1987 Long-Term Performance Stock Plan - CSX Corp.


                                 CSX CORPORATION

                      1987 Long-Term Performance Stock Plan

                As Amended and Restated Effective April 25, 1996
                      (As Amended through December 9, 1998)


1.      Purpose.

        The purpose of the CSX Corporation Long-Term Performance Stock Plan (the
'Plan') is to attract and retain  outstanding  individuals  as officers  and key
employees of CSX Corporation and its subsidiaries, to furnish motivation for the
achievement  of  long-term  performance  objectives  by  providing  such persons
opportunities  to acquire  ownership of common  shares of the Company,  monetary
payments  based on the value of such shares or the financial  performance of the
Company,  or  both,  on  terms  as  herein  provided.  It is  intended  that the
Incentives   provided   under   this  Plan   will  be   treated   as   qualified
performance-based compensation within the meaning of Section 162(m) of the Code.

2.      Definitions.

        Whenever the following  words are capitalized and used in the Plan, they
shall have the respective  meanings set forth below,  unless a different meaning
is expressly provided.  Unless the context clearly indicates to the contrary, in
reading this  document the singular  shall  include the plural and the masculine
shall include the feminine.

               a. 'Beneficiary':  The term Beneficiary shall mean the person
               designated by the  Participant,  on a  form  provided  by the
               Company,  to  exercise  the Participant's  rights in accordance
               with Section 14 of the Plan in the event of his death.

               b. 'Benefits  Trust  Committee':  The term Benefits Trust
               Committee means the  committee  established  pursuant  to the CSX
               Corporation  and  Affiliated Companies Benefits Assurance Trust.

               c. 'Board of  Directors':  The term Board of  Directors  or Board
               means the Board of Directors of CSX Corporation.

               d. 'Cause':  The term Cause means (i) an act or acts of personal
               dishonesty  of a  Participant  intended to result in  substantial
               personal  enrichment  of the  Participant  at the  expense of the
               Company  or  any  of  its  subsidiaries,  (ii)  violation  of the
               management   responsibilities   by  the   Participant   which  is
               demonstrably willful and deliberate on the Participant's part and
               which  is not  remedied  in a  reasonable  period  of time  after
               receipt of written  notice from the Company or a  subsidiary,  or
               (iii) the  conviction of the  Participant  of a felony  involving
               moral turpitude.

               e. 'Change in  Control':  The term  Change in Control is defined
               in Section 22.

               f. 'Code':  The term  Code  means the  Internal  Revenue Code of
               1986,  as amended.

               g. 'Committee':  The term  Committee  means the  Compensation
               Committee of the Board of Directors.

               h. 'Company':  The term Company means CSX Corporation.

               i. 'Completed  Month':  The  term  Completed  Month  shall
               mean  a  period beginning  on the  monthly  anniversary  date of
               a grant  of an  Incentive  and ending on the day before the next
               monthly anniversary.

               j. 'Covered  Employee':  The term Covered Employee shall mean the
               chief  executive  officer of the Company or any other  individual
               who is among the four (4) highest compensated  officers or who is
               otherwise  a 'covered  employee'  within  the  meaning of Section
               162(m) of the Code, as determined by the Committee.

               k. 'Disability':   The  term  Disability  means  long-term
               disability as determined  under the Company's Salary  Continuance
               and Long-Term  Disability Plan.

               l. 'Divisive Transaction':  The term Divisive Transaction means a
               transaction in which the  Participant's  employer  ceases to be a
               Subsidiary or there is a sale of substantially  all of the assets
               of the Subsidiary.

               m. 'Exchange  Act':  The term  Exchange Act means the  Securities
               Exchange Act of 1934, as amended.

               n. 'Exercisability   Requirements':   The  term  Exercisability
               Requirements used with respect to any grant of options means such
               restrictions  or  conditions on the exercise of such options that
               the Committee may, in its discretion, add to the one-year holding
               requirement contained in Sections 7 and 8.

               o. 'Fair  Market  Value':  The term Fair  Market  Value  shall be
               deemed to be the mean  between  the  highest  and  lowest  quoted
               selling  prices of the stock per share as reported under New York
               Stock Exchange-Composite  Transactions on the day of reference to
               any event to which the term is pertinent, or, if there is no sale
               that  day,  on the  last  previous  day on which  any  such  sale
               occurred.

               p. 'Functional Group': The term Functional Group means a group of
               employees,  identified by the Compensation Committee, in its sole
               discretion,  to  be  subject  to  a  common  set  of  Performance
               Objectives.

               q. 'Incentive':  The term  Incentive  means  any  incentive under
               the Plan described in Section 6.

               r. 'Objective  Standard':  The term  Objective  Standard means a
               formula or standard by which a third party,  having  knowledge of
               the relevant performance  results,  could calculate the amount to
               be paid to a Participant.  Such formula or standard shall specify
               the  individual  employees  or  class  of  employees  to which it
               applies,  and shall  preclude  discretion  to increase the amount
               payable  that  would  otherwise  be due  upon  attainment  of the
               objective.

               s. 'Participant':  The term Participant  means an individual
               designated by the Committee as a Participant pursuant to Section
               5.

               t. 'Performance Objective':  The term Performance Objective shall
               mean  a  performance  objective  established  in  writing  by the
               Committee  within  ninety  (90) days of the

                                       -2-

               commencement of the Performance  Period to which the  Performance
               Objective   relates and at a   time when   the  outcome   of such
               objective is substantially uncertain.  Each Performance Objective
               shall   be established in   such a way that a third party  having
               knowledge  of the   relevant facts could   determine  whether the
               objective is met. A Performance Objective may be based  on one or
               more business criteria that apply  to the individual Participant,
               a  business unit or the Company as a whole, and shall  state,  in
               terms of an  Objective  Standard,  the  method of  computing  the
               amount payable to the Participant if  the  Performance  Objective
               is   attained.  With   respect to   Incentives granted to Covered
               Employees, the material terms of the Performance Objective  shall
               be disclosed  to, and   must be subsequently  approved by, a vote
               of  the   shareholders of  the   Company,  consistent   with  the
               requirements of Section 162(m) of the  Code  and the  regulations
               thereunder.  The  Performance    Objectives  for any  Performance
               Period shall be based on one or  more of the  following measures,
               as  determined by the Committee in  writing  within  ninety  (90)
               days  of the  commencement  of the  Performance Period:

               1. The  achievement  by the Company or business  unit of specific
                  levels of Return on Invested Capital ('ROIC'). ROIC for the
                  Company or business unit means its results of operations
                  divided by its capital.

               2. The generation by the Company or business unit of free cash
                  flow.

               3. The creation by the Company or business  unit of specific
                  levels of Economic Value Added ('EVA').  EVA for  the Company
                  or business  unit means its ROIC less its cost of capital
                  multiplied by its capital.

