Document:

ex401stockoptionplan.htm

    
      EXHIBIT
4.1
2008 Stock Option Plan 

        
          

        

      

    

     

    American
Security Resources Corp.

    2008
Stock Option Plan

    

    ARTICLE
I - PLAN

    

    1.1           Purpose.  This
Plan is a plan for key employees, officers, directors, and consultants of the
Company and its Affiliates and is intended to advance the best interests of the
Company, its Affiliates, and its stockholders by providing those persons who
have substantial responsibility for the management and growth of the Company and
its Affiliates with additional incentives and an opportunity to obtain or
increase their proprietary interest in the Company, thereby encouraging them to
continue in the employ of the Company or any of its Affiliates.

    

    1.2           Rule
16b-3 Plan.  The Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”), and therefore the Plan is intended to comply with all applicable
conditions of Rule 16b-3 (and all subsequent revisions thereof) promulgated
under the 1934 Act.  To the extent any provision of the Plan or action
by the Board of Directors or Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.  In addition, the Board of Directors may amend the Plan
from time to time, as it deems necessary in order to meet the requirements of
any amendments to Rule 16b-3 without the consent of the shareholders of the
Company.

    

    1.3           Effective
Date of Plan.   The Plan shall be effective the earlier of
July 31, 2008 or the day the shareholders of the Company approve the Plan (the
“Effective Date”).  No Award shall be granted pursuant to the Plan ten
years after the Effective Date.

    

    ARTICLE
II - DEFINITIONS

    

    The words
and phrases defined in this Article shall have the meaning set out in these
definitions throughout this Plan, unless the context in which any such word or
phrase appears reasonably requires a broader, narrower, or different
meaning.

    

    2.1           “Affiliate”
means any subsidiary corporation.  The term “subsidiary corporation”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the action or
transaction, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.

    

    2.2           “Award”
means each of the following granted under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award,
Performance Stock Award or Stock Award.

    

    2.3           “Board
of Directors” means the board of directors of the Company.

    

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

    

    2.5           “Committee”
means the Compensation Committee of the Board of Directors, or if no
Compensation Committee has been formed, then it shall mean the entire Board of
Directors.

    

    2.6           “Company”
means American Security Resources Corp., a Nevada corporation.

    

    2.7           “Consultant”
means any person, including an advisor, engaged by the Company or Affiliate to
render services and who is compensated for such services.

    

    2.8           “Eligible
Persons” shall mean, with respect to the Plan, those persons who, at the time
that an Award is granted, are (i) Employees and all other key personnel,
including officers and directors, of the Company or Affiliate, or (ii)
Consultants or independent contractors who provide valuable services to the
Company or Affiliate as determined by the Committee.

    

    2.9           “Employee”
means a person employed by the Company or any Affiliate to whom an Award is
granted.

    

    2.10           “Fair
Market Value” of the Stock as of any date means (a) the average of the high and
low sale prices of the Stock on that date on the principal securities exchange
on which the Stock is listed; or (b) if the Stock is not listed on a securities
exchange, the average of the high and low sale prices of the Stock on that date
as reported on the Nasdaq; or (c) if the Stock is not listed on the Nasdaq, the
average of the high and low bid quotations for the Stock on that date as
reported by the National Quotation Bureau Incorporated; or (d) if none of the
foregoing is applicable, an amount at the election of the Committee equal to
(x), the average between the closing bid and ask prices per share of Stock on
the last preceding date on which those prices were reported or (y) that amount
as determined by the Committee in good faith.

    

    2.11           “Incentive
Option” means an option to purchase Stock granted under this Plan which is
designated as an “Incentive Option” and satisfies the requirements of Section
422 of the Code.

    

    2.12           “Non-Employee
Directors” means that term as defined in Rule 16b-3 under the 1934
Act.

    

    2.13           “Nonqualified
Option” means an option to purchase Stock granted under this Plan other than an
Incentive Option.

    

    2.14           “Option”
means both an Incentive Option and a Nonqualified Option granted under this Plan
to purchase shares of Stock.

    

    2.15           “Option
Agreement” means the written agreement by and between the Company and an
Eligible Person, which sets out the terms of an Option.

    

    2.16           “Outside
Director” shall mean a member of the Board of Directors serving on the Committee
who satisfies Section 162(m) of the Code.

    

    2.17           “Plan”
means the American Security Resources Corp. 2008 Stock Option Plan, as set out
in this document and as it may be amended from time to time.

    

    2.18           “Plan
Year” means the Company’s fiscal year.

    

    2.19           “Performance
Stock Award” means an award of shares of Stock to be issued to an Eligible
Person if specified predetermined performance goals are satisfied as described
in Article VII.

    

    2.20           “Restricted
Stock” means Stock awarded or purchased under a Restricted Stock Agreement
entered into pursuant to this Plan, together with (i) all rights, warranties or
similar items attached or accruing thereto or represented by the certificate
representing the stock and (ii) any stock or securities into which or for which
the stock is thereafter converted or exchanged.  The terms and
conditions of the Restricted Stock Agreement shall be determined by the
Committee consistent with the terms of the Plan.

    

    2.21           “Restricted
Stock Agreement” means an agreement between the Company or any Affiliate and the
Eligible Person pursuant to which the Eligible Person receives a Restricted
Stock Award subject to Article VI.

    

    2.22           “Restricted
Stock Award” means an Award of Restricted Stock.

    

    2.23           “Restricted
Stock Purchase Price” means the purchase price, if any, per share of Restricted
Stock subject to an Award.  The Committee shall determine the
Restricted Stock Purchase Price.  It may be greater than or less than
the Fair Market Value of the Stock on the date of the Stock Award.

    

    2.24           “Stock”
means the common stock of the Company, $.001 par value, or, in the event that
the outstanding shares of common stock are later changed into or exchanged for a
different class of stock or securities of the Company or another corporation,
that other stock or security.

    

    2.25           “Stock
Appreciation Right” and “SAR” means the right to receive the difference between
the Fair Market Value of a share of Stock on the grant date and the Fair Market
Value of the share of Stock on the exercise date.

    

    2.26           “Stock
Award” means an Award of Stock to an Eligible Person.

    

    2.27           “10%
Stockholder” means an individual who, at the time the Option is granted, owns
Stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of any Affiliate.  An individual shall be
considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its stockholders, partners, or
beneficiaries.

    

    ARTICLE
III - ELIGIBILITY

    

    The
individuals who shall be eligible to receive Awards shall be those Eligible
Persons of the Company or any of its Affiliates as the Committee shall determine
from time to time. However, no member of the Committee shall be eligible to
receive any Award or to receive Stock, Options, Stock Appreciation Rights, or
any Performance Stock Award under any other plan of the Company or any of its
Affiliates, if to do so would cause the individual not to be a Non-Employee
Director or Outside Director.  The Board of Directors may designate
one or more individuals who shall not be eligible to receive any Award under
this Plan or under other similar plans of the Company.

    

    ARTICLE
IV - GENERAL PROVISIONS RELATING TO AWARDS

    

    4.1           Authority
to Grant Awards.   The Committee may grant to those
Eligible Persons of the Company or any of its Affiliates, as it shall from time
to time determine, Awards under the terms and conditions of this
Plan.  The Committee shall determine subject only to any applicable
limitations set out in this Plan, the number of shares of Stock to be covered by
any Award to be granted to an Eligible Person.

    

    4.2           Dedicated
Shares.   The total number of shares of Stock with respect
to which Awards may be granted under the Plan shall be 30,000,000 shares. The
shares may be treasury shares or authorized but unissued shares.  The
number of shares stated in this Section 4.2 shall be subject to adjustment in
accordance with the provisions of Section 4.5.  In the event that any
outstanding Award shall expire or terminate for any reason or any Award is
surrendered, the shares of Stock allocable to the unexercised portion of that
Award may again be subject to an Award under the Plan.

    

    4.3           Non-transferability.  Awards
shall not be transferable by the Eligible Person otherwise than by will or under
the laws of descent and distribution, or pursuant to a qualified domestic
relations order (as defined by the Code or the rules thereunder), and shall be
exercisable, during the Eligible Person’s lifetime, only by him or a transferee
permitted by this Section 4.  Any attempt to transfer an Award other
than under the terms of the Plan and the Agreement shall terminate the Award and
all rights of the Eligible Person to that Award.

    

    4.4           Requirements
of Law.  The Company shall not be required to sell or issue any
Stock under any Award if issuing that Stock would constitute or result in a
violation by the Eligible Person or the Company of any provision of any law,
statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option or pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable
law.  The determination by the Committee on this matter shall be
final, binding, and conclusive. The Company may, but shall in no event be
obligated to, register any Stock covered by this Plan pursuant to applicable
securities laws of any country or any political subdivision.  In the
event the Stock issuable on exercise of an Option or pursuant to an Award is not
registered, the Company may imprint on the certificate evidencing the Stock any
legend that counsel for the Company considers necessary or advisable to comply
with applicable law. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option or vesting under
an Award, or the issuance of shares pursuant thereto, to comply with any law or
regulation of any governmental authority.

