Document:

<PAGE>

                                                                   Exhibit 10.15

                     PRIVILEGED AND CONFIDENTIAL MATERIAL
              PREPARED IN CONNECTION WITH SETTLEMENT DISCUSSIONS
              --------------------------------------------------

                                 June 21, 2000

Mr. Ronald J. Conway
P.O. Box 1702
Ponte Vedra Beach, FL  32004

               Employment Separation and Consulting Agreement
               ----------------------------------------------
Dear Ron:

     As used in this Agreement, the "Companies" will mean CSX Corporation
("CSX") and CSX Transportation, Inc. ("CSXT"), and each reference to "the
Companies" will include CSX, CSXT and their respective affiliates. This
Agreement sets forth the agreement between you and the Companies with respect to
your separation from employment with the Companies.

     1.  Resignation. Effective April 10, 2000, you voluntarily resigned from
         -----------
your position as President of CSXT. Effective April 10, 2000, you ceased to have
any executive, operational or managerial duties with the Companies, and through
December 30, 2000, CSX will employ you as a consultant of the Companies upon the
terms and conditions set forth herein (the "Consultancy"). As of December 30,
2000 or the date you accept other full-time employment, whichever is earlier
(the "Separation Date") you will voluntarily resign or retire from your
employment with the Companies.

     2.  Consulting Duties. During the Consultancy, you will be available to the
         -----------------
Companies' executive officers and their designees upon reasonable notice and
subject to your agreement to specific assignments. During any such assignments,
you will be reimbursed for reasonable and customary expenses in accordance with
the Companies' Travel and Expense Reimbursement policies and procedures.

     3.  Compensation. For your commitments and undertakings in this Agreement,
         ------------
the Companies will pay you the amounts set forth in this Section 3.

         a.  Monthly Payments. For approximately eight and one-half months of
             ----------------
     the Consultancy, the Companies will pay you at an annualized rate of Five
     Hundred Fifty Thousand Dollars ($550,000), payable in monthly installments
     of approximately Forty Five Thousand Eight Hundred Eighty Three Dollars
     ($45,883) per month (the "Consulting Pay") for the periods ending May 1,
     2000
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 2

     and June 1, 2000, with the balance, approximately Three Hundred Twenty
     Thousand Eight Hundred Thirty Three Dollars ($320,833), being paid in a
     lump sum as soon as practicable. The Companies will attempt to make such
     payment on or before June 30, 2000 and will make such payment before July
     15, 2000. The amounts described in this Section 3(a) are referred to herein
     as the "Monthly Pay."

          b.   General Ineligibility for Stock Options, Performance Shares,
               ------------------------------------------------------------
     Bonuses, Etc. Except as specifically set forth below, you will not be
     ------------
     eligible for any award or new grant of stock options or other stock
     compensation under the CSX Corporation 1987 Long Term Performance Stock
     Plan (the "1987 Plan"), the CSX Corporation Stock Purchase and Loan Plan
     (the "SPLP") or any other stock compensation, bonus or similar or
     substitute program of the Companies (a "Stock Plan").

          c.   Performance Shares. You will receive approximately 9,490
               ------------------
     performance shares for the 1998 through 2000 performance share cycle as
     soon as practicable. The Companies will attempt to make such payment on or
     before June 30, 2000 and will make such payment before July 15, 2000. The
     value of such shares on the date awarded will be included in your year 2000
     compensation for purposes of calculating the bonus described in Section
     3(d).

     You will receive approximately 9,490 performance shares for the 1999
     through 2001 performance share cycle.   The Companies will attempt to make
     such payment on or before June 15, 2000 and will make such payment before
     July 15, 2000. The value of such shares on the date awarded will not be
     included in your year 2000 compensation for purposes of calculating the
     bonus described in Section 3(d).

          d.   One-Time Bonus. You will receive a one-time bonus equal to the
               --------------
     difference between $1 million and the total of $550,000 and the value paid
     to you of 9,490 CSX shares representing performance share buyout for the
     1998 through 2000 cycle as soon as practicable. The Companies will attempt
     to make such payment on or before June 30, 2000 and will make such payment
     before July 15, 2000.
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 3

          e.   Options.  All CSX options previously granted to you will expire,
               -------
     vest or be exercisable in accordance with their terms.

          f.   Employment Agreement. With respect to the Employment Agreement
               --------------------
     between you and CSX dated June 15, 1999 (the "Employment Agreement"), will
     be treated as described on Exhibit A hereto, and the Employment Agreement
                                ---------
     will hereby be rendered null and void in all respects.

          g.   Health Care Coverage. You and your wife will continue coverage
               --------------------
     under the CSX Corporation Medical, Dental and Vision Plan, including
     related prescription drug benefits, through December, 2004, as if you were
     an active employee. After that date, as a retiree of CSX, you and you wife
     will continue coverage under the CSX Corporation Medical, Dental and Vision
     Plan, including related prescription drug benefits, to the same extent as
     other retirees of CSX. The Companies will pay for you to have an annual
     physical at the Mayo Clinic, Jacksonville, Florida, during the year 2000.

          h.   Lump Sum Option for Certain Benefits. The Companies will make
               ------------------------------------
     available to you the lump sum option for the Supplemental and Special
     Retirement Plans when, and to the extent, that option becomes available to
     executives of the Companies; provided, however, that if the Companies
                                  --------  -------
     approve a policy before December 31, 2000 that provides for a lump sum
     option for the Supplemental and Special Retirement Plans, you will receive
     your lump sum payment no later than December 31, 2000, and the Companies
     will use its best efforts to deliver such payment to you on or about
     December 1, 2000.

          i.   Tax. The Companies will withhold applicable taxes, including
               ---
     F.I.C.A., railroad retirement, federal, state and local with respect to the
     payments arrangements described in this outline. The Companies will work
     with your tax advisor to assist him in you financial planning work.

          j.   Pension Enhancement. Your benefits under the Companies' pension
               -------------------
     and similar plans will be calculated substantially as described in Exhibit
                                                                        -------
     B, which includes an additional five years of credited service that will
     -
     provide you a pension benefit that is approximately 15 percent over that
     you otherwise would have received. Such Exhibit B does not reflect
     reduction in monthly payments that would result from your electing to take
     the lump sum option described in Section 3(h).
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 4

          k.   Other Benefits and Perquisites through the Separation Date.
               ----------------------------------------------------------
     During the Consultancy, you will continue to participate in (i) the CSX
     Corporation Medical, Dental and Vision Plan; (ii) the CSX Corporation
     Supplementary Savings and Incentive Deferral Plan and (iii) any other
     benefits or perquisites that you participated in as of April 10, 2000.

          l.   Other Benefits and Perquisites after Separation Date. From and
               ----------------------------------------------------
     after the Separation Date, except for the rights you then may have under
     Section 3(g) of this Agreement providing for extended health care coverage
     and as a former employee or retiree under (i) the Tax Savings Thrift Plan
     for Employees of CSX Corporation and Affiliated Companies, (ii) the CSX
     Corporation Supplementary Savings and Incentive Award Deferral Plan; (iii)
     the CSX life insurance programs; (iv) the CSX Market Value Cash Plan; (v)
     the 1987 Plan; or (vi) COBRA or any similar or successor law, you will not
     be entitled to receive or accrue any benefits or perquisites. You will be
     entitled to the benefits of other plans to the same extent as are other
     retirees of the Companies.

          m.   Club Membership.
               ---------------

               (i)  Pablo Creek. You will resign your membership in the Pablo
                    -----------
          Creek Club (the "Club") on or before September 1, 2000. Within twenty
          (20) days of receipt of the payment from the Club evidencing your
          equity membership in the Club, you will pay to the Companies a sum
          equal to the amount of the equity investment returned to you by the
          Club minus a sum calculated by Ernst & Young equal to 20% of the
          Gross-Up for the taxes incurred by you on the equity investment in the
          Club.

               (ii) TPC. You will transfer the TPC membership either to the
                    ---
          Companies or to an individual designated by the Companies on or before
          September 1, 2000.

          n.   Transition Payment.  You will receive a one time cash payment to
               ------------------
     cover transition expenses of you choosing in an amount up to $10,000.

          o.   Plan Amendments. YOU ACKNOWLEDGE AND AGREE THAT IF ANY BENEFIT OR
               ---------------
     PERQUISITE PLANS OR POLICIES ARE AMENDED OR TERMINATED, YOU WILL BE SUBJECT
     TO SUCH AMENDED OR TERMINATED PLANS OR POLICIES.
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 5

          p.   Death.  If you were to die prior to the Separation Date, your
               -----
     designated beneficiary would be entitled to the payments contemplated by
     Section 3 of this Agreement when, and to the extent, such payment would
     otherwise have been payable hereunder.

