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                                                                    EXHIBIT 10.5


                                                             Adopted June_, 1998

                                               Amended effective January 1, 1999





                              RAILWORKS CORPORATION

                            1998 INCENTIVE STOCK PLAN



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                                      SS. 1

                             BACKGROUND AND PURPOSE

                  The purpose of this Plan is to promote the interest of
RailWorks by authorizing the Committee to grant Options to Key Employees,
Consultants and Directors and to grant Restricted Stock to Key Employees in
order (1) to attract and retain Key Employees, Consultants and Directors, (2) to
provide an additional incentive to each Key Employee, Consultants or Director to
work to increase the value of Stock and (3) to provide each Key Employee,
Consultants or Director with a stake in the future of RailWorks which
corresponds to the stake of each of RailWorks' stockholders.

                                      SS. 2

                                   DEFINITIONS

                  Each term set forth in this ss. 2 shall have the meaning set
forth opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular.

                  2.1 Affiliate -- means any organization (other than a
Subsidiary) that would be treated as under common control with RailWorks under
ss. 414(c) of the Code if "50 percent" were substituted for "80 percent" in the
income tax regulations under ss. 414(c) of the Code.

                  2.2 Board -- means the Board of Directors of RailWorks.

                  2.3 Change in Control -- means (1) a "change in control" of
RailWorks of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A for proxy statement filed under Section 14(a) of the
Securities Exchange Act of 1934, as amended ("1934 Act"), (2) a "person" (as
that term is used in 14(d)(2) of the 1934 Act) becomes the beneficial owner (as
defined


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in Rule 13d-3 under the 1934 Act) directly or indirectly of securities
representing 20% or more of the combined voting power for election of directors
of the then outstanding securities of RailWorks, (3) the individuals who at the
beginning of any period of two consecutive years or less constitute the Board
cease for any reason during such period to constitute at least a majority of the
Board, unless the election or nomination for election of each new member of the
Board was approved by vote of at least two-thirds of the members of the Board
then still in office who were members of the Board at the beginning of such
period, (4) the stockholders of RailWorks approve any dissolution or liquidation
of RailWorks or any sale or disposition of 50% or more of the assets or business
of RailWorks, (5) the stockholders of RailWorks approve a merger or
consolidation to which RailWorks is a party (other than a merger or
consolidation with a wholly-owned subsidiary of RailWorks) or a share exchange
in which RailWorks shall exchange RailWorks shares for shares of another
corporation as a result of which the persons who were stockholders of RailWorks
immediately before the effective date of such merger, consolidation or share
exchange shall have beneficial ownership of less than 50% of the combined voting
power for election of directors of the surviving corporation following the
effective date of such merger, consolidation or share exchange.

                  2.4 Code -- means the Internal Revenue Code of 1986, as
amended.

                  2.5 Committee -- means a committee of the Board which shall
have at least 2 members, each of whom shall be appointed by and shall serve at
the pleasure of the Board and shall come within the definition of a
"non-employee director" under Rule 16b-3 and an "outside director" under
ss. 162(m) of the Code.


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                  2.6 Director -- means any member of the Board who is not an
employee of RailWorks or a Parent or Subsidiary or "affiliate"(as such term is
defined in Rule 405 of the 1933 Act) of RailWorks.

                  2.7 Fair Market Value -- means (1) the closing price on any
date for a share of Stock as reported by The Wall Street Journal under the
Nasdaq Stock Market's quotation system (or under any successor quotation system)
or, if Stock is no longer traded on the Nasdaq Stock Market, under the quotation
system under which such closing price is reported or, if The Wall Street Journal
no longer reports such closing price, such closing price as reported by a
newspaper or trade journal selected by the Committee or, if no such closing
price is available on such date, (2) such closing price as so reported in
accordance with ss. 2.7(1) for the immediately preceding business day, or, if no
newspaper or trade journal reports such closing price or if no such price
quotation is available, (3) the price which the Committee acting in good faith
determines through any reasonable valuation method that a share of Stock might
change hands between a willing buyer and a willing seller, neither being under
any compulsion to buy or to sell and both having reasonable knowledge of the
relevant facts.

