Document:

Plan
                   Notice of Non-Qualified Stock Option Grant

First_Name Last_Name                          Grant Date:         April 27, 1999
Address_Line_1                                Options Granted:    Shares_Granted
Address_Line_2                                Option Price:       $44.8125
Address_Line_3                                Expiration Date:    April 26, 2009
City, State Zip_Code                          Grant Number:       Number
SSN: SSN

CSX  Corporation   ("CSX")  has  granted  to  you  non-qualified  stock  options
("Options")  to purchase CSX common stock.  Your grant has been made pursuant to
CSX's   Plan (the "Plan"),  which,  together with   the terms  contained in this
Notice, sets forth terms and conditions of your grant and is incorporated herein
by  reference.  A copy of the Plan is  available  at your  request  from the CSX
Corporate  Secretary  Department  and can be  sent  to you in  hard  copy or via
e-mail.  You should review the terms of this Notice and the Plan carefully.  The
capitalized terms used in this Notice are defined in the Plan. Unless you notify
the CSX Corporate  Secretary in writing that you do not accept the Options,  you
will be deemed to have  agreed to the terms of this  Notice and the terms of the
Plan.

Vesting and Exercisability:
Subject to the terms of the Plan,  the Options will vest on April 27, 2000,  and
will become exercisable according to the following schedule:

                  First Date of             Shares                   Expiration
                  Exercisability            Exercisable              Date
                  -------------------------------------------------------------
                  04/27/2002        Shares_Period_1                  04/26/2009
                  04/27/2003        Shares_Period_2                  04/26/2009
                  04/27/2004        Shares_Period_3                  04/26/2009
In the  case of a  Change  in  Control,  the  Options  will  become  exercisable
immediately.

Employment Requirements:
The Plan sets out the terms and  conditions  that govern this grant in the event
of your  Separation  from  Employment.  In the  event  of your  Separation  from
Employment  prior to April 27, 2000, a portion of the Options will vest based on
the number of Completed  Months of  employment  following the date of the grant.
Each portion of the grant will be  pro-rated  in the same manner.  As set out in
the Plan,  if your  Separation  from  Employment  is for any  reason  other than
Retirement,  Disability or death,  you will have 30 days after  Separation  from
Employment to exercise any vested Options that are exercisable.  In the event of
your  Separation  from  Employment  due to  Disability  or  death,  you or  your
Beneficiary  or  estate  will  have up to five  years  (but not  later  than the
expiration date) to exercise any vested Options.  Beneficiary  designation forms
may be obtained upon request from the CSX  Corporate  Secretary  Department.  If
your Separation  from  Employment is because of Retirement,  you will have until
the expiration date to exercise any vested Options.  Please consult the Plan for
a more comprehensive explanation of termination and vesting provisions.

Exercise:
You may exercise these Options,  in whole or in part, to purchase a whole number
of vested shares at any time by following the exercise procedures established by
CSX. All exercises must take place before the  expiration  date, or such earlier
dates as established by the Plan following your Separation from  Employment.  An
exercise of Options generates federal and applicable state income and employment
tax withholding obligations. As provided in the Plan, the full purchase price of
the  shares  being  purchased  through  exercise  of  Options  and  the  related
withholding taxes for federal,  state or local jurisdictions must be paid to CSX
at the  time of an  exercise  of  Options.  For  further  information  regarding
procedures  for  exercising  Options,  you  should  contact  the  CSX  Corporate
Secretary Department.

