Document:

Directors' Compensation for 2004-2005

 Exhibit 10.40 
  
 BURLINGTON NORTHERN SANTA FE CORPORATION 
  
 DIRECTORS’ COMPENSATION FOR 2004-2005 
  
 Directors’ Compensation 
  
 In July 2004, the Board, after review of competitive compensation levels and director responsibilities, revised certain elements of the compensation to be
received by non-employee directors through fees, equity, and other programs as described below. Non-employee directors receive an annual retainer fee of $60,000, paid in quarterly installments. The Chairman of the Audit Committee is paid a
supplemental annual retainer fee of $10,000, and each director who chairs any other Board committee is paid a supplemental annual retainer fee of $5,000. In addition, for attendance at each Committee meeting or any inspection trip or similar
meeting, a meeting fee of $1,000 plus expenses is paid, including expenses for attendance by spouses in connection with certain meetings. Directors who are also officers or employees of the Company receive no compensation for duties performed as a
director or a committee chairman. 
  
 Burlington Northern Santa Fe
Directors’ Retirement Plan 
  
 The Directors’
Retirement Plan was terminated as of July 17, 2003. The plan provided non-employee directors an annual benefit if they served as a member of the Board for ten consecutive years, attained the mandatory retirement age, or were designated by the
Directors and Corporate Governance Committee as eligible for benefits. Individual participants who met the eligibility requirements of the Retirement Plan are eligible to receive annual payments for benefits accrued through July 17, 2003. The annual
payment is the amount of the annual retainer for services as a Board member at the time of termination of service for those individuals who are already retired. Non-employee members of the Board who meet the eligibility requirements will receive an
annual payment in the amount of $40,000 upon departure from the Board, which was the amount of the annual retainer for services as a Board member at the time the Retirement Plan was terminated. Payment ceases upon an individual’s death. Service
as a member on the board of directors of one or more of BNSF’s predecessor companies counts toward the requirement of ten consecutive years of service. 
  
 An individual Board member as of July 17, 2003, who had not served as a member of the Board for a period of at least ten consecutive years as of such date
and had not attained age 72 as of July 17, 2003, but who subsequently meets the eligibility requirements, will be entitled to receive a pro rata annual payment for benefits at the time of departure from the Board. See Exhibit 10.23. 
  
 Burlington Northern Santa Fe Non-Employee Directors’ Stock Plan

  
 Under the Plan, each non-employee director is entitled to
receive a one-time grant of 1,000 Restricted Stock Units as of the annual meeting at which he or she is first elected to the Board. 
  
 On April 29, 2004, each non-employee director elected at the 2004 annual meeting of shareholders was granted non-qualified stock options to purchase 3,000
shares of Company common stock at $32.72 per share, the fair market value on the date of grant, pursuant to the Non-Employee Directors’ Stock Plan. These options vest on April 29, 2005, or earlier if a 

 Exhibit 10.40 
  
 director leaves the Board by reason of retirement, death, disability, or change in control, and expire on April 29, 2014. On April 29, 2004, each non-employee director
elected to the Board of Directors at the 2004 annual meeting also received a grant of 1,400 Restricted Stock Units. Under the Plan, as amended by the Board of Directors on July 22, 2004, the amount of Restricted Stock Units that each non-employee
director elected to the Board of Directors at the 2005 annual meeting and at each subsequent annual meeting was increased to 1,700 Restricted Stock Units. 
  
 On February 11, 2005, the Board of Directors amended the Plan to grant an additional 800 Restricted Stock Units to each non-employee director elected to
the Board of Directors at the 2005 annual meeting and each subsequent annual meeting in lieu of the 3,000 non-qualified stock options previously granted annually as described above, for a total grant of 2,500 Restricted Stock Units to each
non-employee director elected at the 2005 annual meeting and each subsequent annual meeting. If an individual becomes a director on a date other than the date of the annual meeting, he or she will receive pro rata grants of Restricted Stock Units
(as described above) for the portion of the one-year term following the date on which the individual becomes a director. The Restricted Stock Units will vest upon the date the director’s term of service ends by reason of retirement, death,
disability, or change in control, subject to the director having served on the Board at least until the next annual meeting following election to the Board. Upon vesting, the director will receive one share of the Company’s common stock for
each Restricted Stock Unit. Directors holding Restricted Stock Units do not have any rights of a shareholder but have the right to receive a cash payment in lieu of a dividend at such times and in such amounts as dividends are paid on the
Company’s common stock. 
  
 Prior to 2004, the Non-Employee
Directors’ Stock Plan also permitted directors by timely election to forego up to 25 percent of their annual retainer and receive a Retainer Stock Award in the form of restricted stock equal to 150 percent of the amount foregone based on the
fair market value of BNSF’s common stock on the date of grant (December 31 of each calendar year), to vest three years from the date of grant, or earlier if a director left the Board by reason of retirement, death, disability, or change in
control. All Retainer Stock Awards will vest by December 31, 2006. See Exhibit 10.1. 
  
 Burlington Northern Santa Fe Deferred Compensation Plan for Directors  
  
 Prior to 2005, non-employee directors could voluntarily defer all or a portion of the fees they would otherwise receive into a Prime Rate interest account, a Company stock-equivalent (phantom stock) account or other
investment option established under the plan’s terms, which now includes an S&P 500 index fund and a long-term capital appreciation stock fund. Participants receive subsequent distributions from the Company in amounts determined by
reference to the investment options chosen. Distributions will be made in cash in either annual installments or as a lump sum after a director’s departure from the Board. Participation in this plan is frozen, and no new contributions may be
made under the plan after December 31, 2004. See Exhibit 10.3. 

