BURLINGTON NORTHERN SANTA FE CORP
BNSF NON-EMPLOYEE DIRECTORS STOCK PLAN
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>dex101.txt
<DESCRIPTION>BNSF NON-EMPLOYEE DIRECTORS STOCK PLAN
<TEXT>
<PAGE>


                                                     As Amended January 16, 1997
                                                            and January 18, 2001


                                                      Exhibit 10.1

                          BURLINGTON NORTHERN SANTA FE
                       NON-EMPLOYEE DIRECTORS' STOCK PLAN

                                    SECTION 1
                                    ---------

                                     GENERAL
                                     -------

     1.1. Purpose. The Burlington Northern Santa Fe Non-Employee Directors'
          -------
Stock Plan (the "Plan") has been established by Burlington Northern Santa Fe
Corporation (the "Company") to promote the interests of the Company and its
stockholders by enhancing the Company's ability to attract and retain the
services of experienced and knowledgeable directors and by encouraging such
directors to acquire an increased proprietary interest in the Company.

     1.2. Operation and Administration. The operation and administration of the
          ----------------------------
Plan shall be subject to the provisions of Section 4. Capitalized terms in the
Plan shall be defined as set forth in Section 7 or elsewhere in the Plan.

                                    SECTION 2
                                    ---------

                                  OPTION AWARDS
                                  -------------

     2.1. Terms and Conditions
          --------------------

     Each Option Award granted under the Plan shall be evidenced by an agreement
and shall comply with the following terms and conditions:

     (a) Each year as of the Annual Meeting of Stockholders of the Company, each
Eligible Director who is a member of the Board as of the adjournment of the
meeting shall automatically receive an Option Award for 3,000 shares of Stock.

     (b) The option exercise price shall be the Fair Market Value of the Stock
subject to such an Option Award on the date of grant.

     (c) The Option Award shall not be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and
distribution, unless the Participant has made an irrevocable election to receive
a transferable option with the Secretary of the Company prior to the date of
grant or as may be required by rules established by the Board. Such transferable
Option Awards may be transferred by a Participant for no consideration to or
from the Participant's Immediate Family (including, without limitation, to a
trust for the benefit of a Participant's Immediate Family or a Family
Partnership for members of the Immediate Family), and the transferee shall
remain subject to all of the terms and conditions applicable to such Option
Award prior to such transfer.

                                      -1-

<PAGE>

     (d) If an individual becomes an Eligible Director during a Plan Year on a
date other than the first day of the Plan Year, he shall be granted an Option
Award for the year, with the number of shares of stock subject to the Option
Award reduced pro-rata to reflect the portion of the Plan Year that has elapsed
prior to the date on which he becomes an Eligible Director. A Director's Option
Award under this paragraph (d) shall be made on the first business day on which
he is an Eligible Director (the "Award Date" for that Option Award), and the
Fair Market Value of the Stock so awarded shall be determined as of that date.

     (e) The Option Awards under this subsection 2.1 shall be subject to the
vesting provision set forth in subsection 2.2.

     2.2. Vesting. Option Awards shall be exercisable commencing one (1) year
          -------
from the date of grant. A Participant who ceases to be a Director shall forfeit
the Option Award which is not vested on his Date of Termination; provided,
however, that (i) if a Participant ceases to be a Director by reason of his
Retirement, death or Disability, any portion of the Option Award that is not
then vested shall vest on his Date of Termination; and (ii) any portion of the
Option Award that is held by an individual serving as a Director on the date of
a Change in Control that is not then vested shall vest on the date of the Change
of Control.

     2.3. Exercise. To the extent that an Option Award is exercisable, it may be
          --------
exercised in whole or in part by filing a written notice with the Secretary of
the Company at its corporate headquarters prior to the date the Option expires.
Such notice shall specify the number of shares of Stock which the Participant
elects to purchase, and shall be accompanied by payment of the exercise price
for such shares of Stock indicated by the Participant's election. Payment shall
be by cash or by check payable to the Company, except that all or a portion of
such required amount may be paid by delivery of shares of Stock having an
aggregate Fair Market Value (valued as of the date of exercise) that is equal to
the amount of cash which would otherwise be required.

