Special Retirement Plan for Directors - CSX Corp.


                             SPECIAL RETIREMENT PLAN
                                       FOR
                                  CSX DIRECTORS

                     As Amended and Restated January 1, 1995
                     (As Amended through December 31, 1997)


            1. Purpose. In order to attract and retain the services of Directors
of the highest  caliber,  to reward them for their  services to the Company when
they cease to be active  Directors,  and to retain for the  Company the value of
their  advice  and  consultation,  the  Board of  Directors  adopted  a  special
retirement  plan for Directors on April 21, 1981. The Plan, as amended  November
14, 1984, is further amended and restated to provide as follows:

            2. Definitions. Whenever used in the Plan, the following terms shall
have the  meanings  set forth  below  unless  the  context  clearly  requires  a
different meaning:

            (a) Actuary.  An actuary or actuaries  engaged by the Corporation in
conjunction  with the Plan;  provided  that  following a Change of Control,  the
selection or  retention  of the actuary  shall be subject to the approval of the
Benefits Trust Committee.

            (b) Benefits Trust Committee.  The committee established pursuant to
the CSX Corporation and Affiliated Companies Benefits Assurance Trust Agreement.

            (c) Board.  The Company's Board of Directors.

            (d)  Change of  Control.  A  'Change  of  Control'  means 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
2(d); 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 2(d); 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.

               (e) Committee. The Executive Committee of the Board.

               (f) Company. CSX Corporation.

               (g) Director.  A person duly elected or appointed to, and serving
as an active member of, the Board.

               (h)  Director's  Fees.  The basic annual  retainer fee paid to an
active Outside  Director for his services,  plus meeting fees,  special fees for
serving as Chairman of a committee,  but excluding  travel expenses or any other
extraordinary form of compensation.

               (i) Effective  Date.  April 21, 1981.  The effective  date of the
amendment and restatement is January 1, 1995. A Participant receiving Retirement
Payments on the date of the  restatement  will  continue to receive  payments in
accordance with the terms of the Plan as restated to the extent not inconsistent
with the terms of the Plan prior to the date of the restatement.

               (j) Eligible  Service.  The period of service with the Company or
any of its  predecessor  companies as an active  Outside  Director,  measured in
years and months  beginning  with the day of the month in which the person first
becomes or performs services as an Outside Director and ending with the month in
which he ceases to be, or no longer performs  services as, an Outside  Director.
Service need not be continuous.

               (k)  Employee  Director.  A person who serves or has served as an
active  Director  during a period  when he or she is a salaried  employee of the
Company or a subsidiary company.

               (l) Outside Director.  A Director who, with respect to any period
of service as an active  Director  taken into account  under the Plan, is not an
Employee Director.

               (m)  Participant.  An Outside Director or former Outside Director
who has met or can be expected to meet the  requirements for and become eligible
for Retirement  Payments under the Plan as determined  under Section 3. The term
includes  Outside  Directors  who on the  Effective  Date of the  amendment  and
restatement  are  receiving  Retirement  Payments  under the Plan.  An  Employee
Director  shall not be entitled to become a Participant in the Plan with respect
to any period of service as a Director  while an  employee  of the  Company or a
predecessor company.

               (n) Plan. The Special Retirement Plan for CSX Directors.

               (o) Payment Date. The last day of each calendar quarter beginning
with the last day of the  calendar  quarter  in which  the  Participant  becomes
entitled to receive Retirement Payments and ending with the payment for the last
calendar  quarter for the calendar  year in which the  Participant  ceases to be
eligible for Retirement Payments under Section 3.

               (p)  Retirement  Payment.  An annual  amount  equal to 50% of the
Director's  Fees paid  during the  Outside  Director's  final  twelve  months of
service as a Director with the Company payable in quarterly installments on each
Payment Date.

               (q) Rule of 75.  Any  combination  of age and  years of  Eligible
Service that totals 75 or more.