               4. The  creation by the Company of specific  levels of Total
                  Shareholder  Return ('TSR').  TSR for the Company  means total
                  return to shareholders as measured by stock price appreciation
                  plus dividends.

               u. 'Performance  Period':  The term Performance Period means a
               fixed period of time,  established  by the  Committee,  during
               which a Participant  performs service  for  the  Company  and
               during  which  Performance  Objectives  may be achieved.

               v. 'Plan':  The  term  Plan  means  this  CSX  Corporation  1987
               Long-Term Performance Stock Plan as amended or restated from time
               to time.

               w. 'Retirement':  The term  Retirement,  for Incentives  granted
               prior to January 1, 1999,  means  termination of employment  with
               immediate commencement of retirement benefits under the Company's
               defined  benefit  pension  plan.  For  Incentives  granted  after
               December 31, 1998,  the term  Retirement  means a termination  of
               employment  after age 55 with  eligibility  to begin  immediately
               receiving retirement benefits under the Company's defined benefit
               pension plan.

               x. 'Separation  From  Employment':   The  term  Separation  From
               Employment  means an employee's  separation  from employment with
               the Company or a  Subsidiary  as a result of  Retirement,  death,
               Disability,   or  termination  of  employment   (voluntarily   or
               involuntarily).  A Participant  in receipt of periodic  severance
               payments shall be considered separated from employment on the day
               preceding  the  day  such  severance   payments   commenced.

               y. 'Subsidiary':  The term  Subsidiary  means,  with  respect to
               any corporation,  or corporation more than 50% of whose voting
               shares are owned directly or indirectly by the Company.

                                      -3-

               z. 'Trust':  The term Trust means the CSX  Corporation  and
               Affiliated Companies Executives'  Stock  Trust or such  other
               trust or  trusts  which substantially  conforms  to the  terms
               of the  Internal  Revenue Service  model trust as  described  in
               Revenue  Procedure  92-64, 1992-2 C.B. 422.

3.      Number of Shares.

        Subject to the provisions of Section 19 of this Plan, the maximum number
of shares which may be issued  pursuant to the  Incentives  shall be  21,000,000
shares of the  Company's  common stock,  par value $1.00 per share.  The maximum
number of such shares that may be issued pursuant to any type of Incentive shall
be 17,500,000 shares. The remaining 3,500,000 shares may be issued only pursuant
to grants of Incentive  Stock Options,  Non-Qualified  Stock Options,  and Stock
Appreciation  Rights. Such shares shall be authorized and unissued shares of the
Company's  common  stock.  Subject  to the  provisions  of  Section  19,  if any
Incentive  granted  under the Plan  shall  terminate  or expire  for any  reason
without having been exercised in full, the unissued shares subject thereto shall
again be available  for the purposes of the Plan.  Similarly,  shares which have
been issued,  but which the Company retains or which the Participant  tenders to
the Company in satisfaction of income and payroll tax withholding obligations or
in satisfaction of the exercise price of any option shall remain  authorized and
shall again be available for the purposes of the Plan, provided,  however,  that
any such  previously  issued  shares shall not be the subject of any grant under
the Plan to any  officer  of the  Company  who,  at the time of such  grant,  is
subject to the short-swing trading provisions of Section 16 of the Exchange Act.

4.      Administration.

        a. Prior to a Change of Control,  the Plan shall be  administered by the
Committee.  The Committee shall consist of three or more members of the Board of
Directors.  No  member  of the  Committee  shall  be  eligible  to  receive  any
Incentives  under the Plan while a member of the  Committee.  A majority  of the
Committee shall constitute a quorum.  The Committee shall recommend to the Board
individuals to receive Incentives, including the type and amount thereof, unless
the Board shall have  delegated  to the  Committee  the  authority  and power to
select  persons to whom  Incentives  may be granted,  to establish  the type and
amount thereof, and to make such grants.

        Subject to the express  provisions of the Plan, the Committee shall have
authority to construe any agreements  entered into with any person in respect of
any  Incentive  or  Incentives,  to  prescribe,  amend  and  rescind  rules  and
regulations  relating to the Plan, to determine the terms and  provisions of any
such agreements and to make all other determinations  necessary or advisable for
administering  the Plan.  The  Committee  may  correct  any defect or supply any
omission or reconcile any  inconsistency  in the Plan or in any agreement  under
the Plan in the manner and to the  extent it shall  deem  expedient  to carry it
into effect,  and it shall be the sole and final judge of such  expedience.  Any
determination  of the  Committee  under the Plan may be made  without  notice of
meeting of the  Committee  by a writing  signed by a majority  of the  Committee
members.  The determinations of the Committee on the matters referred to in this
Section 4 shall be conclusive.

        b.  Following a Change of Control,  the  Benefits  Trust  Committee  may
remove  and/or  replace the Committee as the Plan  Administrator.  Additionally,
following  a Change of Control,  any and all final  benefit  determinations  for
Participants,  their  beneficiaries,  heirs and assigns and decisions  regarding
benefit claims under this Plan shall rest with the Benefits  Trust  Committee or
its delegate in its sole judgment and absolute discretion.

                                       -4-

5.      Eligibility and Participation.

        Incentives  may be granted  only to officers  and key  employees  of the
Company and of its  Subsidiaries  at the time of such grant as the  Committee in
its sole  discretion  may designate from time to time to receive an Incentive or
Incentives.  An officer or key  employee  who is so  designated  shall  become a
Participant.  A director  of the Company or of a  Subsidiary  who is not also an
officer or employee of the Company or of such Subsidiary will not be eligible to
receive an Incentive.

        The Committee's  designation of an individual to receive an Incentive at
any time shall not require the Committee to designate  such person to receive an
Incentive at any other time.  The  Committee  shall  consider such factors as it
deems pertinent in selecting Participants and in determining the type and amount
of their respective  Incentives,  including without limitation (a) the financial
condition of the Company,  (b) anticipated  financial results for the current or
future years,  including return on invested capital, (c) the contribution by the
Participant  to  the  profitability  and  development  of  the  Company  through
achievement  of established  strategic  objectives,  and (d) other  compensation
provided to Participants.

6.      Incentives.

        Incentives  may be granted in any one or a combination  of (a) Incentive
Stock Options;  (b) Non-Qualified Stock Options;  (c) Stock Appreciation Rights;
(d) Performance  Shares;  (e) Performance  Units; (f) Restricted  Stock; and (g)
Incentive  Compensation  Program Shares,  all as described below and pursuant to
the  terms  set forth in  Sections  3 and 7-12  hereof.  With  respect  to Items
(a)-(c),  the  maximum  number of shares of  common  stock of the  Company  with
respect  to which  these  Incentives  may be  granted  in any  Plan  Year to any
Participant will be 750,000.  With respect to Items (d)-(f),  the maximum number
of shares of common stock of the Company with respect to which these  Incentives
may be granted during any Plan Year to any Participant will be 150,000.

7.      Incentive Stock Options.

        Incentive  Stock  Options  (ISOs)  will  consist of options to  purchase
shares  of the  Company's  common  stock at  purchase  prices  not less than 100
percent of the Fair Market Value of such common stock on the date of grant. ISOs
will be  exercisable  upon the date or dates  specified  in an option  agreement
entered into with a Participant  but not earlier than one year after the date of
grant of the  options and not later than 10 years after the date of grant of the
options; provided, however, that whether or not the one-year holding requirement
is satisfied,  any  Exercisability  Requirements must be satisfied.  For options
granted after December 31, 1986, the aggregate Fair Market Value,  determined at
the date of grant,  of shares for which ISOs are  exercisable for the first time
by a Participant during any calendar year shall not exceed $100,000.

        Notwithstanding  the provisions of Section 5 of this Plan, no individual
will be  eligible  for or  granted an ISO if that  individual  owns stock of the
Company  possessing  more than 10 percent of the total combined  voting power of
all classes of the stock of the Company or its Subsidiaries.