     2.4. Expiration. An Option Award granted to a Director shall expire on the
          ----------
tenth anniversary of the Award Date; provided, however, that in no
event shall the Option Award be exercisable after the first anniversary of the
Date of Termination of the Director.

                                    SECTION 3
                                    ---------

                              RETAINER STOCK AWARDS
                              ---------------------

     3.1. Terms and Conditions. As of the date of the 1996 Annual Meeting of
          --------------------
Stockholders of the Company, each Director who is then an Eligible Director
shall be granted a Retainer Stock Award. Thereafter, as of the date of each
subsequent Annual Meeting of Stockholders of the Company, each Director who is
then an Eligible Director (excluding any Eligible Director who has previously
received a Retainer Stock Award) shall be granted a Retainer Stock Award. The
Retainer Stock Award shall be as follows:

     (a) The Retainer Stock Award shall consist of the grant of 3,000 shares of
Stock, to vest as follows:

                                      -2-

<PAGE>

     1) One-third of the Retainer Stock Award shall vest after three years, but
no later than six years, from the date of grant upon attaining Fair Market Value
equal to the Fair Market Value on date of grant increased by 12% compound annual
growth rate for a three year period, provided such price has been maintained for
thirty (30) consecutive trading days either immediately prior to or any time
after the third year;

     2) One-third of the Retainer Stock Award shall vest after four years, but
no later than six years, from the date of grant upon attaining Fair Market Value
equal to the Fair Market Value on date of grant increased by 12% compound annual
growth rate for a four year period, provided such price has been maintained for
thirty (30) consecutive trading days either immediately prior to or any time
after the fourth year;

     3) One-third of the Retainer Stock Award shall vest after five years, but
no later than six years, from the date of grant upon attaining Fair Market Value
equal to the Fair Market Value on date of grant increased by 12% compound annual
growth rate for a five year period, provided such price has been maintained for
thirty (30) consecutive trading days either immediately prior to or any time
after the fifth year.

     (b) As of December 31 for any year in which a Director has made a Deferral
Election as described in Supplement A, each Eligible Director who has made a
Deferral Election shall receive an additional Retainer Stock Award equal to 150
percent of Cancelled Compensation, which shall vest three years from the date of
grant.

     (c) The Retainer Stock Awards granted under this subsection 3.1 shall be
subject to the vesting provision set forth in subsection 3.3.

     3.2. Fractional Shares. If the number of shares that may be vested under a
          -----------------
Retainer Stock Award for a Director would result in a fractional share, then the
number of shares otherwise available shall be reduced to the next lowest number
that would result in the allocation of no fractional shares.

     3.3. Vesting. A Participant who ceases to be a Director prior to vesting of
          -------
a Retainer Stock Award shall forfeit a Retainer Stock Award which is not vested
on his Date of Termination; provided, however, that (i) if a Participant ceases
to be a Director by reason of his Retirement, death or Disability, any portion
of the Retainer Stock Award that is not then vested shall vest on his Date of
Termination, provided that in the event of Retirement, any Retainer Stock Award
granted under Section 3.1(a) shall be vested upon a pro rata basis based upon
the number of years which have elapsed from the date of grant divided by the
five year term of the grant if the Fair Market Value of a share of Stock from
the date of grant has increased by a 12% compound annual growth rate and if such
value has been maintained for thirty (30) consecutive trading days within the
six month period prior to date of Retirement, or such Retainer Stock Award shall
be forfeited; and (ii) any portion of the Retainer Stock Award that is held by
an individual serving as a Director on the date of a Change in Control that is
not then vested shall become vested on the date of the Change of Control.

                                      -3-

<PAGE>

     3.4. Limit on Stock. Stock granted as a Retainer Stock Award shall be
          --------------
subject to the following:

     (a) Such Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date it is vested.

     (b) Each certificate issued in respect of such Stock shall be registered in
the name of the Participant and deposited, together with a stock power endorsed
in blank, with the Company.

     (c) Except as otherwise provided by the Plan, the Participant as owner of
shares of Stock granted to him as a Retainer Stock Award shall have all the
rights of a stockholder, including but not limited to the right to vote such
shares and the right to receive all dividends paid on such shares; provided,
however, that no dividends shall be payable to or for the benefit of a
Participant with respect to record dates for such dividends occurring on or
after the date, if any, on which the Participant has forfeited the Stock.

