dex107.htm


    
      

      

    

    Exhibit
10.7


     

    Amended
and Restated December 11, 2008


    BURLINGTON
NORTHERN SANTA FE 1996 STOCK INCENTIVE PLAN

    


    SECTION
1

    


    STATEMENT
OF PURPOSE

    


    1.1.           The
BURLINGTON NORTHERN SANTA FE CORPORATION 1996 STOCK INCENTIVE PLAN (the "Plan")
has been established by BURLINGTON NORTHERN SANTA FE CORPORATION (the "Company")
to:

    


    
      	
               
      

            	
              (a)

            	
              attract
      and retain executive, managerial and other salaried
    employees;

            


    

    


    
      	
               
      

            	
              (b)

            	
              motivate
      participating employees, by means of appropriate incentives, to achieve
      long-range goals;

            


    

    


    
      	
               
      

            	
              (c)

            	
              provide
      incentive compensation opportunities that are competitive with those of
      other major corporations; and

            


    

    


    
      	
               
      

            	
              (d)

            	
              further
      identify a Participant's interests with those of the Company's other
      stockholders through compensation that is based on the Company's common
      stock;

            


    

    


    and
thereby promote long-term financial interest of the Company and the Related
Companies, including the growth in value of the Company's equity and enhancement
of long-term stockholder return.

    


    SECTION
2

    


    DEFINITIONS

    


    2.1.           Unless
the context indicates otherwise, the following terms shall have the meanings set
forth below:

    


    
      	
               
      

            	
              (a)

            	
              Affiliate.  “Affiliate”
      shall mean all persons with whom the Company is considered to be a single
      employer under section 414 (b) of the Code and all persons with whom the
      Company would be considered a single employer under section 414 (c) of the
      Code.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Award.  The
      term "Award" shall mean any award or benefit granted to any Participant
      under the Plan, including, without limitation, the grant of Options, Stock
      Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
      Stock, Stock acquired through purchase under Section 12, or Performance
      Units.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Board.  The
      term "Board" shall mean the Board of Directors of the
    Company.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Cause.  The
      term "Cause" shall mean (a) the willful and continued failure by the
      Participant to substantially perform his duties with the Company (other
      than any such failure resulting from his incapacity due to physical or
      mental illness), or (b) the willful engaging by the Participant in conduct
      which is demonstrably and materially injurious to the Company, monetarily
      or other-wise.  For purposes of this definition, no act, or
      failure to act, shall be deemed "willful" unless done, or omitted to be
      done, by the Participant not in good faith and without reasonable belief
      that his action or omission was in the best interest of the
      Company.

            


    

     

    
      	
            	
              (e) 

            	
              Change
      in Control.  A "Change in Control" shall be deemed to have
      occurred if:

            


    

     

    
      	
               
      

            	
              (1)

            	
              any
      "person" as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
      than the Company, any trustee or other fiduciary holding securities under
      an employee benefit plan of the Company, or any company owned, directly or
      indirectly, by the stockholders of the Company in substantially the same
      proportions as their ownership of stock of the Company), is or becomes the
      "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Company representing 25% or
      more of the combined voting power of the Company's then outstanding
      securities;

            


    

    


    
      	
               
      

            	
              (2)

            	
              during
      any period of two consecutive years (not including any period prior to the
      effective date of this provision), individuals who at the beginning of
      such period constitute the Board, and any new director (other than a
      director designated by a person who has entered into an agreement with the
      Company to effect a transaction described in clause (1), (3) or (4) of
      this definition) whose election by the Board or nomination for election by
      the Company's stockholders was approved by a vote of at least two-thirds
      (2/3) of the directors then still in office who either were directors at
      the beginning of the period or whose election or nomination for election
      was previously so approved, cease for any reason to constitute at least a
      majority thereof;

            


    

    


    
      	
               
      

            	
              (3)

            	
              the
      stockholders of the Company approve a merger or consolidation of the
      Company with any other company other than (i) a merger or consolidation
      which would result in the voting securities of the Company outstanding
      immediately prior thereto continuing to represent (either by remaining
      outstanding or by being converted into voting securities of the surviving
      entity) more than 80% of the combined voting power of the voting
      securities of the Company (or such surviving entity) outstanding
      immediately after such merger or consolidation, or (ii) a merger or
      consolidation effected to implement a recapitalization of the Company (or
      similar transaction) in which no "person" (as hereinabove defined)
      acquires more than 25% of the combined voting power of the Company's then
      outstanding securities; or

            


    

    


    
      	
               
      

            	
              (4)

            	
              the
      stockholders of the Company adopt a plan of complete liquidation of the
      Company or approve an agreement for the sale or disposition by the Company
      of all or substantially all of the Company's assets.  For
      purposes of this clause (4), the term "the sale or disposition by the
      Company of all or substantially all of the Company's assets" shall mean a
      sale or other disposition transaction or series of related transactions
      involving assets of the company or of any direct or indirect subsidiary of
      the Company (including the stock of any direct or indirect subsidiary of
      the Company) in which the value of the assets or stock being sold or
      otherwise disposed of (as measured by the purchase price being paid
      therefor or by such other method as the Board of Directors of the Company
      determines is appropriate in a case where there is no readily
      ascertainable purchase price) constitutes more than two-thirds of the fair
      market value of the Company (as hereinafter defined).  For
      purposes of the preceding sentence, the "fair market value of the Company"
      shall be the aggregate market value of the outstanding shares of Stock (on
      a fully diluted basis) plus the aggregate market value of the Company's
      other outstanding equity securities.  The aggregate market value
      of the shares of Stock (on a fully diluted basis) outstanding on the date
      of the execution and delivery of a definitive agreement with respect to
      the transaction or series or related transactions (the "Transaction Date")
      shall be determined by the average closing price of the shares of Stock
      for the ten trading days immediately preceding the Transaction
      Date.  The aggregate market value of any other equity securities
      of the Company shall be determined in a manner similar to that prescribed
      in the immediately preceding sentence for determining the aggregate market
      value of the shares of Stock or by such other method as the Board of
      Directors of the Company shall determine is
  appropriate.

            


    

    


    Notwithstanding
the foregoing, a merger, consolidation, acquisition of common control, or
business combination of the Company and a Class I Railroad or a holding company
of a Class I Railroad that is approved by the Board shall not constitute a
"Change in Control" unless the Board makes a determination that the transaction
shall constitute a "Change in Control".

