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 31, 1997)


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  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 means termination of employment with
immediate  commencement  of  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.

     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  16,000,000
shares of the  Company's  common stock,  par value $1.00 per share.  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.

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 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.

      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

      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.

      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;  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 8
and in Sections 12 through 15, 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.  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).

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
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 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.

      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
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 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.

      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;  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.

      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.

      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,  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,  but in no event later than 10
years from the date of 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 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.

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  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 May 2, 1999, 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.  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 May 2, 1999; (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

         (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

      (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  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.