                  2.8 ISO -- means an option granted under this Plan to purchase
Stock which is intended to satisfy the requirements of ss. 422 of the Code.

                  2.9 Key Employee -- means an employee of RailWorks or any
Subsidiary or Parent or Affiliate designated by the Committee who, in the
judgment of the Committee acting in its absolute discretion, is key directly or
indirectly to the success of RailWorks.

                  2.10 1933 Act -- means the Securities Act of 1933, as amended.

                  2.11 1934 Act -- means the Securities Exchange Act of 1934, as
amended.


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                  2.12 Non-ISO -- means an option granted under this Plan to
purchase Stock which is intended to fail to satisfy the requirements of ss. 422
of the Code.

                  2.13 Option -- means an ISO or a Non-ISO which is granted
under ss. 7 of this Plan.

                  2.14 Option Certificate -- means the written certificate which
sets forth the terms and conditions of an Option granted to a Key Employee,
Consultant or Director under this Plan.

                  2.15 Option Price -- means the price which shall be paid to
purchase one share of Stock upon the exercise of an Option granted under this
Plan.

                  2.16 Parent -- means any corporation which is a parent of
RailWorks within the meaning of ss. 424(e) of the Code.

                  2.17 Plan -- means this RailWorks Corporation 1998 Incentive
Stock Plan as effective as of the date adopted by the Board in 1998 and as
amended from time to time thereafter.

                  2.18 RailWorks -- means RailWorks Corporation and any
successor RailWorks Corporation.

                  2.19 Restricted Stock -- means Stock granted to a Key Employee
under ss.8 of this Plan.

                  2.20 Restricted Stock Certificate -- means the written
certificate which sets forth the terms and conditions of a Restricted Stock
grant to a Key Employee.

                  2.21 Rule 16b-3 -- means the exemption under Rule 16b-3 to
Section 16(b) of the 1934 Act or any successor to such rule.

                  2.22 Stock -- means $.01 par value common stock of RailWorks.

                  2.23 Subsidiary -- means a corporation which is a subsidiary
corporation (within the meaning of ss. 424(f) of the Code) of RailWorks.


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                  2.24 Ten Percent Stockholder -- means a person who owns (after
taking into account the attribution rules of ss. 424(d) of the Code) more than
ten percent of the total combined voting power of all classes of stock of either
RailWorks, a Subsidiary or Parent.

                  2.25 Consultant -- means a natural person who is not an
employee of RailWorks, a Subsidiary or a Parent and who provides bona fide
services to RailWorks, a Subsidiary or a Parent except where such services (i)
are in connection with the offer or sale of securities in a capital-raising
transaction; (ii) directly or indirectly promote or maintain a market for
RailWork's securities or the securities of a Parent or Subsidiary; or (iii)
relate to investor relations or shareholder communications.

                                      SS. 3
                           SHARES RESERVED UNDER PLAN

                  There shall be 2,000,000 shares of Stock reserved for use
under this Plan. Such shares of Stock shall be reserved to the extent that
RailWorks deems appropriate from authorized but unissued shares of Stock and
from shares of Stock which have been reacquired by RailWorks. Any shares of
Stock subject to an Option which remain unissued after the cancellation,
expiration or exchange of such Option or any shares of Restricted Stock which
are forfeited or canceled thereafter shall again become available for use under
this Plan, but any shares of Stock used to exercise an Option or to satisfy a
withholding obligation shall not again become available for use under this Plan.


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                                      SS. 4

                                 EFFECTIVE DATE

                  The effective date of this Plan shall be the date of its
adoption by the Board, provided the stockholders of RailWorks (acting at a duly
called meeting of such stockholders) approve such adoption within twelve (12)
months of such effective date. Any Option or Restricted Stock granted before
such stockholder approval automatically shall be granted subject to such
approval.
                                      SS. 5

                                    COMMITTEE

                  This Plan shall be administered by the Committee. The
Committee acting in its absolute discretion shall exercise such powers and take
such action as expressly called for under this Plan and, further, the Committee
shall have the power to interpret this Plan and (subject to ss. 13, ss. 14 and
ss. 15 and Rule 16b-3) to take such other action in the administration and
operation of this Plan as the Committee deems equitable under the circumstances,
which action shall be binding on RailWorks, on each affected Key Employee,
Consultant or Director and on each other person directly or indirectly affected
by such action.