        Any  Participant  who is an option  holder  may  exercise  his option to
purchase  stock  in whole or in part  upon  the date or dates  specified  in the
option  agreement  offered to him. In no case may an option be  exercised  for a
fraction of a share.  Except as set forth in this  Section 7,  Section 12 and in
Sections 14 through 16, no option  holder may  exercise an option  unless at the
time of exercise he has been in the  continuous  employ of the Company or one of
its  Subsidiaries  since the grant of such option.  An option  holder under this
Plan shall have no rights as a shareholder with respect to any shares subject to
such option until such shares have been issued.

                                      -5-

        For  purposes of this  Section 7,  written  notice of  exercise  must be
received by the  Corporate  Secretary  of the Company not less than one year nor
more than 10 years  after the  option is  granted.  Such  notice  must state the
number of shares being  exercised and must be accompanied by payment of the full
purchase  price of such  shares.  Payment  for the shares for which an option is
exercised  may be made by (1) a  personal  check or money  order  payable to CSX
Corporation;  (2) a  tender  by the  employee  (in  accordance  with  procedures
established  by the  Company) of shares of the  Company's  common stock having a
Fair  Market  Value on the date of tender  equaling  the  purchase  price of the
shares for which the option is being  exercised;  or (3) any  combination of (1)
and (2).

8.      Non-Qualified Stock Options.

        NQSOs will be exercisable  upon the date or dates specified in an option
agreement  entered into with a  Participant  but not earlier than one year after
the date of grant of the  options  and not later than 10 years after the date of
grant of the options (15 years if the NQSO grant was a 15-year grant); provided,
however, that whether or not the one-year holding requirement is satisfied,  any
Exercisability Requirements must be satisfied.

        Any  Participant  may exercise an option to purchase stock upon the date
or dates  specified  in the option  agreement  offered to him. In no case may an
option  be  exercised  for a  fraction  of a share.  Except as set forth in this
Section  7,  Section 12 and in  Sections  14  through  16, no option  holder may
exercise an option unless at the time of exercise he has been in the  continuous
employ of the Company or one of its Subsidiaries  since the grant of his option.
An option  holder  under this Plan shall  have no rights as a  shareholder  with
respect to any shares subject to such option until such shares have been issued.

        For  purposes of this  Section 8,  written  notice of  exercise  must be
received by the  Corporate  Secretary of the Company,  not earlier than one year
nor  later  than 10 years  after  the  option  is  granted;  provided,  however,
effective for grants of options after  December 31, 1998, the term of the option
may be 15 years instead of 10 years. Such notice must state the number of shares
being exercised and must be accompanied by payment of the full purchase price of
such shares. Payment for the shares for which an option is exercised may be made
by (1) a personal check or money order payable to CSX Corporation;  (2) a tender
by the employee (in accordance  with  procedures  established by the Company) of
shares of the  Company's  common stock having a Fair Market Value on the date of
tender  equaling the purchase  price of the shares for which the option is being
exercised;  (3) the delivery of a properly  executed  exercise notice,  together
with  irrevocable  instructions  to a broker to promptly  deliver to the Company
either  sale  proceeds of shares  sold to pay the  purchase  price or the amount
loaned by the broker to pay the purchase  price;  or (4) any combination of (1),
(2) and (3).

        Non-Qualified  Stock Options (NQSOs) will consist of options to purchase
shares  of the  Company's  common  stock at  purchase  prices  not less than 100
percent  of the Fair  Market  Value of such  common  stock on the date of grant;
provided,  further, effective for grants of options after December 31, 1998, the
term of the option may be 15 years instead of 10 years.

9.      Stock Appreciation Rights.

        Any option granted under the Plan may include a stock appreciation right
(SAR) by which the  participant may surrender to the Company all or a portion of
the option to the extent  exercisable  at the time of  surrender  and receive in
exchange a payment  equal to the excess of the Fair  Market  Value of the shares
covered by the option  portion  surrendered  over the aggregate  option price of
such shares.  Such payment shall be made in shares of Company  common stock,  in
cash,  or partly in shares  and  partly in cash,  as the  Committee  in its sole
discretion shall determine, but in no event shall the number of shares of common

                                      -6-

stock delivered upon a surrender  exceed the number the option holder could then
purchase  upon  exercise  of the  option.  Such  rights  may be  granted  by the
Committee  concurrently  with the option or  thereafter  by amendment  upon such
terms and conditions as the Committee may determine.

        The Committee  may also grant,  in addition to, or in lieu of options to
purchase  stock,  SARs which will entitle the  Participant  to receive a payment
upon  surrender of that right,  or portion of that right in accordance  with the
provisions of the Plan, equaling the difference between the Fair Market Value of
a stated  number of shares of Company  common stock on the date of the grant and
the Fair Market Value of a comparable  number of shares of Company  common stock
on the day of surrender,  adjusted for stock dividends declared between the time
of the grant of the SAR and its surrender. The Committee shall have the right to
limit the amount of appreciation with respect to any or all of the SARs granted.
Payment  made upon the  exercise of the SARs may be in cash or shares of Company
common  stock,  or partly in shares and partly in cash,  as the Committee in its
sole discretion shall determine.

        For purposes of this  Section 9, written  notice must be received by the
Corporate  Secretary  of the Company not earlier than one year nor later than 10
years after the SAR is granted.  Such notice must state the number of SARs being
surrendered  and  the  method  of  settlement   desired  within  the  guidelines
established  from time to time by the  Committee.  The SAR holder  will  receive
settlement  based on the Fair  Market  Value on the day the  written  request is
received by the Corporate Secretary of the Company.

        In certain  situations as determined by the  Committee,  for purposes of
this Section 9, written  notice must be received by the  Corporate  Secretary of
the Company between the third and twelfth business days after the public release
of the Company's  quarterly  earnings report,  or between such other,  different
period  as may  hereinafter  be  established  by  the  Securities  and  Exchange
Commission. For such settlements, a Participant subject to a restricted exercise
period shall  receive  settlement  based on the highest Fair Market Value during
the period described in the foregoing sentence.

        The  Committee may not grant an SAR or other rights under this Section 9
in  connection  with an  incentive  stock  option if such grant  would cause the
option  or the Plan not to  qualify  under  Section  422 of the Code or if it is
prohibited by such section or Treasury regulations issued thereunder.  Any grant
of an SAR or other rights which would disqualify  either the option as an ISO or
the  Plan,  or which  is  prohibited  by  Section  422 of the  Code or  Treasury
regulations issued thereunder,  is and will be considered as void and vesting no
rights in the grantee. It is a condition for eligibility for the benefits of the
option  and of the Plan that the  Participant  agree that in the event an SAR or
other  right  granted  should  be  determined  to be  void  as  provided  by the
foregoing, the Participant has no right or cause of action against the Company.

10.     Performance Unit Awards and Performance Share Awards.

        The Committee may grant  Performance  Unit Awards (PUAs) and Performance
Share Awards (PSAs) under which payment shall be made in shares of the Company's
common stock,  in cash, or partly in shares and partly in cash, as the Committee
in its  sole  discretion  shall  determine.  PUAs and  PSAs  may be  awarded  to
individual  Participants or to a Functional Group.  Awards to a Functional Group
shall be subject to distribution by the Chief Executive  Officer of the Company,
or by his designees, to individuals within such group. At the time of the grant,
the Committee shall establish in writing and communicate to Participants, and to
members of a Functional Group who can be identified,  Performance  Objectives to
be  achieved  during  the  Performance  Period.  Awards  of PUAs and PSAs may be
determined by the average level of attainment  of  Performance  Objectives  over
multiple Performance Periods.

