EXHIBIT 10.30


                                  RAILTEX, INC.
                                 1993 STOCK PLAN

      1. PURPOSE. This 1993 Stock Plan, as amended, (the "Plan") is intended to
provide incentives (a) to the officers and other employees of RailTex, Inc. (the
"Company"), its parent (if any) and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422A(b) of
the Internal Revenue Code of 1986 (the "Code") ("ISO" or "ISOs"); (b) to
directors, officers, employees and consultants of the Company and Related
Corporations, or any other person or entity, by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs ("Non-Qualified Option" or "Non-Qualified
Options"); (c) to directors, officers, employees and consultants of the Company
and Related Corporations, or any other person or entity, by providing them with
awards of stock in the Company ("Awards"); (d) to directors, officers, employees
and consultants of the Company and Related Corporations, or any other person or
entity, by providing them with Stock Appreciation Rights ("SAR" or "SARs") in
tandem with, or independently of, options granted hereunder; (e) to directors,
officers, employees and consultants of the Company and Related Corporations, or
any other person or entity, by providing them with performance awards in the
form of units ("Units") representing phantom shares of stock ("phantom share" or
"phantom shares"), each Unit representing one phantom share; (f) to directors,
officers, employees and consultants of the Company and Related Corporations, or
any other person or entity, by providing them with opportunities to make direct
purchases of stock in the Company ("Purchases"); and (g) to outside directors by
providing each of them with annual grants of ten-year options to purchase 3,000
shares of Common Stock ("Outside Directors' Options").

      ISOs, Non-Qualified Options and Outside Directors' Options are referred to
hereafter individually as an "Option" and collectively as "Options." Options,
Awards, SARs, Units and authorizations to make Purchases are referred to
hereafter collectively as "Stock Rights." Recipients of such Stock Rights are
hereafter referred to individually as an "Optionee" and collectively as
"Optionees." As used herein, the terms "parent" and "subsidiary" mean "parent
corporation" and "subsidiary corporation" respectively, as those terms are
defined in Section 425 of the Code.

      2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by (i) to
the extent required by Section 162(m) of the Code and Rule 16b-3, or any
successor or amended rule ("Rule 16b-3") promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), by two or more outside
directors of the Board of Directors (the "Board") or (ii) in all other cases by
such administrator or administrators as the Board may designate (collectively,
the "Administrators"). The term "outside director" shall mean (i) for purposes
of the preceding sentence, "outside director" as defined in Section 162(m) of
the Code, and the rules and regulations promulgated thereunder, and a
"non-employee director" as defined under Rule 16b-3, and (ii) for all other
purposes of the Plan, as a director who is not a full-time employee of the


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Company or any of the Related Corporations. Subject to terms of the Plan, the
applicable Administrator shall have the authority to (i) determine the employees
of the Company and Related Corporations (from among the class of employees
eligible under paragraph 1 to receive ISOs) to whom ISOs may be granted and to
determine (from among the class of individuals and entities eligible under
paragraph 1 to receive Non-Qualified Options, Awards, SARs and Units and to make
Purchases) to whom Non-Qualified Options, Awards, SARs, Units and authorizations
to make Purchases may be granted; (ii) determine the time or times at which
Options, Awards, SARs or Units may be granted or Purchases made; (iii) determine
the option price of shares subject to each Option (subject to the requirements
of paragraph 4 with respect to ISOs and paragraph 5 with respect to
Non-Qualified Options); (iv) determine the purchase price of shares subject to
each Purchase; (v) determine whether each Option granted shall be an ISO or a
Non-Qualified Option; (vi) determine the time or times when each Option shall
become exercisable and the duration of the exercise period (subject to paragraph
4 with respect to ISOs and paragraph 5 with respect to Non-Qualified Options);
(vii) determine whether restrictions such as repurchase options are to be
imposed on shares subject to Stock Rights and the nature of such restrictions,
if any; and (viii) interpret the Plan and prescribe and rescind rules and
regulations relating to it; however, neither (a) the Board nor the applicable
Administrator shall have any authority to determine whether or when an outside
director shall receive or exercise Outside Directors' Options (or to determine
the exercise price of such Outside Directors' Options) other than to ensure
compliance with the terms of the Plan with respect to Outside Directors' Options
or (b) neither the Board nor the applicable Administrator shall have any
authority to reprice to a lower exercise price any Option issued pursuant to the
Plan without the prior affirmative vote of the holders of a majority of the
shares of the Common Stock present, in person or by proxy, and voting at a
meeting of the shareholders. With respect to persons subject to Section 16 of
the 1934 Act, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3. To the extent any provision of the Plan or
action by the applicable Administrator fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
applicable Administrator. The interpretation and construction by the applicable
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final unless otherwise determined by the Board. Administrators or
the Board may from time to time adopt such rules and regulations for carrying
out the Plan as they may deem best. No member of the Board, any Administrator
nor the Company shall be liable for any action or determination made in good
faith with respect to the Plan or any Stock Right granted under it.