                                      SS. 6

                        ELIGIBILITY AND ANNUAL GRANT CAPS

                  Only Key Employees who are employed by RailWorks or a
Subsidiary or Parent shall be eligible for the grant of ISOs under this Plan,
and Key Employees, Consultants and Directors shall be eligible for the grant of
Non-ISOs under this Plan. Only Key Employees shall be eligible for the grant of
Restricted Stock under this Plan. No Key Employee, with the exception of any
person who was not previously employed by RailWorks or a Subsidiary or Parent
and whose grant is made in


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connection with such new employment, in any calendar year shall be granted an
Option to purchase more than 100,000 shares of Stock.

                                      SS. 7

                                     OPTIONS

                  7.1 Committee Action. The Committee acting in its absolute
discretion shall have the right to grant Options to Key Employees under this
Plan from time to time to purchase shares of Stock; provided, however, that the
Committee shall not grant new Options in exchange for the cancellation of
outstanding Options which have a higher Option Price than the new Options. Each
grant of an Option to a Key Employee shall be evidenced by an Option
Certificate, and each Option Certificate shall set forth whether the Option is
an ISO or a Non-ISO and shall set forth such other terms and conditions of such
grant as the Committee acting in its absolute discretion deems consistent with
the terms of this Plan; however, if the Committee grants an ISO and a Non-ISO to
a Key Employee on the same date, the right of the Key Employee to exercise the
ISO shall not be conditioned on his or her failure to exercise the Non-ISO. The
Committee shall have the right to grant a Non-ISO and Restricted Stock to a Key
Employee at the same time and to condition the exercise of the Non-ISO on the
forfeiture of the Restricted Stock grant.

                  7.2 $100,000 Limit. To the extent that the aggregate Fair
Market Value of Stock (determined as of the date the ISO is granted) with
respect to which ISOs first become exercisable in any calendar year exceeds
$100,000, such Options shall be treated as Non -ISO's. The Fair Market Value of
Stock subject to any other option (determined as of the date such option was
granted) which (1) satisfies the requirements of ss. 422 of the Code and (2) is
granted to a Key Employee under a plan maintained by RailWorks, a Subsidiary or
a Parent shall be treated (for purposes of this $100,000

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limitation) as if granted under this Plan. The Committee shall interpret and
administer the limitation set forth in this ss. 7.2 in accordance with ss.
422(d) of the Code, and the Committee shall treat this ss. 7.2 as in effect only
for those periods for which ss. 422(d) of the Code is in effect.

                  7.3 Grants to Consultants and Directors. The Board acting in
its absolute discretion shall have the right to grant Options to Consultants or
Directors under this Plan from time to time to purchase shares of Stock;
provided, however, that the Board shall not grant new Options in exchange for
the cancellation of outstanding Options which have a higher Option Price than
the new Options. Each grant of an Option to a Consultant or Director shall be
evidenced by an Option Certificate, and each Option Certificate shall set forth
such terms and conditions of such grant as the Board acting in its absolute
discretion deems consistent with the terms of this Plan. Each Non-ISO granted
under this Plan to a Director shall be evidenced by an Option Certificate, shall
expire 90 days after a Director ceases to serve as such or, if earlier, on the
tenth anniversary of the date of the grant of the Non-ISO. Each Non-ISO granted
to a Consultant under this Plan shall be evidenced by an Option Certificate and
shall expire on such date (not to be later than the tenth anniversary of the
date of the grant of the Non-ISO) as the Committee shall determine in its action
making such grant. A Non-ISO granted to a Consultant or Director under this ss.
7.3 shall conform in all other respects to the terms and conditions of a Non-ISO
under this Plan, and no Consultant or Director shall be eligible to receive an
Option under this Plan except as provided in this ss. 7.3. A grant of a Non-ISO
to a Director under this ss. 7.3 is intended to be granted in a manner which
continues to allow such Director to be a "non-employee director's within the
meaning of Rule 16b-3 and an "outside directions within the meaning of ss.
162(m) of the Code, and all Non-ISOs granted to Directors under this ss. 7.3
shall be construed to effect such intent.