     4.   Waiver and Release.  In exchange for the compensation and benefits
          ------------------
promised herein, you hereby waive and release the Companies from any and all
claims you may have against them, except for claims relating solely to the
performance of their obligations under this Agreement, and further agree to
execute the Waiver and Release attached hereto as Exhibit C at the time of
                                                  ----------
execution of this Agreement to more completely set forth the parties'
understanding, and to execute an additional Waiver and Release in the same form
upon the Separation Date.  Notwithstanding any failure by you to deliver such
additional Waiver and Release, your obligations under this Agreement, including
those under this Section 4, will remain in full force and effect.

     5.   Confidential Information.
          ------------------------

          a.   Confidential Information Defined.  The parties recognize that
               --------------------------------
     during your employment, you have learned trade secrets and other
     information confidential to the Companies and that the Companies would be
     substantially injured if the confidentiality of such information were not
     maintained.  For the purposes of this Section 5, "Confidential Information"
     means and includes every item of and all the contents of any discussions,
     documents, information, technology, procedures, customer lists, business
     plans, employee compensation data, pricing information, strategies,
     software, financial data, ideas and assumptions and all other material
     relating to or in connection with your prior employment or future
     consulting work for the Companies and their property, business methods and
     practices, suppliers and customers, other than that which is generally
     known to the public.  To the extent that the Confidential Information
     comprises any written material or other material in a reproducible form by
     any means whatsoever, whether manual, mechanical or electronic, you will
     not copy, extract or reproduce the same by any means whatsoever, nor
     provide nor otherwise make such material available to any third party, nor
     use such Confidential Information for your own purposes.

          b.   Restriction on Use.  You agree not to disclose to third persons
               ------------------
     such documents or Confidential Information without the prior consent of the
     Companies, whether for compensation or otherwise.  You further agree not to
     use such documents or Confidential Information for any purpose detrimental
     to the Companies. You will at all times use your best possible efforts to
     ensure that any person to whom the Confidential Information is disclosed
     pursuant to this
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 6

     Agreement keeps the same secret and confidential and observes an obligation
     of confidentiality in relation thereto.

          c.   Non-Competition.  You specifically agree that you will advise any
               ---------------
     future employer or client of yours that meets any of the following criteria
     of these confidentiality restrictions and will secure the written agreement
     of such employer or client, and make it available to the Companies upon
     request, that your provision of services will not violate these provisions.
     Such advice and agreement shall be required for any employer or client that
     is (i) engaged in the railroad or intermodal transportation business; (ii)
     a customer representing more than 1% of the revenues of either CSXT or CSX
     Intermodal, Inc.; or (iii) affiliated with the Norfolk Southern
     Corporation.  You further agree not to work for, or provide services,
     directly or indirectly, to any entity that meets any of these criteria
     before January 1, 2001, without the prior written consent of the Companies.
     The covenant in this Section 5(c) will expire on January 1, 2001, and after
     that date, you are free to work anywhere.

          d.   Restriction on Trading. You acknowledge that you may be deemed to
               ----------------------
     be an "officer" of CSX for purposes of Section 16 of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act") and the rules
     promulgated thereunder up until October 10, 2000. Accordingly, you agree to
     comply with the reporting requirements of the Exchange Act and the
     Companies' policies governing trading of such officers for the period after
     cessation of your reporting obligations contemplated by Rule 16a-2
     promulgated under the Exchange Act. You acknowledge that these reporting
     and related short-swing profit liabilities are solely your responsibility.

          e.   No Waiver of Legal Rights. You hereby acknowledge that none of
               -------------------------
     the provisions of this Agreement, including, without limitation, the
     provisions of this Section 5 will be deemed or construed to reduce the
     protections afforded the Companies by common law, statute or regulation.

          f.   Perpetual Restriction. You acknowledge that notwithstanding the
               ---------------------
     expiration of the provisions of Section 5, including your ability to work
     anywhere on or after January 1, 2001, your obligations with respect to
     Confidential Information are perpetual.
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 7

     6.   Private Agreement. It is the desire and in the interest of all parties
          -----------------
affected by this Agreement that the terms hereof be maintained in strictest
confidence. To that end, you and the Companies covenant and agree to maintain
each and every term of this Agreement in the strictest confidence, and to
neither release nor divulge either orally or in writing any term, covenant or
condition hereof to any person, firm or entity provided, however:
                                               -----------------

          a.   that the Companies or you may disclose as required pursuant to a
     lawful subpoena or court order;

          b.   that the Companies or you may disclose in accordance with a
     prepared written statement approved in advance by the Chief Executive
     Officer of CSXT; or

          c.   that the Companies may disclose to employees or advisors,
     including counsel, determined to have a need to know;

          d.   that you may disclose to your spouse, counsel, tax advisor, and
     estate planner, whom you will instruct to preserve confidentiality;

          e.   that you may disclose the existence of the Consultancy and the
     confidentiality provisions.

     7.   Governing Law. This Agreement will be governed, construed and
          -------------
interpreted under the laws of the Commonwealth of Virginia.

     8.   Injunctive Remedy. You acknowledge that any breach or threatened
          -----------------
breach of the covenants set forth in this Agreement would cause irreparable
injury to the Companies and that money damages alone would not provide an
adequate remedy to the Companies. The parties agree that any reviewing court
will have the authority to reform this provision to conform to applicable law,
provided that it is the intent of the parties that this Section 8 be given full
effect in all respects.

     9.   Adequate Consideration. You acknowledge and agree that the
          ----------------------
compensation and benefits reflected herein and which you have already received
fully satisfy all obligations of the Companies arising from your employment or
the termination thereof and that the Companies are not required to provide the
special severance and other termination benefits reflected in this Agreement
under the terms of any personnel policy or benefit plan or contract. You further
acknowledge that you have signed this Agreement in exchange for consideration in
excess of any to which you were otherwise
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 8

entitled and that such consideration is satisfactory and adequate for the
covenants made by you herein.

     10.  Parties' Intent; Mutual Cooperation.  The parties mutually agree to
          -----------------------------------
conduct themselves with a spirit of harmony and mutual cooperation, and to
refrain from and avoid any disparaging or defamatory comments or statements to
any third parties after execution hereof that would reflect negatively on the
business, person or professional reputation of any parties hereto. You
acknowledge and agree that the foregoing applies only to the executive officers
of the Companies and that your remedy with respect to any breach of the
foregoing shall be solely to seek an injunction.

     11.  Litigation.  You agree to cooperate and provide information and
          ----------
assistance to the Companies in any dispute, proceeding, arbitration or
litigation involving the Companies of which you have knowledge or involvement as
a result of your employment with the Companies. During any such activity, you
will be reimbursed for reasonable and customary expenses in accordance with the
Companies' Travel and Expense Reimbursement policies and procedures.

     The Companies hereby confirm that notwithstanding your status as a
consultant, retiree or former employee, for acts on behalf of the Companies
occurring during your tenure as an officer of the Companies, or one of their
affiliates, you will be entitled to indemnity and advances for expenses afforded
officers under the CSX Articles of Incorporation to the extent permitted by the
Virginia Stock Corporation Act.

     12.  Dispute Resolution. Any dispute, controversy or claim arising out of
          ------------------
or relating to this Agreement, or the breach, termination or validity hereof,
except an injunction proceeding under either Section 5 or 8, shall be finally
settled through binding arbitration by a sole, disinterested arbitrator in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be jointly selected by you and the Companies but, if you and
the Companies do not agree on an arbitrator within thirty days after demand for
arbitration is made by a party, the arbitrator shall be designated by the
American Arbitration Association. The award of the arbitrator shall be final and
conclusive, and the arbitration shall be concluded within six months of its
commencement. Each party to the arbitration shall pay the compensation, costs,
fees and expenses of its own witnesses, experts and counsel, and the
compensation and any costs and expenses of the arbitrator shall be borne equally
by the parties.