                                   SECTION 3A
                                   ----------

                          RESTRICTED STOCK UNIT AWARDS
                          ----------------------------

     3A.1. Terms and Conditions. Subject to the terms of this Section 3A, a
           --------------------
Restricted Stock Unit entitles an Eligible Director to receive one share of
Stock for the unit at the end of a vesting period to the extent provided by the
Award with the vesting of such unit also to be contingent upon such conditions
as may be set forth in the Award. During any period in which Restricted Stock
Units are outstanding and have not been settled in Stock, the Eligible Director
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.

     3A.2 Grant. Immediately following the Annual Meeting on April 18, 2001,
          -----
each Director who is then an Eligible Director shall be granted a Restricted
Stock Unit Award under this Section 3A.2. Thereafter, as of the date of each
subsequent Annual Meeting of Shareholders of the Company, each Director who is
then an Eligible Director (excluding any Eligible Director who has previously
received a Restricted Stock Unit Award under this Section 3A.2) shall be granted
a Restricted Stock Unit Award under this Section 3A.2. The Restricted Stock Unit
Awards under this Section 3A.2 shall consist of the grant of 1,000 Restricted
Stock Units, to vest as follows:

     (a) upon the Date of Termination of the Eligible Director's service on the
Board, provided, however, that as of such Date of Termination such Director must
have served on the Board at least until the next Annual Meeting following such
Director's election to the Board; and

     (b) as otherwise provided in Section 3A.3 below.

     3A.3. Vesting. A Director who does not serve on the Board at least until
           -------
the next

                                      -4-

<PAGE>

Annual Meeting following such Director's election to the Board shall forfeit
such Restricted Stock Unit Award; provided, however, that (i) if the Director
ceases to be a Director by reason of his Retirement, death or Disability, the
Restricted Stock Unit Award shall vest on his Date of Termination, and (ii) any
portion of the Restricted Stock Unit Award that is held by an individual serving
as a Director on the date of a Change in Control that is not then vested shall
become vested on the date of the Change of Control.

     3A.4 Limit on Restricted Stock Units. Restricted Stock Units granted as a
          -------------------------------
Restricted Stock Unit Award may not be sold, assigned, transferred, pledged or
otherwise encumbered prior to the date they are vested.

                                    SECTION 4
                                    ---------

                          OPERATION AND ADMINISTRATION
                          ----------------------------

     4.1. Effective Date. Subject to the approval of the stockholders of the
          --------------
Company at the Company's 1996 annual meeting of its stockholders, the Plan shall
be effective as of the Effective Date. The Plan shall be unlimited in duration
and, in the event of Plan termination, shall remain in effect as long as any
shares of Stock or Restricted Stock Units awarded under it are outstanding and
not fully vested.

     4.2. Shares Subject to Plan. The shares of Stock with respect to which
          ----------------------
Awards may be made under the Plan shall be shares currently authorized but
unissued or currently held or subsequently acquired by the Company as treasury
shares, including shares purchased in the open market or in private
transactions. Subject to the provisions of subsection 4.4, the number of shares
of Stock which may be issued with respect to Awards under the Plan shall not
exceed 300,000 shares in the aggregate. 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 of such Award) shall again be available under the Plan.

     4.3. Adjustments to Shares.
          ---------------------

     (a) 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 or
Restricted Stock Units 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.

     (b) 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

                                      -5-

<PAGE>

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.

     4.4. Limit on Distribution. Distribution of shares of Stock or Restricted
          ---------------------
Stock Units or other amounts under the Plan shall be subject to the following:

     (a) Notwithstanding any other provision of the Plan, the Company shall have
no liability to issue any shares of Stock or Restricted Stock Units under the
Plan or make any other distribution of benefits under the Plan unless such
delivery or distribution would comply with all applicable laws and the
applicable requirements of any securities exchange or similar entity.

     (b) The Committee shall add such conditions and limitations to any Award to
any Participant who is subject to Section 16(a) and 16(b) of the Securities
Exchange Act of 1934, as is necessary to comply with Section 16(a) or 16(b) and
the rules and regulations thereunder or to obtain any exemption therefrom.

