COMSAT CORPORATION

                INSURANCE AND RETIREMENT PLAN FOR EXECUTIVES




                     Restated effective January 1, 1997

                        (except as otherwise stated)


<PAGE>

                             TABLE OF CONTENTS


          Section 1 - Name and Purpose                                     PAGE
          ----------------------------                                     ----

1.1       Name                                                               3
1.2       Purpose                                                            3

          Section 2 - Definitions and Construction
          ----------------------------------------

2.1       Definitions                                                        3
2.2       Construction                                                       7

          Section 3 - Participation
          -------------------------

3.1       Initial Participation                                              7
3.2       Continued Participation                                            7
3.3       Disabled Participant                                               7

          Section 4 - Normal Retirement
          -----------------------------

4.1       Normal Retirement Age                                              7
4.2       Normal Retirement Benefit - Participation
          Commencement Date Prior to September 21, 1996                      8
4.3       Normal Retirement Benefit - Participation
          Commencement Date After September 20, 1996                         8
4.4       Nonforfeitable Benefit                                             9

          Section 5 - Early Retirement
          ----------------------------

5.1       Early Retirement Date                                              9
5.2       Retirement Benefit                                                 9

          Section 6 - Late Retirement
          ---------------------------

6.1       Late Retirement Date                                              10
6.2       Retirement Benefit                                                10

          Section 7 - Termination of Employment
          -------------------------------------

7.1       Retirement Benefit - Participation          
          Commencement Date Prior to September 21, 1996                     10
7.2       Retirement Benefit - Participation
          Commencement Date After September 20, 1996                        10

          Section 8 - Vesting
          -------------------

8.1       Vesting - Participation Commencement Date
          Prior to June 21, 1985                                            11

8.2       Vesting - Participation Commencement Date
          After June 20, 1985, and Prior to
          January 1, 1993                                                   11

<PAGE>

8.3       Vesting - Participation Commencement Date
          After December 31, 1992                                           11
8.4       Benefits for Terminated Employees                                 12
8.5       Death Benefits                                                    12

          Section 9 - Form of Payment of
          ------------------------------
                     Retirement Benefits
                     -------------------

9.1       Normal Form of Payment                                            12
9.2       Optional Forms of Payment                                         12
9.3       1991 Lump Sum Payment Option                                      13
9.4       1992 Lump Sum Payment Option                                      13
9.5       Change in Control                                                 14
9.6       Actuarial Equivalent                                              14

          Section 10 - Death Benefits   
          ---------------------------

10.1      Death Benefits While Employed                                     14
10.2      Death Benefits After Retirement                                   15
10.3      Death Benefits Offset                                             15

          Section 11 - Forfeiture of Benefits
          -----------------------------------

11.1      Termination for Cause                                             15
11.2      Employment With a Competitor                                      15

          Section 12 - Administration
          ---------------------------

12.1      Appointment of Administrator                                      16
12.2      Responsibility and Authority of Administrator                     16
12.3      Exceptions Under Board Authority                                  16

          Section 13 - Amendment or Termination of Plan
          ---------------------------------------------

13.1      Right to Amend or Terminate                                       17
13.2      Effect on Benefits Accrued                                        17

          Section 14 - Miscellaneous Provisions
          -------------------------------------

14.1      No Implied Rights                                                 17
14.2      Insurance Policies                                                17
14.3      No Assignment or Alienation                                       17
14.4      Expenses                                                          17
14.5      Applicable Laws                                                   18

                                    ii
<PAGE>

                        Section 1 - Name and Purpose
                        ----------------------------

     1.1 Name.  The name of this plan is the COMSAT  Corporation  Insurance
and Retirement Plan for Executives.

     1.2 Purpose.  The purpose of this plan is to provide key executives of
the Corporation with  supplemental  retirement income and death benefits in
order to assist the  Corporation in attracting and retaining  executives of
outstanding ability.


                  Section 2 - Definitions and Construction
                  ----------------------------------------

     2.1 Definitions.  For purposes of the Plan, unless a different meaning
is  plainly  required  by  the  context,  the  following   definitions  are
applicable:

          (a)  "Accrued  Benefit"  means  an  amount  equal  to the  Normal
Retirement  Benefit of a  Participant,  as of any date, as though that date
were the date of termination of his employment.

          (b)  "Administrator"  means the person  appointed by the Board in
accordance with Section 12.1.

          (c) "Age" means the number of full years which have elapsed since
the Participant's date of birth.