     13.  Other Agreements. In exchange for the compensation and benefits
          ----------------
promised herein, you hereby waive and release the Companies from any and all
claims you may have with respect to (a) the offer of employment dated June 11,
1998; (b) the acceptance of such offer dated June 19, 1998; and (c) the
Employment Agreement, and
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 9

you acknowledge that this Agreement shall supersede and render null and void in
all respects the foregoing agreements.

     14.  Entire Agreement. This Agreement, together with the Waiver and Release
          ----------------
Agreement, reflects the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior discussions or understandings
between the parties. The terms of this Agreement may not be amended, deleted or
modified except by prior written agreement signed by you and the Companies.

     15.  Successors and Assigns. You and the Companies have read this Agreement
          ----------------------
and understand its contents. You and the Companies further acknowledge
satisfaction with the terms of this Agreement and agree that the Agreement will
be binding upon your and the Companies' respective attorneys, heirs, personal
representatives, successors and assigns.

                                    Very truly yours,

                                    CSX CORPORATION

                                        /s/ Andrew B. Fogarty
                                    By: ____________________________
                                            Andrew B. Fogarty
                                            Senior Vice President-
                                            Corporate Services

                                    CSX TRANSPORTATION, INC.

                                        /s/ William J. Ryan
                                    By: __________________________
                                            William J. Ryan
                                            Senior Vice President-
                                            Human Resources
<PAGE>

Mr. Ronald J. Conway
June 21, 2000
Page 10

Reviewed, approved and
agreed as of the 26th day of
June, 2000:

/s/ Ronald J. Conway
______________________________
    Ronald J. Conway
<PAGE>

                                                                       EXHIBIT A

                             Employment Agreement
                             --------------------

The Employment Agreement will be treated as described below and, as provided in
Section 3(f), will be rendered null and void in all respects.

   1.    Immediate Vesting. The Companies will pay you 100,000 CSX shares and
         -----------------
         will attempt to make such payment on or before June 30, 2000 and will
         make such payment before July 15, 2000.

   2.    Total Shares. Assuming that 41% of the 100,000 share award were to be
         ------------
         withheld for tax payments, you would then have 59,000 remaining. Your
         total number of shares would be an estimated 159,000 (the "Shares")
         from (a) your initial 100,000 purchase and (b) the 100,000 share award,
         less shares sold for withholding.

   3.    Interest Coverage. The Companies will pay or reimburse your Loan
         -----------------
         interest from the inception of the Loan to date and through the period
         the Loan is outstanding to the extent your dividend payments on the
         Shares (estimated at $1.20 per share) do not equal such interest. A
         Gross-Up Payment as defined below will be paid with respect to this
         payment (the "Interest Spread Payment").

   4.    Past Interest. In addition, the Companies will pay you a lump sum
         -------------
         amount of $304,419 for the Interest Spread and the related Gross-Up
         Payments for the four interest payments you made through April 2000.
         The Companies will attempt to ensure that such payment is made on or
         before June 30, 2000 and will make such payment before July 15, 2000.

   1.    Principal Coverage. The Companies will hold you harmless from any loss
         ------------------
         on the loan principal in your approximately $4.99 million NationsBank
         credit facility dated May 6, 1999 (the "Loan"), after deducting the
         amount of your proceeds from the sales of the Shares (the "Principal
         Spread Payment"). A Gross Up Payment will be paid with respect to the
         Principal Spread Payment. You represent that the principal balance on
         the Loan is approximately $4.99 million and agree that you will not
         make any further borrowings under the Loan. You acknowledge and agree
         that
<PAGE>

         a. Before June 15, 2001, you will not sell any Shares or repay any Loan
            --------------------
            principal unless:

            (i)  you have the prior written consent of the Companies; or

            (ii) NationsBank has declared the Loan in default for a reason other
                 than your failure to deliver information or payments when due,
                 and you have given the Companies notice within five (5)
                 business days of your receiving notice of such default and at
                 least five (5) business days before any sale of Shares.

         b. After June 15, 2001, you may sell any or all of the Shares if:
            -------------------

            (i)  you give the Companies five (5) days prior written notice; and

            (ii) you immediately remit proceeds from the sale of such Shares to
                 NationsBank in satisfaction of your obligations under the Loan.

   5.    Loan Compliance. You will use your best efforts to avoid any default of
         ---------------
         the Loan, including, without limitation, promptly seeking a waiver of
         any default that could arise in connection with your serving as a
         Consultant with the Companies or retiring from the Companies. The
         Companies will cooperate with you in seeking such a waiver.

   6.    Direct Payments of Loan. You agree to promptly pay Interest Spread
         -----------------------
         Payments to NationsBank. You further agree that the Companies may make
         Interest Spread Payments to NationsBank directly, in the Companies'
         sole discretion, and that the Company will make Principal Spread
         Payments to NationsBank directly.

   7.    Gross-Up Payments. You will be entitled to receive additional payments
         -----------------
         ("Gross-Up Payments") in an amount such that after payment by you of
         all taxes, including income taxes, imposed with respect to the Interest
         Spread Payments and the Principal Spread Payment, you retain an amount
         of the Gross-Up Payment equal to the taxes imposed upon the payments.
<PAGE>

8.    Payment Mechanics.  To receive any Interest Spread, Principal Spread or
      -----------------
      Gross-Up Payment:

      a.  You will send Ernst & Young or such other certified public accounting
          firm as may be agreed upon by you and the Companies (the "Accountant")
          timely notice that the interest payment is due to NationsBank,
          including your interest invoice, if applicable. You agree to provide
          the Companies or the Accountants with any other supporting
          documentation reasonably requested by either of them to permit
          verification and calculation of the Gross-Up Payments.

      b.  The Accountant will review and provide detailed supporting
          calculations both to the Companies and to you within fifteen (15)
          business days of receipt of the materials from you.

      c.  Within seven (7) business days of receipt of the Accountant's work,
          the Company will pay you the Interest Spread, Principal Spread or
          Gross-Up Payment, as the case may be, as calculated by the Accountant.

9.    Companies' Early Termination Right. Notwithstanding Section 5.a. of this
      ----------------------------------
      Exhibit A, the Companies will have the option to require you to sell the
      ---------
      Shares and repay the Loan at any time. If the Companies were to exercise
      such right, they would make the Principal Spread and Gross-Up Payments
      promptly.

10.   Securities Requirements. You and the Companies will work together on the
      -----------------------
      disposition of the Shares to help ensure that securities law requirements
      are satisfied.

11.   Housing Assistance. During the period the Loan is outstanding, the
      ------------------
      Companies will assist you with respect to the refinancing of your North
      Carolina residence. Specifically, the Companies will either (a) provide
      acceptable assurances to your mortgage lender or (b) provide a bridge
      loan.<PAGE>

                                                                   Exhibit 10.16

                                                                 DRAFT: 10/30/00

                              EMPLOYMENT AGREEMENT
                              --------------------

          AGREEMENT by and between CSX CORPORATION, a Virginia corporation (the
"Company"), and ____________________ (the "Executive"), dated as of the first
day of November, 2000.

          The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.  The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations.  Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.   Certain Definitions.
               --------------------

          a.   The "Effective Date" shall mean the first date during the Term
                    --------------
     (as defined in Section l(b)) on which a Change of Control (as defined in
     Section 2) occurs.  Anything in this Agreement to the contrary
     notwithstanding, if a Change of Control occurs, and the Executive's
     employment with the Company is terminated by the Company without Cause
     prior to the date on which the Change of Control occurs or the Executive
     ceases to be an officer of the Company, and if it is reasonably
     demonstrated by the Executive that such termination of employment or
     cessation of status as an officer (i) was at the request of a third party
     who has taken steps reasonably calculated to effect such Change of Control
     or (ii) otherwise arose in connection with or anticipation of such Change
     of Control, then, in each such case, for all purposes of this Agreement the
     "Effective Date" shall mean the date immediately prior to the date of such
     termination of employment or cessation of status as an officer.

          b.   The "Term" shall mean the period commencing on the date hereof
                    ----
     and ending on the earlier to occur of (i) the third anniversary of such
     date or (ii) the first day of the month next following the Employee's
     normal retirement date ("Normal Retirement Date") under the principal
     pension plan in which the Executive participates (the "Retirement Plan");

     provided, however, that commencing on the date one year after the date
     --------  -------
     hereof, and on each annual anniversary of such date (such date and each
     annual anniversary thereof shall be hereinafter referred to as the "Renewal
     Date"), unless previously terminated, the Term shall be automatically
     extended so as to terminate three years from such Renewal Date, unless at
     least 60 days prior to the Renewal Date the Company shall give notice to
     the Executive that the Term shall not be so extended; and
<PAGE>

     provided, further, that the Term shall end on an earlier date if the
     --------  -------
     Company gives the Executive at least one year's advance written notice
     thereof.

