<PAGE>

                                                                    Exhibit 10.1
                               XTRA CORPORATION

                            1997 STOCK INCENTIVE PLAN


1. PURPOSE
   -------

     The purpose of this 1997 Stock Incentive Plan (the "Plan") is to advance
the interests of XTRA Corporation (the "Company") by enhancing the ability of
the Company (a) to attract and retain employees who are in a position to make
significant contributions to the success of the Company; (b) to reward employees
for such contributions; and (c) to encourage employees to take into account the
long-term interests of the Company through ownership of shares of, and other
interests in, the Company's common stock ("Common Stock").

     The Plan is intended to accomplish these goals by enabling the Company to
grant awards ("Awards") to eligible employees. Awards may be in the form of
Stock Options (as described in Section 6), Stock Appreciation Rights (as
described in Section 7) and Restricted Stock Awards (as described in Section 8).

2. ADMINISTRATION
   --------------

     The Plan will be administered by the Compensation Committee of the Board of
Directors of the Company, excluding any member who would not be an "outside
director" for purposes of Section 162(m) of the Internal Revenue Code of 1986,
as amended, and the regulations, including proposed regulations, thereunder (the
"Committee"). The Committee will have authority, not inconsistent with the
express provisions of the Plan, (a) to grant Awards to such eligible employees
as the Committee may select ("Participants"); (b) to determine the type of
Awards to be granted and the times of grants; (c) to determine the number of
shares of Common Stock to be covered by any Award; (d) to determine the terms
and conditions of any Award, which terms and conditions may differ among
individual Awards and Participants; (e) to prescribe the form or forms of
instruments evidencing Awards and any other instruments required under the Plan
and to change such forms from time to time; (f) to adopt, amend and rescind
rules and regulations for the administration of the Plan; (g) to interpret the
Plan and to decide any questions and settle all controversies and disputes that
may arise in connection with the Plan; and (h) to waive compliance by a
Participant with any obligation to be performed by him under an Award, except
that the Committee may not, in the case of an incentive stock option (as
described in Section 6), take any action without consent of the Participant
which would cause such option to lose its status as an "incentive stock option"
("ISO") within the meaning of section 422 of the Internal Revenue Code of 1986
(the "Code"). Such determinations and actions of the Committee shall be
conclusive and shall bind all parties.

     A majority of the members of the Committee will constitute a quorum, and
all determinations of the Committee shall be made by a majority of its members.
Any determination of the Committee under the Plan may be made without notice or
meeting of the Committee by a writing signed by a majority of the Committee
members. All members of the Committee shall
<PAGE>

be non-employee directors within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934.

3. EFFECTIVE DATE AND TERM OF PLAN
   -------------------------------

     The Plan will become effective on the date on which it is approved by the
stockholders of the Company. Grants of Awards under the Plan may be made prior
to that date (but after adoption of the Plan by the Board of Directors), subject
to approval of the Plan by stockholders.

     No Award may be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board of Directors, but
Awards previously granted may extend beyond that date.

4. SHARES SUBJECT TO THE PLAN
   --------------------------

     (a)  Number of Shares.  Subject to adjustment as provided in Section 10,
          ----------------
the aggregate number of shares of Common Stock that may be delivered under the
Plan is 1,150,000.  Shares of Common Stock may be issued up to this maximum
pursuant to any type or types of Award, including ISOs.  For purposes of this
limitation, Awards and shares of Common Stock which are forfeited or reacquired
by the Company, and Awards which are satisfied without the issuance of shares of
Common Stock, will not be counted.  Such limitation will apply only to shares of
Common Stock which have become free of any restrictions under the Plan.

     (b)  Special Limitations Applicable to Certain Awards.  The Committee shall
          ------------------------------------------------
have the discretion under the Plan to award Options and SARs that are intended
to satisfy certain performance-based compensation arrangements intended to be
exempt from the deduction limitations of Section 162(m) of the Code (the
"Section 162(m) requirements") ("exempt Options and SARs") as well as Options
and SARs that not intended to satisfy those requirements ("non-exempt Options
and SARs").  Subject to adjustment as provided in Section 10, to the extent such
adjustment is consistent with the continued satisfaction by exempt Options and
SARs of the requirements of Section 162(m)(4)(C) of the Code, the maximum number
of shares of Common Stock for which Options or SARs may be awarded under the
Plan to any Participant in any calendar year is in each case 200,000 shares.
For purposes of the preceding sentence, the regrant of a canceled Option or SAR,
or the repricing of an Option or SAR, shall be treated as a separate Award to
the extent required under Section 162(m)(4)(C) of the Code.