    


    
      	
               
      

            	
              (f)

            	
              Code.  The
      term "Code" means the Internal Revenue Code of 1986, as
      amended.  A reference to any provision of the Code shall include
      reference to any successor provision of the
  Code.

            


    

    


    
      	
               
      

            	
              (g)

            	
              Date
      of Termination.  “Date of Termination” shall mean “separation
      from service” (within the meaning of Section 409A of the
      Code).

            


    

     

    
      	
            	
              

                (h)

              

            	
              

                Deferred Compensation.  Payments or benefits that would be considered to
      be provided under a nonqualified deferred compensation plan as that term
      is defined in Treas. Reg.
  §1.409A-1.

              

            


    

     

    
      	
               
      

            	
              (i)

            	
              Disability.  Except
      as otherwise provided by the Committee, a Participant shall be considered
      to have a "Disability" during the period in which he is unable, by reason
      of a medically determinable physical or mental impairment, to engage in
      any substantial gainful activity, which condition, in the discretion of
      the Committee, is expected to have a duration of not less than 120
      days.

            


    

    


    
      	
               
      

            	
              (j)

            	
              Employee.  The
      term "Employee" shall mean a person with an employment relationship with
      the Company or a Related Company.

            


    

    


    
      	
               
      

            	
              (k)

            	
              Employer.  The
      Company and each Related Company which, with the consent of the Company,
      participates in the Plan for the benefit of its eligible employees are
      referred to collectively as the "Employers" and individually as an
      "Employer".

            


    

    


    
      	
               
      

            	
              (l)

            	
              Fair
      Market Value.  The "Fair Market Value" of the Stock shall be the
      mean between the highest and lowest quoted sales prices of a share of
      Common Stock on the New York Stock Exchange Composite Transaction Report;
      provided, that if there were no sales on the valuation date but there were
      sales on dates within a reasonable period both before and after the
      valuation date, the Fair Market Value is the weighted average of the means
      between the highest and lowest sales on the nearest date before and the
      nearest date after the valuation date.  The average is to be
      weighed inversely by the respective numbers of trading days between the
      selling dates and the valuation date and shall be determined in good faith
      by the Committee.  In any event the determination of “Fair
      Market Value” shall be consistent with the requirements of Treasury
      Regulation Section
1.409A-1(b)(5)(iv)(A).

            


    

    


    
      	
               
      

            	
              (m)

            	
              Immediate
      Family.  With respect to a particular Participant, the term
      "Immediate Family" shall mean the Participant's spouse, children,
      stepchildren, adoptive relationships, sisters, brothers and
      grandchildren.

            


    

    


    
      	
               
      

            	
              (n)

            	
              Option.  The
      term "Option" shall mean any Incentive Stock Option or Non-Qualified
      Stock Option
      granted under the Plan.

            


    

    


    
      	
               
      

            	
              (o)

            	
              Participant.  The
      term "Participant" means an Employee who has been granted an award under
      the Plan.

            


    

    


    
      	
               
      

            	
              (p)

            	
              Performance-Based
      Compensation.  The term "Performance-Based Compensation" shall
      have the meaning ascribed to it in section 162(m)(4)(C) of the
      Code.

            


    

    


    
      	
               
      

            	
              (q)

            	
              Performance
      Period.  The term "Performance Period" shall mean the period
      over which applicable performance is to be
  measured.

            


    

    


    
      	
               
      

            	
              (r)

            	
              Qualified
      Retirement Plan.  The term "Qualified Retirement Plan" means any
      plan of the Company or a Related Company that is intended to be qualified
      under section 401(a) of the Code.

            


    

    


    
      	
               
      

            	
              (s)

            	
              Related
      Companies.  The term "Related Company" means any company during
      any period in which it is a "subsidiary corporation" (as that term is
      defined in Code section 424(f)) with respect to the
    Company.

            


    

    


    
      	
               
      

            	
              (t)

            	
              Restricted
      Period.  The term "Restricted Period" shall mean the period of
      time for which Restricted Stock is subject to forfeiture pursuant to the
      Plan or during which Options and Stock Appreciation Rights are not
      exercisable.

            


    

    


    
      	
               
      

            	
              (u)

            	
              Retirement.  "Retirement"
      of a Participant shall mean the occurrence of a Participant's Date of
      Termination under circumstances that constitute a retirement at normal
      requirement age under the terms of the Qualified Retirement Plan of an
      Employer or Related Company that is extended to the Participant
      immediately prior to the Participant's Date of Termination or, if no such
      plan is extended to the Participant on his Date of Termination, under the
      terms of any applicable retirement policy of the Participant's employer
      provided, that in respect to grants made on or after January 1, 1999, the
      following definition shall apply:

            


    

    


    
      	
               
      

            	
              Retirement.  “Retirement”
      of a Participant shall mean the occurrence of a Participant’s Date of
      Termination under circumstances that constitute a retirement with
      immediate eligibility for benefits under Article 6 or Article 7 of the
      Burlington Northern Santa Fe Retirement Plan, or under the terms of a
      Qualified Retirement Plan of an Employer or Related Company that is
      extended to the Participant immediately prior to the Participant’s Date of
      Termination, or if no such plan is extended to the Participant on his Date
      of Termination, under the terms of any applicable retirement policy of the
      Participant’s employer.

            


    

    


    
      	
               
      

            	
              (v)

            	
              SEC.  "SEC"
      shall mean the United States Securities and Exchange
      Commission.

            


    

    


    
      	
               
      

            	
              (x)

            	
              Specified
      Employee. “Specified Employee” shall be defined in accordance with Treas.
      Reg. §1.409A-1(i) and such rules as may be established by the Chief
      Executive Officer of the Corporation or his or her delegate from time to
      time.

            


    

     

    
      	
               
      

            	
              (y)

            	
              Stock.  The
      term "Stock" shall mean shares of common stock of the
    Company.

            


    

     

    SECTION
3

     

    ELIGIBILITY

    


    3.1.           Subject
to the discretion of the Committee and the terms and conditions of the Plan, the
Committee shall determine and designate from time to time, from among the
salaried, full-time officers and employees of the Employers those Employees who
will be granted one or more awards under the Plan.