          2.   Change of Control.  For the purpose of this Agreement, a "Change
               -----------------
of Control" shall mean:

          a.   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 (i) the then outstanding shares
     of common stock of the Company (the "Outstanding Company Common Stock") or
     (ii) 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 (a), the following acquisitions shall not
     constitute a Change of Control:  (i) any acquisition directly from the
     Company, (ii) any acquisition by the Company, (iii) any acquisition by any
     employee benefit plan (or related trust) sponsored or maintained by the
     Company or any corporation controlled by the Company or (iv) any
     acquisition by any corporation pursuant to a transaction which complies
     with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

          b.   Board Composition.  Individuals who, as of the date hereof,
               -----------------
     constitute the Board (the "Incumbent Board") cease for any reason to
     constitute at least a majority of the Board; 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; or

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

               (i)   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

                                      -2-
<PAGE>

          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;

               (ii)   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

               (iii)  at least a majority of the members of the board of
          directors of the corporation 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, providing for
          such Business Combination; or

          d.   Regulated Business Combination.  Consummation 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 (i), (ii) and (iii) of subsection (c) of
     this Section 2; or

          e.   Liquidation or Dissolution.  Approval by the shareholders of the
               --------------------------
     Company of a complete liquidation or dissolution of the Company or its
     principal subsidiary.

If any Change of Control is a Regulated Business Combination, but its
implementation involves another "Change of Control" that is not a Regulated
Business Combination within the meaning of this Section 2, then for all purposes
of this Agreement, such Change of Control shall not be deemed to be a Regulated
Business Combination, the provisions governing a Regulated Business Combination
shall not apply, and the provisions governing such other Change in Control shall
apply.

          3.   Employment Period.
               ------------------

          a.   Generally.  Subject to Section 3(b), the Company hereby agrees
               ---------
     to continue the Executive in its employ, and the Executive hereby agrees to
     remain in the employ of the Company subject to the terms and conditions of
     this Agreement, for the period commencing on the Effective Date and ending
     on the third anniversary of such date (the "Employment Period").

          b.   Regulated Business Combination.  Notwithstanding the foregoing,
               ------------------------------
     in the case of a Change of Control that is a Regulated Business
     Combination, then for all

                                      -3-
<PAGE>

     purposes of this Agreement, the "Employment Period" shall mean the longer
     of (i) the period commencing on the Effective Date and ending on the third
     anniversary of such date or (ii) the period commencing on the Effective
     Date and ending thirteen months from the effective date of a final decision
     by the Agency on the proposed Regulated Business Combination ("Final
     Regulatory Action"), provided, however, that (x) if the Final Regulatory
                          --------  -------
     Action is a denial of the Regulated Business Combination then for all
     purposes of this Agreement the "Employment Period" shall end upon the
     sixtieth (60th) day following such Final Regulatory Action and (y) if the
     Final Regulatory Action is an approval of the Regulated Business
     Combination, but the Regulated Business Combination is not consummated by
     the first anniversary of the Final Regulatory Action, then for all purposes
     of this Agreement the "Employment Period" shall end upon such first
     anniversary, of the Final Regulatory Action.

          4.   Terms of Employment.
               --------------------

          a.   Position and Duties.  (i)  During the Employment Period:  (A)
               -------------------
     the Executive's position (including status, offices, titles and reporting
     requirements), authority, duties and responsibilities shall be at least
     commensurate in all material respects with the most significant of those
     held, exercised and assigned at any time during the 120-day period
     immediately preceding the Effective Date, and (B) the Executive's services
     shall be performed at the location where the Executive was employed
     immediately preceding the Effective Date or any office or location less
     than 35 miles from such location.

               (ii)  During the Employment Period, and excluding any periods of
          vacation and sick leave to which the Executive is entitled, the
          Executive agrees to devote reasonable attention and time during normal
          business hours to the business and affairs of the Company and, to the
          extent necessary to discharge the responsibilities assigned to the
          Executive hereunder, to use the Executive's reasonable best efforts to
          perform faithfully and efficiently such responsibilities. During the
          Employment Period it shall not be a violation of this Agreement for
          the Executive to (A) serve on corporate,  civic or charitable boards
          or committees, (B) deliver lectures, fulfill speaking engagements or
          teach at educational institutions and (C) manage personal investments,
          so long as such activities do not significantly interfere with the
          performance of the Executive's responsibilities as an employee of the
          Company in accordance with this Agreement.  It is expressly understood
          and agreed that to the extent that any such activities have been
          conducted by the Executive prior to the Effective Date, the continued
          conduct of such activities (or the conduct of activities similar in
          nature and scope thereto) subsequent to the Effective Date shall not
          thereafter be deemed to interfere with the performance of the
          Executive's responsibilities to the Company.

          b.   Compensation.  (i)  Base Salary.  During the Employment Period,
               ------------        -----------
     the Executive shall receive an annual base salary ("Annual Base Salary"),
     which shall be paid at a monthly rate, at least equal to twelve times the
     highest monthly base salary paid or payable, including any base salary
     which has been earned but deferred, to the

                                      -4-
<PAGE>

     Executive by the Company and its affiliated companies in respect of the
     twelve-month period immediately preceding the month in which the Effective
     Date occurs. During the Employment Period, the Annual Base Salary shall be
     reviewed no more than 12 months after the last salary increase awarded to
     the Executive prior to the Effective Date and thereafter at least annually.
     Any increase in Annual Base Salary shall not serve to limit or reduce any
     other obligation to the Executive under this Agreement. Annual Base Salary
     shall not be reduced after any such increase, and the term Annual Base
     Salary as utilized in this Agreement shall refer to Annual Base Salary as
     so increased. As used in this Agreement, the term "affiliated companies"
     shall include any company controlled by, controlling or under common
     control with the Company.

               (ii)  Annual Bonus.  In addition to Annual Base Salary, the
                     ------------
          Executive shall be eligible to earn, for each fiscal year ending
          during the Employment Period, an annual bonus (the "Annual Bonus") in
          cash, at a minimum, target and maximum level not less favorable (in
          terms both of dollar amounts and difficulty of achievement) to the
          Executive than the Executive's opportunity to earn such annual cash
          bonuses under the Company's annual incentive plans, or any comparable
          bonus under any predecessor or successor plan, for each of the last
          three full fiscal years prior to the Effective Date (annualized in the
          event that the Executive was not employed by the Company for the whole
          of such fiscal year).  (The highest of the actual amounts of such
          bonuses, as so annualized, for each of such three full fiscal years is
          hereafter referred to as the "Recent Annual Bonus".)  Each such Annual
          Bonus shall be paid no later than the end of the third month of the
          fiscal year next following the fiscal year for which the Annual Bonus
          is awarded, unless the Executive shall elect to defer the receipt of
          such Annual Bonus.

               (iii) Incentive, Savings and Retirement Plans.  During the
                     ---------------------------------------
          Employment Period, the Executive shall be entitled to participate in
          all incentive, savings and retirement plans, practices, policies and
          programs applicable generally to other peer executives of the Company
          and its affiliated companies, but in no event shall such plans,
          practices, policies and programs provide the Executive with incentive
          opportunities (measured with respect to both regular and special
          incentive opportunities, to the extent, if any, that such distinction
          is applicable), savings opportunities and retirement benefit
          opportunities, in each case, less favorable, in the aggregate, than
          the most favorable of those provided by the Company and its affiliated
          companies for the Executive under such plans, practices, policies and
          programs as in effect at any time during the 120-day period
          immediately preceding the Effective Date or if more favorable to the
          Executive, those provided generally at any time after the Effective
          Date to other peer executives of the Company and its affiliated
          companies.

