Burlington Northern Inc/DE – ‘424B4’ on 10/14/94

As of:  Friday, 10/14/94   ·   Accession #:  950131-94-1557   ·   File #:  33-56007

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Prospectus   —   Rule 424(b)(4)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Prospectus                                           130    643K 

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                                                RULE NO. 424(b)(4)
                                                       REGISTRATION NO. 33-56007

BURLINGTON NORTHERN INC.
3800 CONTINENTAL PLAZA
777 MAIN STREET 
FORT WORTH, TEXAS 76102-5384

                                                                October 12, 1994

DEAR STOCKHOLDER:                                                               

You are cordially invited to attend a Special Meeting of Stockholders of    
Burlington Northern Inc. ("BNI") to be held at Burlington Northern Railroad     
Company, 3017 Lou Menk Drive, Fort Worth, Texas 76131-2815, on November 18,     
1994 at 10:00 a.m., Fort Worth time.                                            

At this important meeting you are being asked to consider and vote upon a   
proposed merger of BNI and Santa Fe Pacific Corporation ("SFP"), pursuant to    
which SFP will be merged with and into BNI and stockholders of SFP will become  
stockholders of BNI. In the merger, each share of SFP common stock will be      
converted into 0.27 shares of BNI common stock. BNI will be the surviving       
corporation in the merger and, upon completion of the merger, will change its   
name to Burlington Northern Santa Fe Corporation. Each share of BNI common      
stock will remain outstanding and will be unchanged as a result of the merger.  

 The merger is contingent upon, among other things, approval by the Interstate
Commerce Commission (the "ICC"). The merger would be consummated shortly after  
ICC approval is obtained and the other conditions to the merger are satisfied   
or waived.                                                                      

Two-thirds of the members of the Board of Directors of the merged company   
will be designated by BNI, and one-third of the members of the Board will be    
designated by SFP. I will serve as Chairman of the Board of the merged company, 
and Mr. Robert D. Krebs, Chairman, President and Chief Executive Officer of     
SFP, will serve as President and Chief Executive Officer.                       

Attached is a Joint Proxy Statement/Prospectus which will provide you with a
detailed description of the merger and other important information relating to  
BNI and SFP. Please give this information your careful attention and            
consideration.                                                                  

Your Board of Directors believes that the merger is fair to and in the best 
interests of BNI and its stockholders and will create a strong, new rail        
carrier with a diversified traffic base and excellent financial prospects. YOUR 
BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND RECOMMENDS THAT YOU  
VOTE FOR THE MERGER.                                                            

Approval of the merger requires the affirmative vote of a majority of the   
outstanding shares of BNI common stock.                                         

Whether or not you plan to attend the Special Meeting, PLEASE COMPLETE, SIGN
AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE,    
WHICH REQUIRES NO POSTAGE. Your prompt cooperation is greatly appreciated.      

If you are present at the Special Meeting, you may, of course, withdraw your
proxy and vote your shares in person.                                           

                     Very truly yours,

                    Gerald Grinstein
                Chairman and
                           Chief Executive Officer

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LOGO
SANTA FE PACIFIC CORPORATION
1700 EAST GOLF ROAD 
SCHAUMBURG, ILLINOIS 60173-5860 

                                                                October 12, 1994

DEAR STOCKHOLDER:                                                               

You are cordially invited to attend a Special Meeting of Stockholders of    
Santa Fe Pacific Corporation ("Santa Fe") to be held at the Hyatt Regency       
O'Hare, 9300 West Bryn Mawr Avenue, Rosemont, Illinois, on November 18, 1994 at 
3:00 p.m., Chicago time.                                                        

At this important meeting you are being asked to consider and vote upon a   
proposed merger of Santa Fe and Burlington Northern Inc. ("Burlington           
Northern"), pursuant to which Santa Fe will be merged with and into Burlington  
Northern and stockholders of Santa Fe will become stockholders of Burlington    
Northern. In the merger, each share of Santa Fe common stock will be converted  
into 0.27 shares of Burlington Northern common stock.                           

 The merger is contingent upon, among other things, approval by the Interstate
Commerce Commission (the "ICC"). The merger would be consummated shortly after  
ICC approval is obtained and other conditions to the merger are satisfied or    
waived.                                                                         

The merger will provide significant benefits to Santa Fe's stockholders.    
Those benefits are explained in the attached Joint Proxy Statement/Prospectus,  
which you should review carefully. As you will see in the Joint Proxy           
Statement/Prospectus, in their application to the ICC for approval of the       
merger, Burlington Northern and Santa Fe state that the merger is expected to   
result in an increase in operating income of approximately $560 million per     
year, most of which will be achieved in the first three years following the     
merger. The application further states that when these benefits are realized,   
this will result in combined operating income in excess of $1.5 billion per     
year and a combined operating ratio of 79 percent. There can be no assurance    
that these potential benefits will be realized or that the ICC will not impose  
conditions on the operations of the merged entity that will affect its ability  
to fully achieve any one or more of these benefits. Moreover, in order to       
achieve the increases in operating revenue mentioned above, it is expected that 
certain nonrecurring cash costs would be incurred, which would include          
relocation, employee separation and retraining and capital improvement costs.   
The ICC application states that those costs are approximately $350 million, a   
substantial portion of which will be incurred during the first year following   
consummation of the Burlington Northern--Santa Fe merger. A more detailed       
description of what Burlington Northern and Santa Fe have stated in the ICC     
application, as well as some important caveats about this information, is       
provided at pages 62 through 64 of the Joint Proxy Statement/Prospectus.        

As you are probably aware, Union Pacific Corporation ("Union Pacific") has  
made a competing proposal to acquire Santa Fe (the "Union Pacific Proposal").   
Santa Fe's Board of Directors has rejected the Union Pacific Proposal. The      
Board based its decision on, among other things, its conclusion that it is      
unlikely that a Union Pacific--Santa Fe combination would receive ICC approval  
given the anticompetitive effects that would be created by the extensive market 
overlaps between the two railroad systems and the dominant position of Union    
Pacific.                                                                        

The Board also perceived that the Union Pacific Proposal appears designed to
prevent the consummation of the Burlington Northern--Santa Fe merger, which     
would create a strong competitor to Union Pacific. If the Burlington Northern-- 
Santa Fe merger agreement is terminated and the Union Pacific Proposal cannot   
be consummated, Santa Fe would be left without a strategic combination which is 
required to protect and enhance stockholder value.                              

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Appendix                                                                        
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Description of Graphic Materials  
--------------------------------  

   On pages IFC 1 and IFG 1 of the paper format document there appears a map
of the central and western United States superimposed with the routes of both   
Burlington Northern, Inc. and Santa Fe Pacific Corporation. The map identifies  
cities on the routes and is titled, "COMBINED SYSTEM ROUTE MAP - BURLINGTON     
NORTHERN RAILROAD/THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY."           

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 Your Board of Directors believes that the Burlington Northern-Santa Fe merger
is fair to and in the best interests of Santa Fe and its stockholders, and that 
it will create a strong new rail carrier with a diversified traffic base and    
excellent financial prospects. YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED 
THE BURLINGTON NORTHERN-SANTA FE MERGER AND RECOMMENDS THAT YOU VOTE FOR THE    
BURLINGTON NORTHERN-SANTA FE MERGER.                                            

Whether or not you plan to attend the Special Meeting, PLEASE COMPLETE, SIGN
AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE,    
WHICH REQUIRES NO POSTAGE. Your prompt cooperation is greatly appreciated.      
                     Very truly yours,

        LOGO
                   Robert D. Krebs
                           Chairman, President and
                           Chief Executive Officer

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BURLINGTON NORTHERN INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD NOVEMBER 18, 1994

TO THE STOCKHOLDERS OF BURLINGTON NORTHERN INC.:                                

A Special Meeting of the Stockholders of Burlington Northern Inc. ("BNI")   
will be held at Burlington Northern Railroad Company, 3017 Lou Menk Drive, Fort 
Worth, Texas, 76131-2815, on November 18, 1994, at 10:00 a.m., Fort Worth time, 
for the purpose of considering and voting upon the following:                   

1. The approval and adoption of an Agreement and Plan of Merger dated as
of June 29, 1994 (the "Merger Agreement") between BNI and Santa Fe Pacific  
Corporation ("SFP"), a copy of which is set forth as Appendix A to the      
attached Joint Proxy Statement/Prospectus. Pursuant to the Merger           
Agreement, among other things, (i) SFP is to merge with and into BNI (the   
"Merger"), with BNI to be the surviving corporation in the Merger, (ii)     
each share of common stock, par value $1.00 per share, of SFP outstanding   
at the effective time of the Merger (other than shares held by SFP as       
treasury stock or held by BNI or its subsidiaries) will be converted into   
the right to receive 0.27 shares of common stock, no par value, of BNI and  
(iii) BNI will issue approximately 58,250,000 shares of its common stock to 
SFP stockholders, all as more fully set forth in the Merger Agreement and   
described in the attached Joint Proxy Statement/Prospectus.                 

 2. Such other business as may properly come before the Special Meeting or
any adjournment or postponement thereof.                                    

Only stockholders of record at the close of business on October 19, 1994 are
entitled to receive notice of and to vote at the Special Meeting or any         
adjournment or postponement thereof.                                            

 Whether or not you expect to attend the Special Meeting, please fill in, date
and sign the accompanying proxy card and mail it promptly in the enclosed       
prepaid return envelope. If you attend the Special Meeting, you may vote in     
person if you wish, even if you have previously returned your proxy card.       

                                      By Order of the Board of Directors

                   Edmund W. Burke
                             Executive Vice President,
                     Law and Secretary

Fort Worth, Texas                                                               
October 12, 1994                                                                

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SANTA FE PACIFIC CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD NOVEMBER 18, 1994

TO THE STOCKHOLDERS OF SANTA FE PACIFIC CORPORATION:                            

A Special Meeting of Stockholders of Santa Fe Pacific Corporation ("SFP")   
will be held at the Hyatt Regency O'Hare, 9300 West Bryn Mawr Avenue, Rosemont, 
Illinois on November 18, 1994, at 3:00 p.m., Chicago time, for the purpose of   
considering and voting upon the following:                                      

1. The approval and adoption of an Agreement and Plan of Merger dated as
of June 29, 1994 (the "Merger Agreement") between Burlington Northern Inc.  
("BNI") and SFP, a copy of which is set forth as Appendix A to the attached 
Joint Proxy Statement/Prospectus. Pursuant to the Merger Agreement, among   
other things, (i) SFP is to merge with and into BNI (the "Merger"), with    
BNI to be the surviving corporation in the Merger, (ii) each share of       
common stock, par value $1.00 per share, of SFP outstanding at the          
effective time of the Merger (other than shares held by SFP as treasury     
stock or held by BNI or its subsidiaries) will be converted into the right  
to receive 0.27 shares of common stock, no par value, of BNI and (iii) BNI  
will issue approximately 58,250,000 shares of its common stock to SFP       
stockholders, all as more fully set forth in the Merger Agreement and       
described in the attached Joint Proxy Statement/Prospectus.                 

 2. Such other business as may properly come before the Special Meeting or
any adjournment or postponement thereof.                                    

Only stockholders of record at the close of business on October 19, 1994 are
entitled to receive notice of and to vote at the Special Meeting or any         
adjournment or postponement thereof.                                            

 Whether or not you expect to attend the Special Meeting, please fill in, date
and sign the accompanying proxy card and mail it promptly in the enclosed       
prepaid return envelope. If you attend the Special Meeting, you may vote in     
person if you wish, even if you have previously returned your proxy card.       

                                       By Order of the Board of Directors.

        LOGO
                    Marsha K. Morgan
                       Corporate Secretary

Schaumburg, Illinois                                                            
October 12, 1994                                                                

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BURLINGTON NORTHERN INC.
AND 
SANTA FE PACIFIC CORPORATION
JOINT PROXY STATEMENT 
FOR SPECIAL MEETINGS OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 1994

BURLINGTON NORTHERN INC.
PROSPECTUS
COMMON STOCK

This Joint Proxy Statement/Prospectus relates to the proposed merger (the   
"Merger") of Santa Fe Pacific Corporation, a Delaware corporation ("SFP"), with 
and into Burlington Northern Inc., a Delaware corporation ("BNI"), pursuant to  
the Agreement and Plan of Merger dated as of June 29, 1994 (the "Merger         
Agreement") between BNI and SFP. If the proposed merger is consummated, each    
outstanding share of common stock, par value $1.00 per share, of SFP ("SFP      
Common Stock"), other than shares of SFP Common Stock held by SFP as treasury   
stock or held by BNI or its subsidiaries (all of which will be canceled), will  
be converted into the right to receive 0.27 shares of common stock, no par      
value, of BNI ("BNI Common Stock"). The consummation of the Merger is subject   
to various conditions, including, among other things, approval by the           
stockholders of each of BNI and SFP at their respective Special Meetings,       
described herein, and approval by the Interstate Commerce Commission (the       
"ICC"). This Joint Proxy Statement/Prospectus is being furnished to             
stockholders of each of BNI and SFP in connection with the solicitation of      
proxies to be used at the respective Special Meetings of BNI and SFP to be held 
for the purposes described herein.                                              

This Joint Proxy Statement/Prospectus also constitutes a prospectus of BNI  
with respect to up to 58,250,000 shares of BNI Common Stock issuable to SFP     
stockholders in the Merger. It is a condition to SFP's obligation to consummate 
the Merger that such shares of BNI Common Stock be listed on the New York Stock 
Exchange ("NYSE") at the effective time of the Merger. To the extent BNI Rights 
(as defined below) are then outstanding, each share of BNI Common Stock issued  
in the Merger will be accompanied by one BNI Right to purchase Junior Class A   
Preferred Stock of BNI on the terms and subject to the conditions set forth in  
the BNI Rights Agreement (as defined below). Pursuant to the BNI Rights         
Agreement, the BNI Rights will expire on July 24, 1996 unless they are earlier  
redeemed or the term of the BNI Rights Agreement is extended. For a description 
of the BNI Common Stock and the BNI Rights, see "Description of BNI Capital     
Stock" and "Comparison of Rights of Stockholders of BNI and SFP."               

