Document:

dex1012.htm

    
      

      

    

    
 

     

    Exhibit 10.12

    Amended and Restated
Change in
Control Agreement as of December 31,
2007

     

    Mr.
XXXXXXXXXXXXXX:

     

    Burlington
Northern Santa Fe Corporation (the “Corporation”) considers it essential to the
best interests of its stockholders to foster the continuous employment of key
management personnel.  In this connection, the Board of Directors of
the Corporation (the “Board”) recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control (as defined in Section
2) may exist, and that such possibility, and the uncertainty and questions which
it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Corporation and its
stockholders.

     

    The Board
has determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of members of the Corporation’s
management, including yourself, to their assigned duties without distraction in
the face of potentially disturbing circumstances arising from the possibility of
a Change in Control.

     

    In order
to induce you to remain in the employ of the Corporation or any entity with
which the Corporation is considered to be a single employer under Section 414
(b) or Section 414(c) of the Internal Revenue Code of 1986, as amended from time
to time (the “Code”) (all such entities, collectively, “Affiliates”), the
Corporation agrees that you shall receive the severance benefits set forth in
this letter agreement (the “Agreement”) in the event your employment with the
Corporation is terminated under the circumstances described below subsequent to
a Change in Control, and that you shall be eligible for the parachute tax
gross-up and certain other benefits described in this Agreement.

     

    1. TERM.  The
“Agreement Term” shall begin on December 31, 2007 (the “Effective Date” of this
Agreement), and shall end on December 31, 2008, subject to the
following:

     

    (i) As of
January 1, 2009, and each January 1 thereafter, the Agreement Term shall
automatically be extended to the next following December 31; provided, however, that no such
extension shall take place if, on or before the September 30 next preceding the
date on which the extension would otherwise take place, the Corporation has
given notice that it does not wish to extend the Agreement Term; and further
provided that no such extension shall take place if the effect of the extension
would be to extend the Agreement Term beyond the December 31 coincident with or
next following the two-year anniversary of the date on which you cease to be in
a position that is at or above salary band 36 (unless, as of such December 31,
you are again in a position that is at or above salary band 36); and further
provided that subject to paragraph 1(ii) below no such extension shall take
place if a Change in Control has occurred prior to the date on which the
extension would otherwise take place.  For the avoidance of doubt, it
is recited here that if a Change in Control described in paragraph 2(i) or
2(iii) occurs, and your Date of Termination occurs after the 24-month
anniversary of the date of the Change in Control but before consummation of the
transaction approved by the shareholders and before the Agreement Term expires
by reason of paragraph (iii) below (relating to a Board determination that
consummation will not occur), the Agreement Term shall be extended to your Date
of Termination.

     

    (ii) Subject
to paragraph 1(iii) next below, if a Change in Control occurs during the
Agreement Term (as it may be extended from time to time), the Agreement Term
shall be extended for a period of twenty-four (24) months beyond the last day of
the calendar month in which the Change in Control occurs, but in no event less
than twelve (12) months beyond the date of the consummation of the Change in
Control.

     

    (iii) If a
Change in Control described in paragraph 2(iii) or 2(iv) occurs during the
Agreement Term (as it may be extended from time to time), but the Board
thereafter determines that it will not consummate the transaction or regulatory
approval for the transaction is not obtained, then the Board may reduce the
24-month extension period set forth in paragraph 1(ii) next above; provided that the
Agreement Term may not end earlier than six (6) months after such notice of
reduction is provided by the Board or, if earlier, the date such Agreement Term
would end in the absence of action under this paragraph 1(iii).

     

    (iv) In no
event, however, shall the Agreement Term extend beyond the end of the calendar
month in which your 65th birthday occurs if you are subject to mandatory
retirement at such age or to the extent permitted by law.

     

    2. CHANGE IN
CONTROL.  A “Change in Control” shall be deemed to have occurred
if:

     

    (i) 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
Corporation, any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, or any company owned, directly or indirectly,
by the stockholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation’s then outstanding
securities.

     

    (ii) During
any period of two consecutive years (not including any period prior to the
Effective Date), 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 Corporation to effect a transaction
described in paragraphs (i), (iii) or (iv) of this definition) whose election by
the Board or nomination for election by the Corporation’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.

     

    (iii) The
stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other company other than (a) a merger or consolidation
which would result in the voting securities of the Corporation 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 Corporation (or such surviving entity) outstanding immediately after such
merger or consolidation, or (b) a merger or consolidation effected to implement
a recapitalization of the Corporation (or similar transaction) in which no
“person” (as hereinabove defined) acquires more than 25% of the combined voting
power of the Corporation’s then outstanding securities.

     

    (iv) The
stockholders of the Corporation adopt a plan of complete liquidation of the
Corporation or approve an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation’s
assets.  For purposes of this paragraph 2(iv), the term “the sale or
disposition by the Corporation of all or substantially all of the Corporation’s
assets” shall mean a sale or other disposition transaction or series of related
transactions involving assets of the Corporation or of any direct or indirect
subsidiary of the Corporation (including the stock of any direct or indirect
subsidiary of the Corporation) 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 another objective method in a case where there is no readily
ascertainable purchase price) constitutes more than two-thirds of the fair
market value of the Corporation (as hereinafter defined).  For
purposes of the preceding sentence, the “fair market value of the Corporation”
shall be the aggregate market value of the outstanding shares of common stock of
the Corporation (on a fully diluted basis) plus the aggregate market value of
the Corporation’s other outstanding equity securities (excluding employee stock
options).  The aggregate market value of the shares of common stock of
the Corporation (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 common stock of the Corporation
for the ten trading days immediately preceding the Transaction
Date.  The aggregate market value of any other equity securities of
the Corporation 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 common stock of the Corporation.

     

    A Change
in Control that occurs prior to the beginning of the Agreement Term shall be
disregarded for purposes of this Agreement.

     

    3. BASIS OF
EMPLOYMENT TERMINATION.  If (x) your Date of Termination (or the date
of delivery of the applicable Notice of Termination) occurs during the Agreement
Term and is coincident with or follows the occurrence of a Change in Control or
(y) if you have a disability during the Agreement Term after the occurrence of a
Change in Control, then you shall be eligible for payments and benefits in
accordance with, and to the extent provided by, Section 4, with such eligibility
determined on the basis for your termination of employment.  For
purposes of this Agreement, the basis for your termination of employment shall
be determined in accordance with this Section 3.

     

    (i) Disability.  If,
as a result of your incapacity due to physical or mental illness or injury, you
shall have been absent from the full-time performance of your duties with the
Corporation for six (6) consecutive months, and within thirty (30) days after
written Notice of Termination is given by the Corporation, you shall not have
returned to the full-time performance of your duties, your employment may be
terminated by the Corporation for unavailability due to
“Disability.”  Notwithstanding any other provision of this Agreement,
a termination of employment under this paragraph 3(i) shall not cause you to be
considered a terminated employee within the meaning of the Corporation’s long
term disability plan and your rights thereunder shall not be affected by this
Agreement.

     

    (ii) Cause.  Your
Date of Termination shall be deemed to have occurred for “Cause,” if your Date
of Termination occurs because of circumstances described in paragraph 3(ii)(a)
or paragraph 3(ii)(b) next below, as determined in accordance with the
procedures set forth in paragraphs 3(ii)(A), (B) and (C) next
below:

     

    (a) the
willful and continued failure by you to substantially perform your duties with
the Corporation (other than any such failure resulting from your incapacity due
to physical or mental illness or injury, or any such actual or anticipated
failure after the issuance of a Notice of Termination by you for Good Reason);
or

     

    (b) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Corporation, monetarily or otherwise.

     

    For
purposes of this paragraph 3(ii), no act, or failure to act, on your part shall
be deemed “willful” unless done, or omitted to be done, by you not in good faith
and without a reasonable belief that your action or omission was in the best
interest of the Corporation.  Your Date of Termination shall not be
deemed to have occurred for “Cause” unless the procedures described in
paragraphs 3(ii)(A), (B) and (C), next below, have been satisfied:

     

    (A) A written
notice of alleged Cause is delivered to you by the Board or a member of the
Board.  In the case of “Cause” described in paragraph 3(ii)(a)
(relating to a failure to perform your duties), the written notice shall consist
of specific identification of the manner in which the Board or such Board member
believes that you have not substantially performed your duties, and shall
include a demand for such performance.  In the case of “Cause”
described in paragraph 3(ii)(b) (relating to conduct injurious to the
Corporation), the written notice shall consist of specific identification of the
manner in which the Board or such Board member believes that you have engaged in
conduct which is demonstrably and materially injurious to the
Corporation.

     

    (B) You have
received an opportunity to be heard by the Board or a member of the Board, which
will consist of delivery to you of reasonable advance written notice of a Board
meeting (to be delivered at or after the time you receive the notice of alleged
Cause, described in paragraph 3(ii)(A) next above), at which you, together with
your counsel, may be heard by the Board, concerning the contents of the notice
of alleged Cause and, in the case of “Cause” described in paragraph 3(ii)(a),
the manner in which you intend to achieve substantial performance.

     

    (C) You have
received a copy of your Notice of Termination, which will include a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting of the Board, which
occurs after your opportunity to be heard by the Board (at that meeting or a
subsequent meeting), and which finds that in the good faith opinion of the Board
you were guilty of conduct set forth in the notice of alleged Cause and which
specifies the particulars thereof in detail.  The Date of Termination
set forth in the Notice of Termination shall be not earlier than thirty (30)
days after the notice of alleged Cause has been delivered to you in accordance
with paragraph 3(ii)(A).

     

    (iii) Good
Reason.  Subject to the procedures set forth in paragraphs 3(iii)(A),
(B) and (C) next below, you shall be entitled to terminate your employment for
Good Reason.  For purposes of this Agreement, “Good Reason” shall
mean, without your express written consent, the occurrence, after a Change in
Control, of any of the circumstances described in paragraphs 3(iii)(a) through
(h) next below.  However, “Good Reason” shall not exist if such
circumstances are fully corrected (or in the case of a relocation described in
paragraph 3(iii)(c) next below, if the request to relocate your base of
operations is withdrawn) prior to the Date of Termination specified in the
Notice of Termination given in respect thereof.

     

    (a) The
assignment to you of any duties with a level of responsibility materially
inconsistent with the position in the Corporation that you held immediately
prior to the Change in Control, or a significant adverse alteration in the
status of your responsibilities from those in effect immediately prior to such
Change in Control.

     

    (b) A
material reduction by the Corporation in your annual base salary as in effect on
the Effective Date, and adjusted to reflect such increases as may be made after
the Effective Date and prior to the occurrence of a Change in Control, and also
adjusted to reflect such decreases as may be made after the Effective Date, but
taking decreases into account only to the extent that they are part of
across-the-board salary reductions similarly affecting all management personnel
of the Corporation and all management personnel of any person in control of the
Corporation.

     

    (c) The
relocation of your base of operations for the Corporation or any of its
Affiliates to a place that is fifty (50) miles farther from your residence
immediately prior to the Change in Control than the distance from such residence
to your former base of operations for the Corporation or such
Affiliate.  The determination of whether the distance exceeds 50 miles
shall be performed in a manner that is consistent with Internal Revenue Service
rules applicable to the determination of deductibility of moving
expenses.