        Prior to the payment of PUAs and PSAs, the Committee shall determine the
extent to which Performance Objectives have been attained during the Performance
Period or  Performance  Periods in order

                                      -7-

to   determine the level of    payment to be made, if any, and shall record such
results in the   minutes of the meeting of the    Committee. In no instance will
payment be made if the Performance Objectives are not attained.

        Payment, if any, shall be made in a lump sum or in installments, in cash
or shares of Company common stock, as determined by the Committee, commencing as
promptly as feasible  following the end of the Performance  Period,  except that
(a)  payments  to be made in cash may be  deferred  subject  to such  terms  and
conditions as may be  prescribed by the Company,  and (b) payments to be made in
Company  common  stock may be deferred  pursuant  to an election  filed on forms
prescribed and provided by and filed with the Company.  A Participant  may elect
annually to defer to a date certain,  or the occurrence of an event, as provided
in the form, the receipt of all or any part of shares of Company common stock he
may subsequently become entitled to receive. On forms provided by and filed with
the  Company,  the  Participant  shall also specify  whether,  when the deferral
period expires or when the restrictions  below lapse,  payment will be in a lump
sum or installments over a period not exceeding twenty (20) years. The Committee
shall  prescribe  the time periods  during  which the election  must be filed in
order to be effective.  Elections to defer,  once  effective,  are  irrevocable.
Changes regarding the date of payment,  the period over which payments are to be
made and the method of payment are subject to substantial penalties.  However, a
One-Time Change of Distribution Election may be made to change the timing or the
form of payment without penalty.  Any such election which changes a distribution
election on  'termination  of  employment'  or 'the earlier of  termination or a
specified  age'  shall  be  void  in  the  event  the  Participant's  employment
terminates within twelve (12) months following the date of the election.

        If a Participant has made an effective  election to defer the payment of
shares of common stock,  the Company shall,  within a reasonable  period of time
after the deferral  election is made,  transfer  shares of common stock or other
assets equal in value to the number of shares as to which payment is deferred to
the Trust to secure the  Company's  obligation  to pay shares of common stock to
the Participant in the future. However, in any event, the Company shall make any
previously deferred payment of shares to the Participant upon:

           a.  the death of the Participant;
           b.  the Disability of the Participant;
           c.  the  Participant's  termination of employment with the Company
               or a subsidiary of the Company,  subject  to  the  Participant's
               deferral election;
           d.  A Divisive Transaction, subject to the Participant's deferral
               election; or
           e.  a Change in Control.

        If a former Participant who has not received  distribution of his entire
deferred   payment  under  this  Section  is  reemployed  and  again  becomes  a
Participant  in the  Plan,  he may  suspend  payment  of any  remaining  amounts
deferred, by notifying the Company in writing, and make a new deferral election,
without penalty,  with respect to those amounts and new amounts deferred so long
as such change does not accelerate the timing of any payment to the Participant;
provided,   however,   distributions  shall  continue  if  the  commencement  of
distribution  was  because  the  Participant   chose  a  specific  age  for  the
commencement of benefits and that age has been attained.

        Notwithstanding a Participant's  election to defer the payment of shares
of common  stock  pursuant  to this  Section  10,  the  Company  shall make cash
payments to Participants following each common stock dividend payment date equal
to the  dividends  payable  on the  number  of shares of  Company  common  stock
credited to the Participant's  account as of the dividend record date (including
shares for which an election to defer has been made and any reinvested dividends
thereon). A Participant may elect to defer receipt of the cash payments pursuant
to election forms  prescribed  and provided by and filed with the Company.  Such

                                      -8-

deferred  cash  payments  shall be  credited  to the  Participant's  account and
reinvested in shares of Company common stock as of the dividend payment date. An
election to defer,  once effective,  shall be irrevocable for the calendar year,
and shall  continue in effect with respect to  subsequent  calendar  years until
changed by a timely filed new election.

        Any dividends  paid on shares of Company  common stock held in the Trust
shall be paid to the Trust and shall be reinvested  in shares of Company  common
stock, or other assets equal in value, to secure the Company's obligation to pay
shares of common stock to Participants in the future.

11.     Restricted Stock.

        A Restricted Stock Award (RSA) shall entitle the Participant, subject to
his  continued  employment  during  the  restriction  period  determined  by the
Committee and his complete  satisfaction of any other  conditions,  restrictions
and  limitations  imposed  in  accordance  with the Plan,  to the  unconditional
ownership  of the  shares of the  Company's  common  stock  covered by the grant
without payment therefore.

        The  Committee  may  grant  RSAs at any  time or from  time to time to a
Participant  selected by the  Committee in its sole  discretion.  The  Committee
shall  establish  at the  time of grant of each  RSA a  Performance  Period  and
Performance Objectives to be achieved during the Performance Period.

        At the time of grant, the Performance Period and Performance  Objectives
shall be set forth either in  agreements or in  guidelines  communicated  to the
Participant  in such  form  consistent  with this  Plan as the  Committee  shall
approve from time to time.

        Following  the  conclusion  of each  Performance  Period  and  prior  to
payment,   the  Committee  shall  determine  the  extent  to  which  Performance
Objectives  have been attained or a degree of  achievement  between  maximum and
minimum  Performance  Objectives  during  the  Performance  Period  in  order to
determine the level of payment to be made, if any, and shall record such results
in the minutes of the meeting of the  Committee.  In no instance will payment be
made if the Performance Objectives are not attained.

        At the time that an RSA is granted, the Committee shall establish in the
written agreement a restriction  period applicable to all shares covered by such
grant.  Subject  to  the  provisions  of  the  next  following  paragraph,   the
Participant shall have all of the rights of a stockholder of record with respect
to the shares covered by the grant to receive  dividends or other  distributions
in respect of such shares  (provided,  however,  that any shares of stock of the
Company  distributed  with respect to such shares shall be subject to all of the
restrictions  applicable  to such shares) and to vote such shares on all matters
submitted to the stockholders of the Company, but such shares shall not be sold,
exchanged,  pledged,  hypothecated or otherwise disposed of at any time prior to
the expiration of the restriction period, including by operation of law, and any
purported disposition,  including by operation of law, shall result in automatic
forfeiture of any such shares.

        Except as  hereinafter  provided,  if,  during  the  restriction  period
applicable to such grant, a Separation From  Employment of a Participant  occurs
for any reason other than death, Disability or Retirement, all shares covered by
such grant shall be forfeited to the Company automatically. If the Participant's
Separation From Employment is because of Retirement or death, or in the event of
Disability,  the  Participant  or his successor in interest shall be entitled to
unconditional  ownership of a fraction of the total number of shares  covered by
such grant of which the numerator is the number of whole calendar  months in the
period  commencing  with the first whole  calendar  month  following the date of
grant and ending  with the whole  calendar  month  including  the date of death,
Disability or  Retirement,  and of which 

                                      -9-

the  denominator is  the  number of   whole calendar   months in the  applicable
restriction period.  Any fractional shares shall be disregarded.

