ELECTION OF DIRECTORS

Nominees for Director

Chairman and Chief Executive Officer of Fluor Corporation, Aliso Viejo, California (professional services holding company offering engineering, procurement, construction management and other services) since February 2002. Previously, President and Chief Operating Officer of Fluor Corporation from February 2001 to February 2002, President and Chief Executive Officer of Fluor Daniel (engineering, procurement, and construction services) from March 1999 to February 2001, Group President, Energy and Chemicals of Fluor Daniel from June 1997 to March 1999, and Group President, Chemical and Industrial Process of Fluor Daniel from January 1996 to June 1997. Also a director of Fluor Corporation. Member of BNSF’s Audit Committee and the Directors and Corporate Governance Committee.

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President and Chief Executive Officer of Alleghany Corporation, New York, New York (holding company with casualty insurance, industrial minerals, and steel fastener distribution operations, and an investment position in Burlington Northern Santa Fe Corporation) since July 1992. Also a director of Alleghany Corporation and Fidelity National Financial, Inc. Member of BNSF’s Executive Committee and the Compensation and Development Committee.

Partner in Munger, Tolles & Olson LLP, Los Angeles, California (law firm) since September 1982. Also a director of Anheuser-Busch Companies, Inc., and Fluor Corporation. Member of BNSF’s Audit Committee and the Directors and Corporate Governance Committee.

Partner, Bracewell & Patterson, L.L.P., Washington, D.C. (law firm) since February 2001, and Chairman, Republican National Committee, Washington, D.C. (political organization) since January 2002. Previously, Governor of the State of Montana from 1993 to 2001. Also a director of Siebel Systems, Inc. and Massachusetts Mutual Life Insurance Company. Member of BNSF’s Executive Committee and the Directors and Corporate Governance Committee.

Retired Group Vice President, North American Vehicle Sales, Service and Marketing of General Motors Corporation, Detroit, Michigan (manufacturer of motor vehicles) since April 2000, a position he had held since July 1999. Previously, Vice President and Group Executive, North American Vehicle Sales, Service and Marketing from October 1998 to July 1999; Vice President and General Manager, Field Sales, Service and Parts from August 1998 to October 1998; and, from February 1996 to August 1998, Vice President and General Manager of Pontiac-GMC Division of General Motors Corporation. Also a director of Abbott Laboratories. Member of BNSF’s Compensation and Development Committee and the Directors and Corporate Governance Committee.

Chairman, President and Chief Executive Officer of Burlington Northern Santa Fe Corporation since March 2002. Also, Chairman, President and Chief Executive Officer of The Burlington Northern and Santa Fe Railway Company. Previously, President and Chief Executive Officer of Burlington Northern Santa Fe Corporation since December 2000; President and Chief Operating Officer of the Company from June 1999; Senior Vice President and Chief Operations Officer from August 1997 to June 1999; and, from May 1996 to August 1997, Senior Vice President-Merchandise Business Unit. Chairman of BNSF’s Executive Committee.

Vice Chairman for Finance, Risk Management, and Administration of J.P. Morgan Chase & Co., New York, New York (bank holding company) since January 2001. Previously, Vice Chairman for Finance, Risk Management and Administration of The Chase Manhattan Corporation, New York, New York (bank holding company) from July 1997 to December 2000, and Chairman and Chief Executive Officer, Chase Bank of Texas N.A., Houston, Texas (banking) from 1989 to July 1997. Also a director of Kimberly-Clark Corporation and a trustee of Weingarten Realty Investors. Member of BNSF’s Audit Committee and the Directors and Corporate Governance Committee.

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Chairman, J.C. Watts Companies LLC, and J.C. Watts Enterprises, Inc., Norman, Oklahoma (communications and public affairs). Member of Congress (R-4th Dist.-OK) from January 1995 to January 2003 and Chairman of House Republican Conference from 1998-2002. Also a Director of Dillards, Inc., Terex Corporation, and Clear Channel Communications Inc.

Retired Chairman of the Board of Butler Manufacturing Company, Kansas City, Missouri (manufacturer of pre-engineered building systems and specialty components), a position he had held from January 1999 to July 1999. Previously, Chairman and Chief Executive Officer of Butler Manufacturing Company from May 1986 to January 1999. Also a director of Astec Industries, Inc., Commerce Bancshares, Inc. and Great Plains Energy Incorporated. Chairman of BNSF’s Audit Committee and member of the Executive Committee and the Compensation and Development Committee.

Chairman, President and Chief Executive Officer, Phelps Dodge Corporation, Phoenix, Arizona (mining and manufacturing) since May 2000. Previously, President and Chief Executive Officer of Phelps Dodge Corporation from January 2000 to May 2000; President and Chief Operating Officer from December 1997 to January 2000; and from October 1988 to December 1997, Senior Vice President of Phelps Dodge Corporation. Also, President of Phelps Dodge Mining Company, a division of Phelps Dodge Corporation, from November 1991 to September 1998. Also a director of Phelps Dodge Corporation, Southern Peru Copper Corporation, and America West Holdings Corporation and its subsidiary, America West Airlines, Inc. Member of BNSF’s Audit Committee and the Compensation and Development Committee.

Chairman and Chief Executive Officer, SBC Communications Inc., San Antonio, Texas (communications holding company) since January 1990. Also a director of Anheuser-Busch Companies, Inc., Emerson Electric Co., The May Department Stores Company, and SBC Communications Inc. Chairman of BNSF’s Directors and Corporate Governance Committee and member of the Executive Committee.

Chairman, America First Companies L.L.C., Omaha, Nebraska (investments) since August 2001. Previously, Chairman and Chief Executive Officer from October 2000, and Chairman, President and Chief Executive Officer from 1984. Also a director of Forest Oil Corporation, Level 3 Communications, Inc., MFA Mortgage Investments, Inc., and RCN Corporation. Chairman of BNSF’s Compensation and Development Committee and member of the Executive Committee.

APPROVAL OF AMENDMENT OF THE BURLINGTON NORTHERN
SANTA FE 1999 STOCK INCENTIVE PLAN
We recommend a voteFOR all of the above nominees.

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Purposes		The Stock Plan was established to:
		•		attract and retain executive, managerial and other salaried employees;
		•		motivate employees to achieve long-range goals;
		•		provide incentive compensation opportunities that are competitive with other major companies; and
		•		further align our employees' interests with those of all our shareholders through stock-based compensation.
Stock Incentives Under the Stock Plan		We believe the use of stock incentives will promote the growth in value of our stock and the enhancement of long-term shareholder return.
		The types of stock incentives authorized are:
		•		stock options;
		•		restricted stock and restricted stock units;
		•		performance stock; and
		•		a stock purchase program.
		The Stock Plan has been used since 1999 and will be used for future stock awards. On March 6, 2002, the Company's common stock closed at $31.30 on the New York Stock Exchange. Awards of restricted stock, restricted units, and performance stock are cumulatively limited to four million shares for the life of the Stock Plan, but this limit will increase to five million shares upon approval of the amended Stock Plan.
		The Stock Plan, as amended last year, authorized up to 29 million shares to be used for stock awards. As of the close of business on February 28, 2002, an aggregate of 3,760,816 shares of the Company's common stock remained available for future grants under the existing Stock Plan, and there were outstanding awards (options plus restricted shares) of 22,041,395 shares. If the amendment is approved, 9,760,816 shares would be available for future grants overall, and 4,009,704 shares would be available for grant in the form of restricted stock, restricted stock units, or performance stock based on the shares issued and awards outstanding at February 28, 2002. Shares related to awards which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of shares, or which are settled in cash in lieu of common stock, and shares used to pay an option exercise price will be available for grant under the plan.