All information herein concerning BNI has been furnished by BNI, and all    
information herein concerning SFP has been furnished by SFP. BNI has            
represented and warranted to SFP, and SFP has represented and warranted to BNI, 
that the particular information so furnished is true and complete.              

 This Joint Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to stockholders of each of BNI and SFP on or about October   
13, 1994.                                                                       

----------------  

THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE MERGER HAVE NOT BEEN     
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE  
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY     
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS JOINT  
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL    
OFFENSE.                                                                        

----------------  

The date of this Joint Proxy Statement/Prospectus is October 12, 1994.

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AVAILABLE INFORMATION 

Each of BNI and SFP is subject to the informational requirements of the     
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in        
accordance therewith files reports, proxy statements and other information with 
the Securities and Exchange Commission (the "Commission"). The reports, proxy   
statements and other information filed by each of BNI and SFP with the          
Commission can be inspected and copied at the public reference facilities       
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,  
D.C. 20549 and should be available at the Commission's Regional Offices at 7    
World Trade Center, Thirteenth Floor, New York, New York 10048 and 500 West     
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material    
may also be obtained from the Public Reference Section of the Commission at 450 
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,   
material filed by each of BNI and SFP may be inspected at the offices of the    
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and    
also at the offices of the Chicago Stock Exchange, Incorporated, 440 South      
LaSalle Street, One Financial Place, Chicago, Illinois 60605 and the Pacific    
Stock Exchange Incorporated, 301 Pine Street, San Francisco, California 94104.  

BNI has filed with the Commission a Registration Statement on Form S-4      
(together with any amendments thereto, the "Registration Statement") under the  
Securities Act of 1933, as amended (the "Securities Act"), relating to the      
shares of BNI Common Stock offered hereby. This Joint Proxy                     
Statement/Prospectus does not contain all of the information set forth in the   
Registration Statement and the exhibits thereto filed by BNI, certain portions  
which have been omitted pursuant to the rules and regulations of the Commission 
and to which portions reference is hereby made for further information with     
respect to BNI, SFP and the securities offered hereby. The Registration         
Statement and the exhibits thereto may be inspected without charge at the       
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,    
and copies may be obtained from the Commission at prescribed rates.             

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

The following documents previously filed with the Commission by BNI pursuant
to the Exchange Act are incorporated by reference in this Joint Proxy           
Statement/Prospectus:                                                           

1. BNI's Annual Report on Form 10-K for the year ended December 31, 1993    
(which incorporates by reference certain information from BNI's Proxy 
Statement relating to the 1994 Annual Meeting of Stockholders and     
includes Amendment No. 1 on Form 10-K/A dated October 5, 1994);       

2. BNI's Quarterly Reports on Form 10-Q for the quarters ended March 31 and 
June 30, 1994 (including Amendment No. 1 on Form 10-Q/A each dated    
October 5, 1994, respectively);                                       

3. BNI's Current Reports on Form 8-K dated June 29, 1994 and October 6,     
1994; and                                                             

4. BNI's Registration Statement on Form 8-A dated July 15, 1986.            

The following documents previously filed with the Commission by SFP pursuant
to the Exchange Act are incorporated by reference in this Joint Proxy           
Statement/Prospectus:                                                           

1. SFP's Annual Report on Form 10-K for the year ended December 31, 1993    
(which incorporates by reference certain information from SFP's Proxy 
Statement relating to the 1994 Annual Meeting of Stockholders and     
includes both Amendment No. 1 and Amendment No. 2 on Form 10-K/A dated
June 29, 1994 and October 5, 1994, respectively);                     

2. SFP's Quarterly Reports on Form 10-Q for the quarters ended March 31 and 
June 30, 1994 (including Amendment No. 1 thereto on Form 10-Q/A each  
dated October 5, 1994, respectively);                                 

3. SFP's Current Reports on Form 8-K dated June 29, 1994 (including         
Amendment No. 1 thereto on Form 8-K/A dated July 29, 1994), August 3, 
1994 (including Amendment No. 1 thereto on Form 8-K/A dated October 5,
1994) and October 5, 1994; and                                        

4. SFP's Registration Statement on Form 8-B filed with the Commission on    
November 29, 1983 (Item 4 of which incorporates by reference the      
description of the SFP Common Stock as set forth under the sections   
"Comparison of Certain Provisions of Certificates of Incorporation and
By-Laws of SFSP, Santa Fe and Southern Pacific" and "Description of   
  Common Stock of SFSP" in the Joint Proxy Statement-Prospectus of SFP and
Southern Pacific Corporation dated November 10, 1983).                

----------------  

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All documents filed by BNI and SFP pursuant to Sections 13(a), 13(c), 14 or 
15(d) of the Exchange Act after the date of this Joint Proxy                    
Statement/Prospectus and prior to the date of the Special Meetings of the       
stockholders of BNI and SFP shall be deemed to be incorporated by reference in  
this Joint Proxy Statement/Prospectus and to be a part hereof from the dates of 
filing such documents or reports. Any statement contained herein or in a        
document incorporated or deemed to be incorporated by reference herein shall be 
deemed to be modified or superseded for purposes of this Joint Proxy            
Statement/Prospectus to the extent that a statement contained herein or in any  
other subsequently filed document which is also incorporated or deemed to be    
incorporated herein modifies or supersedes such statement. Any such statement   
so modified or superseded shall not be deemed, except as so modified or         
superseded, to constitute a part of this Joint Proxy Statement/Prospectus.      

----------------  

THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE   
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER    
THAN CERTAIN EXHIBITS TO DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY        
INCORPORATED BY REFERENCE) ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM A 
COPY OF THIS JOINT PROXY STATEMENT/PROSPECTUS HAS BEEN DELIVERED UPON WRITTEN   
OR ORAL REQUEST, IN THE CASE OF BNI DOCUMENTS, TO BURLINGTON NORTHERN INC.,     
3800 CONTINENTAL PLAZA, 777 MAIN STREET, FORT WORTH, TEXAS 76102-5384,          
ATTENTION: CORPORATE SECRETARY, TELEPHONE NUMBER (817) 333-7951, AND, IN THE    
CASE OF SFP DOCUMENTS, TO SANTA FE PACIFIC CORPORATION, 1700 EAST GOLF ROAD,    
SCHAUMBURG, ILLINOIS 60173-5860, ATTENTION: CORPORATE SECRETARY, TELEPHONE      
NUMBER (708) 995-6000. IN ORDER TO ENSURE DELIVERY PRIOR TO THE SPECIAL         
MEETINGS, REQUESTS SHOULD BE RECEIVED BY NOVEMBER 9, 1994.                      

----------------  

 NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS IN CONNECTION WITH THE   
OFFERING AND THE SOLICITATIONS MADE HEREBY AND, IF GIVEN OR MADE, SUCH          
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED 
BY BNI OR SFP. THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN     
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES, OR    
THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO  
WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE         
DELIVERY OF THIS JOINT PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THESE 
SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY INFERENCE  
THAT THERE HAS NOT BEEN ANY CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN    
THE AFFAIRS OF EITHER BNI OR SFP SINCE THE DATE HEREOF.                         

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TABLE OF CONTENTS 

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                                                                           PAGE
                                                                           ----
                                                                               
AVAILABLE INFORMATION.....................................................   2 
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...........................   2 
SUMMARY...................................................................   6 
  The Parties.............................................................   6 
    Burlington Northern Inc...............................................   6 
    Santa Fe Pacific Corporation..........................................   6 
    Change of Name........................................................   6 
  The Special Meetings and Votes Required.................................   6 
    Time, Date and Place..................................................   6 
    Matters to be Considered at the Special Meetings......................   6 
    Required Vote.........................................................   7 
    Recommendations of the Boards of Directors............................   7 
    Opinions of Financial Advisors........................................   7 
    Record Date; Shares Outstanding and Entitled to Vote..................   7 
    Security Ownership of Management......................................   8 
  The Merger..............................................................   8 
    General...............................................................   8 
    Effect on SFP Stockholders............................................   8 
    Effect on BNI Stockholders............................................   8 
    ICC Approval; Effective Time..........................................   8 
    Benefits of Merger Described in ICC Application.......................   9 
    Conditions to the Merger; Termination.................................   9 
    Board of Directors after the Merger...................................   9 
    Interests of Certain Persons in the Merger; Management after the           
     Merger...............................................................   9 
    No Appraisal Rights...................................................   9 
    NYSE Listing..........................................................  10 
    Accounting Treatment..................................................  10 
    Tax Consequences......................................................  10 
    SFP Stock Options.....................................................  10 
    Recent Developments...................................................  10 
  Market Prices...........................................................  13 
  Selected Historical Financial Data......................................  14 
  Unaudited Selected Pro Forma Financial Data.............................  18 
  Unaudited Comparative Per Share Data....................................  19 
INTRODUCTION..............................................................  20 
THE COMPANIES.............................................................  20 
  Burlington Northern Inc.................................................  20 
  Santa Fe Pacific Corporation............................................  21 
THE SPECIAL MEETINGS......................................................  22 
  Purpose of the BNI and SFP Special Meetings.............................  22 
  Date, Place and Time....................................................  22 
  Record Dates............................................................  22 
  Required Vote...........................................................  22 
  Voting and Revocation of Proxies........................................  23 
  Solicitation of Proxies.................................................  23 
THE MERGER................................................................  23 
  Background of the Merger................................................  23 
  Factors for Consideration of the Merger.................................  25 
  Recommendations of the Boards of Directors and Reasons for the Merger...  25 
  Opinions of Financial Advisors..........................................  26 
  Merger Consideration....................................................  34 
  Effective Time..........................................................  34 
  Conversion of Shares; Procedures for Exchange of Certificates;               
   Dividends; No Fractional Shares........................................  34 
  Name of Surviving Entity................................................  35 
  NYSE Listing............................................................  35 
  Expenses................................................................  35 
  Interests of Certain Persons in the Merger..............................  36 

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  Accounting Treatment....................................................   41 
  Certain Federal Income Tax Consequences.................................   41 
  Management and Director Stock Options...................................   42 
  No Appraisal Rights.....................................................   42 
RECENT DEVELOPMENTS.......................................................   43 
BOARD OF DIRECTORS AND MANAGEMENT AFTER THE MERGER........................   45 
THE MERGER AGREEMENT......................................................   45 
  The Merger..............................................................   45 
  Representations and Warranties..........................................   46 
  Covenants...............................................................   47 
    Conduct of Business Pending the Merger................................   47 
    Stockholder Meetings..................................................   48 
    Access to Information.................................................   48 
    Notice of Certain Events..............................................   48 
    Tax Matters...........................................................   48 
    No Solicitations......................................................   49 
    Additional SFP Covenants..............................................   49 
    Additional BNI Covenants..............................................   49 
    Joint Covenants of SFP and BNI........................................   50 
  Conditions to the Consummation of the Merger............................   50 
  Termination.............................................................   51 
  Survival of Representations and Warranties..............................   52 
  Amendments; No Waivers..................................................   52 
  Expenses................................................................   52 
  Governing Law...........................................................   52 
  Jurisdiction............................................................   52 
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS.........................   53 
OTHER MATTERS.............................................................   61 
  ICC Approval............................................................   61 
  Other Regulatory Approvals..............................................   62 
  Additional Financial Considerations.....................................   62 
  Acceleration of Certain Debt Obligations of SFP.........................   64 
  The Gold Spinoff........................................................   64 
  Certain Pending Litigation..............................................   64 
DESCRIPTION OF BNI CAPITAL STOCK..........................................   66 
  BNI Common Stock........................................................   66 
  6 1/4% Convertible Preferred Stock......................................   66 
  Additional Classes of Preferred Stock...................................   68 
  BNI Rights; Junior Class A Preferred Stock..............................   68 
COMPARISON OF RIGHTS OF STOCKHOLDERS OF BNI AND SFP.......................   68 
  Board of Directors......................................................   69 
  Special Meetings of Stockholders........................................   69 
  No Stockholder Action by Written Consent................................   70 
  Advance Notice Provisions for Stockholder Proposals.....................   70 
  Vote Required for Certain Business Combinations.........................   70 
  Indemnification of Directors and Officers...............................   71 
  Rights Plans............................................................   72 
EXPERTS...................................................................   75 
LEGAL MATTERS.............................................................   75 
OTHER BUSINESS AT THE SPECIAL MEETINGS; STOCKHOLDER PROPOSALS.............   75 
APPENDIX A--AGREEMENT AND PLAN OF MERGER..................................  A-1 
APPENDIX B--LETTER AGREEMENT BETWEEN BURLINGTON NORTHERN INC. AND SANTA FE      
 PACIFIC CORPORATION......................................................  B-1 
APPENDIX C--OPINION OF LAZARD FRERES & CO.................................  C-1 
APPENDIX D--OPINION OF GOLDMAN, SACHS & CO................................  D-1 

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SUMMARY 

 The following is a summary of certain information contained elsewhere in this
Joint Proxy Statement/Prospectus. This summary is qualified in its entirety by  
reference to the more detailed information contained elsewhere in this Joint    
Proxy Statement/Prospectus, the Appendices hereto and the documents referred to 
herein. Stockholders are urged to review carefully this Joint Proxy             
Statement/Prospectus, the Merger Agreement attached as Appendix A and the other 
appendices attached hereto.                                                     

THE PARTIES                                                                     

Burlington Northern        Burlington Northern Inc., a Delaware corporation   
Inc.....................    ("BNI"), is a holding company primarily engaged in
                           the rail transportation business. BNI's principal
                           subsidiary, Burlington Northern Railroad Company,
                            operates the largest railroad system in the United
                       States based on miles of road and second main
                         track, with approximately 24,500 total miles at
                       December 31, 1993, covering 25 states and two
                  Canadian provinces. See "The Companies--
   Burlington Northern Inc."

