on 120,000 shares of Common Stock
and the opportunity to earn up to 75,000 performance shares, and the other
Executive Officers as a group were awarded options on a total of 144,000
shares of Common Stock and the opportunity to earn up to 96,000 performance
shares; the number of options and performance shares granted has been
adjusted in this report to give effect to the three-for-one stock split
that was effective in September of 1997.
In summary, the Committee believes that the compensation of Executive
Officers is competitive with that of similar positions at comparable American
corporations. More important, the Committee believes each Executive Officer's
compensation has been appropriately structured and administered so that a
substantial component of total compensation is dependent upon, and directly
related to, the Corporation's efficient use of assets, its profitability and
the total returns to its stockholders.
Regulations of the Securities and Exchange Commission require the Committee
to report to stockholders on the Committee's policy concerning the Revenue
Reconciliation Act of 1993 which amended Section 162 of the Internal Revenue
Code regarding the deductibility of certain executive compensation over $1
million. Based on the requirements of this new legislation and on then-current
interpretive regulations and transition rules, the Committee recommended to
the Board, the Board approved and recommended to the stockholders, and at
their 1995 Annual Meeting the stockholders approved, modifications to the LTIP
and establishment of the Executive Management Incentive Plan (which was
effective as of January 1, 1996, for certain Board-elected officers), all as
more particularly described in the Corporation's 1995 Proxy Statement. The
Committee will continue to seek to offer its Executive Officers and other
personnel competitive compensation and to structure such compensation
arrangements to entitle the Corporation to take appropriate related tax
deductions.
E. B. Leisenring, Jr., Chairman
L. E. Coleman, Member
T. M. Hahn, Jr., Member
16
<PAGE>
PERFORMANCE GRAPH
The performance graph comparing the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock with the
cumulative total return of the S&P Composite 500 Stock Index and a published
industry index has been omitted because the Company's Common Stock is owned
entirely by NS and is not publicly traded.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP,
independent public accountants, to audit the books, records and accounts of
the Company for the year 1998. This firm has acted as auditors for the Company
since June 1, 1982, and also provides services to NS.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting, with the opportunity to make a statement if they so desire,
and available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. In order for a stockholder proposal for the 1998 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's proxy statement and
form of proxy, it must be received by the Corporate Secretary, Norfolk
Southern Railway Company, Three Commercial Place, Norfolk, Virginia 23510-
9219, no later than December 15, 1998.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than as set forth above. However, if any other matters
come before the meeting, the proxies received pursuant to this solicitation
will be voted thereon in accordance with the judgment of the person or persons
acting under the proxies.
By order of the Board of Directors,
SANDRA T. PIERCE,
Corporate Secretary.
17
<PAGE>
NORFOLK SOUTHERN RAILWAY COMPANY
THREE COMMERCIAL PLACE, NORFOLK, VIRGINIA 23510-2191
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints L. I. Prillaman, Henry C. Wolf or Sandra T.
Pierce, and each or any of them, proxy for the undersigned, with power of
substitution, to vote with the same force and effect as the undersigned at the
annual meeting of stockholders of Norfolk Southern Railway Company to be held
at Three Commercial Place, Norfolk, Virginia, on Tuesday, May 26, 1998, and any
adjournments, postponements or reschedulings thereof, upon the matters more
fully set forth in the Proxy Statement, dated April 14, 1998, and to transact
such other business as properly may come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
OTHER SIDE BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF DIRECTORS.
(Continued, and to be MARKED, DATED AND SIGNED on the other side)
NORFOLK SOUTHERN RAILWAY COMPANY
P.O. BOX 11139
NEW YORK, N.Y. 10203-0139
<PAGE>
- --------------------------------------------------------------------------------
--------------
--------------
PLEASE MARK BOXES [_] OR [X] IN BLUE OR BLACK INK.
(1) Election of Directors
FOR all nominees listed below, except
as marked to the contrary (see instruction). [X]
WITHHOLD AUTHORITY to vote
for all nominees listed below. [X]
David R. Goode and Stephen C. Tobias
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME.
Address Change and/or
Comments-Mark Here [X]
SIGN EXACTLY AS NAME APPEARS HEREON.
ATTORNEYS-IN-FACT, EXECUTORS, TRUSTEES,
GUARDIANS, CORPORATE OFFICERS, ETC.,
SHOULD GIVE FULL TITLE.
Dated: ____________________________, 1998
_________________________________________
(SIGNATURE)
_________________________________________
(SIGNATURE)
- --------------------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
- --------------------------------------------------------
- --------------------------------------------------------------------------------