     (c)  Shares to be Delivered.  Shares delivered under the Plan will be
          ----------------------
authorized but unissued shares of Common Stock or, if the Committee so decides
in its sole discretion, previously issued Common Stock acquired by the Company
and held in treasury.  No fractional shares of Common Stock will be delivered
under the Plan.

5. ELIGIBILITY
   -----------

     Employees eligible to become Participants shall be those key employees of
the Company and its subsidiaries who, in the opinion of the Committee, are in a
position to make a significant contribution to the success of the Company or its
subsidiaries. A subsidiary for purposes of the

<PAGE>

Plan is a corporation in which the Company owns, directly or indirectly, stock
possessing 50% or more of the total combined voting power of all classes of
stock. Members of the Committee will not be eligible to become Participants.

6. STOCK OPTIONS
   -------------

     Stock Options granted under the Plan ("Options") may be either ISOs or non-
qualified stock options ("NSOs"). Except to the extent expressly designated as
an ISO, each Option will be an NSO.

     No term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted to the Committee under the
Plan be exercised, so as to disqualify the Plan or, without the consent of the
optionee, any ISO, under section 422 of the Code. The documents evidencing ISOs
will contain such provisions as are required of ISOs under the applicable
provisions of the Code.

     Options granted under the Plan will be subject to the following terms and
conditions and will contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee deems desirable:

     (a)  Exercise Price.  The exercise price of each Option will be determined
          --------------
by the Committee but may not be less than 100% (110%, in the case of an ISO
granted to a ten-percent stockholder) of the fair market value per share of
Common Stock at the time the Option is granted.  For this purpose, "ten-percent
stockholder" means any employee who at the time of grant owns directly, or is
deemed to own by reason of the attribution rules in section 424(d) of the Code,
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any of its parent or subsidiary
corporations.

     (b)  Duration of Options.  An Option will be exercisable during such period
          -------------------
or periods as the Committee may specify.  The latest date on which an Option may
be exercised will be the date which is ten years (five years, in the case of an
ISO granted to a ten-percent stockholder) from the date the Option was granted
or such earlier date as may be specified by the Committee at the time the Option
is granted.

     (c)  Exercise of Options.
          --------------------

     (1)  Options will be exercisable at such future time or times, whether or
          not in installments, as determined by the Committee at or after the
          grant date.  The Committee may at any time accelerate the
          exercisability of all or any portion of any Option.

     (2)  Any exercise of an Option must be by written notice to the Company,
          accompanied by (i) the document evidencing the Option (the "Option
          Certificate") and any other documents required by the Committee and
          (ii) payment in accordance with Section 6(d) below for the number of
          shares of Common Stock for which the Option is exercised.
<PAGE>

     (d)  Payment for and Delivery of Common Stock.  Common Stock purchased on
          ----------------------------------------
exercise of an Option shall be paid for as follows:  (1) in cash or by certified
check, bank draft or money order payable to the order of the Company or (2) if
so permitted by the Option Certificate, (i) through the delivery of shares of
Common Stock (held for at least six months, or such other period as the
Committee may specify) having a fair market value on the last business day
preceding the date of exercise equal to the purchase price or (ii) by a
combination of cash and Common Stock as provided in clauses (1) and (2)(i) above
or (iii) by delivery of a promissory note of the Participant to the Company,
payable on such terms as are specified in the Option Certificate (except that
the Option Certificate may provide that the rate of interest on the note will be
the lowest rate which is sufficient, at the time the note is given, to avoid
imputation of interest under the applicable provisions of the Code), or by a
combination of cash (or cash and Common Stock) and the Participant's promissory
note; provided, that if the Common Stock delivered upon exercise of the Option
      --------
is an original issue of authorized Common Stock, at least so much of the
exercise price as represents the par value of such Common Stock must be paid in
cash if the Committee determines that cash payment is required by law.

