By-laws - BURLINGTON NORTHERN SANTA FE CORP - 11-13-1995

EXHIBIT 3.2 BY-LAWS OF BURLINGTON NORTHERN SANTA FE CORPORATION TABLE OF CONTENTS ARTICLE I. OFFICES SECTION 1. Registered Office and Agent SECTION 2. Other Offices ARTICLE II. MEETINGS OF STOCKHOLDERS SECTION 1. Annual Meetings SECTION 2. Special Meetings SECTION 3. Place of Meetings SECTION 4. Notice of Meetings SECTION 5. Quorum SECTION 6. Organization SECTION 7. Voting SECTION 8. Inspectors SECTION 9. List of Stockholders SECTION 10. Business at Meetings of Stockholders SECTION 11. No Stockholder Action by Consent ARTICLE III. BOARD OF DIRECTORS SECTION 1. Number, Qualification and Term of Office SECTION 2. Vacancies SECTION 3. Resignations SECTION 4. Removals SECTION 5. Place of Meetings; Books and Records SECTION 6. Annual Meeting of the Board SECTION 7. Regular Meetings SECTION 8. Special Meetings SECTION 9. Quorum and Manner of Acting SECTION 10. Organization SECTION 11. Consent of Directors in Lieu of Meeting SECTION 12. Telephonic Meetings SECTION 13. Compensation ARTICLE IV. COMMITTEES OF THE SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION ARTICLE V. OFFICERS SECTION SECTION SECTION SECTION SECTION SECTION SECTION 1. 2. 3. 4. 5. 6. 7. Number Election, Term of Office and Qualifications Resignations Removals Vacancies Compensation of Officers Chairman of the Board 8 8 9 9 9 9 9 9 BOARD OF DIRECTORS 1. Executive Committee 2. Audit Committee 3. Compensation Committee 4. Committee on Directors and Corporate Governance 5. Committee Chairman, Books and Records 6. Alternates 7. Other Committees 8. Quorum and Manner of Acting 6 6 6 7 8 8 8 8 8 4 4 4 4 4 4 5 5 5 5 5 5 6 6 1 1 1 1 1 2 2 2 3 3 3 4 1 1 1 SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION ARTICLE VI. 7. Chairman of the Board 8. Non-Executive Vice Chairman 9. President and Chief Executive Officer 10. Vice President and Chief Financial Officer 11. Vice President, Law 12. Secretary 13. Treasurer 14. Absence or Disability of Officers 9 9 9 10 10 10 10 10 STOCK CERTIFICATES AND TRANSFER THEREOF SECTION 1. Stock Certificates SECTION 2. Transfer of Stock SECTION 3. Transfer Agent and Registrar SECTION 4. Additional Regulations SECTION 5. Lost, Destroyed or Mutilated Certificates SECTION 6. Record Date ARTICLE VII. DIVIDENDS, SURPLUS, ETC. ARTICLE VIII. SEAL ARTICLE IX. FISCAL YEAR ARTICLE X. INDEMNIFICATION SECTION 1. Right to Indemnification SECTION 2. Right of Indemnitee to Bring Suit SECTION 3. Nonexclusivity of Rights SECTION 4. Insurance, Contracts and Funding SECTION 5. Definition of Director and Officer SECTION 6. Indemnification of Employees and Agents of the Corporation ARTICLE XI. CHECKS, DRAFTS, BANK ACCOUNTS, ETC. SECTION 1. Checks, Drafts, Etc.; Loans SECTION 2. Deposits 11 11 11 11 11 11 12 12 12 12 12 12 13 13 13 13 14 14 14 14 ARTICLE XII. NOMINATIONS OF DIRECTOR CANDIDATES SECTION 1. General SECTION 2. Nominations by Board of Directors SECTION 3. Nominations by Stockholders SECTION 4. Substitute Nominees SECTION 5. Void Nominations ARTICLE XIII. AMENDMENTS 15 14 14 14 14 15 15 BY-LAWS OF BURLINGTON NORTHERN SANTA FE CORPORATION ARTICLE I. OFFICES SECTION 1. Registered Office and Agent. The registered office of the corporation is located at 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware 19801, and the name of its registered agent at such address is The Corporation Trust Company. SECTION 2. Other Offices. The corporation may have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require. ARTICLE II. MEETINGS OF STOCKHOLDERS SECTION 1. Annual Meetings. A meeting of the stockholders for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting shall be held annually at 10 A.M. on the third Thursday of April, or at such other time on such other day as shall be fixed by resolution of the Board of Directors. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. SECTION 2. Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called at any time by a majority of the Board of Directors, by the Chairman of the Board, or by the President and shall be called by the Secretary at the request of the holders of not less than fifty-one percent of all issued and outstanding shares of the corporation entitled to vote at the meeting. SECTION 3. Place of Meetings. The annual meeting of the stockholders of the corporation shall be held at the general offices of the corporation in the City of Ft. Worth, State of Texas, or at such other place in the United States as may be stated in the notice of the meeting. All other meetings of the stockholders shall be held at such places within or without the State of Delaware as shall be stated in the notice of the meeting. SECTION 4. Notice of Meetings. Except as otherwise provided by statute, written notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, notice shall be given when deposited in the United States mails, postage prepaid, directed to such stockholder at his address as it appears in the stock ledger of the corporation. Each such notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. When a meeting is adjourned to another time and place, notice of the adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment is given. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 5. Quorum. At any meeting of the stockholders the holders of record of a majority of the total number of outstanding shares of stock of the corporation entitled to vote, present in person or represented by proxy, shall constitute a quorum for all purposes, provided that at any meeting at which the holders of any series of class of stock shall be entitled, voting as a class, to elect Directors, the holders of record of a majority of the total number of outstanding shares of such series or class, present in person or represented by proxy, shall constitute a quorum for the purpose of such election. If a quorum is present at any meeting of stockholders, the vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting shall be sufficient for the transaction of any business, unless otherwise provided by statute or the Certificate of Incorporation. In the absence of a quorum at any meeting, the holders of a majority of the shares of stock entitled to vote thereat, present in person or represented by proxy at the meeting, may adjourn the meeting, from time to time, until the holders of the number of shares requisite to constitute a quorum shall be present in person or represented at the meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally convened. SECTION 6. Organization. At each meeting of the stockholders, the Chairman of the Board, or if he so designates or is absent, the President, shall act as Chairman of the meeting. In the absence of both the Chairman of the Board and the President, such person as shall have been designated by the Board of Directors, or in the absence of such designation a person elected by the holders of a majority in number of shares of stock present in person or represented by proxy and entitled to vote, shall act as Chairman of the meeting. The Secretary or, in his absence, an Assistant Secretary or, in the absence of the Secretary and all of the Assistant Secretaries, any person appointed by the Chairman of the meeting shall act as Secretary of the meeting. SECTION 7. Voting. Unless otherwise provided in the Certificate of Incorporation or a resolution of the Board of Directors creating a series of stock, at each meeting of the stockholders, each holder of shares of any series or class of stock entitled to vote at such meeting shall be entitled to one vote for each share of stock having voting power in respect of each matter upon which a vote is to be taken, standing in his name on the stock ledger of the corporation on the record date fixed as provided in these By-Laws for determining the stockholders entitled to vote at such meeting or, if no record date be fixed, at the close of business on the day next preceding the day on which notice of the meeting is given. Shares of its own capital stock belonging to the corporation, or to another corporation if a majority of the shares entitled to vote in the election of directors of such other corporation is held by the corporation, shall neither be entitled to vote nor counted for quorum purposes. At each election of Directors the voting shall be by ballot, and the persons having the greatest number of votes shall be deemed and declared elected. Except as otherwise required by statute, the Certificate of Incorporation or these By-Laws, all matters shall be decided by a majority of the votes cast, a quorum being present. SECTION 8. Inspectors. Prior to each meeting of stockholders, the Board of Directors shall appoint two Inspectors who are not directors, candidates for directors or officers of the corporation, who shall receive and determine the validity of proxies and the qualifications of voters, and receive, inspect, count and report to the meeting in writing the votes cast on all matters submitted to a vote at such meeting. In case of failure of the Board of Directors to make such appointments or in case of failure of any Inspector so appointed to act, the Chairman of the Board shall make such appointment or fill such vacancies. Each Inspector, immediately before entering upon his duties, shall subscribe to an oath or affirmation faithfully to execute the duties of Inspector at such meeting with strict impartiality and according to the best of his ability. SECTION 9. List of Stockholders. The Secretary or other officer or agent having charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares of each class and series registered in the name of each such stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, SECTION 8. Inspectors. Prior to each meeting of stockholders, the Board of Directors shall appoint two Inspectors who are not directors, candidates for directors or officers of the corporation, who shall receive and determine the validity of proxies and the qualifications of voters, and receive, inspect, count and report to the meeting in writing the votes cast on all matters submitted to a vote at such meeting. In case of failure of the Board of Directors to make such appointments or in case of failure of any Inspector so appointed to act, the Chairman of the Board shall make such appointment or fill such vacancies. Each Inspector, immediately before entering upon his duties, shall subscribe to an oath or affirmation faithfully to execute the duties of Inspector at such meeting with strict impartiality and according to the best of his ability. SECTION 9. List of Stockholders. The Secretary or other officer or agent having charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares of each class and series registered in the name of each such stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this Section, or the books of the corporation, or to vote in person or by proxy at any such meeting. SECTION 10. Business at Meetings of Stockholders. To be properly brought before the meeting, business must be either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board, or (c) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation, not less than 50 days nor more than 75 days prior to the meeting; provided, however, that in the event that less than 65 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 15th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 10 of Article II, provided, however, that nothing in this Section 10 of Article II shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 10 of Article II, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. SECTION 11. No Stockholder Action by Consent. Any action by stockholders of the corporation shall be SECTION 11. No Stockholder Action by Consent. Any action by stockholders of the corporation shall be taken at a meeting of stockholders and no action may be taken by written consent of stockholders entitled to vote upon such action. ARTICLE III. BOARD OF DIRECTORS SECTION 1. Number, Qualification and Term of Office. The business, property and affairs of the corporation shall be managed by a Board consisting of not less than three or more than twenty-one Directors. The Board of Directors shall from time to time by a vote of a majority