      3. STOCK. The stock subject to the Stock Rights shall be authorized but
unissued shares of the Company's Common Stock, par value $.10 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares of Common Stock which may be issued
pursuant to the Plan is 1,650,000; PROVIDED, HOWEVER, that in no event shall the
number of shares of Common Stock subject to, and issued upon the exercise of,
ISOs exceed 1,650,000 in the aggregate; PROVIDED FURTHER that the aggregate
number of shares of Common Stock subject to, and issuable or issued under, the
Plan and the shares of Common Stock subject to the Company's outstanding options
to purchase 306,168 shares of Common Stock that were granted outside of the Plan
shall not exceed 1,650,000; PROVIDED FURTHER that the maximum number of shares
of Common Stock issuable under the Plan to any employee in any calendar year
shall not exceed 1,650,000; and PROVIDED FURTHER that the 400,000 additional
shares of Common Stock authorized for issuance under the Plan by the
shareholders at the Company's Annual Meeting of Shareholders on May 26, 1999,
may only be issued as Options, and not as any other Stock Rights, under the
Plan. The number of shares authorized for the grant of Stock Rights under the
Plan shall be subject to adjustment as provided in



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paragraph 10. If any Option or any other Stock Right granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, or if the
Company shall reacquire any unvested shares issued pursuant to any Stock Right
the unpurchased shares subject to such Options or Stock Rights and any unvested
shares so reacquired by the Company shall again be available for grants of Stock
Rights under the Plan to the extent permitted by Rule 16b-3.

      4. ISO PROVISIONS. Any of the following provisions shall have no force or
effect if its inclusion in the Plan is not necessary for Options issued as ISOs
to qualify as ISOs pursuant to the Code and the regulations issued thereunder.

            A. GRANT OF ISO. All ISOs shall be granted under the Plan within ten
(10) years of the date of the Plan's adoption by the Board or the date the Plan
receives the requisite shareholder approval, whichever is earlier.

            B.    MINIMUM OPTION PRICE FOR ISOS.

                        (i) The price per share specified in the agreement
                  relating to each ISO granted under the Plan shall not be less
                  than the fair market value per share of Common Stock on the
                  date of such grant. In the case of an ISO to be granted to an
                  employee owning stock representing more than ten percent of
                  the total combined voting power of all classes of stock of the
                  Company or any Related Corporation, the price per share
                  specified in the agreement relating to such ISO shall not be
                  less than 110 percent of the fair market value per share of
                  Common Stock on the date of grant.

                        (ii) In no event shall the aggregate fair market value
                  (determined at the time an ISO is granted) of Common Stock for
                  which ISOs granted to any employee are exercisable for the
                  first time by such employee during any calendar year (under
                  all stock option plans of the Company and any Related
                  Corporation) exceed $100,000.

                        (iii) If, at the time an ISO is granted under the Plan,
                  the Company's Common Stock is publicly traded, "fair market
                  value" shall be determined as of the last business day for
                  which the prices or quotes discussed in this sentence are
                  available prior to the date such Option is granted and shall
                  mean (a) the last reported sales price of the Common Stock on
                  the principal national securities exchange on which the Common
                  Stock is traded, if the Common Stock is then traded on a
                  national securities exchange; or (b) the last reported sale
                  price (on that date) of the Common Stock on the NASDAQ
                  National Market List, if the Common Stock is not then traded
                  on a national securities exchange; or (c) the closing bid
                  price (or the average of bid prices) last quoted (on that
                  date) by an established


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                  quotation service for over-the-counter securities, if the
                  Common Stock is not reported on the NASDAQ National Market
                  List. However, if the Common Stock is not publicly traded at
                  the time an ISO is granted under the Plan, "fair market value"
                  shall be deemed to be the fair market value of the Common
                  Stock as determined by the applicable Administrator after
                  taking into consideration all factors which it deems
                  appropriate, including, without limitation, recent sale and
                  offer prices of the Common Stock in private transactions
                  negotiated at arm's length.