Restrictions on Exercise:
Your  ability  to  exercise  the  Options  is  subject  to any  restrictions  or
requirements imposed by law or by CSX.CSX CORPORATION

                      1987 Long-Term Performance Stock Plan

                As Amended and Restated Effective April 25, 1996

                     (As Amended through September 8, 1999)

1.      Purpose.

        The purpose of the CSX Corporation Long-Term Performance Stock Plan (the
"Plan") is to attract and retain  outstanding  individuals  as officers  and key
employees of CSX Corporation and its subsidiaries, to furnish motivation for the
achievement  of  long-term  performance  objectives  by  providing  such persons
opportunities  to acquire  ownership of common  shares of the Company,  monetary
payments  based on the value of such shares or the financial  performance of the
Company;  or  both,  on  terms  as  herein  provided.  It is  intended  that the
Incentives   provided   under   this  Plan   will  be   treated   as   qualified
performance-based compensation within the meaning of Section 162(m) of the Code.
The Company believes there are  circumstances,  however,  where the provision of
compensation  that is not  fully  deductible  may be more  consistent  with  the
compensation  philosophy  of the Company  and/or may be in the Company's and its
shareholders'  best  interests.  The  Company  reserves  the  right to  exercise
discretion and retain flexibility in this regard and in certain circumstances to
provide incentives that do not qualify as deductible under Section 162(m).

2.      Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        w.     "Retirement":  The  term  Retirement  means  a  termination  of
               employment  after  age 55  with eligibility to begin  immediately
               receiving  retirement  benefits  under the Company's  defined
               benefit pension plan.

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

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

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

3.      Number of Shares.

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

4.      Administration.

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

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

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

5.      Eligibility and Participation.

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

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

6.      Incentives.

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

7.      Incentive Stock Options.

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

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

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

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

8.      Non-Qualified Stock Options.

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

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

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

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

9.      Stock Appreciation Rights.

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

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

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

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

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

10.     Performance Unit Awards and Performance Share Awards.

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

        Prior to the payment of PUAs and PSAs, the Committee shall determine the
extent to which Performance Objectives have been attained during the Performance
Period or  Performance  Periods in order to determine the level of payment to be
made, if any, and shall record such results in the minutes of the meeting of the
Committee. In no instance will payment be made if the Performance Objectives are
not attained.

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

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

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

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

        Notwithstanding a Participant's  election to defer the payment of shares
of common  stock  pursuant  to this  Section  10,  the  Company  shall make cash
payments to Participants following each common stock dividend payment date equal
to the  dividends  payable  on the  number  of shares of  Company  common  stock
credited to the Participant's  account as of the dividend record date (including
shares for which an election to defer has been made and any reinvested dividends
thereon). A Participant may elect to defer receipt of the cash payments pursuant
to election forms  prescribed  and provided by and filed with the Company.  Such
deferred  cash  payments  shall be  credited  to the  Participant's  account and
reinvested in shares of Company common stock as of the dividend payment date. An
election to defer,  once effective,  shall be irrevocable for the calendar year,
and shall  continue in effect with respect to  subsequent  calendar  years until
changed by a timely filed new election.

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

11.     Restricted Stock.

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

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

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

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

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

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

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

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

12.     Incentive Compensation Program Shares.

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

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

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

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

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

13.     Contributions to the Trust.

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

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

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

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

14.     Separation From Employment and Divisive Transactions.

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

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

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

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

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

        If the  Participant's  employer is a  Subsidiary  involved in a Divisive
Transaction or if the Participant's employment is terminated with the consent of
the Company (as a result of a business  transaction  or a reduction  in force or
any other circumstances approved by the Committee), the right of the Participant
or his successor in interest to exercise an ISO, NQSO or SAR shall terminate not
less than three years after the date of the closing of such Divisive Transaction
or after the date the Participant's employment is terminated with the consent of
the  Company,  but in no event  later  than 10 years  from the date of grant (15
years if the NQSO grant was a 15-year grant);  provided,  however,  that if such
Participant  is  eligible  to  retire  with the  ability  to  begin  immediately
receiving  retirement  benefits  under the Company's  pension  plan,  his or his
successor  in  interest's  right to  exercise  any ISO,  NQSO' or SAR'  shall be
determined  as if he had  retired.  Notwithstanding  anything to the contrary in
this  paragraph,  a  Participant  may not  exercise  such  Incentives  prior  to
satisfaction  of  the  one  year  holding  requirement  and  the  Exercisability
Requirements  pertaining  to  such  Incentives.  In  the  event  of  a  Divisive
Transaction,  employees of Sea-Land  Service,  Inc.,  hired by that  corporation
prior to January 1, 1986, shall be deemed eligible to retire upon termination of
employment  after  age 50 with 20  years of  service  and  eligibility  to begin
immediately  receiving  retirement  benefits under the Company's defined benefit
pension plan.