of the Directors then in office fix within the maximum and minimum limits the number of Directors to constitute the Board. At each annual meeting of stockholders a Board of Directors shall be elected by the stockholders for a term of one year. Each Director shall serve until his successor is elected and shall qualify. SECTION 2. Vacancies. Vacancies in the Board of Directors and newly created directorships resulting from any increase in the authorized number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director, at any regular or special meeting of the Board of Directors. SECTION 3. Resignations. Any Director may resign at any time upon written notice to the Secretary of the corporation. Such resignation shall take effect on the date of receipt of such notice or at any later date specified therein; and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make it effective. When one or more Directors shall resign effective at a future date, a majority of the Directors then in office, including those who have resigned, shall have power to fill such vacancy or vacancies to take effect when such resignation or resignations shall become effective. SECTION 4. Removals. Any Director may be removed, with cause, at any special meeting of the stockholders called for that purpose, by the affirmative vote of the holders of a majority in number of shares of the corporation entitled to vote for the election of Directors, and the vacancy in the Board caused by any such removal may be filled by the stockholders at such a meeting. SECTION 5. Place of Meetings; Books and Records. The Board of Directors may hold its meetings, and have an office or offices, at such place or places within or without the State of Delaware as the Board from time to time may determine. The Board of Directors, subject to the provisions of applicable statutes, may authorize the books and records of the corporation, and offices or agencies for the issue, transfer and registration of the capital stock of the corporation, to be kept at such place or places outside of the State of Delaware as, from time to time, may be designated by the Board of Directors. SECTION 6. Annual Meeting of the Board. The first meeting of each newly elected Board of Directors, to be known as the Annual Meeting of the Board, for the purpose of electing officers, designating committees and the transaction of such other business as may come before the Board, shall be held as soon as practicable after the adjournment of the annual meeting of stockholders, and no notice of such meeting shall be necessary to the newly elected Directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held due to the absence of a quorum, the meeting may be held at such time and place as shall be specified in a notice given as SECTION 6. Annual Meeting of the Board. The first meeting of each newly elected Board of Directors, to be known as the Annual Meeting of the Board, for the purpose of electing officers, designating committees and the transaction of such other business as may come before the Board, shall be held as soon as practicable after the adjournment of the annual meeting of stockholders, and no notice of such meeting shall be necessary to the newly elected Directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held due to the absence of a quorum, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors or as shall be specified in a written waiver signed by all of the newly elected Directors. SECTION 7. Regular Meetings. The Board of Directors shall, by resolution, provide for regular meetings of the Board at such times and at such places as it deems desirable. Notice of regular meetings need not be given. SECTION 8. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board or the President and shall be called by the Secretary on the written request of three Directors on such notice as the person or persons calling the meeting shall deem appropriate in the circumstances. Notice of each such special meeting shall be mailed to each Director or delivered to him by telephone, telegraph or any other means of electronic communication, in each case addressed to his residence or usual place of business, or delivered to him in person or given to him orally. The notice of meeting shall state the time and place of the meeting but need not state the purpose thereof. Attendance of a Director at any meeting shall constitute a waiver of notice of such meeting except when a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened. SECTION 9. Quorum and Manner of Acting. Except as otherwise provided by statute, the Certificate of Incorporation or these By-Laws, the presence of a majority of the total number of Directors shall constitute a quorum for the transaction of business at any regular or special meeting of the Board of Directors, and the act of a majority of the Directors present at any such meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the Directors present may adjourn the meeting, from time to time, until a quorum is present. Notice of any such adjourned meeting need not be given. SECTION 10. Organization. At every meeting of the Board of Directors, the Chairman of the Board or, in his absence the President or, if both of the said officers are absent, a Chairman chosen by a majority of the Directors present shall act as Chairman of the meeting. The Secretary or, in his absence, an Assistant Secretary or, in the absence of the Secretary and all the Assistant Secretaries, any person appointed by the Chairman of the meeting shall act as Secretary of the meeting. SECTION 11. Consent of Directors in Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors, or any committee designated by the Board, may be taken without a meeting if all members of the Board or committee consent thereto in writing, and such written consent is filed with the minutes of the proceedings of the Board or committee. SECTION 12. Telephonic Meetings. Members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of SECTION 12. Telephonic Meetings. Members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting. SECTION 13. Compensation. Each Director, who is not a full-time salaried officer of the corporation or any of its wholly owned subsidiaries, when authorized by resolution of the Board of Directors may receive as a Director a stated salary or an annual retainer and in addition may be allowed a fixed fee and his reasonable expenses for attendance at each regular or special meeting of the Board or any Committee thereof. ARTICLE IV. COMMITTEES OF THE BOARD OF DIRECTORS SECTION 1. Executive Committee. The Board of Directors may, in its discretion, designate annually an Executive Committee consisting of not less than five Directors as it may from time to time determine. The Committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it, but the Committee shall have no power or authority to amend the Certificate of Incorporation (except that the Committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), adopt an agreement of merger or consolidation, recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, amend the ByLaws of the corporation, elect officers or fill vacancies on the Board of Directors or any Committee of the Board, declare a dividend, authorize the issuance of stock, or such other powers as the Board may from time to time eliminate. Without limiting the generality of the foregoing, the Committee shall monitor, review, appraise and recommend to the Board of Directors appropriate action with respect to the corporation's capital structure, its source of funds and its financial position; review and recommend appropriate delegations of authority to management on expenditures and other financial commitments; review terms and conditions of financing plans and develop and recommend dividend policies and recommend to the Board specific dividend payments. SECTION 2. Audit Committee. The Board of Directors shall designate annually an Audit Committee consisting of not less than three directors as it may from time to time determine, none of whom shall be an officer of the corporation, to assist the Board in fulfilling its responsibilities with respect to overseeing the accounting, auditing and financial reporting practices and the internal control policies and procedures of the corporation. Specifically, the Audit Committee is authorized and directed on behalf of the Board to: (a) Review with the independent accountants the corporation's financial statements, basic accounting and financial policies and practices, competency of control personnel, standard and special tests used in verifying the corporation's statements of account and in determining the soundness of the corporation's financial condition and report to the Board the results of such reviews. (b) Review the policies and practices pertaining to publication of quarterly and annual statements to assure consistency with audited results and the implementing of policies and practices recommended by the independent accountants. (c) Ensure that suitable independent audits are made of the operations and results of subsidiary corporations and affiliates. (d) Review and approve the audit program to be conducted by the corporation's internal auditors and the results of completed audits. (e) Review the nature of, and fees charged for, all audit and non-audit services performed by the corporation's independent auditing firm. (f) Retain at its discretion independent auditors and legal counsel, at the expense of the corporation, to assist the Committee in performing the responsibilities delegated to it in this resolution and conduct any additional reviews, discussions or investigations which in its discretion would be of assistance in fulfilling its responsibilities under this resolution. (g) Monitor compliance with the corporation's code of business conduct, and such other duties, functions and powers as the Board may from time to time prescribe. SECTION 3. Compensation Committee. The Board of Directors may, in its discretion, designate annually a Compensation Committee, consisting of not less than five Directors as it may from time to time determine. The Committee shall review, report and make recommendations to the Board of Directors on the following matters: (a) The compensation of the Chairman of the Board, the compensation of the President following the Chairman of the Board's recommendation as to compensation of the President, and the compensation of all senior officers of the corporation and its principal operating subsidiaries reporting directly to the President following an annual review of management's recommendations for such senior officers. If circumstances involving such senior officers require a salary adjustment between such reviews, a recommendation may be made directly to the Board of Directors by the President without the necessity of a meeting of the Compensation and Nominating Committee. (b) Management recommendations for individual stock options to be granted under existing stock option plans to key executives of the corporation and its subsidiary companies. (c) The performance of the trustee of the corporation's pension trust fund and any proposed change in the investment policy of the trustee with respect to such fund. (d) Any proposed stock option plans, stock purchase plans, retirement plans and any other plans, systems and practices of the corporation relating to the compensation of any employees of the corporation and any proposed plans of any subsidiary company involving the issuance or purchase of capital stock of the corporation. (e) The evaluation of the performance of the officers of the corporation and, together with management, the selection and recommendation to the Board of Directors of appropriate individuals for election, appointment and promotion as officers of the corporation to ensure the continuity of able, capable management. (f) Such other matters as the Board may from time to time prescribe. SECTION 4. Committee on Directors and Corporate Governance. The Board of Directors may, in its discretion, designate annually a Committee on Directors and Corporate Governance, consisting of not less than five Directors as it may from time to time