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(1)

Salary has been reduced by the amounts foregone for participation in the Salary Exchange

Stock Option Program by Messrs. Rose, Schultz, Ice, Hund and Moreland, and for participation in the Company's Estate Enhancement Program for Mr. Moreland in 2001, 2000 and 1999. (2) The bonus awards for the individuals named above were paid pursuant to the annual incentive compensation plan described in the Compensation and Development Committee Report on 2001 Executive Compensation in this proxy statement. Messrs. Rose and Hund elected to forego all or a portion of their annual incentives pursuant to the Incentive Bonus Stock Program in exchange for restricted stock in 2001, 2000 and 1999. Mr. Moreland made a similar election as to 2000. (3) Mr. Rose was granted 300,000 shares of restricted stock on April 20, 2000, which consisted of 100,000 shares valued at $2,378,000 that vest in equal installments over three years, and 200,000 shares valued at $4,756,000 that were to vest in two equal annual installments following the proposed combination of BNSF and Canadian National Railway Company. Upon the public announcement of the mutual termination of the combination on July 14, 2000, the latter 200,000 shares were cancelled. Restricted shares and corresponding market value owned by the individuals named above on December 31, 2001, based upon a per share value of $28.84, are shown below. The final column reflects performance-based restricted shares that were cancelled on January 18, 2002, because the performance criteria were not met. Dividends are paid to holders of restricted stock. Named Executive   Shares of Restricted Stock   Market Value   Shares Cancelled January 18, 2002 Matthew K. Rose   149,359   $ 4,307,514   21,030 Charles L. Schultz   52,390   $ 1,510,928   32,400 Carl R. Ice   46,840   $ 1,350,866   25,440 Thomas N. Hund   68,881   $ 1,986,528   24,360 Jeffrey R. Moreland   62,340   $ 1,797,886   31,980 29 (4) For 2001, reflects matching contributions to the Burlington Northern Santa Fe Investment and Retirement Plan and the Burlington Northern Santa Fe Supplemental Investment and Retirement Plan. In addition, in connection with his 2001 participation in the Company's Estate Enhancement Program, $78,200 is reflected for Mr. Moreland. Stock Option Grants in 20012002 The following table provides information as to the individuals named in the Summary Compensation Table and grants of stock options during 2001.2002. All initial option grants to these individuals have a reload feature under which optionees using outstanding shares to pay the exercise price receive an option for the number of shares so used with an exercise price equal to fair market value on the date of exercise and expiring on the same date as the initial option. No more than two reload grants may be made in connection with any initial grant and the reload feature is not available with respect to any grant of options pursuant to a reload.         Individual Grants         Name   Number of Securities Underlying Options Granted (Shares)   % of Total Options Granted to Employees in Fiscal Year   Exercise Or Base Price ($/Share)   Expiration Date   Potential Realizable Value at Assumed Black-Scholes Calculation(6) Matthew K. Rose(1)   350,000   4.75 % $ 29.04   04/25/2011   $ 2,950,500 Charles L. Schultz(2)   80,500   1.09 % $ 29.04   04/25/2011   $ 678,615 Carl R. Ice(3)   111,000 3,226   1.51 0.04 % % $ $ 29.04 31.00   04/25/2011 01/12/2010   $ $ 935,730 29,292 Thomas N. Hund(4)   78,500 14,028   1.07 0.19 % % $ $ 29.04 32.34   04/25/2011 03/28/2005   $ $ 661,755 133,687 Jeffrey R. Moreland(5)   19,350 71,500 1,345   0.26 0.97 0.02 % % % $ $ $ 28.49 29.04 30.42   01/01/2011 04/25/2011 03/28/2005   $ $ $ 159,444 602,745 11,944 (1) The option grant of 350,000 shares was granted on April 25, 2001, with a reload option, of which the first one-third will become exercisable on April 25, 2002, another one-third will become exercisable on April 25, 2003, and the final one-third will become exercisable on April 25, 2004. (2) The option grant of 80,500 shares was granted on April 25, 2001, with a reload option, of which the first one-third will become exercisable on April 25, 2002, another one-third will become exercisable on April 25, 2003, and the final one-third will become exercisable on April 25, 2004. (3) The option grant of 111,000 shares was granted on April 25, 2001, with a reload option, of which the first one-third will become exercisable on April 25, 2002, another one-third will become exercisable on April 25, 2003, and the final one-third will become exercisable on April 25, 2004. The option grant of 3,226 shares was granted on June 1, 2001, as a reload grant in connection with his use of shares to exercise vested stock options and became exercisable on December 1, 2001. (4) The option grant of 78,500 shares was granted on April 25, 2001, with a reload option, of which the first one-third will become exercisable on April 25, 2002, another one-third will become exercisable on April 25, 2003, and the final one-third will become exercisable on April 25, 2004. The option grant of 14,028 shares was granted on May 15, 2001, as a reload grant in connection with his use of shares to exercise vested stock options and became exercisable on November 15, 2001. (5) The option grant of 19,350 shares, exercisable beginning January 1, 2004, was granted on January 1, 2001, with a reload option in exchange for $43,000 of his 2003 base salary. The option grant of 71,500 shares was granted on April 25, 2001, with a reload option, of which the first one-third will become exercisable on April 25, 2002, another one-third will become exercisable on April 25, 2003, and the final one-third will become exercisable 30               Individual Grants             Name      Number of Securities Underlying Options Granted (Shares)      % of Total Options Granted to Employees in Fiscal Year      Exercise Or Base Price ($/Share)    Expiration Date      Potential Realizable Value at Assumed Black-Scholes Calculation(6) Matthew K. Rose(1)      245,000      8.51 %    $ 27.55    04/25/2012      $ 1,913,450 Carl R. Ice(2)      78,000      2.71 %    $ 27.55    04/25/2012      $ 609,180 Charles L. Schultz(3)      56,000      1.95 %    $ 27.55    04/25/2012      $ 437,360 Thomas N. Hund(4)      57,000      1.98 %    $ 27.55    04/25/2012      $ 445,170        14,433      0.50 %    $ 29.20    01/18/2006      $ 99,010        41,315      1.44 %    $ 29.20    01/31/2006      $ 283,421 Jeffrey R. Moreland(5)      20,700      0.72 %    $ 28.79    01/01/2012      $ 173,880        9,937      0.35 %    $ 31.48    03/28/2005      $ 80,688        50,000      1.74 %    $ 27.55    04/25/2012      $ 390,500 on April 25, 2004. The option grant of 1,345 shares was granted on July 2, 2001, as a reload grant in connection with his use of shares to exercise vested stock options and became exercisable on January 2, 2002. (6) The estimated present value at grant date reflected in the table has been calculated using the Black-Scholes option pricing model based on the following assumptions: Exercise price:(1)   The option grant of 245,000 shares was granted on April 25, 2002, with a reload option, and becomes exercisable in three equal annual installments commencing April 25, 2003. (2) The option grant of 78,000 shares was granted on April 25, 2002, with a reload option, and becomes exercisable in three equal annual installments commencing April 25, 2003. (3) The option grant of 56,000 shares was granted on April 25, 2002, with a reload option, and becomes exercisable in three equal annual installments commencing April 25, 2003. (4) The option grant of 57,000 shares was granted on April 25, 2002, with a reload option, and becomes exercisable in three equal annual installments commencing April 25, 2003. The option grants of 14,433 shares and 41,315 shares were granted on August 9, 2002, as reload grants in connection with his use of shares to exercise vested stock options and became exercisable on February 9, 2003. (5) The option grant of 20,700 shares, exercisable beginning January 1, 2005, was granted on January 1, 2002, with a reload option, in exchange for $46,000 of his 2004 base salary. The option grant of 9,937 shares was granted on March 7, 2002, as a reload grant in connection with his use of shares to exercise vested stock options and became exercisable on September 7, 2002. The option grant of 50,000 shares was granted on April 25, 2002, with a reload option, and becomes exercisable in three equal annual installments commencing April 25, 2003. (6) The estimated present value at grant date reflected in the table has been calculated using the Black-Scholes option pricing model based on the following assumptions: Exercise price: Equal to the fair market value of the underlying stock on the date of grant. Interest rate:    Equal to the interest rate on a U.S. Treasury security on December 31, 2001at the end of the quarter in which the option was granted with a maturity date corresponding to the option term. Volatility rate:    35%. Dividend rate:    $0.48 annual dividend per share. Time of exercise:    