----

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|   | (a) | attract      and retain executive, managerial and other salaried employees; |
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|   | (b) | motivate      participating employees, by means of appropriate incentives, to achieve      long-range goals; |
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|   | (c) | provide      incentive compensation opportunities that are competitive with those of      other major corporations; and |
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|   | (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; |
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|   | (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. |
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|   | (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. |
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|   | (c) | Board.      The term "Board" shall mean the Board of Directors of the Company. |
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|   | (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. |
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|   | (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; |
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|   | (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; |
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|   | (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 |
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|   | (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. |
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|   | (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. |
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|   | (g) | Date      of Termination. “Date of Termination” shall mean “separation      from service” (within the meaning of Section 409A of the Code). |
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|   | (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. |
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|   | (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. |
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|   | (j) | Employee.      The term "Employee" shall mean a person with an employment relationship      with the Company or a Related Company. |
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|   | (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". |
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|   | (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). |
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|   | (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. |
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|   | (n) | Option.      The term "Option" shall mean any Incentive Stock Option or Non-Qualified      Stock Option      granted under the Plan. |
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|   | (o) | Participant.      The term "Participant" means an Employee who has been granted an award      under the Plan. |
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|   | (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. |
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|   | (q) | Performance      Period. The term "Performance Period" shall mean the period over which      applicable performance is to be measured. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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: |
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|   | 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. |
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|   | (v) | SEC.      "SEC" shall mean the United States Securities and Exchange Commission. |
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|   | (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. |
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|   | (y) | Stock.      The term "Stock" shall mean shares of common stock of the Company. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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). |
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|   | (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. |
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|   | (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. |
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|   | (a) | the      number of shares of Stock subject to such Award; |
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|   | (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 |
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|   | (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; |
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|   | (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. |
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|   | (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. |
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|   | (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). |
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|   | (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. |
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|   | (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. |
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|   | (b) | The      exercise of an Option will result in the surrender of the corresponding      rights under a tandem Stock Appreciation Right, if any. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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). |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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). |
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| (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; |
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| (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; |
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| (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. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   |               (a) | three      years after the Date of Termination, if the Participant’s termination      occurs because of death, Disability, or Retirement; and |
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| (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 |
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| (a)   | three      years after the Date of Termination, if the Participant’s termination      occurs because of death; and |
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|   |               (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. |
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|   |                (a) | All      outstanding Options and Stock Appreciation Rights then held by the      Participant shall become exercisable on the Participant’s Date of      Termination. |
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|   |                (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. |
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|   | (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. |
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|   | (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. |
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|   | (c) | All      shares of Restricted Stock, Restricted Stock Units and Performance Stock      shall become fully vested. |
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|   | (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. |
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|   | (e) | Performance      Units may be paid out in such manner and amounts as determined by the      Committee. |
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