determine. The Committee shall review, report and make recommendations to the Board of Directors on the following matters: (a) The size and composition of the Board of Directors and nominees for Directors; the evaluation of the performance of the Board of Directors of the corporation and the recommendation to the Board of Directors of compensation and benefits for Directors. (b) Such other matters as the Board may from time to time prescribe. SECTION 4. Committee on Directors and Corporate Governance. The Board of Directors may, in its discretion, designate annually a Committee on Directors and Corporate Governance, consisting of not less than five Directors as it may from time to time determine. The Committee shall review, report and make recommendations to the Board of Directors on the following matters: (a) The size and composition of the Board of Directors and nominees for Directors; the evaluation of the performance of the Board of Directors of the corporation and the recommendation to the Board of Directors of compensation and benefits for Directors. (b) Such other matters as the Board may from time to time prescribe. SECTION 5. Committee Chairman, Books and Records. Each Committee shall elect a Chairman to serve for such term as it may determine, shall fix its own rules of procedure and shall meet at such times and places and upon such call or notice as shall be provided by such rules. It shall keep a record of its acts and proceedings, and all action of the Committee shall be reported to the Board of Directors at the next meeting of the Board. SECTION 6. Alternates. Alternate members of the Committees prescribed by this Article IV may be designated by the Board of Directors from among the Directors to serve as occasion may require. Whenever a quorum cannot be secured for any meeting of any such Committees from among the regular members thereof and designated alternates, the member or members of such Committee present at such meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of such absent or disqualified member. Alternative members of such Committees shall receive a reimbursement for expenses and compensation at the same rate as regular members of such Committees. SECTION 7. Other Committees. The Board of Directors may elect such other Committees, each to consist of two or more Directors, as it may from time to time determine, and each such Committee shall serve for such term and shall have and may exercise, during intervals between meetings of the Board of Directors, such duties, functions and powers as the Board of Directors may from time to time prescribe. SECTION 8. Quorum and Manner of Acting. At each meeting of any Committee the presence of a majority of the members of such Committee, whether regular or alternate, shall be necessary to constitute a quorum for the transaction of business, and if a quorum is present the concurrence of a majority of those present shall be necessary for the taking of any action; provided, however, that no action may be taken by the Executive Committee or the Finance Committee when two or more officers of the corporation are present as members at a meeting of either such Committee unless such action shall be concurred in by the vote of two or more members of such Committee who are not officers of the corporation. ARTICLE V. OFFICERS SECTION 1. Number. The officers of the corporation shall be a Chairman of the Board, a President, a Vice President and Chief Financial Officer, a Vice President, Law, a Secretary and a Treasurer, each of which officers shall be elected by the Board of Directors, and such other officers as the Board of Directors may determine, in its discretion, to elect. Any number of offices may be held by the same person. Any officer may hold such additional title descriptions or qualifiers such as "Chief Executive Officer", "Chief Operating Officer", "Senior Vice President", "Executive Vice President" or "Assistant Secretary" or such other title as the Board of Directors shall determine. SECTION 2. Election, Term of Office and Qualifications. The officers of the corporation shall be elected annually by the Board of Directors. Each officer elected by the Board of Directors shall hold office until his successor shall have been duly elected and qualified, or until he shall have died, resigned or been removed in the manner hereinafter provided. SECTION 3. Resignations. Any officer may resign at any time upon written notice to the Secretary of the corporation. Such resignation shall take effect at the date of its receipt, or at any later date specified therein; and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make it effective. SECTION 4. Removals. Any officer elected or appointed by the Board of Directors may be removed, with or without cause, by the Board of Directors at a regular meeting or special meeting of the Board. Any officer or agent appointed by any officer or committee may be removed, either with or without cause, by such appointing officer or committee. SECTION 5. Vacancies. Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term in the same manner as prescribed in these By-Laws for regular election or appointment to such office. SECTION 6. Compensation of Officers. The compensation of all officers elected by the Board of Directors shall be approved or authorized by the Board of Directors or by the President when so authorized by the Board of Directors or these By-Laws. SECTION 7. Chairman of the Board. The Chairman of the Board shall perform such duties as shall be prescribed by the Board of Directors and, when present, shall preside at all meetings of the stockholders and the Board of Directors. In the absence or disability of the Chairman of the Board, the Board of Directors shall designate a member of the Board to serve as Chairman of the Board and such designated Board Member shall have the powers and perform the duties of the office; provided, however, that if the Chairman of the Board shall so designate or shall be absent from a meeting of stockholders, the President shall preside at such meeting of stockholders. SECTION 8. Non-Executive Vice Chairman. The Non-Executive Vice Chairman shall perform such duties as shall be prescribed by the Board of Directors. SECTION 9. President and Chief Executive Officer. The President shall be the chief executive officer of the corporation and shall have, subject to the control of the Board of Directors, the general executive responsibility for the management and direction of the business and affairs of the corporation, and the general supervision of its officers, employees and agents. He shall have the power to appoint any and all officers, employees and agents of the corporation not required by these by-laws to be elected by the Board of Directors or not otherwise elected by the Board of Directors in its discretion. He shall have the power to accept the resignation of or to discharge any and all officers, employees and agents of the corporation not elected by the Board of Directors. He shall sign all papers and documents to which his signature may be necessary or appropriate and shall have such other powers and duties as shall devolve upon the chief executive officer of a corporation, and such further powers and duties as may be prescribed for him by the Board of Directors. SECTION 10. Vice President and Chief Financial Officer. The Vice President and Chief Financial Officer shall have responsibility for development and administration of the corporation's financial plans and all financial arrangements, its insurance programs, its cash deposits and shortterm investments, its accounting policies, and its federal and state tax returns. Such officer shall also be responsible for the corporation's internal control procedures and for its relationship with the financial community. SECTION 11. Vice President, Law. The Vice President, Law shall be the chief legal advisor of the corporation and shall have charge of the management of the legal affairs and litigation of the corporation. SECTION 12. Secretary. The Secretary shall record the proceedings of the meetings of the stockholders and directors, in one or more books kept for that purpose; see that all notices are duly given in accordance with the provisions of the By-Laws or as required by law; have charge of the corporate records and of the seal of the corporation; affix the seal of the corporation or a facsimile thereof, or cause it to be affixed, to all certificates for shares prior to the issue thereof and to all documents the execution of which on behalf of the corporation under its seal is duly authorized by the Board of Directors or otherwise in accordance with the provisions of the By-Laws; keep a register of the post office address of each stockholder, director or member, sign with the Chairman of the Board or President, certificates for shares of stock of the corporation, the issuance of which shall have been duly authorized by resolution of the Board of Directors; have general charge of the stock transfer books of the corporation; and in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors, the Chairman of the Board, the President or the Vice President, Law. SECTION 13. Treasurer. The Treasurer shall have the responsibility for the custody and safekeeping of all funds of the corporation and shall have charge of their collection, receipt and disbursement; shall receive and have authority to sign receipts for all monies paid to the corporation and shall deposit the same in the name and to the credit of the corporation in such banks or depositories as the Board of Directors shall approve; shall endorse for collection on behalf of the corporation all checks, drafts, notes and other obligations payable to the corporation; shall sign or countersign all notes, endorsements, guaranties and acceptances made on behalf of the corporation when and as directed by the Board of Directors; shall give bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors may require; shall have the responsibility for the custody and safekeeping of all securities of the corporation; and in general shall have such other powers and perform such other duties as are incident to the office of Treasurer and as from time to time may be prescribed by the Board of Directors or be delegated to him by the Chairman of the Board, the President or the Vice President, Finance. SECTION 14. Absence or Disability of Officers. In the absence or disability of the Chairman of the Board or the President, the Board of Directors may designate, by resolution, individuals to perform the duties of those absent or disabled. The Board of Directors may also delegate this power to a committee or to a senior corporate officer. ARTICLE VI. STOCK CERTIFICATES AND TRANSFER THEREOF SECTION 1. Stock Certificates. Except as otherwise permitted by statute, the Certificate of Incorporation or resolution or resolutions of the Board of Directors, every holder of stock in the corporation shall be entitled to have a certificate, signed by or in the name of the corporation by the Chairman of the Board, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares, and the class and series thereof, owned by him in the corporation. Any and all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were ARTICLE VI. STOCK CERTIFICATES AND TRANSFER THEREOF SECTION 1. Stock Certificates. Except as otherwise permitted by statute, the Certificate of Incorporation or resolution or resolutions of the Board of Directors, every holder of stock in the corporation shall be entitled to have a certificate, signed by or in the name of the corporation by the Chairman of the Board, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares, and the class and series thereof, owned by him in the corporation. Any and all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. SECTION 2. Transfer of Stock. Transfer of shares of the capital stock of the corporation shall be made only on the books of the corporation by the holder thereof, or by his attorney there unto duty authorized, and on surrender of the certificate or certificates for such shares. A person in whose name shares of stock stand on the books of the corporation shall be deemed the owner thereof as regards