    


    SECTION
4

    


    OPERATION
AND ADMINISTRATION

    


    4.1.           Subject
to the approval of the stockholders of the Company at the Company's 1996 annual
meeting of the stockholders, the Plan shall be effective as of January 1, 1996
("Effective Date"), provided however, that any awards made under the Plan prior
to approval by stockholders, shall be contingent on approval of the Plan by
stockholders of the Company and all dividends on Awards shall be held by the
Company and paid only upon such approval and all other rights of a Participant
in connection with an Award shall not be effective until such approval is
obtained.  The Plan shall be unlimited and remain in effect until
termination by the Board, provided however, that no Incentive Stock Options may
be granted under the Plan on a date that is more than ten years from the
Effective Date or, if earlier, the date the Plan is adopted by the
Board.

    


    4.2.           The
Plan shall be administered by the Compensation Committee of the Board which
shall be selected by the Board, shall consist of members of the Board who are
not employees of the Company and are not eligible to participate in the Plan,
and shall consist of not less than two members of the Board, or such greater
number as may be required for compliance with SEC Rule 16b-3.  The
authority to manage and control the operation and administration of the Plan
shall be vested in the Committee, subject to the following:

    


    
      	
               
      

            	
              (a)

            	
              Subject
      to the provisions of the Plan, the Committee will have the authority and
      discretion to select Employees to receive Awards, to determine the time or
      times of receipt, to determine the types of Awards and the number of
      shares covered by the Awards, to establish the terms, conditions,
      performance criteria, restrictions, and other provisions of such Awards,
      and to cancel or suspend Awards.  In making such Award
      determinations, the Committee may take into account the nature of services
      rendered by the respective Employee, his present and potential
      contribution to the Company's success and such other factors as the
      Committee deems relevant.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Subject
      to the provisions of the Plan, the Committee will have the authority and
      discretion to determine the extent to which Awards under the Plan will be
      structured to conform to the requirements applicable to Performance-Based
      Compensation as described in Code section 162(m), and to take such action,
      establish such procedures, and impose such restrictions at the time such
      awards are granted as the Committee determines to be necessary or
      appropriate to conform to such
requirements.

            


    

    


    
      	
               
      

            	
              (c)

            	
              The
      Committee will have the authority and discretion to interpret the Plan, to
      establish, amend, and rescind any rules and regulations relating to the
      Plan, to determine the terms and provisions of any agreements made
      pursuant to the Plan, and to make all other determinations that may be
      necessary or advisable for the administration of the
  Plan.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Any
      interpretation of the Plan by the Committee and any decision made by it
      under the Plan is final and binding on all
  persons.

            


    

    


    
      	
               
      

            	
              (e)

            	
              Except
      as otherwise expressly provided in the Plan, where the Committee is
      authorized to make a determination with respect to any Award, such
      determination shall be made at the time the Award is made, except that the
      Committee may reserve the authority to have such determination made by the
      Committee in the future (but only if such reservation is made at the time
      the Award is granted and is expressly stated in the Agreement reflecting
      the Award).

            


    

    


    
      	
               
      

            	
              (f)

            	
              Except
      to the extent prohibited by applicable law or the rules of any stock
      exchange, the Committee may allocate all or any portion of its
      responsibilities and powers to any one or more of its members and other
      than in respect to eligibility, times of Awards, and terms, conditions,
      performance criteria, restrictions and other provisions of Awards, and
      except as otherwise provided by the Committee from time to time, the
      Committee delegates its responsibilities and powers to the Senior Vice
      President-Employee Relations or his successor.  Any such
      allocation or delegation may be revoked by the Committee at any
      time.

            


    

    


    
      	
               
      

            	
              (g)

            	
              No
      member or authorized delegate of the Committee shall be liable to any
      person for any action taken or omitted in connection with the
      administration of the Plan unless attributable to his own fraud or willful
      misconduct; nor shall the Employers be liable to any person for any such
      action unless attributable to fraud or willful misconduct on the part of a
      director or employee of the Employers.  The Committee, the
      individual members thereof, and persons acting as the authorized delegates
      of the Committee under the plan, shall be indemnified by the Employers
      against any and all liabilities, losses, costs and expenses (including
      legal fees and expenses) of whatsoever kind and nature which may be
      imposed on, incurred by or asserted against the Committee or its members
      or authorized delegates by reason of the performance of a Committee
      function if the Committee or its members or authorized delegates did not
      act dishonestly or in willful violation of the law or regulation under
      which such liability, loss, cost or expense arises.  This
      indemnification shall not duplicate but may supplement any coverage
      available under any applicable
insurance.

            


    

    


    4.3.           Notwithstanding
any other provision of the Plan to the contrary, no Participant shall receive
any Award of an Option or a Stock Appreciation Right under the Plan to the
extent that the sum of:

    


    
      	
               
      

            	
              (a)

            	
              the
      number of shares of Stock subject to such
Award;

            


    

    


    
      	
               
      

            	
              (b)

            	
              the
      number of shares of Stock subject to all other prior Awards of Options and
      Stock Appreciation Rights under the Plan during the one-year period ending
      on the date of the Award; and

            


    

    


    
      	
               
      

            	
              (c)

            	
              the
      number of shares of Stock subject to all other prior stock options and
      stock appreciation rights granted to the Participant under other plans or
      arrangements of the Employers and Related Companies during the one-year
      period ending on the date of the
Award;

            


    

    


    would
exceed the Participant's Individual Limit under the Plan.  The
determination made under the foregoing provisions of this subsection 4.3 shall
be based on the shares subject to the awards at the time of grant, regardless of
when the awards become exercisable.  Subject to the provisions of
Section 14, a Participant's "Individual Limit" shall be 1,000,000 shares per
calendar year.

    


    4.4.           To
the extent that the Committee determines that it is necessary or desirable to
conform any Awards under the Plan with the requirements applicable to
“Performance-Based Compensation”, as that term is used in Code section
162(m)(4)(C), it may, at or prior to the time an Award is granted, take such
steps and impose such restrictions with respect to such Award as it determines
to be necessary to satisfy such requirements.  To the extent that is
necessary to establish performance goals for a particular performance period,
those goals will be based on one or more of the following business criteria: net
income, earnings per share, debt reduction, safety, on-time train performance,
return on investment, operating ratio, cash flow, return on assets, stockholders
return, revenue, customer satisfaction, and return on equity.  If the
Committee establishes performance goals for a performance period relating to one
or more of these business criteria, the Committee may determine to approve a
payment for that particular performance period upon attainment of the
performance goal relating to any one or more of such criteria.