            C. DURATION OF ISOS. Subject to earlier termination as provided in
subparagraphs F and G hereunder, each ISO shall expire on the date specified by
the applicable Administrator, but not more than (i) ten years from the date of
grant in the case of ISOs generally, and (ii) five years from the date of grant
in the case of ISOs granted to an employee owning stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or any Related Corporation. Subject to the foregoing provisions and such
earlier termination as provided in said subparagraphs E and F, the term of each
ISO shall be the term set forth in the original instrument granting such ISO,
except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to subparagraph K below.

            D. ELIGIBLE EMPLOYEES. ISOs may be granted to any employee of the
Company or any Related Corporation. Those officers and directors of the Company
who are not employees may not be granted ISOs under the Plan.

            E. ACCELERATION OF EXERCISE OF ISOS. The Administrator shall not,
without the consent of the Optionee, accelerate the exercise date of any
installment of any ISO granted to any employee (and not previously converted
into a Non-Qualified Option pursuant to subparagraph K below) if such
acceleration would violate the annual vesting limitation contained in Section
422A(d) of the Code, as described in subparagraph B(ii) hereinabove.

            F. EFFECT OF TERMINATION OF EMPLOYMENT ON ISOS. If an ISO Optionee
ceases to be employed by the Company or any Related Corporation other than by
reason of death or disability (as such term is defined in subparagraph I
hereunder), any ISO granted to such Optionee within the six-month period
immediately preceding such termination shall be cancelled forthwith. With
respect to any ISOs granted to such Optionee more than six months prior to such
termination, no further installments of such ISOs shall become exercisable and
his ISOs shall terminate after the passage of 60 days from the date of
termination of his employment, but in no event later than on their specified
expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
subparagraph K below. Leave of absence with the written approval of the
applicable Administrator shall not be considered an interruption of employment
under the Plan, provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of the employee
after the approved period of absence. Employment shall also be considered as
continuing uninterrupted during any other bona fide leave of absence (such as


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those attributable to illness, military obligations or governmental service)
provided that the period of such leave does not exceed 90 days or, if longer,
any period during which such Optionee's right to reemployment is guaranteed by
statute. ISOs granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations, so long as the
Optionee continues to be an employee of the Company or any Related Corporation.

            G. EFFECT OF DEATH OR DISABILITY ON ISOS. If an Optionee ceases to
be employed by the Company or any Related Corporation by reason of his death,
any ISO of his may be exercised, to the extent of the number of shares with
respect to which he could have exercised it on the date of his death, by his
estate, personal representative or beneficiary who has acquired the ISO by will
or by the laws of descent and distribution, at any time prior to the earlier of
the date specified in the ISO agreement, the ISO's specified expiration date or
one year of the death of the Optionee.

      If an Optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to the extent of
the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the date specified in the ISO
agreement, the ISO's specified expiration date or one year from the date of the
termination of the Optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or successor statute.

            H. ADJUSTMENTS. Any adjustment made pursuant to paragraphs 10(A) or
(B) with respect to ISOs shall be made only after the applicable Administrator,
after consulting with counsel for the Company, determines whether such
adjustments would constitute a "modification" of such ISOs (as that term is
defined in Section 425 of the Code) or would cause any adverse tax consequences
for the holders of such ISOs. If the applicable Administrator determines that
such adjustments made with respect to ISOs would constitute a modification of
such ISOs, it may refrain from making such adjustments.

            I. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITIONS. Each employee
who receives an ISO must agree to notify the Company in writing immediately
after the employee makes a "disqualifying disposition" of any Common Stock
acquired pursuant to the exercise of an ISO. A "disqualifying disposition" is
any disposition (including any sale) of such Common Stock before the later of
(a) two years after the date the employee was granted the ISO or (b) one year
after the date the employee acquired Common Stock by exercising the ISO. If the
employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter.

            J. OTHER REQUIREMENTS. ISOs shall be issued subject to such
additional requirements as may be imposed from time to time by the Code or the
regulations issued thereunder.