     

    (d) The
failure by the Corporation to pay to you any material portion of your current
compensation or to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the Corporation when
such compensation is due.

     

    (e) The
failure by the Corporation to continue in effect any compensation plan in which
you participate immediately prior to the Change in Control that is material to
your total compensation, including but not limited to a material reduction in
the benefits (or, in the case of incentive- or performance-based compensation,
opportunities) provided to you under the Corporation’s Retirement Plan,
Supplemental Retirement Plan, Investment and Retirement Plan, Supplemental
Investment and Retirement Plan, Incentive Compensation Plan, Stock Incentive
Plan, or any substitute plans adopted prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Corporation to
continue your participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control.

     

    (f) The
failure by the Corporation to continue to provide you with benefits
substantially similar to those enjoyed by you under any of the Corporation’s
life insurance, medical, health and accident, or disability plans in which you
were participating at the time of the Change in Control, the taking of any
action by the Corporation which would directly or indirectly materially reduce
any of such benefits or deprive you of any material fringe benefit enjoyed by
you at the time of the Change in Control, or the provision by the Corporation to
you of a number of paid vacation days that is materially less than the number of
vacation days to which you were entitled on the basis of years of service with
the Corporation in accordance with the Corporation’s normal vacation policy in
effect at the time of the Change in Control.

     

    (g) The
failure of the Corporation to obtain an agreement from any successor to assume
and agree to perform this Agreement, as contemplated in Section 7.

     

    (h) Any
purported termination of your employment that is not effected pursuant to a
Notice of Termination in material compliance with the requirements of paragraph
3(vi) (and, if applicable, the requirements of paragraph 3(ii)), which purported
termination shall not be effective for purposes of this Agreement.

     

    You shall
not be deemed to have terminated employment for Good Reason unless, within a
reasonable time (not more than six (6) months) after the initial existence of
the circumstances constituting Good Reason, you have delivered a written Notice
of Termination, which:

     

    (A) identifies
the circumstances, and the provisions of this paragraph 3(iii), which form the
basis for your termination for Good Reason;

     

    (B) demands
correction; and

     

    (C) specifies
a Date of Termination which is not less than fifteen (15) days nor more than
sixty (60) days after the Notice of Termination has been provided to the
Corporation;

     

    provided that if the
Corporation is reasonably unable to correct the circumstances described in your
Notice of Termination within the time period prior to your scheduled Date of
Termination, and responds to you in writing within seven (7) days of the receipt
of your Notice of Termination notifying you of the time reasonably required to
correct the circumstances (which may not be more than thirty (30) days after
receipt of your Notice of Termination), your scheduled Date of Termination in
your Notice of Termination will be deemed to be postponed until the end of such
correction period, and Good Reason will not exist if the circumstances are fully
corrected (or, if applicable, the request for relocation is withdrawn) within
that correction period.  Your continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder, and your failure to relocate after filing
the Notice of Termination will not adversely affect the characterization of the
Corporation’s relocation request as Good Reason under paragraph 3(iii)(c)
above.

     

    (iv) Discharge
Absent Cause or Disability.  You shall be deemed to have been
discharged by the Corporation absent Cause or Disability if your employment is
terminated by the Corporation other than in accordance with paragraph 3(i)
(relating to Disability) or paragraph 3(ii) (relating to Cause).  Your
Date of Termination under this paragraph 3(iv) may not be earlier than sixty
(60) days after the written Notice of Termination is delivered to you, except
that the sixty (60) day notice requirement shall not apply to the extent the
Date of Termination occurs prior to the date of a Change in
Control.  If your employment is terminated in accordance with this
paragraph 3(iv) and the Notice of Termination is delivered to you within sixty
(60) days prior to the occurrence of a Change in Control, your Date of
Termination shall be deemed to be, for purposes of Section 4(iii), the day after
such Change in Control; provided that, for purposes of
the timing of any payments or benefits owed to you under Section 4, the Date of
Termination shall be the date specified in the Notice of
Termination.

     

    (v) Payment
in Lieu of Notice.  The Corporation shall be deemed to have complied
with the requirement of this Section 3 relating to advance Notice of Termination
notwithstanding that the Corporation may have provided you with fewer days’
notice than otherwise required pursuant to this Section 3, and in the event of a
termination of employment by you for Good Reason, the Corporation may waive your
obligation to provide the number of days of notice otherwise required pursuant
to this Section 3 (and thereby cause your Date of Termination to occur earlier
than the Date of Termination specified in your Notice of Termination for Good
Reason) (the days of notice otherwise required to be given by the Corporation or
you, as applicable, the “Required Notice Days” and the number of Required Notice
Days less the number of days of notice actually provided by the Corporation or
you, as applicable, the “Waived Notice Days”); provided that the
Corporation shall pay you a cash amount equal to the base salary that you would
have earned during the Waived Notice Days had the Corporation provided you with,
or you provided the Corporation with, as applicable, the number of Required
Notice Days.  Such payment shall be made in a lump sum no later than
the fifth day following your Date of Termination.

     

    (vi) Notice of
Termination.  “Notice of Termination” shall mean a notice that shall
indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provision so indicated and
shall specify a Date of Termination in accordance with this Section
3.

     

    (vii)  Date of
Termination. “Date of Termination” shall mean your ceasing to be employed by the
Corporation and the Affiliates; provided that the
employment relationship will be deemed to have ended at the time you and your
employer reasonably anticipate that the level of bona fide services you would
perform for the Corporation and the Affiliates 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 Corporation and the Affiliates if you have performed services for
the Corporation and the Affiliates for less than 36 months).  In the
absence of an expectation that you will perform at the above-described level,
the Date of Termination of employment will not be delayed solely by reason of
your continuing to be on the Corporation’s and the Affiliates’ payroll after
such date.  The employment relationship will be treated as continuing
intact while you are on a bona fide leave of absence (determined in accordance
with Treas. Reg. §1.409A-1(h)).

     

    4. COMPENSATION
UPON TERMINATION OR DURING DISABILITY.  If (x) your Date of
Termination (or the date of delivery of the applicable Notice of Termination)
occurs during the Agreement Term and is coincident with or follows the
occurrence of a Change in Control or (y) if you have a disability during the
Agreement Term and after the occurrence of a Change in Control, then you shall
be entitled to payments and benefits in accordance with, and to the extent
provided by, this Section 4.

     

    (i) Discharge
for Cause and Voluntary Resignation.  If your employment is terminated
by the Corporation for Cause, or is terminated by you other than for Good
Reason, the Corporation shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
with payment to be made no later than the fifth day following your Date of
Termination, plus all other amounts to which you are entitled under any
compensation plan of the Corporation or any Affiliate at the time such payments
are due, and the Corporation shall have no further obligations to you under this
Agreement.

     

    (ii) Disability.  During
any period that you fail to perform your full-time duties with the Corporation
as a result of incapacity due to physical or mental illness or injury, you shall
continue to receive your base salary at the rate in effect at the commencement
of any such period, together with all compensation payable to you under any long
term disability plan or other similar plan during such period, until your
employment is terminated pursuant to paragraph 3(i).  Thereafter, or
in the event your employment shall be terminated by reason of your death, your
benefits shall be determined under the Corporation’s retirement, insurance and
other compensation programs then in effect in accordance with the terms of such
program; however, your receipt of benefits under the long term disability plan
will not be affected by your termination under this Agreement.

     

    (iii) Termination
for Good Reason and Discharge Absent Cause or Disability.  If your
employment is terminated by you for Good Reason, or by the Corporation absent

    Cause or
Disability
(as described in paragraph 3(iv)), then you shall be entitled to the payments
and benefits described below, subject to Section 14:

     

    (a) Prior
Salary and Deferrals.  The Corporation shall pay to you (1) your full
base salary through your Date of Termination at the rate in effect at the time
the Notice of Termination is given, with payment to be made no later than the
fifth day following your Date of Termination; (2) a lump sum cash payment equal
to your Bonus Rate (defined below) for the year in which your Date of
Termination occurs, subject to a pro rata reduction for the portion of the year
after your Date of Termination, with payment to be made at the time specified in
paragraph 4(iv)(a); and (3) all other amounts to which you are entitled under
any compensation plan of the Corporation, at the time such payments are due
under the terms of such plans.

     

    (b) Additional
Salary and Severance.  In lieu of any further salary or bonus payments
to you for periods subsequent to your Date of Termination, and except as
provided in paragraph 4(iv)(b), the Corporation will pay to you, at the time
specified in paragraph 4(iv)(a), a lump sum salary and bonus distribution, in an
amount equal to the sum of: (I)  a severance payment of  (1)
2.0 times your Salary Rate plus (2) 2.0 times your Bonus Rate plus (II) a
payment in return for the imposition of the requirements of paragraph 4(iv)(b)
(relating to competition) equal to (1) 0.5 times your Salary Rate plus (2) 0.5
times your Bonus Rate.

     

    For
purposes of this paragraph 4(iii)(b):

     

    (A) Your
“Salary Rate” shall be equal to the greatest of:  (1) your annual
salary as in effect as of the Date of Termination, inclusive of amounts that
would have been included in annual salary if such amounts had not been deferred
under the Burlington Northern Santa Fe Corporation Supplemental Investment and
Retirement Plan or foregone under any other arrangement of the Corporation or
its Affiliates providing for the elective deferral of salary, (2) your highest
consecutive twelve (12) months’ salary over the twenty-four (24) month period
preceding the Date of Termination, or (3) your annual salary as in effect
immediately prior to the Change in Control.

     

    (B) Your
“Bonus Rate” shall be the amount which you would have received under the
Corporation’s Incentive Compensation Plan (or other successor annual bonus plan)
for the calendar year in which your Date of Termination occurs, if you had
remained employed by the Corporation for that entire year, and the target level
of performance established annually by the Corporation had been achieved for the
year.  For the avoidance of doubt, it is recited here that achievement
of target level of performance shall mean the achievement of a performance level
whereby all of the performance objectives for the year are at planned and
budgeted levels of performance (as provided in the bonus plan); and such level
of performance shall be greater than threshold level of performance (which is
the minimum level of performance that will result in payment of any bonus), and
shall be less than the maximum level of performance, which is a level of
performance above the performance level planned and budgeted for the year, which
would result in maximum bonus.

     

    (c) Outstanding
Stock Awards.  The following provisions of this paragraph 4(iii)(c)
shall apply to stock awards granted under the Corporation’s 1996 Stock Incentive
Plan, 1999 Stock Incentive Plan, or any similar successor plan:

     

    (A) Except as
provided in paragraph 4(iii)(d) below, the restrictions shall lapse (to the
extent that they have not previously lapsed) on any stock option award or stock
appreciation right award outstanding on the Date of Termination, such stock
options and stock appreciation rights shall become fully exercisable beginning
as of the Date of Termination, and such exercisability shall continue until it
would otherwise terminate in accordance with the terms of the applicable award
agreement.