    


    4.5.           To
the extent that the Plan and the Awards under the Plan are subject to the rules
applicable to nonqualified deferred compensation plans under section 409A of the
Code, such portion of the Plan and such awards are not intended to result in
acceleration of income recognition or imposition of penalty taxes by reason of
section 409A, and the terms of such portion of the Plan and such awards shall be
interpreted in a manner (and such portion of the Plan and such awards may be
amended to the extent determined necessary or appropriate by the Committee) to
avoid such acceleration and penalties.

    


    SECTION
5

    


    SHARES
AVAILABLE UNDER THE PLAN

    


    5.1.           The
shares of Stock with respect to which Awards may be made under the Plan shall be
shares currently authorized but unissued or treasury shares acquired by the
Company, including shares purchased in open market or in private
transactions.  Subject to the provisions of Section 14, the total
number of shares of Stock available for grant of Awards shall not exceed ten
million (10,000,000) shares of stock.  Except as otherwise provided
herein, any shares subject to an Award which for any reason expires or is
terminated without issuance of shares (whether or not cash or other
consideration is paid to a Participant in respect to such Award) as well as
shares used to pay an Option Purchase Price under this Plan or a predecessor
plan shall again be available under the Plan.

    


    SECTION
6

    


    OPTIONS

    


    6.1.           The
grant of an "Option" under this Section 6 entitles the Participant to purchase
shares of Stock at a price fixed at the time the Option is granted, or at a
price determined under a method established at the time the Option is granted,
subject to the terms of this Section 6. Options granted under this section may
be either Incentive Stock Options or Non-Qualified Stock Options, and subject to
Sections 13 and 18, shall not be exercisable for six months from date of grant,
as determined in the discretion of the Committee.  An "Incentive Stock
Option" is an Option that is intended to satisfy the requirements applicable to
an "incentive stock option" described in section 422(b) of the
Code.  A "Non-Qualified Option" is an Option that is not intended to
be an "incentive stock option" as that term is described in section 422(b) of
the Code.

    


    6.2.           The
Committee shall designate the Participants to whom Options are to be granted
under this Section 6 and shall determine the number of shares of Stock to be
subject to each such Option.  To the extent that the aggregate fair
market value of Stock with respect to which Incentive Stock Options are
exercisable for the first time by any individual during any calendar year (under
all plans of the Company and all Related Companies) exceeds $100,000, such
options shall be treated as Non-Qualified Stock Options, to the extent required
by section 422 of the Code.

    


    6.3.           The
determination and payment of the purchase price of a share of Stock under each
Option granted under this section shall be subject to the
following:

    


    
      	
               
      

            	
              (a)

            	
              The
      purchase price shall be established by the Committee or shall be
      determined by a method established by the Committee at the time the Option
      is granted;  provided, however, that in no event shall such
      price be less than Fair Market Value on the date of the
    grant.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Subject
      to the following provisions of this subsection 6.3, the full purchase
      price of each share of Stock purchased upon the exercise of any Option
      shall be paid at the time of such exercise and, as soon as practicable
      thereafter, a certificate representing the shares so purchased shall be
      delivered to the person entitled
thereto.

            


    

    


    
      	
               
      

            	
              (c)

            	
              The
      purchase price shall be payable in cash or in shares of Stock (valued at
      Fair Market Value as of the day of
exercise).

            


    

    


    
      	
               
      

            	
              (d)

            	
              A
      Participant may elect to pay the purchase price upon the exercise of an
      Option through a cashless exercise arrangement as may be established by
      the Company.

            


    

    


    6.4.           Except
as otherwise expressly provided in the Plan, an Option granted under this
Section 6 shall be exercisable in accordance with the following terms of this
subsection 6.4:

    


    
      	
               
      

            	
              (a)

            	
              The
      terms and conditions relating to exercise of an Option shall be
      established by the Committee, and may include, without limitation,
      conditions relating to completion of a specified period of service,
      achievement of performance standards prior to exercise of the Option, or
      achievement of Stock ownership objectives by the
      Participant.  No Option may be exercised by a Participant after
      the expiration date applicable to that
Option.

            


    

    


    
      	
               
      

            	
              (b)

            	
              The
      exercise of an Option will result in the surrender of the corresponding
      rights under a tandem Stock Appreciation Right, if
  any.

            


    

    


    6.5.          
The exercise period of any Option shall be determined by the Committee
and shall not extend more than ten years after the Date of Grant.

    


    6.6.           In
the event the Participant exercises an Option under this Plan or a predecessor
plan of the Company or a Related Company and pays all or a portion of the
purchase price in Common Stock, in the manner permitted by subsection 6.3, such
Participant, pursuant to the exercise of Committee discretion at the time the
Option is exercised or to the extent previously authorized by the Committee, may
be issued a new Option to purchase additional shares of Stock equal to the
number of shares of Stock surrendered to the Company in such
payment.  Such new Option shall have an exercise price equal to the
Fair Market Value per share on the date such new Option is granted, shall first
be exercisable six months from the date of grant of the new Option and shall
have an expiration date on the same date as the expiration date of the original
Option so exercised by payment of the purchase price in shares of
Stock.

    


    SECTION
7

    


    STOCK
APPRECIATION RIGHTS

    


    7.1.         
Subject to the terms of this Section 7, a Stock Appreciation Right granted under
the Plan entitles the Participant to receive, in cash or Stock (as determined in
accordance with subsection 7.4), value equal to all or a portion of the excess
of: (a) the Fair Market Value of a specified number of shares of Stock at the
time of exercise; over (b) a specified price which shall not be less than 100%
of the Fair Market Value of the Stock at the time the Stock Appreciation Right
is granted, or, if granted in tandem with an Option, the exercise price with
respect to shares under the tandem Option.

    


    7.2.           Subject
to the provisions of the Plan, the Committee shall designate the Participants to
whom Stock Appreciation Rights are to be granted under the Plan, shall determine
the exercise price or a method by which the price shall be established with
respect to each such Stock Appreciation Right, and shall determine the number of
shares of Stock on which each Stock Appreciation Right is based.  A
Stock Appreciation Right may be granted in connection with all or any portion of
a previously or contemporaneously granted Option or not in connection with an
Option.  If a Stock Appreciation Right is granted in connection with
an Option then, in the discretion of the Committee, the Stock Appreciation Right
may, but need not, be granted in tandem with the Option.