            K. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF
ISOS. The


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applicable Administrator, at the written request of any Optionee, may in its
discretion take such actions as may be necessary to convert such Optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the Optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such Options.
At the time of such conversion, the applicable Administrator (with the consent
of the Optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the applicable Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent with the
provisions of paragraph 5 or any other paragraph of the Plan. Nothing in the
Plan shall be deemed to give any Optionee the right to have such Optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Administrator takes appropriate action. The applicable
Administrator, with the consent of the Optionee, may also terminate any portion
of any ISO that has not been exercised at the time of such termination.

      5.    NON-QUALIFIED OPTIONS.

            A. MINIMUM OPTION PRICE. The price per share specified in the
agreement relating to each Non-Qualified Option granted under the Plan shall not
be less than the fair market value per share of Common Stock on the date of such
grant. If, at the time a Non-Qualified Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Non-Qualified Option is
granted and shall mean (i) the last reported sales price of the Common Stock on
the principal national securities exchange on which the Common Stock is traded,
if the Common Stock is then traded on a national securities exchange; or (ii)
the last reported sale price (on that date) of the Common Stock on the NASDAQ
National Market List, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or the average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market List. However, if the Common Stock is not publicly traded at the
time a Non-Qualified Option is granted under the Plan, "fair market value" shall
be deemed to be the fair market value of the Common Stock as determined by the
applicable Administrator after taking into consideration all factors which it
deems appropriate, including, without limitation, recent sale and offer prices
of the Common Stock in private transactions negotiated at arm's length.

            B. DURATION OF NON-QUALIFIED OPTIONS. Each Non-Qualified Option
shall expire on the date specified by the applicable Administrator, but not more
than ten (10) years from the date of grant.

            C. VESTING OF NON-QUALIFIED OPTIONS. Subject to any longer or
shorter vesting period and any termination provisions which the applicable
Administrator may impose, a


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Non-Qualified Option shall be exercisable as follows: (i) 20% of the shares
under the Non-Qualified Option shall be exercisable one calendar year after the
date of its grant, (ii) an additional 20% of the shares under the Non-Qualified
Option shall be exercisable two calendar years after the date of its grant,
(iii) an additional 20% of the shares under the Non-Qualified Option shall be
exercisable three calendar years after the date of its grant, (iv) an additional
20% of the shares under the Non-Qualified Option shall be exercisable four
calendar years after the date of its grant, and (v) the last 20% of the shares
under the Non-Qualified Option shall be exercisable five calendar years after
the date of its grant.

            D. MAINTAIN NON-ISO STATUS. If the applicable Administrator
determines to issue a Non-Qualified Option, it shall take whatever actions it
deems necessary, under Section 422A of the Code and the regulations promulgated
thereunder, to ensure that such Non-Qualified Option is not treated as an ISO.

      6. STOCK APPRECIATION RIGHTS. At the discretion of the applicable
Administrator, Options granted under this Plan may be granted in tandem with
SARs ("tandem SARS"), or SARs may be granted independently of and not in tandem
with any Option ("naked SARs"). SARs will become exercisable at such time or
times, and on such conditions, as the applicable Administrator may specify; the
applicable Administrator may impose conditions upon the grant or exercise of any
SAR, which conditions may include a condition that the SAR may only be exercised
in accordance with rules and regulations adopted by the applicable Administrator
from time to time. Such rules and regulations may govern the right to exercise
the SAR granted prior to the adoption or amendment of such rules and regulations
as well as SAR rights granted thereafter.

            A.    TANDEM SARS.

                        (i) Any tandem SAR granted with an ISO may be granted
                  only at the date of grant of such ISO. Any tandem SAR granted
                  with a Non-Qualified Option may be granted either at or after
                  the time such Option is granted. A tandem SAR is the right of
                  an Optionee, without payment to the Company (except for
                  applicable withholding taxes), to receive the excess of the
                  fair market value (as defined in subparagraph 4(B)(iii)) per
                  share on the date on which such SAR is exercised over the
                  option price per share as provided in the relating underlying
                  Option. A tandem SAR granted with an ISO may be exercised only
                  when the fair market value (as defined in subparagraph
                  4(B)(iii)) per share of the Common Stock subject to the ISO
                  exceeds the per share exercise price of the ISO. A tandem SAR
                  granted with an Option shall pertain to, and be granted only
                  in conjunction with, the related underlying Option granted
                  under this Plan and shall be exercisable and exercised only to
                  the extent that the underlying Option is exercisable. The
                  number of shares of Common Stock subject to such tandem SAR
                  shall be all or part of the shares subject to such Option as
                  determined by the applicable Administrator. The tandem SAR
                  shall either


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                  become fully or partially non-exercisable and shall then be
                  fully or partially forfeited if the exercisable portion, or
                  any part thereof, of the underlying Option is exercised and
                  vice versa.