     

    (B) Except as
provided in paragraph 4(iii)(c)(C) below and paragraph 4(iii)(d) below, the
restricted period (or other vesting or similar period) with respect to any
restricted stock, restricted stock units and, except for stock options and stock
appreciation rights, all other stock-based awards granted to you as of a date
prior to the date of the Change in Control shall lapse on your Date of
Termination, and such shares shall be distributed to you at the same time as the
cash payments described in paragraph 4(iv) are paid.  However, any
change in the time or form of distribution otherwise provided under this
paragraph (B) shall be disregarded to the extent that such change would
otherwise result in the application of penalties under Section
409A.

     

    (C) The
foregoing provisions of this paragraph 4(iii)(c) shall not apply to the vesting
of Performance Stock Awards, and the vesting of Performance Stock Awards shall
be governed by the applicable award agreements for such awards, without regard
to the terms of this Agreement.  For purposes of this Agreement, the
term “Performance Stock Awards” shall have the meaning set forth in Section 9 of
the 1999 Stock Incentive Plan (and shall include any awards expressly designated
as “Performance Stock Awards” under any successor to the 1999 Stock Incentive
Plan), but shall not include performance-based Restricted Stock,
performance-based Restricted Stock Units, or any other awards.

     

    (d) Awards
Granted after Change in Control.  For any stock option, stock
appreciation right, restricted stock, restricted stock unit, or other
stock-based award granted after a transaction that constitutes a Change in
Control, such preceding transaction will not be treated as a Change in Control
for purposes of paragraph 4(iii)(c) above.

     

    (e) Legal
Fees.  The Corporation shall pay to you all legal fees and expenses
incurred by you at any time during your lifetime as a result of such termination
including all such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement; provided, however, that payment
with respect to any legal action other than in connection with a tax dispute
(which is addressed in Section 5) shall be made only if you are successful in
the action.  With respect to any such fees or expenses paid with
respect to any legal action other than a tax dispute, any such payment to you
shall be made no later than the end of the calendar year next following the year
in which such legal fees or expenses are incurred by you; the amount of fees and
expenses reimbursed in any calendar year shall not affect the amount reimbursed
in any other year; and such right to reimbursement may not be liquidated or
exchanged for any other benefit.

     

    (f) Group
Health Coverage.  You and your eligible family members shall be
entitled to group health coverage to the extent that such coverage is required
to be provided in accordance with the provisions of Section 4980B of the Code
and Section 601 of the Employee Retirement Income Security Act (sometimes
referred to as “COBRA coverage”); provided that your
eligibility for such coverage shall be determined as though such coverage was
required for the greater of twenty-four (24) months after your Date of
Termination or the period otherwise required under the applicable COBRA coverage
provisions.  For the twenty-four (24) month period during which you
are entitled to such medical benefit coverage under this paragraph 4(iii)(f),
the premiums for such coverage shall be paid by the Corporation (either by
direct payment of such premiums, or by reimbursing you for the premiums, at the
election of the Corporation), and the period of such coverage provided under
this paragraph 4(iii)(f) shall be counted toward the Corporation’s obligation to
provide COBRA coverage.  (For the avoidance of doubt, it is recited
that the value of all or a portion of such coverage may be included in your
taxable gross income as reported by the Corporation.)  Except as
specifically permitted by Section 409A of the Code and the regulations
thereunder as in effect from time to time (collectively, “Section 409A”), the
amount of coverage provided pursuant to this paragraph 4(iii)(f) to you and your
eligible family members during any calendar year will not affect the amount of
such coverage to be provided to you and your eligible family members in any
other calendar year, and any reimbursement for any premiums pursuant to this
paragraph 4(iii)(f) shall be paid to you no later than the end of the calendar
year next following the year in which you pay such premiums.   

     

    (g) Welfare
Benefits.  For the twenty-four (24) month period after your Date of
Termination, the Corporation shall arrange to provide you with life and
disability insurance benefits substantially similar to those which you were
receiving immediately prior to the Notice of Termination.  Benefits
otherwise receivable by you pursuant to this paragraph 4(iii)(g) shall be
reduced to the extent comparable benefits are actually received by you from
another employer or otherwise during the twenty-four (24) month period following
your termination, and any such benefits actually received by you shall be
reported to the Corporation.  Except as specifically permitted by
Section 409A, the amount of  coverage provided to you pursuant to this
paragraph 4(iii)(g) during any calendar year will not affect the amount of such
coverage to be provided to you in any other calendar year.

     

    (h) Retiree
Coverage.  You and your eligible family members shall be eligible for
(I) retiree medical benefits under the Corporation’s applicable plan, and (II)
retiree life insurance coverage under the Corporation’s applicable plan to the
extent that if, on your Date of Termination, you had terminated employment with
the Corporation and its Affiliates and you would have become eligible for
severance benefits under the BNSF Railway Company Severance Plan (the “Severance
Plan”) if you had not been covered by this Agreement, and by reason of the terms
of the Severance Plan, you would otherwise have qualified for medical or life
coverage or benefits, respectively, either upon your Date of Termination or at
such later date as provided in the Severance Plan.  In determining
whether you would have become eligible for severance benefits under the
Severance Plan for purposes of the foregoing provisions of this paragraph
4(iv)(h), you will be treated as having been involuntarily terminated by the
Corporation for reasons other than Cause under the Severance Plan, and thereby
became an “Eligible Employee” under the Severance Plan, if your employment is
terminated by you for Good Reason (as defined in this
Agreement).  Notwithstanding the foregoing, nothing in this paragraph
4(iv)(h) shall be construed to require your being provided with the benefits
described in clause (I) or clause (II) above to the extent that:

     

    (A) you would
not have been covered by the Severance Plan as of your Date of Termination,
or

     

    (B) you would
not have been eligible for such benefits under the Severance Plan as of your
Date of Termination,

     

    with such
eligibility for coverage or benefits under paragraph (A) or (B) above determined
as though you were not covered by this Agreement, and regardless of whether such
reduction or elimination of eligibility for coverage or benefits occurs by
reason of amendment or termination of the Severance Plan or for any other
reason.  For purposes of this paragraph (h), the term “Severance Plan”
shall include any successor to the Severance Plan to the extent that it provides
for post-termination health or life insurance benefits.  Except as
specifically permitted by Section 409A, the amount of coverage provided pursuant
to this paragraph 4(iii)(h) to you and your eligible family members during any
calendar year will not affect the amount of such coverage to be provided to you
and your eligible family members in any other calendar year.

     

    (i) Outplacement
and Financial Assistance.  The Corporation shall pay you a lump sum
cash payment equal to $20,000 to be used for outplacement and financial
assistance following your Date of Termination (provided that the financial
assistance will not be available to you if, during the year in which your Date
of Termination occurs, you are expected by the Corporation to be a named
executive officer for that year for proxy reporting purposes), with payment to
be made at the time specified in paragraph 4(iv)(A); provided that you
must submit documentation of any such expenses to the
Corporation.  If, as of the date that is 12 months following your Date
of Termination, you have not provided the Corporation with documentation showing
that you have spent $20,000 on outplacement and financial assistance, you shall
repay to the Corporation in cash within five (5) business days after written
demand made therefor by the Corporation an amount equal to $20,000 less the
amount you have spent on outplacement and financial assistance within the
12-month period following your Date of Termination.

     

    (iv) Form of
and Restrictions on Payment.  The payments provided for in paragraph
4(iii)(a)(2), paragraph 4(iii)(b) and paragraph 4(iii)(i) (the “Severance
Payments”) shall be 

    paid in
accordance with the following:

     

    (a) The
Severance Payments shall be made not later than the 60th day following your Date
of Termination or, if earlier, the fifth day after the General Release and
Covenant Not to Sue (as defined below) becomes irrevocable in accordance with
its terms.

     

    (b) If you
are treated as terminating your employment for Good Reason, or if your
employment is terminated by the Corporation without Cause, then, for the
12-month period immediately following your Date of Termination, you agree
that:

     

    (I) You will
not, without the express written consent of the Chief Executive Officer of the
Corporation, be in Competition.  For purposes of this
paragraph 4(iv)(b)(I), you shall be considered to be in “Competition”
during any period in which you are employed by, perform any material services
for, or own any interest in (except for an interest of not more than 1% in any
publicly traded business) any “Competitor.”  The term “Competitor”
shall mean:

     

    (A) any Class
I railroad;

     

    (B) any
company or other enterprise that offers shipping services to the public
(including, without limitation, trucking services, rail services, air-freight
services, and water-going freight services);

     

    (C) any
shipper for or customer of the Corporation; and

     

    (D) any
Affiliate or agent of any entity described in paragraphs (A), (B) or (C) above,
if the provision of services to or ownership of the interest in such Affiliate
or agent could conflict with or impair the interests of the Corporation, in the
reasonable judgment of its chief legal officer.

     

    (II) You will
not, without the express written consent of the Chief Executive Officer of the
Corporation, solicit or attempt to solicit any party who is then or, during the
12-month period prior to such solicitation or attempt by you was (or was
solicited to become), a customer or supplier of the Corporation or Affiliate;
provided that
the restriction in this paragraph 4(iv)(b)(II) shall not apply to any
activity on behalf of a business that is not a Competitor.

     

    (III) You will
not, without the express written consent of the Chief Executive Officer of the
Corporation, solicit, entice, persuade or induce any individual who is employed
by the Corporation or any Affiliate of the Corporation (or was so employed
within 90 days prior to your action) to terminate or refrain from renewing or
extending such employment or to become employed by or enter into contractual
relations with any other individual or entity other than the Corporation or its
Affiliates, and you will not approach any such employee for any such purpose or
authorize or knowingly cooperate with the taking of any such actions by any
other individual or entity.

     

    If,
during the 12-month period after your Date of Termination, you violate any of
the foregoing provisions of this paragraph (b), you shall not be paid any of the
Severance Payments if you have not yet been paid them as of the date of such
violation, and the Corporation may, in its discretion, require you to
immediately (or at such other time determined by the Corporation) repay to the
Corporation all (or, in the discretion of the Corporation, less than all)
Severance Payments previously paid to you.  You agree that the
Corporation, in addition to any other remedies available to it for such breach
or threatened breach, shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining you from any actual
or threatened breach of the foregoing provisions of this paragraph
4(iv)(b).

     

    (v) Mitigation
and Set-Off.  Except as provided in paragraph 4(iii)(f), paragraph
4(iii)(g) and paragraph 4(iv)(b), you shall not be required to mitigate the
amount of any payment 

     provided
for in this Section 4 by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for in this Section 4 be reduced by
any 

    compensation
earned by you as the result of employment by another employer or by retirement
benefits, or be offset against any amount claimed to be owed by you to the

    Corporation,
or otherwise.

     

    (vi) Section
409A.  It is intended that the provisions of this Agreement comply
with Section 409A, and all provisions of this Agreement shall be construed and
interpreted in a 

    manner
consistent with the requirements for avoiding taxes or penalties under Section
409A.