Santa Fe Pacific           Santa Fe Pacific Corporation, a Delaware           
Corporation.............    corporation ("SFP"), is a holding company         
                          primarily engaged in (i) rail transportation and
                        (ii) operation of a refined petroleum products
                            pipeline system. SFP's equity interest in Santa Fe
                   Pacific Gold Corporation ("SFP Gold") was
                            distributed to SFP's stockholders on September 30,
                          1994 (the "Gold Spinoff"). Primarily through its
                       subsidiary, The Atchison, Topeka and Santa Fe
                        Railway Company, SFP operates a rail system of
                           approximately 8,500 total miles (excluding, among
                          other things, second main track) at December 31,
                            1993, covering twelve states. See "The Companies--
        Santa Fe Pacific Corporation."

Change of Name..........   Upon consummation of the Merger (as defined below),
                         BNI will change its name to Burlington Northern
Santa Fe Corporation. 

THE SPECIAL MEETINGS AND                                                        
VOTES REQUIRED                                                                

Time, Date and Place....   A Special Meeting (the "BNI Special Meeting") of   
                        stockholders of BNI will be held at Burlington
                         Northern Railroad Company, 3017 Lou Menk Drive,
                           Fort Worth, Texas 76131-2815 on November 18, 1994
         at 10:00 a.m., Fort Worth time.

                        A Special Meeting (the "SFP Special Meeting") of
                       stockholders of SFP will be held at the Hyatt
                     Regency O'Hare, 9300 West Bryn Mawr Avenue,
                          Rosemont, Illinois, on November 18, 1994 at 3:00
p.m., Chicago time.   

Matters to be                                                                 
Considered at the                                                           
Special Meetings.......                                                     
                At the BNI and SFP Special Meetings, the
                            stockholders of BNI and SFP, respectively, will be
                       asked to consider and vote upon a proposal to
                           approve and adopt an Agreement and Plan of Merger
                            dated as of June 29, 1994 (the "Merger Agreement")
                         between BNI and SFP providing for the merger of
                      SFP with and into BNI (the "Merger") and the
                           issuance by BNI of its common stock, no par value
                          (the "BNI Common Stock"), in connection with the
Merger.               

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Required Vote...........   The approval and adoption of the Merger Agreement  
                           require the affirmative vote of a majority of the
                 outstanding shares of BNI Common Stock.

                         The approval and adoption of the Merger Agreement
                           require the affirmative vote of a majority of the
                       outstanding shares of common stock, par value
                           $1.00 per share, of SFP (the "SFP Common Stock").
                    See "The Special Meetings--Required Vote."

Recommendations of the                                                        
Boards of Directors....                                                     
                           The Boards of Directors of BNI and SFP believe that
                        the terms of the Merger are fair to and in the
                            best interest of their respective stockholders and
                          each has, by unanimous vote, approved the Merger
                            Agreement and each unanimously recommends that its
                      stockholders vote FOR approval of the Merger
                      Agreement. Each of the BNI and SFP Boards of
                        Directors believes that a BNI-SFP combination,
                    which will create a rail system with broad
                          geographic coverage, should, among other things,
                          provide shippers with efficient single-line rail
                          service, diversify each railroad's traffic base,
                         generate significant operating efficiencies and
                     create a financially strong, more effective
                         competitor. See "The Merger--Recommendations of
                     the Boards of Directors and Reasons for the
Merger."              

Opinions of Financial      Lazard Freres & Co. ("Lazard") has delivered its   
Advisors................    written opinion to the Board of Directors of BNI  
                       to the effect that, based upon and subject to
                          various considerations and assumptions set forth
                      therein and based upon such other matters as
                            Lazard considered relevant, the Exchange Ratio (as
                            defined below) is fair to the stockholders of BNI.

                  Goldman, Sachs & Co. ("Goldman Sachs") has
                       delivered its written opinion to the Board of
                         Directors of SFP to the effect that, based upon
                   and subject to various considerations and
                           assumptions set forth therein and based upon such
                   other matters as Goldman Sachs considered
                     relevant, the Exchange Ratio is fair to the
stockholders of SFP.  

                        For information on the assumptions made, matters
                            considered and limits of the reviews by Lazard and
                     Goldman Sachs, see "The Merger--Opinions of
                          Financial Advisors." Holders of BNI Common Stock
                        and SFP Common Stock are urged to, and should,
                           read in their entirety the opinions of Lazard and
                          Goldman Sachs dated the date of this Joint Proxy
                            Statement/Prospectus, copies of which are attached
                        hereto as Appendices C and D, respectively, to
                this Joint Proxy Statement/Prospectus.

Record Date; Shares                                                           
Outstanding and                                                             
 Entitled to Vote.......   The record date (the "Record Date") for each of the
                            BNI Special Meeting and the SFP Special Meeting is
                         October 19, 1994. As of October 10, 1994, there
                          were outstanding 89,224,101 shares of BNI Common
                           Stock and 186,996,400 shares of SFP Common Stock.
                           Only holders of record of BNI Common Stock on the

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                     Record Date are entitled to vote at the BNI
                        Special Meeting. Only holders of record of SFP
                         Common Stock on the Record Date are entitled to
          vote at the SFP Special Meeting.

Security Ownership of                                                         
Management.............                                                     
                       As of October 10, 1994, directors and executive
                   officers of BNI and their affiliates were
                        beneficial owners of an aggregate of 1,917,056
                           shares of BNI Common Stock (approximately 2.0% of
                           the shares of BNI Common Stock then outstanding).
                         As of October 10, 1994, directors and executive
                   officers of SFP and their affiliates were
                        beneficial owners of an aggregate of 2,572,978
                           shares of SFP Common Stock (approximately 1.4% of
                           the shares of SFP Common Stock then outstanding).

THE MERGER                                                                      

General.................   At the effective time of the Merger (the "Effective
                       Time"), SFP will be merged with and into BNI,
                        which will be the surviving corporation in the
Merger.               

Effect on SFP              At the Effective Time, each issued and outstanding 
Stockholders............    share of SFP Common Stock (other than shares of   
                           SFP Common Stock held by SFP as treasury stock or
                        shares held by BNI or its subsidiaries, all of
                            which will be canceled) will be converted into the
                          right to receive 0.27 shares of BNI Common Stock
                         (the "Exchange Ratio"), with cash being paid in
                           lieu of fractional shares of BNI Common Stock. To
                           the extent BNI Rights (as defined below) are then
                            outstanding, each share of BNI Common Stock issued
                           in the Merger will be accompanied by one right (a
                           "BNI Right") to purchase Junior Class A Preferred
                      Stock of BNI on the terms and subject to the
                           conditions of the Rights Agreement dated July 14,
                           1986 (the "Rights Agreement") between BNI and The
                         First National Bank of Boston, as Rights Agent.
                 The BNI Rights will be evidenced by the
                            certificate for the BNI Common Stock issued in the
                           Merger. Pursuant to the Rights Agreement, the BNI
                         Rights will expire on July 24, 1996 unless they
                            are earlier redeemed or the term of the BNI Rights
Agreement is extended.

Effect on BNI              At the Effective Time, each share of BNI Common    
Stockholders............    Stock then issued and outstanding will continue as
                          one share of BNI Common Stock and, to the extent
                    that BNI Rights are then outstanding, will
                      continue to be accompanied by one BNI Right.

ICC Approval; Effective    The approval of the Interstate Commerce Commission 
Time....................    (the "ICC") is required to consummate the Merger. 
                            Under existing law, the ICC is required to enter a
                          final order with respect to the Merger within 31
                           months after the application for such approval is
                          filed by BNI and SFP. On October 5, 1994 the ICC
                            served an order establishing a schedule that would
        result in a final ICC decision

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                within 535 days from the filing of the
                   application. The parties are filing their
                          application on October 13, 1994. There can be no
                          assurance that the ICC will issue a decision any
                           sooner than the 31 month period permitted the ICC
                            by law. In addition, if the decision of the ICC is
                      appealed to the courts, and if that decision
                         should be stayed by the ICC or the courts, more
                      time could elapse before the Merger could be
                           consummated. Accordingly, the actual consummation
                           of the Merger may not occur for two or more years
                           in the future. See "Other Matters--ICC Approval."

Benefits of Merger                                                            
Described in ICC                                                            
Application............   The application to the ICC filed by the parties   
                        describes certain estimates of the anticipated
                     benefits relating to the Merger. See "Other
                           Matters--Additional Financial Considerations" for
                     a discussion of the estimates, assumptions,
                           methods of calculation and caveats applied to the
ICC application.      

Conditions to the                                                             
Merger; Termination....                                                     
                        The obligations of BNI and SFP to consummate the
                   Merger are subject to various conditions,
                   including obtaining requisite stockholder
                 approvals, the approval of the ICC, the
                     termination or expiration of any applicable
                    waiting period under the Hart-Scott-Rodino
                         Antitrust Improvements Act of 1976, as amended,
                           the absence of any order or other legal restraint
                           or prohibition preventing the consummation of the
                     Merger, receipt of an opinion of counsel in
                            respect of certain Federal income tax consequences
                           of the Merger and compliance with the terms of an
                            Internal Revenue Service private letter ruling, as
                     supplemented, previously received by SFP in
           connection with the Gold Spinoff.

                       The Merger Agreement may be terminated, and the
                    Merger abandoned, at any time prior to the
                    Effective Time, whether or not stockholder
                     approvals have been obtained, (i) by mutual
                           consent of BNI and SFP, (ii) by either BNI or SFP
                           (a) if the Merger is not consummated on or before
                       December 31, 1997, (b) if any non- appealable
                          judgment, injunction, order or decree is entered
                           enjoining BNI or SFP from consummating the Merger
                          or (c) if the required stockholder approvals are
                          not obtained, and (iii) by BNI or SFP in certain
other situations.     

Board of Directors                                                            
after the Merger.......                                                     
                   The board of directors of the merged entity
                        initially will be constituted as follows: two-
                            thirds of the directors will be designated by BNI,
                           and one-third of the directors will be designated
by SFP.               

Interests of Certain                                                          
Persons in the Merger;                                                      
Management after the                                                        
Merger.................                                                     
                           Pursuant to a letter agreement between BNI and SFP,
                          attached hereto as Appendix B, Gerald Grinstein,
                            Chairman and Chief Executive Officer of BNI, is to
                          become Chairman of the merged entity, and Robert
                           D. Krebs, Chairman, President and Chief Executive
                          Officer of SFP, is to become President and Chief
                       Executive Officer of the merged entity. Other
                      senior officers of the merged entity will be
                            selected by the merged entity's board of directors
             based upon, among other things, the
                         recommendations of Mr. Grinstein and Mr. Krebs.

No Appraisal Rights.....                                                      
                         Under Delaware law, neither holders of BNI Common
                            Stock nor holders of SFP Common Stock are entitled
                            to appraisal rights in connection with the Merger.
                See "The Merger--No Appraisal Rights."

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NYSE Listing............   It is a condition to SFP's obligation to consummate
                           the Merger that the BNI Common Stock to be issued
                           to SFP stockholders in the Merger be approved for
                 listing on the New York Stock Exchange.

Accounting Treatment....   The Merger will be accounted for under the "pooling
                      of interests" method of accounting. See "The
        Merger--Accounting Treatment."

Tax Consequences........   Consummation of the Merger is conditioned upon     
                            receipt by SFP and BNI of an opinion of nationally
                       recognized tax counsel to the effect that the
                         Merger will be a tax-free reorganization within
                       the meaning of section 368(a) of the Internal
                           Revenue Code of 1986, as amended (the "Code"). If
                          the Merger constitutes a "reorganization" within
                          the meaning of the Code, no gain or loss will be
                         recognized by stockholders of SFP Common Stock,
                          except to the extent of cash received in lieu of
                        fractional shares of BNI Common Stock. All SFP
                       stockholders are urged to read the discussion
                       under "The Merger--Certain Federal Income Tax
                          Consequences" below and to consult their own tax
                       advisors as to the particular Federal, state,
                           local and foreign tax consequences to them of the
Merger.               