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                  7.4 Option Price. The Option Price for each share of Stock
subject to an Option which is granted to a Key Employee, Consultant or a
Director shall be no less than the Fair Market Value of a share of Stock on the
date the Option is granted; provided, however, if the Option is an ISO granted
to a Key Employee who is a Ten Percent Stockholder, the Option Price for each
share of Stock subject to such ISO shall be no less than 110% of the Fair Market
Value of a share of Stock on the date such ISO is granted. The Option Price
shall be payable in full upon the exercise of any Option, and at the discretion
of the Committee an Option Certificate can provide for the payment of the Option
Price either in cash, by check or in Stock which has been held for at least six
months and which is acceptable to the Committee or in any combination of cash,
check and such Stock. The Option Price in addition may be paid through any
broker facilitated cashes exercise procedure acceptable to the Committee or its
delegate. Any payment made in Stock shall be treated as equal to the Fair Market
Value of such Stock on the date the properly endorsed certificate for such Stock
is delivered to the Committee or its delegate.

                  7.5 Exercise Period. Each Option granted under this Plan to a
Key Employee shall be exercisable whole or in part at such time or times as set
forth in the related Option Certificate, but no Option Certificate shall make an
Option granted to a Key Employee exercisable after the earlier of:

                  (1) the date such Option is exercised in full, or


                  (2) the date which is the fifth anniversary of the date the
                      Option is granted, if the Option is an ISO and the Key
                      Employee is a Ten Percent Stockholder an the date the
                      Option is granted, or

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                  (3) the date which is the tenth anniversary of the date
                      the Option is granted, if the Option is (a) a Non-ISO
                      or (b) an ISO which is granted to a Key Employee who
                      is not a Ten Percent Stockholder on the date the
                      Option is granted.

An Option Certificate may provide for the exercise of an Option after the
employment of a Key Employee has terminated for any reason whatsoever, including
death or disability.

                                      SS. 8

                                RESTRICTED STOCK

                  8.1 Committee Action. The Committee acting in its absolute
discretion shall have the right to grant Restricted Stock to Key Employees under
this Plan from time to time and, further, shall have the right to make new
Restricted Stock grants in exchange for the cancellation of an outstanding
Restricted Stock grant to such Key Employee. Each Restricted Stock grant shall
be evidenced by a Restricted Stock Certificate, and each Restricted Stock
Certificate shall set forth the conditions, if any, under which the grant will
be effective and the conditions under which the Key Employee's interest in the
underlying Stock will become nonforfeitable.

                  8.2 Effective Date. A Restricted Stock grant shall be
effective (1) as of the date set by the Committee when the grant is made or, if
the grant is made subject to one, or more than one, condition, (2) as of the
date such conditions have been timely satisfied.

                  8.3 Conditions.


                  (a) Conditions to Issuance of Stock. The Committee acting in
its absolute discretion may make the issuance of Restricted Stock to a Key
Employee subject to the satisfaction of one, or more than one, condition which
the Committee deems appropriate under the circumstances for Key Employees
generally or for a Key Employee in particular, and the related Restricted Stock

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Certificate shall set forth each such condition, if any, and the deadline, if
any, for satisfying each such condition. Stock subject to a Restricted Stock
grant shall be issued in the name of a Key Employee only after each such
condition, if any, has been timely satisfied or has expired in accordance with
the terms of the related Restricted Stock Certificate, and any Stock which is so
issued shall be held by RailWorks pending the satisfaction of the forfeiture
conditions, if any, under ss. 8.3(b) for the related Restricted Stock grant.

                  (b) Forfeiture Conditions. The Committee acting in its
absolute discretion may make Restricted Stock issued in the name of a Key
Employee subject to forfeiture upon a failure to satisfy one, or more then one,
condition that the Committee acting in its absolute discretion deems appropriate
under the circumstances for Key Employees generally or for a Key Employee in
particular, and the related Restricted Stock Certificate shall set forth each
such condition, If any, and the deadline, if any, for satisfying each such
forfeiture condition or the expiration date, if any, for each such condition.
Stock issued in the name of a Key Employee shall be forfeited unless each such
forfeiture condition, if any, has been satisfied or has expired in accordance
with the terms of the related Restricted Stock Certificate. Each share of Stock
underlying a Restricted Stock grant shall be unavailable under ss. 3 after such
grant is effective unless such share is forfeited as a result of a failure to
timely satisfy a forfeiture condition, in which event such share of Stock shall
again become available under ss. 3 as of the date of such failure.