     (c) To the extent that the Plan provides for issuance of certificates to
reflect the transfer of shares of Stock, the transfer of such shares may, at the
direction of the Committee, be effected on a non-certificated basis, to the
extent not prohibited by the provisions of Rule 16b-3 or any other applicable
rules.

     4.5. Taxes. All Awards and other payments under the Plan are subject to all
          -----
applicable taxes which shall be obligations of the Participant.

     4.6. Distributions to Disabled Persons. Notwithstanding any other provision
          ---------------------------------
of the Plan, if, in the Committee's opinion, a Participant or other person
entitled to benefits under the Plan is under a legal disability or is in any way
incapacitated so as to be unable to manage his financial affairs, the Committee
may direct that payment be made to a relative or friend of such person for his
benefit until claim is made by a conservator or other person legally charged
with the care of his person or his estate, and such payment or distribution
shall be in lieu of any such payment to such Participant or other person.
Thereafter, any benefits under the Plan to which such Participant or other
person is entitled shall be paid to such conservator or other person legally
charged with the care of his person or his estate.

     4.7. Administration. The authority to control and manage the operation and
          --------------
administration of the Plan shall be vested in a committee (the
"Committee") in accordance with Section 5.

     4.8. Form and Time of Elections. Any election required or permitted under
          --------------------------
the Plan shall be in writing, and shall be deemed to be filed when delivered to
the Secretary of the Company. Any Deferral Election made under Supplement A
shall be irrevocable after it is filed.

     4.9. Agreement With Company. Each Award granted under Sections 2, 3 and 3A
          ----------------------
shall be evidenced by an Agreement (an "Agreement") duly executed on behalf of
the Company and by the Participant to whom such Award is granted and dated as of
the applicable date of grant. Each Agreement shall comply with and be subject to
the terms of the Plan.

                                      -6-

<PAGE>

     4.10. Evidence. Evidence required of anyone under the Plan may be by
           --------
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable, and signed, made or presented by
the proper party or parties.

     4.11. Action by Company. Any action required or permitted to be taken by
           -----------------
the Company shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly
authorized to act for the board, by a duly authorized officer of the Board, or
(except to the extent prohibited by the provisions of Rule 16b-3 or any other
applicable rules) by a duly authorized officer of the Company.

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

                                    SECTION 5
                                    ---------

                                    COMMITTEE
                                    ---------

     5.1. Selection of Committee. The Committee shall be the Directors and
          ----------------------
Corporate Governance Committee.

     5.2. Powers of Committee. The authority to manage and control the operation
          -------------------
and administration of the Plan shall be vested in the Committee. The Committee
will have the authority to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the Plan.

     5.3. Information to be Furnished to Committee. The Company shall furnish
          ----------------------------------------
the Committee with such data and information as may be required for it to
discharge its duties. The records of the Company as to the period of a
Director's service shall be conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to benefits under the Plan
must furnish the Committee such evidence, data or information as the Committee
considers desirable to carry out the terms of the Plan.

     5.4. Liability and Indemnification of Committee. 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 Company 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 Company. The Committee, the individual
members thereof, and persons acting as the authorized delegates of the Committee
under the Plan, shall be indemnified by the Company, to the fullest extent
permitted by law, against any and all liabilities, losses, costs and expenses
(including legal fees and expenses) of whatsoever kind and nature which may be
imposed on, incurred by or asserted against the Committee or its members or
authorized delegates by reason of the performance of a Committee function if the
Committee or its members or authorized delegates did not act dishonestly or in

                                      -7-

<PAGE>

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.

                                    SECTION 6
                                    ---------

                            AMENDMENT AND TERMINATION
                            -------------------------

     The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 4.3 (relating to certain adjustments to shares), no
amendment or termination may adversely affect the rights of any Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board. Notwithstanding the provisions of this Section 6, in no
event shall the provisions of the Plan relating to Awards under the Plan be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code ("Code"), the Employee Retirement Income Security Act,
or the rules thereunder; provided, however, that the limitation set forth in
this sentence shall be applied only to the extent required under SEC Rule
16b-3(c)(2)(ii)(B) or any successor provision thereof.