SFP Stock Options.......   At the Effective Time, each outstanding option to  
                           purchase shares of SFP Common Stock granted under
                           any employee stock option or compensation plan or
                          arrangement of SFP will be canceled and replaced
                            by an option (an "Adjusted BNI Option") to acquire
                       shares of BNI Common Stock. Each Adjusted BNI
                           Option will provide the option holder with rights
                        and benefits that are no less favorable to the
                       holder than were provided under the SFP stock
                      option for which the Adjusted BNI Option was
                      substituted. See "The Merger--Management and
  Director Stock Options."

RECENT DEVELOPMENTS 

On October 5, 1994, Mr. Drew Lewis, the Chairman and Chief Executive Officer
of Union Pacific Corporation ("UPC"), called Mr. Robert D. Krebs, the Chairman, 
President and Chief Executive Officer of SFP, and stated that UPC wished to     
acquire SFP and that Mr. Lewis wanted to meet with Mr. Krebs. Mr. Lewis further 
stated that he was going to call Mr. Gerald Grinstein, the Chairman and Chief   
Executive Officer of BNI, to request a meeting with him as well. Mr. Krebs told 
Mr. Lewis that SFP was already a party to a merger agreement, that it was       
unlikely that the ICC would permit a merger between SFP and UPC, and that       
therefore there was no reason to have a meeting. Mr. Lewis replied that UPC     
intended to make public a proposal if no meeting occurred and urged that a      
meeting be held. The two men then agreed that Mr. Krebs would consult his       
counsel. After doing so, Mr. Krebs called Mr. Lewis back and agreed to a        
meeting. During the conversations, Mr. Lewis told Mr. Krebs that UPC had looked 
at Southern Pacific and at SFP, and had decided that SFP was the company to     
break up. Mr. Lewis also stated that UPC would offer concessions to BNI to      
persuade it to acquiesce to UPC's proposal.                                     

Mr. Lewis then called Mr. Grinstein, stated that UPC wanted to acquire SFP  
and asked to see Mr. Grinstein. Mr. Grinstein declined to see Mr. Lewis.        

Mr. Lewis, Mr. Richard Davidson, President of UPC, Mr. Krebs, and Mr. Robert
A. Helman, SFP's counsel, had a meeting in the late afternoon of October 5. At  
the meeting, Mr. Helman stated that SFP is subject to a binding Merger          
Agreement and that it is unlikely that a UPC-SFP combination would be approved  
by the ICC. Mr. Helman also stated that UPC had misled SFP because, earlier in  
1994, when Mr. Krebs returned an unsolicited telephone call from Mr. Lewis, Mr. 
Lewis had stated that if SFP made its deal with BNI, UPC would not oppose it.   

Mr. Lewis denied having made that statement, contending that what he had    
stated was that UPC would not oppose a BNI-SFP merger subject to an evaluation  
of its merits. Mr. Lewis then placed a written proposal (the "UPC Proposal") on 
Mr. Krebs' desk and, as Mr. Lewis was leaving, stated that Mr. Krebs was making 

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a mistake, that UPC would offer more--$20 per share--than the amount provided   
for in the UPC Proposal, and that UPC would consider using a voting trust for   
the proposed transaction. Mr. Lewis and Mr. Davidson then left SFP's            
headquarters, where the meeting had taken place.                                

In the UPC Proposal, UPC proposed to acquire SFP in a tax-free merger in    
which SFP stockholders would receive, for each share of SFP Common Stock, .344  
of a share of UPC common stock, having a value of $18 per SFP share based on    
the closing price on October 4, 1994 of UPC common stock. On October 10, 1994,  
.344 of a share of UPC common stock (based on the closing price on that date)   
had a value of $17.24.                                                          

The transaction contemplated in the UPC Proposal is subject to ICC approval,
the termination of the BNI-SFP Merger Agreement, execution of a definitive      
agreement and the approval of the Board of Directors and the stockholders of    
both SFP and UPC. The UPC Proposal is also conditioned upon the satisfactory    
completion of a due diligence review of SFP. UPC offered to facilitate an SFP   
due diligence review of UPC.                                                    

The UPC Proposal stated that UPC is prepared to grant conditions to Southern
Pacific, BNI or other railroads, including access to points that would          
otherwise change from two serving railroads to one, rights to handle service-   
sensitive business moving between California, Chicago and the Midwest, and      
access to the Kansas and Oklahoma grain markets. The UPC Proposal further       
stated that UPC envisions that certain members of the SFP Board would be        
invited to serve on UPC's Board. The UPC Proposal further stated that UPC was   
prepared to immediately commence negotiation of a definitive merger agreement   
containing mutually agreeable terms and conditions.                             

The SFP Board met to consider the UPC Proposal on October 5 and October 6,  
1994. At those meetings, counsel for SFP explained that SFP's directors did not 
have the right to terminate the Merger Agreement in response to the UPC         
Proposal but did have the right, to the extent required by their fiduciary      
duties under applicable law if so advised by outside counsel, (i) to engage in  
negotiations or provide any confidential information or data to UPC relating to 
the UPC Proposal and (ii) to withdraw, modify or amend their recommendation     
that SFP's stockholders approve the Merger Agreement and the Merger.            

Mr. Krebs reminded the SFP Board of his description at prior Board meetings 
of two telephone calls he had had with Mr. Lewis earlier in the year. The       
first, on June 7, 1994, occurred when Mr. Krebs returned Mr. Lewis' unsolicited 
telephone call made on June 6. Mr. Lewis stated on June 7 that if SFP made its  
deal with BNI, UPC would not oppose it and in fact would welcome it because UPC 
liked good competitors. Mr. Lewis went on to say that UPC also would not object 
if SFP entered into a transaction to acquire Kansas City Southern Railway       
Company. The second telephone call was shortly after the BNI-SFP Merger         
Agreement was announced on June 29, 1994. Mr. Krebs called Mr. Lewis as a       
courtesy, and Mr. Lewis stated that he had seen the press release and that UPC  
would study the matter.                                                         

After discussions at both meetings and consultation with its financial and  
legal advisors, the SFP Board unanimously decided to reject the UPC Proposal    
and reaffirm its recommendation to SFP's stockholders that they approve the     
Merger Agreement and the Merger. In reaching its decision, the SFP Board        
considered the following factors:                                               

1. Likelihood of ICC Approval. The SFP Board concluded that it is unlikely  
that a UPC-SFP combination would receive ICC approval. The SFP Board based its  
conclusion in part on its own knowledge, and the view of management, that the   
extensive market overlaps between the two railroad systems and the dominant     
position of UPC would make such a combination anticompetitive. The SFP Board    
also based its conclusion in part on advice of counsel that, given the          
anticompetitive effects of a UPC-SFP combination, the ICC was unlikely to       
approve such a combination absent concessions by UPC that would make the        
transaction untenable                                                           

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and the ICC might well not approve it regardless of any concessions made by     
UPC. The SFP Board noted that in the past it had, as part of management's       
strategic reviews with the SFP Board, discussed the possibility of a UPC-SFP    
combination, but had not pursued this idea because of the improbability of      
obtaining ICC approval, given the adverse effect on competition that such a     
combination would have.                                                         

2. Perception of UPC Proposal. The SFP Board perceived the UPC Proposal as  
apparently designed to prevent the consummation of the BNI-SFP Merger and the   
creation of a strong competitor to UPC. The SFP Board based this perception on  
its conclusion that ICC approval of a UPC-SFP combination is unlikely and on    
the timing of the UPC Proposal. The SFP Board also took account of the          
inconsistency between UPC's present position and Mr. Lewis' earlier statement   
to Mr. Krebs that UPC would not oppose a BNI-SFP Merger.                        

3. Opinion of Financial Advisor. Goldman Sachs advised the SFP Board that   
under the circumstances described to the SFP Board by SFP's management and      
counsel, Goldman Sachs reaffirmed its opinion with respect to the Exchange      
Ratio contemplated by the BNI-SFP Merger. See the full text of the opinion of   
Goldman Sachs dated the date hereof, which sets forth certain assumptions made  
by Goldman Sachs, including the assumption that under the foregoing             
circumstances Goldman Sachs, in analyzing the Exchange Ratio, need not take     
into account the consideration which might be received under the UPC Proposal.  

4. Binding Agreement. The SFP Board noted that SFP has no right to terminate
the Merger Agreement and that it is important to avoid breaches of the Merger   
Agreement, particularly in light of the SFP Board's belief that consummation of 
the BNI-SFP Merger is in the best interest of SFP's stockholders because (1)    
the BNI-SFP Merger has significant benefits for SFP stockholders and (2) if the 
Merger Agreement is terminated and if the UPC Proposal cannot be consummated,   
SFP would be left without a strategic combination which is required to protect  
and enhance shareholder value.                                                  

The SFP Board also discussed the significance of Mr. Lewis' remarks to Mr.  
Krebs regarding the possibility of UPC offering a $20 per share price and       
establishing a voting trust. The SFP Board noted that Mr. Lewis' statements     
were inconsistent with the UPC Proposal and UPC's press release, which was      
issued after Mr. Lewis met with Mr. Krebs. However, the SFP Board decided,      
after being advised by outside counsel that its fiduciary duties under          
applicable law required such a step, that SFP should communicate to UPC that,   
if UPC were to make a proposal at a fair price and with an adequate provision   
for a voting trust that would substantially eliminate the regulatory risk for   
SFP stockholders, the SFP Board would consider that proposal in light of its    
fiduciary duties.                                                               

On October 6, 1994, this information, along with the SFP Board's decision to
reject the UPC Proposal, was sent to UPC in a letter from Mr. Krebs to Mr.      
Lewis and in a press release issued by SFP. BNI was made aware of, and did not  
object to, the contents of the letter and press release before they were sent   
or issued.                                                                      

On October 11, 1994, in a letter addressed to Mr. Krebs, UPC expressed its  
dissatisfaction with the SFP Board's prompt rejection of the UPC Proposal. It   
emphasized the possible benefits to be attained in accepting the UPC Proposal,  
asked the SFP Board to consider UPC's analysis of ICC matters, and urged Mr.    
Krebs, along with his advisors, to meet with UPC representatives. UPC concluded 
its letter by stating that the proposed purchase price was considered by UPC to 
be a "fair price" but that UPC would be prepared to receive information from    
SFP that might justify a greater consideration. The SFP Board considered the    
October 11 letter, and decided to reaffirm its prior position but requested UPC 
to provide SFP with UPC's analysis of ICC matters.                              

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MARKET PRICES 

The BNI Common Stock and SFP Common Stock are both listed and traded on the 
New York Stock Exchange ("NYSE"), the Chicago Stock Exchange ("CSE") and the    
Pacific Stock Exchange. The following table sets forth the high and low closing 
prices per share of the BNI Common Stock and the SFP Common Stock as reported   
in The Wall Street Journal for the periods indicated.                           

                                                                [Download Table]

                                                   BNI COMMON      SFP COMMON   
                                                      STOCK           STOCK     
                                                 --------------- ---------------
                                                  HIGH     LOW    HIGH     LOW  
                                                 ------- ------- ------- -------
                                                                                
1992                                                                            
 First Quarter.................................. $44 3/4 $33 1/8 $14 1/8 $11 1/8
 Second Quarter.................................  47 1/4  36 1/8  13 3/8  11    
 Third Quarter..................................  39 5/8  33 1/2  12 7/8  10 7/8
 Fourth Quarter.................................  43 7/8  35 7/8  13 7/8  10 5/8
1993                                                                            
 First Quarter..................................  52      42 1/4  15 5/8  12 3/4
 Second Quarter.................................  58 5/8  50      18 3/8  14 1/2
 Third Quarter..................................  57 1/2  51 1/8  19 1/8  16 3/4
 Fourth Quarter.................................  58      48 3/4  22 1/2  18    
1994                                                                            
 First Quarter..................................  66      56 3/4  26 1/8  22 3/8
 Second Quarter.................................  60 1/8  52 1/2  24 1/4  20    
 Third Quarter..................................  53 5/8  48 1/4  23      18 1/2

On June 29, 1994, the last trading day before public announcement of        
execution of the Merger Agreement, the closing prices of BNI Common Stock and   
SFP Common Stock as reported in The Wall Street Journal were $53 1/2 per share  
and $20 3/8 per share, respectively.                                            

 SFP's gold operations have been conducted through SFP Gold. On June 23, 1994,
SFP Gold, previously a wholly owned subsidiary of SFP, sold to the public 19.2  
million newly issued shares of its common stock at a price of $14.00 per share. 
SFP Gold has been listed and traded on the NYSE and the CSE since June 16,      
1994. The high and low closing prices per share of SFP Gold common stock from   
June 16, 1994 through October 3, 1994 as reported in The Wall Street Journal    
were $17 7/8 per share and $13 1/2 per share, respectively, and the closing     
prices on June 29, 1994 and October 3, 1994 were $13 7/8 per share and $16 7/8  
per share, respectively. On June 29, 1994, the Board of Directors of SFP        
approved the Gold Spinoff, which was effected through the distribution on       
September 30, 1994 of approximately 0.60 of a share of common stock of SFP Gold 
for each share of SFP Common Stock held of record on September 12, 1994 (or one 
share of SFP Gold common stock for approximately each 1.67 shares of SFP Common 
Stock). SFP Common Stock traded both on a "Regular Way" and an "Ex-             
Distribution" (i.e., giving effect to the Gold Spinoff) basis from September 6  
through September 30, 1994.                                                     

On October 10, 1994, the closing prices of BNI Common Stock and SFP Common  
Stock as reported in The Wall Street Journal were $48 1/4 per share and $14 1/2 
per share, respectively.                                                        

BNI AND SFP STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR  
THE BNI COMMON STOCK AND THE SFP COMMON STOCK IN CONNECTION WITH VOTING THEIR   
SHARES.                                                                         

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SELECTED HISTORICAL FINANCIAL DATA

The following tables set forth selected historical financial data of BNI and
SFP for each of the last five years and selected unaudited historical financial 
data for the interim periods ended June 30, 1994 and 1993. The selected         
historical financial data of each of BNI and SFP have been derived from and     
should be read in conjunction with the annual audited consolidated financial    
statements of BNI or SFP, as the case may be, including the notes thereto, and  
the unaudited interim consolidated financial statements of BNI or SFP, as the   
case may be, including the notes thereto, which are incorporated by reference   
in this Joint Proxy Statement/Prospectus. See "Incorporation of Certain         
Documents by Reference." The BNI income statement data and per share data for   
the six months ended June 30, 1994 and 1993 and the balance sheet data at June  
30, 1994 include, in the opinion of BNI's management, all adjustments necessary 
to present fairly the information for such periods. Such adjustments consist    
only of normal recurring adjustments. The SFP income statement data and per     
share data for the six months ended June 30, 1994 and 1993 and the balance      
sheet data at June 30, 1994 include, in the opinion of SFP's management, all    
adjustments necessary to present fairly the information for such periods. Such  
adjustments consist only of normal recurring adjustments. The results for       
certain periods for which selected historical financial data are provided       
include the impact of various special items. The affected periods, together     
with a description of the nature and financial impact of such special items,    
are set forth after each table (per share amounts are net of tax). These        
historical data are not necessarily indicative of results to be expected after  
the Merger is consummated.                                                      

SELECTED HISTORICAL FINANCIAL DATA FOR BURLINGTON NORTHERN INC. 