          (d) "Beneficiary" means a person designated by a Participant,  in
a  written  instrument  filed  with  and  in a  form  satisfactory  to  the
Administrator,  to receive the lump sum death benefit payable under Section
10.1 or 10.2 upon the death of a Participant.

          (e) "Board" means the Board of Directors of COMSAT Corporation or
any successor to such Corporation.

          (f)  "Change  in   Control"   means,   with   respect  to  COMSAT
Corporation, the occurrence of any of the following events:

               (i) The  acquisition  by any  individual,  entity  or  group
(within  the meaning of  Sections  13(d)(3)  or 14(d)(2) of the  Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act")) of  beneficial
ownership  (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of fifty  percent  (50%) or more of the  combined  voting power of the
then outstanding voting securities of the Corporation;  provided,  however,
that the following  acquisitions  shall not  constitute a Change in Control
for purposes of this definition:  (A) any acquisitions of voting securities
of the Corporation by the  Corporation,  or (B) any  acquisitions of voting

                                     3
<PAGE>

securities of the  Corporation by any employee  benefit or stock  ownership
plan or related trust  sponsored or maintained by the  Corporation  for the
benefit of its employees;

               (ii) Any  change in the  composition  of the Board such that
the individuals  who, as of May 17, 1996,  constitute  those members of the
Board who have been  elected  by the  shareholders  of the  Corporation  in
accordance  with the  provisions  of Section  303(a) of the  Communications
Satellite Act of 1962, as amended (the  "Incumbent  Directors"),  cease for
any reason to  constitute  a majority  of the Board at any time;  provided,
however,  that any individual  becoming a director  subsequent to such date
whose  election,  or nomination for election,  was approved by a vote of at
least  three-fourths  (3/4)  of  the  then  Incumbent  Directors  shall  be
considered as though such individual were an Incumbent Director;

               (iii) Approval by the  shareholders  of the Corporation of a
merger,  share exchange,  swap,  consolidation,  recapitalization  or other
business   combination   involving  any  other  corporation  or  entity  (a
"Transaction"),  the effect of which would  result in the  combined  voting
securities of the Corporation  immediately  prior to the  effectiveness  of
such  Transaction  continuing to represent less than sixty percent (60%) of
the combined voting power of the voting  securities of the Corporation,  or
of any surviving  entity of, or parent entity  following,  the Transaction,
immediately after the effectiveness of the Transaction;

               (iv) Approval by the  shareholders of the Corporation of (A)
a complete  liquidation or dissolution of the Corporation,  or (B) the sale
or disposition by the Corporation of all or substantially all of its assets
other than to a corporation or entity with respect to which  following such
sale or  other  disposition  more  than  eighty  percent  (80%) of the then
combined  voting  power of the voting  securities  of such  corporation  or
entity is,  immediately  following such sale or  disposition,  beneficially
owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
by all or  substantially  all of the  individuals and entities who were the
beneficial  owners of the  voting  securities  of the  Corporation  upon or
immediately before such approval; or

               (v) Any event  that  would be  required  to be  reported  in
response  to  Item  6(e)  or  any  successor  thereto  of  Schedule  14A of
Regulation 14A promulgated under the Exchange Act;

provided, however, that none of the events described in clauses (i) through
(v) shall be deemed to  constitute  a Change in  Control  if,  prior to the
occurrence  of such  event,  the  Board  adopts a  resolution  specifically

                                     4

<PAGE>

providing  that the event  shall not be  deemed to  constitute  a Change in
Control for purposes of the Plan.

               (g) "Corporation"  means COMSAT Corporation or any successor
thereto, and any subsidiary of such Corporation.

               (h)  "Disability"  means total  disability as defined in the
Corporation's Long-Term Disability Plan.

               (i) "Disabled  Participant" means a Participant who incurs a
Disability  while he is an Employee and who  continues  to accrue  Credited
Service under the Retirement Plan.

               (j)  "Early  Retirement  Date"  means  the  date on  which a
Participant retires pursuant to Section 5.1.

               (k) "Early Retirement Supplement" means the amount of annual
income equal to the Primary Social Security Benefit of the Participant used
in determining his Normal Retirement Benefit under the Retirement Plan.

               (l) "Earnings" means:

                    (i) In the case of a  Participant  whose  Participation
Commencement  Date is prior to September 21, 1996,  (A) the regular,  basic
salary received by the Participant from the Corporation,  before any salary
reductions,  (B)  Incentive  Compensation,  (C) dividend  equivalents  from
Restricted Stock Units, and (D) cash proceeds from vested  Restricted Stock
Units.