               (iv)  Welfare Benefit Plans.  During the Employment Period, the
                     ---------------------
          Executive and/or the Executive's family, as the case may be, shall be
          eligible for participation in and shall receive all benefits under
          welfare benefit plans, practices, policies and programs provided by
          the Company and its affiliated

                                      -5-
<PAGE>

          companies (including, without limitation, medical, prescription,
          dental, disability, employee life, group life, accidental death and
          travel accident insurance plans and programs) to the extent applicable
          generally to other peer executives of the Company and its affiliated
          companies, but in no event shall such plans practices, policies and
          programs provide the Executive with benefits which are less favorable,
          in the aggregate, than the most favorable of such plans, practices,
          policies and programs its effect for the Executive at any time during
          the 120-day period immediately preceding the Effective Date or, if
          more favorable to the Executive, those provided generally at any time
          after the Effective Date to other peer executives of the Company and
          its affiliated companies.

               (v)    Expenses.  During the Employment Period, the Executive
                      --------
          shall be entitled to receive prompt reimbursement for all reasonable
          expenses incurred by the Executive in accordance with the most
          favorable policies, practices and procedures of the Company and its
          affiliated companies in effect for the Executive at any time during
          the 120-day period immediately preceding the Effective Date or, if
          more favorable to the Executive, as in effect generally at any time
          thereafter with respect to other peer executives of the Company and
          its affiliated companies.

               (vi)   Fringe Benefits.  During the Employment Period, the
                      ---------------
          Executive shall be entitled to fringe benefits, including, without
          limitation, tax and financial planning services, payment of club dues,
          and, if applicable, use of an automobile and payment of related
          expenses, in accordance with the most favorable plans, practices,
          programs and policies of the Company and its affiliated companies in
          effect for the Executive at any time during the 120-day period
          immediately preceding the Effective Date or, if more favorable to the
          Executive, as in effect generally at any time thereafter with respect
          to other peer executives of the Company and its affiliated companies.

               (vii)  Office and Support Staff.  During the Employment Period,
                      ------------------------
          the Executive shall be entitled to an office or offices of a size and
          with furnishings and other appointments, and to exclusive personal
          secretarial and other assistance, at least equal to the most favorable
          of the foregoing provided to the Executive by the Company and its
          affiliated companies at any time during the 120-day period immediately
          preceding the Effective Date or, if more favorable to the Executive,
          as provided generally at any time thereafter with respect to other
          peer executives of the Company and its affiliated companies.

               (viii) Vacation.  During the Employment Period, the Executive
                      --------
          shall be entitled to paid vacation in accordance with the most
          favorable plans, policies, programs and practices of the Company and
          its affiliated companies as in effect for the Executive at any time
          during the 120-day period immediately preceding the Effective Date or,
          it more favorable to the Executive, as in effect generally at any time
          thereafter with respect to other peer executives of the Company and
          its affiliated companies.

                                      -6-
<PAGE>

          5.   Termination of Employment.
               --------------------------

          a.   Death or Disability.  The Executive's employment shall terminate
               -------------------
     automatically upon the Executive's death during the Employment Period.  If
     the Company determines in good faith that the Disability of the Executive
     has occurred during the Employment Period (pursuant to the definition of
     Disability set forth below), it may give to the Executive written notice in
     accordance with Section 13(b) of this Agreement of its intention to
     terminate the Executive's employment.  In such event, the Executive's
     employment with the Company shall terminate effective on the 30th day after
     receipt of such notice by the Executive (the "Disability Effective Date"),
     provided that, within the 30 days after such receipt, the Executive shall
     not have returned to full-time performance of the Executive's duties.  For
     purposes of this Agreement, "Disability" shall mean the absence of the
     Executive from the Executive's duties with the Company on a full-time basis
     for 180 consecutive business days as a result of incapacity due to mental
     or physical illness which is determined to be total and permanent by a
     physician selected by the Company or its insurers and acceptable to the
     Executive or the Executive's legal representative.

          b.   Cause.  The Company may terminate the Executive's employment
               -----
     during the Employment Period for Cause.  For purposes of this Agreement,
     "Cause" shall mean:

               (i)   the willful and continued failure of the Executive to
          perform substantially the Executive's duties with the Company or one
          of its affiliates (other than any such failure resulting from
          incapacity due to physical or mental illness), after a written demand
          for substantial performance is delivered to the Executive by the Board
          or the Chief Executive Officer of the Company which specifically
          identifies the manner in which the Board or Chief Executive officer
          believes that the Executive has not substantially performed the
          Executive's duties, or

               (ii)  the willful engaging by the Executive in illegal conduct
          or gross misconduct which is materially and demonstrably injurious to
          the Company.

     For purposes of this provision, no act or failure to act, on the part of
     the Executive, shall be considered "willful" unless it is done, or omitted
     to be done, by the Executive in bad faith or without reasonable belief that
     the Executive's action or omission was in the best interests of the
     Company.  Any act, or failure to act, based upon authority given pursuant
     to a resolution duly adopted by the Board or upon the instructions of the
     Chief Executive Officer or a senior officer of the Company or based upon
     the advice of counsel for the Company shall he conclusively presumed to be
     done, or omitted to be done, by the Executive in good faith and in the best
     interests of the Company.  The cessation of employment of the Executive
     shall not be deemed to be for Cause unless and until there shall have been
     delivered to the Executive a copy of a resolution duly adopted by the
     affirmative vote of not less than three-quarters of the entire membership
     of the Board at a meeting of the Board called and held for such purpose
     (after reasonable notice is provided to the Executive and the Executive is
     given an

                                      -7-
<PAGE>

     opportunity, together with counsel, to be heard before the Board), finding
     that, in the good faith opinion of the Board, the Executive is guilty of
     the conduct described in subparagraph (i) or (ii) above, and specifying the
     particulars thereof in detail.

          c.   Good Reason.  The Executive's employment may be terminated by
               -----------
     the Executive during the Employment Period for Good Reason.  For purposes
     of this Section 5(c), any good faith determination of "Good Reason" made by
     the Executive shall be conclusive.  For purposes of this Agreement, "Good
     Reason" shall mean:

               (i)   the assignment to the Executive of any duties inconsistent
          in any respect with the Executive's position (including status,
          offices, titles and reporting requirements), authority, duties or
          responsibilities as contemplated by Section 4(a) of this Agreement, or
          any other diminution in such position, authority, duties or
          responsibilities, excluding for this purpose an isolated,
          insubstantial and inadvertent action not taken in bad faith and which
          is remedied by the Company promptly after receipt of notice thereof
          given by the Executive;

               (ii)  any failure by the Company to comply with any of the
          provisions of Section 4(b) of this Agreement, other than an isolated,
          insubstantial and inadvertent failure not occurring in bad faith and
          which is remedied by the Company promptly after receipt of notice
          thereof given by the Executive;

               (iii) the Company's requiring the Executive to be based at any
          office or location other than as provided in Section 4(a)(i)(B) hereof
          or the Company's requiring the Executive to travel on Company business
          to a substantially greater extent than required immediately prior to
          the Effective Date;

               (iv)  any purported termination by the Company of the
          Executive's employment otherwise than as expressly permitted by this
          Agreement; or

               (v)   any failure by the Company to comply with and satisfy
          Section 12(c) of this Agreement.

     Anything in this Agreement to the contrary notwithstanding, a termination
     by the Executive for any reason shall be deemed to be a termination for
     Good Reason for all purposes of this Agreement if such termination occurs
     (i) in the case of a Change of Control that is a Business Combination but
     not a Regulated Business Combination, during the 30-day period beginning on
     the 180/th/ day following the day on which the Business Combination is
     consummated, (ii) in the case of any other Change of Control that is not a
     Regulated Business Combination, during the 30-day period beginning on the
     180/th/ day following the Effective Date, and (iii) in the case of a Change
     of Control that is a Regulated Business Combination consummated pursuant to
     Final Regulatory Action, during the 30-day period immediately following the
     first anniversary of the Final Regulatory Action (it being understood that
     the Executive will have no rights under this paragraph in the case of a
     Change of Control that is a Regulated Business Combination denied by the
     Agency).

                                      -8-
<PAGE>

          d.   Regulated Business Combination.  Notwithstanding the foregoing,
               ------------------------------
     in the case of a Change of Control that is a Regulated Business
     Combination, then for all purposes of this Agreement, during that portion
     of the Employment Period prior to Final Regulatory Action, the Executive
     may not exercise his rights to terminate his employment under this
     Agreement for "Good Reason."  The Executive may only terminate his
     employment under this Agreement if he is "Constructively Terminated" by the
     Company.  Moreover, except to the extent expressly set forth in the
     definition of "Constructive Termination," the Executive shall have no
     remedy for any breach by the Company of the provisions of Section 4;
     provided, however, that any failure of the Company to comply in any
     --------  -------
     material respect with the provisions of Section 4 shall create a rebuttable
     presumption that a Constructive Termination has occurred.