               (r) Trust. The CSX Corporation and Affiliated  Companies Benefits
Assurance Trust or a similar grantor trust established by the Company which will
substantially  conform to the terms of the Internal  Revenue Service model trust
as described in Revenue Procedure 92-64,  1992-2 D.B. 422. Except as provided in
Section 5, the Company is not obligated to make any contribution to the Trust.

               (s) Valuation  Date.  The last day of each calendar year and such
other  dates as the  Committee  deems  necessary  or  appropriate  to value  the
Participants' benefits under this Plan.

            3.   Eligibility for Retirement Payments.

               (a) An Outside  Director who no longer  serves as a Director (for
any reason other than death),  whose service as a Director  ended prior to April
17,  1997,  and who has (i)  attained the age of 68, or (ii) has met the Rule of
75, shall be deemed a  Participant  in the Plan and shall be entitled to receive
Retirement  Payments.  A  Participant  who ceased to serve as a Director  before
attaining the age of 68 will be entitled to receive Retirement Payments when the
Participant attains the age of 68 or meets the Rule of 75, whichever event shall
first occur. In  consideration  of the receipt of Retirement  Payments under the
Plan,  a  Participant  agrees to be  available  for advice and  consultation  as
requested by the Board.
               (b) A  Participant  entitled  to  compensation  under  (a)  shall
receive  Retirement  Payments on each Payment Date as  hereinafter  provided.  A
Participant  who has  completed 10 or more years of Eligible  Service or has met
the Rule of 75, will be entitled to Retirement  Payments for life. A Participant
who has not  completed 10 years of Eligible  Service and has not met the Rule of
75, will be entitled to receive  Retirement  Payments  for a period equal to the
lesser  of (i) the  Participant's  life  and (ii) the  Participant's  period  of
Eligible Service.  A Participant's  right to compensation  shall terminate as of
the last day of the calendar year in which his or her death  occurs,  or, if the
Participant has less than 10 years of Eligible  Service and has not met the Rule
of 75, as of the end of the  calendar  year in which  falls the date that is the
anniversary of the date the Participant's last period of Eligible Service began.

               (c) Any  retirement  payment due after the death of a Participant
shall be paid to the Participant's  surviving spouse, or, if no spouse survives,
to the Participant's personal representative.

               (d)  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 Trust.

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

            5. Change of Control.

               (a) If a Change of Control  has  occurred,  the  Committee  shall
cause the  Company to  contribute  to the Trust  within 7 days of such Change of
Control, a lump sum contribution equal to the greater of:

                    (i)  the  aggregate   unfunded  value  of  the  amount  each
Participant would be eligible to receive, under (b), below; or

                    (ii) the present value of accumulated Plan benefits based on
the  assumptions  the Company's  independent  actuary deems  reasonable for this
purpose,  as of a Valuation Date  coinciding with nor next preceding the date of
Change of Control,  to the extent such amounts are not already in the Trust. The
aggregate  value of the  amount of the lump sum to be  contributed  to the Trust
pursuant to this  Section 4 shall be  determined  by the  Company's  independent
actuaries.  Thereafter,  the  Company's  independent  actuaries  shall  annually
determine as of a Valuation Date for such  Participant  not receiving a lump sum
payment pursuant to subsection (b), below, the greater of:

                           (A) the amount such  Participant  would have received
                           under  subsection (b) had such  Participant  not made
                           the  election   under   subsection   (c)  below,   if
                           applicable; and

                           (B) the present value of  accumulated  benefits based
                           on assumptions the actuary deems  reasonable for this
                           purpose.  To the extent  that the value of the assets
                           held in the  Trust  relating  to this  Plan  does not
                           equal the amount described in the preceding sentence,
                           at the time of the valuation,  the Company shall make
                           a lump sum  contribution  to the  Trust  equal to the
                           difference.

               In no event,  however,  shall the Company's  contribution  to the
Trust be less than the  amount  that would have been  contributed  thereto  with
respect to liabilities  relating to the Plan (including  related  administrative
and investment expense),  pursuant to and at the time and in the manner provided
under Section 1(h) of the Trust.