     

    (a) Neither
you nor any of your creditors or beneficiaries shall have the right to subject
any deferred compensation (within the meaning of Section 409A) payable under
this Agreement or under any other plan, policy, arrangement or agreement of or
with the Corporation or any of its Affiliates (this Agreement and such other
plans, policies, arrangements and agreements, the “Corporation Plans”) to any
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment.  Except as permitted under Section 409A,
any deferred compensation (within the meaning of Section 409A) payable to you or
for your benefit under the Corporation Plans may not be reduced by, or offset
against, any amount owing by you to the Corporation or any of its
Affiliates.

     

    (b) If, at
your separation from service (as defined under Treas. Reg. §1.409A-1(h)), (I)
you are a Specified Employee and (II) the Corporation makes a good faith
determination that an amount payable under a Corporation Plan constitutes
deferred compensation (within the meaning of Section 409A) the payment of which
is required to be delayed pursuant to the six-month delay rule set forth in
Section 409A in order to avoid taxes or penalties under Section 409A, then the
Corporation (or its Affiliate, as applicable) shall not pay such amount on the
otherwise scheduled payment date but shall instead accumulate such amount and
pay it, without interest, on the first day of the seventh month following such
separation from service.  “Specified Employee” shall be defined in
accordance with Treas. Reg. §1.409A-1(i) and such rules as may be established by
the Chief Executive Officer of the Corporation or his or her delegate from time
to time.

     

    (c) Notwithstanding
any provision of any Corporation Plan to the contrary, in light of the
uncertainty with respect to the proper application of Section 409A, the
Corporation reserves the right to make amendments to this Agreement and any
Corporation Plan as the Corporation deems necessary or desirable to avoid the
imposition of taxes or penalties under Section 409A.  In any case,
except as specifically provided in Section 5, you are solely responsible and
liable for the satisfaction of all taxes (together with interest and penalties
thereon) that may be imposed on you or for your account in connection with any
Corporation Plan (including any taxes and penalties under Section 409A), and
neither the Corporation nor any Affiliate shall have any obligation to indemnify
or otherwise hold you harmless from any or all of such taxes or
penalties.

     

    (vii)  Vesting
Of Stock Awards. Notwithstanding the foregoing provisions of this Section 4, the
following provisions of this paragraph (vii) shall apply to awards described in

    this
paragraph (vii) that were granted on or before September 21, 2006:

     

    (a)  If the
consummation of a Change in Control occurs before your Date of Termination, the
restrictions shall lapse (to the extent that they have not previously lapsed) on
any stock option award or stock appreciation right award outstanding on such
consummation, such stock options and stock appreciation rights shall become
fully exercisable upon such consummation, and such exercisability shall continue
until it would otherwise terminate in accordance with the terms of the
applicable award agreement.

     

    (b)  If the
consummation of a Change in Control occurs before your Date of Termination, the
restricted period (or other vesting or similar period) with respect to any
restricted stock, restricted stock units and, except for stock options and stock
appreciation rights, all other stock based awards granted to you shall lapse on
such consummation, and such shares shall be distributed to you at the same time
as the cash payments described in paragraph 4(iv) are paid. However, any change
in the time or form of distribution otherwise provided under this paragraph (b)
shall be disregarded to the extent that such change would otherwise result in
the application of penalties under Code Section 409A. 

     

    (c)  If your
Date of Termination occurs prior to the consummation of a Change in Control, the
vesting in the awards described in this paragraph (vii) shall be determined in
accordance with paragraphs 4(i), (ii), (iii), and (iv), to the extent
applicable, without regard to this paragraph (vii).

     

    5. PARACHUTE
TAX.

     

    (i) In the
event it shall be determined that any payment, benefit or distribution (or
combination thereof) by the Corporation, any affiliate (as that term is used in
Treas. Reg. §1.280G-1, Q/A-46) or associated company or any trust established by
the Corporation, any such affiliate or associated company for the benefit of its
employees, to or for your benefit (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement, or otherwise) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties are incurred by you with respect to such
excise tax (such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the “Excise Tax”), you shall be entitled
to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by you of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and the Excise Tax
imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.  For purposes of
this Section 5, “Payments” will include any payments, benefits or distributions
to other persons with respect to awards granted to you and transferred by you to
such other person in accordance with the terms of the awards, to the extent that
such awards result in taxable income being attributable to you.

     

    Notwithstanding
the foregoing provisions of this paragraph (5)(i), if it is determined that
you are entitled to a Gross-Up Payment, but that the value of the Parachute
Payments (as defined below) does not exceed 110% (105% if you are Recently Hired
(as defined below) by the Corporation) of the Safe Harbor Amount (as defined
below), then no Gross-Up Payment will be made to you and the Payments, in the
aggregate, will be reduced to the Safe Harbor Amount.  The reduction
of the Payments to the Safe Harbor Amount will be made in the following
order:

    

    
      	
               

            	
              (a)

            	
              First,
      by reducing the cash amounts of Parachute Payments (including welfare
      benefits described in paragraph 4(iii)(g)) that would not constitute
      deferred compensation (within the meaning of Section 409A) subject to
      Section 409A (with the Payments subject to such reduction to be determined
      by you), to the extent necessary to decrease the Payments that would
      otherwise constitute Parachute Payments to the Safe Harbor Amount.
      

            

    

    

    
      	
               

            	
              (b)

            	
              Next,
      if after the reduction to zero of the amounts described in paragraph (a)
      above, the remaining scheduled Parachute Payments are greater than the
      Safe Harbor Amount, then by reducing the cash amounts of Payments
      (excluding welfare benefits described in paragraph 4(iii)(g)) that
      constitute deferred compensation (within the meaning of Section 409A)
      subject to Section 409A, with the reductions to be applied first to the
      Payments scheduled for the latest distribution date, and then applied to
      distributions scheduled for progressively earlier distribution dates, to
      the extent necessary to decrease the Payments that would otherwise
      constitute Parachute Payments to the Safe Harbor Amount.
  

            

    

    

    
      	
               

            	
              (c)

            	
              Next,
      if after the reduction to zero of the amounts described in paragraphs (a)
      and (b) above, the remaining scheduled Parachute Payments are greater than
      the Safe Harbor Amount, then, by reducing any of the remaining scheduled
      Payments, in an order to be determined by the Corporation, to the extent
      necessary to decrease the Payments that would otherwise constitute
      Parachute Payments to the Safe Harbor Amount.

            

    

    

    The term
“Parachute Payment” is the portion of the Payments that would be treated as
parachute payments under Code Section 280G.  The “Safe Harbor Amount”
is the maximum amount of Payments that could be made to you without giving rise
to any Excise Tax.  You will be treated as “Recently Hired” by the
Corporation if you were first employed by the Corporation or any of its
Affiliates in a calendar year that is less than three years prior to the
calendar year in which the change in control occurs for purposes of Code Section
280G.

    

    (ii) Subject
to the provisions of paragraph 5(iii), all determinations required to be made
under this Section 5, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment, whether a reduction to the Safe Harbor
amount is required and, if so, the amount of the reduction, and the assumptions
to be utilized in arriving at such determination, shall be made by such
nationally recognized certified public accounting firm as may be designated by
the Corporation (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Corporation and you within fifteen (15) business days
of the receipt of notice from you that there has been a Payment, or such earlier
time as is requested by the Corporation.  All fees and expenses of the
Accounting Firm shall be borne solely by the Corporation.  Any
Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by the
Corporation to you within five (5) days after the receipt of the Accounting
Firm’s determination.  If the Accounting Firm determines that no
Excise Tax is payable by you, it shall so indicate to you in
writing.  Any determination by the Accounting Firm shall be binding
upon the Corporation and you.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Corporation should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder.  In the event that the Corporation exhausts its remedies
pursuant to paragraph 5(iii) and you thereafter are required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Corporation to you or for your benefit.

     

    (iii) You shall
notify the Corporation in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Corporation of the
Gross-Up Payment.  Such notification shall be given as soon as
practicable but no later than ten (10) business days after you are informed in
writing of such claim and shall apprise the Corporation of the nature of such
claim and the date on which such claim is requested to be paid.  You
shall not pay such claim prior to the expiration of the thirty (30) day period
following the date on which you give such notice to the Corporation (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due).  If the Corporation notifies you in writing prior to
the expiration of such period that it desires to contest such claim, you
shall:

     

    
      	
              (a)  

            	
              give
      the Corporation any information requested by the Corporation relating to
      such claim;

            

    

     

    
      	
              (b)  

            	
              take
      such action in connection with contesting such claim as the Corporation
      shall reasonably request in writing from time to time, including, without
      limitation, accepting legal representation with respect to such claim by
      an attorney reasonably selected by the
  Corporation;

            

    

     

    
      	
              (c)  

            	
              cooperate
      with the Corporation in good faith in order to effectively contest such
      claim; and

            

    

     

    
      	
              (d)  

            	
              permit
      the Corporation to participate in any proceedings relating to such
      claim;

            

    

     

    provided, however, that the
Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing provisions of this
paragraph 5(iii), the Corporation shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may pay the tax claimed on your
behalf and direct you to sue for a refund or contest the claim in any
permissible manner, and you agree to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Corporation shall determine; provided, however, that if the
Corporation pays the tax claimed on your behalf and directs you to sue for a
refund, the Corporation shall indemnify and hold you harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such payment; and provided, further, that if you
are required to extend the statute of limitations to enable the Corporation to
contest such claim, you may limit this extension solely to such contested
amount.  The Corporation’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
you shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing
authority.

     

    (iv) If, after
the payment by the Corporation of any tax claim pursuant to paragraph 5(iii),
you become entitled to receive any refund with respect to such claim, you shall
(subject to the Corporation’s complying with the requirements of paragraph
5(iii)) promptly pay to the Corporation the amount of such refund (together with
any interest paid or credited thereon after taxes applicable
thereto).  If, after the payment by the Corporation of any tax claim
pursuant to paragraph 5(iii), a determination is made that you shall not be
entitled to any refund with respect to such claim and the Corporation does not
notify you in writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then the amount the
Corporation paid in respect of such claim shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     

    (v) You shall
be eligible for benefits under this Section 5, and shall be subject to the terms
of this Section 5, regardless of whether the Change in Control occurs or the
payments are made during the Agreement Term, regardless of whether you are
employed by the Corporation on or after the occurrence of a Change in Control
and, if your Date of Termination shall have occurred, regardless of the reason
for such termination.

     

    (vi) Any
amounts that you become entitled to receive in respect of taxes, interest and
penalties pursuant to this Section 5 shall be paid to you (or to the applicable
taxing authority on your behalf) not later than the last day of the calendar
year after the calendar year in which you remit the underlying taxes to the
applicable taxing authority, and any amounts that you become entitled to receive
in respect of costs and expenses incurred in connection with a contest pursuant
to this Section 5 shall be paid not later than the later of (a) the last day of
the calendar year after the calendar year in which you remit the underlying
taxes to the applicable taxing authority and (b) the last day of the calendar
year after the calendar year in which the applicable contest is
concluded.  The foregoing provisions of this paragraph (vi) are
intended to conform the payments under this paragraph 5 and reimbursements under
this Agreement to the requirements of Section 409A, and shall not be construed
to permit delay by the Corporation of payment of amounts due earlier in
accordance with this Agreement.