     (e)  Nontransferability of Options.  Except as may otherwise be determined
          -----------------------------
by the Committee, no Option may be transferred other than by will or by the laws
of descent and distribution, and during a Participant's lifetime an Option may
be exercised only by the Participant.

     (f)  Death or Disability.  If a Participant's employment with the Company
          -------------------
and its subsidiaries terminates by reason of death or total and permanent
disability, each Option held by the Participant will become fully exercisable
and will remain exercisable after the date of such termination for a period of
two years in the case of death and one year in the case of disability (but in no
event later than the date the option would have expired in all events under
Section 6(b)). In the case of a deceased Participant, such Option may be
exercised within such time limits by the executor or administrator of the
deceased Participant's estate, or by the person or persons to whom the Option is
transferred by will or the applicable laws of descent and distribution.

     (g)  Other Termination of Employment. If a Participant's employment with
          -------------------------------
          the Company and its subsidiaries terminates for any reason other than
          death or total and permanent disability, all Options held by the
          Participant that are not then exercisable shall terminate. Options
          that are exercisable on the date of termination will continue to be
          exercisable for a period of three months (but in no event later than
          the date the option would have expired in all events under Section
          6(b)) unless the employee has confessed to, or been convicted of, any
          act of fraud, theft or dishonesty arising in the course of, or in
          connection with, his employment with the Company, in which case the
          Option will terminate immediately and in full. After completion of
          that three-month (or shorter) period such Options shall terminate to
          the extent not previously exercised, expired or terminated.
<PAGE>

7. STOCK APPRECIATION RIGHTS
   -------------------------

     (a)  Nature of Stock Appreciation Right.  A Stock Appreciation Right
          ----------------------------------
("SAR") is an Award entitling the recipient to receive an amount in cash or
shares of Common Stock or a combination thereof having a value equal to the
excess of the fair market value of a share of Common Stock on the date of
exercise over the fair market value of a share of Common Stock on the date of
grant (or over the Option exercise price, if the SAR was granted in tandem with
an Option) multiplied by the number of shares with respect to which the SAR has
been exercised, with the Committee having the right to determine the form of
payment.

     (b)  Grant of SARs.  SARs may be granted in tandem with, or independently
          -------------
of, Options granted under the Plan.  In the case of an SAR granted in tandem
with an NSO, such SAR may be granted either at or after the time of the grant of
such Option.  In the case of an SAR granted in tandem with an ISO, such SAR may
be granted only at the time of the grant of the Option.  SARs will be evidenced
by such written agreement as is deemed appropriate by the Committee.

     An SAR or applicable portion thereof granted in tandem with an Option will
terminate and no longer be exercisable upon the termination or exercise of such
Option, except that an SAR granted with respect to less than the full number of
shares covered by an Option will not be reduced until the exercise or
termination of the related Option exceeds the number of shares not covered by
the SAR.

     (c)  Terms and Conditions of SARS.  SARs will be subject to such terms and
          ----------------------------
conditions as are determined from time to time by the Committee, subject, in the
case of SARs granted in tandem with Options, to the following:

     (1)  SARs will be exercisable only at such time or times and to the extent
          that the related Option is exercisable.

     (2)  Upon the exercise of an SAR, the applicable portion of any related
          Option must be surrendered.

     (3)  SARs will be transferable only with the related Option.  All SARs will
          be exercisable during the Participant's lifetime only by the
          Participant or his legal representative.

     (4)  An SAR granted in tandem with an Option may be exercised only when the
          market price of the Common Stock subject to the Option exceeds the
          exercise price of such Option.

     The provisions of Sections 6(f) and 6(g) relating to the exercisability and
termination of Options shall also apply to SARs, whether or not granted in
tandem with Options.

     Any exercise of an SAR must be by written notice to the Company,
accompanied by the document evidencing the SAR and any other documents required
by the Committee.
<PAGE>

8.   RESTRICTED STOCK
     ----------------

     (a)  Nature of Restricted Stock Award.  A Restricted Stock Award is an
          --------------------------------
Award entitling the recipient to acquire shares of Common Stock ("Restricted
Stock") for a purchase price (which may be zero) not to exceed par value,
subject to such conditions, including the restrictions specified in Section 8(d)
below, as the Committee may impose at the time of grant.