                        (ii) Subject to any restrictions or conditions imposed
                  by the applicable Administrator, a tandem SAR may be exercised
                  by the Optionee as to a number of shares of Common Stock under
                  its related Option only upon the surrender of the
                  then-exercisable portion of the related Option covering a like
                  number of shares of Common Stock. Upon the exercise of a
                  tandem SAR and the surrender of the exercisable portion of the
                  related Option, the Optionee shall be awarded cash, shares of
                  Common Stock or a combination of shares and cash at the
                  discretion of the applicable Administrator. The award shall
                  have a total value equal to the product obtained by
                  multiplying (1) the excess of the fair market value per share
                  on the date on which such tandem SAR is exercised over the
                  Option price per share by (2) the number of shares subject to
                  the exercisable portion of the related Option so surrendered.

            B. NAKED SARS.

                        (i) A naked SAR may be granted irrespective of whether
                  the recipient holds, is being granted, or has been granted any
                  options under any stock plan of the Company. A naked SAR may
                  be granted irrespective of whether the recipient holds, is
                  being granted, or has been granted any tandem SARs. A naked
                  SAR may be made exercisable without regard to the
                  exercisability of any option.

                        (ii) With respect to the exercise of any naked SAR, the
                  term "Spread" as used in this paragraph 6 shall mean an amount
                  equal to the product computed by multiplying (1) the excess of
                  (A) the fair market value per share of Common Stock of the
                  Company on the date such naked SAR is exercised over (B) the
                  price designated by the applicable Administrator (the "Award
                  Price") by (2) the number of shares with respect to which such
                  naked SAR is being exercised.

            C.    GENERAL PROVISIONS.

                        (i) The applicable Administrator may specify that a SAR
                  shall be exercisable for cash, for shares, for a combination
                  of cash or shares, or in cash or shares at the holder's
                  option. On the exercise of a SAR, the holder thereof, except
                  as provided in subparagraphs (ii) and (iii) of this paragraph
                  6(C), shall be entitled to receive either:


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                        (a) if the exercise is for shares, a number of shares
                        equal to the quotient computed by dividing the Spread by
                        the fair market value per share on the date of exercise
                        of the SAR, PROVIDED, HOWEVER, that in lieu of
                        fractional shares the Company shall pay cash equal to
                        the same fraction of the fair market value per share on
                        the date of exercise of the SAR; or

                        (b) if the exercise is for cash, an amount in cash equal
                        to the Spread; or

                        (c) if the exercise is partly for cash and partly for
                        shares, a combination of cash in the amount specified in
                        such SAR holder's notice of exercise, and a number of
                        shares calculated as provided in clause (a) of this
                        subparagraph (i), after reducing the Spread by such cash
                        amount, plus cash in lieu of any fractional share as
                        provided above.

                        (ii) Notwithstanding the provisions of subparagraph (i)
                  of this paragraph 6(C) the applicable Administrator shall have
                  sole discretion to consent to or disapprove, in whole or in
                  part, any permitted election or the right without election of
                  a holder of a SAR to receive cash upon the exercise of a SAR
                  ("Cash Election"). Such consent or disapproval may be given at
                  any time after the Cash Election to which it relates. If the
                  applicable Administrator shall disapprove a Cash Election, in
                  lieu of paying the cash (or any portion thereof) specified in
                  such Cash Election, the Administrator shall determine the
                  amount of cash, if any, to be paid pursuant to such Cash
                  Election and shall issue a number of shares calculated as
                  provided in clause (a) of subparagraph (i) of this paragraph
                  6(C), after reducing the Spread by such cash to be paid plus
                  cash in lieu of any fractional share.