     

    6. RIGHTS OF
EMPLOYMENT, CONTINUATION OF EQUITY AWARDS.  Except as otherwise
expressly provided in this Agreement:

     

    (i) Nothing
in this Agreement shall be construed as limiting your right to resign prior to
the beginning or after the end of the Agreement Term.

     

    (ii) Nothing
in this Agreement shall be construed as limiting the Corporation’s right to
discharge you at any time prior to the beginning or after the end of the
Agreement Term, or to renegotiate the terms of your employment for any period
prior to the beginning or after the end of the Agreement Term.

     

    (iii) Except as
otherwise provided in paragraph 3(iv) (relating to discharge absent Cause or
Disability), or as otherwise expressly provided in this Agreement, this
Agreement shall be inapplicable to the determination of your rights to payments
and benefits, if your Date of Termination occurs prior to the occurrence of a
Change in Control, or if your Date of Termination occurs after the end of the
Agreement Term and you are not subject to a disability after a Change in
Control.

     

    (iv) This
paragraph 6(iv) will apply to any stock awards granted to you under the
Corporation’s 1996 Stock Incentive Plan, 1999 Stock Incentive Plan, or any
similar successor Plan that you hold immediately before a Change in Control
(“Equity Awards”).

     

    (a) The Board
(as constituted immediately prior to the Change in Control) shall determine, not
later than immediately before the Change in Control date, whether immediately
after the Change in Control, the Equity Awards in each Award Category (as
defined below) will be Comparable (as defined below) to the Equity Awards in
that Award Category that you held immediately before the Change in
Control.  The three “Award Categories” are:  (1)
Appreciation Awards, which includes stock options, stock appreciation rights,
and other similar awards based on appreciation in the price of the Corporation’s
stock after the grant date; (2) Non-Performance Based Full Value Awards, which
includes restricted stock, restricted stock units, and other awards the value of
which is based on the full value of the Corporation’s stock (rather than being
based on appreciation), and no portion of the value of which is based on
performance measures other than stock value; and (3) Performance Based Full
Value Awards, which includes restricted stock, restricted stock units and other
awards (but not Performance Stock), the value of which is based in part on the
full value of the Corporation’s stock, where vesting or other aspects of the
value of the awards is based on performance measures other than the value of the
Corporation’s stock.  The following shall apply to that
determination:

     

    (I) The
category of Appreciation Awards will not be treated as Comparable if, for any of
the awards in that category, the intrinsic value of such award (that is, the
excess of the fair market value of the shares covered by such award over the
exercise price) immediately after the Change in Control is less than the
intrinsic value of such award immediately before the Change in
Control.

     

    (II) The
category of Performance Based Full Value Awards and the category of
Non-Performance Based Full Value Awards, respectively, will not be treated as
Comparable for any of the awards in that category unless the fair market value
of the stock covered by the award immediately after the Change in Control is at
least equal to the fair market value of the stock subject to the award prior to
the Change in Control.

     

    (III) In
determining whether awards are Comparable, the Board shall take into account
such factors as it determines to be relevant, including the credit quality of
the acquiring or remaining entity, the business fundamentals of the entity whose
shares are covered by the awards, and whether the shares subject to the awards
will be readily tradable or saleable to the Corporation or its successor at fair
market value after the Change in Control.

     

    (IV) In
determining whether awards are Comparable, the Board shall disregard reductions
in value that are not material.

     

    (b) If the
Board determines in accordance with paragraph 6(iv)(a) that awards in any Award
Category will not be Comparable after the Change in Control, the 

    following
will apply:

     

    (I) If
Appreciation Awards are determined not to be Comparable after a Change in
Control, the restrictions on exercise (or any similar limitations) shall lapse
(to the extent that they have not previously lapsed) for all awards in that
category outstanding immediately prior to the Change in Control, all awards in
that category shall become fully exercisable beginning immediately prior to the
Change in Control, and to the extent such awards would otherwise remain
outstanding, such exercisability shall continue until they would otherwise
terminate in accordance with the terms of the applicable award
agreement.

     

    (II) If
Non-Performance Based Full Value Awards, or Performance Based Full Value Awards,
respectively, are determined not to be Comparable after a Change in Control, the
restricted period (or other vesting or similar period) for all awards in the
applicable category or categories shall lapse immediately before the Change in
Control, and shares covered by the awards in the applicable category or
categories shall be distributed to you immediately before the Change in
Control.  However, any change in the time or form of distribution
otherwise provided under this paragraph 6(iv)(b)(II) shall be disregarded to the
extent that such change would otherwise result in the application of penalties
under Section 409A, and such shares shall instead be delivered at the earliest
time that would not result in such penalties.

     

    (III) If such
determination applies to Performance Based Full Value Awards, the performance
objectives for all awards in that category will be deemed to have been achieved
at the target level of performance (without reduction to reflect that the Change
in Control occurred prior to the end of the performance
period).  However, the foregoing provisions of this paragraph
6(iv)(b)(III) shall not be applicable to Performance Stock, and the effect of a
Change in Control with respect to such stock shall be determined in accordance
with the provisions of the agreement governing the terms of such
award.

     

    (c) Nothing
in this paragraph 6(iv) shall be construed to authorize the cancellation of
Equity Awards without the grant of replacement awards in the absence of such
authorization under the applicable Equity Award and/or stock plan or payment of
cash or other property therefor.

     

    7. SUCCESSORS;
BINDING AGREEMENT.

     

    (i) The
Corporation will require (a) any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Corporation or (b) in the event of a transaction
described in paragraph 2(iii) or (iv), the acquiring or surviving entity in such
transaction, in each case, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform it if no such succession had taken
place.  Failure of the Corporation to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement.  As used in this Agreement, “Corporation” shall mean
the Corporation as hereinbefore defined and any successor to its business and/or
assets or acquiring or surviving entity as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise, and “Board” shall mean
the Board as hereinbefore defined or equivalent governing body of such successor
or other entity, as applicable.

     

    (ii) This
Agreement shall inure to the benefit of and be enforceable by you and your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If you should die while any
amount would still be payable to you hereunder had you continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there is no such designee, to your estate.

     

    8. NOTICE.  For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all notices to the
Corporation shall be directed to the attention of the Board with a copy to the
Secretary of the Corporation, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

     

    9. MISCELLANEOUS.

     

    (i) Subject
to paragraph 4(vi), no provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board.  No amendment, modification, or termination of this
Agreement shall be adopted or effective if it would result in accelerated
recognition of income or imposition of additional tax under Section
409A.  No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.  The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Texas without regard to its conflicts of
law principles.  All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such
sections.  Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local
law.  Except as otherwise specifically provided in this Agreement, to
the extent that the provision of payments or benefits to you results in your
being liable for taxes, you shall not be entitled to any make-whole, gross-up,
or other indemnification with respect to such taxes.  The obligations
of the parties to this Agreement shall survive the expiration of the Agreement
Term.  Capitalized terms used in this Agreement shall be defined as
set forth in this Agreement.

     

    (ii) If any
amount owed to you hereunder is not paid on the applicable due date, then, upon
the actual payment of such amount to you, you shall also receive interest
thereon from the original due date until the date of actual payment at an annual
rate of interest equal to the Prime Rate reported in The Wall Street Journal,
Northeast Edition, on the last business day of the month preceding the Payment
Date, compounded annually.

     

    10. VALIDITY.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

     

    11. COUNTERPARTS.  This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.

     

    12. ARBITRATION.  Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators in Ft. Worth, Texas, in accordance with the rules of the American
Arbitration Association then in effect.  Judgment may be entered on
the arbitrator’s award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

     

    13. AMENDMENT.  This
Agreement may be amended or canceled only by mutual agreement of the parties in
writing without the consent of any other person.  So long as you shall
live, no person, other than the parties hereto, shall have any rights under or
interest in this Agreement or the subject matter hereof.

     

    14. GENERAL
RELEASE AND COVENANT NOT TO SUE.  You agree that as a condition of
receiving the Severance Payments and other benefits under paragraph 4(iii) of
this Agreement in connection with your termination of employment, you shall
execute the attached General Release and Covenant Not to Sue within thirty (30)
days following your Date of Termination.  You will be deemed to have
executed a general release as described in the preceding sentence only if such
release is properly executed by you and returned to the Corporation within such
thirty (30) day period.  Notwithstanding any other provision herein,
unless the executed General Release and Covenant Not to Sue has been received by
the Corporation within such thirty (30) day period and a seven (7) day
revocation period from the date of execution has expired without your revoking
such release, (i) no Severance Payments shall be provided and all
entitlements to Severance Payments shall expire and be forfeited, (ii) the
Corporation shall be relieved of all obligations to make any further payments,
or provide or make available any further benefits, to you pursuant to paragraphs
4(iii)(e), 4(iii)(f), 4(iii)(g) and 4(iii)(h), (iii) you shall be required
to repay the Corporation, in cash within five (5) business days after written
demand is made therefor by the Corporation, an amount equal to the value of any
benefits received by your pursuant to paragraph 4(iii)(e), 4(iii)(f), 4(iii)(g)
or 4(iii)(h) and (iv) you shall forfeit any stock awards that vested or became
exercisable pursuant to paragraph 4(iii)(c)(A) or 4(iii)(B) and any other
stock-based or other awards that otherwise vested (without regard to this
Agreement) under the terms of the applicable plan or award agreements by reason
of your termination of employment following a change in control, as defined in
this Agreement or any applicable plan or award agreement, and you shall not
receive any shares with respect thereto.

     

    15. ENTIRE
AGREEMENT.  This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein is hereby terminated
and canceled.  This Agreement constitutes an amendment, restatement,
and continuation of your Change in Control Agreement.  The terms of
this Agreement, as set forth herein, shall apply with respect to any Change in
Control that occurs on or after December 31, 2007, and the terms of your
Agreement in effect prior to this amendment and restatement shall be deemed to
be completely replaced by the terms set forth herein.  For the
avoidance of doubt, it is recited here that this Agreement shall not apply to
any award (regardless of when granted) if the document(s) applicable to such
award provide that the terms of the award will be determined based solely on the
provisions of such award document(s), or determined without regard to the terms
of any other change in control arrangement.

     

    If this
letter sets forth our agreement on the subject matter hereof, kindly sign and
return to the Corporation the enclosed copy of this letter, which will then
constitute our agreement on this subject.