                                                                [Download Table]

                            AT OR FOR SIX                                      
                            MONTHS ENDED                                       
                              JUNE 30,     AT OR FOR YEAR ENDED DECEMBER 31,   
                            -------------- ------------------------------------
                             1994    1993   1993   1992    1991    1990   1989 
                            ------  ------ ------ ------  ------  ------ ------
                              (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)     
                                                                               
INCOME STATEMENT DATA                                                          
  Revenues................. $2,402  $2,312 $4,699 $4,630  $4,559  $4,674 $4,606
  Income (loss) before                                                         
   extraordinary items and                                                     
   cumulative effect of                                                        
   changes in accounting                                                       
   methods.................    169     154    296    299    (306)    222    243
  Extraordinary                                                                
   items/cumulative effect                                                     
   of changes in accounting                                                    
   methods.................    (10)     --     --    (21)    (14)     14     --
  Net income (loss)........    159     154    296    278    (320)    236    243
PER SHARE DATA                                                                 
  Income (loss) before                                                         
   extraordinary items and                                                     
   cumulative effect of                                                        
   changes in accounting                                                       
   methods................. $ 1.75  $ 1.60 $ 3.06 $ 3.35  $(3.96) $ 2.89 $ 3.19
  Extraordinary                                                                
   items/cumulative effect                                                     
   of changes in accounting                                                    
   methods.................   (.11)     --     --   (.24)   (.18)    .18     --
  Net income (loss)........   1.64    1.60   3.06   3.11   (4.14)   3.07   3.19
  Book value...............  18.89    (a)   17.73  15.61   13.64   16.13  14.15
  Cash dividends declared..    .60     .60   1.20   1.20    1.20    1.20   1.20
BALANCE SHEET DATA                                                             
  Total assets............. $7,394    (a)  $7,045 $6,563  $6,324  $6,061 $6,144
  Total debt, including                                                        
   current portion and                                                         
   commercial paper........  1,934    (a)   1,737  1,567   1,982   2,133  2,333
  Redeemable preferred                                                         
   stock...................     --    (a)      --      9      11      12     14
  Stockholders' equity.....  2,030    (a)   1,919  1,728   1,202   1,241  1,080

--------                                                                        
(a) Not required.                                                               

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SIX MONTHS ENDED JUNE 30,                                                       

1994--BNI adopted Statement of Financial Accounting Standards ("SFAS") No.  
112, "Employers' Accounting for Postemployment Benefits." The cumulative        
effect, net of $7 million income tax benefit, of this change in accounting      
attributable to years prior to 1994, at the time of adoption, was to decrease   
income by $10 million, or $.11 per common share.                                

YEAR ENDED DECEMBER 31,                                                         

 1993--Results include the effects of the Omnibus Budget Reconciliation Act of
1993 (the "Act") which was signed into law on August 10, 1993. The Act          
increased the corporate federal income tax rate by 1 percent, effective January 
1, 1993, which reduced net income by $29 million, or $.32 per common share,     
through the date of enactment.                                                  

 1992--Results include a settlement agreement relating to the reimbursement of
attorneys' fees and costs incurred by BNI in conjunction with litigation filed  
by Energy Transportation Systems, Inc. ("ETSI"), and others, and reimbursement  
of a portion of the amount paid in prior years by BNI in settlement of that     
action. Under the terms of the settlement, BNI received approximately $50       
million, before $3 million in legal fees, for a net amount of $47 million. The  
after-tax effect of the settlement increased net income by $31 million, or $.35 
per common share.                                                               

 BNI received notification that an Appeals Division settlement of the Internal
Revenue Service audits for the years 1981 through 1985 had been approved by the 
Joint Committee on Taxation. This action settled all unagreed issues for those  
years. The tax effect of the settlement was included in the 1992 tax provision  
and resulted in an increase in net income of $17 million, or $.19 per common    
share.                                                                          

Results reflect the cumulative effect of the change in accounting method for
revenue recognition and the cumulative effect of the implementation of the      
accounting standard for postretirement benefits (SFAS No. 106). The cumulative  
effect of the change in accounting method for revenue recognition decreased     
1992 net income by $11 million, or $.13 per common share. The cumulative effect 
of the change in accounting method for postretirement benefits decreased 1992   
net income by $10 million, or $.11 per common share. Neither change had an      
effect on cash flows.                                                           

1991--Results include a $708 million pre-tax special charge which related to
(i) restructuring costs for reducing surplus crew positions and a management    
separation pay program, (ii) increases in estimated personal injury costs and   
(iii) increases in estimated environmental clean-up costs. The after-tax effect 
of the charge decreased net income by $442 million, or $5.79 per common share.  

BNI extinguished debt through an early redemption resulting in an           
extraordinary loss, net of income taxes, of $14 million, or $.18 per common     
share.                                                                          

 Beginning in November 1991, shares used in computation of earnings (loss) per
common share reflect a November 1991 public offering of 10,350,000 shares.      

1990--Results include the extinguishment of debt through note exchange      
agreements and the purchase of certain debentures. The net income for the year  
ended December 31, 1990 includes a resulting extraordinary gain, net of income  
taxes, of $14 million, or $.18 per common share.                                

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SELECTED HISTORICAL FINANCIAL DATA FOR SANTA FE PACIFIC CORPORATION 

                                                                [Download Table]

                            AT OR FOR SIX                                      
                            MONTHS ENDED                                       
                              JUNE 30,    AT OR FOR YEAR ENDED DECEMBER 31,    
                            ------------- ------------------------------------ 
                             1994   1993   1993   1992    1991   1990    1989  
                            ------ ------ ------ ------  ------ ------  ------ 
                              (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)     
                                                                               
INCOME STATEMENT DATA                                                          
  Revenues................. $1,290 $1,192 $2,409 $2,252  $2,154 $2,112  $2,202 
  Income (loss) from                                                           
   continuing operations...    103    135    177     21      62   (245)   (316)
  Income from discontinued                                                     
   operations, net of tax..     23    140    162     42      34    162     170 
  Extraordinary                                                                
   items/cumulative effect                                                     
   of changes in accounting                                                    
   methods.................     --     --     --   (168)     --    (29)    161 
  Net income (loss)........    126    275    339   (105)     96   (112)     15 
PER SHARE DATA                                                                 
  Income (loss) from                                                           
   continuing operations... $  .54 $  .72 $  .95 $  .11  $  .35 $(1.51) $(1.99)
  Income from discontinued                                                     
   operations, net of tax..    .12    .75    .86    .23     .19   1.00    1.07 
  Extraordinary                                                                
   items/cumulative effect                                                     
   of changes in accounting                                                    
   methods.................     --     --     --   (.91)     --   (.18)   1.01 
  Net income (loss)........    .66   1.47   1.81   (.57)    .54   (.69)    .09 
  Book value...............   6.20   (a)    6.83   5.11    5.77   5.27    5.39 
  Cash dividends declared..     --     --    .10    .10     .10    .10     .10 
BALANCE SHEET DATA                                                             
  Total assets............. $5,717   (a)  $5,374 $4,946  $4,812 $4,710  $5,087 
  Total debt, including                                                        
   current portion.........  1,105   (a)   1,176  1,307   1,702  1,791   2,067 
  Stockholders' equity.....  1,156   (a)   1,268    929   1,037    912     852 

--------                                                                        
(a) Not required.                                                               

SIX MONTHS ENDED JUNE 30,                                                       

 1994--Income from continuing operations includes pre-tax gains of $24 million
related to the sale of an investment and $29 million resulting from a change in 
eligibility requirements for postretirement medical benefits. The after-tax     
effect of the gains increased net income by $31 million, or $.17 per common     
share.                                                                          

1993--Income from continuing operations includes a pre-tax gain of $145     
million related to the sale of rail lines in southern California. The after-tax 
effect of the gain increased net income by $85 million, or $.46 per common      
share.                                                                          

Discontinued operations includes an after-tax gain of $108 million, or $.58 
per common share, related to the exchange of mineral assets.                    

YEAR ENDED DECEMBER 31,                                                         

1993--Income from continuing operations includes the gain on sale of rail   
lines in southern California discussed above and a $28 million increase in      
income tax expense related to the retroactive impact from the date of enactment 
of the increase in the corporate Federal income tax rate by one percent. The    
net effect of the above items was to increase net income by $57 million, or     
$.31 per common share.                                                          

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Discontinued operations in 1993 includes the after-tax gain discussed above.

1992--Income from continuing operations includes a pre-tax gain of $205     
million for the sale of rail lines in southern California and a pre-tax special 
charge of $320 million at The Atchison, Topeka and Santa Fe Railway Company     
("SFP Rail") related to a new labor agreement, operations centralization and    
environmental accruals. The net effect of the above items was to decrease net   
income by $73 million, or $.39 per common share.                                

Net income includes a noncash reduction of $163 million, or $.88 per common 
share, related to the cumulative effect of adopting SFAS No. 106, and a $5      
million, or $.03 per common share, reduction for an extraordinary charge on the 
early retirement of debt.                                                       

1990--Income from continuing operations includes a $342 million pre-tax     
charge related to the settlement of litigation with ETSI and a pre-tax credit   
of $51 million related to favorable property tax settlements. The net after-tax 
effect of the above items was to reduce net income by $188 million, or $1.16    
per share.                                                                      

Income from discontinued operations includes an after-tax gain of $102      
million, or $.63 per common share, related to a litigation settlement.          

 Net income includes a reduction of $29 million, or $.18 per common share, for
an extraordinary charge on the early retirement of debt.                        

 1989--Income from continuing operations includes a $442 million SFP Rail pre-
tax special charge related to restructuring and an increase in accruals for     
personal injury costs. The after-tax effect of the charge reduced net income by 
$272 million, or $1.71 per common share.                                        

Net income includes a credit of $161 million, or $1.01 per common share,    
related to the cumulative effect of a change in accounting for income taxes.    

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UNAUDITED SELECTED PRO FORMA FINANCIAL DATA 

The following unaudited selected pro forma financial data give effect to the
exchange of 0.27 shares of BNI Common Stock for each share of SFP Common Stock  
pursuant to the Merger Agreement, with the Merger accounted for under the       
pooling of interests method. The unaudited pro forma balance sheet data as of   
June 30, 1994, give effect to the Merger as if it had occurred on that date,    
and the unaudited pro forma income statement data give effect to the Merger as  
if it had occurred on January 1, 1991. The unaudited selected pro forma         
financial data set forth below do not reflect any potential increases in        
operating income which may arise from the Merger or adjustments to conform the  
accounting practices of BNI and SFP and should be read in conjunction with the  
respective audited and unaudited consolidated historical financial statements   
of BNI and SFP, including the respective notes thereto, which are incorporated  
by reference in this Joint Proxy Statement/Prospectus and the unaudited pro     
forma combined financial statements, including the notes thereto, appearing     
elsewhere in this Joint Proxy Statement/Prospectus. See "Incorporation of       
Certain Documents by Reference" and "Unaudited Pro Forma Combined Financial     
Statements." The unaudited selected pro forma financial data are prepared for   
illustrative purposes only and are not necessarily indicative of the financial  
position or results of operations that might have occurred had the Merger       
actually taken place on the dates indicated, or of future results of operations 
or financial position of the combined company.                                  