4 years. The approach used in developing the assumptions upon which the Black-Scholes variation was based is consistent with the requirements of Statement of Financial Accounting Standard No. 123, "Accounting for Stock Based Compensation." The ultimate value of these options will depend on the future market price of the Company's stock. The Black-Scholes model is only one method of valuing options, and the actual value of the options may be significantly different. The actual value of an option to an executive, if any, will depend on the excess of the stock price over the exercise price on the date the option is exercised. The approach used in developing the assumptions upon which the Black-Scholes variation was based is consistent with the requirements of Statement of Financial Accounting Standard No. 123, “Accounting for Stock Based Compensation.” The ultimate value of these options will depend on the future market price of the Company’s stock. The Black-Scholes model is only one method of valuing options, and the actual value of the options may be significantly different. The actual value of an option to an executive, if any, will depend on the excess of the stock price over the exercise price on the date the option is exercised. Aggregated 20012002 Stock Option Exercises and Year-End Option Values The following table provides information as to the individuals named in the Summary Compensation Table concerning their exercise of stock options during 20012002 and unexercised stock options held as of the end of 2001.2002. No executive officers held Stock Appreciation Rights (SARs) in 2001,2002, and BNSF has no plans to award SARs in the future.             Number of Securities Underlying Unexercised Options at Year End (Shares)   Value of Unexercised In-the-Money Options at Year End(1)(2)     Shares Acquired On Exercise         Aggregate Value Realized(1) Name   Exercisable   Unexercisable   Exercisable   Unexercisable Matthew K. Rose   0   $ 0   753,466   404,934   $ 912,516   $ 102,600 Charles L. Schultz   75,000   $ 1,699,250   626,283   193,700   $ 2,222,019   $ 418,950 Carl R. Ice   3,897   $ 20,791   290,829   161,417   $ 460,148   $ 160,313 Thomas N. Hund   24,765   $ 347,205   419,433   178,200   $ 771,974   $ 354,825 Jeffrey R. Moreland   55,038   $ 1,210,094   526,263   167,795   $ 1,007,850   $ 365,873 (1) Dollar values are calculated by determining the difference between the fair market value of the securities underlying options and the exercise price of options at exercise or at year-end, as applicable. (2) Options are in-the-money if the fair market value of the underlying securities exceeds the exercise or base price of the option.        Shares Acquired On Exercise    Aggregate Value Realized(1)    Number of Securities Underlying Unexercised Options at Year End (Shares)    Value of Unexercised In-the-Money Options at Year End(1)(2) Name            Exercisable    Unexercisable    Exercisable    Unexercisable Matthew K. Rose      0    $ 0    914,267    489,133    $ 104,528    $ 19,764 Carl R. Ice      0    $ 0    357,996    172,250    $ 96,688    $ 37,058 Charles L. Schultz      25,000    $ 549,750    697,217    153,766    $ 936,271    $ 80,703 Thomas N. Hund      67,950    $ 247,598    440,000    202,431    $ 170,209    $ 68,351 Jeffrey R. Moreland      22,531    $ 296,395    576,648    175,516    $ 204,108    $ 69,174 Pension Plans(1)   Dollar values are calculated by determining the difference between the fair market value of the securities underlying options and the exercise price of options at exercise or at year-end, as applicable. (2) Options are in-the-money if the fair market value of the underlying securities exceeds the exercise or base price of the option. Pension Plans The following tables show the estimated pension benefits payable to a covered participant at normal retirement age (age 65) under the Burlington Northern Santa Fe Retirement Plan ("(“Retirement Plan"Plan”), as well as under the non-qualified supplemental pension plan that provides benefits that would otherwise be denied participants by reason of certain Internal Revenue Code limitations on qualified plan benefits. 31 A participant'sparticipant’s average yearly compensation for purposes of the Retirement Plan is based upon his or her average base salary and cash bonus earned for the 60 consecutive months during the last 120 months of service for which such average is the highest or, in the case of a participant who has been employed for less than five years, the period of his or her employment with the Company and its subsidiaries.subsidiaries (not including supplemental benefits discussed below). For purposes of the Retirement Plan, 20012002 covered compensation as used in the computation of this average for the five individuals named in the Summary Compensation Table is as follows:     Executive Officer   2001 Covered Compensation   Estimated Years Of Service     Matthew K. Rose   $ 1,125,009   9     Charles L. Schultz   $ 622,570   32     Carl R. Ice   $ 604,873   23     Thomas N. Hund   $ 560,791   19     Jeffrey R. Moreland   $ 538,139   24 Executive Officer    2002 Covered Compensation      Estimated Years of Service Matthew K. Rose    $ 1,886,150      10 Charles L. Schultz    $ 749,043      33 Carl R. Ice    $ 825,239      24 Thomas N. Hund    $ 731,088      20 Jeffrey R. Moreland    $ 685,304      25 Messrs. Rose, Ice and Hund and Ice and onethree other executive officerofficers are covered under the current Retirement Plan formula. Estimated annual benefit levels under the BNSF Retirement Plan are not subject to any reduction for Social Security, Railroad Retirement, or other offsets. The estimated annual benefits are computed in the form of a single life annuity and are based on average earnings and years of service at retirement as follows: BNSF RETIREMENT PLAN FORMULA     Years of Service Average Annual Compensation   10   15   20   25   30   35   40 $ 250,000   $ 29,907   $ 44,861   $ 59,814   $ 74,768   $ 89,722   $ 104,675   $ 119,629 $ 300,000   $ 36,907   $ 55,361   $ 73,814   $ 92,268   $ 110,722   $ 129,175   $ 147,629 $ 400,000   $ 50,907   $ 76,361   $ 101,814   $ 127,268   $ 152,722   $ 178,175   $ 203,629 $ 500,000   $ 64,907   $ 97,361   $ 129,814   $ 162,268   $ 194,722   $ 227,175   $ 259,629 $ 600,000   $ 78,907   $ 118,361   $ 157,814   $ 197,268   $ 236,722   $ 276,175   $ 315,629 $ 800,000   $ 106,907   $ 160,361   $ 213,814   $ 267,268   $ 320,722   $ 374,175   $ 427,629 $ 1,200,000   $ 162,907   $ 244,361   $ 325,814   $ 407,268   $ 488,722   $ 570,175   $ 651,629 $ 1,500,000   $ 204,907   $ 307,361   $ 409,814   $ 512,268   $ 614,722   $ 717,175   $ 819,629 32 Pursuant to the Retirement Plan, Messrs. Schultz and Moreland are grandfathered under the Santa Fe Pacific Retirement Plan benefit formula that was in place prior to adoption of the Retirement Plan. Annual benefits payable under the SFP benefit formula are not subject to any reduction for Railroad Retirement, Social Security, or other offsets. The estimated annual benefits are computed in the form of a single life annuity and are based on average earnings and years of service at retirement as follows:     Years of Service Average Annual Compensation   10   15   20   25   30   35   40    $300,000   $ 36,614   $ 54,922   $ 73,229   $ 91,536   $ 109,843   $ 128,150   $ 146,458    $400,000   $ 50,614   $ 75,922   $ 101,229   $ 126,536   $ 151,843   $ 177,150   $ 202,458    $500,000   $ 64,614   $ 96,922   $ 129,229   $ 161,536   $ 193,843   $ 226,150   $ 258,458    $600,000   $ 78,614   $ 117,922   $ 157,229   $ 196,536   $ 235,843   $ 275,150   $ 314,458    $800,000   $ 106,614   $ 159,922   $ 213,229   $ 266,536   $ 319,843   $ 373,150   $ 426,458 $1,200,000   $ 162,614   $ 243,922   $ 325,229   $ 406,536   $ 487,843   $ 569,150   $ 650,458 $1,500,000   $ 204,614   $ 306,922   $ 409,229   $ 511,536   $ 613,843   $ 716,150   $ 818,458 $2,000,000   $ 274,614   $ 411,922   $ 549,229   $ 686,536   $ 823,843   $ 961,150   $ 1,098,458 Pursuant to the Retirement Plan, Messrs. Schultz and Moreland are grandfathered under the Santa Fe Pacific Retirement Plan benefit formula that was in place prior to adoption of the Retirement Plan. Annual benefits payable under the SFP benefit formula are not subject to any reduction for Railroad Retirement, Social Security, or other offsets. The estimated annual benefits are computed in the form of a single life annuity and are based on average earnings and years of service at retirement as follows: SFP RETIREMENT PLAN FORMULA     Years of Service Average Annual Compensation   10   15   20   25   30   35   40 $ 250,000   $ 33,996   $ 50,995   $ 67,993   $ 84,991   $ 101,989   $ 118,987   $ 135,986 $ 300,000   $ 41,996   $ 62,995   $ 83,993   $ 104,991   $ 125,989   $ 146,987   $ 167,986 $ 400,000   $ 57,996   $ 86,995   $ 115,993   $ 144,991   $ 173,989   $ 202,987   $ 231,986 $ 500,000   $ 73,996   $ 110,995   $ 147,993   $ 184,991   $ 221,989   $ 258,987   $ 295,986 $ 600,000   $ 89,996   $ 134,995   $ 179,993   $ 224,991   $ 269,989   $ 314,987   $ 359,986 $ 800,000   $ 121,996   $ 182,995   $ 243,993   $ 304,991   $ 365,989   $ 426,987   $ 487,986 $ 1,200,000   $ 185,996   $ 278,995   $ 371,993   $ 464,991   $ 557,989   $ 650,987   $ 743,986 $ 1,500,000   $ 233,996   $ 350,995   $ 467,993   $ 584,991   $ 701,989   $ 818,987   $ 935,986     Years of Service Average Annual Compensation   10   15   20   25   30   35   40    $300,000   $ 41,651   $ 62,476   $ 83,302   $ 104,127   $ 124,952   $ 145,778   $ 166,603    $400,000   $ 57,651   $ 86,476   $ 115,302   $ 144,127   $ 172,952   $ 201,778   $ 230,603    $500,000   $ 73,651   $ 110,476   $ 147,302   $ 184,127   $ 220,952   $ 257,778   $ 294,603    $600,000   $ 89,651   $ 134,476   $ 179,302   $ 224,127   $ 268,952   $ 313,778   $ 358,603    $800,000   $ 121,651   $ 182,476   $ 243,302   $ 304,127   $ 364,952   $ 425,778   $ 486,603 $1,200,000   $ 185,651   $ 278,476   $ 371,302   $ 464,127   $ 556,952   $ 649,778   $ 742,603 $1,500,000   $ 233,651   $ 350,476   $ 467,302   $ 584,127   $ 700,952   $ 817,778   $ 934,603 $2,000,000   $ 313,651   $ 470,476   $ 627,302   $ 784,127   $ 940,952   $ 1,097,778   $ 1,254,603 Employment Contracts and Other Arrangements In January 1997, the Board of Directors adopted new BNSF change in control agreements to replace existing BNI and SFP Severance Agreements. Messrs. Ice, Schultz, Hund Moreland, and Ice and one other executive officerMoreland have the BNSF severance agreement. Under this agreement, in the event of a change in control (as defined in the Company'sCompany’s Trust Agreements as discussed below) and a subsequent qualifying termination of employment, a participant would receive benefits equal to: three times base salary and target bonus plus a tax make-whole payment; life, disability, and health benefits for a period of up to thirty-six months; vesting of all restricted stock (other than performance-based restricted stock) and pro rata vesting of stock options upon consummation of a future change in control event; and outplacement and legal fees and expenses relating to claims under the severance agreement. • three times (one time for certain officers) base salary and target bonus plus a tax make-whole payment (limited to the extent that its value, when aggregated with other benefits or payments, would result in an excise tax under Section 4999 of the U.S. Internal Revenue Code); • life, disability, and health benefits for a period of up to thirty-six months; • vesting of all restricted stock (other than performance-based restricted stock) and pro rata vesting of stock options upon consummation of a future change in control event; and • outplacement and legal fees and expenses relating to claims under the severance agreement. In addition, the The tax make-whole payment would be limited to the extent that its value, when aggregated with other benefits or payments, equals three times the "base amount"“base amount” as defined in Section 280G of the Internal Revenue Code. Moreover, the benefits of the BNSF severance agreement are limited if total benefits would incur an excise tax under Section 4999 of the Code except where the total of the benefits exceeds 120% of three times the "base“base amount,"” in which case the benefits will be paid in full with all accompanying excise taxes due. 33 Certain officers, including Mr. Rose, retain benefits under prior BNI agreements. These agreements provide similar benefits except that the bonus would be paid at maximum level, certain additional pension and 401(k) Company match benefits are provided (calculated based on an assumed additional three years of service with annual increases in compensation), and a tax make-whole payment is not provided. The Burlington Northern and Santa Fe Railway Company Severance Plan covers all full-time salaried employees, including BNSF executive officers, who are terminated other than for cause as defined in the Severance Plan. A participant will generally be entitled to an amount up to two years'years’ pay based upon a participant'sparticipant’s age, length of service and current salary. Benefits under the Severance Plan will not be paid if a participant receives payments under an individual severance agreements.agreement. BNSF executives who have individual severance agreements may elect to receive benefits under the Severance Plan instead of the severance payments provided by their individual severance agreements, but executive officers would receive benefits under their individual agreements in excess of those provided by the Severance Plan. Certain executive officers are eligible to participate in the Company's BNSF’s Estate Enhancement Program which allows an individual to irrevocably forego a portion of base salarycash compensation to enable the purchase of life insurance coverage on the individual and his or her spouse pursuant to a collateral assignment, split-dollar arrangement with BNSF. One executive officer, Mr. Moreland, and one former executive officer and current director, Mr. Krebs, participated in the program in 2001.2002. Under a Board-approved special retirement agreement for Mr. Rose, a supplemental benefit is provided based on the following target benefit formula: 2.2% of plan compensation (using a 3 year final average of base salary and ICP awards) for each of the first 14 years of service; 2.5% of plan compensation for each of the next 3 years; 3.0% of plan compensation for each of the next 3 years; and 3.5% of plan compensation for each of the next 4 years, subject to a maximum benefit of 61.3% of plan compensation. The benefit is offset by benefits payable under both the Retirement Plan and the non-qualified supplemental pension plan. In connection with electing Under a Board-approved special retirement agreement for Mr. Schultz, a supplemental benefit is to be provided under the Retirement Plan, adding four years of age and service, reducing the benefit for early retirement by 2% per year, and adding benefits related to the expiration of stock option grants. Former Chairman Robert D. Krebs Chairman ofretired from the Board of Directors on December 7, 2000, the Board established a base salary for him of $500,000 effective January 1, 2001, and an annual bonus at the discretion of the Compensation and Development Committee for each year he serves as Chairman. The Board also provided for: waiver of payments due the Company under the Estate Enhancement Program; a supplemental pension benefit under the Retirement Plan (adding four additional years of service and four yearsApril 17, 2002, subsequent to his age to determine benefits); relocation benefits as provided to current salaried employees under BNSF's relocation program for any sale of his home and movement of household goods; a two-year consulting and non-compete agreement to commence upon retirement as Chairman with a $250,000 per year consulting fee; and, in lieu of office and secretarial support, a $75,000 per year allowance for 20 years beginning upon his retirement. In December 2001,which the Board approved a discretionary bonus to him of $2,500,000 to Mr. Krebs. $2,500,000. 34 Trust Agreements The Company maintains trust agreements to permit funds to be set aside with respect to the Company'sCompany’s obligation to the individuals named in the Summary Compensation Table and the directors under deferred compensation programs and agreements, retirement commitments, and supplemental retirement plans. To the extent the plans are currently funded, the trusts provide for permanent funding of benefits under the supplemental retirement plans and the Directors'Directors’ Retirement Plan on a present value basis. The trust agreements further provide for a split-dollar life insurance plan ("Split-dollar Plan") for one director, Mr. Krebs. The Split-dollar Plan provides for the purchase of life insurance policies covering key employees, and for the payment to each covered employee's beneficiary of a portion of the death benefit payable under such employee's life insurance policy, with the remaining value in each policy to be used to fund the other obligations of the trust. The trust retains all rights to any cash values of the policies and the employee pays the cost of term coverage. In the event of a "change“change in control"control” of the Company, the trust agreements provide for the payment of amounts which may become due, subject only to the claims of general creditors of the Company in the event that it became bankrupt or insolvent. Any of the following events are considered a "change“change in control"control”: • any person becomes the beneficial owner of securities representing 25% or more of the voting power of the Company's outstanding securities; • any person becomes the beneficial owner of securities representing 25% or more of the voting power of the Company’s outstanding securities; during any period of two consecutive years, individuals who at the beginning of this period constitute the Board of Directors for the Company cease to constitute at least a majority of the Board;
		•		The Company's shareholders approve a merger or consolidation of the Company with another company; or
		•		The Company's shareholders approve a plan of complete liquidation or an agreement for the sale or disposition by the Company of all or substantially all of its assets.