the corporation, and the corporation shall not, except as expressly required by statute, be bound to recognize any equitable or other claim to, or interest in, such shares on the part of any other person whether or not it shall have express or other notice thereof. SECTION 3. Transfer Agent and Registrar. The corporation shall at all times maintain a transfer office or agency in the Borough of Manhattan, The City of New York, in charge of a transfer agent designated by the Board of Directors (who shall have custody, subject to the direction of the Secretary, of the original stock ledger and stock records of the corporation), where the shares of the capital stock of the corporation of each class shall be transferable, and also a registry office in the Borough of Manhattan, The City of New York, other than its transfer office or agency in said city, in charge of a registrar designated by the Board of Directors, where its stock of each class shall be registered. The corporation may, in addition to the said offices, if and whenever the Board of Directors shall so determine, maintain in such place or places as the Board shall determine, one or more additional transfer offices or agencies, each in charge of a transfer agent designated by the Board, where the shares of capital stock of the corporation of any class or classes shall be transferable, and also one or more additional registry offices, each in charge of a registrar designated by the Board of Directors, where such shares of stock of any class or classes shall be registered. Except as otherwise provided by resolution of the Board of Directors in respect of temporary certificates, no certificates for shares of capital stock of the corporation shall be valid unless countersigned by a transfer agent and registered by a registrant authorized as aforesaid. SECTION 4. Additional Regulations. The Board of Directors may make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the corporation. SECTION 5. Lost, Destroyed or Mutilated Certificates. The Board of Directors may provide for the issuance of new certificates of stock to replace certificates of stock lost, stolen, mutilated or destroyed, or alleged to be lost, stolen, mutilated or destroyed, upon such terms and in accordance with such procedures as the Board of Directors shall deem proper and prescribe. SECTION 6. Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of SECTION 6. Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. ARTICLE VII. DIVIDENDS, SURPLUS, ETC. Except as otherwise provided by statute or the Certificate of Incorporation, the Board of Directors may declare dividends upon the shares of its capital stock either (1) out of its surplus, or (2) in case there shall be no surplus, out of its net profits for the fiscal year, whenever, and in such amounts as, in its opinion, the condition of the affairs of the corporation shall render it advisable. Dividends may be paid in cash, in property or in shares of the capital stock of the corporation. ARTICLE VIII. SEAL The Board of Directors shall adopt a suitable corporate seal which shall be in the form imprinted hereon. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. ARTICLE IX. FISCAL YEAR The fiscal year of the corporation shall begin on the first day of January of each year. ARTICLE X. INDEMNIFICATION SECTION 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the full extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), or by other applicable law as then in effect, against all expense, liability and loss (including attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators, provided, however, that except as provided in Section 2 of this Article with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee while a director or officer, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such indemnitee is not entitled to be indemnified under this Section 1, or otherwise. SECTION 2. Right of Indemnitee to Bring Suit. If a claim under Section 1 of this Article is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, to the extent successful in whole or in part, the indemnitee shall be entitled to be paid also the expense of prosecuting such suit. The indemnitee shall be presumed to be entitled to indemnification under this Article upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses where the required undertaking, if any is required, has been tendered to the Corporation), and thereafter the Corporation shall have the burden of proof to overcome the presumption that the indemnitee is not so entitled. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances not an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the indemnitee is not entitled to indemnification shall be a defense to the suit or create a presumption that the indemnitee is not so entitled. SECTION 3. Nonexclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or disinterested directors or otherwise. SECTION 4. Insurance, Contracts and Funding. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. The Corporation may enter into contracts with any indemnitee in furtherance of the provisions of this Article and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Article. SECTION 5. Definition of Director and Officer. Any person who is or was serving as a director of a wholly owned subsidiary of the Corporation shall be deemed, for purposes of this Article only, to be a director or officer of the Corporation entitled to indemnification under this Article. SECTION 6. Indemnification of Employees and Agents of the Corporation. The Corporation may, by action of its Board of Directors from time to time, grant rights to indemnification and advancement of expenses to employees and agents of the Corporation with the same scope and effects as the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. SECTION 6. Indemnification of Employees and Agents of the Corporation. The Corporation may, by action of its Board of Directors from time to time, grant rights to indemnification and advancement of expenses to employees and agents of the Corporation with the same scope and effects as the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. ARTICLE XI. CHECKS, DRAFTS, BANK ACCOUNTS, ETC. SECTION 1. Checks, Drafts, Etc.; Loans. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall, from time to time, be determined by resolution of the Board of Directors. No loans shall be contracted on behalf of the corporation unless authorized by the Board of Directors. Such authority may be general or confined to specific circumstances. SECTION 2. Deposits. All funds of the Corporation shall be deposited, from time to time, to the Credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select, or as may be selected by any officer or officers, agent or agents of the corporation to whom such power may, from time to time, be delegated by the Board of Directors; and for the purpose of such deposit, the Chairman, the President, any Vice President, the Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary or any other officer or agent to whom such power may be delegated by the Board of Directors, may endorse, assign and deliver checks, drafts and other order for the payment of money which are payable to the order of the corporation. ARTICLE XII. NOMINATIONS OF DIRECTOR CANDIDATES SECTION 1. General. Nomination of candidates for election as directors of the corporation at any meeting of stockholders called for election of directors (an "Election Meeting") may be made by the Board of Directors or by any stockholder entitled to vote at such Election Meeting. SECTION 2. Nominations by Board of Directors. Nominations made by the Board of Directors shall be made at a meeting of the Board of Directors, or by written consent of directors in lieu of a meeting, not less than 30 days prior to the date of the Election Meeting. At the request of the Secretary of the corporation each proposed nominee shall provide the corporation with such information concerning himself as is required, under the rules of the Securities and Exchange Commission, to be included in the corporation's proxy statement soliciting proxies for his election as a director. SECTION 3. Nominations by Stockholders. Not less than 50 days nor more than 75 days prior to the date of the Election Meeting any stockholder who intends to make a nomination at the Election Meeting shall deliver a notice to the Secretary of the corporation setting forth (a) as to each nominee whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the nominee, (ii) the principal occupation or employment of the nominee, (iii) the class and number of shares of capital stock of the corporation which are beneficially owned by the nominee and (iv) any other information concerning the nominee that would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominee; and (b) as to the stockholder giving the notice, (i) the name and record address of the stockholder and (ii) the class and number of shares of capital stock of the corporation which are beneficially owned by the stockholder; provided, however, that in the event that less than 65 days' notice or prior public disclosure of the date of the Election Meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered not later than the close of business on the 15th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such notice shall include a signed consent to serve as a director of the corporation, if elected, of each such nominee. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the corporation. SECTION 4. Substitute Nominees. In the event that a person is validly designated as a nominee in accordance with Section 2 or Section 3 of this Article XII and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors or the stockholder who proposed such nominee, as the case may be, may designate a substitute nominee. SECTION 5. Void Nominations. If the Chairman of the Election Meeting determines that a nomination was not made in accordance with the foregoing procedures, such nomination shall be void. ARTICLE XIII. AMENDMENTS These By-Laws may be altered or repealed and new By-Laws may be made by the affirmative vote, at any meeting of the Board, of a majority of the whole Board of Directors, subject to the rights of the stockholders of the Corporation to amend or repeal By-Laws made or amended by the Board of Directors by the affirmative vote of the holders of record of a majority in number of shares of the outstanding stock of the Corporation present or represented at any meeting of the stockholders and entitled to vote thereon, provided that notice of the proposed action be included in the notice of such meeting. Exhibit 4 CERTIFICATE OF DESIGNATION OF 6 1/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A, $0.01 PAR VALUE OF BURLINGTON NORTHERN SANTA FE CORPORATION (Pursuant to Section 151 of the General Corporation Law of the State of Delaware) BURLINGTON NORTHERN SANTA FE CORPORATION, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation: RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the "Board of Directors") by the provisions of the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), and pursuant to resolutions adopted by this Board of Directors on September 11, 1995, there hereby is created, out of the 25,000,000 shares of Preferred Stock, $0.01 par value, of the Corporation authorized in Article Fourth of the Certificate of Incorporation (the "Preferred Stock"), a series of the Preferred Stock consisting of 6,900,000 shares, which series shall have the following powers, designations, preferences, and relative, participating, optional, or other rights, and the following qualifications limitations, and restrictions (in addition to the powers, designations, preferences, and relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions, set forth in the Certificate of Incorporation which are applicable to preferred stock and/or to the Preferred Stock): SECTION 1. DESIGNATION OF AMOUNT. The shares of such series shall be designated as "6 1/4" Cumulative , Convertible Preferred Stock, Series A, $0.01 Par Value" (the "6 1/4% Preferred Stock"), and the authorized number of shares constituting such series shall be 6,900,000. The 6 