                    (ii) In the case of a Participant  whose  Participation
Commencement  Date is after  September  20,  1996,  the items  described in
subparagraphs (i)(A) and (B).

Incentive  Compensation,  dividend equivalents from Restricted Stock Units,
and cash proceeds from vested  Restricted  Stock Units shall be included in
Earnings at the earliest time they could have been paid to the  Participant
in cash,  whether or not he elects to receive such payment then or defer it
to a later date.

               (m)  "Employee"  means any  person  who is  employed  by the
Corporation.

               (n) "Highest Average Earnings Period" means:

                    (i) In the case of a  Participant  whose  Participation
Commencement Date is prior to September 21, 1996, the 48 consecutive months
in which the Participant's Earnings were the greatest. If a Participant has
completed  less  than  48  consecutive   months  of  employment   with  the
Corporation as of any date,  "Highest  Average  Earnings Period" shall mean


                                     5

<PAGE>

all of the consecutive months of employment with the Corporation as of that
date.

                    (ii) In the case of a Participant  whose  Participation
Commencement  Date is after  September 20, 1996, the 60 consecutive  months
during  the 120  months  immediately  preceding  the  Participant's  Normal
Retirement  Date,  Early  Retirement  Date, Late Retirement Date or date of
termination of employment with the  Corporation,  whichever is earlier,  in
which his Earnings were the greatest.  If a Participant  has completed less
than 60 consecutive months of employment with the Corporation at such date,
"Highest Average Earnings Period" shall mean all of the consecutive  months
of employment with the Corporation immediately preceding such date.

               (o)  "Highest  Average  Annual  Earnings"  means the  amount
determined by dividing the total  Earnings  earned by a Participant  during
his  Highest  Average  Earnings  Period by the  number of years  (including
fractions of years) included in the Highest Average Earnings Period.

               (p) "Inactive  Participant"  means a  Participant  who is no
longer an  Employee  but who has an interest in the Plan which has not been
fully paid.

               (q)   "Incentive    Compensation"   means   the   additional
compensation awarded a Participant under the Corporation's Annual Incentive
Plan, as amended from time to time.

               (r)  "Late  Retirement  Date"  means  the  date  on  which a
Participant retires pursuant to Section 6.1.

               (s) "Normal  Retirement  Benefit" means the amount of annual
income payable from and after a Participant's  Normal  Retirement  Date, as
calculated as provided in Section 4.2 or 4.3, whichever is applicable.

               (t)  "Normal  Retirement  Date"  means  the first day of the
month coincident with or next following a Participant's 65th birthday.  The
"normal retirement age" under the Plan shall be age 65.

               (u)  "Participant"  means an Employee  participating  in the
Plan in accordance with Section 3, an Inactive Participant,  and a Disabled
Participant.

               (v)  "Participation  Commencement  Date"  means  the date on
which an Employee  becomes a  Participant  in the Plan in  accordance  with
Section 3.
                                     6

<PAGE>

               (w)  "Plan"  means  the  COMSAT  Corporation  Insurance  and
Retirement Plan for Executives, as amended from time to time.

               (x)  "Restricted  Stock  Units"  (RSUs)  means  stock  units
awarded to a Participant under the Corporation's  1986 or 1990 Key Employee
Stock Plans or any successors thereto.

               (y)  "Retirement  Plan"  means the  Corporation's  qualified
defined  benefit pension plan,  currently  known as the COMSAT  Corporation
Retirement Plan, as amended from time to time, or any successor thereto.

               (z)   "Spouse"   means  the  person  who  is  married  to  a
Participant on the date of the Participant's death.

               (aa) "Years of Service" means the number of full years which
a Participant has been employed by the Corporation.

               (bb) Any term used in the Plan in capitalized  form which is
not defined in one of the preceding  paragraphs shall have the same meaning
as in the Retirement Plan.

          2.2  Construction.  Wherever  applicable,  the masculine  pronoun
shall mean or include the feminine pronoun,  and words used in the singular
shall include the plural, and vice versa.


                         Section 3 - Participation
                         -------------------------

          3.1 Initial Participation. An Employee shall become a Participant
in the Plan upon being designated as such by the Board. There is no minimum
age or service requirement to become a Participant.

          3.2   Continued   Participation.   An  Employee   who  becomes  a
Participant  shall remain a  Participant  as long as he is an Employee.  He
shall  thereafter be an Inactive  Participant as long as he has an interest
in the Plan which has not been fully paid.