     For purposes of this Agreement, a "Constructive Termination" shall mean:

               (i)   substantial diminution of the Executive's duties or
          responsibilities as contemplated by Section 4(a) of this Agreement,
          excluding for this purpose an isolated, insubstantial and inadvertent
          action not taken in bad faith and which is remedied by the Company
          promptly after receipt of notice thereof given by the Executive;

               (ii)  a reduction in the Executive's Annual Base Salary;

               (iii) a failure by the Company to comply with Section 4(b)(ii)
          regarding the Annual Bonus;

               (iv)  a reduction in the Executive's other incentive
          opportunities, benefits or perquisites described in Section 4(b)
          unless the Executive's peer executives suffer a comparable reduction;

               (v)   the Company's requiring the Executive to be based at any
          office or location other than as provided in Section 4(a)(i)(B)
          hereof; or

               (vi)  any purported termination by the Company of the
          Executive's employment otherwise than for Cause.

  During that portion of the Employment Period after Final Regulatory Action,
  the Executive may terminate his Employment under this Agreement for "Good
  Reason."

          e.   Notice of Termination.  Any termination by the Company for
               ---------------------
     Cause, or by the Executive for Good Reason or Constructive Termination,
     shall be communicated by Notice of Termination to the other party hereto
     given in accordance with Section 13(b) of this Agreement.  For purposes of
     this Agreement, a "Notice of Termination" means a written notice which (i)
     indicates the specific termination provision in this Agreement relied upon,
     (ii) to the extent applicable, sets forth in reasonable detail the facts
     and circumstances claimed to provide a basis for termination of the
     Executive's employment under the provision so indicated, and (iii) if the
     Date of Termination (as defined below) is other than the date of receipt of
     such notice, specifies the termination date (which date shall be not more
     than thirty days after the giving of such notice).  The

                                      -9-
<PAGE>

     failure by the Executive or the Company to set forth in the Notice of
     Termination any fact or circumstance which contributes to a showing of Good
     Reason, Cause or Constructive Termination shall not waive any right of the
     Executive or the Company, respectively, hereunder or preclude the Executive
     or the Company, respectively, from asserting such fact or circumstance in
     enforcing the Executive's or the Company's rights hereunder.

          f.   Date of Termination.  "Date of Termination" means (i) if the
               -------------------
     Executive's employment is terminated by the Company for Cause, or by the
     Executive for Good Reason or Constructive Termination, the date of receipt
     of the Notice of Termination or any later date specified therein, as the
     case may be, (ii) if the Executive's employment is terminated by the
     Company other than for Cause or Disability, the Date of Termination shall
     be the date on which the Company notifies the Executive of such termination
     and (iii) if the Executive's employment is terminated by reason of death or
     Disability, the Date of Termination shall be the date of death of the
     Executive or the Disability Effective Date, as the case may be.

          6.   Obligations of the Company upon Termination.
               --------------------------------------------

          a.   Good Reason or Constructive Termination: Other Than for Cause,
               --------------------------------------------------------------
     Death or Disability.  If, during the Employment Period, the Company shall
     -------------------
     terminate the Executive's employment other than for Cause or Disability or
     the Executive shall terminate employment for Good Reason or Constructive
     Termination, then the Company shall provide the following payments and
     benefits:

               (i)  The Company shall pay to the Executive in a lump sum in cash
          within 30 days after the Date of Termination the aggregate of the
          following amounts:

                    A.   the sum of (1) the Executive's Annual Base Salary
               through the Date of Termination to the extent not theretofore
               paid, (2) the product of (x) the higher of (I) the Recent Annual
               Bonus and (II) the Executive's most recently established target
               Annual Bonus (annualized for any fiscal year consisting of less
               than twelve full months or during which the Executive was
               employed for less than twelve full months) (such higher amount
               being referred to as the "Highest Annual Bonus") and (y) a
               fraction, the numerator of which is the number of days in the
               current fiscal year through the Date of Termination, and the
               denominator of which is 365 and (3) any compensation previously
               deferred by the Executive (together with any accrued interest or
               earnings thereon) and any accrued vacation pay, in each case to
               the extent not theretofore paid (the sum of the amounts described
               in clauses (1), (2), and (3) shall be hereinafter referred to as
               the "Accrued Obligations"); and

                    B.   the amount equal to the product of (1) three and (2)
               the sum of (x) the Executive's Annual Base Salary and (y) the
               Highest Annual Bonus; and

                                      -10-
<PAGE>

                    C.   an amount equal to the excess of (a) the actuarial
               equivalent of the benefit under the Company's qualified defined
               benefit retirement plan (the "Retirement Plan") (utilizing
               actuarial assumptions no less favorable to the Executive than
               those in effect under the Company's Retirement Plan immediately
               prior to the Effective Date), and any excess or supplemental
               retirement plan in which the Executive participates (together,
               the "SERP") which the Executive would receive if the Executive's
               employment continued for three years after the Date of
               Termination assuming for this purpose that all accrued benefits
               are fully vested, and, assuming that the Executive's compensation
               in each of the three years is that required by Section 4(b)(i)
               and Section 4(b)(ii), over (b) the actuarial equivalent of the
               Executive's actual benefit (paid or payable), if any, under the
               Retirement Plan and the SERP as of the Date of Termination;

          provided, that if the Executive shall have previously so elected in
          --------
          accordance with any nonqualified deferred compensation plan of the
          Company in which the Executive is eligible to participate, some or all
          of such cash payments may be deferred under such plan.

               (ii)   for three years after the Executive's Date of Termination,
          or such longer period as may be provided by the terms of the
          appropriate plan, program, practice or policy, the Company shall
          continue benefits to the Executive and/or the Executive's family at
          least equal to those which would have been provided to them in
          accordance with the plans, programs, practices and policies described
          in Section 4(b)(iv) of this Agreement if the Executive's employment
          had not been terminated or, if more favorable to the Executive, as in
          effect generally at any time thereafter with respect to other peer
          executives of the Company and its affiliated companies and their
          families; provided, however, that if the Executive becomes reemployed
                    --------  -------
          with another employer and is eligible to receive medical or other
          welfare benefits under another employer provided plan, the medical and
          other welfare benefits described herein shall be secondary to those
          provided under such other plan during such applicable period of
          eligibility; and provided, further, that the period during which the
                           --------  -------
          Executive and his family are eligible for health continuation coverage
          under Section 4980B of the Code by reason of the Executive's
          termination of employment shall be determined in accordance with the
          same principles as are applicable under the Company's general
          severance plan or policy.  For purposes of determining eligibility
          (but not the time of commencement of benefits) of the Executive for
          retiree benefits pursuant to such plans, practices, programs and
          policies, the Executive shall be considered to have remained employed
          until three years after the Date of Termination and to have retired on
          the last day of such period.

               (iii)  The Company shall, at its sole expense as incurred,
          provide the Executive with outplacement services the scope and
          provider of which shall be selected by the Executive in his sole
          discretion, but at a cost not in excess of $20,000.

                                      -11-
<PAGE>

               (iv)  The provisions of this Section 6.a.(iv) shall apply with
          respect to each option to acquire stock of the Company and/or its
          affiliated companies, whether vested or unvested, that has been
          granted to the Executive before the Effective Date, remains
          outstanding immediately before the Date of Termination, and
          terminates, expires, or is forfeited without having been exercised (an
          "Unexercised Option"); provided, that this Section 6.a.(iv) shall not
                                 --------
          be applicable if the Change of Control transaction referred to in
          Section 1.a. hereof is intended to be eligible for pooling-of-
          interests accounting under APB No. 16, and would, but for this Section
          6.a.(iv), be eligible for such accounting treatment.  The Company
          shall pay to the Executive, upon the termination, expiration or
          forfeiture of an Unexercised Option, a cash lump sum equal to the
          value of such Unexercised Option, determined as of the day before the
          Date of Termination, using the Black-Scholes method of valuation,
          determined based upon the terms and conditions that would have
          governed such Unexercised Option if the Executive's employment had not
          terminated.