     (b)  Award Agreement.  A Participant who is granted a Restricted Stock
          ---------------
Award will have no rights with respect to such Award unless the Participant
accepts the Award within 60 days (or such other period as the Committee may
specify) following the Award date by making payment to the Company by certified
or bank check or other instrument acceptable to the Committee in an amount equal
to the specified purchase price, if any, of the shares covered by the Award and
by executing and delivering to the Company an agreement (an "Award Agreement")
in such form as the Committee determines.

     (c)  Rights as a Stockholder.  Upon complying with Section 8(b) above, a
          -----------------------
Participant will have all the rights of a stockholder with respect to the
Restricted Stock awarded to him including voting and dividend rights, subject to
the restrictions described in this Section 8 and subject to any other conditions
contained in the Award Agreement.  Unless the Committee otherwise determines,
certificates evidencing shares of Restricted Stock will remain in the possession
of the Company until such shares are free of any restrictions under the Plan.

     (d)  Restriction.  Shares of Restricted Stock may not be sold, assigned,
          -----------
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein.  If a Participant ceases for any reason to be
employed by the Company or its subsidiaries, shares of Restricted Stock held by
such Participant shall be resold to the Company at their purchase price, or
forfeited to the Company if the purchase price was zero, except as specifically
set forth herein.  Shares of Restricted Stock resold to the Company shall have
the status of authorized but unissued shares of Common Stock.

     (1)  The Committee will specify in the Award Agreement the date or dates
          (which may depend upon or be related to the attainment of performance
          goals or other conditions) on which the nontransferability of the
          Restricted Stock and the obligation of the Participant to resell such
          Stock to the Company will lapse.  The Committee may at any time
          accelerate such date or dates.

     (2)  If the Participant's employment terminates because of death or total
          and permanent disability, all restrictions on Restricted Stock held by
          the Participant will lapse.

     (e)  Notice of Election.  Any Participant making an election under section
          ------------------
83(b) of the Code with respect to a Restricted Stock Award must provide a copy
thereof to the Company within 30 days of the filing of such election with the
Internal Revenue Service.
<PAGE>

9.   CASH AWARDS
     -----------

     In connection with any Award hereunder the Committee may, in its sole
discretion, at the time such Award is made or at a later date, provide for and
grant a cash award to the Participant not to exceed an amount equal to (a) the
amount of any federal, state and local income tax on ordinary income for which
the Participant will be liable with respect to the Award, plus (b) an additional
amount on a grossed-up basis necessary to make him whole after tax, discharging
all his income tax liabilities arising from all payments under this Section 9.
Any payments under this Section 9 will be made at the time the Participant
incurs federal income tax liability with respect to the Award.

10.  CHANGES IN COMPANY; SUBSTITUTE AWARDS
     -------------------------------------

     (a)  Changes in Stock.  In the event of a stock dividend, stock split or
          ----------------
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of stock or securities of the Company
subject to Awards then outstanding or subsequently granted under the Plan, the
maximum number of shares of stock or securities that may be delivered under the
Plan, the purchase price, and other relevant provisions will be appropriately
adjusted by the Committee, whose determination shall be binding on all persons.

     The Committee may also adjust the number of shares subject to outstanding
Awards, the exercise price of outstanding Options and the terms of outstanding
Awards, to take into consideration material changes in accounting practices or
principles, consolidations or mergers (except those described in Section 10(b)
below), acquisitions or dispositions of stock or property or any other event if
it is determined by the Committee that such adjustment is appropriate to avoid
distortion in the operation of the Plan.

     (b)  Merger, Etc.  In the event of a dissolution or liquidation of the
          -----------
Company or a merger or consolidation in which the Company is not the surviving
corporation or its outstanding shares are converted into securities of another
corporation or exchanged for other consideration, all Options and SARs granted
hereunder will terminate, but at least 20 days prior to the effective date of
any such dissolution or liquidation (or 20 days prior to any earlier related
sale of substantially all the assets of the Company) or of any such merger or
consolidation, the Committee may arrange that the successor or surviving
corporation, if any, grant replacement or substitute replacement Options and/or
SARs.