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

        Notwithstanding  anything to the contrary in this Plan, if a Participant
or  former  Participant  (a)  becomes  the  owner,  director  or  employee  of a
competitor of the Company or its subsidiaries, (b) has his employment terminated
by the  Company  or one  of  its  subsidiaries  on  account  of  actions  by the
Participant  which  are  detrimental  to the  interests  of the  Company  or its
subsidiaries,  or (c) engages in conduct  subsequent to the  termination  of his
employment with the Company or its subsidiaries  which the Committee  determines
to be detrimental to the interests of the Company or its  subsidiaries  then the
Committee may, in its sole discretion, pay the Participant or former Participant
a single  sum  payment  equal to the amount of his  unpaid  benefits  which were
awarded and deferred under Sections 10 or 12 of the Plan; provided,  however, if
the  deferral  has been for less than  three (3) years  under  Section  12,  the
Participant  shall not be eligible to receive the Stock Premium.  The single sum
payment shall be made as soon as practicable  following the date the Participant
or former  Participant  becomes an owner,  director or employee of a competitor,
his  termination of employment or the Committee's  determination  of detrimental
conduct,  as the case may be, and shall be in lieu of all other  benefits  which
may be payable to the Participant or former Participant under this Plan.

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

15.     Incentives Non-assignable and Non-transferable.

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

16.     Death of Option Holder.

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

17.     No Right to Continued Employment.

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

        Incentives granted under the Plan shall not be affected by any change of
employment  so long as the Incentive  holder has not suffered a Separation  From
Employment. A leave of absence granted by the Company or one of its subsidiaries
shall not  constitute  Separation  From  Employment  unless so determined by the
Committee.  Nothing in the Plan or in any Incentive granted pursuant to the Plan
shall  confer on any  individual  any  right to  continue  in the  employ of the
Company or one of its subsidiaries or interfere in any way with the right of the
Company or such subsidiary to terminate employment at any time.

18.     Funding Method.

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

19.     Adjustment of Shares.

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

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

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

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

20.     Loans to Option Holders.

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

21.     Termination and Amendment of Plan.

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

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

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

22.     Change in Control.

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

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

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

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

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

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

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

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

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

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

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

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

23.     Compliance with Regulatory Authorities.

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

24.     Withholding Tax.

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

25.     Non-Uniform Determinations.

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

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

26.     Construction.

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

Addendum.

        Addendum I

        Pursuant  to  Sections  4a  and 8 of  the  Plan,  with  respect  to  any
Non-Qualified  Stock  Option  ("NQSO")  granted  to any  Participant  who may be
subject to taxation in The Netherlands at any time during the term of such NQSO,
the Committee  shall have the authority to impose  additional  conditions on the
exercise of the NQSO.

        Effective  for any NQSO granted after  December 31, 1997,  the Committee
may, in  addition to any other  conditions  specified  in the option  agreement,
require that the NQSO is granted  conditionally.  Such conditions  shall include
that the NQSO can be  exercised  only  with the  approval  of the  Participant's
Senior Vice  President - Human  Resources  ("SVP-HR").  Such  approval  shall be
granted  at the  discretion  of the  SVP-HR,  which  shall  not be  unreasonably
refused.  Approval  may be refused for  reasons  which shall be set forth in the
option agreement such as, but not limited to, the following:  (i) termination of
employment  for willful or gross  misconduct or receipt of notice of termination
for  such  conduct;  (ii)  disclosure  of  confidential  information;  or  (iii)
rendering  services  to a  competitor.  Once  approval  has been  obtained,  the
Participant must immediately exercise the NQSO. If approval is refused or if the
NQSO is not  exercised  immediately  upon  receipt  of  approval,  it  shall  be
forfeited.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]