    

    4.5           Changes
in the Company’s Capital Structure.

    

    (a)           The
existence of outstanding Options or Awards shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock or its rights, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.  If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; and (b)
the number and class of shares of Stock then reserved to be issued under the
Plan shall be adjusted by substituting for the total number and class of shares
of Stock then reserved, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.

    

    (b)           If
the Company is merged or consolidated with another corporation and the Company
is not the surviving corporation, or if the Company is liquidated or sells or
otherwise disposes of substantially all its assets while unexercised Options
remain outstanding under this Plan (each of the foregoing referred to as a
“Corporate Transaction”):

    

    (i)           Subject
to the provisions of clause (ii) below, in the event of such a Corporate
Transaction, any unexercised Options shall automatically accelerate so that they
shall, immediately prior to the specified effective date for the Corporate
Transaction become 100% vested and exercisable; provided, however, that any
unexercised Options shall not accelerate if and to the extent such Option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof (the “Successor Corporation”) or to be replaced
with a comparable award for the purchase of shares of the capital stock of the
Successor Corporation.  Whether or not any unexercised Option is
assumed or replaced shall be determined by the Company and the Successor
Corporation in connection with the Corporate Transaction.  The Board
of Directors shall make the determination of what constitutes a comparable award
to the unexercised Option, and its determination shall be conclusive and
binding.  The unexercised Option shall terminate and cease to remain
outstanding immediately following the consummation of the Corporate Transaction,
except to the extent assumed by the Successor Corporation.

    

    (ii)           All
outstanding Options may be canceled by the Board of Directors as of the
effective date of any Corporate Transaction, if (i) notice of cancellation shall
be given to each holder of an Option and (ii) each holder of an Option shall
have the right to exercise that Option in full (without regard to any
limitations set out in or imposed under this Plan or the Option Agreement
granting that Option) during a period set by the Board of Directors preceding
the effective date of the merger, consolidation, liquidation, sale, or other
disposition and, if in the event all outstanding Options may not be exercised in
full under applicable securities laws without registration of the shares of
Stock issuable on exercise of the Options, the Board of Directors may limit the
exercise of the Options to the number of shares of Stock, if any, as may be
issued without registration.  The method of choosing which Options may
be exercised, and the number of shares of Stock for which Options may be
exercised, shall be solely within the discretion of the Board of
Directors.

    

    (c)           After
a merger of one or more corporations into the Company or after a consolidation
of the Company and one or more corporations in which the Company shall be the
surviving corporation, each Eligible Person shall be entitled to have his
Restricted Stock and shares earned under a Performance Stock Award appropriately
adjusted based on the manner the Stock was adjusted under the terms of the
agreement of merger or consolidation.

    

    (d)           In
each situation described in this Section 4.5, the Committee will make similar
adjustments, as appropriate, in outstanding Stock Appreciation
Rights.

    

    (e)           The
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding
Awards.

    

    4.6           Election
under Section 83(b) of the Code.  No Employee shall exercise
the election permitted under Section 83(b) of the Code without written approval
of the Committee.  Any Employee doing so shall forfeit all Awards
issued to him under this Plan.

    

    ARTICLE
V - OPTIONS AND STOCK APPRECIATION RIGHTS

    

    5.1           Type of
Option.  The Committee shall specify at the time of grant
whether a given Option shall constitute an Incentive Option or a Nonqualified
Option.  Incentive Stock Options may only be granted to
Employees.

    

    5.2           Option
Exercise Price.  The price at which Stock may be purchased
under an Incentive Option shall not be less than the greater of:  (a)
100% of the Fair Market Value of the shares of Stock on the date the Option is
granted or (b) the aggregate par value of the shares of Stock on the date the
Option is granted.  The Committee in its discretion may provide that
the price at which shares of Stock may be purchased under an Incentive Option
shall be more than 100% of Fair Market Value.  In the case of any 10%
Stockholder, the price at which shares of Stock may be purchased under an
Incentive Option shall not be less than 110% of the Fair Market Value of the
Stock on the date the Incentive Option is granted.   The price at
which shares of Stock may be purchased under a Nonqualified Option shall be such
price as shall be determined by the Committee in its sole discretion but in no
event lower than the par value of the shares of Stock on the date the Option is
granted.

    

    5.3           Duration
of Options and SARS.  No Option or SAR shall be exercisable
after the expiration of ten (10) years from the date the Option or SAR is
granted.  In the case of a 10% Stockholder, no Incentive Option shall
be exercisable after the expiration of five years from the date the Incentive
Option is granted.

    

    5.4           Amount
Exercisable -- Incentive Options.   Each Option may be
exercised from time to time, in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding.  To the
extent that the aggregate Fair Market Value (determined as of the time an
Incentive Option is granted) of the Stock with respect to which Incentive
Options first become exercisable by the optionee during any calendar year (under
this Plan and any other incentive stock option plan(s) of the Company or any
Affiliate) exceeds $100,000, the portion in excess of $100,000 of the Incentive
Option shall be treated as a Nonqualified Option.  In making this
determination, Incentive Options shall be taken into account in the order in
which they were granted.

    

    5.5           Exercise
of Options.  Each Option shall be exercised by the delivery of
written notice to the Committee setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with:

    

    (a)           cash,
certified check, bank draft, or postal or express money order payable to the
order of the Company for an amount equal to the option price of the
shares;

    

    (b)           stock
at its Fair Market Value on the date of exercise (if approved in advance in
writing by the Committee);

    

    (c)           an
election to make a cashless exercise through a registered broker-dealer (if
approved in advance in writing by the Committee);

    

    (d)           an
election to have shares of Stock, which otherwise would be issued on exercise,
withheld in payment of the exercise price (if approved in advance in writing by
the Committee); and/or

    

    (e)           any
other form of payment which is acceptable to the Committee, including without
limitation, payment in the form of a promissory note, and specifying the address
to which the certificates for the shares are to be mailed.

    

    As
promptly as practicable after receipt of written notification and payment, the
Company shall deliver to the Eligible Person certificates for the number of
shares with respect to which the Option has been exercised, issued in the
Eligible Person’s name. If shares of Stock are used in payment, the aggregate
Fair Market Value of the shares of Stock tendered must be equal to or less than
the aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, certified check, bank draft, or
postal or express money order payable to the order of the
Company.  Delivery of the shares shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have deposited the
certificates in the United States mail, addressed to the Eligible Person, at the
address specified by the Eligible Person.

    

    Whenever
an Option is exercised by exchanging shares of Stock owned by the Eligible
Person, the Eligible Person shall deliver to the Company certificates registered
in the name of the Eligible Person representing a number of shares of Stock
legally and beneficially owned by the Eligible Person, free of all liens,
claims, and encumbrances of every kind, accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank or trust company or
by a brokerage firm having a membership on a registered national stock
exchange).  The delivery of certificates upon the exercise of Options
is subject to the condition that the person exercising the Option provides the
Company with the information the Company might reasonably request pertaining to
exercise, sale or other disposition.

    

    5.6           Stock
Appreciation Rights.  All Eligible Persons shall be eligible to
receive Stock Appreciation Rights.  The Committee shall determine the
SAR to be awarded from time to time to any Eligible Person.  The grant
of a SAR to be awarded from time to time shall neither entitle such person to,
nor disqualify such person from, participation in any other grant of awards by
the Company, whether under this Plan or any other plan of the
Company.  If granted as a stand-alone SAR Award, the terms of the
Award shall be provided in a Stock Appreciation Rights Agreement.

    

    5.7           Stock
Appreciation Rights in Tandem with Options.  Stock Appreciation
Rights may, at the discretion of the Committee, be included in each Option
granted under the Plan to permit the holder of an Option to surrender that
Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock.  In the
event of the surrender of an Option, or a portion of it, to exercise the Stock
Appreciation Rights, the shares represented by the Option or that part of it
which is surrendered, shall not be available for reissuance under the
Plan.  Each Stock Appreciation Right issued in tandem with an Option
(a) will expire not later than the expiration of the underlying Option, (b) may
be for no more than 100% of the difference between the exercise price of the
underlying Option and the Fair Market Value of a share of Stock at the time the
Stock Appreciation Right is exercised, (c) is transferable only when the
underlying Option is transferable, and under the same conditions, and (d) may be
exercised only when the underlying Option is eligible to be
exercised.

    

    5.8           Conditions
of Stock Appreciation Rights.  All Stock Appreciation Rights
shall be subject to such terms, conditions, restrictions or limitations as the
Committee deems appropriate, including by way of illustration but not by way of
limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company, or
payment of any applicable employment or withholding taxes.