    


    7.3.           The
exercise of Stock Appreciation Rights shall be subject to the
following:

    


    
      	
               
      

            	
              (a)

            	
              If
      a Stock Appreciation Right is not in tandem with an Option, then the Stock
      Appreciation Right shall be exercisable in accordance with the terms
      established by the Committee in connection with such rights but, subject
      to Sections 13 and 18 shall not be exercisable for six months from the
      date of grant; and may include, without limitation, conditions relating to
      completion of a specified period of service, achievement of performance
      standards prior to exercise of the Stock Appreciation Rights, or
      achievement of objectives relating to Stock ownership by the
      Participant.  However, except as otherwise expressly provided in
      the Plan, no Stock Appreciation Right subject to this paragraph (a) may be
      exercised by a Participant after the expiration date applicable to that
      Stock Appreciation Right.

            


    

    


    
      	
               
      

            	
              (b)

            	
              If
      a Stock Appreciation Right is in tandem with an Option, then the Stock
      Appreciation Right shall be exercisable at the time the tandem Option is
      exercisable.  The exercise of a Stock Appreciation Right will
      result in the surrender of the corresponding rights under the tandem
      Option.

            


    

    


    7.4.           Upon
the exercise of a Stock Appreciation Right, the value to be distributed to the
Participant, in accordance with subsection 7.1, shall be distributed in shares
of Stock (valued at their Fair Market Value at the time of exercise), in cash,
or in a combination thereof, in the discretion of the Committee.

    


    7.5.           The
Committee may grant Limited Stock Appreciation
Rights.  Notwithstanding the foregoing provisions of this Section 7, a
Limited Stock Appreciation Rights shall be subject to the
following:

    


    
      	
               
      

            	
              (a)

            	
              A
      Limited Stock Appreciation Right may (but need not) be granted in
      connection with all or any portion of a previously or contemporaneously
      granted Option and shall not be exercisable for six months from the date
      of grant.  A Limited Stock Appreciation Right may be granted in
      tandem with an Option regardless of whether the Option is in tandem with a
      Stock Appreciation Right.

            


    

    


    
      	
               
      

            	
              (b)

            	
              A
      Limited Stock Appreciation Rights entitles the Participant to receive a
      cash payment in connection with a Change in Control.  In the
      case of a Limited Stock Appreciation Right that is in tandem with an
      Option, the payment amount shall be equal to the difference between the
      exercise price per share of the Stock covered by the tandem Option and the
      Fair Market Value of a share of Stock upon the date of
      exercise.

            


    

    


    
      	
               
      

            	
              (c)

            	
              To
      the extent provided by the Committee, a Limited Stock Appreciation Right
      may be automatically exercisable at a time determined by the Committee, or
      it may be exercised by the Participant during the period beginning not
      earlier than the date of a Change in Control, and ending not later than
      ninety (90) days following the date of the Change in Control, and may be
      exercisable regardless of whether the Participant is then employed by an
      Employer or a Related Company.

            


    

    


    
      	
               
      

            	
              (d)

            	
              If
      the Limited Stock Appreciation Right is in tandem with an Option, the
      exercise of the Limited Stock Appreciation Right shall result in the
      cancellation of the tandem Option (and any Stock Appreciation Right in
      tandem with such Option).

            


    

    


    SECTION
8

    


    RESTRICTED
STOCK

    


    8.1.         
Subject to the terms of this Section 8, Restricted Stock Awards under the Plan
are grants of Stock to Participants, the vesting of which is subject to certain
conditions  established by the Committee, with some or all of those
conditions relating to events (such as performance or continued employment)
occurring after the date of grant, provided however that to the extent that
vesting of a Restricted Stock Award is contingent on continued employment, the
required employment period shall not generally be less than three years
following the grant of the Award unless such grant is in substitution for an
Award under this Plan or a predecessor plan of the Company or a Related
Company.

    


    8.2.           The
Committee shall designate the Participants to whom Restricted Stock is to be
granted, and the number of shares of Stock that are subject to each such
Award.  The Award of shares under this Section 8 may, but need not, be
made in conjunction with a cash-based incentive compensation program maintained
by the Company, and may, but need not, be in lieu of cash otherwise awardable
under such program.

    


    8.3.          
Shares of Restricted Stock granted to Participants under the Plan shall be
subject to the following terms and conditions:

    


    
      	
               
      

            	
              (a)

            	
              Except
      as otherwise hereinafter provided, Restricted Stock granted to
      Participants may not be sold, assigned, transferred, pledged or otherwise
      encumbered during the Restricted Period.  Except for such
      restrictions, the Participant as owner of such shares shall have all the
      rights of a stockholder, including but not limited to the right to vote
      such shares and, except as otherwise provided by the Committee or as
      otherwise provided by the Plan, the right to receive all dividends paid on
      such shares.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Each
      certificate issued in respect of shares of Restricted Stock granted under
      the Plan shall be registered in the name of the Participant and, at the
      discretion of the Committee, each such certificate may be deposited with
      the Company with a stock power endorsed in blank or in a bank designated
      by the Committee.

            


    

    


    
      	
               
      

            	
              (c)

            	
              The
      Committee may award Performance-Based Restricted Stock, which shall be
      Restricted Stock that becomes vested (or for which vesting is accelerated)
      upon the achievement of performance goals established by the
      Committee.  The Committee may specify the number of shares that
      will vest upon achievement of different levels of
      performance.  Except as otherwise provided by the Committee,
      achievement of maximum targets during the Performance Period shall result
      in the Participant's receipt of the full Performance-Based Restricted
      Stock Award.  For achievement of the minimum target but less
      than the maximum target the Committee may establish a portion of the Award
      which the Participant is entitled to
receive.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Except
      as otherwise provided by the Committee, any Restricted Stock which is not
      earned by the end of a Performance Period shall be
      forfeited.  If a Participant's Date of Termination occurs during
      a Performance Period with respect to any Restricted Stock subject to a
      Performance Period granted to him, the Committee may determine that the
      Participant will be entitled to settlement of all or any portion of the
      Restricted Stock subject to a Performance Period as to which he would
      otherwise be eligible, and may accelerate the determination of the value
      and settlement of such Restricted Stock subject to a Performance Period or
      make such other adjustments as the Committee, in its sole discretion,
      deems desirable.  Subject to the limitations of the Plan and the
      Award of Restricted Stock, upon the vesting of Restricted Stock, such
      Restricted Stock will be transferred free of all restrictions to a
      Participant (or his or her legal representative, beneficiary or
      heir).