               (v)   To the extent not theretofore paid or provided, the Company
          shall timely pay or provide to the Executive any other amounts or
          benefits required to be paid or provided or which the Executive is
          eligible to receive under any plan, program, policy or practice or
          contract or agreement of the Company and its affiliated companies,
          including earned but unpaid stock and similar compensation (such other
          amounts and benefits shall be hereinafter referred to as the "Other
          Benefits").

          b.   Death.  If the Executive's employment is terminated by reason of
               -----
     the Executive's death during the Employment Period, this Agreement shall
     terminate without further obligations to the Executive's legal
     representatives under this Agreement, other than for payment of Accrued
     Obligations and the timely payment or provision of Other Benefits.  Accrued
     Obligations shall be paid to the Executive's estate or beneficiary, as
     applicable, in a lump sum in cash within 30 days of the Date of
     Termination.  With respect to the provision of Other Benefits, the term
     Other Benefits as utilized in this Section 6(b) shall include, without
     limitation, and the Executive's estate and/or beneficiaries shall be
     entitled to receive, benefits at least equal to the most favorable benefits
     provided by the Company and affiliated companies to the estates and
     beneficiaries of peer executives of the Company and such affiliated
     companies under such plans, programs, practices and policies relating to
     death benefits, if any, as in effect with respect to other peer executives
     and their beneficiaries at any time during the 120-day period immediately
     preceding the Effective Date or, if more favorable to the Executive's
     estate and/or the Executive's beneficiaries, as in effect on the date of
     the Executive's death with respect to other peer executives of the Company
     and its affiliated companies and their beneficiaries.

          c.   Disability.  If the Executive's employment is terminated by
               ----------
     reason of the Executive's Disability during the Employment Period, this
     Agreement shall terminate without further obligations to the Executive,
     other than for payment of Accrued Obligations and the timely payment or
     provision of Other Benefits. Accrued Obligations shall be paid to the
     Executive in a lump sum in cash within 30 days of the

                                      -12-
<PAGE>

     Date of Termination. With respect to the provision of Other Benefits, the
     term Other Benefits as utilized in this Section 6(c) shall include, and the
     Executive shall be entitled after the Disability Effective Date to receive,
     disability and other benefits at least equal to the most favorable of those
     generally provided by the Company and its affiliated companies to disabled
     executives and/or their families in accordance with such plans, programs,
     practices and policies relating to disability, if any, as in effect
     generally with respect to other peer executives and their families at any
     time during the 120-day period immediately preceding the Effective Date or,
     if more favorable to the Executive and/or the Executive's family, as in
     effect at any time thereafter generally with respect to other peer
     executives of the Company and its affiliated companies and their families.

          d.   Cause; Other than for Good Reason or Constructive Termination.
               -------------------------------------------------------------
     If the Executive's employment shall be terminated for Cause during the
     Employment Period, this Agreement shall terminate without further
     obligations to the Executive other than the obligation to pay to the
     Executive (x) his Annual Base Salary through the Date of Termination, (y)
     the amount of any compensation previously deferred by the Executive, and
     (z) Other Benefits, in each case to the extent theretofore unpaid. If the
     Executive voluntarily terminates employment during the Employment Period,
     excluding a termination for Good Reason or Constructive Termination, this
     Agreement shall terminate without further obligations to the Executive,
     other than for Accrued Obligations and the timely payment or provision of
     Other Benefits. In such case, all Accrued Obligations shall be paid to the
     Executive in a lump sum in cash within 30 days of the Date of Termination.

          7.   Non-exclusivity of Rights.  Nothing in this Agreement shall
               --------------------------
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies for which the Executive may qualify, nor, subject to Section 13(f),
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies; provided, that any amounts payable to the Executive pursuant to
           --------
Section 6(a) hereof shall not be eligible for deferral by the Executive.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

          8.   Full Settlement.  The Company's obligation to make the payments
               ----------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest regardless of the outcome thereof by the Company, the Executive or
others of the validity or enforceability of, or

                                      -13-
<PAGE>

liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment, at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code");
provided, that the Executive shall repay to the Company all such amounts paid by
the Company, and shall not be entitled to any further payments hereunder, in
connection with a contest originated by the Executive if the trier of fact in
such contest determines that the Executive's claim was not brought in good faith
or was frivolous.

          9.   Certain Additional Payments by the Company.
               -------------------------------------------

          a.   Anything in this Agreement to the contrary notwithstanding and
     except as set forth below, in the event it shall be determined that any
     payment or distribution by the Company to or for the benefit of the
     Executive (whether paid or payable or distributed or distributable pursuant
     to the terms of this Agreement or otherwise, but determined without regard
     to any additional payments required under this Section 9) (a "Payment")
     would be subject to the excise tax imposed by Section 4999 of the Code or
     any interest or penalties are incurred by the Executive with respect to
     such excise tax (such excise tax, together with any such interest and
     penalties, are hereinafter collectively referred to as the "Excise Tax"),
     then the Executive shall be entitled to receive an additional payment (a
     "Gross-Up Payment") in an amount such that after payment by the Executive
     of all taxes (including any interest or penalties imposed with respect to
     such taxes), including, without limitation, any income taxes (and any
     interest and penalties imposed with respect thereto) and Excise Tax imposed
     upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
     Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding
     the foregoing provisions of this Section 9(a), if it shall be determined
     that the Executive is entitled to a Gross-Up Payment, but that the
     Executive, after taking into account the Payments and the Gross-Up Payment,
     would not receive a net after-tax benefit of at least $50,000 (taking into
     account both income taxes and any Excise Tax) as compared to the net after-
     tax proceeds to the Executive resulting from an elimination of the Gross-Up
     Payment and a reduction of the Payments, in the aggregate, to an amount
     (the "Reduced Amount") such that the receipt of Payments would not give
     rise to any Excise Tax, then no Gross-Up Payment shall be made to the
     Executive and the Payments, in the aggregate, shall be reduced to the
     Reduced Amount.

          b.   Subject to the provisions of Section 9(c), all determinations
     required to be made under this Section 9, including whether and when a
     Gross-Up Payment is required and the amount of such Gross-Up Payment and
     the assumptions to be utilized in arriving at such determination, shall be
     made by Ernst & Young or such other certified public accounting firm as may
     be designated by the Executive (the "Accounting Firm") which shall provide
     detailed supporting calculations both to the Company and the Executive
     within 15 business days of the receipt of notice from the Executive that
     there has been a Payment, or such earlier time as is requested by the
     Company. In the event that the Accounting Firm is serving as accountant or
     auditor for the individual, entity or group effecting the Change of
     Control, the Executive shall appoint another nationally recognized
     accounting firm to make the determinations

                                      -14-
<PAGE>

     required hereunder (which accounting firm shall then be referred to as the
     Accounting Firm hereunder). All fees and expenses of the Accounting Firm
     shall be borne solely by the Company. Any Gross-Up Payment, as determined
     pursuant to this Section 9, shall be paid by the Company to the Executive
     within five days of the receipt of the Accounting Firm's determination. Any
     determination by the Accounting Firm shall be binding upon the Company and
     the Executive. As a result of the uncertainty in the application of Section
     4999 of the Code at the time of the initial determination by the Accounting
     Firm hereunder, it is possible that Gross-Up Payments which will not have
     been made by the Company should have been made ("Underpayment"), consistent
     with the calculations required to be made hereunder. In the event that the
     Company exhausts its remedies pursuant to Section 9(c) and the Executive
     thereafter is required to make a payment of any Excise Tax, the Accounting
     Firm shall determine the amount of the Underpayment that has occurred and
     any such Underpayment shall be promptly paid by the Company to or for the
     benefit of the Executive.

          c.   The Executive shall notify the Company in writing of any claim by
     the Internal Revenue Service that, if successful, would require the payment
     by the Company of the Gross-Up Payment. Such notification shall be given as
     soon as practicable but no later than ten business days after the Executive
     is informed in writing of such claim and shall apprise the Company of the
     nature of such claim and the date on which such claim is requested to be
     paid. The Executive shall not pay such claim prior to the expiration of the
     30-day period following the date on which it gives such notice to the
     Company (or such shorter period ending on the date that any payment of
     taxes with respect to such claim is due). If the Company notifies the
     Executive in writing prior to the expiration of such period that it desires
     to contest such claim, the Executive shall:

               (i)   give the Company any information reasonably requested by
          the Company relating to such claim,

               (ii)  take such action in connection with contesting such claim
          as the Company shall reasonably request in writing from time to time,
          including, without limitation, accepting legal representation with
          respect to such claim by an attorney reasonably selected by the
          Company,