                        (iii) SARs granted or to be granted to officers or
                  directors of the Company under the Plan shall be subject to
                  the following additional provisions: (a) no grant shall be
                  made unless and until the Company has been subject to the
                  reporting requirements of Section 13(a) of the 1934 Act for at
                  least a year and has filed all reports and statements required
                  to be filed pursuant to such Section for that year; and (b) no
                  Cash Election may be made (and no related Option exercised)
                  during the six months after grant, except in the event of the
                  death or disability of the holder. The Company intends that
                  this subparagraph (iii) shall comply with the requirements of
                  Rule 16b-3. Should any provision of this subparagraph (iii) be
                  unnecessary to comply with the requirements of the said Rule
                  16b-3, the Board may amend this Plan to add to or modify the


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                  provisions of this Plan accordingly.

                        (iv) Except as otherwise provided by the applicable
                  Administrator, no SAR shall be transferable except by will or
                  by the laws of descent and distribution. During the life of a
                  holder of a SAR, the SAR shall be exercisable only by him or
                  his guardian or legal representative.

                        (v) A person exercising a SAR for shares shall not be
                  treated as having become the registered owner of any shares
                  issued on such exercise until such shares are delivered to
                  him.

                        (vi) Each SAR shall be on such terms and conditions
                  (including additional terms and conditions) not inconsistent
                  with this Plan as the applicable Administrator may determine.

                        (vii) To exercise a SAR, the holder shall (i) give
                  written notice thereof to the Company addressed to the
                  Secretary of the Company by delivery to RailTex, Inc. at 4040
                  Broadway, Suite 200, San Antonio, Texas 78209, and by
                  specifying therein the amount he elects (if such election is
                  permitted under the terms of the SAR) to receive in cash, if
                  any, and the amount he elects (if such election is permitted
                  under the terms of the SAR) to receive in shares and (ii)
                  deliver to the Company such written representations,
                  warranties and covenants as may be required by the Company or
                  Company counsel. The date of exercise of a SAR shall be the
                  date on which the Company shall have received the notice
                  referred to in the first sentence of this subparagraph (vii).

                        (viii) The number of shares awardable to an Optionee
                  with respect to the noncash portion of a SAR shall be
                  determined by dividing such noncash portion by the fair market
                  value per share (as determined in accordance with subparagraph
                  4(B)(iii)) on the exercise date. No fractional shares shall be
                  issued. Any fractional shares which, but for this subparagraph
                  (viii), would have been issued to an Optionee pursuant to a
                  SAR, shall be deemed to have been issued and immediately sold
                  to the Company for their fair market value, and the Optionee
                  shall receive from the Company cash in lieu of such fractional
                  shares.

      7. UNITS. At the discretion of the applicable Administrator, performance
awards in the form of Units may be granted either independently of or in tandem
with a Stock Right granted hereunder, to such extent as determined by the
applicable Administrator, except that such Units shall not be granted in tandem
with ISOs granted under the Plan. Units granted hereunder may be based on such
factors as changes in the market price for shares of Common Stock of the
Company, personal performance of the recipient of such Units or of his division
or department,


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the performance of the Related Corporation by which he is employed, or any other
factors or criteria set by the applicable Administrator. Units shall have such
other terms and conditions as the applicable Administrator shall determine and
shall be payable in such form as such Administrator may determine including, for
example, payment in shares of the Company's Common Stock.

      8.    OUTSIDE DIRECTORS' OPTIONS.

            A. GRANT. On January 1 of each calendar year after the date the Plan
is approved by the shareholders of the Company, each outside director then
serving shall receive an option to purchase 3,000 shares of Common Stock
(individually, an "Outside Director's Option," and collectively, "Outside
Directors' Options").

            B. MINIMUM PURCHASE PRICE. The exercise price per share of the
Outside Directors' Options shall not be less than the fair market value per
share of Common Stock on the date of such grant. If, at the time an Outside
Director's Option is granted under the Plan, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of the last business
day for which the prices or quotes discussed in this sentence are available
prior to the date such Outside Director's Option is granted and shall mean (i)
the last reported sales price of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if the Common Stock is
then traded on a national securities exchange; or (ii) the last reported sale
price (on that date) of the Common Stock on the NASDAQ National Market List, if
the Common Stock is not then traded on a national securities exchange; or (iii)
the closing bid price (or the average of bid prices) last quoted (on that date)
by an established quotation service for over-the-counter securities, if the
Common Stock is not reported on the NASDAQ National Market List. However, if the
Common Stock is not publicly traded at the time an Outside Director's Option is
granted under the Plan, "fair market value" shall be the average of the three
most recent sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.