SHAREHOLDER PROPOSAL

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One owner of 123 shares of the Company's common stock has given notice that he intends to introduce the following proposal and has furnished the following statement in support of the proposal. The Company will provide the proponent's name and address to shareholders promptly upon receiving an oral or written request.

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Proposal

Resolved: That shareholders urge that the board of directors will solicit shareholder approval for any "shareholder rights" plan that might be adopted, and that if this approval is not granted in the form of a majority of the shares voted, then any rightsBoard;

The Company’s shareholders approve a merger or consolidation of the Company with another company; or

The Company’s shareholders approve a plan be redeemed.

Supporting Statement

Shareholder rights plans, sometimes called "poison pills," may be adopted by boards at any time. Such board action presumes a knowledge of what is bestcomplete liquidation or an agreement for shareholders. Yet I believe shareholders frequently oppose "pills" when they are asked in a vote.

This resolution merely urges the board to secure shareholder approval if and when a pill is put in placesale or disposition by the board. Companies such as Texaco and Compaq have instituted the policy imbedded in this resolution and understandably highlight it as a signCompany of shareholder accountability. Last year, management argued that "The Board believes it is important that it retain the flexibility to adopt a rights plan without having to conduct a shareholder vote in order to maintain the plan." A majority of shareholders rejected this agreement when they voted to support the above resolution. Broadly, the poison pill and a board's actions to establish them without shareholder vote have come to signify management insulation.

By supporting this resolution, shareholders can signal that [they] will hold the board to the highest standards of accountability.

The Company's Response

Your directors recommend a vote AGAINST this proposal.

The Board of Directors believes that the action requested in the shareholder proposal is neither needed nor advisable. BNSF does not have a rights plan (sometimes called a "poison pill") in place, and it has no present intention of adopting one. Future developments might, under certain circumstances, compel the Board to consider adoption of a rights plan as a means to protect shareholders' interests in the exercise of the Board's fiduciary duties. Requiring a shareholder vote on any rights plan adopted could hinder the Board's ability to use a rights plan to protect shareholder interests.

A rights plan is designed to improve the Board's ability to protect and advance the interests of BNSF andall or substantially all of its shareholders, especially in the face of unfair and abusive takeover tactics. It enhances the ability of the Board to negotiate with potential acquirers and discourages coercive or low-ball takeover tactics that would operate to the detriment of BNSF shareholders. A requirement that we seek shareholder approval for any rights plan could seriously weaken the Board's negotiating position in a hostile situation and leave it less able to protect shareholder interests.assets.

Our recommendation that shareholders vote against this proposal does not mean that the Board has determined a rights plan should be adopted. Consideration of a rights plan would be made only after informed and careful deliberation by the Board in the exercise of its fiduciary duties on behalf of shareholders. The Board believes that it will best be able to maximize shareholder value if it retains the ability to adopt a plan in the future, if warranted in its judgment based on circumstances then prevailing, to preserve and protect shareholder interests. For these reasons, we believe that adoption of the proposal would not be in the best interest of our shareholders.

We recommend that shareholders voteAGAINSTthis proposal.

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ADDITIONAL INFORMATION

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Independent Public Accountant

PricewaterhouseCoopers LLP served as the independent public accountant for the Company in 2001.2002. The Company'sCompany’s independent public accountant for 20022003 will be selected by the Board at a regular Board meeting to be held in 2002,2003, prior to which PricewaterhouseCoopers LLP will continue its work under its engagement for 2001.2002. Representatives of PricewaterhouseCoopers LLP will be present at the annual meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Audit Fees.    The aggregate fees and expenses billed by PricewaterhouseCoopers LLP for professional services rendered for the audit of the Company'sCompany’s annual financial statements for the fiscal year ended December 31, 2001,2002, and for the reviews of the financial statements included in the Company'sCompany’s Quarterly Reports on Form 10-Q for that fiscal year, were $755,000.$967,000.

All Other Fees.    The aggregate fees and expenses billed by PricewaterhouseCoopers LLP for professional services rendered to the Company, other than the services described under "Audit Fees"“Audit Fees” above, for the fiscal year ended December 31, 2001,2002, were $733,000.$639,000. These fees were predominantly for services related to Company financings that are required to be provided by PricewaterhouseCoopers LLP, other audits required of the Company, and other audit and tax services for specific transactions or potential transactions of the Company. No information technology services relating to financial information systems design and implementation were rendered by PricewaterhouseCoopers LLP during the year.year ended December 31, 2002.

Audit Committee Report

This report is submitted by the Audit Committee of the Board of Directors.

The Board of Directors pursuescarries out its responsibility for its oversight of the Company'sCompany’s financial reporting process through the Audit Committee. The Board of Directors, in its business judgment, has determined that all members of the Audit Committee are independent and financially literate and that at least one member has accounting or related financial management expertise as required by the applicable listing standards of the New York Stock Exchange. The Audit Committee operates pursuant to a charter adopted by the Board in March 2000 and revised in February 2001, a copy of which is attached to this proxy statement as Appendix II.2001. The Audit Committee and the Board annually review and reassess the adequacy of the charter. The Audit Committee and the Board currently have under review the rules proposed by the Securities and Exchange Commission to implement provisions of the Sarbanes-Oxley Act of 2002, and the new listing standards proposed by the New York Stock Exchange. When more of the applicable rules and standards become final, any charter revisions necessary to comply with those rules and standards will be made.

In the performance of our oversight function, we have reviewed and discussed the audited financial statements with management and the Company’s independent public accountant, PricewaterhouseCoopers LLP. We have also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statements on Auditing Standards No. 61 (Communication with Audit Committees) and No. 90 (Audit Committee Communications). In addition, we have received the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with them their independence from the Company and management. We have concluded, after review, that the non-audit services provided by PricewaterhouseCoopers LLP are not incompatible with their independence.

	As set forth in the Committee’s charter, management is responsible for the preparation, presentation and integrity of the Company'sCompany’s financial statements, the maintenance of appropriate accounting and financial reporting principles and practices and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The Company'sCompany’s independent accounting firm,public accountant, PricewaterhouseCoopers LLP, is responsible for auditing the Company'sCompany’s financial statements and expressing an opinion on the conformity of the Company'sCompany’s audited financial statements with accounting principles generally accepted in the United States of America.States. The Audit Committee meets regularly with PricewaterhouseCoopers LLP, management and the Company'sCompany’s internal auditors. PricewaterhouseCoopers LLP and the Company'sCompany’s internal auditors have direct access to the Audit Committee, with and without the presence of management representatives, to discuss the scope and results of their work and their comments on the adequacy of internal accounting controls and the quality of financial reporting.

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		In the performance of our oversight function, we have reviewed and discussed the audited financial statements with management and PricewaterhouseCoopers LLP. We have also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). In addition, we have received the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with them their independence from the Company and management. Finally, we have considered whether the non-audit services provided by PricewaterhouseCoopers LLP are compatible with their independence.
		Based on our review and the discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2001,2002, filed with the Securities and Exchange Commission.

Audit Committee:

Robert H. West, Chairman

Alan L. Boeckmann

Bill M. Lindig

Vilma S. Martinez

Marc J. Shapiro

J. Steven Whisler

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers to file reports of holdings of and transactions in BNSF'sBNSF’s common stock with the Securities and Exchange Commission. Based on our records and representations

from these persons, we believe that all Securities and Exchange Commission beneficial ownership reporting requirements for 20012002 were met, with the exception of one late filing with respect to one transactionan exercise of an option through tendering stock and another late filing with respect to two transactionsexercises of options through tendering stock on one day by Michael B. Yanney,Robert D. Krebs, a former director of BNSF, one late filing with respect to an exercise of options through tendering stock by Dennis R. Johnson, an executive officer of BNSF, and one late filing with respect to two exercises of options through tendering stock on one day by Jeffrey R. Moreland, an executive officer of BNSF.

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Advance Notice Procedures Requirements

Shareholder Proposals for Annual Meeting in 2003.2004.    Proposals by shareholders to be considered for inclusion in the proxy materials solicited by the directors for the annual meeting in 20032004 must be received by BNSF'sBNSF’s Secretary at 2650 Lou Menk Drive, Fort Worth, Texas 76131-2830, no later than November 11, 2002.2003. The use of certified mail, return receipt requested, is advised. To be eligible for inclusion, a proposal must also comply with Rule 14a-8 and all other applicable provisions of Regulation 14A under the Securities Exchange Act of 1934.