    

    5.9           Payment
of Stock Appreciation Rights.  The amount of payment to which
the Eligible Person who reserves an SAR shall be entitled upon the exercise of
each SAR shall be equal to the amount, if any by which the Fair Market Value of
the specified shares of Stock on the exercise date exceeds the Fair Market Value
of the specified shares of Stock on the date of grant of the SAR.  The
SAR shall be paid in either cash or Stock, as determined in the discretion of
the Committee as set forth in the SAR agreement.  If the payment is in
Stock, the number of shares to be paid shall be determined by dividing the
amount of such payment by the Fair Market Value of Stock on the exercise date of
such SAR.

    

    5.10           Exercise
on Termination of Employment.  Unless it is expressly provided
otherwise in the Option or SAR agreement, Options and SAR’s granted to Employees
shall terminate three months after severance of employment of the Employee from
the Company and all Affiliates for any reason, with or without Cause (defined
below), other than death, retirement under the then established rules of the
Company, or severance for disability.  The Committee shall determine
whether authorized leave of absence or absence on military or government service
shall constitute severance of the employment of the Employee at that
time.  Notwithstanding anything contained herein, no Option or SAR may
be exercised after termination of employment for any reason (whether by death,
disability, retirement or otherwise) if it has not vested as at the date of
termination of employment. Cause shall mean any of the following: (A)
conviction of a crime (including conviction on a nolo contendere plea)
involving a felony or dishonesty, or moral turpitude; (B) deliberate and
continual refusal to perform employment duties reasonably requested by the
Company or an affiliate after thirty (30) days’ written notice by certified mail
of such failure to perform, specifying that the failure constitutes cause (other
than as a result of vacation, sickness, illness or injury); (C) fraud or
embezzlement as determined by an independent certified public accountant firm;
or (D) gross misconduct or gross negligence in connection with the business of
the Company or an affiliate which has substantial effect on the Company or the
affiliate.

    

    5.11           Death.  If,
before the expiration of an Option or SAR, the Eligible Person, whether in the
employ of the Company or after he has retired or was severed for disability, or
otherwise dies, the Option or SAR may be exercised until the earlier of the
Option’s or SAR’s expiration date or six months following the date of his death,
unless it is expressly provided otherwise in the Option or SAR
agreement.  After the death of the Eligible Person, his executors,
administrators, or any persons to whom his Option or SAR may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to the Option’s or SAR’s expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR’s agreement.

    

    5.12           Retirement.  Unless
it is expressly provided otherwise in the Option Agreement, before the
expiration of an Option or SAR, the Employee shall be retired in good standing
from the employ of the Company under the then established rules of the Company,
the Option or SAR may be exercised until the earlier of the Option’s or SAR’s
expiration date or three months following the date of his retirement, unless it
is expressly provided otherwise in the Option or SAR agreement.

    

    5.13           Disability.  If,
before the expiration of an Option or SAR, the Employee shall be severed from
the employ of the Company for disability, the Option or SAR shall terminate on
the earlier of the Option’s or SAR’s expiration date or six months after the
date he was severed because of disability, unless it is expressly provided
otherwise in the Option or SAR agreement.

    

    5.14           Substitution
Options.  Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of or affiliated with the Company or any
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company.  The terms and
conditions of the substitute Options granted may vary from the terms and
conditions set out in this Plan to the extent the Committee, at the time of
grant, may deem appropriate to conform, in whole or in part, to the provisions
of the stock options in substitution for which they are granted.

    

    5.15           Reload
Options.   Without in any way limiting the authority of
the Board of Directors or Committee to make or not to make grants of Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Eligible Person to a further Option (a “Reload Option”) in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement.  Any such Reload
Option (a) shall be for a number of shares equal to the number of shares
surrendered as part or all of the exercise price of such Option; (b) shall have
an expiration date which is the greater of (i) the same expiration date of the
Option the exercise of which gave rise to such Reload Option or (ii) one year
from the date of grant of the Reload Option; and (c) shall have an exercise
price which is equal to one hundred percent (100%) of the Fair Market Value of
the Stock subject to the Reload Option on the date of exercise of the original
Option.   Notwithstanding the foregoing, a Reload Option which is
an Incentive Option and which is granted to a 10% Stockholder, shall have an
exercise price which is equal to one hundred ten percent (110%) of the Fair
Market Value of the Stock subject to the Reload Option on the date of exercise
of the original Option and shall have a term which is no longer than five (5)
years.

    

    Any such
Reload Option may be an Incentive Option or a Nonqualified Option, as the Board
of Directors or Committee may designate at the time of the grant of the original
Option; provided, however, that the designation of any Reload Option as an
Incentive Option shall be subject to the provisions of the Code. There shall be
no Reload Options on a Reload Option.  Any such Reload Option shall be
subject to the availability of sufficient shares under Section 4.2 herein and
shall be subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.

    

    5.16           No Rights
as Stockholder.  No Eligible Person shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.

    

    ARTICLE
VI - AWARDS

    

    6.1           Restricted
Stock Awards.  The Committee may issue shares of Stock to an
Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant.  Restricted
Stock shall be subject to restrictions as to sale, transfer, alienation, pledge
or other encumbrance and generally will be subject to vesting over a period of
time specified in the Restricted Stock Agreement.  The Committee shall
determine the period of vesting, the number of shares, the price, if any, of
Stock included in a Restricted Stock Award, and the other terms and provisions
which are included in a Restricted Stock Agreement.

    

    6.2           Restrictions.  Restricted
Stock shall be subject to the terms and conditions as determined by the
Committee, including without limitation, any or all of the
following:

    

    (a)           a
prohibition against the sale, transfer, alienation, pledge, or other encumbrance
of the shares of Restricted Stock, such prohibition to lapse (i) at such time or
times as the Committee shall determine (whether in annual or more frequent
installments, at the time of the death, disability, or retirement of the holder
of such shares, or otherwise);

    

    (b)           a
requirement that the holder of shares of Restricted Stock forfeit, or in the
case of shares sold to an Eligible Person, resell back to the Company at his
cost, all or a part of such shares in the event of termination of the Eligible
Person’s employment during any period in which the shares remain subject to
restrictions;

    

    (c)           a
prohibition against employment of the holder of Restricted Stock by any
competitor of the Company or its Affiliates, or against such holder’s
dissemination of any secret or confidential information belonging to the Company
or an Affiliate;

    

    (d)           unless
stated otherwise in the Restricted Stock Agreement, (i) if restrictions remain
at the time of severance of employment with the Company and all Affiliates,
other than for reason of disability or death, the Restricted Stock shall be
forfeited; and (ii) if severance of employment is by reason of disability or
death, the restrictions on the shares shall lapse and the Eligible Person or his
heirs or estate shall be 100% vested in the shares subject to the Restricted
Stock Agreement.

    

    6.3           Stock
Certificate.   Shares of Restricted Stock shall be
registered in the name of the Eligible Person receiving the Restricted Stock
Award and deposited, together with a stock power endorsed in blank, with the
Company. Each such certificate shall bear a legend in substantially the
following form:

    

    “The
transferability of this certificate and the shares of Stock represented by it is
restricted by and subject to the terms and conditions (including conditions of
forfeiture) contained in the American Security Resources Corp.. 2008 Stock
Option Plan, and an agreement entered into between the registered owner and the
Company.  A copy of the Plan and agreement is on file in the office of
the Secretary of the Company.”

    

    6.4           Rights as
Stockholder.   Subject to the terms and conditions of the
Plan, each Eligible Person receiving a certificate for Restricted Stock shall
have all the rights of a stockholder with respect to the shares of Stock
included in the Restricted Stock Award during any period in which such shares
are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.  Dividends paid with
respect to shares of Restricted Stock in cash or property other than Stock in
the Company or rights to acquire stock in the Company shall be paid to the
Eligible Person currently.  Dividends paid in Stock in the Company or
rights to acquire Stock in the Company shall be added to and become a part of
the Restricted Stock.

    

    6.5           Lapse of
Restrictions.  At the end of the time period during which any
shares of Restricted Stock are subject to forfeiture and restrictions on sale,
transfer, alienation, pledge, or other encumbrance, such shares shall vest and
will be delivered in a certificate, free of all restrictions, to the Eligible
Person or to the Eligible Person’s legal representative, beneficiary or heir;
provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law.  By accepting a
Stock Award and executing a Restricted Stock Agreement, the Eligible Person
agrees to remit when due any federal and state income and employment taxes
required to be withheld.

    

    6.6           Restriction
Period.  No Restricted Stock Award may provide for restrictions
continuing beyond ten (10) years from the date of grant.

    

    6.7           Award of
Stock.  The Committee may award shares of Stock, without any
cash payment for such shares or without any restrictions, to designated Eligible
Persons for services rendered to the Company. The Stock may be awarded at, above
or below the Fair Market Value on the date of grant.  The designation
of a Stock Award shall be made by the Committee in writing at any time after
such Eligible Person has provided value to the Company (or within such period as
permitted by IRS regulations).  The Committee reserves the right to
make adjustments in the amount of an Award if in its discretion unforeseen
events make such adjustment appropriate.