            


    

    


    8.4.   A grant
of Restricted Stock subject to a Performance Period shall be made in 1996 and
shall vest as follows:

    


    
      	
                

            	(1) 	
              One-third
      of the Award shall vest after three years, but no later than six years
      from the date of grant upon attaining Fair Market Value equal to the Fair
      Market Value on date of grant increased by a 12% compound annual growth
      rate for a three year period, provided such price has been maintained for
      thirty (30) consecutive trading days either immediately prior to or any
      time after the third year;

            


    

     

    
      	
                

            	(2) 	
              
                One-third
      of the Award shall vest after four years, but no later than six years from
      the date of grant upon attaining Fair Market Value equal to the Fair
      Market Value on date of grant increased by a 12% compound annual growth
      rate for a four year period, provided such price has been maintained for
      thirty (30) consecutive trading days either immediately prior to or any
      time after the fourth year;

              

            


    

     

    
      	
                

            	(3) 	
              
                
                  One-third
      of the Award shall vest after five years, but no later than six years from
      the date of grant upon attaining Fair Market Value equal to the Fair
      Market Value on date of grant increased by a 12% compound annual growth
      rate for a five year period, provided such price has been maintained for
      thirty (30) consecutive trading days either immediately prior to or any
      time after the fifth
year.

                

              

            


    

     

    SECTION
9

    


    RESTRICTED
STOCK UNITS

    


    9.1.         
Subject to the terms of this Section 9, a Restricted Stock Unit entitles a
Participant to receive shares for the units at the end of a Restricted Period to
the extent provided by the Award with the vesting of such units to be contingent
upon such conditions as may be established by the Committee (such as continued
employment which, when required shall be not less than three years or
satisfaction of performance criteria).  The Award of Restricted Stock
Units under this Section 9 may, but need not, be made in conjunction with a
cash-based incentive compensation program maintained by the Company, and may,
but need not, be in lieu of cash otherwise awardable under such
program.

    


    9.2.           The
Committee shall designate the Participants to whom Restricted Stock Units shall
be granted and the number of units that are subject to each such
Award.  During any period in which units are outstanding and have not
been settled in stock, the Participant shall not have the rights of a
stockholder, but shall have the right to receive a payment from the Company in
lieu of a dividend in an amount equal to such dividends and at such times as
dividends would otherwise be paid.

     

          
9.3.    If a
Participant's Date of Termination occurs during a Restricted Period with respect
to any Restricted Stock Units granted to him, the Committee may determine that
the Participant will be entitled to settlement of all or any portion of the
Restricted Stock Units as to which he would otherwise be eligible, and may
accelerate the determination of the value and settlement of such Restricted
Stock Units or make such other adjustments as the Committee, in its sole
discretion, deems desirable.

    


    


    SECTION
10

     

    PERFORMANCE
STOCK

    


    10.1.         Subject
to the terms of this Section 10, a Performance Stock Award provides for the
distribution of Stock to a Participant upon the achievement of performance
objectives established by the Committee.  For purposes of the Plan,
the "Performance Period" with respect to any Award shall be the period over
which the applicable performance is to be measured.

    


    10.2.         The
Committee shall designate the Participants to whom Performance Stock Awards are
to be granted, and the number of shares of Stock that are subject to each such
Award.  The Award of shares under this Section 10 may, but need not,
be made in conjunction with a cash-based incentive compensation program
maintained by the Company, and may, but need not, be in lieu of cash otherwise
awardable under such program.

    


    10.3.         If
a Participant's Date of Termination occurs during a Performance Period with
respect to any Performance Stock granted to him, the Committee may determine
that the Participant will be entitled to settlement of all or any portion of the
Performance Stock as to which he would otherwise be eligible, and may accelerate
the determination of the value and settlement of such Performance Stock or make
such other adjustments as the Committee, in its sole discretion, deems
desirable.

    


    SECTION
11

    


    PERFORMANCE
UNITS

    


    11.1.         Subject
to the terms of this Section 11, the Award of Performance Units under the Plan
entitles the Participant to receive value for the units at the end of a
Performance Period to the extent provided under the Award.  The number
of units earned, and value received for them, will be contingent on the degree
to which the performance measures established at the time of grant of the Award
are met.

    


    11.2.         The
Committee shall designate the Participants to whom Performance Units
are

    to be
granted, and the number of units to be the subject to each such
Award.

    


    11.3.         For
each Participant, the Committee will determine the value of units, which may be
stated either in cash or in units representing shares of Stock; the performance
measures used for determining whether the Performance Units are earned; the
Performance Period during which the performance measures will apply; the
relationship between the level of achievement of the performance measures and
the degree to which Performance Units are earned; whether, during or after the
Performance Period, any revision to the performance measures or Performance
Period should be made to reflect significant events or changes that occur during
the Performance Period; and the number of earned Performance Units that will be
settled in cash and/or shares of Stock.

    


    11.4.         Settlement
of Performance Units shall be subject to the following:

    


    
      	
               
      

            	
              (a)

            	
              The
      Committee will compare the actual performance to the performance measures
      established for the Performance Period and determine the number of units
      as to which settlement is to be made, and the value of such
      units.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Settlement
      of units earned shall be wholly in cash, wholly in Stock or in a
      combination of the two, to be distributed in a lump sum or installments,
      as determined by the Committee.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Shares
      of Stock distributed in settlement of the units shall be subject to such
      vesting requirements and other conditions, if any, as the Committee shall
      determine.  Such vesting restrictions may include, without
      limitation, restrictions of the type that may be imposed with respect to
      Restricted Stock under Section 8.

            


    

    


    11.5.         If
a Participant's Date of Termination occurs during a Performance Period with
respect to any Performance Units granted to him, the Committee may determine
that the Participant will be entitled to settlement of all or any portion of the
Performance Units as to which he would otherwise be eligible, and may accelerate
the determination of the value and settlement of such Performance Units or make
such other adjustments as the Committee, in its sole discretion, deems
desirable.