     

    Sincerely,

    

    Burlington
Northern

    Santa Fe
Corporation

    

    

     

    
      
        
          Form
1

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Attachment

     

    GENERAL
RELEASE AND COVENANT NOT TO SUE

     

    For and
in consideration of the terms of the Agreement between Burlington Northern Santa
Fe Corporation and its Affiliates and _____________dated _____________, _____,
(“Agreement”), the undersigned (i) does hereby agree to comply with the
restrictions applicable to me under the change in control agreement dated
________ between Burlington Northern Santa Fe Corporation and me (as well as any
other restrictions applicable to me) after my termination of employment, and
(ii) does hereby fully waive, release, acquit, and forever discharge Burlington
Northern Santa Fe Corporation and any and all of its Affiliates, divisions,
subsidiaries, benefit plans, officers, directors, stockholders, agents,
advisors, fiduciaries, administrators, and employees, or any of their successors
or assigns, from any and all claims, demands or causes of action, including but
not limited to any claims for merger protection benefits pursuant to the
Interstate Commerce Commission decision in the Northern Lines, BNSF, or Frisco merger
proceedings, claims arising under Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. § 2000(e), et seq., the Civil
Rights Act of 1866, 42 U.S.C. § 1981, the Age Discrimination in Employment Act
of 1967, as amended, 29 U.S.C. § 621, et seq., the Federal
Employers’ Liability Act, and any other federal, state or local law, order,
regulation, common law, contract or collective bargaining agreement, which
relates to my employment or cessation of employment by Burlington Northern Santa
Fe Corporation and its Affiliates; provided however that the undersigned does
not waive enforcement of rights to any benefits provided or extended pursuant to
the terms of the Agreement or to assert any counterclaims in response to any
litigation initiated by Burlington Northern Santa Fe Corporation against
me.  The undersigned specifically waives all claims, whether past or
present, known or unknown, and whether or not in litigation, which I, or acting
on my behalf, my heirs, successors, executors, administrators or assigns, may
have based on any action, omission or event occurring prior to this
date.  Included in this Release are any and all claims for future
damages allegedly arising from the alleged continuation of the effects of any
past action, omission or event.

     

    I
acknowledge that (i) I have read the Agreement including this General Release
and Covenant Not to Sue (“Release”); (ii) I am advised by the Corporation to
consult, and have had the opportunity to consult, an attorney about the meaning
and effect of this Agreement and Release; (iii) I have had sufficient time, and
at least 45 days, to consider and fully understand the meaning and effect of
signing this Agreement and Release; (iv) I have 7 days after signing to change
my mind and revoke my acceptance by so notifying __________________________; (v)
this Agreement and Release will not become effective and enforceable until that
7-day period has passed; (vi) I am not otherwise entitled to the benefits of the
Agreement; (vii) I am not relying on any written or oral statement or promise
other than as set out in the Agreement and Release; and (viii) this Agreement
and Release shall be governed by and construed in accordance with the laws of
the State of Texas.

     

    This
General Release and Covenant Not to Sue is executed knowingly and voluntarily,
for adequate consideration, and is irrevocable and binding upon the
undersigned.

     

    ACCEPTED
AND AGREED TO this _____ day of _______, 20___:

     

    Person’s
Name: _________________________
Signature:_______________________________dex1016.htm

    
      

      

    

    
 

    Exhibit 10.16

    

      Amended
and Restated February 13, 2008

      

      BURLINGTON
NORTHERN SANTA FE

      1999
STOCK INCENTIVE PLAN

      
        

      

      

      SECTION
1

      

      STATEMENT
OF PURPOSE

      

      1.1.           The
BURLINGTON NORTHERN SANTA FE 1999 STOCK INCENTIVE PLAN (the "Plan") has been
established by BURLINGTON NORTHERN SANTA FE CORPORATION (the "Company")
to:

      

      
        	
                 
      

              	
                (a)

              	
                attract
      and retain executive, managerial and other salaried
    employees;

              

      

      

      
        	
                 
      

              	
                (b)

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

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      
        	
                 
      

              	
                (d)

              	
                further
      identify a Participant's interests with those of the Company's other
      stockholders through compensation that is based on Stock (as defined
      below);

              

      

      

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

      

      SECTION
2

      

      DEFINITIONS

      

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

      

      
        	
                               
      (a)

              	
                Affiliates.  The
      term "Affiliates"
      shall mean all persons with whom the Company is considered to be a single
      employer under section 414 (b) of the Code and all persons with whom the
      Company would be considered a single employer under section 414 (c) of the
      Code.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Award.  The
      term "Award" shall mean any award or benefit granted to any Participant
      under the Plan, including, without limitation, the grant of Options,
      Restricted Stock, Restricted Stock Units, Performance Stock, Achievement
      Award Stock, or Stock acquired through purchase under Section
      10.

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      
        	
                 
      

              	
                (d)

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

              

      

      

      
        	
                 
      

              	
                (e)

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

              

      

      

      
        	
                 
      

              	
                (1)

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

              

      

      

      
        	
                 
      

              	
                (2)

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

              

      

      

      
        	
                 
      

              	
                (3)

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

              

      

      

      
        	
                 
      

              	
                (4)

              	
                the
      stockholders of the Company adopt a plan of complete liquidation of the
      Company or approve an agreement for the sale or disposition by the Company
      of all or substantially all of the Company's assets. For purposes of this
      clause (4), the term "the sale or disposition by the Company of all or
      substantially all of the Company's assets" shall mean a sale or other
      disposition transaction or series of related transactions involving assets
      of the company or of any direct or indirect subsidiary of the Company
      (including the stock of any direct or indirect subsidiary of the Company)
      in which the value of the assets or stock being sold or otherwise disposed
      of (as measured by the purchase price being paid therefor or by another
      objective method 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 (excluding Employee stock options). 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.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Code.  The
      term "Code" means the Internal Revenue Code of 1986 and the regulations
      thereunder, as each may be amended from time to time. A reference to any
      provision of the Code shall include reference to any successor provision
      of the Code.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Date of Termination.
      The term "Date of Termination" shall mean your ceasing to be
      employed by the Company and the Affiliates; provided that the employment
      relationship will be deemed to have ended at the time you and your
      employer reasonably anticipate that the level of bona fide services you
      would perform for the Company and the Affiliates 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 Affiliates if you have
      performed services for the Company and the Affiliates for less than 36
      months).  In the absence of an expectation that you will perform
      at the above-described level, the Date of Termination of employment will
      not be delayed solely by reason of your continuing to be on the Company's
      and the Affiliates' payroll after such
date.

              

      

      

      
        	
                 
      

              	
                (h)

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

              

      

      

      
        	
                 
      

              	
                (i)

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

              

      

      

      
        	
                 
      

              	
                (j)

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

              

      

      

      
        	
                 
      

              	
                (k)

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

              

      

      

      
        	
                 
      

              	
                (l)

              	
                Fair Market
      Value.  The "Fair Market Value" of the Stock shall be the
      closing price of a share of Common Stock on the New York Stock Exchange
      Composite Transaction Report on the valuation date; provided, that if
      there were no sales on the valuation date but there were sales on dates
      within a reasonable period before the valuation date, the Fair Market
      Value is the closing price on the nearest date before the valuation
      date.  In any event the determination of "Fair Market Value"
      shall be consistent with the requirements of Treas. Reg. §
      1.409A-1(b)(5)(iv)(A).

              

      

      

      
        	
                 
      

              	
                (m)

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

              

      

      

      
        	
                 
      

              	
                (n)

              	
                Independent
      Director.  The term "Independent Director" shall mean a
      member of the Board who is not an Employee and who, at the time of acting,
      qualifies as a "Non-Employee Director" under Rule 16b-3 of the Exchange
      Act and an "outside director" under section 162(m) of the
      Code.

              

      

      

      
        	
                 
      

              	
                (o)

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

              

      

      

      
        	
                 
      

              	
                (p)

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

              

      

      

      
        	
                 
      

              	
                (q)

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

              

      

      

      
        	
                 
      

              	
                (r)

              	
                Performance
      Period.  The term "Performance Period" shall mean the
      period over which applicable performance is to be measured, provided that
      such period shall not be less than one
year.

              

      

      

      
        	
                 
      

              	
                (s)

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

              

      

      

      
        	
                 
      

              	
                (t)

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

              

      

      

      
        	
                 
      

              	
                (u)

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

              

      

      

      
        	
                 
      

              	
                (v)

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

              

      

      

      
        	
                 
      

              	
                (w)

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

              

      

      

      
        	
                 
      

              	
                (x)

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

              

      

      

      
        	
                 
      

              	
                (y)

              	
                Stock.  The
      term "Stock" shall mean shares of common stock of the Company, par value
      $0.01 per share.

              

      

      

      SECTION
3

      

      ELIGIBILITY

      

      3.1.           The
Compensation and Development Committee of the Board ("Committee") shall
determine and designate from time to time, from among the salaried, full-time
officers and Employees of the Employers, those Employees who will be granted one
or more Awards under the Plan, and from among the salaried and non-salaried
full- or part-time non-officer Employees of an Employer, those Employees who
will be granted Achievement Award Stock under Section 11 of the
Plan.

      

      SECTION
4

      

      OPERATION
AND ADMINISTRATION

      

      4.1.           Subject
to the approval of the stockholders of the Company at the Company's 2006 annual
meeting of the stockholders, the Plan, as amended and restated, shall be
effective as of the date of such approval ("Effective Date"), provided however,
that any Awards made under the Plan, as amended and restated, other than Awards
that can be made under the Plan prior to amendments to be approved at the 2006
annual meeting of the stockholders and that are made prior to approval by
stockholders, shall be contingent on approval of the Plan, as amended and
restated, by stockholders of the Company and all dividends on such Awards shall
be held by the Company and paid only upon such approval and all other rights of
a Participant in connection with such an Award shall not be effective until such
approval is obtained. The Plan will terminate (except with respect to then
outstanding Awards) on April 21, 2014, or, if shareholders approve the Plan, as
amended and restated, at the 2006 annual meeting of stockholders, ten years from
the date of such approval, provided however, that no Incentive Stock Options may
be granted under the Plan on a date that is more than ten years from the
Effective Date or, if earlier, the date the Plan is adopted by the
Board.

      

      4.2.           Except
as otherwise provided in Section 4.3, the Plan shall be administered by the
Committee, which shall be selected by the Board in accordance with the charter
of the Committee adopted by the Board. The authority to manage and control the
operation and administration of the Plan is subject to the
following:

      

      
        	
                 
      

              	
                (a)

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

              

      

      

      
        	
                 
      

              	
                (b)

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

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Any
      interpretation of the Plan by the Committee and any decision made by it or
      the Independent Directors pursuant to its or their respective authority
      under the Plan is final and binding on all
  persons.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Except
      as otherwise expressly provided in the Plan, where the Committee or the
      Independent Directors are authorized to make a determination with respect
      to any Award, such determination shall be made at the time the Award is
      granted; except that the Committee or the Independent Directors, as
      applicable, may reserve the authority to have such determination made by
      the Committee or the Independent Directors, as applicable, in the future
      (but only if such reservation is either made at the time the Award is
      granted and is stated in the Agreement reflecting the Award or, if the
      Agreement does not address the issue, is provided in the
      Plan);

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Except
      to the extent prohibited by applicable law or the rules of any stock
      exchange, the Committee may allocate all or any portion of its
      responsibilities and powers to any one or more of its members or, with
      respect to Awards to Employees below the level of Vice President (provided
      that such Awards shall not exceed 5% of the shares of Stock currently
      available for grant under the Plan), to one or more subcommittees, each
      composed of one or more other members of the Board; and
      other than in respect to eligibility, times of Awards, and terms,
      conditions, performance criteria, restrictions and other provisions of
      Awards, and except as otherwise provided by the Committee from time to
      time, the Committee delegates its responsibilities and powers to the Vice
      President-Human Resources or his or her successor. Any such allocation or
      delegation may be revoked by the Committee at any
  time.