                  8.4 Dividends and Voting Rights. Each Restricted Stock
Certificate shall specify what rights, if any, a Key Employee shall have with
respect to the Stock issued in the name of a Key Employee, including rights to
receive dividends and to vote, pending the forfeiture of such Stock or the
satisfaction or expiration of each forfeiture condition, if any, with respect to
such Stock.


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Furthermore, the Committee may grant dividend equivalent rights on Restricted
Stock while such Stock remains subject to an issuance condition under ss. 8.3(a)
under which cash equivalent to a dividend shall be paid to the Key Employee by
RailWorks when a dividend is paid, and any such dividend equivalent right shall
be set forth in the related Restricted Stock Certificate.

                  8.5 Satisfaction of All Conditions. A share of Stock issued in
the name of a Key Employee shall cease to be Restricted Stock at such time as a
Key Employee's interest in such Stock becomes nonforfeitable, and the
certificate representing such share shall be released by RailWorks (or
RailWorks' delegate) and transferred to the Key Employee as soon as practicable
thereafter.

                  8.6 Section 162(m). Except where the Committee deems it in the
best interests of RailWorks, the Committee shall use its best efforts to grant
Restricted Stock either (1) subject to at least one condition which can result
in the Restricted Stock qualifying as "performance-based compensation" under ss.
162(m) of the Code if the stockholders of RailWorks approve such condition and
the Committee takes such other action as the Committee deems necessary or
appropriate for such grant to so qualify under 162(m) or (2) under such other
circumstances as the Committee deems likely to result in an income tax deduction
for the grant.

                                      SS. 9


                               NONTRANSFERABILITY

                  No ISO granted to a Key Employee, and no Non-ISO granted to a
Consultant or an Outside Director or Restricted Stock grant shall be
transferable by a Key Employee, Consultant or Outside Director other than by
will or by the laws of descent and distribution, and any ISO granted


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to a Key Employee and Non-ISO granted to a Consultant or an Outside Director
shall be exercisable during a Key Employee's or Consultant's or Outside
Director's lifetime only by the Key Employee, Consultant or Outside Director. No
Non-ISO granted to a Key Employee shall be transferable other than (1) under
circumstances that would permit the Non-ISO or the underlying Stock to be
registered on a Form S-8 and (2) by will or by the laws of descent and
distribution. The person or persons to whom an Option or Restricted Stock is
transferred thereafter shall be treated as the Key Employee, Consultant or
Outside Director.

                                      SS.10

                    SECURITIES REGISTRATION AND RESTRICTIONS

                  Each Option Certificate or Restricted Stock Certificate shall
provide that, upon the receipt of shares of Stock as a result of the exercise of
an Option or the satisfaction or expiration of the forfeiture conditions, if
any, on any Restricted Stock, the Key Employee, Consultant or Outside Director
shall, if so requested by RailWorks, agree to hold such shares of stock for
investment and not with a view of resale or distribution to the public and, if
so requested by RailWorks, shall deliver to RailWorks a written statement
satisfactory to RailWorks to that effect. Each Option Certificate and Restricted
Stock Certificate also shall provide that, if so requested by RailWorks, the Key
Employee, Consultant or Outside Director shall make a written representation to
RailWorks that he or she will not sell or offer for sale any of such Stock
unless a registration statement shall be in
effect with respect to such Stock under the 1933 Act and any applicable state
securities law or he or she shall have furnished to RailWorks an opinion in form
and substance satisfactory to RailWorks of legal counsel satisfactory to
RailWorks that such registration is not required. Certificates representing the
Stock transferred upon the exercise of an Option or upon the lapse of the
forfeiture


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conditions, if any, on any Restricted Stock may at the discretion of
RailWorks bear a legend to the effect that such Stock has not been registered
under the 1933 Act or any applicable state securities law and that such Stock
cannot be sold or offered for sale in the absence of an effective registration
statement as to such Stock under the 1933 Act and any applicable state
securities law or an opinion in form and substance satisfactory to RailWorks of
legal counsel satisfactory to RailWorks that such registration is not required.