    

    ARTICLE
VII - PERFORMANCE STOCK AWARDS

    

    7.1           Award of
Performance Stock.  The Committee may award shares of Stock,
without any payment for such shares, to designated Eligible Persons if specified
performance goals established by the Committee are satisfied. The terms and
provisions herein relating to these performance-based awards are intended to
satisfy Section 162(m) of the Code and regulations issued
thereunder.  The designation of an employee eligible for a specific
Performance Stock Award shall be made by the Committee in writing prior to the
beginning of the period for which the performance is measured (or within such
period as permitted by IRS regulations).  The Committee shall
establish the maximum number of shares of Stock to be issued to a designated
Employee if the performance goal or goals are met.  The Committee
reserves the right to make downward adjustments in the maximum amount of an
Award if in its discretion unforeseen events make such adjustment
appropriate.

    

    7.2           Performance
Goals.  Performance goals determined by the Committee may be
based on specified increases in cash flow; net profits; Stock price; Company,
segment, or Affiliate sales; market share; earnings per share; return on assets;
and/or return on stockholders’ equity.

    

    7.3           Eligibility.  The
employees eligible for Performance Stock Awards are the senior officers (i.e.,
chief executive officer, president, vice presidents, secretary, treasurer, and
similar positions) of the Company and its Affiliates, and such other employees
of the Company and its Affiliates as may be designated by the
Committee.

    

    7.4           Certificate
of Performance.  The Committee must certify in writing that a
performance goal has been attained prior to issuance of any certificate for a
Performance Stock Award to any Employee.  If the Committee certifies
the entitlement of an Employee to the Performance Stock Award, the certificate
will be issued to the Employee as soon as administratively practicable, and
subject to other applicable provisions of the Plan, including but not limited
to, all legal requirements and tax withholding.  However, payment may
be made in shares of Stock, in cash, or partly in cash and partly in shares of
Stock, as the Committee shall decide in its sole discretion.  If a
cash payment is made in lieu of shares of Stock, the number of shares
represented by such payment shall not be available for subsequent issuance under
this Plan.

    

    ARTICLE
VIII - ADMINISTRATION

    

    The
Committee shall administer the Plan.   All questions of
interpretation and application of the Plan and Awards shall be subject to the
determination of the Committee.  A majority of the members of the
Committee shall constitute a quorum.  All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by a majority of the members shall
be as effective as if it had been made by a majority vote at a meeting properly
called and held.  This Plan shall be administered in such a manner as
to permit the Options, which are designated to be Incentive Options, to qualify
as Incentive Options.  In carrying out its authority under this Plan,
the Committee shall have full and final authority and discretion, including but
not limited to the following rights, powers and authorities, to:

    

    (a)           determine
the Eligible Persons to whom and the time or times at which Options or Awards
will be made;

    

    (b)           determine
the number of shares and the purchase price of Stock covered in each Option or
Award, subject to the terms of the Plan;

    

    (c)           determine
the terms, provisions, and conditions of each Option and Award, which need not
be identical;

    

    (d)           accelerate
the time at which any outstanding Option or SAR may be exercised, or Restricted
Stock Award will vest;

    

    (e)           define
the effect, if any, on an Option or Award of the death, disability, retirement,
or termination of employment of the Employee;

    

    (f)           prescribe,
amend and rescind rules and regulations relating to administration of the Plan;
and

    

    (g)           make
all other determinations and take all other actions deemed necessary,
appropriate, or advisable for the proper administration of this
Plan.

    

    The
actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.

    

    ARTICLE
IX - AMENDMENT OR TERMINATION OF PLAN

    

    The Board
of Directors of the Company may amend, terminate or suspend this Plan at any
time, in its sole and absolute discretion; provided, however, that to the extent
required to qualify this Plan under Rule 16b-3 promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended, no amendment that would (a)
materially increase the number of shares of Stock that may be issued under this
Plan, (b) materially modify the requirements as to eligibility for participation
in this Plan, or (c) otherwise materially increase the benefits accruing to
participants under this Plan, shall be made without the approval of the
Company’s stockholders; provided further, however, that to the extent required
to maintain the status of any Incentive Option under the Code, no amendment that
would (a) change the aggregate number of shares of Stock which may be issued
under Incentive Options, (b) change the class of employees eligible to receive
Incentive Options, or (c) decrease the Option price for Incentive Options below
the Fair Market Value of the Stock at the time it is granted, shall be made
without the approval of the Company’s stockholders.  Subject to the
preceding sentence, the Board of Directors shall have the power to make any
changes in the Plan and in the regulations and administrative provisions under
it or in any outstanding Incentive Option as in the opinion of counsel for the
Company may be necessary or appropriate from time to time to enable any
Incentive Option granted under this Plan to continue to qualify as an incentive
stock option or such other stock option as may be defined under the Code so as
to receive preferential federal income tax treatment.

    

    ARTICLE
X - MISCELLANEOUS

    

    10.1           No
Establishment of a Trust Fund.   No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of
any Eligible Person under this Plan.  All Eligible Persons shall at
all times rely solely upon the general credit of the Company for the payment of
any benefit which becomes payable under this Plan.

    

    10.2           No
Employment Obligation.  The granting of any Option or Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person.  The right of the Company or any Affiliate to
terminate the employment of any person shall not be diminished or affected by
reason of the fact that an Option or Award has been granted to him.

    

    10.3           Forfeiture.  Notwithstanding
any other provisions of this Plan, if the Committee finds by a majority vote
after full consideration of the facts that an Eligible Person, before or after
termination of his employment with the Company or an Affiliate for any reason
(a) committed or engaged in fraud, embezzlement, theft, commission of a felony,
or proven dishonesty in the course of his employment by the Company or an
Affiliate, which conduct damaged the Company or Affiliate, or disclosed trade
secrets of the Company or an Affiliate, or (b) participated, engaged in or had a
material, financial, or other interest, whether as an employee, officer,
director, consultant, contractor, stockholder, owner, or otherwise, in any
commercial endeavor in the United States which is competitive with the business
of the Company or an Affiliate without the written consent of the Company or
Affiliate, the Eligible Person shall forfeit all outstanding Options and all
outstanding Awards, and including all exercised Options and other situations
pursuant to which the Company has not yet delivered a stock
certificate.  Clause (b) shall not be deemed to have been violated
solely by reason of the Eligible Person’s ownership of stock or securities of
any publicly owned corporation, if that ownership does not result in effective
control of the corporation.

    

    The
decision of the Committee as to the cause of an Employee’s discharge, the damage
done to the Company or an Affiliate, and the extent of an Eligible Person’s
competitive activity shall be final.  No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.

    

    10.4           Tax
Withholding.  The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Eligible Person any sums required
by federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option or SAR, lapse of restrictions on Restricted Stock, or
award of Performance Stock.  In the alternative, the Company may
require the Eligible Person (or other person exercising the Option, SAR or
receiving the Stock) to pay the sum directly to the employer corporation. If the
Eligible Person (or other person exercising the Option or SAR or receiving the
Stock) is required to pay the sum directly, payment in cash or by check of such
sums for taxes shall be delivered within 10 days after the date of exercise or
lapse of restrictions. The Company shall have no obligation upon exercise of any
Option or lapse of restrictions on Stock until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise or lapse of restrictions is sufficient to cover all sums due with
respect to that exercise.  The Company and its Affiliates shall not be
obligated to advise an Eligible Person of the existence of the tax or the amount
which the employer corporation will be required to withhold.

    

    10.5           Written
Agreement or Course of Conduct.  Each Option and Award shall be
embodied in a written agreement which shall be subject to the terms and
conditions of this Plan and shall be signed by the Eligible Person and by a
member of the Committee on behalf of the Committee and the Company or an
executive officer of the Company, other than the Eligible Person, on behalf of
the Company.  The agreement may contain any other provisions that the
Committee in its discretion shall deem advisable which are not inconsistent with
the terms of this Plan.  Notwithstanding the foregoing, a written
agreement is not required if the Option or Award is granted in the ordinary
course of conduct of the business and the Company has sufficient accounting
records reflecting the services rendered in connection with the
grant.

    

    10.6           Indemnification
of the Committee and the Board of Directors.  With
respect  to administration of this Plan, the Company shall indemnify
each present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Company for, all
expenses (including attorney’s fees, the amount of judgments, and the amount of
approved settlements made with a view to the curtailment of costs of litigation,
other than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors.  However, this indemnity shall not include any expenses
incurred by any member of the Committee and/or the Board of Directors in respect
of matters as to which he shall be finally adjudged in any action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in the
performance of his duty as a member of the Committee and the Board of
Directors.  In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee and the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Company, in writing, the opportunity to
handle and defend same at its own expense.  This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.

    

    10.7           Gender.  If
the context requires, words of one gender when used in this Plan shall include
the others and words used in the singular or plural shall include the
other.

    

    10.8           Headings.  Headings
of Articles and Sections are included for convenience of reference only and do
not constitute part of the Plan and shall not be used in construing the terms of
the Plan.