              

      

      

      
        	
                 
      

              	
                (g)

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

              

      

      

      4.3.           Notwithstanding
any other provision of the Plan to the contrary, all Awards granted to the Chief
Executive Officer of the Company under the Plan shall be recommended by the
Committee and awarded by the Independent Directors, and the Independent
Directors shall have the authority to determine, subject to the recommendations
of the Committee, the times of such Awards and the terms, conditions,
restrictions and other provisions of such Awards,
except with respect to the establishment of performance criteria or goals, which
shall be established by the Committee.  With respect to any
Awards granted to the Chief Executive Officer of the Company, the phrase
“Independent Directors, subject to the recommendation of the Committee” shall be
substituted for the word “Committee” each time it appears in Sections 3.1,
4.2(a), 6.2, 6.4, 6.5, 7.1, 7.2, 7.3(a), 7.3(c), 7.3(d), 8.1, 8.2, 8.3, 9.2,
9.3, 12.9 and 16.1 of the Plan, except in each case with respect to the
establishment of performance criteria or goals.

      

      4.4.           Notwithstanding
any other provision of the Plan to the contrary, no Participant shall receive
any Award of an Option under the Plan to the extent that the sum
of:

      

      
        	
                 
      

              	
                (a)

              	
                the
      number of shares of Stock subject to such
Award;

              

      

      

      
        	
                 
      

              	
                (b)

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

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      would
exceed the Participant's Individual Limit under the Plan. The determination made
under the foregoing provisions of this subsection 4.3 shall be based on the
shares subject to the Awards at the time of grant, regardless of when the Awards
become exercisable. Subject to the provisions of Section 13, a Participant's
"Individual Limit" shall be 1,000,000 shares per calendar year.

      

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

      

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

      

      SECTION
5

      

      SHARES
AVAILABLE UNDER THE PLAN

      

      5.1.           The
shares of Stock with respect to which Awards may be made under the Plan shall be
shares currently authorized but unissued or treasury shares acquired by the
Company, including shares purchased in open market or in private transactions.
Subject to the provisions of Section 13, the total number of shares of Stock
available for grant of Awards shall not exceed fifty-three million (53,000,000)
shares of Stock. Except as otherwise provided herein, any shares subject to an
Award which for any reason expires or is terminated without issuance of shares
(whether or not cash or other consideration is paid to a Participant in respect
to such Award) shall again be available under the Plan. Shares tendered by a
Participant in full or partial payment to the Company upon exercise of an Option
granted under the Plan or shares withheld by, or otherwise remitted to, the
Company to satisfy a Participant's tax withholding obligation in respect to any
Award shall not become available for issuance under the Plan.

      

       

      SECTION
6

      

      OPTIONS

      

      6.1.           The
grant of an "Option" under this Section 6 entitles the Participant to purchase
shares of Stock at a price fixed at the time the Option is granted, or at a
price determined under a method established at the time the Option is granted,
subject to the terms of this Section 6. Options granted under this section may
be either Incentive Stock Options or Non-Qualified Stock Options, and subject to
Section 12, shall not be exercisable for six months from date of grant, as
determined in the discretion of the Committee. An "Incentive Stock Option" is an
Option that is intended to satisfy the requirements applicable to an "incentive
stock option" described in section 422(b) of the Code. A "Non-Qualified Stock
Option" is an Option that is not intended to be an "incentive stock option" as
that term is described in section 422(b) of the Code.

      

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

      

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

      

      
        	
                 
      

              	
                (a)

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

              

      

      

      
        	
                 
      

              	
                (b)

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

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      
        	
                 
      

              	
                (d)

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

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Except
      for either adjustments pursuant to Section 13 of the Plan (relating to the
      adjustments to shares), or reductions of the purchase price approved by
      the Company's stockholders, and subject to any applicable restrictions
      imposed by Section 409A, the purchase price for any outstanding Option may
      not be decreased after the date of grant nor may an outstanding Option
      granted under the Plan be surrendered to the Company as consideration for
      the grant of a replacement Option with a lower purchase
    price.

              

      

      

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

      

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

      

      6.6.           In
the event the Participant exercises an Option granted before February 28, 2005,
under this Plan or a predecessor plan of the Company or a Related Company and
pays all or a portion of the purchase price in Common Stock, in the manner
permitted by subsection 6.3, such Participant, pursuant to the exercise of
Committee discretion at the time the Option is exercised or to the extent
previously authorized by the Committee, may be issued a new Option to purchase
additional shares of Stock equal to the number of shares of Stock surrendered to
the Company in such payment. Such new Option shall have an exercise price equal
to the Fair Market Value per share on the date such new Option is granted, shall
first be exercisable six months from the date of grant of the new Option and
shall have an expiration date on the same date as the expiration date of the
original Option so exercised by payment of the purchase price in shares of
Stock. No new Option shall be granted pursuant to this subsection 6.6 in
connection with the exercise of any Option granted on or after February 28,
2005.

       

      SECTION
7

      

      RESTRICTED
STOCK

      

      7.1.           Subject
to the terms of this Section 7, Restricted Stock Awards under the Plan are
grants of Stock to Participants, the vesting of which is subject to certain
conditions established by the Committee, with some or all of those conditions
relating to events (such as performance or continued employment) occurring after
the date of grant, provided however that to the extent that vesting of a
Restricted Stock Award is contingent on continued employment, then (i) the
required employment period shall not be less than three years following the
grant of the Award unless the Award is being granted in replacement of a
previously granted Award under the Plan or another plan and, as of the date of
the replacement, the required employment period for the replacement grant is not
less than the remaining required employment period under the grant that is being
replaced, and (ii) the grant may provide for equal, annual, pro-rata vesting
during the employment period.

      

      7.2.           The
Committee shall designate the Participants to whom Restricted Stock is to be
granted, and the number of shares of Stock that are subject to each such Award.
The maximum number of shares of Stock that may be issued in conjunction with
Awards granted under Sections 7, 8 and 9 of the Plan shall be twenty-three
million shares. The Award of shares under this Section 7 may, but need not, be
made in conjunction with a cash-based incentive compensation program maintained
by the Company, and may, but need not, be in lieu of cash otherwise awardable
under such program, provided, however, that one million of the shares remaining
to be granted under Sections 7, 8 and 9 of the Plan as of April 18, 2002, shall
only be used for Awards of shares of Performance-Based Restricted Stock,
performance-based Restricted Stock Units or Performance Stock or in lieu of cash
otherwise awardable under such program.

      

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

      

      
        	
                 
      

              	
                (a)

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

              

      

      

      
        	
                 
      

              	
                (b)

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

              

      

      

      
        	
                 
      

              	
                (c)

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

              

      

      

      
        	
                 
      

              	
                (d)

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

              

      

      

      

      SECTION
8

      

      RESTRICTED
STOCK UNITS

      

      8.1.           Subject
to the terms of this Section 8, a Restricted Stock Unit entitles a Participant
to receive shares for the units at the end of a Restricted Period to the extent
provided by the Award with the vesting of such units to be contingent upon such
conditions as may be established by the Committee (such as continued employment
which, when required, shall be not less than three years (although the grant may
provide for equal, annual, pro-rata vesting during that period), or satisfaction
of performance criteria). The Award of Restricted Stock Units under this Section
8 may, but need not, be made in conjunction with a cash-based incentive
compensation program maintained by the Company, and may, but need not, be in
lieu of cash otherwise awardable under such program, provided, however, that one
million of the shares remaining to be granted under Sections 7, 8 and 9 of the
Plan as of April 18, 2002, shall only be used for Awards of shares of
Performance-Based Restricted Stock, performance-based Restricted Stock Units or
Performance Stock or in lieu of cash otherwise awardable under such
program.

      

      8.2.           The
Committee shall designate the Participants to whom Restricted Stock Units shall
be granted and the number of units that are subject to each such Award. The
maximum number of shares of Stock that may be issued in conjunction with Awards
granted under Sections 7, 8 and 9 of the Plan shall be twenty-three million
shares. During any period in which units are outstanding and have not been
settled in Stock, the Participant shall not have the rights of a stockholder,
but shall have the right to receive a payment from the Company in lieu of a
dividend in an amount equal to such dividends and at such times as dividends
would otherwise be paid.

       

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

      

      

      SECTION
9

      

      PERFORMANCE
STOCK

      

      9.1.           Subject
to the terms of this Section 9, a Performance Stock Award provides for the
distribution of Stock to a Participant upon the achievement of performance
objectives established by the Committee.

      

      9.2.           The
Committee shall designate the Participants to whom Performance Stock Awards are
to be granted, and the number of shares of Stock that are subject to each such
Award. The maximum number of shares of Stock that may be issued in conjunction
with Awards granted under Sections 7, 8 and 9 of the Plan shall be twenty-three
million shares. The Award of shares under this Section 9 may, but need not, be
made in conjunction with a cash-based incentive compensation program maintained
by the Company, and may, but need not, be in lieu of cash otherwise awardable
under such program, provided, however, that one million of the shares remaining
to be granted under Sections 7, 8 and 9 of the Plan as of April 18, 2002, shall
only be used for Awards of shares of Performance-Based Restricted Stock,
performance-based Restricted Stock Units or Performance Stock or in lieu of cash
otherwise awardable under such program.

      

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

      

      SECTION
10

      

      STOCK
PURCHASE PROGRAM

      

      10.1.         The
Committee may, from time to time, establish one or more programs under which
Participants will be permitted to purchase shares of Stock under the Plan, and
shall designate the Participants eligible to participate under such Stock
purchase programs. The purchase price for shares of Stock available under such
programs, and other terms and conditions of such programs, shall be established
by the Committee. The purchase price may not be less than 85% of the Fair Market
Value of the Stock at the time of purchase (or, in the Committee's discretion,
the average Stock value over a period determined by the Committee), and the
purchase price may not be less than par value. Issuances under the Stock
purchase programs authorized under this Section 10.1 shall not exceed a
cumulative total of 400,000 shares subsequent to April 17, 2002.

      

      10.2.         The
Committee may impose such restrictions with respect to shares purchased under
this section, as the Committee determines to be appropriate. Such restrictions
may include, without limitation, restrictions of the type that may be imposed
with respect to Restricted Stock under Section 7.

      

      SECTION
11

      

      ACHIEVEMENT
AWARD STOCK

      

      11.1.         Subject
to the eligibility provisions of Section 3, the Committee may determine and
designate from time to time from among the eligible Employees of an Employer
those Employees who will be granted Achievement Award Stock. Such Employees
shall be those Employees who are recognized for specific and unique achievements
that exceed normal expectations for the job.

      

      11.2.         Stock
granted under this Section 11 shall consist of shares of Stock, which shall not
be subject to a vesting period. The total number of shares of Stock to be
awarded under this Section 11 shall not exceed 50,000 shares, and in any
calendar year no Employee may be granted more than 25 shares of Stock (or such
other number as the Committee may determine) under this Section 11, and such
Stock shall be granted in lieu of a cash payment equal to no more than 25 (or
such other number as the Committee may determine) times the Fair Market Value of
one share of Stock on the date of grant.