                                                                [Download Table]

                                           AT OR FOR SIX       AT OR FOR       
                                            MONTHS ENDED       YEAR ENDED      
                                              JUNE 30,        DECEMBER 31,     
                                           -------------- -------------------- 
                                            1994    1993   1993   1992   1991  
                                           ------- ------ ------ ------ ------ 
                                              (DOLLARS IN MILLIONS)            
                                                                               
COMBINED PRO FORMA BASIS                                                       
INCOME STATEMENT DATA                                                          
  Revenues................................ $ 3,692 $3,504 $7,108 $6,882 $6,713 
  Income (loss) from continuing opera-                                         
   tions..................................     272    289    473    320   (244)
BALANCE SHEET DATA                                                             
  Total assets............................ $12,607   (a)     (a)   (a)    (a)  
  Total debt, including current portion...   3,039   (a)     (a)   (a)    (a)  
  Stockholders' equity....................   3,156   (a)     (a)   (a)    (a)  

--------                                                                        
(a)Not required.                                                                

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UNAUDITED COMPARATIVE PER SHARE DATA

The following table sets forth for BNI Common Stock and SFP Common Stock    
certain historical combined pro forma and pro forma equivalent per share data   
for the six months ended June 30, 1994 and 1993 and for each of the three years 
ended December 31, 1993. The information presented herein should be read in     
conjunction with the selected historical financial data and the unaudited       
selected pro forma financial data appearing elsewhere in this Joint Proxy       
Statement/Prospectus. See "Selected Historical Financial Data" and "Unaudited   
Selected Pro Forma Financial Data."                                             

                                                                [Download Table]

                                         AT OR FOR SIX        AT OR FOR        
                                         MONTHS ENDED        YEAR ENDED        
                                           JUNE 30,         DECEMBER 31,       
                                         -------------  ---------------------- 
                                          1994   1993    1993   1992    1991   
                                         ------ ------  ------ ------  ------- 
                                                                               
BNI COMMON STOCK                                                               
  Income (loss) from continuing                                                
   operations per share:                                                       
    Historical.......................... $ 1.75 $ 1.60  $ 3.06 $ 3.35  $ (3.96)
    Combined pro forma (a)..............   1.85   1.99    3.22   2.29    (1.95)
  Book value per share:                                                        
    Historical..........................  18.89     (b)  17.73  15.61    13.64 
    Combined pro forma..................  20.14     (b)  20.24     (b)      (b)
  Cash dividends per share:                                                    
    Historical..........................    .60    .60    1.20   1.20     1.20 
    Combined pro forma (c)..............    .60    .60    1.20   1.20     1.20 
SFP COMMON STOCK                                                               
  Income (loss) from continuing                                                
   operations per share:                                                       
    Historical (a)...................... $  .54 $  .72  $  .95 $  .11  $   .35 
    Pro forma equivalent (a)(d).........    .50    .54     .87    .62     (.53)
  Book value per share:                                                        
    Historical..........................   6.20     (b)   6.83   5.11     5.77 
    Pro forma equivalent (d)............   5.44     (b)   5.46     (b)      (b)
  Cash dividends per share:                                                    
    Historical..........................    --     --      .10    .10      .10 
    Pro forma equivalent (c)(d).........    .16    .16     .32    .32      .32 

--------                                                                        
(a) Income (loss) from continuing operations of certain periods includes the    
impact of special items as set forth in "Selected Historical Financial  
Data." Earnings (loss) per share from continuing operations (which are  
 before discontinued operations, extraordinary items and cumulative effect
 of changes in accounting methods) adjusted to exclude these special items
were as follows:                                                        

                                                                [Download Table]

                                            SIX MONTHS                   
                                               ENDED       YEAR ENDED    
                                             JUNE 30,     DECEMBER 31,   
                                            ----------- -----------------
                                            1994  1993  1993  1992  1991 
                                            ----- ----- ----- ----- -----
                                                                         
Adjusted combined pro forma basis.......... $1.63 $1.38 $3.02 $2.47 $1.57
SFP-Adjusted historical basis..............   .37   .26   .64   .50   .35
SFP-Adjusted pro forma equivalent basis                                  
 (d).......................................   .44   .37   .82   .67   .42

(b) Not required.                                                               
(c) Cash dividends declared are assumed to be the same as those paid by BNI on  
an historical basis.                                                    
(d) Calculated by multiplying combined pro forma amounts by the exchange ratio  
of 0.27.                                                                

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INTRODUCTION

This Joint Proxy Statement/Prospectus is being furnished to stockholders of 
Burlington Northern Inc., a Delaware corporation ("BNI"), in connection with    
the solicitation of proxies by the BNI Board of Directors for use at the        
Special Meeting of Stockholders of BNI (the "BNI Special Meeting") to be held   
at Burlington Northern Railroad Company, 3017 Lou Menk Drive, Fort Worth, Texas 
76131-2815, on November 18, 1994 at 10:00 a.m., Fort Worth time, and at any     
adjournment or postponement thereof.                                            

This Joint Proxy Statement/Prospectus is also being furnished to the        
stockholders of Santa Fe Pacific Corporation, a Delaware corporation ("SFP"),   
in connection with the solicitation of proxies by the SFP Board of Directors    
for use at the Special Meeting of Stockholders of SFP (the "SFP Special         
Meeting") to be held at the Hyatt Regency O'Hare, 9300 Bryn Mawr Avenue,        
Rosemont, Illinois on November 18, 1994 at 3:00 p.m., Chicago time, and at any  
adjournment or postponement thereof.                                            

At the BNI Special Meeting and the SFP Special Meeting, the common          
stockholders of BNI and SFP, respectively, will be asked to adopt and approve   
the Agreement and Plan of Merger dated as of June 29, 1994 (the "Merger         
Agreement") between BNI and SFP, pursuant to which SFP is to merge with and     
into BNI, with BNI to be the surviving corporation in the merger (the           
"Merger").                                                                      

This Joint Proxy Statement/Prospectus also constitutes a prospectus of BNI  
with respect to up to 58,250,000 shares of common stock, no par value, of BNI   
(the "BNI Common Stock") issuable to SFP stockholders in connection with the    
Merger. Unless the context otherwise requires, all references in this Joint     
Proxy Statement/Prospectus to BNI Common Stock include the associated rights    
(the "BNI Rights") to purchase Junior Class A Preferred Stock of BNI issued     
pursuant to the Rights Agreement dated as of July 14, 1986 between BNI and The  
First National Bank of Boston, as Rights Agent (the "Rights Agreement"). To the 
extent BNI Rights are then outstanding, each share of BNI Common Stock to be    
issued in the Merger will be accompanied by one BNI Right, which will be        
evidenced by the certificate of BNI Common Stock. Pursuant to the Rights        
Agreement, the BNI Rights will expire on July 24, 1996 unless they are earlier  
redeemed or the term of the BNI Rights Agreement is extended.                   

All information herein concerning BNI has been furnished by BNI, and all    
information herein concerning SFP has been furnished by SFP. BNI has            
represented and warranted to SFP, and SFP has represented and warranted to BNI, 
that the particular information so furnished is true and complete.              

 This Joint Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to stockholders of BNI and SFP on or about October 13, 1994. 

THE COMPANIES 

BURLINGTON NORTHERN INC.                                                        

BNI was incorporated in the State of Delaware in 1981 as part of a holding  
company reorganization. BNI and its majority-owned subsidiaries are primarily   
engaged in the rail transportation business. BNI's principal subsidiary is      
Burlington Northern Railroad Company ("BN Railroad"). BN Leasing Corporation, a 
wholly owned subsidiary of BNI, was formed in 1989 to acquire railroad rolling  
stock and other equipment necessary for the transportation and other business   
affairs of BNI.                                                                 

BN Railroad operates the largest railroad system in the United States based 
on miles of road and second main track, with approximately 24,500 total miles   
at December 31, 1993. The principal cities served include Chicago, Minneapolis- 
St. Paul, Fargo-Moorhead, Billings, Spokane, Seattle, Portland, St. Louis,      
Kansas City, Des Moines, Omaha, Lincoln, Cheyenne, Denver, Fort Worth, Dallas,  
Houston, Galveston, Tulsa, Wichita, Springfield (Missouri), Memphis,            
Birmingham, Mobile and Pensacola.                                               

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The transportation of coal is BN Railroad's single largest source of        
revenues, accounting for approximately one-third of the total. Based on         
carloadings and tons hauled, BN Railroad is the largest transporter of western  
low-sulfur coal in the United States. Based on the same criteria, BN Railroad   
is also the largest rail transporter of grain in North America. Other           
significant aspects of BN Railroad's business include intermodal transportation 
and the transportation of forest products, chemicals, consumer products,        
minerals processors, iron and steel, vehicles and machinery and aluminum, non-  
ferrous metals and ores.                                                        

 The principal executive offices of BNI are located at 3800 Continental Plaza,
777 Main Street, Fort Worth, Texas 76102-5384. BNI's telephone number is (817)  
333-2000.                                                                       

SANTA FE PACIFIC CORPORATION                                                    

 SFP was incorporated in the State of Delaware in 1983. A holding company, SFP
owns subsidiaries engaged in two businesses: Rail, consisting principally of    
The Atchison, Topeka and Santa Fe Railway Company ("SFP Rail"), a major Class I 
railroad operating in twelve midwestern, western and southwestern states; and   
Pipeline, reflecting SFP's interest in a refined petroleum products pipeline    
system operating in six western and southwestern states. Prior to the           
consummation of the Gold Spinoff (as defined below) on September 30, 1994, SFP  
was also engaged in the exploration for and development of gold properties and  
the mining and processing of gold ores through Santa Fe Pacific Gold            
Corporation ("SFP Gold") and its subsidiaries.                                  

 One of the nation's major freight railroads, SFP Rail operated as of December
31, 1993 approximately 8,500 route miles of track (excluding, among other       
things, second main track) extending from Chicago to the Gulf of Mexico and the 
West Coast and operated related facilities in twelve midwestern, western and    
southwestern states. Major markets served directly by SFP Rail include          
Albuquerque, Chicago, Dallas, Denver, Houston, Kansas City, Los Angeles,        
Phoenix, the San Francisco Bay area and the United States/Mexico crossings of   
El Paso and San Diego.                                                          

In serving the midwestern, western and southwestern regions of the country, 
SFP Rail transports a broad range of commodities derived from manufacturing,    
agricultural and natural resource industries. Intermodal transportation         
constitutes the single largest source of freight revenues for SFP Rail, which   
also transports, among other things, chemicals and petroleum, coal, vehicles    
and parts, whole grain, minerals and ores, forest products, consumer products,  
grain products and primary metals.                                              

 Santa Fe Pacific Pipelines, Inc. ("SFP Pipelines"), an indirect, wholly owned
subsidiary of SFP, serves as the general partner of Santa Fe Pacific Pipeline   
Partners, L.P. (the "Partnership"), a publicly traded Delaware master limited   
partnership formed in 1988 to acquire and operate the refined petroleum         
products pipeline business of SFP. SFP Pipelines owns a two percent interest in 
the Partnership as the Partnership's general partner and approximately 42       
percent as a limited partner. The Partnership is one of the largest independent 
pipeline common carriers of refined petroleum products in the United States,    
and the largest in the western United States, in terms of product deliveries,   
barrel miles, and pipeline mileage, with approximately 3,300 miles of pipeline  
and fourteen truck loading terminals serving six states.                        

SFP Gold is engaged in the exploration for and the development of gold      
properties and the mining and processing of gold ores. On June 23, 1994, SFP    
Gold effected an initial public offering of 19.2 million shares of common stock 
or approximately 14.6% of its outstanding shares at a price of $14.00 per       
share. On June 29, 1994, the SFP Board declared a special dividend to holders   
of SFP Common Stock as of September 12, 1994, consisting of a pro-rata          
distribution of its interests in SFP Gold (the "Gold Spinoff"). The             
distribution became effective on September 30, 1994.                            

The principal executive offices of SFP are located at 1700 East Golf Road,  
Schaumburg, Illinois 60173-5860. SFP's telephone number is (708) 995-6000.      

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THE SPECIAL MEETINGS

PURPOSE OF THE BNI AND SFP SPECIAL MEETINGS                                     

The purpose of the BNI and SFP Special Meetings is to consider and vote upon
the adoption and approval of the Merger Agreement.                              

EACH OF THE BOARDS OF DIRECTORS OF BNI AND SFP HAS, BY UNANIMOUS VOTE,      
APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT ITS STOCKHOLDERS VOTE FOR     
APPROVAL OF THE MERGER AGREEMENT.                                               

DATE, PLACE AND TIME                                                            

BNI. The BNI Special Meeting will be held at Burlington Northern Railroad   
Company, 3017 Lou Menk Drive, Fort Worth, Texas 76131-2815 on November 18,      
1994, commencing at 10:00 a.m., Fort Worth time.                                

SFP. The SFP Special Meeting will be held at the Hyatt Regency O'Hare, 9300 
West Bryn Mawr Avenue, Rosemont, Illinois on November 18, 1994, commencing at   
3:00 p.m., Chicago time.                                                        

RECORD DATES                                                                    

 BNI. The Board of Directors of BNI has fixed the close of business on October
19, 1994 as the record date for the determination of stockholders entitled to   
notice of and to vote at the BNI Special Meeting. As of October 10, 1994, there 
were issued and outstanding 89,224,101 shares of BNI Common Stock. Only holders 
of record of BNI Common Stock on the Record Date are entitled to vote.          

 SFP. The Board of Directors of SFP has fixed the close of business on October
19, 1994 as the record date for the determination of stockholders entitled to   
notice of and to vote at the SFP Special Meeting. As of October 10, 1994, there 
were issued and outstanding 186,996,400 shares of SFP Common Stock. Only        
holders of record of SFP Common Stock on the Record Date are entitled to vote.  