 Exhibit 10.40 
  
 Charitable Contributions 
  
 Burlington Northern Santa Fe Foundation will make an annual match of up to $10,000 for qualified contributions by non-employee directors.Description of Executive Officer Cash Compensation For 2004 and 2005

 Exhibit 10.41 
  
 BURLINGTON NORTHERN SANTA FE CORPORATION 
  
 DESCRIPTION OF EXECUTIVE OFFICER CASH COMPENSATION 
  
 FOR 2004 AND 2005 
  
 Annual Cash Compensation 
  
 Base Salary – Set forth below are the base salaries of the Chief Executive Officer and each of the four most highly compensated executive officers in 2004 and
their increased annual base salary effective February 16, 2005. The Company considers various factors in assigning executive officers to specific salary ranges, including job content, level of responsibility, accountability, and the competitive
compensation market. On an annual basis, all executive officers’ salaries are reviewed and adjusted to reflect individual performance and position within their respective ranges. 
  
 Incentive Compensation Plan (ICP) Target – Executive officers are eligible for annual performance-based awards under the
Company’s ICP, as are all salaried employees. If the Company attains its targeted performance goals, cash compensation levels (base salary plus annual incentives) will approximate the competitive compensation market. For 2004, goals for all
participants including executive officers were weighted 55 percent upon achievement of targeted levels of earnings per share, and 15 percent each upon achievement of targeted levels of revenue, on-time performance and safety (lost and restricted
work time and personal injuries as measured by Federal Railroad Administration standards). The goals for 2005 will be weighted in the same manner. 
  
 Long-Term Incentives – Opportunities provided to executive officers under long-term incentive programs are targeted to approximate the competitive
market for total direct compensation (cash plus long-term incentives). 
  
 Incentive Bonus Stock Program – To encourage individual stock ownership, executive officers are given the opportunity to exchange up to 100 percent of their ICP cash awards for a grant of restricted stock. Participants electing
the exchange receive a restricted stock grant equal to 150 percent of the ICP award foregone. Shares vest three years after grant. Please see Exhibits 10.8 and 10.39. 
  
 Salary Exchange Option Program – To reinforce the link between stock price performance and executive compensation, executive
officers have the opportunity to exchange up to 25 percent of their base salary each year for a grant of non-qualified stock options with an exercise price equal to the fair market value of the Company’s common stock on the date of grant and
with a term of up to ten years from the date of grant. Participants receive 450 non-qualified stock options for each $1,000 of base salary exchanged and may elect salary exchanges for up to three consecutive years at one time. Options vest on the
anniversary of the date of grant following the year for which the base salary was exchanged. Please see Exhibits 10.18 and 10.34. 
  
 Senior Management Stock Deferral Plan – The Senior Management Stock Deferral Plan provided executive officers with retirement and tax planning flexibility.
The plan allowed executive officers to defer unrealized gains from non-qualified stock option exercises, or the value of restricted stock grants, such as grants from the Incentive Bonus Stock Program (above), 

 Exhibit 10.41 
  
 into phantom share units held in the plan. Stock options were required to be exercised using previously acquired shares of the Company’s common stock to take
advantage of this plan. Participation in this plan is frozen, and no new deferrals into the plan are allowed after December 31, 2004. Please see Exhibits 10.5 and 10.35. 
  
 Restricted Stock and Option Grants – Under the Stock Plan, the Company makes periodic grants of stock options and restricted
stock or restricted stock units to executive officers. Stock options cannot be issued with an exercise price below the market value of the Company common stock on the date of grant, thus ensuring that recipients will benefit only when the price of
the Company’s stock appreciates, and they vest pro rata over three years. Stock options for executive officers may also include a reload feature that encourages them to exercise their options using previously acquired shares of the
Company’s common stock and helps them achieve their stock ownership goals; reload grants of options vest in six months but expire under the terms of the original option grant. Grants of restricted stock or restricted stock units provide for
vesting in three years after grant; vesting may also be contingent on achievement of Company performance goals. Please see Exhibits 10.21, 10.32, 10.33, 10.34, 10.35, 10.36 and 10.39. 
  

 Matthew Rose 
 Chairman, President and Chief Executive Officer 
  

				
	 	  	Base

	 2004
	  	$	980,000
	 2005*
	  	$	1,100,000

  
 Thomas Hund 
 Executive Vice President and Chief Financial Officer 
  

				
	 	  	Base

	 2004
	  	$	450,000
	 2005*
	  	$	473,500

  
 Carl Ice 
 Executive Vice President and Chief Operations Officer 
  

				
	 	  	Base

	 2004
	  	$	500,000
	 2005*
	  	$	520,000

  
  

 John Lanigan 
 Executive Vice President and Chief Marketing Officer 
  

				
	 	  	Base

	 2004
	  	$	475,000
	 2005*
	  	$	500,000

  
 Jeffrey Moreland 
 Executive Vice President Law & Government Affairs and Secretary 
  

				
	 	  	Base

	 2004
	  	$	435,000
	 2005*
	  	$	455,000

  

	*	Salary increases from 2004 levels are effective February 16, 2005

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