          3.3 Disabled  Participant.  A Disabled Participant shall remain a
Participant for all purposes of the Plan.


                       Section 4 - Normal Retirement
                       -----------------------------

          4.1 Normal  Retirement  Age. A  Participant  who has not  retired
earlier  pursuant to Section 5.1 shall retire on his 65th birthday,  except
as provided in Section 6.1.

                                     7

<PAGE>

          4.2 Normal Retirement  Benefit - Participation  Commencement Date
Prior to September  21,  1996.  Subject to the  provisions  of Sections 8.1
through 8.3, a Participant whose  Participation  Commencement Date is prior
to September 21, 1996 who retires at the Normal  Retirement Age of 65 shall
receive a Normal  Retirement  Benefit,  beginning on his Normal  Retirement
Date,  in an amount  equal to 60  percent  (65  percent  in the case of the
President of COMSAT Corporation, and 70 percent in the case of the Chairman
and/or  Chief  Executive  Officer  of COMSAT  Corporation)  of his  Highest
Average Annual Earnings, reduced by the following:

               (a) The Normal  Retirement  Income of the Participant  under
the Retirement Plan, provided that in the case of a Participant who retires
under the  Retirement  Plan on or after  March 1,  1993,  the amount of the
reduction  shall be the  amount  of  annual  retirement  income  which  the
Participant is actually receiving under the Retirement Plan;

               (b) The Primary Social  Security  Benefit of the Participant
used in determining his Normal Retirement Income under the Retirement Plan;

               (c) Vested age 65  retirement  benefits  of the  Participant
from the  qualified  defined  benefit  pension  plans  of prior  employers,
including any lump sum retirement benefit previously received, expressed in
the form of a single life  annuity,  whether or not  actually  paid in that
form; and

               (d) Retirement  benefits of the Participant  from government
and  military  pensions,  expressed  in the form of a single life  annuity,
whether or not actually paid in that form.

          4.3 Normal Retirement  Benefit - Participation  Commencement Date
After September 20, 1996. Subject to the provisions of Sections 8.1 through
8.3, a Participant whose Participation Commencement Date is after September
20, 1996 who  retires at the Normal  Retirement  Age of 65 shall  receive a
Normal Retirement  Benefit,  beginning on his Normal Retirement Date, in an
amount equal to:

               (a) The sum of:

                    (i) An amount equal to 30 percent of the  Participant's
Highest Average Annual Earnings once the Participant  completes 10 Years of
Service; plus

                    (ii) 2 percent  of the  Participant's  Highest  Average
Annual Earnings  multiplied by the number of his Years of Service in excess
of 10 years  but not in  excess  of 25 years  (30  years in the case of the
Chief Executive Officer of the Corporation);

               (b) Reduced by the amounts described in Sections 4.2(a) and (b).

     4.4  Nonforfeitable  Benefit.  Except as provided in Section 11.2, the
Normal  Retirement  Benefit  of a  Participant  who  retires  at the Normal
Retirement Age of 65 shall be nonforfeitable.


                        Section 5 - Early Retirement
                        ----------------------------

     5.1 Early  Retirement  Date. A Participant  may elect to retire on the
first day of any month between his 55th and 65th birthdays, provided that a
Participant  may retire  before  his 62nd  birthday  only with the  Board's
consent,  and  provided  further  that a  Participant  eligible  for  early
retirement  under the Retirement Plan may retire early under this Plan only
if he also elects early  retirement  under the Retirement  Plan on the same
date.

     5.2 Retirement Benefit.

          (a) A  Participant  retiring on an Early  Retirement  Date shall,
unless he makes the  election  provided for in  paragraph  (b),  receive an
annual retirement  benefit,  beginning on his Normal Retirement Date, in an
amount equal to his Accrued Benefit at his Early Retirement Date.

          (b) Such Participant  may, by a written  statement filed with the
Administrator  at least 30 days before the date on which he wishes  payment
to begin,  elect that payment of his annual retirement  benefit shall begin
on the first day of any month  between  his Early  Retirement  Date and his
Normal  Retirement Date. The amount of annual  retirement  benefit shall be
equal to (i) his Accrued Benefit at his Early Retirement Date plus (ii) the
Early  Retirement  Supplement,  provided  that if  payment  of such  annual
retirement  benefit commences before the Participant's  62nd birthday,  the
amount of the Accrued  Benefit  shall be reduced by 1/4 of one percent (1/2
of one percent for any Participant whose Participation Commencement Date is
after  September  20, 1996) for each  complete  month  between the date the
retirement   benefit   payments   commence  and  his  62nd  birthday.   