               (iii) cooperate with the Company in good faith in order
          effectively to contest such claim, and

               (iv)  permit the Company to participate in any proceedings
          relating to such claim;

     provided, however, that the Company shall bear and pay directly all costs
     --------  -------
     and expenses (including additional interest and penalties) incurred in
     connection with such contest and shall indemnify and hold the Executive
     harmless, on an after-tax basis, for any Excise Tax or income tax
     (including interest and penalties with respect thereto) imposed as a result
     of such representation and payment of costs and expenses.  Without
     limitation on the foregoing provisions of this Section 9(c), the Company
     shall control all proceedings taken in connection with such contest and, at
     its sole option, may pursue or

                                      -15-
<PAGE>

     forgo any and all administrative appeals, proceedings, hearings and
     conferences with the taxing authority in respect of such claim and may, at
     its sole option, either direct the Executive to pay the tax claimed and sue
     for a refund or contest the claim in any permissible manner, and the
     Executive agrees to prosecute such contest to a determination before any
     administrative tribunal, in a court of initial jurisdiction and in one or
     more appellate courts, as the Company shall determine; provided, however,
                                                            --------  -------
     that if the Company directs the Executive to pay such claim and sue for a
     refund, the Company shall advance the amount of such payment to the
     Executive, on an interest-free basis and shall indemnify and hold the
     Executive harmless, on an after-tax basis, from any Excise Tax or income
     tax (including interest or penalties with respect thereto) imposed with
     respect to such advance or with respect to any imputed income with respect
     to such advance; and further provided that any extension of the statute of
     limitations relating to payment of taxes for the taxable year of the
     Executive with respect to which such contested amount is claimed to be due
     is limited solely to such contested amount. Furthermore, the Company's
     control of the contest shall be limited to issues with respect to which a
     Gross-Up Payment would be payable hereunder and the Executive shall be
     entitled to settle or contest, as the case may be, any other issue raised
     by the Internal Revenue Service or any other taxing authority.

          d.   If, after the receipt by the Executive of an amount advanced by
     the Company pursuant to Section 9(c), the Executive becomes entitled to
     receive any refund with respect to such claim, the Executive shall (subject
     to the Company's complying with the requirements of Section 9(c)) promptly
     pay to the Company the amount of such refund (together with any interest
     paid or credited thereon after taxes applicable thereto).  If, after the
     receipt by the Executive of an amount advanced by the Company pursuant to
     Section 9(c), a determination is made that the Executive shall not be
     entitled to any refund with respect to such claim and the Company does not
     notify the Executive in writing of its intent to contest such denial of
     refund prior to the expiration of 30 days after such determination, then
     such advance shall be forgiven and shall not be required to be repaid and
     the amount of such advance shall offset, to the extent thereof, the amount
     of Gross-Up Payment required to be paid.

          10.  Confidential Information.  The Executive shall hold in a
               ------------------------
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.

          11.  Arbitration.  The Company and the Executive agree that all
               ------------
disputes, controversies and claims arising between them concerning the subject
matter of this Agreement,

                                      -16-
<PAGE>

other than Sections 9 and 10 hereof, shall be settled by arbitration in
accordance with the rules and procedures of the American Arbitration Association
of Virginia in Richmond, Virginia in accordance with the laws of the
Commonwealth of Virginia. If the parties to any such dispute, controversy or
claim are unable to agree upon an arbitrator or arbitrators, then three
arbitrators or two arbitrators and one umpire shall be appointed by the American
Arbitration Association of Virginia, as it may determine, in accordance with the
rules and practices, then obtaining, of such association. If the parties to any
such dispute, controversy or claim shall agree upon two arbitrators, but such
parties or such arbitrators shall be unable to agree upon a third arbitrator or
upon an umpire, then such third arbitrator or umpire shall be appointed as
aforesaid by the said American Arbitration Association. Any arbitration pursuant
to this Section shall be final and binding on the parties, and judgment upon the
award rendered in any such arbitration may be entered in any court, state or
federal, having jurisdiction. The parties expressly acknowledge that they are
waiving their rights to seek remedies in court, including without limitation the
right (if any) to a jury trial.

          12.   Successors.
                -----------

          a.    This Agreement is personal to the Executive and without the
     prior written consent of the Company shall not be assignable by the
     Executive otherwise than by will or the laws of descent and distribution.
     This Agreement shall inure to the benefit of and be enforceable by the
     Executive's legal representatives.

          b.    This Agreement shall inure to the benefit of and be binding upon
     the Company and its successors and assigns.

          c.    The Company will require any successor (whether direct or
     indirect, by purchase, merger, consolidation or otherwise) to all or
     substantially all of the business and/or assets of the Company to assume
     expressly and agree to perform this Agreement in the same manner and to the
     same extent that the Company would be required to perform it if no such
     succession had taken place.  As used in this Agreement, "Company" shall
     mean the Company as hereinbefore defined and any successor to its business
     and/or assets as aforesaid which assumes and agrees to perform this
     Agreement by operation of law, or otherwise.

          13.   Miscellaneous.
                --------------

          a.    This Agreement shall be governed by and construed in accordance
     with the laws of the Commonwealth of Virginia, without reference to
     principles of conflict of laws.  The captions of this Agreement are not
     part of the provisions hereof and shall have no force or effect.  This
     Agreement may not be amended or modified otherwise than by a written
     agreement executed by the parties hereto or their respective successors and
     legal representatives; provided, that the Company may unilaterally amend
                            --------
     Exhibit A hereto from time to time, but only to the extent it determines,
     upon the advice of counsel, to be necessary to comply with the legal
     requirements to obtain a valid release.

                                      -17-
<PAGE>

          b.   All notices and other communications hereunder shall be in
     writing and shall be given by hand delivery to the other party or by
     registered or certified mail, return receipt requested, postage prepaid,
     addressed as follows:

          If to the Executive:
          -------------------

          If to the Company:
          -----------------

          CSX Corporation
          One James Center
          Richmond, Virginia 23219

          Attention: General Counsel

     or to such other address as either party shall have furnished to the other
     in writing in accordance herewith.  Notice and communications shall be
     effective when actually received by the addressee.

          c.   The invalidity or unenforceability of any provision of this
     Agreement shall not affect the validity or enforceability of any other
     provision of this Agreement.

          d.   The Company may withhold from any amounts payable under this
     Agreement such Federal, state, local or foreign taxes as shall be required
     to be withheld pursuant to any applicable law or regulation.

          e.   The Executive's or the Company's failure to insist upon strict
     compliance with any provision of this Agreement or the failure to assert
     any right the Executive or the Company may have hereunder, including,
     without limitation, the right of the Executive to terminate employment for
     Good Reason or Constructive Termination pursuant to Section 5 of this
     Agreement, shall not be deemed to be a waiver of such provision or right or
     any other provision or right of this Agreement.

          f.   The Executive and the Company acknowledge that, except as may
     otherwise be provided under any other written agreement between the
     Executive and the Company, the employment of the Executive by the Company
     is "at will" and, subject to Section 1(a) hereof, prior to the Effective
     Date, the Executive's employment may be terminated by either the Executive
     or the Company at any time prior to the Effective Date, in which case the
     Executive shall have no further rights under this Agreement.  From and
     after the Effective Date this Agreement shall supersede any other agreement
     between the parties with respect to the subject matter hereof.

          14.  Waiver and Release with Respect to Prior Agreements.  In
               ----------------------------------------------------
exchange for the compensation and benefits promised herein, the Executive hereby
waives and releases the Company and its affiliates from any and all claims he
ever had or may have arising from or in

                                      -18-
<PAGE>

connection with the letter agreement dated November 14, 1988, as the same may be
amended to the date hereof, between the Company and the Executive and the
Employment Agreement dated _____________, 19__, between the Company and the
Executive (together, the "Prior Agreements"), and the Executive acknowledges
that this Agreement supersedes and renders null and void in all respects the
Prior Agreements.

          15.  Other Agreements Unaffected.  Except for the Prior Agreement,
               ----------------------------
or as otherwise expressly provided herein, this Agreement shall have no effect
on any other agreement between the Executive and the Company or any of its
affiliates, and any such agreement is ratified and confirmed in all respects and
shall remain in full force and effect in accordance with its terms.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                              __________________________________

                              CSX CORPORATION

                              By________________________________

                                      -19-

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