1/4% Preferred Stock shall be $0.01 par value stock. SECTION 2. DIVIDENDS. Exhibit 4 CERTIFICATE OF DESIGNATION OF 6 1/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A, $0.01 PAR VALUE OF BURLINGTON NORTHERN SANTA FE CORPORATION (Pursuant to Section 151 of the General Corporation Law of the State of Delaware) BURLINGTON NORTHERN SANTA FE CORPORATION, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation: RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the "Board of Directors") by the provisions of the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), and pursuant to resolutions adopted by this Board of Directors on September 11, 1995, there hereby is created, out of the 25,000,000 shares of Preferred Stock, $0.01 par value, of the Corporation authorized in Article Fourth of the Certificate of Incorporation (the "Preferred Stock"), a series of the Preferred Stock consisting of 6,900,000 shares, which series shall have the following powers, designations, preferences, and relative, participating, optional, or other rights, and the following qualifications limitations, and restrictions (in addition to the powers, designations, preferences, and relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions, set forth in the Certificate of Incorporation which are applicable to preferred stock and/or to the Preferred Stock): SECTION 1. DESIGNATION OF AMOUNT. The shares of such series shall be designated as "6 1/4" Cumulative , Convertible Preferred Stock, Series A, $0.01 Par Value" (the "6 1/4% Preferred Stock"), and the authorized number of shares constituting such series shall be 6,900,000. The 6 1/4% Preferred Stock shall be $0.01 par value stock. SECTION 2. DIVIDENDS. (a) The holders of shares of the 6 1/4% Preferred Stock will be entitled to receive when, as, and if declared by the Board of Directors out of funds of the Corporation legally available therefor, cumulative cash dividends on the shares of the 6 1/4% Preferred Stock at the rate of $3.125 per annum per share of 6 1/4% Preferred Stock, AND NO MORE, payable in arrears in equal quarterly installments on January 1, April 1, July 1, and October 1 of each year, commencing on October 1, 1995. Such dividends shall be cumulative from the date of original issuance of any shares of the 6 1/4% Preferred Stock. Each such dividend shall be paid to the holders of record of the shares of the 6 1/4% Preferred Stock as they appear on the stock register of the Corporation on such record date, which shall be not more than 30 days nor less than 10 days preceding the dividend payment date thereof, as shall be fixed by the Board of Directors or a duly authorized committee thereof. If a holder converts a share or shares of the 6 1/4% Preferred Stock after the close of business on the record date for a dividend and before the opening of business on the payment date for such dividend (except for a share or shares called for redemption on a Redemption Date (as defined in Section 3(c) hereof) during the period from the close of business on any dividend payment record date to the close of business on the corresponding dividend payment date), then, pursuant to Section 6 hereof, the holder will be required to pay to the Corporation at the time of such conversion the amount of such dividend. (b) If dividends are not paid in full, or declared in full, and sums set apart for the payment thereof, upon the shares of the 6 1/4% Preferred Stock and shares of any other preferred stock ranking on a parity as to dividends with the 6 1/4% Preferred Stock, all dividends declared upon shares of the 6 1/4% Preferred Stock, and of any other preferred stock ranking on a parity as to dividends, shall be paid or declared pro rata so that in all cases the amount of dividends paid or declared per share on the 6 1/4% Preferred Stock, and such other preferred stock, shall bear to each other the same ratio that accumulated dividends per share, including dividends accrued or in arrears, if any, on the shares of the 6 1/4% Preferred Stock, and such other preferred stock, bear to each other. Except as provided in the preceding sentence, unless full cumulative dividends on the shares of the 6 1/4% Preferred Stock have been paid or declared in full and sums set aside for the payment thereof, no dividends (other than dividends in shares of, or options, warrants, or rights to subscribe for or purchase shares of the Common Stock (as hereinafter defined) or in shares of any other capital stock of the Corporation ranking junior to the 6 1/4% Preferred Stock as to dividends) shall be paid or declared and set aside for payment or other distribution made upon the Corporation's Common Stock, $0.01 par value (the "Common Stock"), or, except as provided above, on any other capital stock of the Corporation ranking junior to or on a parity with the 6 1/4% Preferred Stock as to dividends, nor shall any shares of the Common Stock or shares of any other capital stock of the Corporation ranking junior to or on a parity with the 6 1/4% Preferred Stock as to dividends be redeemed, purchased, or otherwise acquired for any consideration (or any payment made to or available for a sinking fund for the redemption of any such shares) by the Corporation or any subsidiary of the Corporation (except by conversion into or exchange for shares of capital stock of the Corporation ranking junior to the 6 1/4% Preferred Stock as to dividends). Holders of shares of the 6 1/4% Preferred Stock shall not be entitled to any dividends, whether payable in cash, property, or shares of capital stock, in excess of full accrued and cumulative dividends as herein provided. No interest or sum of money in lieu of interest shall be payable in respect of any dividend payment or payments on the shares of the 6 1/4% Preferred Stock that may be in arrears. The terms "accrued dividends," "dividends accrued," and "dividends in arrears," whenever used herein with reference to shares of preferred stock shall be deemed to mean an amount which shall be equal to dividends thereon at the annual dividend rates per share for the respective series from the date or dates on which such dividends commence to accrue to the end of the then current quarterly dividend period for such preferred stock (or, in the case of redemption, to the date of redemption), less the amount of all dividends paid, or declared in full and sums set aside for the payment thereof, upon such shares of preferred stock. (c) Dividends payable on the shares of the 6 1/4% Preferred Stock for any period less than a full quarterly dividend period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in the period for which payable. Any dividend otherwise payable on a date which is not a business day will be paid on the next day which is a business day, but without interest. SECTION 3. OPTIONAL REDEMPTION. (a) The shares of the 6 1/4% Preferred Stock will be redeemable at the option of the Corporation by resolution of its Board of Directors, in whole, or, from time to time, in part, at any time on or after December 26, 1995, at the following redemption prices per share, if redeemed during the twelve-month period beginning November 24 of the year indicated below, plus, in each case, all dividends accrued and unpaid on the shares of the 6 1/4% Preferred Stock up to the date fixed for the redemption, upon giving notice as provided hereinbelow: Price -------52.1875 51.88 51.56 51.25 50.94 50.63 50.31 50 1,995 1,996 1,997 1,998 1,999 2,000 2,001 2002 and thereafter (b) If fewer than all of the outstanding shares of the 6 1/4% Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be determined pro rata or by lot or in such other manner and subject to such regulations as the Board of Directors in its sole discretion shall prescribe. (c) At least 30 days, but not more than 60 days, prior to the date fixed for the redemption of shares of the 6 1/4% Preferred Stock, a written notice shall be mailed in a postage prepaid envelope to each holder of record of the shares of 6 1/4% Preferred Stock to be redeemed, addressed to such holder at his post office address as shown on the records of the Corporation, notifying such holder of the election of the Corporation to redeem such shares, stating the date fixed for redemption thereof (the "Redemption Date"), and calling upon such holder to surrender to the Corporation, on the Redemption Date at the place designated in such notice, his certificate or certificates representing the number of shares specified in such notice of redemption. On or after the Redemption Date, each holder of shares of the 6 1/4% Preferred Stock to be redeemed shall present and surrender his certificate or certificates for such shares to the Corporation at the place designated in such notice and thereupon the redemption price of such shares shall be paid to or on the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be cancelled. In case less than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. From and after the Redemption Date (unless default shall be made by the Corporation in payment of the redemption price), all dividends on the shares of the 6 1/4% Preferred Stock designated for redemption in such notice shall cease to accrue and all rights of the holders thereof as stockholders of the Corporation, except the right to receive the redemption price of such shares (including all accrued and unpaid dividends up to the Redemption Date) upon the surrender of certificates representing the same, shall cease and terminate and such shares shall not thereafter be transferred (except with the consent of the Corporation) on the books of the Corporation, and such shares shall not be deemed to be outstanding for any purpose whatsoever. At its election, the Corporation, prior to the Redemption Date, may deposit the redemption price (including all accrued and unpaid dividends up to the Redemption Date) of shares of the 6 1/4% Preferred Stock so called for redemption in trust for the holders thereof with a bank or trust company (having a capital surplus and undivided profits aggregating not less than $50,000,000) in the Borough of Manhattan, City and State of New York, or in any other city in which the Corporation at the time shall maintain a transfer agency with respect to such shares, in which case the aforesaid notice to holders of shares of the 6 1/4% Preferred Stock to be redeemed shall state the date of such deposit, shall specify the office of such bank or trust company as the place of payment of the redemption price, and shall call upon such holders to surrender the certificates representing such shares at such place on or after the date fixed in such redemption notice (which shall not be later than the Redemption Date) against payment of the redemption price (including all accrued and unpaid dividends up to the Redemption Date). Any interest accrued on such funds shall be paid to the Corporation from time to time. Any moneys so deposited which shall remain unclaimed by the holders of such shares of the 6 1/4% Preferred Stock at the end of two years after the Redemption Date shall be returned by such bank or trust company to the Corporation. If a notice of redemption has been given pursuant to this Section 3 and any holder of shares of the 6 1/4% Preferred Stock shall, prior to the close of business on the last business day preceding the Redemption Date, give written notice to the Corporation pursuant to Section 6 below of the conversion of any or all of the shares to be redeemed held by such holder (accompanied by a certificate or certificates for such shares, duly endorsed or assigned to the Corporation, and any necessary transfer tax payment, as required by Section 6 below), then such redemption shall not become effective as to such shares to be converted, such conversion shall become effective as provided in Section 6 below, and any moneys set aside by the Corporation for the redemption of such shares of converted 6 1/4% Preferred Stock shall revert to the general funds of the Corporation. (d) Shares of the 6 1/4% Preferred Stock redeemed, repurchased, retired, or otherwise acquired by the Corporation (whether pursuant to the provisions of Section 3 or otherwise), or surrendered to the Corporation upon conversion, or