Other Shareholder Business at Annual Meeting in 2003.2004.    For other business to be introduced at the annual meeting in 2003,2004, including proposals not submitted pursuant to Rule 14a-8 for inclusion in our proxy materials, shareholders must send advance notice in writing to BNSF'sBNSF’s Secretary. To be timely, notice must be received no later than December 18, 20022003 and no earlier than November 18, 2002.17, 2003. The advance notice must also meet the other requirements of Article II, Section 10 of the Company'sCompany’s By-Laws. You may obtain a copy of our By-Laws by writing to our Secretary, Jeffrey R. Moreland.

Shareholder Nomination of Directors.    The Directors and Corporate Governance Committee will consider candidates for election as director as recommended by shareholders. Any such recommendation, together with the person'sperson’s qualifications and consent to being considered as a nominee, should be sent in writing to BNSF'sBNSF’s Secretary on or before November 30 of the year preceding the annual meeting to permit adequate time for review by the Committee. Shareholders intending to nominate a candidate for election as director at the annual meeting in 20032004 must give advance notice in writing to the BNSF'sBNSF’s Secretary. To be timely, notice must be received no later than December 18, 20022003 and no earlier than November 18, 2002.17, 2003. The advance notice must also meet the other requirements of Article XII, Section 3 of the Company'sCompany’s By-Laws.

Other Business

If any matters other than those set forth above are properly brought before the meeting, including any shareholder proposalsproposal omitted from the proxy materials pursuant to SEC rules, it is intended that the persons acting under the proxy will vote the proxies given to the Company in accordance with their best judgment. We are not aware of any other matters that may properly be brought before the meeting.

Your Vote is Important		If you are going to vote by mail, we encourage you to specify your choices by marking the appropriate boxes on the enclosed proxy card. However, you do not need to mark any boxes if you wish to vote according to the Board of Directors'Directors’ recommendations; just sign, date and return the proxy in the enclosed envelope. If you are going to vote your proxy by telephone or via the Internet, simply follow the instructions on the enclosed proxy card. Thank you for your cooperation and your prompt response.

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By order of the Board of Directors.

Jeffrey R. Moreland

Executive Vice President Law & Government Affairs and Secretary

March 11, 20022003

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APPENDIX I

BURLINGTON NORTHERN SANTA FE 1999 STOCK INCENTIVE PLAN,
AS AMENDED

SECTION 1

STATEMENT OF PURPOSE

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 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 the Company's common stock;

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

SECTION 2

DEFINITIONS

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

(a)

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, or Stock acquired through purchase under Section 10.



(b)

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



(c)

Cause.    The term "Cause" shall mean (a) the willful and continued failure by the Participant to substantially perform his duties with the Company (other than any such failure resulting from his incapacity due to physical or mental illness), or (b) the willful engaging by the Participant in conduct which is demonstrably and materially injurious to the Company, monetarily or 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 action or omission was in the best interest of the Company.



(d)

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),

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directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities;

(2)

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



(3)

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



(4)

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

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

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(e)

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



(f)

Date of Termination.    A Participant's "Date of Termination" shall be the date on which his employment with all Employers and Related Companies terminates for any reason; provided that a Date of Termination shall not be deemed to occur by reason of a transfer of the Participant between the Company and a Related Company (including Employers) or between two Related Companies (including Employers); and further provided that unless agreed otherwise by the Participant, a Participant's employment shall not be considered terminated while the Participant is on a leave of absence from an Employer or a Related Company approved by the Participant's employer.



(g)

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



(h)

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



(i)

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".



(j)

Fair Market Value.    The "Fair Market Value" of the Stock shall be the mean between the highest and lowest quoted sales prices of a share of Common Stock on the New York Stock Exchange Composite Transaction Report; provided, that if there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the Fair Market Value is the weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date. The average is to be weighed inversely by the respective numbers of trading days between the selling dates and the valuation date and shall be determined in good faith by the Committee.



(k)

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.



(l)

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



(m)

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



(n)

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



(o)

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



(p)

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

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(q)

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



(r)

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



(s)

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 Date of Termination, under the terms of any applicable retirement policy of the Participant's employer.



(t)

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



(u)

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

SECTION 4

OPERATION AND ADMINISTRATION

        4.1.    Subject to the approval of the stockholders of the Company at the Company's 1999 annual meeting of the stockholders, the Plan shall be effective as of January 1, 1999 ("Effective Date"), provided however, that any awards made under the Plan prior to approval by stockholders, shall be contingent on approval of the Plan by stockholders of the Company and all dividends on Awards shall be held by the Company and paid only upon such approval and all other rights of a Participant in connection with an Award shall not be effective until such approval is obtained. The Plan shall be unlimited and remain in effect until termination by the Board, provided however, that no Incentive Stock Options may be granted under the Plan on a date that is more than ten years from the Effective Date or, if earlier, the date the Plan is adopted by the Board.

        4.2.    The Plan shall be administered by the Compensation and Development Committee of the Board ("Committee") which shall be selected by the Board, shall consist solely of members of the Board who are not employees or officers of the Company or any Related Company and are not eligible to participate in the Plan, and shall consist of not less than two members of the Board who meet the definition of a "Non-Employee Director" under SEC Rule 16b-3 or such greater number as may be required for compliance with SEC Rule 16b-3. The authority to manage and control the operation and administration of the Plan shall be vested in the Committee, subject to the following:

(a)

Subject to the provisions of the Plan, the Committee will have the authority and discretion to select Employees to receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and to cancel or suspend Awards. In making such Award determinations, the Committee may take

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into account the nature of services rendered by the respective Employee, his present and potential contribution to the Company's success, and such other factors as the Committee deems relevant.

(b)

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



(c)

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



(d)

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



(e)

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



(f)

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



(g)

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

        4.3.    Notwithstanding any other provision of the Plan to the contrary, no Participant shall receive any Award of an Option 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

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(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.

        4.4.    To the extent that the Committee determines that it is necessary or desirable to conform any Awards under the Plan with the requirements applicable to "Performance-Based Compensation", as that term is used in Code section 162(m)(4)(c), it may, at or prior to the time an Award is granted, take such steps and impose such restrictions with respect to such Award as it determines to be necessary to satisfy such requirements. To the extent that 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.

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 12, the total number of shares of Stock available for grant of Awards shall not exceed thirty-five million (35,000,000) shares of Stock. Except as otherwise provided herein, any shares subject to an Award which for any reason expires or is terminated without issuance of shares (whether or not cash or other consideration is paid to a Participant in respect to such Award) as well as shares used to pay an Option Purchase Price under this Plan or a predecessor plan shall again be available under the Plan.

SECTION 6

OPTIONS

        6.1.    The grant of an "Option" under this Section 6 entitles the Participant to purchase shares of Stock at a price fixed at the time the Option is granted, or at a price determined under a method established at the time the Option is granted, subject to the terms of this Section 6. Options granted under this section may be either Incentive Stock Options or Non-Qualified Stock Options, and subject to Sections 11 and 16, 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

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Company and all Related Companies) exceeds $100,000, such options shall be treated as Non-Qualified Stock Options, to the extent required by section 422 of the Code.

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

(a)

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



(b)

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



(c)

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



(d)

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

        6.4.    Except as otherwise expressly provided in the Plan, an Option granted under this Section 6 shall be exercisable as follows:

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

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

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

SECTION 7

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, the required employment period shall not generally be less than three years following the grant of the Award unless such grant is in substitution for an Award under this Plan or a predecessor plan of the Company or a Related Company.

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        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. In no event shall more than five million shares be granted under Sections 7, 8 and 9 of the Plan. 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.

        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, the Committee may determine that the Participant will be entitled to settlement of all or any portion of the Restricted Stock subject to a Performance Period as to which he would otherwise be eligible, and may accelerate the determination of the value and settlement of such Restricted Stock subject to a Performance Period or make such other adjustments as the Committee, in its sole discretion, deems desirable. Subject to the limitations of the Plan and the Award of Restricted Stock, upon the vesting of Restricted Stock, such Restricted Stock will be transferred free of all restrictions to a Participant (or his or her legal representative, beneficiary or heir).

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 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.