      

      SECTION
12

      

      TERMINATION
OF EMPLOYMENT

      

      12.1.         If
a Participant's Date of Termination occurs for any reason other than death,
Disability, Retirement, or by reason of the Participant's employment being
terminated by the Participant's employer for any reason other than Cause, all
outstanding Awards shall be forfeited.

      

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

      

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

      

      12.4.         If
a Participant's Date of Termination occurs by reason of the Participant's
employment being terminated by the Participant's employer for any reason other
than for Cause, the Restricted Period shall lapse on a proportion of any
outstanding Awards (except that to the extent an Award of Restricted Stock,
Restricted Stock Units or Performance Stock is subject to a Performance Period,
such proportion of the Award shall remain subject to the same terms and
conditions for vesting as were in effect prior to termination). The proportion
of an Award upon which the Restricted Period shall lapse shall be a fraction,
the denominator of which is the total number of months of any Restricted Period
applicable to an Award and the numerator of which is the number of months of
such Restricted Period which elapsed prior to the Date of
Termination.

      

      12.5.         Non-Qualified
Stock Options which are exercisable at the time of (or become exercisable by
reason of) the Participant's death, Disability, Retirement, or other termination
of employment by the Participant's employer for reasons other than Cause shall
expire on the expiration date set forth in the Award or, if earlier, five years
after the Date of Termination, if the Participant's termination occurs because
of death, Disability, or Retirement or if the Participant's employment is
terminated by the Participant's employer for reasons other than
Cause.

      

                      
Incentive Stock Options which are exercisable at the time of (or become
exercisable by reason of) the Participant's death, Disability, Retirement, or
other termination of employment by the Participant's employer for reasons other
than Cause and not exercised prior to the Date of Termination shall be treated
as Non-Qualified Stock Options on the day following the Date of Termination and
shall expire on the expiration date set forth in the Award or, if earlier, five
years after the Date of Termination, if the Participant's termination occurs
because of death, Disability, or Retirement or if the Participant's employment
is terminated by the Participant's employer for reasons other than
Cause.

      

      12.6.         Notwithstanding
any other provision of this Section 12 to the contrary, if a Participant's
employment is terminated by the Participant's employer for reasons other than
Cause in connection with and after a Change in Control:

      

      
        	
                 
      

              	
                (a)

              	
                All
      Options outstanding on the Participant's Date of Termination shall become
      exercisable (to the extent not already exercisable) on the Participant's
      Date of Termination, provided that this paragraph (a) shall apply only to
      options that were held by the Participant on the date of a Change in
      Control.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Any
      restrictions shall lapse on awards of Restricted Stock and Restricted
      Stock Units, including without limitation performance-based Restricted
      Stock and performance-based Restricted Stock Units, that are outstanding
      on the Participant's Date of Termination, and such Awards shall be fully
      vested as if all performance objectives have been attained (provided that
      this paragraph (b) shall apply only to Restricted Stock and Restricted
      Stock Units that were held by the Participant on the date of the Change in
      Control, and further provided that this paragraph (b) shall not apply to
      Performance Stock).

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Any
      Performance Stock awards held by a Participant on the date of a Change in
      Control shall vest to the extent provided by the terms in the applicable
      Performance Stock Award Agreement.

              

      

      

      For
purposes of this Section 12.6, a Participant will be treated as having been
terminated by the Participant's employer for reasons other than Cause if the
employment is terminated by the Participant for Good Reason.  For
purposes of this Plan, "Good Reason" shall mean the occurrence after a Change in
Control of one or more of the following conditions without the consent of the
Participant:

      

      
        	
                 
      

              	
                (i)

              	
                The
      relocation of the Participant's base of operations for the Company or
      Related Company to a place that is 50 miles farther from his or her
      residence immediately prior to the Change in Control than the distance
      from such residence to the Participant's former base of operations for the
      Company or Related Company.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                The
      Participant's salary rate is reduced to a level that is less than 85% of
      the Participant's salary level immediately prior to the Change in
      Control.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                The
      aggregate value of a Participant's (A) annual salary rate at the time of
      termination, (B) bonus opportunity for the year in which the Date of
      Termination occurs, and (C) long-term incentive compensation awards for
      the year in which the Date of Termination occurs, is less than 85% of the
      aggregate value of a Participant's salary rate, bonus opportunity and
      long-term incentive awards for the year ending prior to the year in which
      the Change in Control occurs (with all such values to be determined by the
      Committee).

              

      

      

      However,
if the reduction in compensation described in paragraph (ii) or (iii) is
consistent with a broad-based company reduction in compensation by the
Participant's employer (as determined by the Committee), the reduction will not
be a basis for treating the Participant as having been terminated by the
Participant's employer for reasons other than Cause, and the reduction shall be
disregarded for purposes of paragraph (ii) and (iii).

      

      A
Participant shall be considered to have terminated employment for Good Reason
if:

      

      
        	
                (I)  

              	
                in
      regard to paragraph (i), the Participant resigns within 60 days of being
      notified by the Participant's employer in writing that the Participant's
      base of operations is being relocated to a destination that is described
      in paragraph (i), unless the employer notifies the Participant in writing
      of the cancellation of such relocation within 30 days after the
      Participant notifies the Company in writing that such relocation would
      constitute Good Reason; or

              

      

      

      
        	
                (II)  

              	
                in
      regard to paragraphs (ii) and (iii):  (a) the Participant
      provides written notice to the Company of the occurrence of Good Reason
      within  60 days of being notified by the Participant's employer
      in writing that any of the actions described in preceding paragraphs (ii)
      or (iii) will apply to him or her; (b) the Company fails to notify the
      Participant of the Company's intended method of correction within 30 days
      after the Company's receipt of the notice, or the Company fails to correct
      the circumstances within said 30 day period; and (c) the Participant
      resigns within 60 days after receiving the Company's response, if such
      response does not indicate an intention to correct such circumstances, or
      within a reasonable time after the Company fails to correct such
      circumstances (provided that in no event may such termination occur less
      than 30 days following the provision of notice to the Company, or more
      than six (6) months after the initial existence of the condition
      constituting Good Reason).

              

      

      

      12.7.         Notwithstanding
any other provision of this Section 12 to the contrary and provided that the
provisions of Section 12.6 do not apply, except as otherwise provided in the
Award Agreement or by the Committee at the date of grant, in the event of a
Change in Control, to the extent outstanding Awards granted under this Plan are
not assumed, converted or replaced by the resulting entity on terms comparable
to the Awards immediately prior to the Change in Control as determined by the
Board of Directors (as constituted at the time of the Change in Control), all
outstanding Awards that may be exercised shall become fully exercisable, all
restrictions with respect to outstanding Awards shall lapse and become vested
and non-forfeitable, and any specified corporate goals and objectives with
respect to outstanding Awards shall be deemed to be satisfied at
target.

      

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

      

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

      

      SECTION
13

      

      ADJUSTMENTS
TO SHARES

      

      13.1.         If
the Company shall effect a reorganization, merger, or consolidation, or similar
event or effect any subdivision or consolidation of shares of Stock or other
capital readjustment, payment of stock dividend, stock split, spin-off,
combination of shares or recapitalization or other increase or reduction of the
number of shares of Stock outstanding without receiving compensation therefor in
money, services or property, then the Committee shall adjust equitably and
proportionally (i) the number of shares of Stock available under the Plan; (ii)
the number of shares available under any individual or other limits; (iii) the
number of shares of Stock subject to outstanding Awards; and (iv) the per-share
price under any outstanding Award to the extent that the Participant is required
to pay a purchase price per share with respect to the Award.

      

      SECTION
14

      

      TRANSFERABILITY
OF AWARDS

      

      14.1.          Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution. To the extent that the
Participant who receives an Award under the Plan has the right to exercise such
Award, the Award may be exercised during the lifetime of the Participant only by
the Participant. Notwithstanding the foregoing provisions of this Section 14,
the Committee may permit Awards under the Plan (other than an Incentive Stock
Option) to be transferred by a Participant for no consideration to or for the
benefit of the Participant's Immediate Family (including, without limitation, to
a trust for the benefit of a Participant's Immediate Family or to a family
partnership for members of the Immediate Family), subject to such limits as the
Committee may establish, and the transferee shall remain subject to all of the
terms and conditions applicable to such Award prior to such
transfer.

      

      

      SECTION
15

      

      AWARD
AGREEMENT

      

      15.1.         Each
Employee granted an Award pursuant to the Plan shall execute an Award Agreement
which signifies in writing, electronically or by such other means as the Company
may designate, the offer of the Award by the Company and the acceptance of the
Award by the Employee in accordance with the terms of the Award and the
provisions of the Plan. Each Award Agreement shall reflect the terms and
conditions of the Award. In the event of a disagreement between the individual
Award Agreement and the Plan or the Compensation and Development Committee
resolution, the Plan or the resolution will govern. Participation in the Plan
shall confer no rights to continued employment with the Company nor shall it
restrict the right of the Company to terminate a Participant's employment at any
time.

      

      SECTION
16

      

      TAX
WITHHOLDING; SECTION 409A

      
 

      16.1.   All
Awards and other payments under the Plan are subject to withholding of all
applicable taxes, which withholding obligations shall be satisfied (without
regard to whether the Participant has transferred an Award under the Plan) by a
cash remittance, or with the consent of the Committee, through the surrender of
shares of Stock which the Participant owns or to which the Participant is
otherwise entitled under the Plan pursuant to an irrevocable election submitted
by the Participant to the Company at the office designated for such purpose,
provided that if shares are used for Awards granted on or after July 1, 2000,
shares from the Awards may be used only in an amount equal to the minimum
applicable tax withholding rate as established by the Code and relevant state or
local tax authorities, and any additional amount due must be satisfied by use of
attestation of ownership of other shares. The number of shares of Stock needed
to be submitted in payment of the taxes shall be determined using the Fair
Market Value as of the applicable tax date rounding down to the nearest whole
share; provided that no election to have shares of Stock withheld from an Award
or submission of shares shall be effective with respect to an Award which was
transferred by a Participant in accordance with the Plan.

      
 

      16.2.   The
Committee may modify the time at which any Award will be settled, paid-out,
vested or transferred 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 Committee modifies or fails to modify
the time at which any such Award is settled, paid-out, vested or transferred,
the Employee shall be solely liable for any taxes, including without limitation
taxes that may be imposed under Section 409A, penalties and interest incurred by
reason of such transfer.

      

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

      

      SECTION
17

      

      TERMINATION
AND AMENDMENT

      

      17.1.          The
Board may suspend, terminate, modify or amend the Plan, provided that any
amendment that would increase the aggregate number of shares which may be issued
under the Plan; materially increase the benefits accruing to Participants under
the Plan; modify Section 6.3(e) or materially modify the requirements as to
eligibility for participation in the Plan, shall be subject to the approval of
the Company's stockholders, except that any such increase or modification that
may result from adjustments authorized by Section 13 does not require such
approval. No suspension, termination, modification or amendment of the Plan may
terminate a Participant's existing Award or materially and adversely affect a
Participant's rights under such Award without the Participant's
consent.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]