     (c)  Substitute Awards.  The Company may grant Awards under the Plan in
          -----------------
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a subsidiary or the acquisition by the Company or a subsidiary of
property or stock of the employing corporation.  The Committee may direct that
the substitute Awards be granted on such terms and conditions as the Committee
considers appropriate.
<PAGE>

11.  GENERAL PROVISIONS
     ------------------

     (a)  No Distribution; Compliance with Legal Requirements, Etc.  The
          --------------------------------------------------------
Committee may require each person acquiring Common Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the Common Stock without a view to distribution thereof.

     The Company will not be obligated to deliver any shares of Common Stock
pursuant to an Award (1) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with, and
(2) if the outstanding Common Stock is at the time listed on any stock exchange,
until the shares to be delivered have been listed or authorized to be listed on
such exchange upon official notice of issuance, and (3) until all other legal
matters in connection with the issuance and delivery of such shares have been
approved by the Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the Company may require
such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Common Stock bear an appropriate legend restricting transfer.

     Notwithstanding any provision of the Plan, the Company will be under no
obligation to deliver shares of Common Stock to an estate of a deceased
Participant, or to the person or persons to whom the Award has been transferred
by the Participant's will or the applicable laws of descent and distribution,
until the Company is satisfied as to the authority of such person or persons.

     (b)  Tax Withholding, Etc.  Each Participant will, no later than the date
          --------------------
as of which the value of an Award or of any Common Stock or other amounts
received hereunder first becomes includable in gross income for federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, all federal, state and local taxes required by
law to be withheld with respect to such income.  The Company and its
subsidiaries will, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.

     The Committee may provide, in respect of any transfer of Common Stock under
an Award, that if and to the extent withholding of any federal, state or local
tax is required, the Participant may elect in such manner as the Committee
prescribes, to have the Company hold back from the transfer Common Stock having
a value calculated to satisfy such withholding obligation, or to deliver to the
Company previously owned shares of equal value. Notwithstanding the foregoing,
in the case of a Participant subject to the restrictions of Section 16(b) of the
Securities Exchange Act of 1934 no such election shall be effective unless made
in compliance with any applicable requirements of Rule 16b-3(e) or any successor
rule under such Act.

     (c)  Continuance of Employment.  For purposes of the Plan, employment of a
          -------------------------
Participant will not be considered terminated (1) in the case of sick leave or
other bona fide leave of absence approved for purposes of the Plan by the
Committee, so long as the Participant's right to reemployment is guaranteed
either by statute or by contract, or (2) in the case of a transfer to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which section
424(a) of the Code would apply.
<PAGE>

     (d)  Fair Market Value.  For purposes of the Plan, in general, "fair market
          -----------------
value" of a share of Common Stock on any date means the closing price on such
date as reflected in the New York Stock Exchange Composite Index.  If, however,
the Committee determines that a different meaning is in any circumstance
necessary in order to comply with applicable law, such different meaning will
apply in that circumstance.

     (e)  Employment Rights.  Neither the adoption of the Plan nor the grant of
          -----------------
Awards will confer upon any employee any right to continued employment with the
Company or any subsidiary or affect in any way the right of the Company or
subsidiary to terminate the employment of an employee at any time.  Except as
specifically provided by the Committee in any particular case, the loss of
existing or potential profit in Awards granted under this Plan shall not
constitute an element of damages in the event of termination of the employment
of an employee even if the termination is in violation of an obligation of the
Company to the employee by contract or otherwise.

12.  EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
     --------------------------------------------------- -----------

     Neither adoption of the Plan nor the grant of Awards to a Participant shall
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Common Stock as a bonus or
otherwise, or to adopt other plans or arrangements under which Common Stock may
be issued to employees.

     The Committee may at any time discontinue granting Awards under the Plan.
With the consent of the Participant, the Committee may at any time cancel an
existing Award in whole or in part and grant the Participant another Award for
such number of shares of Common Stock as the Committee specifies, subject to
Section 4(b). The Committee may at any time or times amend the Plan or any
outstanding Award for the purpose of satisfying the requirements of any changes
in applicable laws or regulations or for any other purpose which may at the time
be permitted by law; or may at any time terminate the Plan as to any further
grants of Awards, provided that no such amendment shall, without the approval of
the stockholders of the Company effect a change to the Plan for which
stockholder approval would at the time be required to maintain qualification or
exemption of the Plan under Section 422 or Section 162(m)(4) of the Code.



As adopted by the Board of Directors:  November 1997
As approved by the Stockholders:  January 1998