          (c) Participants eligible for the Early Retirement Supplement are
those (i) whose  Participation  Commencement Date is prior to September 21,
1996 and (ii) who either  retire on or after  January  1, 1988,  or who are
receiving an Early Retirement Benefit as of that date.

                                     9

<PAGE>

                        Section 6 - Late Retirement
                        ---------------------------

     6.1 Late  Retirement  Date. A Participant  shall retire not later than
the earlier of: (a) his 70th  birthday;  or (b) the earliest day upon which
he meets all of the following  tests:  (i) he has attained age 65; (ii) his
Normal Retirement Benefit under this Plan plus his Normal Retirement Income
under the  Retirement  Plan would be at least $44,000;  provided,  however,
that no  Participant  shall be required to retire  before the earliest date
upon which he may be required to retire  under the  applicable  laws of the
state or other jurisdiction in which he is employed.

     6.2 Retirement  Benefit.  A Participant  retiring on a Late Retirement
Date  pursuant to Section 6.1 shall receive an annual  retirement  benefit,
beginning on the first day of the month  coincident  with or next following
his Late Retirement  Date, in an amount equal to his Accrued Benefit at his
Late Retirement Date.


                   Section 7 - Termination of Employment
                   -------------------------------------

     7.1  Retirement  Benefit -  Participation  Commencement  Date Prior to
September 21, 1996.

          (a) A Participant whose Participation  Commencement Date is prior
to September 21, 1996 whose employment with the Corporation  terminates for
any reason other than death or retirement under this Plan shall be entitled
to receive an annual retirement  benefit,  payable as provided in paragraph
(b), in an amount equal to his Accrued  Benefit at his date of  termination
multiplied by a fraction,  the numerator of which is the number of complete
months of his employment  before his termination  date, and the denominator
of which is the number of complete  months of  employment he would have had
if he had retired at the normal retirement age of 65.

          (b) If a  Participant  entitled to an annual  retirement  benefit
pursuant to paragraph (a) dies before  payment of such  retirement  benefit
has begun  pursuant to  paragraph  (c), no payment  shall be made under any
provision of this Plan for the benefit of such Participant.

          (c)  Payment  of  the  annual  retirement   benefit  to  which  a
Participant  is  entitled  under  paragraph  (a) shall  begin on his Normal
Retirement Date, if he shall be living on that date.

     7.2  Retirement  Benefit  -  Participation   Commencement  Date  After
September 20, 1996. A Participant whose Participation  Commencement Date is

                                    10

<PAGE>

after September 20, 1996 whose  employment with the Corporation  terminates
for any reason other than death or retirement under this Plan shall forfeit
all rights to any benefits under the provisions of this Plan, except to the
extent  that  the  Board in the  exercise  of its  discretionary  authority
pursuant to Section 12.3 determines to pay a benefit to such Participant.


                            Section 8 - Vesting
                            -------------------


     8.1 Vesting - Participation  Commencement Date Prior to June 21, 1985.
Notwithstanding  any other provision of this Plan except Sections 11, 12.3,
and 13, a Participant  whose  Participation  Commencement  Date is any time
before  June 21,  1985,  shall be fully  vested at all times in the  annual
retirement  benefit  and the  Early  Retirement  Supplement  to which he is
entitled under the Plan.

     8.2 Vesting - Participation Commencement Date After June 20, 1985, and
Prior to January 1, 1993.  Notwithstanding any other provision of this Plan
except  Sections  11,  12.3,  and 13,  in the case of a  Participant  whose
Participation  Commencement  Date is after  June  20,  1985,  and  prior to
January 1, 1993,  the annual  retirement  benefit and the Early  Retirement
Supplement to which such a  Participant  is otherwise  entitled  under this
Plan shall be multiplied  by a fraction (not to exceed 1.0),  the numerator
of  which  is  the  number  of  complete  months  of  employment  with  the
Corporation  before his retirement or termination date, and the denominator
of which is 60.

     8.3 Vesting - Participation Commencement Date After December 31, 1992.
Notwithstanding  any other provision of this Plan except Sections 11, 12.3,
and 13,  a  Participant  whose  Participation  Commencement  Date is  after
December 31, 1992, shall be entitled to receive  retirement income equal to
a  percentage  of the annual  retirement  benefit and the Early  Retirement
Supplement to which the Participant is otherwise  entitled under this Plan,
computed in  accordance  with the  following  schedule  once the sum of the
Participant's Age and the Participant's Years of Service equals 60:

                                    11

<PAGE>

          Years of Service          Vested Percentage
          ----------------          -----------------

               0-4                          0%
                5                          50
                6                          60
                7                          70
                8                          80
                9                          90
               10                         100


     8.4  Benefits  for  Terminated  Employees.  The amount of the benefits
payable under the Plan for any Participant who retired or whose  employment
with the Corporation  otherwise  terminated before January 1, 1997 shall be
governed in all  respects by the terms of the Plan as in effect on the date
of his retirement or other termination of employment.