which were not originally issued as part of a contemplated public offering of such 6 1/4% Preferred Stock, shall cease to be shares of the 6 1/4% Preferred Stock and shall thereupon be retired and may not be reissued as shares of the 6 1/4% Preferred Stock, but shall thereafter have the status of authorized but unissued shares of the Preferred Stock, without designation as to series, until such shares are once more designated as part of a particular series of the Preferred Stock by the Board of Directors. SECTION 4. VOTING RIGHTS. (a) Except as otherwise set forth hereafter, or by the laws of the State of Delaware specifically provided, the holders of shares of the 6 1/4% Preferred Stock shall not be entitled to vote on any question or matter, or in any proceedings, or to be represented at or to receive notice of any meeting of stockholders of the Corporation; provided, however, that the holders of the 6 1/4% Preferred Stock will have voting rights as provided in this Section 4 and in Section 8 hereof. When the holders of the 6 1/4% Preferred Stock vote on any matter as members of a class which does not include the holders of Common Stock, the holders of 6 1/4% Preferred Stock shall be entitled to an aggregate number of votes which is in the same proportion to the total number of class votes as the aggregate liquidation preference of the outstanding shares of 6 1/4% Preferred Stock bears to the aggregate liquidation preference of all shares of capital stock in the class; and each holder of 6 1/4% Preferred Stock shall be entitled to his or her proportionate share of the aggregate number of votes to which the holders of 6 1/4% Preferred Stock are entitled. (b) In the event that the Corporation shall have failed to declare and pay or set apart for payment in full the dividends accumulated on the outstanding shares of the 6 1/4% Preferred Stock for any six quarterly dividend payment periods, whether or not consecutive (a "Preferential Dividend Non-Payment"), the number of directors of the Corporation shall be increased by two and the holders of outstanding shares of the 6 1/4% Preferred Stock, voting together as a class with all other series of Preferred Stock of the Corporation ranking on a parity with the 6 1/4% Preferred Stock with respect to dividends or distribution of assets upon liquidation and then entitled to vote on the election of such additional directors, shall be entitled to elect, as a single class separately from the holders of any other class of capital stock of the Corporation, two additional directors until the full dividends accumulated on all outstanding shares of the 6 1/4% Preferred Stock have been declared and paid or set apart for payment. Upon the occurrence of a Preferential Dividend Non-Payment, the Board of Directors shall, within a reasonable period, call a special meeting of the holders of shares of the 6 1/4% Preferred Stock and all holders of other classes or series of preferred stock of the Corporation ranking on a parity with the 6 1/4% Preferred Stock with respect to the payment of dividends or distribution of assets upon liquidation who are then entitled to vote on the election of such additional directors for the purpose of electing the additional directors provided by the foregoing provisions. If and when all accumulated dividends on the shares of the 6 1/4% Preferred Stock have been declared and paid or set aside for payment in full, the holders of shares of the 6 1/4% Preferred Stock shall be divested of the special voting rights provided by this Section 4(b), subject to revesting in the event of each and every subsequent Preferential Dividend Non-Payment. Upon termination of such special voting rights attributable to all holders of shares of the 6 1/4% Preferred Stock and shares of any other class or series of preferred stock of the Corporation ranking on a parity with the 6 1/4% Preferred Stock with respect to payment of dividends or distribution of assets upon liquidation, the term of office of each Director elected by the holders of shares of the 6 1/4% Preferred Stock and such parity Preferred Stock (a "Preferred Stock Director") pursuant to such special voting rights shall forthwith terminate and the number of directors constituting the entire Board of Directors shall be reduced by the number of Preferred Stock Directors. Any Preferred Stock Director may be removed by, and shall not be removed otherwise than by, the vote of the holders of record of a majority of the outstanding shares of the 6 1/4% Preferred Stock and all other series of Preferred Stock ranking on a parity with the 6 1/4% Preferred Stock with respect to the payment of dividends or distribution of assets upon liquidation who were entitled to vote in such Preferred Stock Director's election, voting as a separate class, at a meeting called for such purpose. (c) So long as any shares of this Series are outstanding, the bylaws of the Corporation shall contain provisions ensuring that the number of Directors constituting the entire Board of Directors of the Corporation shall at all times be such that the exercise, by the holders of shares of the 6 1/4% Preferred Stock and the holders of parity Preferred Stock, of the right to elect Directors under the circumstances provided for in subclause (a) of this Section 4 will not contravene any provision of this Certificate of Incorporation restricting the number of Directors which may constitute the entire Board of Directors of the Corporation. (d) Directors elected pursuant to subclause (b) of this Section 4 shall serve until the earlier of (1) the next annual meeting of the stockholders of the Corporation and the election (by the holders of shares of the 6 1/4% Preferred Stock and the holders of parity Preferred Stock) and qualification of their respective successors, or (2) the date upon which all dividends in default on the shares of the 6 1/4% Preferred Stock and such other parity Preferred Stock shall have been paid in full. (e) So long as a Preferential Dividend Non-Payment shall continue, any vacancy in the office of a Preferred Stock Director may be filled by written consent of the Preferred Stock Director remaining in office or, if none remain in office, by vote of the holders of record of a majority of the outstanding shares of the 6 1/4% Preferred Stock and all other series of Preferred Stock ranking on a parity with the 6 1/4% Preferred Stock with respect to the payment of dividends or distribution of assets upon liquidation who are then entitled to vote in the election of such Preferred Stock Directors as provided above. As long as the Preferential Dividend Non-Payment shall continue, holders of shares of the 6 1/4% Preferred Stock shall not, as such stockholders, be entitled to vote on the election or removal of directors other than Preferred Stock Directors, but shall not be divested of any other voting rights provided to such stockholders by law with respect to any other matter to be acted upon by the stockholders of the Corporation. SECTION 5. LIQUIDATION RIGHTS. (a) In the event of any liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares or the 6 1/4% Preferred Stock shall be entitled to receive, in cash, out of the remaining net assets of the Corporation, the amount of Fifty Dollars ($50.00) for each share of the 6 1/4% Preferred Stock, plus an amount equal to all dividends accrued and unpaid on each such share up to the date fixed for distribution, AND NO MORE, before any distribution shall be made to the holders of shares of the Common Stock or any other capital stock of the Corporation ranking (as to any such distribution) junior to the 6 1/4% Preferred Stock. If, upon any liquidation, dissolution, or winding up of the Corporation, the assets distributable among the holders of shares of the 6 1/4% Preferred Stock and all other classes and series of preferred stock ranking (as to any such distribution) on a parity with the 6 1/4% Preferred Stock are insufficient to permit the payment in full to the holders of all such shares of all preferential amounts payable to all such holders, then the entire assets of the Corporation thus distributable shall be distributed ratably among the holders of the shares of the 6 1/4% Preferred Stock and any such other classes and series of preferred stock ranking (as to any such distribution) on a parity with the 6 1/4% Preferred Stock in proportion to the respective amounts that would be payable per share if such assets were sufficient to permit payment in full. (b) For purposes of this Section 5, a distribution of assets in any dissolution, winding up, or liquidation shall not include (i) any consolidation or merger of the Corporation with or into any other corporation or (ii) a sale or other disposition of all or substantially all of the Corporation's assets to another corporation. (c) After the payment of the full preferential amounts provided for herein to the holders of shares of the 6 1/4% Preferred Stock or funds necessary for such payment have been set aside in trust for the holders thereof, such holders shall be entitled to no other or further participation in the distribution of the assets of the Corporation. SECTION 6. CONVERSION. (a) Holders of shares of the 6 1/4% Preferred Stock shall have the right, exercisable at any time and from time to time, except in the case of shares of the 6 1/4% Preferred Stock called for redemption, to convert all or any such shares of the 6 1/4% Preferred Stock into such number of whole shares of the Common Stock as is equal to the aggregate liquidation preference amount of the shares of 6 1/4% Preferred Stock surrendered for conversion dividend by the conversion price of $47 per share of such Common Stock (equivalent to a conversion rate of 1.0638298 shares of the Common Stock for each share of the 6 1/4% Preferred Stock so converted), subject to adjustment as described below. In the case of shares of the 6 1/4% Preferred Stock called for redemption, conversion rights will expire at the close of business on the day preceding the date fixed for redemption. Notice of an optional redemption must be mailed not less than 30 days and not more than 60 days prior to the Redemption Date. Upon conversion, no adjustment or payment will be made on account of accrued or unpaid dividends, but if any holder surrenders a share of the 6 1/4% Preferred Stock for conversion after the close of business on the record date for the payment of a dividend and prior to the opening of business on the next dividend payment date, then, notwithstanding such conversion, the dividend payable on such dividend payment date will be paid to the registered holder of such share of the 6 1/4% Preferred Stock on such record date. In such event, such share of the 6 1/4% Preferred Stock, when surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding dividend payment date (except for a share or shares of the 6 1/4% Preferred Stock called for redemption on a Redemption Date (as defined in Section 3(c) hereof) during the period from the close of business on any dividend payment record date to the close of business on the corresponding dividend payment date), must be accompanied by payment of an amount equal to the dividend payable on such dividend payment date on the share so converted. A holder of shares of the 6 1/4% Preferred Stock on a dividend payment record date who (or whose transferee) converts such shares of 6 1/4% Preferred Stock on a dividend payment date will receive the dividend payable on such shares of 6 1/4% Preferred Stock by the Corporation on such dividend payment date, and the converting holder need not include payment in the amount of such dividend upon surrender of shares of the 6 1/4% Preferred Stock for conversion on such dividend payment date. (b) Any holder of a share or shares of the 6 1/4% Preferred Stock electing to convert such share or shares thereof shall deliver the certificate or certificates therefor to the principal office of any transfer agent for the Common Stock, with the form of notice of election to convert as the Corporation shall prescribe fully completed and duly executed and (if so required by the Corporation or any conversion agent) accompanied by instruments of transfer in