    

    10.9           Other
Compensation Plans.  The adoption of this Plan shall not affect
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.

    

    10.10         Other
Options or Awards.  The grant of an Option or Award shall not
confer upon the Eligible Person the right to receive any future or other Options
or Awards under this Plan, whether or not Options or Awards may be granted to
similarly situated Eligible Persons, or the right to receive future Options or
Awards upon the same terms or conditions as previously granted.

    

    10.11        
Governing
Law.  The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.dex101.htm

    
      

      

    

    Exhibit
10.1

      THE
BURLINGTON NORTHERN SANTA FE SUPPLEMENTAL RETIREMENT PLAN

      

      Amended and Restated April 24,
2008, effective as of January 1, 2005

      

      Section
1

       

      General

      

      
        	
                1.1.  

              	
                Establishment of Supplemental
      Plan and Purpose.

              

      

      

      Burlington
Northern Santa Fe Corporation, a Delaware corporation (hereinafter the
"Company"), has established the Burlington Northern Santa Fe Supplemental
Retirement Plan (hereinafter
the "Supplemental Plan"), effective October 1, 1996.  The Supplemental
Plan is subject to the following:

      

      
        	
                (a)

              	
                The purpose of the
      Supplemental Plan is to enable eligible employees of the Employers to receive
      retirement income and other benefits in addition to the retirement income
      and other benefits payable under the qualified plans of the
      Company.  The Company and each Affiliated Company
      which, with the consent of the Chief Executive Officer or Board of
      Directors of the Company, adopts the Supplemental Plan are referred
      to herein
      collectively as the "Employers" and individually as an "Employer".   The term
      "Affiliated Company" shall mean all persons with whom the Company is
      considered to be a single employer under section 414(b) of the Internal
      Revenue Code of 1986, as amended (hereinafter, the “Code”) and all persons
      with whom the Company would be considered a single employer under section
      414(c) of the Code.

              

      

      

      
        	
                (b)

              	
                The Supplemental Plan as set
      forth herein shall apply to distributions under the Supplemental Plan
      commencing on or after January 1, 2005 (the “Effective Date” of the
      Supplemental Plan as set forth herein), excluding payments made before or
      made after the Effective Date that are part of a series of installment or
      annuity payments that commenced prior to the Effective Date; provided that
      payments that commenced prior to the
      Effective Date will be subject to the applicable provisions of the
      Supplemental Plan as in effect prior to the Effective
      Date.

              

      

      

      
        	
                (c)

              	
                Notwithstanding the
      foregoing, if a Participant’s Termination Date occurred before January 1,
      2009, and payment of his Supplemental Plan benefits did not commence
      before the Effective Date,
then:

              

      

      

      (i)  If payment of the
Participant’s Supplemental Plan benefits has commenced before January 1, 2009,
the time and form of payments will be as elected by the Participant in
accordance with the terms of the Supplemental Plan as in effect prior to the
Effective Date.

      

      (ii)  If payment of the
Participant’s Supplemental Plan benefits has not commenced before January 1,
2009, payment of the Participant’s Supplemental Plan benefits will be made in
accordance with the terms of the Supplemental Plan as set forth herein, provided
that:

      

      (A) The Participant’s Benefit
Commencement Date will be the later of (I) January 1, 2009 or (II) the Benefit
Commencement Date determined under subsection 4.3 determined without regard to
clause (I) of this paragraph (A).

      

      (B) The Participant may file a
Distribution Election no later than November 30, 2008 in accordance with
paragraph 4.2(a), and if the Participant fails to file a timely Distribution
Election, paragraph 4.2(b) will apply.  If the Participant has elected
in accordance with subsection 4.2 to have benefits paid as an Annuity (or
amounts are otherwise to be paid as an Annuity), the form of Annuity will be
determined in accordance with paragraph 4.2(c).

      

      
        	
                1.2.  

              	
                ERISA

              

      

      

      For
purposes of applying Title I of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), the Supplemental Plan
consists of two components: (a) an "excess benefit" plan, within the meaning of
section 3(36) of ERISA (the "Excess Plan")
and (b) a plan maintained primarily for the purpose of providing supplemental
retirement benefits for a select group of management or highly compensated
employees within the meaning of section 301 (a)(3) of ERISA (the "Management
Plan").  All benefits provided under the Supplemental Plan will be
provided under the Excess Plan component, except to the extent that such
benefits may not be provided under an excess plan as defined under section
3(36) of ERISA. Any
benefits that may not be provided under the Excess Plan component will be
provided under the Management Plan component.

      

      
        	
                1.3.  

              	
                Administration

              

      

      

      The
Supplemental Plan shall be administered by the Vice President – Human Resources
and Medical of the Company (the “Administrator”) as more fully described
in Section 5 hereof.

       

                   1.4. Source
of Benefits

      

      The
amount of any benefit payable under the Supplemental Plan will be paid in cash
from the general assets of the Employers or from one or more trusts, the assets
of which are subject to the claims of the Employers' general creditors in the
event of bankruptcy or insolvency.  Such amounts payable shall be
reflected on the accounting records of the Employers but shall not be construed
to create, or require the creation of, a trust, custodial or escrow
account.  Nothing contained in this Supplemental Plan and no action
taken pursuant to its provisions, shall create a trust or fiduciary relationship
of any kind between an Employer and an employee or any other
person.  Neither an employee nor beneficiary of an
employee shall acquire any interest greater than that of an unsecured
creditor, subject
to any preferences provided by federal bankruptcy laws. 

       

      

      
        	
                1.5.  

              	
                Applicable
      Laws

              

      

      

      The
Supplemental Plan shall be construed and administered in accordance with the
internal laws of the State of Texas to the extent that such laws are not
preempted by the laws of the United States.

      

      
        	
                1.6.  

              	
                Gender
      and Number

              

      

      

      Where
the context admits, words in any gender shall include any other gender words,
and the singular shall include the plural, and the plural shall include the
singular.

      

      
        	
                1.7.  

              	
                Capitalized
      Terms

              

      

      

      Capitalized
terms shall have the meaning as defined herein.  If not separately
defined herein, they shall have the meaning as defined in the Burlington
Northern Santa Fe Retirement Plan
("Retirement Plan").

      

      
        	
                1.8.  

              	
                Severability
      of Supplemental
      Plan Provisions

              

      

      

      In
the event any provision of the Supplemental Plan shall be held invalid or
illegal for any reason, any invalidity or illegality shall not affect the
remaining parts of the Supplemental Plan, but the Supplemental Plan shall be
construed and enforced as if the invalid or illegal provision had never been
inserted, and the Company shall have the right to correct and remedy such
questions of invalidity or illegality by amendment as provided in the
Supplemental Plan.

       

      
        	
                1.9.  

              	
                Notices

              

      

      

      Any
notice or document required to be filed with the Administrator under the
Supplemental Plan will be properly filed if delivered or mailed by certified
mail to the Administrator or the Administrator’s delegate, in care of the
Company, at its principal executive offices or such other address as may be
specified by the Administrator.  Any notice required under the
Supplemental Plan may be waived by the party entitled to notice.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                Section
      2

              

      

       

      Participation

       

                 
2.1  Participation

      

      Subject
to any conditions or limitations of the Supplemental Plan, each individual who
was a Participant in the Supplemental Plan immediately prior to the Effective
Date will continue to be a Participant under this Section 2 on and after that
date, and each other employee of an Employer who was not a Participant
immediately prior to the Effective Date will automatically be enrolled in and
become a Participant
in the Supplemental Plan under this section on the first day upon which he
satisfies the following requirements:

      

      
        	
                (a)

              	
                he
      is a participant in the Retirement Plan;
and

              

      

      

      
        	
                (b)

              	
                his
      benefits under the Retirement Plan are limited or affected by any of
      the provisions set forth in subparagraphs (i), (ii) or (iii)
      below:

              

      

      

      (i)
the compensation limitations of section 401(a)(17) of the Code or the benefit
limitation of sections 415(b) or 415(e) of the Code;

      

      (ii)
the Retirement Plan does not take into account as compensation any non-
qualified deferred compensation, or compensation foregone in
exchange for a Company stock award as set forth in Schedule A(1) to this Supplemental
Plan, or

      

      (iii) any other such
compensatory arrangement as may be established by the Company as set forth in
Schedule A(2).

      

      Schedule
A is hereby attached hereto and incorporated by reference.   Notwithstanding the
foregoing, an individual shall not be eligible to become a Participant in the
Supplemental Plan earlier than the 31st day following the date on which he first
is in Salary Band 34 or higher.