    


    SECTION
12

    


    STOCK
PURCHASE PROGRAM

    


    12.1.         The
Committee may, from time to time, establish one or more programs under which
Participants will be permitted to purchase shares of Stock under the Plan, and
shall designate the Participants eligible to participate under such Stock
purchase programs.  The purchase price for shares of Stock available
under such programs, and other terms and conditions of such programs, shall be
established by the Committee.  The purchase price may not be less than
75% of the Fair Market Value of the Stock at the time of purchase (or, in the
Committee's discretion, the average Stock value over a period determined by the
Committee), and further provided that the purchase price may not be less than
par value.

    


    12.2.         The
Committee may impose such restrictions with respect to shares purchased under
this section, as the Committee determines to be appropriate.  Such
restrictions may include, without limitation, restrictions of the type that may
be imposed with respect to Restricted Stock under Section 8.

    


    SECTION
13

    


    TERMINATION
OF EMPLOYMENT

    


    13.1.         If
a Participant's Date of Termination occurs for any reason other than death,
Disability, early retirement under the terms of a Qualified Retirement Plan of
an Employer, Retirement, or by reason of the Participant's employment being
terminated by the Participant's employer for any reason other than Cause, all
Awards shall be forfeited.

    


    13.2.         If
a Participant's Date of Termination occurs by reason of death, all Options and
Stock Appreciation Rights outstanding immediately prior to the Participant's
Date of Termination shall immediately become exercisable and all restrictions on
Restricted Stock, Restricted Stock Units, Performance Units, Performance Stock
and shares purchased under the Stock Purchase Program outstanding immediately
prior to the Participant's Date of Termination shall lapse.

    


    13.3.         If
a Participant's Date of Termination occurs by reason of Disability, early
retirement under the terms of a Qualified Retirement Plan of an Employer, or
Retirement, the Restricted Period shall lapse on a proportion of any Awards
outstanding immediately prior to the Participant's Date of Termination (except
to the extent that an Award of Restricted Stock, Restricted Stock Units,
Performance Units and Performance Stock is subject to a Performance Period, such
proportion of the Award shall remain subject to the same terms and conditions
for vesting as were in effect prior to termination).  The proportion
of an Award upon which the Restricted Period shall lapse shall be a fraction,
the denominator of which is the total number of months of any Restricted Period
applicable to an Award and the numerator of which is the number of months of
such Restricted Period which elapsed prior to the Date of
Termination.

    


    13.4.         If
a Participant's Date of Termination occurs by reason of the Participant's
employment being terminated by the Participant's employer for any reason other
than for Cause, the Restricted Period shall lapse on a proportion of any
outstanding Awards (except Restricted Stock and Restricted Stock Units subject
only to a Performance Period, Performance Units and Performance Stock which
shall be forfeited).  The proportion of an Award upon which the
Restricted Period shall lapse shall be a fraction, the denominator of which is
the total number of months of any Restricted Period applicable to an Award and
the numerator of which is the number of months of such Restricted Period which
elapsed prior to the Date of Termination.

    


    13.5.         Stock
Appreciation Rights and Non-Qualified Stock Options which are or become
exercisable by reason of death, Disability, early retirement under the terms of
a Qualified Retirement Plan of an Employer, or Retirement shall expire on the
expiration date set forth in the award or, if earlier:

    


    
      	
               
      

            	
              (a)

            	
              three
      years after the Date of Termination, if the Participant’s termination
      occurs because of death, Disability, or Retirement;
  and

            


    

    


    
      	
                

            	
              (b)

            	
              three
      months after the Date of Termination, if the Participant’s employment is
      terminated by the Participant’s employer for reasons other than Cause or
      early retirement under the terms of a Qualified Retirement Plan of an
      Employer

            


    

    


    Incentive
stock options which are or become exercisable by reason of death, Disability,
early retirement under the terms of a Qualified Retirement Plan of an Employer,
or Retirement shall expire on the expiration date set forth in the award or, if
earlier;

    


    
      	
                

            	(a)	
              three
      years after the Date of Termination, if the Participant’s termination
      occurs because of death; and

            


    

    


    
      	
               
      

            	
              (b)

            	
              three
      months after the Date of Termination, if the Participant’s is terminated
      because of Disability, by the Participant’s employer for reasons other
      than Cause, early retirement under the terms of a Qualified Retirement
      Plan of an Employer, or Retirement.

            


    

    


    Options
and Stock Appreciation Rights which are or become exercisable at the time of a
Participant’s death may be exercised by the Participant’s designated beneficiary
or, in the absence of such designation, by the person to whom the Participant’s
rights will pass by will or the laws of descent and distribution.

    


    13.6.         If
a Participant's employment is terminated by the Participant's employer for
reasons other than Cause in connection with a merger, consolidation, acquisition
of common control, or business combination of the Company and a Class I Railroad
or a holding company of a Class I Railroad:

    


    
      	
               
      

            	
              (a)

            	
              All
      outstanding Options and Stock Appreciation Rights then held by the
      Participant shall become exercisable on the Participant’s Date of
      Termination.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Any
      restrictions on Awards held by the Participant as of the Participant’s
      Date of Termination shall lapse and all Awards vested as if all
      performance objectives have been
attained.

            


    

    


    13.7.        
Except to
the extent the Committee shall otherwise determine, if as a result of a sale or
other transaction, a Participant's employer ceases to be a Related Company (and
the Participant's employer is or becomes an entity that is separate from the
Company), the occurrence of such transaction shall be treated as the
Participant's Date of Termination caused by the Participant being discharged by
the Employer.

    


    13.8.         Notwithstanding
the foregoing provisions of this section, the Committee may, with respect to any
Awards of a Participant (or portion thereof) that are outstanding immediately
prior to the Participant's Date of Termination, determine that a Participant's
Date of Termination will not result in forfeiture or other termination of the
Award.

    


    13.9.        
Notwithstanding
the foregoing provisions of this section, Awards of Non-Qualified Stock Options
issued after January 1, 1999 which are or become exercisable upon early
retirement under the terms of a Qualified Retirement Plan shall expire on the
expiration date set forth in the award or, if earlier, three years after the
Date of Termination.

    


    SECTION
14

    


    ADJUSTMENTS
TO SHARES

    


    14.1.         If
the Company shall effect a reorganization, merger, or consolidation, or similar
event or effect any subdivision or consolidation of shares of Stock or other
capital readjustment, payment of stock dividend, stock split, spin-off,
combination of shares or recapitalization or other increase or reduction of the
number of shares of Stock outstanding without receiving compensation therefor in
money, services or property, then the Committee shall adjust equitably and
proportionally (i) the number of shares of Stock available under the Plan; (ii)
the number of shares available under any individual or other limits; (iii) the
number of shares of Stock subject to outstanding Awards; and (iv) the per-share
price under any outstanding Award to the extent that the Participant is required
to pay a purchase price per share with respect to the Award.  However,
in no event shall this Section 14.1 be construed to permit a modification or
other action with respect to an Option if such action would result in
accelerated recognition of income or imposition of additional tax under Section
409A.