     8.5 Death  Benefits.  Any benefits  payable  pursuant to Section 10 on
account  of  a  Participant's  death  shall  not  be  reduced  because  the
Participant  had  completed  less than five  years of  employment  with the
Corporation at the time of his death.


             Section 9 - Form of Payment of Retirement Benefits
             --------------------------------------------------

     9.1 Normal Form of Payment.  The normal form of payment of  retirement
benefits  shall  be in  equal  monthly  installments  for  the  life of the
Participant.

     9.2 Optional Forms of Payment.

          (a) At any time prior to the date on which  payment of retirement
benefits  is to  begin,  a  Participant  may by an  instrument  in  writing
delivered to the Administrator elect to receive, in lieu of the normal form
of payment  provided  in Section  9.1, a  retirement  benefit  which is the
actuarial equivalent of the benefit specified in Section 9.1, in one of the
forms provided for the payment of retirement  benefits under the Retirement
Plan.

          (b) Notwithstanding  paragraph (a), with respect to a Participant
who (i) retires on an Early  Retirement  Date, (ii) elects to begin payment
of his retirement  benefits  before his Normal  Retirement  Date, and (iii)
elects an optional form of payment  pursuant to paragraph  (a), the portion
of his retirement  benefits  specified in Section 5.2 (b)(ii) shall be paid
in equal  monthly  installments.

                                    12

<PAGE>

          c)  Notwithstanding  paragraph (a), the  retirement  benefit of a
Participant  who  retires  on a Late  Retirement  Date  and who  elects  an
optional form of payment pursuant to paragraph (a) shall not be actuarially
increased to take account of the  commencement  of such benefits  after the
Participant's Normal Retirement Date.

     9.3 1991 Lump Sum Payment Option.

          (a)  For purposes of this Section 9.3:

               (i) "Lump Sum Payment"  means a single  payment,  payable on
January  1,  2000,  equal to the  actuarial  equivalent  of the  retirement
benefits  otherwise  payable to a Participant under the Plan after December
31, 2000, based on the Participant's  Accrued Benefit as of March 31, 1991.
In the  case  of a  Participant  who  has not  begun  receiving  retirement
benefits  before  January  1, 2000,  such  actuarial  equivalence  shall be
computed on the basis as if the Participant's  retirement  benefits were to
begin on the  later of  January  1,  2001,  or the  first  day of the month
coincident with or next following his 62nd birthday.

               (ii) "Electing Participant" means an Employee who: (1) was a
Participant on April 1, 1991 and (2) by an instrument in writing filed with
the  Administrator no later than August 31, 1991,  elects to receive a Lump
Sum Payment.

          (b)  On January 1, 2000, a Lump Sum Payment shall be made to each
Electing  Participant  who  as  of  that  date:  (i)  has  begun  receiving
retirement  benefits  pursuant to Section 4.2, 5.2 or 6.2; (ii) has retired
on an  Early  Retirement  Date  and has not  begun to  receive  his  annual
retirement  benefit  pursuant to Section 5.2; or (iii) is an Employee.  The
annual retirement  benefit payable after December 31, 2000, to the Electing
Participant  pursuant  to  Section  4.2,  5.2  or  6.2,  whichever  may  be
applicable,  shall  be  reduced  to  reflect  his  receipt  of the Lump Sum
Payment.

     9.4 1992 Lump Sum Payment Option.

          (a) For purposes of this Section 9.4:

               (i) "Lump Sum Payment"  means a single  payment,  payable on
January  1,  2001,  equal to the  actuarial  equivalent  of the  retirement
benefits  otherwise  payable to a Participant under the Plan after December
31,  2001,  based  on the  amount  equal to (1) the  Participant's  Accrued
Benefit as of March 31, 1992, less (2) if the Participant made the election
provided in Section 9.3, the Participant's  Accrued Benefit as of March 31,
1991. In the case of a Participant who has not begun  receiving  retirement
benefits  before  January  1, 2001,  such  actuarial  equivalence  shall be

                                    13

<PAGE>

computed on the basis as if the Participant's  retirement  benefits were to
begin on the  later of  January  1,  2002,  or the  first  day of the month
coincident with or next following his 62nd birthday.