       

                 
2.2  Plan Not Contract of Employment

      

      The
Supplemental Plan does not constitute a contract of employment, and
participation in the Supplemental Plan will not give any employee the right to
be retained in the employ of any Employer nor any right or claim to any benefit
under the Supplemental Plan, unless such right or claim has specifically accrued
under the terms of the Supplemental Plan.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
3

       

      Amount of Supplemental Retirement Benefits

       

                 
3.1  Amount of Benefits

      

      A
Participant under this Section 3 shall be eligible for a Supplemental Retirement
Benefit under this Supplemental Plan in an amount equal to:

      

      
        	
                (a)

              	
                the
      amount of the monthly benefit to which the Participant, surviving spouse, or other Contingent
      Annuitant as defined in the Retirement Plan would be entitled under
      the Retirement Plan, if (i) such benefit were determined without regard to
      the compensation limitations of section 401(a)(17) of the Code and without
      regard to the limitations imposed by section 415 of the Code, and (ii) the
      Retirement Plan included as compensation any Participant contributions
      under a non-qualified deferred compensation arrangement, or compensation
      foregone in exchange for a Company stock award as set forth in Schedule
      A(1) to this
      Supplemental Plan, or (iii) any other such
      compensatory arrangement as may be established by the Company as set forth
      in Schedule A(2), if
      not otherwise credited under the Retirement Plan.  To the
      extent that any compensation is taken into account under the Excess Plan,
      such compensation shall not be taken into account under the Management
      Plan.

              

      

      

      REDUCED
BY

      

      
        	
                (b)

              	
                the
      value of the benefits
      under the Retirement Plan that are payable to or on account of the
      Participant, surviving spouse, and other Contingent Annuitants; provided
      that if benefit payments under the Retirement Plan to or on account of the
      Participant, surviving spouse, or other Contingent Annuitants have not
      commenced on or before the Benefit Commencement Date, the amount
      determined under this paragraph (b) shall equal the value of the benefits
      that would be payable under the Retirement Plan to or on account of
      the Participant, surviving spouse, and other Contingent
      Annuitants if such benefit payments under the Retirement Plan had
      commenced on the Benefit Commencement
  Date.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
4

       

      Vesting and Payment of
Supplemental Retirement Benefits

       

                  
4.1 Vesting

      

      Subject to subsection 7.2, a
Participant shall have become vested and have a nonforfeitable interest in his
benefits determined under Section 3 when and to the extent
that his accrued benefit under the Retirement Plan becomes vested and
nonforfeitable, provided,
however, that if a Participant has entered into an agreement set forth in
Schedule A(2) and such agreement contains provisions related to vesting
under the Supplemental Plan, such provisions shall control for
purposes of this Supplemental Plan.  Notwithstanding the
foregoing provisions of this subsection 4.1, a Participant’s right to any
benefits shall be subject to the provisions of the Recoupment Policy adopted by
the Board of Directors on February 13, 2008, as may be amended from time to
time.

       

                 
4.2  Distribution Election

      

      Subject to the terms of the
Supplemental Plan, a Participant may elect the form in which such Participant’s
benefits will be distributed, subject to the following:

      

      
        	
                (a)

              	
                A Participant’s election as
      to whether his benefits are to be distributed as an Annuity, in a Lump Sum
      Form, or in an Installment Form shall be made by the Participant by filing
      a Distribution Election with the Administrator no later than the
      30th day following the date on
      which the Participant first becomes eligible to participate in the
      Supplemental Plan in accordance with subsection 2.1, or is deemed to
      participate in the Supplemental Plan in accordance with Treasury
      Regulation Section 1.409A-2(a).  However, individuals who are
      Participants in the Supplemental Plan on or prior to January 1, 2009 may
      file a Distribution Election with the Administrator no later than November
      30, 2008, subject to the provisions of section 409A of the Code and
      applicable guidance issued thereunder (“Section
    409A”).

              

      

      

      
        	
                (b)

              	
                If a Participant fails to
      file a Distribution Election in a timely manner in accordance with this
      subsection 4.2, then the Participant will be deemed to have elected to
      have his benefits paid in the form of an
  Annuity.

              

      

      

      
        	
                (c)

              	
                If the Participant has
      elected in accordance with the foregoing provisions of this Section 4 to
      have benefits paid as an Annuity (or amounts are otherwise to be paid as
      an Annuity), he may at any time before the date any Annuity payments have
      commenced, modify his election by choosing that payments will be made in a
      different form of Annuity, and/or choosing a different Contingent
      Annuitant of the Annuity; provided that such change may not modify the
      Benefit Commencement Date; and further provided that this paragraph (c) is
      subject to subsection 4.8, if that subsection is otherwise
      applicable.  If the Participant has elected in accordance with
      the foregoing provisions of this Section 4 to have benefits paid as an
      Annuity (or amounts are otherwise to be paid as an Annuity), and fails to
      elect the form of Annuity prior to the date Annuity payments are to
      commence, payment will be made in the Single Life Annuity Form if the
      Participant is not married on the Benefit Commencement Date and in the
      100% Joint and Survivor Annuity Form with the Participant’s spouse as the
      Contingent Annuitant if the Participant is married on the Benefit
      Commencement Date.

              

      

       

                
4.3   Commencement of
Benefits

      

      Subject to the terms and conditions
of the Supplemental Plan (including, without limitation, subsection 4.7,
relating to Specified Employees), a Participant’s Supplemental Retirement
Benefit will commence on the Participant’s Benefit Commencement
Date.  The
Benefit Commencement Date is the first day of the calendar month following the
later of:

      

      (a)  the calendar month
in which occurs the Participant’s Termination Date; and

      

      (b)  if the Participant
has completed 10 Years of Vesting Service on or before his Termination Date, the
calendar month in which the Participant attains age 55, or if the Participant
has not completed at least 10 Years of Vesting Service on his Termination Date,
the calendar month in which the Participant attains age 65.

       

                
4.4   Termination
Date

      

      A Participant’s “Termination Date”
(including references to a Participant’s employment termination and terminating
employment, as well as references to a Participant’s separation from service)
shall mean the Participant ceasing to be employed by the Company and the
Affiliated Companies, subject to the following:

      

      
        	
                (a)

              	
                The employment relationship
      will be deemed to have ended at the time the employee and his employer
      reasonably anticipate that a level of bona fide services the employee
      would perform for the Company and the Affiliated Companies after such date
      (whether as an employee or independent contractor, but not as a director)
      would permanently decrease to no more than 20% of the average level of
      bona fide services performed over the immediately preceding 36 month
      period (or the full period of service to the Company and the Affiliated
      Companies if the employee has performed services for the Company and the
      Affiliated Companies for less than 36 months).  In the absence
      of an expectation that the employee will perform at the above-described
      level, the date of termination of employment will not be delayed solely by
      reason of the employee continuing to be on the Company's and the
      Affiliated Companies' payroll after such
  date.

              

      

      

      
        	
                (b)

              	
                The employment relationship
      will be treated as continuing intact while the employee is on a bona fide
      leave of absence (determined in accordance with Treasury Regulation
      Section 1.409A-1(h)).

              

      

       

               
4.5    Forms of
Payment

      

      If a Participant survives to his
Benefit Commencement Date (determined without regard to the provisions of
subsection 4.7, relating to Specified Employees), the Participant’s Supplemental
Retirement Benefit will be distributed in one of the forms set forth in this
subsection 4.5, as determined in accordance with subsection
4.2:

      

      
        	
                (a)

              	
                Single Life Annuity
      Form.  Under the Single Life Annuity Form, a Participant’s
      Supplemental Retirement Benefit will be paid to him monthly, commencing on
      his Benefit Commencement Date, and ending with the payment for the month
      during which his death
occurs.

              

      

      

      
        	
                (b)

              	
                Joint and Survivor Annuity
      Form.  Under the Joint and Survivor Annuity Form, the
      Participant will receive a reduced monthly amount commencing on the
      Benefit Commencement Date and payable for the life of the Participant and,
      upon his death, a continuing monthly payment to the Contingent Annuitant
      of 25%, 50%, 66-2/3%, or 100% of the monthly amount the Participant was
      receiving, with the payments to the Contingent Annuitant to continue for
      the Contingent Annuitant’s life.  The Contingent Annuitant under
      the Joint and Survivor Annuity Form may be designated by the Participant
      (and may be changed by the Participant) at any time before the Benefit
      Commencement Date.

              

      

      

      
        	
                (c)

              	
                Period Certain and Life
      Annuity Form.  Under the Period Certain and Life Annuity Form,
      the Participant will receive a reduced monthly amount commencing on the
      Benefit Commencement Date and payable to the Participant for life and,
      upon his death, a continuing monthly payment to the Contingent Annuitant
      of the same amount for the remainder of the 120 months beginning with the
      month that includes the Benefit Commencement Date.  The
      Contingent Annuitant may be designated by the Participant (and may be
      changed by the Participant) at any time before the Participant's
      death.  If the Contingent Annuitant designated by the
      Participant predeceases the Participant, the Contingent Annuitant shall
      receive no benefits under this subsection 4.5, and the benefits will be
      paid to the Participant or, if the Participant dies prior to the payment
      of the 120 monthly payments, the remainder will be paid to the
      Participant’s estate at the same time and in the same manner as they would
      have been paid to the Participant had he survived to the end of the 120
      month period after the Benefit Commencement Date.  Subject to
      the applicable provisions of subsection 4.8, if the Contingent Annuitant
      designated by the Participant survives the Participant but dies prior to
      payment of all period certain benefits, the benefits, if any, that would
      be payable to the Contingent Annuitant shall be paid to the Contingent
      Annuitant’s estate (or to a secondary Contingent Annuitant to the extent
      designated in an effective Contingent Annuitant Designation Form) at the
      same time and in the same manner as they would have been payable to the
      Contingent Annuitant if the Contingent Annuitant had
      survived.