            C. DURATION OF OUTSIDE DIRECTORS' OPTIONS. Each Outside Director's
Option shall expire ten (10) years from the date of grant and, subject to any
shorter vesting period and any termination provisions which the applicable
Administrator may impose, each Outside Director's Option shall be exercisable as
follows: (i) 33.33% of the shares under the Outside Directors' Option shall be
exercisable one calendar year after the date of its grant, (ii) an additional
33.33% of the shares under the Outside Directors' Option shall be exercisable
two calendar years after the date of its grant, and (iii) the last 33.33% of the
shares under the Outside Directors' Option shall be exercisable three calendar
years after the date of its grant.

            D. EXERCISE. An outside director may exercise an Outside Director's
Option, if exercisable, by providing written notice to the Company addressed to
the Secretary of the Company at 4040 Broadway, Suite 200, San Antonio, Texas
78209. The written notice shall specify the number of options being exercised,
and by paying the full exercise price. The written notice shall also include
such written representations, warranties and covenants as may be required by the
Company, Company counsel or the applicable Administrator.

            E. MAINTAIN NON-ISO STATUS. The applicable Administrator shall take
whatever actions it deems necessary, under Section 422A of the Code and the
regulations


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<PAGE>
promulgated thereunder, to ensure that any such Outside Director's Option is not
treated as an ISO.

            F. HOLDING PERIOD AND TERMINATION. An outside director may not
dispose of any shares acquired as a result of the exercise of an Outside
Director's Option until six months after the date of the "grant" of the Outside
Director's Option, as determined in accordance with Rule 16(b)-3. Upon the
termination of the Plan or the unavailability of shares of Common Stock for
issuance under the Plan, no additional Outside Directors' Options shall be
granted.

      9. WRITTEN AGREEMENTS. Stock Rights shall be evidenced by instruments
(which need not be identical) in such forms as the applicable Administrator may
from time to time approve. Such instruments shall conform to such terms,
conditions and provisions as are applicable hereunder and may contain such other
terms and conditions and provisions as the applicable Administrator deems
advisable which are not inconsistent with the Plan, including restrictions
applicable to shares of Common Stock issuable upon exercise of Stock Rights and
the payment, if applicable, of any legal form of consideration (including,
without limitation, whether payment must be in cash or by tendering shares of
Common Stock). A Stock Right may provide for acceleration of exercise in the
event of a change in control of the Company, in the discretion of and as defined
by the applicable Administrator. The applicable Administrator may from time to
time confer authority and responsibility on one or more of its own members
and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.

      10. ADJUSTMENTS. Upon the happening of any of the following described
events, an Optionee's rights with respect to Options granted to him hereunder,
and the recipient's rights with respect to Common Stock to be acquired (or used
for measurement purposes) pursuant to the exercise of SARs or Units, or to be
acquired pursuant to a Purchase or Award hereunder, shall be adjusted as
hereinafter provided, unless otherwise specifically provided, in addition or to
the contrary, in the written agreement between the recipient and the Company
relating to such Stock Right.

            A. CERTAIN CORPORATE EVENTS. In the event shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or
if, upon a merger, consolidation, reorganization, split-up, liquidation,
combination, recapitalization or the like of the Company, the shares of Common
Stock shall be exchanged for other securities of the Company or of another
corporation, each grantee of a Stock Right shall be entitled, subject to the
conditions herein stated, to purchase (or have used for measurement purposes)
such number of shares of Common Stock or amount of other securities of the
Company or such other corporation as were exchangeable for the number of shares
of Common Stock which such grantee would have been entitled to purchase (or have
used for measurement purposes) except for such action, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or exchange.


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<PAGE>
            B. STOCK DIVIDENDS. In the event the Company shall issue any of its
shares as a stock dividend upon or with respect to the shares of stock of the
class which at the time shall be subject to a Stock Right hereunder, each
grantee upon exercising a Stock Right shall be entitled to receive (for the
purchase price paid upon such exercise) (or have used for measurement purposes)
the shares or other consideration as to which he is exercising his Stock Right
and, in addition thereto (at no additional cost), such number of shares of the
class or classes in which such stock dividend or dividends were declared or
paid, and such amount of cash in lieu of fractional shares, or other
consideration as he would have received if he had been the holder of the shares
as to which he is exercising (or which are used for measurement in connection
with) his Stock Right at all times between the date of grant of such Stock Right
and the date of its exercise.