        The  Committee  may, at the time of granting any RSA,  impose such other
conditions,  restrictions  or  limitations  upon the rights of the  Participants
during  the  restriction  period  or upon the  Participant's  right  to  acquire
unconditional  ownership  of shares as the  Committee  may,  in its  discretion,
determine and set forth in the written agreement.

        At the time of grant of an RSA, the Company shall cause to be issued and
registered in the name of the Participant a stock  certificate  representing the
full  number  of  shares  covered  thereby,  which  certificate  shall  bear  an
appropriate   legend  referring  to  the  terms,   conditions  and  restrictions
applicable  to such  grant,  and the  grantee  shall  execute and deliver to the
Company a stock  power  endorsed  in blank  covering  such  shares.  Such  stock
certificate  and stock power shall be held by the Company or its designee  until
the  expiration  of the  restriction  period,  at which  time the same  shall be
delivered  to the  Participant  or his  designee  if all of the  conditions  and
restrictions of the grant have been  satisfied,  or until the forfeiture of such
shares,  at which  time the same  shall be  cancelled  and the  shares  shall be
returned to the status of unissued shares.

12.     Incentive Compensation Program Shares.

        A Participant who receives base compensation in excess of a dollar level
to be  determined by the Committee and who is eligible to receive an award under
the Company's  Incentive  Compensation  Program ('ICP') may elect, by filing the
prescribed  election form with the Company in accordance with rules  established
by the  Committee,  to receive  all or part of his annual ICP award in shares of
the Company's common stock, rather than cash; provided, however, the Participant
must agree that his receipt of the stock will be deferred  until his  retirement
or termination of employment, with a minimum deferral period of three (3) years.
Elections to defer are irrevocable. A Participant who makes such election shall,
at the time that the stock is  deferred,  receive an  additional  award of stock
equal to a percentage,  established  by the Committee  from time to time, of the
amount  that he elected  to have  deferred,  but not to exceed  25% (the  'Stock
Premium').  The  Participant's  election  to defer shall also apply to the Stock
Premium.

        If a  Participant  made an  effective  election  to defer the payment of
shares of common stock and receive the Stock Premium,  the Company shall, within
a reasonable period of time after the deferral election is made, transfer shares
of common  stock or other  assets  equal in value to the  number of shares as to
which payment is deferred to the Trust to secure the Company's obligation to pay
shares of common stock to the Participant in the future.  However, in any event,
the  Company  shall  make any  previously  deferred  payment  of  shares  to the
Participant upon:

        a.     the death of the Participant;
        b.     the Disability of the Participant;
        c.     the  Participant's termination of employment with the Company  or
               a subsidiary of the Company,  subject to the Participant's  
               deferral election and the three (3) year deferral requirement;
        d.     a Divisive Transaction, subject to the Participant's deferral 
               election; or
        e.     a Change in Control.

        Notwithstanding  any  provisions of this Plan to the contrary,  upon the
occurrence of a Divisive Transaction,  the three (3) year holding requirement of
the stock premium for deferred ICP shares shall be deemed satisfied.

                                      -10-

        Notwithstanding a Participant's  election to defer the payment of shares
of common  stock  pursuant  to this  Section  12,  the  Company  shall make cash
payments to Participants following each common stock dividend payment date equal
to the  dividends  payable  on the  number  of shares of  Company  common  stock
credited to the Participant's  account as of the dividend record date (including
shares for which an election to defer has been made and any reinvested dividends
thereon). A Participant may elect to defer receipt of the cash payments pursuant
to election forms  prescribed  and provided by and filed with the Company.  Such
deferred  cash  payments  shall be  credited  to the  Participant's  account and
reinvested in shares of Company common stock as of the dividend payment date. An
election to defer,  once effective,  shall be irrevocable for the calendar year,
and shall  continue in effect with respect to  subsequent  calendar  years until
changed by a timely filed new election.

13.     Contributions to the Trust.

        a. The Company shall make  contributions to the Trust to secure a source
of future payments with respect to Participant's  deferral elections pursuant to
Sections  10 and 12. The Trustee  shall be  responsible  only for  contributions
actually  received  by it  hereunder  and  the  Trustee  shall  have  no duty or
responsibility  with  respect to the  timing,  amounts  and  sufficiency  of the
contributions made or to be made by the Company hereunder.

        b. The Company may make contributions to the Trust in Common Stock.

        c. A separate bookkeeping account (an 'Account') shall be established by
the Trustee for each  Participant  covered by the Trust pursuant to the Plan, as
directed  in  writing  by the  Company.  A  Participant  may have  more than one
Account.  Each  account is intended to represent  the amount of a  Participant's
deferred and unpaid benefit under the related  provisions of the Plan. The value
of a  Participant's  Account at any time will equal the fair market value of the
number of  shares  of Common  Stock  owed to a  Participant  under the  affected
provisions of this Plan at such time. The number of shares owed at any time will
equal the number of shares of Common Stock which were originally deferred by the
Participant (including any applicable Stock Premium), plus, the number of Common
Stock Shares which would have been acquired if dividends  subsequently  declared
by the  Company  had been paid with  respect to such  shares and  reinvested  in
Common Stock. 'Account' may also mean individual sub-accounts which have been or
may be established under this Plan from time to time.

        d. Within sixty days  following the close of each calendar year, or more
frequently or at such other time as may be required by the Trust Agreement,  the
Trustee shall provide the Company and each Participant with a written  statement
of the Account of each Participant.

14.     Separation From Employment and Divisive Transactions.

        If the Participant's Separation From Employment is because of Disability
or death,  the right of the Participant or his successor in interest to exercise
an ISO, NQSO or SAR shall  terminate not later than five years after the date of
such  Disability or death,  but in no event later than 10 years from the date of
grant (15 years if the NQSO grant was a 15-year grant); provided,  however, that
if such Participant is eligible to retire with the ability to begin  immediately
receiving  retirement  benefits  under the Company's  pension  plan,  his or his
successor  in  interest's  right to  exercise  any ISOs,  NQSOs or SARs shall be
determined as if his Separation From Employment was because of Retirement.

        If the  Participant's  Separation  From  Employment  is  because  of his
Retirement,  the  right of the  Participant  or his  successor  in  interest  to
exercise an ISO,  NQSO or SAR shall  terminate  not later than 10 years from the
date of grant (15 years if the NQSO grant was a 15-year grant).

                                      -11-

        Unless the Committee deems it necessary in individual cases (except with
respect to Covered  Employees) to extend a Participant's  exercise period,  if a
Participant's   Separation   From  Employment  is  for  any  reason  other  than
Retirement,  Disability or death,  the right of the  Participant  to exercise an
ISO,  NQSO or SAR  shall  terminate  not  later  than one year  from the date of
Separation From  Employment,  but in no event later than 10 years after the date
of grant (15 years if the NQSO grant was a 15-year grant).  For any ISO, NQSO or
SAR granted after December 31, 1998,  the  Participant  must exercise  within 30
days instead of one year.

        At the time of his Separation  From Employment for any reason other than
Cause,  a Participant  shall vest in a portion of any  Incentives  granted under
Sections 7 (ISOs), 8 (NQSOs) or 9 (SARs) that he has held for less than one year
from the  date of the  grant.  The  portion  of such  Incentives  in  which  the
Participants shall vest shall be determined by multiplying all shares subject to
such  Incentives  by a fraction,  the  numerator of which shall be the number of
Completed  Months of employment  following the date of grant and the denominator
of which shall be twelve.