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        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. In no event shall more than five million shares be granted under Sections 7, 8 and 9 of the Plan. 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, the Committee may determine that the Participant will be entitled to settlement of all or any portion of the Restricted Stock Units as to which he would otherwise be eligible, and may accelerate the determination of the value and settlement of such Restricted Stock Units or make such other adjustments as the Committee, in its sole discretion, deems desirable.

SECTION 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. For purposes of the Plan, the "Performance Period" with respect to any Award shall be the period over which the applicable performance is to be measured.

        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. In no event shall more than five million shares be granted under Sections 7, 8 and 9 of the Plan. 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.

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

SECTION 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 75% of the Fair Market Value of the Stock at the time of purchase (or, in the Committee's discretion, the average Stock value over a period determined by the Committee), and further provided that the purchase price may not be less than par value.

        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.

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SECTION 11

TERMINATION OF EMPLOYMENT

        11.1.    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.

        11.2.    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.

        11.3.    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 to the extent that an Award of Restricted Stock, Restricted Stock Units, and Performance Stock is subject to a Performance Period, such proportion of the Award shall remain subject to the same terms and conditions for vesting as were in effect prior to termination). The proportion of an Award upon which the Restricted Period shall lapse shall be a fraction, the denominator of which is the total number of months of any Restricted Period applicable to an Award and the numerator of which is the number of months of such Restricted Period which elapsed prior to the Date of Termination.

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

        11.5.    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:

(a)

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



(b)

five years after the Date of Termination, 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:

(i)

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



(ii)

five years after the Date of Termination, if the Participant's employment is terminated by the Participant's employer for reasons other than Cause.

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

(a)

All outstanding options then held by the Participant shall become exercisable on the Participant's Date of Termination.



(b)

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

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

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

SECTION 12

ADJUSTMENTS TO SHARES

        12.1.    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 (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.

        12.2.    If the Committee determines that the adjustments in accordance with the foregoing provisions of this section would not be fully consistent with the purposes of the Plan or the purposes of the outstanding Awards under the Plan, the Committee may make such other adjustments to the Awards to the extent that the Committee determines such adjustments are consistent with the purposes of the Plan and of the affected Awards.

SECTION 13

TRANSFERABILITY OF AWARDS

        13.1.    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 13, 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.

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SECTION 14

AWARD AGREEMENT

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

SECTION 15

TAX WITHHOLDING

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

SECTION 16

CHANGE IN CONTROL

        16.1.    Subject to the provisions of Section 12 (relating to the adjustment of shares), and except as otherwise provided in the Plan or the Agreement reflecting the applicable Award, upon the occurrence of a Change in Control:

(a)

All outstanding Options shall become fully exercisable.



(b)

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



(c)

All vesting restrictions imposed under Section 10 (relating to restrictions on shares purchased by the Participants) shall cease to apply, and the Participant shall become fully vested in those shares.

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; 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 12 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.

APPENDIX II

BURLINGTON NORTHERN SANTA FE CORPORATION

Audit Committee Charter

Organization

The Audit Committee (the "Committee") shall be composed of at least three directors, each of whom shall be free of any relationship that, in the business judgment of the Board, would interfere with the exercise of their independence from management and the Company. Each Committee member shall also be financially literate as this qualification is interpreted by the Board, or become financially literate within a reasonable time after appointment to the Committee, and at least one member of the Committee shall possess accounting or related financial management expertise. In determining financial expertise, the Board may consider past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background, including being or having been a chief executive officer or other senior officer with financial oversight responsibilities. In addition to these requirements for Committee members, the Board shall consider other applicable stock exchange or regulatory requirements in determining a director's eligibility to serve on the Committee.

Statement of Policy

The Committee shall provide assistance to the Board in: (i) fulfilling its oversight of the corporate accounting and reporting practices of the Company and the financial reports and related independent audits of the Company, (ii) selecting the independent auditors, and (iii) evaluating the independence of the independent auditors. In so doing, it is the responsibility of the Committee to maintain free and open means of communication among the Board, the independent auditors, the internal auditors, and the financial management of the Company.

Responsibilities

In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to provide oversight to the Board and shareholders to help ensure that the corporate accounting and reporting practices of the Company are in accordance with all applicable requirements. The function of the Committee is oversight. The management of the Company is responsible for the preparation, presentation and integrity of the Company's financial statements. Management and the internal audit department are responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The external auditors are responsible for planning and carrying out a proper audit and reviews, including reviews of the Company's annual financial statements, reviews of the quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures. In fulfilling their responsibilities hereunder, it is recognized that the members of the Committee are not employees of the Company and are not, and do not represent themselves to be, accountants or auditors by profession or experts in the fields of accounting or auditing, including in respect of auditor independence. Therefore, it is not the duty or responsibility of the Committee to conduct "field work" or other types of auditing or accounting reviews or procedures, or to set audit or independence standards, and each member of the Committee shall be entitled to rely on (i) the integrity and skill of those persons and organizations within and outside the Company from which it receives information, and (ii) the accuracy of the financial and other information provided by such persons or organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board).

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In carrying out these responsibilities, the Committee will:

•

Review and recommend to the Board the independent accountants to be selected to audit the financial statements of the Company and its subsidiaries. Such independent accountants shall be ultimately accountable to the Board and the Committee as representatives of the shareholders, and the Board and the Committee shall have the ultimate responsibility to select, evaluate and, where appropriate, to replace the independent accountants.



•

Require that the independent accountants annually provide a formal written statement delineating all relationships between the independent accountants and the Company, consistent with the Independence Standards Board (ISB) Standard No. 1 (it being understood that the independent accountants are responsible for the accuracy and completeness of the statement). The Committee shall be responsible for actively engaging in a dialogue with the independent accountants, and recommending action to the Board as appropriate, with respect to any disclosed relationships or services which may affect the objectivity and independence of the independent accountants.



•

Meet with the independent accountants and financial management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion of such audit, including any comments or recommendations of the independent accountants.



•

Review with the independent accountants, the Company's internal auditors, and the financial and accounting personnel, the adequacy and effectiveness of the accounting and financial controls of the Company, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures may be desirable. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.



•

Review the internal audit function of the Company including its independence, the proposed audit plans for the coming year, the coordination of such plans with the independent accountants, and periodically receive a summary of findings from completed internal audits and a progress report on the proposed internal audit plan, with explanations for any deviations from the original plan.



•

Discuss, or the Committee Chair will discuss, matters identified during the independent accountants' review of interim financial information with the independent accountants and management prior to the filing of the Company's Quarterly Report on Form 10-Q.



•

Review the financial statements to be included in the Annual Report on Form 10-K with management and the independent accountants to determine that the independent accountants are satisfied with the disclosure and content of the financial statements to be presented to the shareholders. Any changes in accounting principles should be reviewed.



•

Discuss with the independent accountants and the Company's financial management the independent accountants judgments about the quality of the Company's accounting principles as applied in its financial reporting, and significant judgments affecting the financial statements. The discussion should include such matters as the consistency of application of accounting policies and the clarity and completeness of the Company's accounting information contained in the financial statements and related disclosures.



•

Review and reassess the adequacy of this charter on an annual basis.



•

As required by the applicable regulations, (i) review and approve disclosures concerning fees and other matters, including consideration by the Committee of whether non-audit services provided by the independent accountants are compatible with maintaining the independent accountants' independence, and (ii) provide a report in the annual proxy statement disclosing that the Committee has: (a) reviewed and discussed the audited financial statements with management, (b) discussed with

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the independent accountants the matters required to be discussed by SAS 61, as may be modified or supplemented, (c) received the written disclosures and the letter from the independent auditors required by the ISB Standard No. 1, as may be modified or supplemented, and has discussed with them the independent accountants independence and (d) disclosed that based on the review and discussions described in (a) through (c) above, the Committee recommended to the Board that the audited financial statements be included in the Company's Annual Report on Form 10-K.

•

Provide sufficient opportunity for the internal auditors and independent accountants to meet with the members of the Committee without members of management present. Among the items to be discussed in these meetings are the independent accountants' evaluation of the Company's financial, accounting, and auditing personnel, and the cooperation that the independent accountants received during the course of the audit.



•

Discuss significant Audit Committee matters with the full Board.



•

Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel or independent accountants for this purpose if, in its judgment, that is appropriate.