            C. NEW SECURITIES. If any person or entity owning restricted Common
Stock obtained by exercise of a Stock Right made hereunder receives new or
additional or different shares or securities ("New Securities") in connection
with a corporate transaction described in subparagraph A above or a stock
dividend described in subparagraph B above as a result of owning such restricted
Common Stock, such New Securities shall be subject to all of the conditions and
restrictions applicable to the restricted Common Stock with respect to which
such New Securities were issued.

            D. CASH DIVIDENDS. No adjustments shall be made for dividends paid
in cash or in property other than securities of the Company, unless specified to
the contrary by the applicable Administrator in the instrument evidencing such
Stock Right.

            E. FRACTIONAL SHARES. No fractional shares shall actually be issued
under the Plan. Any fractional shares which, but for this subparagraph E, would
have been issued to a grantee pursuant to a Stock Right shall be deemed to have
been issued and immediately sold to the Company for their fair market value, and
the grantee shall receive from the Company cash in lieu of such fractional
shares.

            F. ADJUSTMENTS. Upon the happening of any of the foregoing events
described in subparagraphs A or B above, the class and aggregate number of
shares set forth in paragraph 3 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Board shall determine the specific adjustments to be made under this
paragraph 10 and, subject to paragraph 4(H), its determination shall be
conclusive.

      11. MEANS OF EXERCISING STOCK RIGHTS. A Stock Right (or any part or
installment thereof) shall be exercised as specified in the written instrument
granting such Stock Right, which instrument may specify any legal method of
exercise and any method of payment of the exercise price, including, without
limitation, the payment of the exercise price by tendering outstanding shares of
Common Stock or shares of Common Stock received upon exercise of a Stock Right.
The holder of a Stock Right exercisable for shares shall not have the rights of
a shareholder with


                                       13
<PAGE>
respect to the shares covered by his Stock Right until the date of issuance of a
stock certificate to him for such shares. Except as expressly provided above in
paragraph 10 with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.

      12. TRANSFERABILITY OF STOCK RIGHTS. Except as otherwise provided in the
Plan or by the applicable Administrator, no Stock Right granted under the Plan
shall be transferrable by an Optionee other than by (i) will or the laws of
descent and distribution, or (ii) pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder.

      13. TERM OF THE PLAN. This Plan was adopted by the Board on September 13,
1993, effective September 13, 1993, subject to approval of the Plan by the
holders of a majority of the outstanding shares of the Company at the next
meeting of shareholders present in person or by proxy at the next meeting of
shareholders. Stock Rights may be granted under the Plan at any time after
September 13, 1993, even if prior to the date of shareholder approval of the
Plan; PROVIDED, HOWEVER, that such date shall not be prior to the date on which
the applicable Administrators acts to approve the grant or award. If the
requisite shareholder approval is not obtained by September 13, 1994, any grants
of ISOs under the Plan and any grants of Stock Rights to officers and directors,
as the case may be, made prior to that date will be automatically rescinded.

      14. TERMINATION; AMENDMENT. The Board may terminate or amend the Plan in
any respect at any time, except that (i) no amendment requiring shareholder
approval under provisions of the Code and related regulations relating to ISOs
or under the law will be effective without approval of shareholders as required
and within the times set by such rules and (ii) no amendment to Paragraph 2(b)
of the Plan shall be made without the prior affirmative vote of the holders of a
majority of the shares of the Common Stock present, in person or by proxy, and
voting at a meeting of the shareholders.

      15. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Stock Rights authorized under the Plan shall be used
for general corporate purposes.

      16. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

      17. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, an Outside Director's Option, the grant of an Award, the
making of a Purchase of Common Stock for less than its fair market value, the
making of a Disqualifying Disposition (as defined in paragraph 4(I)), the
vesting of restricted Common Stock acquired on the exercise of a Stock Right
hereunder, or any other event in connection with a Stock Right, the Company, in
accordance with Section 3402(a) of the Code, may require the Optionee, Award
recipient, purchaser, or holder or exerciser of a Stock Right to pay additional
withholding taxes in respect of the amount that is considered compensation
includable in such person's gross income.


                                       14
<PAGE>
      18. GOVERNING LAW; CONSTRUCTION. The validity and construction of the Plan
and the instruments evidencing Stock Rights shall be governed by the laws of the
State of Texas. In construing this Plan, the singular shall include the plural
and the masculine gender shall include the feminine and neuter, unless the
context otherwise requires.


                                       15