October 19, 1994 is referred to in this Joint Proxy Statement/Prospectus as 
the "Record Date."                                                              

REQUIRED VOTE                                                                   

BNI. The affirmative vote of a majority of the shares of BNI Common Stock   
outstanding on the Record Date is required to approve the Merger Agreement.     
Each share of BNI Common Stock is entitled to one vote on each matter on which  
the respective holders of such shares are entitled to vote as set forth above   
in the BNI Special Meeting. Holders of BNI's 6 1/4% Cumulative Convertible      
Preferred Stock, Series A No Par Value are not entitled to vote on the Merger.  
See "Description of BNI Capital Stock--6 1/4% Convertible Preferred Stock."     

As of October 10, 1994, directors and executive officers of BNI and their   
affiliates were beneficial owners of an aggregate of 1,917,056 shares of BNI    
Common Stock (approximately 2.0% of the shares then outstanding). The directors 
and executive officers of BNI have indicated that they intend to vote their     
shares of BNI Common Stock in favor of approval of the Merger Agreement.        

SFP. The affirmative vote of a majority of the shares of SFP Common Stock   
outstanding on the Record Date is required to approve the Merger Agreement.     
Each share of SFP Common Stock is entitled to one vote on each matter on which  
the respective holders of such shares are entitled to vote as set forth above   
in the SFP Special Meeting.                                                     

As of October 10, 1994, directors and executive officers of SFP and their   
affiliates were beneficial owners of an aggregate of 2,572,978 shares of SFP    
Common Stock (approximately 1.4% of the shares then outstanding). The directors 
and executive officers of SFP have indicated that they intend to vote their     
shares of SFP Common Stock in favor of the approval of the Merger Agreement.    

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VOTING AND REVOCATION OF PROXIES                                                

Proxy cards for use at either the BNI Special Meeting or the SFP Special    
Meeting, as the case may be, accompany this Joint Proxy Statement/Prospectus. A 
stockholder may use the appropriate proxy card if he or she is unable to attend 
the meeting in person or wishes to have his or her shares voted by proxy even   
if he or she does attend the meeting. A proxy may be revoked by the person      
giving it at any time before it is exercised by providing written notice of     
such revocation to the Secretary of BNI or SFP, as the case may be, by          
submitting a proxy having a later date, or by appearing at the meeting and      
electing to vote in person. Any proxy validly submitted and not revoked will be 
voted in the manner specified therein by the stockholder. IF NO SPECIFICATION   
IS MADE, SHARES OF BNI COMMON STOCK OR SFP COMMON STOCK, AS THE CASE MAY BE,    
REPRESENTED BY PROXY WILL BE VOTED FOR APPROVAL OF THE MERGER AGREEMENT.        
Because approval of the Merger Agreement by BNI stockholders requires the       
affirmative vote of a majority of the shares of BNI Common Stock outstanding as 
of the Record Date, and approval of the Merger Agreement by SFP stockholders    
requires the affirmative vote of a majority of the shares of SFP Common Stock   
outstanding as of the Record Date, abstentions and broker non-votes will have   
the effect of a vote against approval of the Merger Agreement. Neither BNI's    
nor SFP's Board of Directors knows of any other matter that will be presented   
for action at either of the Special Meetings. If, however, any other matter     
properly comes before either of the Special Meetings, the persons named in the  
proxy or their substitutes will vote thereon in accordance with their judgment. 

SOLICITATION OF PROXIES                                                         

BNI and SFP each will bear the cost of the solicitation of proxies from its 
own stockholders, except that BNI and SFP will share equally the cost of        
printing and mailing this Joint Proxy Statement/Prospectus. In addition to      
solicitation by mail, the directors, officers and employees of BNI and SFP and  
their subsidiaries may solicit proxies from stockholders of the relevant        
corporation by telephone or telegram or in person. Such directors, officers and 
employees will not be additionally compensated for such solicitation but may be 
reimbursed for out-of-pocket expenses in connection therewith. Arrangements     
will also be made with brokerage houses and other custodians, nominees and      
fiduciaries for the forwarding of solicitation materials to the beneficial      
owners of shares held of record by such persons, and BNI and SFP will reimburse 
such custodians, nominees and fiduciaries for their reasonable out-of-pocket    
expenses in connection therewith.                                               

Kissel-Blake, Inc. will assist in the solicitation of proxies by BNI for a
fee of $9,000 plus reasonable out-of-pocket expenses.                           

D. F. King & Co., Inc. and MacKenzie Partners, Inc. will assist in the      
solicitation of proxies by SFP for an aggregate anticipated fee of $150,000     
plus reasonable out-of-pocket expenses.                                         

THE MERGER

BACKGROUND OF THE MERGER                                                        

The possibility of a business combination between BNI and SFP was first     
discussed on July 16, 1993 in a meeting between Mr. Gerald Grinstein, Chairman  
and Chief Executive Officer of BNI, and Mr. Robert D. Krebs, Chairman,          
President and Chief Executive Officer of SFP. Following that meeting, senior    
members of management of both companies, together with their legal and          
financial advisors, undertook to examine, on a preliminary basis, a possible    
transaction. On the basis of that investigation, both companies concluded that  
a BNI-SFP merger presented significant strategic and financial opportunities.   
The two companies then agreed to investigate further a possible stock merger    
transaction, executed a confidentiality agreement on or about July 28, 1993 and 
exchanged confidential information.                                             

From August through November 1993, each company undertook a detailed due    
diligence investigation of the other. Beginning in October 1993,                
representatives of BNI and SFP, and their financial and legal advisors, met on  
a number of occasions and held numerous additional discussions to attempt to    
negotiate the                                                                   

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terms of a merger transaction, including the terms of a merger agreement. A     
number of difficult issues were raised during the course of these discussions.  
Of particular importance were the parties' views as to an appropriate exchange  
ratio.                                                                          

At meetings during this period, each of the SFP Board and BNI Board         
separately received information about a possible BNI-SFP merger, discussed the  
possibility of such a merger and was briefed by its management on the merger    
negotiations.                                                                   

On November 29, 1993, BNI and SFP separately concluded that they could not  
reach an agreement on an exchange ratio. In addition, BNI had concerns with     
respect to certain tax issues and several matters relating to the planned Gold  
Spinoff. Thereafter, each company independently decided to discontinue merger   
negotiations.                                                                   

On January 31, 1994, Mr. Grinstein and Mr. Krebs met to discuss the         
possibility of resuming merger negotiations, but reached no conclusion as to    
whether to do so.                                                               

On or about February 15, 1994, CS First Boston informed representatives of  
BNI and SFP that Kansas City Southern Industries, Inc. ("KCSI") intended to     
explore strategic transactions involving its wholly owned railroad subsidiary,  
The Kansas City Southern Railway Company and related transportation businesses  
("KCSR").                                                                       

During the period January 1994 through June 1994, the SFP Board was kept    
informed of and discussed the possibility of resuming merger negotiations with  
BNI. At its May 24, 1994 board meeting, SFP management reported to the SFP      
Board on both the status of the potential BNI transaction and a possible KCSR   
transaction, and stated its view that, although each of these potential         
transactions would have advantages, a BNI transaction would be superior for SFP 
and its stockholders.                                                           

On several occasions in June 1994, representatives of BNI and SFP discussed 
whether to resume merger negotiations in light of, among other things, the fact 
that KCSI had informed potential bidders that it would establish in the near    
future a deadline for bids to acquire KCSR and that the KCSI Board would meet,  
and might select the winning bidder for KCSR, on June 30, 1994.                 

On June 24, 1994, the SFP Board, in light of the fact that merger           
negotiations with BNI had not resumed, authorized SFP management to make a bid  
for KCSR. That bid was communicated to KCSI on June 24, 1994.                   

On June 24, 1994, the BNI Board authorized BNI management to make a bid for 
KCSR. That bid was communicated to KCSI on June 24, 1994. At that meeting and   
following presentations from BNI's management and financial and legal advisors, 
the Board of Directors of BNI also authorized management, together with its     
financial and legal advisors, to attempt to negotiate a merger agreement with   
SFP. The Board noted that, among other things, some of its prior concerns had   
been alleviated by SFP's progress in effecting the Gold Spinoff.                

On June 24, 1994, after the SFP Board had met, a representative of BNI      
informed a representative of SFP that BNI was interested in resuming merger     
negotiations with SFP. From shortly after that time through June 29, 1994,      
representatives of BNI, SFP and their financial and legal advisors resumed      
negotiations, which resulted in a definitive merger agreement, subject to BNI   
and SFP Board approval.                                                         

On June 29, 1994, the Boards of Directors of SFP and BNI each met separately
to consider a BNI-SFP merger. Each Board separately received presentations from 
its management and financial and legal advisors about a BNI-SFP merger. Each    
Board then resumed the discussions in which it had engaged at earlier meetings  
about whether to pursue such a merger. Following these discussions, each Board  
approved the terms of the agreement negotiated by their respective managements  
and advisors and the Merger Agreement was executed and delivered promptly after 
receipt of such approval. Upon approval of the Merger, each of the SFP and the  
BNI Boards authorized SFP management and BNI management, respectively, to       
withdraw their bids for KCSR. The KCSR bids were withdrawn shortly thereafter.  

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FACTORS FOR CONSIDERATION OF THE MERGER                                         

Each of the BNI and SFP Boards of Directors believes that a BNI-SFP         
combination, which will create a rail system with broad geographic coverage,    
should, among other things, provide shippers with efficient single-line rail    
service, diversify each railroad's traffic base, generate significant operating 
efficiencies and create a financially strong, more effective competitor. See    
"--Recommendations of the Boards of Directors and Reasons for the Merger."      
However, there can be no assurances that these potential benefits will be       
realized or that the ICC will not impose conditions on the operation of the     
merged entity that will affect its ability to fully achieve any one or more of  
such benefits. See "Other Matters--Additional Financial Considerations." In     
addition, if the Merger cannot be consummated because the ICC does not give its 
approval, each of BNI and SFP will have incurred expenses without a             
corresponding benefit.                                                          

RECOMMENDATIONS OF THE BOARDS OF DIRECTORS AND REASONS FOR THE MERGER           

BNI. At a meeting on June 29, 1994, the Board of Directors of BNI, by       
unanimous vote, determined that the terms of the Merger are fair to and in the  
best interests of BNI and its stockholders and approved the Merger Agreement    
and the transactions contemplated thereby. In reaching these determinations,    
the BNI Board of Directors considered, among other things, the negotiations     
that had occurred during 1993; advice as to the background of the negotiations  
since that time; financial and strategic factors relating to the proposed       
merger; the results of due diligence; financial assessments by Lazard Freres &  
Co. ("Lazard"), BNI's financial advisor, and BNI management of (x) SFP, (y) BNI 
and (z) the combined company; legal and regulatory considerations with respect  
to the proposed merger, including issues relating to the Directors' fiduciary   
duties and issues relating to the ICC approval process; and the terms and       
conditions of the Merger Agreement. The Board also was given a presentation by  
Lazard concerning the Merger and Lazard's written opinion to the effect that    
the Exchange Ratio was fair to BNI's stockholders from a financial point of     
view. See "The Merger--Opinions of Financial Advisors--Opinion of Lazard."      

SFP. At a meeting on June 29, 1994, the Board of Directors of SFP, by       
unanimous vote, determined that the terms of the Merger are fair to and in the  
best interests of SFP and its stockholders and approved the Merger Agreement    
and the transactions contemplated thereby. In reaching these determinations,    
the SFP Board of Directors considered, among other things, the negotiations     
that had occurred during 1993; advice as to the background of the negotiations  
since that time; financial and strategic factors relating to the proposed       
merger; the results of due diligence; financial assessments by Goldman Sachs,   
SFP's financial advisor, of (x) BNI, (y) SFP and (z) the combined company;      
legal, tax and regulatory considerations with respect to the proposed merger,   
including issues relating to the Directors' fiduciary duties and issues         
relating to the ICC approval process; and the terms and conditions of the       
Merger Agreement. The Board also was given a presentation by Goldman Sachs      
concerning the Merger and Goldman Sachs' oral opinion (which has subsequently   
been confirmed in writing) to the effect that, based on various considerations  
and assumptions, the Exchange Ratio was fair to SFP's stockholders. See "The    
Merger--Opinions of Financial Advisors--Opinion of Goldman Sachs."              

The strategic factors considered independently by the BNI and SFP Boards of 
Directors in approving the Merger included:                                     

1. Geographic Coverage. The merged entity should provide substantial        
opportunities for revenue and earnings growth by linking all principal West     
Coast and Gulf Coast ports, major midwestern and southeastern markets and       
Canada and Mexico. A BNI-SFP combination will create an expanded rail network,  
with far broader geographic coverage than either of the carriers' existing      
systems, and should increase opportunities for intermodal partnerships between  
the combined company and trucking companies, provide access to better routing   
opportunities and increase traffic densities.                                   

2. Single-Line Rail Service. A BNI-SFP combination should provide shippers  
with more efficient and cost-effective single-line service. The extensive       
single-line service should position the carriers to attract and serve customers 
more effectively by eliminating costs and delays of interchanges, improving     
productivity and enhancing the combined company's ability to respond to         
customer needs.                                                                 

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3. Diversified Traffic Base. The Merger should serve to balance SFP's       
strength in intermodal traffic with BNI's strength in coal and grain            
operations. The resulting diversification of the combined company's traffic     
base should reduce the impact of fluctuations in demand for particular          
commodities and therefore reduce the volatility of the combined company's       
financial results.                                                              

4. Operating Efficiencies. The Merger should increase operating efficiencies
and create substantial cost savings through reductions in general and           
administrative costs, operations and transportation savings, reduced costs and  
delays of interchange and maintenance of way and equipment savings.             