               (ii) "Electing Participant" means an Employee who: (1) was a
Participant  on January 1, 1992,  and (2) by an instrument in writing filed
with the Administrator no later than May 31, 1992, elects to receive a Lump
Sum Payment.

          (b) On January 1, 2001, a Lump Sum Payment  shall be made to each
Electing  Participant  who  as  of  that  date:  (i)  has  begun  receiving
retirement  benefits  pursuant to Section 4.2, 5.2 or 6.2; (ii) has retired
on an  Early  Retirement  Date  and has not  begun to  receive  his  annual
retirement  benefit  pursuant to Section 5.2; or (iii) is an Employee.  The
annual retirement  benefit payable after December 31, 2001, to the Electing
Participant  pursuant  to  Section  4.2,  5.2  or  6.2,  whichever  may  be
applicable,  shall  be  reduced  to  reflect  his  receipt  of the Lump Sum
Payment.

     9.5 Change in Control.*  Notwithstanding  any other  provision of this
Plan, upon the occurrence of a Change in Control,  each  Participant in the
Plan shall be entitled to an immediate  lump sum payment in an amount equal
to the actuarial equivalent of the Participant's  Accrued Benefit as of the
date of occurrence of the Change in Control  determined  without  regard to
Sections 8.1 through 8.3.

     9.6 Actuarial  Equivalent.  Wherever in the Plan a benefit is required
to  be  the  actuarial  equivalent  of  another  benefit,   such  actuarial
equivalence shall be computed on the basis of (a) Table V in section 1.72-9
of the Treasury Department Regulations and (b) the Pension Benefit Guaranty
Corporation's interest rate for immediate annuities,  both as in effect for
the month preceding the date of distribution of such benefit.


                        Section 10 - Death Benefits
                        ---------------------------


     10.1 Death Benefits  While  Employed.  If a Participant  dies while an
active Employee:






* Effective as of February 16, 1996.

                                    14

<PAGE>
          (a) His Spouse shall receive an annual death benefit in an amount
equal to 50% of his Accrued Benefit at the date of his death.  Such benefit
shall be payable in equal monthly  installments  beginning on the first day
of  the  month   coincident   with  or  next  following  the  date  of  the
Participant's death, and continuing until the earlier of (i) the completion
of 120 months or (ii) the date of the Spouse's death.

          (b) In the case of a Participant whose Participation Commencement
Date is prior to September 21, 1996, his  Beneficiary  shall receive a lump
sum death  benefit in the amount of $200,000 as soon as  practicable  after
the date of his death.

     10.2  Death  Benefits  After   Retirement.   If  a  Participant  whose
Participation  Commencement  Date is prior to September 21, 1996 dies after
retirement,  his Beneficiary  shall receive a lump sum death benefit in the
amount of $200,000 as soon as practicable after the date of his death.

     10.3 Death Benefits  Offset.  If a Participant  dies before January 1,
2000, any payments made to the Participant's Spouse or Beneficiary pursuant
to life  insurance  policies  on the  life  of the  Participant  which  are
purchased in connection with this Plan shall be offset  against,  and shall
to that extent  reduce the payments  otherwise  required to be made to such
Spouse or Beneficiary pursuant to Section 10.1 or 10.2.


                    Section 11 - Forfeiture of Benefits
                    -----------------------------------


     11.1  Termination for Cause. A Participant  whose  employment with the
Corporation is terminated for cause shall forfeit all right to any benefits
under the  provisions  of this  Plan.  For this  purpose,  a  Participant's
employment  with the  Corporation  shall be considered to be terminated for
cause only if: (a) the Participant is convicted of a felony, without regard
to his right to appeal,  which involves the Corporation's real, tangible or
intellectual  property,  any of its  personnel  or any person with whom the
Corporation has a business relationship, and (b) at least two-thirds of the
members  of the Board  affirmatively  vote,  in their sole  discretion,  to
terminate the Participant's employment with the Corporation because of such
conviction.