                                    SECTION 7
                                    ---------

                                  DEFINED TERMS
                                  -------------

     For purposes of the Plan, the terms listed below shall be defined as
follows:

(a)  Award. The term "Award" shall mean an award of stock options, restricted
     -----
     stock or restricted stock units granted to any person under the Plan.

(b)  Board.  The term "Board" shall mean the Board of Directors of the Company.
     -----

(c)  Change in Control.  A "Change in Control" shall be deemed to have occurred
     -----------------
     if:


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

                                         (2)   during any period of two
                                consecutive years (not including any period
                                prior to the effective date of this provision),
                                individuals who at the beginning of such period
                                constitute the Board,

                                      -8-

<PAGE>

                                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

                                      -9-

<PAGE>

                               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 shall not constitute a "Change in
                               Control" unless the Board makes a determination
                               that such transaction shall constitute a "Change
                               in Control."

(d)      Date of  Termination.  A Participant's "Date of Termination" shall be
         --------------------
         the day following the last day on which he serves as a Director.

(e)      Director. The term "Director" means a member of the Board.
         --------

(f)      Disability. 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 opinion of a
         physician selected by the Committee, is expected to have a duration of
         not less than 120 days.

(g)      Effective Date. The "Effective Date" means the date of the Company's
         --------------
         1996 annual stockholders meeting.

(h)      Eligible Director. Each Director who is not an employee of the  Company
         -----------------
         or any Related Company shall be an "Eligible Director".

(i)      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.

(j)      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.

                                      -10-

<PAGE>

(k)      Option Award. The term "Option Award" shall mean a non-qualified stock
         ------------
         option granted under the Plan.

(l)      Participant. A "Participant" is any person who has received an Award
         -----------
         under the Plan.

(m)      Plan Year. The term "Plan Year" means the period (i) beginning on the
         ---------
         date of the Company's annual stockholders meeting and (ii) ending on
         the day immediately prior the first day of the following Plan Year. The
         first Plan Year shall begin on the Effective Date.

(n)      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.

(o)      Retirement. The term "Retirement" means termination of service as a
         ----------
         Director in accordance with and pursuant to the Retirement Policy for
         Directors adopted by the Company.

(p)      SEC.  "SEC" shall mean the Securities and Exchange Commission.
         ---

(q)      Stock.  The term "Stock" shall mean shares of common stock of the
         -----
         Company.



                                      -11-

<PAGE>

                                  SUPPLEMENT A

                                DEFERRAL ELECTION
                                -----------------

     A-1.1. Eligibility. An individual who is otherwise entitled to receive a
            -----------
Retainer Stock Award or who is otherwise eligible to receive cash payment for
services provided as a Director ("Cash Compensation") may elect to forego a
portion of the annual retainer fee exclusive of any fees or other amounts
payable for attendance at the meetings of the Board or for service on any
committee thereof, to receive a Retainer Stock Award as described in Section 3
hereof, subject to the following terms of this Supplement A.

     A-1.2. Date of Grant. The date of grant shall be as of December 31 for any
            -------------
year in which a Director has made a Deferral Election as described in this
Supplement A.

     A-1.3. Amount of Elective Compensation. Each Participant may exchange up to
            -------------------------------
25% of the annual cash retainer fee, exclusive of any fees or other amounts
payable for attendance at the meetings of the Board or for service on any
committee thereof, payable in a calendar year in exchange for a Retainer Stock
Award equal to a number of shares of Stock determined by dividing 150% of the
amount of Cancelled Compensation by the Fair Market Value of Stock on the date
of grant; provided that such Retainer Stock Award shall be of substantially
equivalent value to the Cancelled Compensation to the extent required by SEC
Rule 16b-3(c)(2)(i)(C). The Cancelled Compensation shall be deducted from the
last quarterly payment of the annual retainer fee in a fiscal year.

     A-1.4. Method of Election. A Participant who wishes to elect to receive a
            ------------------
Retainer Stock Award must deliver to the Secretary of the Company, a written
irrevocable election specifying the amount of Cash Compensation he wishes to
forego ("Cancelled Compensation"), by December 31 prior to the fiscal year in
which the Cash Compensation would be earned (or at such other time required
under rules established by the Board.)

                                      -12-

</TEXT>
</DOCUMENT>