        A Participant who vests in any Incentives under the preceding  paragraph
may not  exercise  such  Incentives  prior to the  satisfaction  of the one-year
holding  requirement  and the  Exercisability  Requirements  pertaining  to such
Incentives.  Any  Incentives  vested  under  the  preceding  paragraph  must  be
exercised  within one year from the date of the  Participant's  Separation  From
Employment.

        If the  Participant's  employer is a  Subsidiary  involved in a Divisive
Transaction or if the Participant's employment is terminated with the consent of
the Company (as a result of a business  transaction  or a reduction  in force or
any other circumstances approved by the Committee), the right of the Participant
or his successor in interest to exercise an ISO, NQSO or SAR shall terminate not
less than three years after the date of the closing of such Divisive Transaction
or after the date the Participant's employment is terminated with the consent of
the  Company,  but in no event  later  than 10 years  from the date of grant (15
years if the NQSO grant was a 15-year grant);  provided,  however,  that if such
Participant  is  eligible  to  retire  with the  ability  to  begin  immediately
receiving  retirement  benefits  under the Company's  pension  plan,  his or his
successor  in  interest's  right to  exercise  any ISO,  NQSO' or SAR'  shall be
determined  as if he had  retired.  Notwithstanding  anything to the contrary in
this  paragraph,  a  Participant  may not  exercise  such  Incentives  prior  to
satisfaction  of  the  one  year  holding  requirement  and  the  Exercisability
Requirements pertaining to such Incentives.

        As to PUAs or PSAs,  in the  event of a  Participant's  Separation  from
Employment  because of his  Retirement,  Disability or death prior to the end of
the  applicable  Performance  Period,  or if  the  Participant's  employer  is a
Subsidiary involved in a Divisive Transaction prior to the end of the applicable
Performance  Period,  payment, if any, to the extent earned under the applicable
Performance Objectives and awarded by the Committee, shall be payable at the end
of the Performance Period in proportion to the active service of the Participant
during the Performance Period, as determined by the Committee. If the Separation
From  Employment  prior to the end of the  Performance  Period  is for any other
reason,  the  Participant's  participation  in  Section  10 of  the  Plan  shall
immediately terminate,  his agreement shall become void and the PUA or PSA shall
be canceled.

        Notwithstanding  anything to the contrary in this Plan, if a Participant
or  former  Participant  (a)  becomes  the  owner,  director  or  employee  of a
competitor of the Company or its subsidiaries, (b) has his employment terminated
by the  Company  or one  of  its  subsidiaries  on  account  of  actions  by the
Participant  which  are  detrimental  to the  interests  of the  Company  or its
subsidiaries,  or (c) engages in conduct  subsequent to the  termination  of his
employment with the Company or its subsidiaries  which the Committee  determines
to be detrimental to the interests of the Company or its  subsidiaries  then the
Committee may, in its sole discretion, pay the Participant or former Participant
a single  sum  payment  equal to the amount of his

                                      -12-

unpaid  benefits  which were awarded and deferred under Sections 10 or 12 of the
Plan;   provided,  however, if  the  deferral  has been for less than  three (3)
years  under Section  12,  the Participant  shall not be eligible to receive the
Stock   Premium.  The single sum   payment shall be  made as soon as practicable
following   the date the  Participant or former  Participant  becomes  an owner,
director or   employee of a  competitor, his  termination of   employment or the
Committee's  determination  of   detrimental conduct,  as the   case may be, and
shall be in lieu of all other  benefits  which may be payable to the Participant
or former Participant under this Plan.

        Effective   for   Incentives    granted   after   December   31,   1998,
notwithstanding  anything to the  contrary  in this Plan,  if a  Participant  or
former Participant (a) becomes  associated with,  recruits or solicits customers
or other  employees  of the Company or its  Subsidiaries  for,  is employed  by,
renders  services  to, or owns any  interest in (other  than any  nonsubstantial
interest,  as determined by the  Committee)  any business that is in competition
with the Company or one of its subsidiaries,  (b) has his employment  terminated
by the Company or one of its subsidiaries for Cause or on account of actions, by
the  Participant  which are  detrimental  to the interests of the Company or its
subsidiaries,  or (c) engages  in, or has engaged in,  conduct at the time of or
subsequent  to the  termination  of  his  employment  with  the  Company  or its
subsidiaries  which the Committee  determines to be detrimental to the interests
of the  Company  or  its  subsidiaries  then  the  Committee  may,  in its  sole
discretion,  except  following  a Change  of  Control,  cancel  all  outstanding
Incentives of the  Participant,  including  immediately  terminating any Options
held by the Participant, regardless of whether then exercisable.

15.     Incentives Non-assignable and Non-transferable.

        Any  Incentive  granted  under  this Plan  shall be  non-assignable  and
non-transferable  other than as provided in Section 16 and shall be  exercisable
(including  any action of  surrender  and  exercise of rights  under  Section 9)
during the  Participant's  lifetime only by the Participant who is the holder of
the Incentive or by his guardian or legal representative.

16.     Death of Option Holder.

        In the event of the death of a  Participant  who is an Incentive  holder
under the Plan while employed by the Company or one of its subsidiaries or prior
to exercise of all rights under an Incentive,  the Incentive theretofore granted
may be exercised (including any action of surrender and exercise of rights under
Section 9) by the Participant's Beneficiary or, if no Beneficiary is designated,
by the  executor or executrix  of the  Participant's  estate or by the person or
persons to whom  rights  under the  Incentive  shall pass by will or the laws of
descent and  distribution  in accordance  with the provisions of the Plan and of
the option and to the same extent as though the Participant were then living.

17.     No Right to Continued Employment.

        Notwithstanding any other provisions of this Plan to the contrary, it is
a condition for  eligibility  for any benefit or right under this Plan that each
individual  agrees that his or her  designation  as a Participant  and any grant
made under the Plan may be rescinded  and  determined  to be void and  forfeited
entirely in the absolute and sole  discretion of the Committee in the event that
such individual is discharged for Cause.

        Incentives granted under the Plan shall not be affected by any change of
employment  so long as the Incentive  holder has not suffered a Separation  From
Employment. A leave of absence granted by the Company or one of its subsidiaries
shall not  constitute  Separation  From  Employment  unless so determined by the
Committee.  Nothing in the Plan or in any Incentive granted pursuant to the Plan
shall  confer on any

                                      -13-

individual  any  right to  continue  in the  employ of the Company or one of its
subsidiaries   or interfere  in any way  with the   right of the Company or such
subsidiary to terminate employment at any time.

18.     Funding Method.

        To the extent  reflected  by  resolutions  of the  applicable  boards of
directors, obligations for benefits under this Plan shall be joint and several.