     11.2  Employment  With a Competitor.  A Participant  who,  without the
written consent of the Administrator, becomes employed with a competitor of
the Corporation, shall forfeit all rights to any further benefits under the
provisions  of  this  Plan;  provided,  however,  that  the  benefits  of a
Participant  whose  Participation  Commencement Date is prior to January 1,
1993, and who retires at the normal retirement age of 65, or who retires at

                                    15

<PAGE>

a later date upon meeting all of the tests of Section 6.1 (a)(ii), shall be
nonforfeitable.  For this purpose,  a Participant shall be considered to be
employed  with a competitor of the  Corporation  only if, within the period
ending two years after the date of his  termination of employment  with the
Corporation:

          (a)  there  is  a  final   judgement  by  a  court  of  competent
jurisdiction, in an action brought by the Corporation, that the Participant
is liable for an act of unfair competition or the misappropriation of trade
secrets or confidential information; or
 
          (b) (i) the Participant is employed in a management position with
another  employer in a line of business that is  classified  under the same
four-digit industry code of the Standard Industrial  Classification as is a
line of  business  operated  by the  Corporation,  and  (ii)  such  line of
business  generated  revenues  for  the  Corporation  during  the  previous
12-month period exceeding the greater of (1) $10,000,000 or (2) two percent
of the total revenues generated during such period by the Corporation.


                        Section 12 - Administration
                        ---------------------------

     12.1 Appointment of Administrator. The Board shall appoint a person to
serve as Administrator of the Plan. The initial  Administrator shall be the
Vice President for Human Resources and Organization Development.

     12.2 Responsibility and Authority of Administrator.  The Plan shall be
administered by the  Administrator,  who shall have the  responsibility and
authority to, among other  things,  (a) interpret and construe the terms of
the Plan and (b)  adopt  such  regulations,  rules,  procedures  and  forms
consistent  with the Plan as he  considered  necessary or desirable for the
administration  of  the  Plan.  In  all  cases  the  determination  of  the
Administrator  shall be  final,  conclusive  and  binding  on all  persons,
subject to Section 12.3.

     12.3  Exceptions  Under  Board  Authority.  Notwithstanding  any other
provision  of this Plan,  the Board in its sole  discretion  shall have the
authority to make exceptions to the normal  application and  administration
of any and  all  provisions  of the  Plan in  individual  cases;  provided,
however,  that no such exception shall,  without the written consent of the
person involved, deprive any Participant, Beneficiary or Spouse of any part
of his  benefits  under the Plan  accrued as of the time such  exception is
made.

                                    16

<PAGE>

               Section 13 - Amendment or Termination of Plan
               ---------------------------------------------


     13.1  Right to Amend or  Terminate.  The  Board  reserves  in its sole
discretion  the  right,  at any  time and  from  time to time,  to amend or
terminate the Plan.

     13.2 Effect on Benefits  Accrued.  No amendment or  termination of the
Plan  pursuant to Section  13.1 shall,  without the written  consent of the
person  involved,  deprive any Participant,  Beneficiary,  or Spouse of any
part  of his  benefits  under  the  Plan  accrued  as of the  time  of such
amendment or termination.


                   Section 14 - Miscellaneous Provisions
                   -------------------------------------


     14.1 No Implied  Rights.  Nothing in this Plan shall be deemed to: (a)
give  to any  Employee  the  right  to be  retained  in the  employ  of the
Corporation  or to interfere  with the right of the  Corporation to dismiss
any Employee at any time, or (b) give to any Participant,  Beneficiary,  or
Spouse (i) any right to any payments except as specifically provided for in
the Plan or (ii) any  interest in any  insurance  policies  acquired by the
Corporation in accordance with Section 14.2.

     14.2 Insurance  Policies.  The  Corporation in its discretion may, but
shall  not be  required  to,  provide  for its  obligations  under the Plan
through the purchase of one or more life insurance  policies on the life of
a Participant.  Each  Participant  agrees,  as a condition to receiving any
benefits  under this Plan, to cooperate in securing  life  insurance on his
life by furnishing  such  information as the Corporation or any insurer may
require,  by submitting to such physical  examinations as may be necessary,
and by taking such other actions as may be requested by the  Corporation or
any insurer to obtain and maintain such insurance coverage.

     14.3 No Assignment or Alienation.  To the extent  permitted by law, no
benefit  provided under the Plan shall be anticipated,  assigned (either at
law or in equity), alienated or subject to attachment,  garnishment,  levy,
execution or other process. Any attempt to perform any such action shall be
void.

     14.4 Expenses.  The Corporation shall pay all expenses incident to the
operation and administration of the Plan.


                                    17

<PAGE>

     14.5 Applicable Laws. Except as otherwise required by federal law, the
provisions  of the Plan and the rules,  regulations,  and  decisions of the
Board and the  Administrator  shall be construed and enforced  according to
the laws of the State of Maryland.

                                    18
<PAGE>