Resources and Authority

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to engage outside accountants for special audits, reviews, and other procedures and to retain special counsel and other experts or consultants.

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Burlington Northern Santa Fe Corporation

2650 Lou Menk Drive

Fort Worth, Texas 76131-2830

This Proxy is solicited on behalf of the Board of Directors.

The undersigned, revoking any proxy previously given, hereby appoints Jeffrey R. Moreland and Marsha K. Morgan, and each of them, proxy for the undersigned, with power of substitution, to vote as specified herein, all Common Stock held by the undersigned, with the same force and effect as the undersigned would be entitled to vote if personally present, at the annual meeting of shareholders of the Company to be held at The Fort Worth Club, 306 West 7th Street, Fort Worth, Texas, Wednesday, April 17, 2002,16, 2003, at 2:00 p.m. and at any adjournment or postponement thereof. In their discretion, the proxies are authorized to vote upon such other business as is properly brought before the meeting.

You are encouraged to specify your choices by marking the appropriate box, SEE REVERSE SIDE, but you need not mark any box if you wish to vote in accordance with the Board of Directors'Directors’ recommendation; however, the proxies appointed above cannot vote your shares unless you sign and return this card, or vote by telephone or via the Internet as explained on the other side.

If you are a participant in any of the following employee benefit plans of the Company, this card also constitutes voting instructions for any shares held for the stockholder in the Burlington Northern Santa Fe Investment and Retirement Plan, Burlington Northern 401(k) Plan for TCU Employees, and Burlington Northern Santa Fe Non-Salaried Employees 401(k) Retirement Plan. If you are a participant in any of these plans, your shares will be voted in accordance with the terms of such plan.

IMPORTANT-PLEASE SIGN AND DATE ON REVERSE SIDE

SEE REVERSE SIDE

[Fold and Detach proxy card HereFOLD AND DETACH PROXY CARD HERE AND RETURN IN ENCLOSED POSTAGE-PAID ENVELOPETO VOTE BY MAIL]MAIL]

Burlington Northern Santa Fe Corporation

Annual Meeting of Shareholders

April 17 2002,16, 2003, 2:00 p.m.

The Fort Worth Club

Horizon Room

306 West 7^THth Street

Fort Worth, Texas

PLEASE NOTE: IF YOU PLAN TO ATTEND THE 20022003 ANNUAL MEETING OF SHAREHOLDERS, PLEASE MARK THE APPROPRIATE BOX ON THE REVERSE SIDE OF THE PROXY CARD.

It is important that your shares are represented at the meeting, whether or not you attend the meeting in person. To make sure your shares are represented, we urge you to complete and mail the proxy card above in the enclosed postage-paid envelope, or to vote using the telephone or Internet voting instructions on the other side.

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6677

ýx  Please mark your

votes as in this
example.

example.

This Proxy, when properly executed, will be voted in the manner directed herein.herein and in the discretion of the proxies as to any other business that may properly come before the meeting. If no directions are made, this proxy will be voted "FOR"“FOR” the nominees for Director listed below, "FOR" approval of amendment of the Burlington Northern Santa Fe 1999 Stock Incentive Plan, and "AGAINST" the Shareholder Proposal concerning shareholder rights plans.below.

The Board of Directors recommends a vote "FOR"“FOR” all Nominees listed below, "FOR" approval of amendment of the Burlington Northern Santa Fe 1999 Stock Incentive Plan, and "AGAINST" the Shareholder Proposal concerning shareholder rights plans.below.

		FOR		FORWITHHELD
1.    Election of Directors		WITHHELD¨
1.		Election of Directors		o		o	¨If marked, a vote is withheld from all nominees
							NOMINEES FOR DIRECTOR:

NOMINEES FOR DIRECTOR:

For, except vote withheld from the following nominee(s):

		01.		A.L. Boeckmann
		01. 02.		A.L. Boeckmann J.J. Burns, Jr.
		02. 03.		J.J. Burns, Jr. V.S. Martinez
		03. 04.		B.M. Lindig M.F. Racicot
		04. 05.		V.S. Martinez R.S. Roberts
		05. 06.		M.F. Racicot M.K. Rose
		06. 07.		R.S. Roberts M.J. Shapiro
		07. 08.		M.K. Rose J.C. Watts, Jr.
		08. 09.		M.J. Shapiro R.H. West
		09. 10.		R.H. West J.S. Whisler
		10. 11.		J.S. Whisler E.E. Whitacre, Jr.
		11. 12.		E.E. Whitacre, Jr.
		12.		M.B. Yanney.

I plan to attend the Annual Meeting of Shareholders.    ¨

						FOR		AGAINST		ABSTAIN
2.		Approval of amendment of Burlington Northern Santa Fe 1999 Stock Incentive Plan.		o		o		o
3.		Shareholder Proposal concerning shareholder rights plans.		o		o		o
		I plan to attend the Annual Meeting of Shareholders.		o

		In their discretion, the proxies are authorized to vote upon such other business as is properly brought before the meeting. Please sign EXACTLY as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. This proxy votes all shares held in all capacities.
	SIGNATURE(S) IF HELD JOINTLY,
		TITLE OR AUTHORITY
		DATE

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[FOLD AND DETACH PROXY CARD HERE AND RETURN IN ENCLOSED ENVELOPE;ENVELOPE IF YOU ARE VOTING BY MAIL, OR VOTE BY TELEPHONE OR VIA THE INTERNET AS EXPLAINED ON THE OTHER SIDE; RETAIN ADMISSION TICKET]TICKET

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YOU CAN VOTE BY TELEPHONE OR VIA THE INTERNET 24 HOURS A DAY AND 7 DAYS A WEEK

Your vote by telephone voteor via the Internet authorizes the named proxies to vote your shares in the same manner as if you marked, signed, and returned your proxy card. Please follow these easy steps:

VOTE BY TELEPHONE— Call toll free 1-877-PRX-VOTE (1-877-779-8683) on a touch tone telephone. Shareholders residing outside the United States, Canada and Puerto Rico should call 1-201-536-8073. Use the Control Number located in the box above, just below the perforation. Enter the Control Number exactly as it appears.

Followappears and follow the recorded instructions. Your telephone vote must be received by 12:00 midnight New York time on April 16, 2002.15, 2003.

VOTE VIA INTERNET— Go to the website http://www.eproxyvote.com/bni. You will be prompted to enter your Control Number located in the box above, just below the perforation, to obtain your records and to create an electronic ballot. Your Internet vote must be received by 12:00 midnight New York time on April 15, 2003.

It is important that your shares are represented at this meeting, whether or not you attend the meeting in person. To make sure your shares are represented, we urge you to complete and mail the proxy card above.above or to vote by telephone or via the Internet.

IF YOU PLAN ON ATTENDING THE 2002 ANNUAL MEETING, PLEASE MARK THE BOX ON THE PROXY CARD ABOVE, AND BRING THIS TICKET WITH YOU FOR ADMITTANCE AT THE ANNUAL MEETING.

ELECTRONIC DELIVERY OF PROXY MATERIALS

You may sign up to receive future annual reports to shareholders and proxy materials electronically rather than by mail. If you are a registered shareholder and wish to consent to Internet delivery of future annual reports and proxy statements, go to the website http://www.econsent.com/bni. You will need to provide your taxpayer I.D. or social security number, your e-mail address, and your account number. If you are not a registered shareholder and wish to consent to electronic delivery, please contact the bank, broker or other nominee holder of record through which you hold your shares and inquire about this option. If you do elect to receive your BNSF materials via the Internet, you can still request paper copies by contacting BNSF’s Investor Relations office at 2500 Lou Menk Drive, Fort Worth, TX 76131-2828.

IF YOU PLAN ON ATTENDING THE 2003 ANNUAL MEETING, PLEASE MARK THE BOX ON THE PROXY CARD ABOVE OR AS PROMPTED WHEN VOTING BY TELEPHONE OR VIA THE INTERNET, AND BRING THIS TICKET WITH YOU FOR ADMITTANCE AT THE ANNUAL MEETING.

ADMISSION CARD

Burlington Northern Santa Fe Corporation

Annual Meeting of Shareholders

April 17, 2002,16, 2003, 2:00 p.m.

The Fort Worth Club

Horizon Room

306 West 7th Street

Fort Worth, Texas

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