19.     Adjustment of Shares.

        a.  In  the  event  of any  change  (through  recapitalization,  merger,
consolidation,  stock dividend, split-up,  combination or exchanges of shares or
otherwise)  in the  character or amount of the  Company's  common stock prior to
exercise of any Incentive granted under this Plan, the Incentives, to the extent
not exercised,  shall entitle the  Participant  who is the holder to such number
and kind of securities  as he would have been entitled to had he actually  owned
the  stock  subject  to the  Incentives  at the time of the  occurrence  of such
change.  If any such event  should  occur,  prior to  exercise  of an  Incentive
granted  hereunder,  which shall increase or decrease the amount of common stock
outstanding  and which the Committee,  in its sole  discretion,  shall determine
equitably  requires an  adjustment  in the number of shares which the  Incentive
holder should be permitted to acquire,  such  adjustment as the Committee  shall
determine  may be made,  and when so made shall be effective and binding for all
purposes of the Plan.

        b. Incentives may also be granted having terms and provisions which vary
from those specified in the Plan provided that any Incentives  granted  pursuant
to this  paragraph are granted in  substitution  for, or in connection  with the
assumption  of, then  existing  Incentives  granted by another  corporation  and
assumed or otherwise  agreed to be provided for by the Company pursuant to or by
reason of a transaction involving a corporate merger, consolidation, acquisition
of property or stock,  separation,  reorganization  or  liquidation to which the
Company or a subsidiary corporation is a party.

        c. The obligations of the Company or any of its affiliated  corporations
and the benefit due any Participant,  surviving spouse or beneficiary  hereunder
shall be  reduced  by any  amount  received  in  regard  thereto  under  the CSX
Corporation  and  Affiliated  Companies  Executives'  Stock Trust or any similar
trust or trusts or other vehicle.

        d.  Notwithstanding  the preceding,  following a Change of Control,  the
authority to delay  payment of a  Participant's  benefits  rests solely with the
Benefits Trust Committee

20.     Loans to Option Holders.

        The Committee may adopt  programs and  procedures  pursuant to which the
Company may lend money to any  Participant  who is an  Incentive  holder for the
purpose of assisting the  Participant to acquire or carry shares of common stock
issued upon the exercise of Incentives granted under the Plan.

21.     Termination and Amendment of Plan.

        a. Unless the Plan shall have been previously  terminated as hereinafter
provided, the Plan shall terminate on April 27, 2000, and no Incentives under it
shall be granted thereafter. The Board of Directors, without further approval of
the  company's  shareholders,  may at any time prior to that date  terminate the
Plan,  and  thereafter  no further  Incentives  may be  granted  under the Plan.
However,  Incentives  previously granted thereunder may continue to be exercised
in  accordance  with the  terms  thereof.

                                      -14-

Following  a  Change of  Control,  all amendments  to this Plan are  subject  to
the  approval  of the  Benefits  Trust Committee.

        b. Prior to a Change of Control, the Board of Directors, without further
approval of the  shareholders,  may, on the  recommendation  of the Compensation
Committee of the Board, amend the Plan from time to time in such respects as the
Board may deem  advisable;  provided,  however,  that no amendment  shall become
effective  without prior approval of the shareholders  which would: (i) increase
(except in  accordance  with Section 19) the maximum  number of shares for which
Incentives may be granted under the Plan; (ii) reduce (except in accordance with
Section 19) the  Incentive  price below the Fair Market  Value of the  Company's
common stock on the date of grant of the Incentive; (iii) extend the term of the
Plan beyond April 27, 2000; (iv) change the standards of eligibility  prescribed
by Section 5; or (v) increase the maximum awards identified in Sections 7, 8, 9,
10 and 11.  Following  a Change  of  Control,  all  amendments  to this Plan are
subject to the approval of the Benefits Trust Committee.

        c. No termination or amendment of the Plan may, without the consent of a
Participant who is a holder of an Incentive then existing,  terminate his or her
Incentive  or  materially  and  adversely  affect  his or her  rights  under the
Incentive.

22.     Change in Control.

        a. Notwithstanding any provision of this Plan to the contrary,  upon the
occurrence of a Change in Control as set forth in subsection b., below:  (i) all
stock options then outstanding under this Plan shall become fully exercisable as
of the date of the Change in Control, whether or not then otherwise exercisable;
(ii) all SARs which have been  outstanding  for at least six months shall become
fully  exercisable as of the date of the Change in Control,  whether or not then
otherwise  exercisable;  (iii) all terms and conditions of RSAs then outstanding
shall be deemed satisfied as of the date of the Change in Control; (iv) all PUAs
and PSAs then  outstanding  shall be deemed to have been fully  earned and to be
immediately  payable in cash as of the date of the Change of  Control,  however,
Participants may defer those case payments, as stock, into the Trust, consistent
with the deferral  provisions  of Section 10; and (v) the three (3) year holding
requirement of the Stock Premium for deferred ICP shall be deemed satisfied.

        b. A 'Change in Control' shall mean any of the following:

          (i) Stock Acquisition. The acquisition, by any individual,  entity or 
              group [within  the meaning of Section  13(d)(3)  or  14(d)(2)  of 
              the  Securities Exchange  Act of 1934,  as amended (the  'Exchange
              Act')] (a 'Person') of beneficial  ownership  (within the meaning 
              of Rule 13d-3  promulgated under the Exchange Act) of 20% or more 
              of either (A) the then outstanding  shares of common stock of the 
              Company (the 'Outstanding Company Common Stock'), or (B) the 
              combined voting power of the then outstanding voting securities of
              the Company  entitled to vote  generally in the election of 
              directors (the 'Outstanding  Company  Voting  Securities');  
              provided,  however,  that for purposes of this  subsection  (i),  
              the  following  acquisitions  shall not constitute  a Change of  
              Control:  (A) any  acquisition  directly  from the Company;  (B) 
              any  acquisition by the Company;  (C) any  acquisition by any
              employee  benefit plan (or related  trust)  sponsored or  
              maintained by the Company  or  any  corporation   controlled  by  
              the  Company;  or  (D)  any acquisition  by any  corporation  
              pursuant to a transaction  which complies with clauses (A), (B) 
              and (C) of subsection (iii) of this Section 22(b); or

                                      -15-

         (ii) Board Composition.  Individuals who, as of the date  hereof,  
              constitute  the  Board  of  Directors  (the 'Incumbent  Board')  
              cease for any reason to constitute at least a  majority  of the  
              Board of  Directors;  provided, however,   that  any   individual 
              becoming   a  director subsequent to the date hereof whose 
              election or nomination for election by the Company's  
              shareholders,  was approved by a vote of at least a  majority  of 
              the  directors  then comprising  the  Incumbent  Board shall be  
              considered  as though  such  individual  were a member  of the  
              Incumbent Board,  but excluding,  for  this  purpose,   any  such
              individual whose initial  assumption of office occurs as a result 
              of an actual or  threatened  election  contest with respect to the
              election or removal of  directors or other actual or threatened  
              solicitation  of proxies or consents by or on  behalf of a  Person
              other  than  the  Board of Directors; or

      (iii)   Business   Combination.   Approval  by  the  shareholders of the 
              Company of a  reorganization,  merger, consolidation  or  sale  or
              other  disposition  of all or substantially  all of the  assets of
              the  Company  or its principal  subsidiary that is not subject, as
              a matter of law or contract,  to approval by the  Interstate  
              Commerce Commission  or any  successor agency or  regulatory  body
              having  jurisdiction over such transactions (the 'Agency')(a  
              'Business   Combination'),   in  each  case,   unless,  following 
              such Business Combination:

                         (A) all or substantially  all of the individuals  and 
                             entities  who were the  beneficial  owners,  
                             respectively,  of the Outstanding  Company
                             Common  Stock  and   Outstanding   Company   Voting
                             Securities   immediately  prior  to  such  Business
                             Combination    beneficially    own,   directly   or
                             indirectly,  more  than 50% of,  respectively,  the
                             then  outstanding  shares of  common  stock and the
                             combined  voting  power  of  the  then  outstanding
                             voting securities entitled to vote generally in the
                             election of  directors,  as the case may be, of the
                             corporation    resulting    from   such    Business
                             Combination  (including,   without  limitation,   a
                             corporation  which as a result of such  transaction
                             owns the Company or its principal subsidiary or all
                             or  substantially  all of the assets of the Company
                             or its  principal  subsidiary  either  directly  or
                             through one or more  subsidiaries) in substantially
                             the   same    proportions   as   their   ownership,
                             immediately  prior to such Business  Combination of
                             the   Outstanding    Company   Common   Stock   and
                             Outstanding Company Voting Securities,  as the case
                             may be;

                       (B)   no Person (excluding any corporation resulting from
                             such Business Combination or any employee benefit  
                             plan (or related  trust) of the Company or such  
                             corporation resulting from such Business 
                             Combination) beneficially owns, directly or 
                             indirectly, 20% or more of, respectively,  the then
                             outstanding shares of common stock of the 
                             corporation  resulting from such Business  
                             Combination  or the combined  voting power of the 
                             then outstanding  voting securities of such  
                             corporation  except to the  extent  that such
                             ownership    existed    prior   to   the   Business
                             Combination; and

                        (C)  at least a majority of the members of the board of 
                             directors  resulting  from such  Business  
                             Combination  were  members  of  the Incumbent Board
                             at the time of the execution of the initial 
                             agreement, or of the action of the Board of
                             Directors, providing for such Business Combination;
                             or

                                      -16-

                             (iv) Regulated  Business  Combination.  Approval by
                                  the shareholders of the Company of a Business 
                                  Combination that  is  subject,  as a  matter  
                                  of law or  contract,  to  approval   by   the 
                                  Agency   (a   'Regulated    Business
                                  Combination') unless such Business Combination
                                  complies  with clauses (A), (B) and (C) of 
                                  subsection  (iii) of this Section 22(b); or

                             (v)  Liquidation  or  Dissolution.  Approval by the
                                  shareholders  of the Company of a complete  
                                  liquidation or dissolution of the Company or 
                                  its principal subsidiary.

        c.  Each  Participant  who has  elected  to defer  the  payment  of PSAs
pursuant  to Section 10 or an ICP award  pursuant  to Section 12, may elect in a
time and manner determined by the Committee, but in no event later than December
31, 1996 or the occurrence of a Change in Control,  if earlier,  to have amounts
and benefits currently deferred,  and to be deferred,  under the Plan determined
and  payable  under  the  terms of the Plan as if a Change  in  Control  had not
occurred. New Participants in the Plan may elect in a time and manner determined
by the  Committee,  but in no event later than ninety (90) days after becoming a
Participant,  to  have  amounts  and  benefits  currently  deferred,  and  to be
deferred,  under the Plan  determined and payable under the terms of the Plan as
if a Change in Control had not occurred. A Participant who has made an election,
as set forth in the two  preceding  sentences,  may at any time and from time to
time, change that election; provided, however, a change of election that is made
within one year of a Change in Control shall be invalid.

        d. Upon a Change of Control, the Company or Subsidiary shall, as soon as
possible,  but in no event  more than  seven (7) days  following  the  Change of
Control  make an  irrevocable  contribution  to the Trust in an  amount  that is
sufficient to pay each  Participant  or beneficiary of this Plan the benefits to
which Participants of this Plan or their  beneficiaries  would be entitled based
on elections under Sections 10 and 12 (including any applicable  Stock Premium),
and for which the Company is liable pursuant to the terms of this Plan as of the
date on which the  Change  of  Control  occurred.  The  amount of the  Company's
irrevocable  contributions  shall  be  based  on  the  actuarial  valuation  and
accounting for the most recent calendar year or more recent period for the Plan,
as  approved by the  independent  actuary  engaged by the  Company  prior to the
Change of Control and  approved by the Benefits  Trust  Committee if selected or
changed  following a Change of Control  (the  'Actuary'),  and shall  include an
amount  deemed  necessary  to pay  estimated  administrative  expenses  for  the
following  five (5)  years.  The  Benefits  Trust  Committee  shall  cause  such
actuarial  valuations  or  accountings  to be updated,  using  Participant  data
supplied to the Actuary by the Company,  through a date no earlier than the date
of the  initial  contribution  and shall  notify  the  Company  of the amount of
additional contributions required as soon as practicable.

23.     Compliance with Regulatory Authorities.

        Any shares purchased or distributed  pursuant to any Incentives  granted
under  this  Plan  must  be  held  for  investment  and  not  with a view to the
distribution  or resale  thereof.  Each person who shall  exercise an  Incentive
granted under this Plan may be required to give satisfactory  assurances to such
effect to the Company as a condition  to the issuance to him or to her of shares
pursuant to such exercise;  provided,  however,  that the Company may waive such
condition  if it  shall  determine  that  such  resale  or  distribution  may be
otherwise  lawfully made without  registration under the Securities Act of 1933,
or if satisfactory  arrangements for such  registration are made. Each Incentive
granted under this Plan is further  subject to the condition that if at any time
the Board shall in its sole discretion determine that the listing,  registration
or  qualification  of the shares  covered by such  Incentive upon any securities
exchange  or under any state or federal  law,  or the consent or approval of any
governmental  regulatory body, is necessary or desirable as a condition of or in
connection  with the granting of such  Incentives or the purchase or transfer of
shares  thereunder,  the  delivery  of any or all  shares of stock  pursuant  to
exercise  of the  Incentive  may be  withheld  

                                      -17-

unless  and   until  such   listing,   registration,  qualification,  consent or
approval  shall   have   been  effected or  obtained free of any  conditions not
acceptable to the Board.

24.     Withholding Tax.

        Whenever the Company proposes or is required to issue or transfer shares
of common  stock  under the Plan,  a  Participant  shall remit to the Company an
amount sufficient to satisfy any federal,  state or local income and payroll tax
withholding  liability  prior to the delivery of any certificate or certificates
for such shares. Alternatively, to the extent permitted by applicable laws, such
federal,  state or local  income and payroll tax  withholding  liability  may be
satisfied  prior to the  delivery of any  certificate  or  certificates  for the
shares by an  adjustment,  equal in value to such  liability,  in the  number of
shares to be  transferred to the  Participant.  Whenever under the Plan payments
are to be made in cash,  such payments  shall be net of an amount  sufficient to
satisfy  any  federal,  state  or  local  income  and  payroll  tax  withholding
liability.

25.     Non-Uniform Determinations.

        Determinations  by the  Committee  under  the Plan,  including,  without
limitation,  determinations  of the persons to receive  Incentives and the form,
amount  and  timing of such  Incentives,  and the terms and  provisions  of such
Incentives and the agreements  evidencing the same need not be uniform,  and may
be made by the Committee  selectively among persons who receive, or are eligible
to receive, Incentives under the Plan, whether or not such persons are similarly
situated.

        Without  amending  the  Plan,  Incentives  may be  granted  to  eligible
employees  who are  foreign  nationals  or who are  employed  outside the United
States or both, on such terms and conditions  different from those  specified in
the Plan as may, in the judgment of the Committee,  be necessary or desirable to
further the purposes of the Plan.  Such  different  terms and  conditions may be
reflected in Addenda to the Plan.

26.     Construction.

        The Plan shall be governed by the laws of the Commonwealth of Virginia.

                                      -18-