               (b) In the event a Change of Control has occurred, the trustee of
the  Trust  shall,  within  45 days  of  such  Change  of  Control,  pay to each
Participant  not making an  election  under  subsection  (c), a lump sum payment
equal to the  present  value  of the  Retirement  Payments  the  Participant  is
entitled to receive from the Company  pursuant to the terms of the Plan assuming
when  applicable  for each  Participant as of the date of Change of Control that
(i) the  Participant  will  complete  his  current  term as  Director,  (ii) the
Participant  will survive during the period of his normal life  expectancy,  and
(iii) the age requirement  for retirement and receipt of Retirement  Payments is
the age of the Participant on the Change of Control date. Present value shall be
determined  by using a  discount  rate  equal  to the  applicable  Federal  rate
provided  for in Section  7872(f)(2)  of the Internal  Revenue Code of 1986,  as
amended.  The amount of each  Participant's lump sum payment shall be determined
by the Actuary.

               (c) Each Participant 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 of Control,  if earlier, to have amounts and benefits determined and
payable under the terms of this Plan as if a Change of 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 90 days after becoming a Participant,  to
have amounts and benefits  determined and payable under the terms of the Plan as
if a Change of 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 of Control shall be invalid.

               (d) Each  Participant  who has made an election under (c), above,
may elect  within 90 days  following a Change of  Control,  in a time and manner
determined  by the  Benefits  Trust  Committee,  to  receive a lump sum  payment
calculated  under the provisions of subsection (b), above,  determined as of the
Valuation  Date next  preceding  such payment,  except that such amount shall be
reduced by 5% and such reduction  shall be irrevocably  forfeited to the Company
by the Participant.  Furthermore,  as a result of such election, the Participant
shall no longer be eligible to participate or otherwise  benefit under the Plan.
Payments  under this  subsection (d) shall be made not later than seven (7) days
following  receipt by the Company of the  Participant's  election.  The Benefits
Trust  Committee  shall,  no later than seven (7) days after a Change of Control
has  occurred,  cause  written  notification  to be  given  to each  Participant
eligible to make an election under this subsection (d), that a Change of Control
has occurred and informing such Participant of the availability of the election.

            (e)Notwithstanding the preceding, following a Change of Control, any
election by a Participant  to receive his or her payment in an alternate form or
to delay his or her  payment is subject to the  approval of the  Benefits  Trust
Committee in its sole judgment and discretion.

            6.  Committee  Powers.  Prior to a Change of Control,  the Committee
shall have full power and authority to interpret,  construe and administer  this
Plan,  and all  actions of the  Committee  under the Plan  shall be binding  and
conclusive on all persons for all purposes.  Following a Change of Control,  the
Benefits  Trust  Committee may remove and/or replace the Committee as the Plan's
administrator.  Accordingly,  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.

            7.  Successors.  The Plan  shall be  binding  upon and  inure to the
benefit  of  Participants.  If the  Company  becomes  a  party  to  any  merger,
consolidation, reorganization or in the event of a sale of substantially all the
assets of the  Company,  the Plan  shall  remain in full  force and effect as an
obligation of the Company or its successor in interest.

            8. Amendment and Termination.  Prior to a Change of Control and upon
the  recommendation  of the Committee,  the Board reserves the right to amend or
terminate  the Plan at any time without the consent of any  Participant,  but no
amendment or termination  shall deprive any Participant of the right to continue
to receive payment under Section 3 once payments have begun. Notwithstanding the
foregoing, if a Change of Control occurs, each Participant, regardless of age or
Eligible Service shall be eligible for benefits under the Plan, and the Plan may
not be terminated and no amendment may be made that would  adversely  affect the
right of any such  Participant  to receive  Retirement  Payments or  Accelerated
Retirement Payments under the Plan. Following a Change of Control, this Plan may
not be  amended  or  terminated  without  the  approval  of the  Benefits  Trust
Committee.

            9.  Construction.  The Plan shall be  governed by and  construed  in
accordance with the laws of the Commonwealth of Virginia.  The masculine pronoun
shall mean the feminine wherever  appropriate.  The captions inserted herein are
inserted as a matter of convenience and shall not affect the construction of the
Plan.