    


    SECTION
15

    


    TRANSFERABILITY
OF AWARDS

    


    15.1.         Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.  To the extent that
the Participant who receives an Award under the Plan has the right to exercise
such Award, the Award may be exercised during the lifetime of the Participant
only by the Participant.  Notwithstanding the foregoing provisions of
this Section 15, the Committee may permit Awards under the Plan (other than an
Incentive Stock Option) to be transferred by a Participant for no consideration
to or for the benefit of the Participant's Immediate Family (including, without
limitation, to a trust for the benefit of a Participant's Immediate Family or to
a Family Partnership for members of the Immediate Family), subject to such
limits as the Committee may establish and the transferee shall remain subject to
all of the terms and conditions applicable to such Award prior to such
transfer.

    


    SECTION
16

    


    AWARD
AGREEMENT

    


    16.1.         Each
employee granted an Award pursuant to the Plan shall sign an Award Agreement
which signifies the offer of the Award by the Company and the acceptance of the
Award by the employee in accordance with the terms of the Award and the
provisions of the Plan.  Each Award Agreement shall reflect the terms
and conditions of the Award.  Participation in the Plan shall confer
no rights to continued employment with the Company nor shall it restrict the
right of the Company to terminate a Participant's employment at any
time.

    


    SECTION
17

    


    TAX
WITHHOLDING

    


    17.1.         All
Awards and other payments under the Plan are subject to withholding of all
applicable taxes, which withholding obligations shall be satisfied (without
regard to whether the Participant has transferred an Award under the Plan) by a
cash remittance, or with the consent of the Committee, through the surrender of
shares of Stock which the Participant owns or to which the Participant is
otherwise entitled under the Plan pursuant to an irrevocable election submitted
by the Participant to the Company at the office designated for such
purpose.  The number of shares of Stock needed to be submitted in
payment of the taxes shall be determined using the Fair Market Value as of the
applicable tax date rounding down to the nearest whole share; provided that no
election to have shares of Stock withheld from an Award or submission of shares
shall be effective with respect to an Award which was transferred by a
Participant in accordance with the Plan.

    


    17.2          The
Committee may modify the time at which any Award will be transferred if it
determines that such modification may be necessary to avoid acceleration of tax
or imposition of penalties under section 409A of the Internal Revenue
Code.  Regardless of whether the Committee modifies or fails to modify
the time at which any such Award is transferred, the Employee shall be solely
liable for any taxes, including without limitation taxes that may be imposed
under section 409A of the Internal Revenue Code, penalties and interest incurred
by reason of such transfer.

    


    17.3.         If,
at the time of an Employee’s “separation from service” (within the meaning of
Section 409A of the Code), (a) the Employee shall be a Specified Employee and
(b) the Company shall make a good faith determination that an issuance of Stock
or payment of cash in settlement of an Award constitutes Deferred Compensation,
the payment of which is required to be delayed pursuant to the six-month delay
rule set forth in Section 409A of the Code in order to avoid taxes or penalties
under Section 409A of the Code, then the Company shall not issue such Stock or
pay such cash, as applicable, but shall instead accumulate and pay it, without
interest, on the first business day of the seventh month following such
separation from service.

    
 

    SECTION
18

    


    CHANGE
IN CONTROL

    


    18.1.         Subject
to the provisions of Section 14 (relating to the adjustment of shares), and
except as otherwise provided in the Plan or the Agreement reflecting the
applicable Award, upon the occurrence of a Change in Control:

    


    
      	
               
      

            	
              (a)

            	
              All
      outstanding Options (regardless of whether in tandem with Stock
      Appreciation Rights) shall become fully exercisable, except to the extent
      that the right to exercise the Option is subject to any restrictions
      established in connection with a Limited Stock Appreciation Right that is
      in tandem with the Option.

            


    

    


    
      	
               
      

            	
              (b)

            	
              All
      outstanding Stock Appreciation Rights (regardless of whether in tandem
      with Options) shall become fully exercisable, except that if Stock
      Appreciation Rights are in tandem with an Option, and the Option is in
      tandem with a Limited Stock Appreciation Right, the right to exercise the
      Stock Appreciation Right shall be subject to any restrictions established
      in connection with the Limited Stock Appreciation
  Right.

            


    

    


    
      	
               
      

            	
              (c)

            	
              All
      shares of Restricted Stock, Restricted Stock Units and Performance Stock
      shall become fully vested.

            


    

    


    
      	
               
      

            	
              (d)

            	
              All
      vesting restrictions imposed under Section 12 (relating to restrictions on
      shares purchased by the Participants) shall cease to apply, and the
      Participant shall become fully vested in those
  shares.

            


    

    


    
      	
               
      

            	
              (e)

            	
              Performance
      Units may be paid out in such manner and amounts as determined by the
      Committee.

            


    

    
 

    SECTION
19

    


    TERMINATION
AND AMENDMENT

    


    19.1.         The
Board may suspend, terminate, modify or amend the Plan, provided that any
amendment that would increase the aggregate number of shares which may be issued
under the Plan; materially increase the benefits accruing to Participants under
the Plan; or materially modify the requirements as to eligibility for
participation in the Plan, shall be subject to the approval of BNSF's
stockholders, except that any such increase or modification that may result from
adjustments authorized by Section 14 does not require such
approval.  No suspension, termination, modification or amendment of
the Plan may terminate a Participant's existing Award or materially and
adversely affect a Participant's rights under such Award without the
Participant's consent.  The Board hereby delegates to the Chief
Executive Officer of the Company the authority to modify or amend the Plan and
the Awards granted under the Plan and to take such actions as he or she
determines to be necessary or appropriate solely for the purpose of avoiding
acceleration of income recognition or imposition of taxes under Section
409A.  Notwithstanding the foregoing, in no event shall any amendment or
termination of the Plan be made to the extent that it would not satisfy the
provisions of Treasury Regulation Section 1.409A-3 (or other applicable
provisions of Section 409A).