form satisfactory to the Corporation and to any conversion agent, duly executed by the registered holder or his duly authorized attorney, and transfer taxes, stamps or funds therefor or evidence of payment thereof if required pursuant to Section 6(a) or 6(d) hereof. The conversion right with respect to any such shares shall be deemed to have been exercised at the date upon which the certificates therefor accompanied by such duly executed notice of election and instruments of transfer and such taxes, stamps, funds or evidence of payment shall have been so delivered, and the person or persons entitled to receive the shares of the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of the Common Stock upon said date. (c) No fractional shares of the Common Stock or scrip representing fractional shares shall be issued upon conversion of shares of the 6 1/4% Preferred Stock. If more than one share of the 6 1/4% Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of the Common Stock which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the 6 1/4% Preferred Stock so surrendered. Instead of any fractional shares of the Common Stock which would otherwise be issuable upon conversion of any shares of the 6 1/4% Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the closing price for the Common Stock on the last trading day preceding the date of conversion. The closing price for such day shall be the last reported sales price regular way or, in case no such reported sale takes place on such date, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the closing sale price of the Common Stock or in case no reported sale takes place, the average of the closing bid and asked prices, on NASDAQ or any comparable system. If the Common Stock is not quoted on NASDAQ or any comparable system, the Board of Directors shall in good faith determine the current market price on the basis of such quotation as it considers appropriate. (d) If a holder converts a share or shares of the 6 1/4% Preferred Stock, the Corporation shall pay any documentary, stamp or similar issue or transfer tax due on the issue of Common Stock upon the conversion. The holder, however, shall pay to the Corporation the amount of any tax which is due (or shall establish to the satisfaction of the Corporation payment thereof) if the shares are to be issued in a name other than the name of such holder and shall pay to the Corporation any amount required by the last sentence of Section 6(a) hereof. (e) The Corporation shall reserve and shall at all times have reserved out of its authorized but unissued shares of the Common Stock enough shares of the Common Stock to permit the conversion of the then outstanding shares of the 6 1/4% Preferred Stock. All shares of Common Stock which may be issued upon conversion of shares of the 6 1/4% Preferred Stock shall be validly issued, fully paid and nonassessable. In order that the Corporation may issue shares of the Common Stock upon conversion of shares of the 6 1/4% Preferred Stock, the Corporation will endeavor to comply with all applicable Federal and State securities laws and will endeavor to list such shares of the Common Stock to be issued upon conversion on each securities exchange on which the Common Stock is listed. (f) The conversion price in effect at any time shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall (1) pay a dividend or make a distribution in shares of the Common Stock to holders of any class of capital stock of the Corporation, (2) subdivide or reclassify the outstanding shares of the Common Stock into a greater number of shares of the Common Stock or (3) combine the outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, the conversion price immediately prior to such action shall be adjusted so that the holder of any shares of the 6 1/4% Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of the Common Stock which he would have owned immediately following such action had such shares of the 6 1/4% Preferred Stock been converted immediately prior thereto. An adjustment made pursuant to this Section 6 (f)(i) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In case the Corporation shall issue rights or warrants to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Common Stock (or securities convertible into shares of the Common Stock) at a price per share less than the current market price (as determined pursuant to Section 6(f)(iv)) of the Common Stock on such record date, the number of shares of the Common Stock into which each share of the 6 1/4% Preferred Stock shall be convertible shall be adjusted so that the same shall be equal to the number determined by multiplying the number of shares of the Common Stock into which such share of the 6 1/4% Preferred Stock was convertible immediately prior to such record date by a fraction of which the numerator shall be the number of shares of the Common Stock outstanding on such record date plus the number of additional shares of the Common Stock offered (or into which the convertible securities so offered are convertible), and of which the denominator shall be the number of shares of the Common Stock outstanding on such record date, plus the number of shares of the Common Stock which the aggregate offering price of the offered shares of the Common Stock (or the aggregate conversion price of the convertible securities so offered) would purchase at such current market price. Such adjustments shall become effective immediately after such record date. (iii) In case the Corporation shall distribute to all holders of the Common Stock evidences of indebtedness or other assets, including securities, but excluding those dividends, rights, warrants, and distributions referred to in Section 6(f)(i) and (ii), and dividends and distributions paid in cash out of profits or surplus, or shall distribute to all holders of the Common Stock rights or warrants to subscribe for securities (other than those referred to in Section 6(f)(ii), then, in each such case, the number of shares of the Common Stock into which each share of the 6 1/4% Preferred Stock shall be convertible shall be adjusted so that the same shall equal the number determined by multiplying the number of shares of the Common Stock into which such share of the 6 1/4% Preferred Stock was convertible immediately prior to the date of such distribution by a fraction of which the numerator shall be the current market price (determined as provided in Section 6(f)(iv) of the Common Stock on the record date mentioned below, and of which the denominator shall be such current market price of the Common Stock, less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value) of the portion of the assets so distributed or of such subscription rights or warrants applicable to one share of the Common Stock. Such adjustment shall become effective immediately after the record date for the determination of the holders of the Common Stock entitled to receive such distribution. Notwithstanding the foregoing, in the event that the Corporation shall distribute rights or warrants (other than those referred to in Section 6(f)(ii)) ("Rights") pro rata to holders of the Common Stock, the Corporation may, in lieu of making any adjustment pursuant to this Section 6(f)(iii), make proper provision so that each holder of a share of the 6 1/4% Preferred Stock who converts such share after the record date for such distribution and prior to the expiration or redemption of the Rights shall be entitled to receive upon such conversion, in addition to the shares of the Common Stock issuable upon such conversion (the "Conversion Shares"), a number of Rights to be determined as follows: (i) if such conversion occurs on or prior to the date for the distribution to the holders of Rights of separate certificates evidencing such Rights (the "Distribution Date"), the same number of Rights to which a holder of a number of shares of the Common Stock equal to the number of Conversion Shares is entitled at the time of such conversion in accordance with the terms and provisions of and applicable to the Rights; and (ii) if such conversion occurs after the Distribution Date, the same number of Rights to which a holder of the number of the Common Stock into which a share of the 6 1/4% Preferred Stock so converted was convertible immediately prior to the Distribution Date would have been entitled on the Distribution Date in accordance with the terms and provisions of and applicable to the Rights. (iv) The current market price per share of the Common Stock on any date shall be deemed to be the average of the daily closing prices for thirty consecutive trading days commencing forty-five trading days before the day in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such date, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the closing sale price of the Common Stock, or in case no reported sale takes place the average of the closing bid and asked prices, on NASDAQ or any comparable system, or if the Common Stock is not quoted on NASDAQ or any comparable system, the closing sale price or, in case no reported sale takes place, the average of the closing bid and asked prices, as furnished by any two members of the National Association of Securities Dealers, Inc. selected from time to time by the Corporation for that purpose. (v) In any case in which this Section 6 shall require that an adjustment be made immediately following a record date, the Corporation may elect to defer (but only until five business days following the mailing of the notice described in Section 6(j)) issuing to the holder of any share of the 6 1/4% Preferred Stock converted after such record date the shares of the Common Stock and other capital stock of the Corporation issuable upon such conversion over and above the shares of the Common Stock and other capital stock of the Corporation issuable upon such conversion only on the basis of the conversion price prior to adjustment; and, in lieu of the shares the issuance of which is so deferred, the Corporation shall issue or cause its transfer agents to issue due bills or other appropriate evidence of the right to receive such shares. (g) No adjustment in the conversion price shall be required until cumulative adjustments result in a concomitant change of 1% or more of the conversion price as existed prior to the last adjustment of the conversion price; provided, however, that any adjustments which by reason of this Section 6(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. No adjustment to the conversion price shall be made for cash dividends. (h) In the event that, as a result of an adjustment made pursuant to Section 6(f), the holder of any share of the 6 1/4% Preferred Stock thereafter surrendered for conversion shall become entitled to receive any shares of capital stock of the Corporation other than shares of the Common Stock, thereafter the number of such other shares so receivable upon conversion of any shares of the 6 1/4% Preferred Stock shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in this Section 6. (i) The Corporation may make such decreases in the conversion price, in addition to those required by Sections 6 (f)(i), (ii) and (iii), as it considers to be advisable in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the holders of the Common Stock. (j) Whenever the conversion price is adjusted, the Corporation shall promptly mail to all holders of record of shares of the 6 1/4% Preferred Stock a notice of the adjustment and shall cause to be prepared a certificate signed by a principal financial officer of the Corporation setting forth the adjusted conversion price and a brief statement of the facts requiring such adjustment and the computation thereof; such certificate shall forthwith be filed with each transfer agent for the shares of the 6 1/4% Preferred Stock. (k) In the event that: (1) the Corporation takes any action which would require an adjustment in the conversion price, (2) the Corporation consolidates or merges with, or transfers all or substantially all of its assets to, another corporation and stockholders of the Corporation must approve the transaction, or (3) there is a dissolution or liquidation of the Corporation, a