                                      SS. 11

                                  LIFE OF PLAN

                  No Option or Restricted Stock shall be granted under this Plan
on or after the earlier of


                  (1)      the tenth anniversary of the effective date of this
                           Plan (as determined under ss. 4 of this Plan), in
                           which event this Plan otherwise thereafter shall
                           continue in effect until all outstanding Options have
                           been exercised in full or no longer are exercisable
                           and all Restricted Stock grants under this Plan have
                           been forfeited or the forfeiture conditions, if any,
                           on such Stock have been satisfied in full, or

                  (2)      the date on which all of the Stock reserved under ss.
                           3 of this Plan has (as a result of the exercise of
                           Options granted under this Plan or the satisfaction
                           of the forfeiture conditions, if any, on Restricted
                           Stock) been issued or no longer is available for use
                           under this Plan, in which event this Plan also shall
                           terminate on such date.



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                                     SS. 12

                                   ADJUSTMENT

                  12.1 Capital Structure. The number, kind or class (or any
combination thereof) of shares of Stock reserved under ss. 3 of this Plan, the
number, kind or class (or any combination thereof) of shares of Stock subject to
Options granted under this Plan and the Option Price of such Options as well as
the number, kind or class of shares of Restricted Stock granted under this Plan
shall be adjusted by the Committee in an equitable manner to reflect any change
in the capitalization of RailWorks, including, but not limited to, such changes
as stock dividends or stock splits.

                  12.2 Mergers. The Committee as part of any corporate
transaction described in ss. 424(a) of the Code shall have the right to adjust
(in any manner which the Committee in its discretion deems consistent with ss.
424(a) of the Code) the number, kind or class (or any combination thereof) of
shares of Stock reserved under ss. 3 of this Plan. Furthermore, the Committee
as part of any corporate transaction described in ss. 424(a) of the Code. shall
have the right to adjust (in any manner which the Committee in its discretion
deems consistent with ss.424(a)of the Code) the number, kind or class (or any
combination thereof) of shares of stock underlying any Restricted Stock grants
previously made under this plan and any related grant conditions and forfeiture
conditions, and the number, kind or class (or any combination thereof) of
shares subject Option grants previously made under this Plan and related Option
Price for each such Option, and, further, shall have the right (in any manner
which the Committee in its discretion deems consistent with ss.424(a) of the
Code) to make Restricted Stock and Option grants to effect the assumption of,
or the substitution for, restricted stock and option grants previously made by
any other corporation to the



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extent that such corporate transaction calls for such substitution or assumption
of such restricted stock or option grants.

                  12.3 Fractional Shares. If any adjustment under this ss.12
would create a fractional share of Stock or right acquire a fractional share of
initial Stock, such fractional share shall be disregarded and the number of
shares of Stock reserved under this Plan and the number subject to any Options
grants and Restricted Stock grants shall be the next lower number of shares of
Stock, rounded all fractions downward. An adjustment made under this ss.12 by
the Committee shall be conclusive and binding on all affected persons and,
further, shall not constitute an increase in the "the number of shares reserved
under ss.3" within the meaning of ss.14 of this Plan.

                                     SS. 13

                        SALE, MERGER OR CHANGE IN CONTROL

                  If on any date RailWorks agrees to sell all or substantially
all of its assets or agrees to any merger, consolidation, reorganization,
division or other corporate transaction in which Stock is converted into another
security or into the right to receive securities or property or if a tender
offer is made which could lead to a Change in Control (other than a tender offer
by RailWorks or an employee benefit plan established and maintained by
RailWorks), the Board shall waive any conditions to the exercise of all then
outstanding Options and waive any then outstanding issuance and forfeiture
conditions on any Restricted Stock and shall have the right to cancel such
Options and Restricted Stock grants after providing each Key Employee,
Consultant and Director a reasonable opportunity to exercise his or her Options
and to take such other action as necessary or appropriate to receive the Stock
subject to any Restricted Stock grants.