              

      

      

      
        	
                (d)

              	
                Lump Sum
      Form.  Under the Lump Sum Form, the Participant will receive a
      single sum in full satisfaction of any liability under the Supplemental
      Plan to such
Participant.  

              

      

      

      
        	
                (e)

              	
                Installment
      Form.  Under the Installment Form, the Participant will receive
      monthly installments over a period of five or ten years, beginning on the
      Benefit Commencement Date, and if the Participant dies prior to payment of
      all such installments, the remainder shall be paid to the Contingent
      Annuitant.  The Contingent Annuitant with respect to the
      Installment Form may be designated by the Participant (and may be changed
      by the Participant) at any time before the Participant's
      death.  If the Contingent Annuitant designated by the
      Participant predeceases the Participant, the Contingent Annuitant shall
      receive no benefits under this subsection 4.5, and the installments will
      be paid to the Participant or, if the Participant dies prior to the
      payment of all of the installments, the remainder will be paid to the
      Participant’s estate at the same time and in the same manner as they would
      have been paid to the Participant had he survived during the entire
      installment payment period.  Subject to the applicable
      provisions of subsection 4.8, if the Contingent Annuitant designated by
      the Participant survives the Participant but dies prior to payment of all
      installments, then the installments, if any, that would be payable to the
      Contingent Annuitant shall be paid to the Contingent Annuitant’s estate
      (or to a secondary Contingent Annuitant to the extent designated in an
      effective Contingent Annuitant Designation Form) at the same time and in
      the same manner as they would have been payable to the Contingent
      Annuitant if the Contingent Annuitant had
  survived.

              

      

      

      
        	
                (f)

              	
                Annuity Form of
      Payment.  For purposes of this Supplemental Plan, the term
      “Annuity” means the Life Annuity Form, the Joint and Survivor Annuity
      Form, and the Period Certain and Life Annuity
  Form.

              

      

      

      Notwithstanding the foregoing, if a
Participant’s Supplemental Retirement Benefit has a present value (determined in
accordance with subsection 4.6 below) on the Participant’s Benefit Commencement
Date of $25,000.00 or less, such benefit shall be distributed on the Benefit
Commencement Date in the Lump Sum Form described in paragraph (d)
above.  

      

      For purposes of the Joint and
Survivor Annuity Form, a Participant may designate any natural person as his
“Contingent Annuitant” by signing a Contingent Annuitant Designation Form
furnished by the Administrator.  For purposes of the Period Certain
and Life Annuity Form, and the Installment Form, a Participant may designate any
legal or natural person as his “Contingent Annuitant” by signing a Contingent
Annuitant Designation Form furnished by the Administrator.  A
Contingent Annuitant Designation Form will be effective only when the signed
form is filed with the Administrator while the Participant is
alive.  A designation of a Contingent Annuitant may be revoked or
amended only by the completion of a new Contingent Annuitant Designation Form,
and only to the extent permitted by the provisions of the Supplemental
Plan.  If a Participant’s spouse is named as such Participant’s
Contingent Annuitant, the Participant and such spouse are subsequently divorced,
and such divorce occurs prior to the Benefit Commencement Date, then the
designation of the spouse made prior to the divorce shall be null and
void.  In order to designate a former spouse as a Contingent
Annuitant, a new Contingent Annuitant Designation Form must be
completed.  Subject to paragraphs (c) and (e) above (relating to the
Period Certain and Life Form and the Installment Form), if a deceased
Participant failed to designate a Contingent Annuitant as provided above, his
benefits shall be paid in accordance with the following order of
priority:  (i) to his surviving spouse, if any; (ii) to his surviving
children in equal shares; or (iii) the estate of the
Participant.

       

                 4.6
  Actuarial
Equivalence

      

      A Participant’s Supplemental
Retirement Benefit will be the Actuarial Equivalent of the Participant’s benefit
determined under subsection 3.1, determined by applying the appropriate interest
rate and other actuarial assumptions then set forth in Article 9.02(g) of the
Retirement Plan as of the Participant's Benefit Commencement
Date.

      

      
        	 	
                4.7

              	
                Specified
      Employees

              

      

      

      If a Participant is a "Specified
Employee" at the time of his separation from service, and payment of his
benefits is pursuant to the separation from
service, payment of the Participant’s Supplemental Plan benefits shall be made
to him on the later of the date otherwise scheduled for such payment or the
first day of the seventh month following such separation from service; provided
that if payment of such benefit is delayed by reason of this subsection 4.7,
amounts otherwise due to the Participant prior to the payment date shall be
accumulated with interest determined in accordance with subsection 4.6, and paid
to him on the first day of the seventh month.  “Specified Employee”
shall be defined in compliance with Treasury Regulation Section 1.409A-1(i) and
such rules as may be established by the Chief Executive Officer of the Company
or his delegate from time to time.

       

                
4.8   Payment of Supplemental Plan
Benefits to Contingent Annuitants

      

      If a Participant dies before his
Benefit Commencement Date and he is married at the time of his death, then
benefits will be provided to the Participant’s spouse (determined at the time of
the Participant’s death, and referred to as the “Surviving Spouse”) to the
extent provided in this subsection 4.8.  If the Participant dies
before his Benefit Commencement Date, benefits will be payable with respect to
the Participant only to the extent provided under this subsection
4.8.  For the avoidance of doubt, it is recited that no person will be
entitled to benefits under this Supplemental Plan if the Participant dies before
his Benefit Commencement Date without a Surviving Spouse or if the Participant
dies before his Benefit Commencement Date with a Surviving Spouse and the
Surviving Spouse does not survive until the Benefit Commencement
Date.

      

      
        	
                (a)

              	
                Annuity Form.  If
      the Participant’s Distribution Election provides for payment of his
      benefits as an Annuity (or benefits are otherwise to be paid as in an
      Annuity), then the Surviving Spouse will be entitled to the Pre-Retirement
      Surviving Spouse Benefit in the form of an annuity payable for her
      lifetime to which the Surviving Spouse would have been entitled under the
      Retirement Plan if the benefit had been determined under the Retirement
      Plan in accordance with subsection 3.1 of this Supplemental Plan,
      including the reduction provided by paragraph 3.1(b) (the “Supplemental
      Plan Pre-Retirement Surviving Spouse
      Benefit”).  

              

      

      

      
        	
                (b)

              	
                Installment and Lump Sum
      Forms.  If the Participant’s Distribution Election provides for
      payment of his benefits in the Installment Form or the Lump Sum Form, and
      such election is in effect and has not been revoked before the
      Participant’s death, then the Surviving Spouse will be entitled to the
      Installment Form of payment over a period of five or ten years or to the
      Lump Sum Form, (with choice of the Lump Sum Form or the Installment Form,
      and the number of years of installments if applicable, to be as elected by
      the Participant in his Distribution Election), and such Installment Form
      or Lump Sum Form to be the actuarial equivalent of the Supplemental Plan
      Pre-Retirement Surviving Spouse
Benefit.

              

      

      

      
        	
                (c)

              	
                Time of Benefit
      Commencement.  Benefits to the Surviving Spouse under this
      subsection 4.8 will commence (or in the case of the Lump Sum Form, will be
      made) on the Participant’s Benefit Commencement
      Date.  

              

      

      

      
        	
                (d)

              	
                Death after Benefit
      Commencement.  If a Participant dies on or after his Benefit
      Commencement Date, no death benefits will be payable under the
      Supplemental Plan except as may be provided under the distribution method
      applicable to such benefits in accordance with subsection 4.5 hereof.
      

              

      

      

      
        	
                (e)

              	
                Designation of Contingent
      Annuitant.  If the Participant dies before his Benefit
      Commencement Date, then, for purposes of this subsection 4.8, the
      Participant’s designation of a Contingent Annuitant other than the
      Surviving Spouse will be disregarded, and instead the Participant will be
      treated as though he had designated the Surviving Spouse as his Contingent
      Annuitant.

              

      

      

      
        	
                (f)

              	
                Application to Specified
      Employees.  For purposes of this subsection 4.8, the provisions
      of subsection 4.7 will be disregarded in determining the Participant’s
      Benefit Commencement Date.

              

      

       

                 
4.9  Alienation of Benefits

      

      The
benefits payable to, or on account of, any individual under the Supplemental
Plan may not be voluntarily or involuntarily assigned or alienated.