holder of shares of the 6 1/4% Preferred Stock may wish to convert some or all of such shares into shares of the Common Stock prior to the record date for, or the effective date of, the transaction so that he may receive the rights, warrants, securities or assets which a holder of shares of the Common Stock on that date may receive. Therefore, the Corporation shall mail to holders of shares of the 6 1/4% Preferred Stock a notice stating the proposed record or effective date of the transaction, as the case may be. The Corporation shall mail the notice at least 10 days before such date; however, failure to mail such notice or any defect therein shall not affect the validity of any transaction referred to in clause (1), (2) or (3) of this Section 6(k). (l) If any of the following shall occur, namely: (i) any reclassification or change of outstanding shares of the Common Stock issuable upon conversion of shares of the 6 1/4% Preferred Stock (other than a change in par value, or as a result of a subdivision or combination), (ii) any consolidation or merger to which the Corporation is a party other than a merger in which the Corporation is the continuing corporation and which does not result in any reclassification of, or change (other than a change in name, or par value, or as a result of a subdivision or combination) in, outstanding shares of the Common Stock or (iii) any sale or conveyance of all or substantially all of the property or business of the Corporation as an entirety, then the Corporation, or such successor or purchasing corporation, as the case may be, shall, as a condition precedent to such reclassification, change, consolidation, merger, sale or conveyance, provide in its certificate of incorporation or other charter document that each share of the 6 1/4% Preferred Stock shall be convertible into the kind and amount of shares of capital stock and other securities and property (including cash) receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of shares of the Common Stock deliverable upon conversion of such share of the 6 1/4% Preferred Stock immediately prior to such reclassification, change, consolidation, merger, sale or conveyance. Such certificate of incorporation or other charter document shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 6. The foregoing, however, shall not in any way affect the right a holder of a share of the 6 1/4% Preferred Stock may otherwise have, pursuant to clause (ii) of the last sentence of Section 6(f)(iii), to receive Rights upon conversion of a share of the 6 1/4% Preferred Stock. If, in the case of any such consolidation, merger, sale or conveyance, the stock or other securities and property (including cash) receivable thereupon by a holder of the Common Stock includes shares of capital stock or other securities and property of a corporation other than the successor or purchasing corporation, as the case may be, in such consolidation, merger, sale or conveyance, then the certificate of incorporation or other charter document of such other corporation shall contain such additional provisions to protect the interests of the holders of shares of the 6 1/4% Preferred Stock as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The provision of this Section 6(l) shall similarly apply to successive consolidations, mergers, sales or conveyances. SECTION 7. RANKING. With respect to rights to receive dividends or distributions upon liquidation of the Corporation, the 6 1/4% Preferred Stock shall rank prior to the Common Stock and on a parity with any other Preferred Stock, unless the terms of such other Preferred Stock provide otherwise and, if applicable, the requirements of Section 8 hereof have been complied with. SECTION 8. LIMITATIONS. In addition to any other rights provided by applicable law, so long as any shares of the 6 1/4% Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote, or the written consent as provided by law, of the holders of at least two-thirds (2/3) of the outstanding shares of the 6 1/4% Preferred stock, voting as a single class: (a) create, authorize, or issue any class or series of, or rights to subscribe to or any security convertible into, capital stock ranking senior to the 6 1/4% Preferred Stock as to payment of dividends, in distribution of assets upon liquidation or in voting rights; or (b) amend, alter or appeal, whether by merger, consolidation or otherwise, any of the provisions of the Certificate of Incorporation (including this Certificate of Designation) that would change the preferences, rights or powers with respect to the 6 1/4% Preferred Stock so as to affect the 6 1/4% Preferred Stock adversely; but (except as otherwise required by applicable law) nothing herein contained shall require such a vote or consent (i) in connection with any increase in the total number of authorized shares of the Common Stock, or (ii) in connection with the authorization or increase of any class or series of shares ranking, as to dividends and distribution of assets upon liquidation, pari passu with or junior to the 6 1/4% Preferred Stock; provided, however, that no such vote or written consent of the holders of the shares of the 6 1/4% Preferred Stock shall be required if, at or prior to the time when the issuance of any such shares ranking prior to the 6q% Preferred Stock is to be made or any such change is to take effect, as the case may be, provision is made for the redemption of all the then outstanding shares of the 6q% Preferred Stock. SECTION 9. NO PREEMPTIVE RIGHTS. No holder of shares of the 6q% Preferred Stock will possess any preemptive rights to subscribe for or acquire any unissued shares of capital stock of the Corporation (whether now or hereafter authorized) or securities of the Corporation convertible into or carrying a right to subscribe to or acquire shares of capital stock of the Corporation. IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be signed by Douglas J. Babb its President, and attested by Jeffrey Moreland its Vice President and Secretary this September 11, 1995. BURLINGTON NORTHERN SANTA FE CORPORATION By: /s/ Douglas J. Babb Attested: By: /s/ Jeffrey Moreland EXHIBIT 11 BURLINGTON NORTHERN SANTA FE CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE EXHIBIT 11 BURLINGTON NORTHERN SANTA FE CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) Three Months Ended September 30, 1995 1994 ------- -------Net income - ----------------------------------------Primary: Net income Convertible preferred stock dividends Net income available for common stockholders Nine Months Ended September 30, 1995 1994 ------- -------- $ 139 (5) ------- $ 115 (5) -------- $ 377 (16) ------- $ 274 (16) -------- $ 134 ======= $ 110 ======== $ 361 ======= $ 258 ======== Fully diluted: Net income $ 139 ======= $ 115 ======== $ 377 ======= $ 274 ======== Weighted average number of shares - ----------------------------------------Primary: Average common shares outstanding Common share equivalents resulting from assumed exercise of stock options 94.9 89.3 91.3 89.1 2.0 ------96.9 ======= 94.9 0.9 -------90.2 ======== 89.2 1.4 ------92.7 ======= 91.3 1.1 -------90.2 ======== 89.1 Fully diluted: Average common shares outstanding Common shares resulting from assumed conversion of convertible preferred stock Common share equivalents resulting from assumed exercise of stock options assuming full dilution 7.3 7.4 7.3 7.4 2.1 ------104.3 ======= 0.9 -------97.5 ======== 1.9 ------100.5 ======= 1.1 -------97.6 ======== Earnings per common share - ----------------------------------------Primary Fully diluted $ 1.38 1.34 $ 1.22 1.18 $ 3.90 3.76 $ 2.86 2.81 Primary earnings per common share are computed by dividing net income, after deduction of preferred stock dividends, by the weighted average number of common shares and common share equivalents outstanding. Fully diluted earnings per common share are computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding. Common share equivalents are computed using the treasury stock method. An average market price is used to determine the number of common share equivalents for primary earnings per common share. The higher of the average or end-of-period market price is used to determine common share equivalents for fully diluted earnings per common share. In addition, the if-converted method is used for convertible preferred stock when computing fully diluted earnings per common share. The average number of common shares used for earnings per share calculations through September 30, 1995 reflect the effect of common shares issued in connection with the September 22, 1995 merger with SFP as outstanding the effect of common shares issued in connection with the September 22, 1995 merger with SFP as outstanding for only nine days. Future calculations will therefore reflect a significant increase in the number of outstanding common shares. Earnings per common share may not compute due to the level of rounding in this exhibit. EXHIBIT 12 BURLINGTON NORTHERN SANTA FE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIO AMOUNTS) (UNAUDITED) Three Months Ended September 30, 1995 1994 ------- ------Earnings: Pre-tax income Add: Interest and fixed charges, excluding capitalized interest Portion of rent under long-term operating leases representative of an interest factor Deduct: Undistributed equity in earnings of investments accounted for under the equity method $ 229 $ 188 $ 619 $ 464 Nine Months Ended September 30, 1995 1994 ------- ------- 52 40 145 118 30 25 85 77 (18) ------- ------- (18) ------- ------- Total earnings available for fixed charges $ 293 ======= $ 253 ======= $ 831 ======= $ 659 ======= Fixed charges: Interest and fixed charges Portion of rent under long-term operating leases representative of an interest factor $ 53 $ 40 $ 148 $ 119 30 ------$ 83 ======= 3.53x 25 ------$ 65 ======= 3.89x 85 ------$ 233 ======= 3.57x 77 ------$ 196 ======= 3.36x Total fixed charges Ratio of earnings to fixed charges ARTICLE 5 This schedule contains summary information from Burlington Northern Santa Fe Corporation's consolidated financial statements as of and for the nine month period ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000,000 PERIOD TYPE FISCAL YEAR END PERIOD END CASH 9 MOS DEC 31 1995 SEP 30 1995 62 EXHIBIT 12 BURLINGTON NORTHERN SANTA FE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIO AMOUNTS) (UNAUDITED) Three Months Ended September 30, 1995 1994 ------- ------Earnings: Pre-tax income Add: Interest and fixed charges, excluding capitalized interest Portion of rent under long-term operating leases representative of an interest factor Deduct: Undistributed equity in earnings of investments accounted for under the equity method $ 229 $ 188 $ 619 $ 464 Nine Months Ended September 30, 1995 1994 ------- ------- 52 40 145 118 30 25 85 77 (18) ------- ------- (18) ------- ------- Total earnings available for fixed charges $ 293 ======= $ 253 ======= $ 831 ======= $ 659 ======= Fixed charges: Interest and fixed charges Portion of rent under long-term operating leases representative of an interest factor $ 53 $ 40 $ 148 $ 119 30 ------$ 83 ======= 3.53x 25 ------$ 65 ======= 3.89x 85 ------$ 233 ======= 3.57x 77 ------$ 196 ======= 3.36x Total fixed charges Ratio of earnings to fixed charges ARTICLE 5 This schedule contains summary information from Burlington Northern Santa Fe Corporation's consolidated financial statements as of and for the nine month period ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000,000 PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES 9 MOS DEC 31 1995 SEP 30 1995 62 0 820 54 218 1414 20008 3989 18355 2286 ARTICLE 5 This schedule contains summary information from Burlington Northern Santa Fe Corporation's consolidated financial statements as of and for the nine month period ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000,000 PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED 1 2 9 MOS DEC 31 1995 SEP 30 1995 62 0 820 54 218 1414 20008 3989 18355 2286 4164 4251 2 0 336 2 771 18355 0 4091 0 3358 0 01 145 619 242 377 0 0 0 377 3.90 3.76 Provision for doubtful accounts is included in total costs. Includes the respective additional paid in capital.