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                                     SS. 14

                            AMENDMENT OR TERMINATION

                  This Plan may be amended by the Board from time to time to the
extent that the Board deems necessary, or appropriate; provided, however, no
such amendment shall be made absent the approval of the stockholders of
RailWorks required under ss. 422 of the Code (1) to increase the number of
shares of stock reserved under ss. 3, or (2) to change the class of employees
eligible for Options. The Board also may suspend the granting of Options or
Restricted Stock under this Plan at any time and may terminate this Plan at any
time provided, however, the Board shall not have the right unilaterally to
modify, amend or cancel any Option or Restricted Stock granted before such
suspension or termination unless (1) the Key Employee or Director consents in
writing to such modification, amendment or cancellation or (2) there is a
dissolution or liquidation of RailWorks or a transaction described in ss. 12 or
ss. 13 of this Plan.

                                     SS. 15

                                  MISCELLANEOUS

                  15.1 Stockholder Rights. No Key Employee, Consultant or
Director shall have any rights as a stockholder of RailWorks as a result of the
grant of an Option granted to him or her under this Plan or his or her exercise
of such Option pending the actual delivery of the Stock subject to such Option
to such Key Employee or Director. Subject to ss. 8.4, a Key Employee's rights as
a stockholder in the shares of Stock underlying a Restricted Stock grant which
is effective shall be set forth in the related Restricted Stock Certificate.

                  15.2 No Contract of Employment. The grant of an Option or
Restricted Stock to a Key Employee, Consultant or Director under this Plan shall
not constitute a contract of


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employment or a right to continue to serve on the Board and shall not confer on
a Key Employee, Consultant or Director any rights upon his or her termination of
employment or service in addition to those rights, if any, expressly set forth
in the related Option Certificate or Restricted Stock Certificate.

                  15.3 Withholding. Each Option and Restricted Stock grant shall
be made subject to the condition that the Key Employee, Consultant or Director
consents to whatever action the Committee directs to satisfy the federal and
state tax withholding requirements, if any, which the Committee in its
discretion deems applicable to the exercise of such Option or the satisfaction
of any. forfeiture conditions with respect to Restricted Stock issued in the
name of the Key Employee, Consultant or Director. The Committee also shall have
the right to provide in an Option Certificate or a Restricted Stock Certificate
that a Key Employee, Consultant or Director may elect to satisfy federal and
state tax withholding requirements through a reduction in the cash or the number
of shares of Stock actually transferred to him or to her under this Plan.

                  15.4 Construction. All references to sections (ss.) are to
sections (ss.) of this Plan unless otherwise indicated. This Plan shall be
construed under the laws of the State of Delaware.

                  15.5 Other Conditions. Each Option Certificate or Restricted
Stock Certificate may require that a Key Employee, Consultant or Director (as a
condition to the exercise of an Option or a Restricted Stock grant) enter into
any agreement or make such representations prepared by RailWorks, including any
agreement which restricts the transfer of Stock acquired pursuant to the
exercise of an Option or Restricted Stock grant or provides for the repurchase
of such Stock by RailWorks under certain circumstances.



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                  15.6 Rule 16b-3. The Committee shall have the right to amend
any Option or Restricted Stock, grant or to withhold or otherwise restrict the
transfer of any Stock or cash under this Plan to a Key Employee, Consultant or
Director as the Committee deems appropriate in order to satisfy any condition or
requirement under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be
applicable to such grant or transfer.

                  15.7 Loans. If approved by the Committee, RailWorks may lend
money to, or guarantee loans made by a third party to, any Key Employee to
finance the exercise of any Option granted under this Plan, and the exercise of
an Option with the proceeds of any such loan shall be treated as an exercise for
cash under this Plan. If approved by the Committee, RailWorks also may, in
accordance with a Key Employee's instructions, transfer Stock upon the exercise
of an Option directly to a third party in connection with any arrangement made
by the Key Employee for financing the exercise of such Option.

                  IN WITNESS WHEREOF, RailWorks Corporation has caused
authorized officer to execute this Plan to evidence its adoption of this Plan.


                                      RAILWORKS CORPORATION



                                      BY: /s/ Michael R. Azarela
                                         ---------------------------------

                                      DATE: October 26, 1999
                                           -------------------------------



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