       

               
4.10  Administration and Tax Liability 

      

      Notwithstanding any other
provisions of this Supplemental Plan, it is intended that the Supplemental Plan
shall in all respects be operated in accordance with Section
409A.  Further, the Administrator may modify the
time of payment of the Participant’s benefits if it determines that such
modification may be necessary to avoid acceleration of tax or imposition of
penalties under Section 409A.  Regardless of whether the Administrator
modifies or fails to modify the time at which any such benefit is settled,
paid-out, vested or transferred, the Participant shall be solely liable for any
taxes, including without limitation taxes that may be imposed under Section
409A, additional taxes and interest incurred by reason of such
transfer.

      

      The
Employers may withhold from any payment of benefits hereunder any taxes required
to be withheld and such sum as the Employers may reasonably estimate to be
necessary to cover any taxes for which the Employers may be liable and which may
be assessed with regard to such payment.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
5

       

      Administration

       

                 
5.1  Authority

      

      The
Administrator shall have the following discretionary authority, powers, rights
and duties in addition to those vested in the Administrator elsewhere in the
Supplemental Plan:

      

      
        	
                (a)

              	
                to
      adopt and apply in a uniform and nondiscriminatory manner to all persons
      similarly situated, such rules of procedure and regulations as, in its
      opinion, may be necessary for the proper and efficient administration of
      the Supplemental Plan and as are consistent with the provisions of the
      Supplemental Plan;

              

      

       

      
        	
                (b)

              	
                to
      enforce the Supplemental Plan in accordance with its terms and with
      such applicable rules
      and regulations as may be adopted by the
  Administrator;

              

      

      

      
        	
                (c)

              	
                to
      determine conclusively all questions arising under the Supplemental Plan,
      including the power to determine the eligibility of employees and the
      rights of Participants and other persons entitled to benefits under the
      Supplemental Plan and their respective benefits, to make factual findings
      and to remedy ambiguities, inconsistencies or omissions of whatever
      kind;

              

      

      

      
        	
                (d)

              	
                to
      maintain and keep adequate records concerning the Supplemental Plan and
      concerning its proceedings and acts in such form and detail as the Administrator may
      decide;

              

      

      

      
        	
                (e)

              	
                to
      direct all payment of benefits under the Supplemental Plan;
      and

              

      

      

      
        	
                (f)

              	
                to
      employ such agents, attorney, accountants or other persons (who may also
      be employed by or represent the Employers) for such purposes as the
      Administrator considers necessary or desirable to discharge the
      Administrator’s duties.

              

      

       

      The Administrator
may from time to time delegate duties to members of the Human Resources
Department or other employees of the Company.

       

                 
5.2  Information to be Furnished to the Administrator

      

      The
Employers shall furnish to the Administrator such data, tax withholding
certifications and information as may be required for it to discharge its
duties, and the records of the Employers shall be conclusive on all persons
unless determined to be incorrect.  Participants and other persons
entitled to benefits under the Supplemental Plan must furnish to the
Administrator such evidence, data or information as the Administrator considers
desirable to carry out the Supplemental Plan.

       

                 
5.3  Decisions

      

      Any
interpretation of the Supplemental Plan and any decision on any matter within
the discretion of the Administrator made by the Administrator shall be binding
on all persons, provided, however, that any person claiming entitlement to
benefits in an amount other than that received shall have the right after review
and denial, in whole or in part, of such claim by the Administrator to a review
of such denial by the Burlington Northern Santa Fe Employee Benefits Committee
(the “Committee”).  Such review shall be initiated by the written
request therefore by such person filed with the Committee within 60 days after
receipt by the person of the denial by the Administrator.  The
Committee may from time to time delegate its duties to members of the Human
Resources Department or other employees of the Company.  A
misstatement or other mistake of fact shall be corrected when it becomes known,
and the Administrator shall make such adjustment on account thereof as it
considers equitable and practicable.   Any interpretation of
the Supplemental Plan with respect to benefits payable to the Administrator
shall be made by the Committee.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
6

       

      Amendment
and Termination

       

                 
6.1  Amendment and Termination 

      

                 The
Supplemental Plan may be amended at any time and from time to time by the Chief
Executive Officer of the Company or resolution of the Board of Directors of the
Company; provided however, the Chief Executive Officer of the Company may not
amend the Supplemental
Plan in any manner which would make benefit or other changes materially
increasing an Employer’s liabilities under
the Supplemental Plan,
make amendments required by law to be approved by the Board of Directors or a
committee thereof, make amendments which change the design of the Supplemental Plan with
respect to the allocation of responsibilities, or make changes affecting the
Company’s indemnification obligations.  The Supplemental Plan may be
terminated by resolution of the Board of Directors of the Company.  No
amendment or termination of the Supplemental Plan may:

      

      
        	
                (a)

              	
                reduce
      or impair the interests of Participants in benefits being paid under the
      Supplemental Plan as of the date of the amendment or termination, as the
      case may be; or

              

      

       

      
        	
                (b)

              	
                reduce
      the amount of Supplemental Retirement Benefits
      payable to or on account of an employee of an Employer to an amount which
      is less that the amount to which he would be entitled in accordance with
      the provisions of the Supplemental Plan if the employee terminated
      employment immediately prior to the date of the amendment or termination,
      as the case may be, and
      the employee were fully vested in his benefits accrued through the date of
      such amendment or termination
.

              

      

       

      Notwithstanding the foregoing, in
no event shall any such termination or distribution 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).

       

                 
6.2  Merger

      

      No
Employer will merge or consolidate with any other corporation, or liquidate or
dissolve, without making suitable arrangements, satisfactory to the
Administrator, for the payment of any benefits payable under the Supplemental
Plan.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
7

       

      Change
in Control

                 
7.1  Definition.

      

      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 of 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."

       

                 
7.2  Effect of a Change in Control

      

      Notwithstanding
any other provision of the Supplemental Plan to the contrary, in the event of a
Change in Control, each Participant shall immediately be fully vested in the
amounts accrued under the Supplemental Plan.  The Company shall be
obligated to transmit funds equal to the present value of the Supplemental
Retirement Benefits under this Supplemental Plan to the Burlington Northern
Santa Fe Corporation Amended and Restated Benefits Protection Trust or a
successor to such trust (such trust, together with any such successor, referred
to as the “Trust”) to the extent required by the provisions of such
Trust.  For purposes of this subsection 7.2, the present value of the
Supplemental Retirement Benefits under this Supplemental Plan shall be
determined by applying the
assumptions set forth in the Retirement Plan, provided that for purposes of
determining the discount rate, an interest rate equal to the average yield to
worst specified in the Lehman Brothers U.S. Aggregate Index for the last day of
each month for the sixty calendar months prior to the calendar month in which
the Change in Control occurs shall be used, and the reduction factors for early
commencement applicable at the earliest age the Participant would be eligible
for Early Retirement shall be used.

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
A

      

      
        	
                (1)

              	
                Plans
      and Programs providing for non-qualified deferred compensation or
      compensation foregone in exchange for a Company stock award which is not
      taken into account under the Retirement Plan but which is taken into
      account under the Supplemental Plan

              

      

      

       Burlington
Northern Inc. Deferred Compensation Plan

      

       Santa
Fe Pacific Supplemental Deferred Compensation Plan

      

       Burlington Northern
Santa Fe Incentive Bonus Stock
Program

      

       Burlington Northern
Santa Fe Salary Exchange Option Program

      

       Burlington Northern
Santa Fe Estate Enhancement Program

      

       Santa
Fe Pacific Supplemental Retirement and Savings Plan

      

       Burlington Northern
Santa Fe Supplemental Investment and Retirement Plan

      

      

      
        	
                (2)

              	
                Other
      compensatory arrangement established by the Company relating to benefits
      under the Supplemental Plan

              

      

      

       Retirement
Benefit Agreement between R. D. Krebs and Santa Fe Pacific Corporation, dated
March 24, 1992

      

       Retirement
Benefit Agreement between R. D. Krebs and Burlington Northern
Santa  Fe Corporation, dated December 12, 2001

       

      

       Retirement
Benefit Agreement between M. D. Dealy and The Atchison, Topeka and Santa Fe
Railway Company, dated July 19, 1993

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between BNSF Corporation and John Klaus, dated January
      22, 2000

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between Burlington Northern Santa Fe Corporation and Mr.
      Craig Hill, dated January 26, 2000

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between BNSF Corporation and Sami Shalah, dated January
      27, 2000

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between BNSF Corporation and Gloria Zamora, dated
      October 30, 2001

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between Burlington Northern Santa Fe Corporation and Mr.
      Matthew K. Rose, dated April 19,
2002

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between Burlington Northern Santa Fe Corporation and Mr.
      Charles L. Schultz, dated May 22,
2003

              

      

      

      
        	
                 
      

              	
                Retirement
      Benefit Agreement between BNSF Corporation and John Lanigan, dated March
      20, 2003

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