5. Increased Competitiveness and Financial Strength. Based on the expanded  
geographic coverage, single-line service, diversified traffic base and          
operating efficiencies, the Merger should create a strong, new rail system that 
is able to compete more effectively with other major western rail carriers. In  
addition, the combination of two financially sound entities should create a     
stronger company providing enhanced stockholder value, greater financial        
strength and improved credit quality.                                           

In addition, the BNI Board separately concluded that a BNI-SFP merger should
provide an opportunity to strengthen and deepen the management team of the      
combined entity by integrating the BNI and SFP management teams. The SFP Board  
separately concluded that, because SFP is smaller than a number of its          
competitors, its ability to grow and compete effectively should be enhanced by  
the economies of scale that a BNI-SFP merger makes possible.                    

OPINIONS OF FINANCIAL ADVISORS                                                  

Opinion of Lazard                                                             

Lazard has rendered to the BNI Board of Directors its written opinion dated 
June 29, 1994, that, based upon and subject to various considerations set forth 
in the opinion and such other factors as it deemed relevant, on June 29, 1994,  
the Exchange Ratio was fair to the holders of BNI Common Stock from a financial 
point of view. Lazard has also delivered to the BNI Board of Directors a        
substantially identical opinion, dated the date of this Joint Proxy             
Statement/Prospectus, to the effect that based upon and subject to various      
considerations set forth in the opinion and such other factors as it deemed     
relevant, on the date hereof, the Exchange Ratio was fair to the holders of BNI 
Common Stock from a financial point of view.                                    

THE FULL TEXT OF THE WRITTEN OPINION OF LAZARD DATED THE DATE OF THIS JOINT 
PROXY STATEMENT/PROSPECTUS, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS          
CONSIDERED AND THE REVIEW UNDERTAKEN WITH REGARD TO SUCH OPINION, IS ATTACHED   
AS APPENDIX C TO THIS JOINT PROXY STATEMENT/PROSPECTUS. BNI STOCKHOLDERS ARE    
URGED TO, AND SHOULD, READ THE OPINION CAREFULLY AND IN ITS ENTIRETY. LAZARD'S  
OPINION IS DIRECTED ONLY TO THE EXCHANGE RATIO AND DOES NOT CONSTITUTE A        
RECOMMENDATION TO ANY STOCKHOLDER OF BNI AS TO HOW SUCH STOCKHOLDER SHOULD VOTE 
AT THE SPECIAL MEETING OF STOCKHOLDERS OF BNI. THE SUMMARY OF THE OPINION OF    
LAZARD SET FORTH IN THIS JOINT PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS   
ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.                         

 In rendering its opinions, Lazard, among other things: (i) reviewed the terms
and conditions of the Merger Agreement; (ii) analyzed certain historical        
business and financial information relating to BNI and SFP, including the       
Annual Reports to Stockholders and Annual Reports on Form 10-K of BNI and SFP   
for each of the fiscal years ended December 31, 1989 through 1993 (and any      
amendments thereto), and Quarterly Reports on Form 10-Q of BNI and SFP for the  
quarters ended March 31, June 30 and September 30 for each of the same fiscal   
years and for the quarters ended March 31 and, solely with respect to its       
opinion dated the date hereof, June 30, 1994 (and any amendments thereto);      
(iii) solely with respect to its opinion dated the date hereof, certain Current 
Reports on Form 8-K of BNI and SFP; (iv) reviewed certain financial forecasts   
and other data provided to Lazard by BNI and SFP relating to their respective   
businesses; (v) held discussions with members of the senior management of BNI   
and SFP with respect to the businesses and prospects of BNI and SFP,            
respectively, the strategic objectives of each, and possible benefits that      
might be realized following the Merger; (vi) reviewed public information with   
respect to certain other companies in                                           

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lines of businesses Lazard believed to be comparable to the businesses of BNI   
and SFP; (vii) reviewed the financial terms of certain recent business          
combinations involving companies in lines of businesses Lazard believed to be   
comparable to those of BNI and SFP, and in other industries generally; (viii)   
analyzed the pro forma financial impact of the Merger on BNI and SFP; (ix)      
reviewed the historical stock prices and trading volumes of the BNI Common      
Stock and SFP Common Stock; and (x) conducted such other financial studies,     
analyses and investigations as Lazard deemed appropriate. In addition, solely   
with respect to its opinion dated the date hereof, Lazard also reviewed this    
Joint Proxy Statement/Prospectus.                                               

In connection with its review, Lazard relied upon the accuracy and          
completeness of the financial and other information provided by BNI and SFP to  
it and did not undertake any independent verification of such information or    
any independent valuation or appraisal of any of the assets of BNI or SFP. With 
respect to the financial forecasts, Lazard assumed that they had been           
reasonably prepared on bases reflecting the best then currently available       
estimates and judgments of the respective managements of BNI and SFP as to the  
future financial performance of their businesses. Further, Lazard assumed that  
obtaining the necessary regulatory and governmental approvals for the Merger,   
including approval of the ICC, may significantly delay the consummation of the  
Merger, and that, in the course of obtaining such approvals, no restriction     
will be imposed that will have a material adverse effect on the contemplated    
benefits of the Merger to BNI. Lazard's opinions stated that they were also     
based on economic, monetary, market and other conditions as in effect on, and   
the information made available to Lazard as of, the dates of such opinions.     

The following is a brief summary of the analyses performed by Lazard in     
connection with rendering its June 29, 1994 opinion and discussed with BNI's    
Board of Directors at its meeting on June 29, 1994.                             

Relative Contribution Analysis. Lazard analyzed the pro forma contributions 
from each of BNI and SFP to the combined company if the Merger were to be       
consummated as set forth in the Merger Agreement. Among the various income and  
cash flow statement items analyzed were the relative contribution to the pro    
forma company of each of BNI's and SFP's revenues, earnings before interest,    
taxes, depreciation and amortization ("EBITDA") and net income available to     
common stockholders for the years ended December 31, 1993 and 1994 (projected). 
The 1994 projections were based on estimates of each of BNI's and SFP's         
managements. In addition, SFP's financial information was adjusted throughout   
Lazard's analyses to reflect the Gold Spinoff, which was assumed to be          
consummated on September 30, 1994. (For these purposes, Lazard defined the rail 
and pipeline businesses of SFP as "SFP Rail" and used such definition           
throughout its analyses to refer to the entity which would be remaining         
following the Gold Spinoff.) The relative contribution analysis showed that BNI 
would contribute between 64.5% and 66.2% of the revenues, between 66.7% and     
67.6% of the EBITDA and between 69.3% and 72.8% of the net income available to  
common stockholders to the combined company, before taking into account any of  
the possible benefits that may be realized following the Merger. Lazard         
observed that SFP Rail's net income available to common stockholders was        
reduced by various non-operating factors, including the relatively high         
interest rate on certain of its debt. These contribution ratios may be compared 
with the projected pro forma fully diluted ownership interest of 65.8% that BNI 
stockholders would receive if the Merger were to be consummated.                

Reconciliation of Theoretical SFP Rail Trading Value. Lazard analyzed the   
theoretical trading value of SFP Rail reflected in the then current trading     
value of SFP Common Stock based on the trading values of SFP Common Stock and   
SFP Gold common stock. Lazard explained that, based on the number of shares of  
SFP Common Stock outstanding and the number of shares of SFP Gold common stock  
held by SFP and the fact that SFP had publicly stated its intention to          
consummate the Gold Spinoff, each share of SFP Common Stock theoretically       
contained approximately 0.6 of a share of SFP Gold common stock. This           
methodology suggested the theoretical trading value of SFP Rail of $12.43 and   
$12.05 based on closing prices of SFP Common Stock and SFP Gold common stock as 
of June 27 and 29, 1994, respectively. These values were used in connection     
with certain of the analyses described below.                                   

Comparable Publicly Traded Company Analysis. Lazard analyzed certain        
financial and stock market data for SFP Rail based on the theoretical trading   
value of SFP Rail as described above and SFP Rail's historical and projected    
financial information provided by SFP's management. Lazard then compared the    
results                                                                         

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calculated for SFP Rail with that of selected publicly traded Class I railroad  
holding companies that have operations primarily in the western part of the     
United States, including BNI, Southern Pacific Rail Corporation ("Southern      
Pacific"), and Union Pacific Corporation ("Union Pacific"). In performing these 
comparisons, Lazard made certain adjustments with respect to the estimated net  
present value of the cash proceeds from expected sales of excess real estate of 
Southern Pacific. This analysis was performed in order to examine whether the   
theoretical SFP Rail trading value described in the immediately preceding       
analysis appeared to reasonably reflect SFP Rail's operations and its future    
prospects in a manner consistent with such other publicly traded railroad       
holding companies. Although Lazard calculated various financial ratios, it      
focused on and discussed with BNI's Board of Directors the relationship of      
market price to earnings per share estimates for 1994 and 1995 which, for SFP   
Rail were 14.6x and 12.4x, respectively, as of June 27, 1994. Earnings per      
share estimates for the comparable companies, including that for BNI for the    
purposes of this comparable company analysis, were based on Institutional       
Brokers Estimate System ("IBES") estimates as of June 23, 1994. IBES is a data  
service that monitors and publishes a compilation of earnings estimates         
produced by selected research analysts regarding companies of interest to       
institutional investors. This analysis showed that as of June 27, 1994, BNI     
traded at 11.8x and 9.9x forecasted earnings per share for 1994 and 1995,       
respectively, Southern Pacific at 18.7x and 12.6x forecasted earnings per share 
for 1994 and 1995, respectively, after taking into account the real estate      
related adjustments described above, and Union Pacific at 13.3x and 11.8x       
forecasted earnings per share for 1994 and 1995, respectively. Lazard noted     
that these multiples, if calculated based upon closing prices of June 29, 1994, 
would not change materially.                                                    

 Comparable Transaction Analysis. Lazard reviewed certain financial aspects of
selected mergers and acquisitions transactions in the U.S. railroad industry,   
including Kansas City Southern Industries' acquisition of MidSouth Corporation, 
the acquisition of CNW Corporation by an investor group led by Blackstone       
Capital Partners, Prospect Group's acquisition of Illinois Central              
Transportation Corporation, Rio Grande Industries' acquisition of Southern      
Pacific Transportation Company, Union Pacific's acquisition of Missouri-Kansas- 
Texas Railroad Company, Anschutz Corporation's acquisition of Rio Grande        
Industries, and Union Pacific's acquisition of Missouri Pacific (collectively,  
the "Comparable Transactions"). Of the Comparable Transactions listed above,    
Lazard noted that the first three transactions (involving MidSouth, CNW and     
Illinois Central as the acquired companies) were announced within the past six  
years (collectively, the "Recent Comparable Transactions"). Among the ratios    
reviewed by Lazard were the equity purchase prices as a multiple of, among      
other things, historical net earnings, and the transaction values as a multiple 
of, among other things, historical EBITDA and earnings before interest and      
taxes ("EBIT"). The historical net earnings multiples of the Comparable         
Transactions and Recent Comparable Transactions ranged from 6.5x to 33.2x and   
18.5x to 24.1x, respectively. The historical EBITDA multiples of the Comparable 
Transactions and Recent Comparable Transactions ranged from 4.0x to 10.3x and   
6.2x to 9.2x, respectively. The historical EBIT multiples of the Comparable     
Transactions and Recent Comparable Transactions ranged from 6.7x to 20.3x and   
12.1x to 12.3x, respectively. These multiples may be compared with the SFP Rail 
multiples of 18.7x historical net earnings, 7.1x historical EBITDA and 10.8x    
historical EBIT, in each case implied by the closing price of BNI Common Stock  
as of June 27, 1994, and the Exchange Ratio. Lazard noted that these multiples, 
if calculated based upon closing price of June 29, 1994, would not change       
materially.                                                                     

In addition, Lazard analyzed the premiums paid over the pre-announcement    
share price for each of the Comparable Transactions and for certain selected    
recently announced stock-for-stock mergers in industries other than railroads,  
including the mergers between Columbia Healthcare and Medical Care America,     
Adobe Systems and Aldus Corp., United Healthcare and Ramsay HMO, BankAmerica    
and Continental Bank, Mellon Bank and Dreyfus, Bell Atlantic and Tele-          
Communications (which was subsequently canceled), Columbia Healthcare and HCA-  
Hospital Corp. of America, Society Corp. and KeyCorp., Mattel Inc. and Fisher-  
Price, AT&T and McCaw Cellular, and Merck and Medco Containment (collectively,  
the "Recent Large Stock Swaps"). The premiums paid ranged from 6.4% to 90.7% in 
the Comparable Transactions, from 63.3% to 90.7% in the Recent Comparable       
Transactions and from -0.9% to 75.8% in the Recent Large Stock Swaps. Lazard    
noted that, of the Recent Large Stock Swaps, if the merger between Society      
Corp. and KeyCorp. were to be excluded, the range would be from 20.2% to 75.8%. 
These premiums may be compared with the implied SFP Rail premium of             
approximately 16.5% based upon closing prices of June 27, 1994.                 

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Lazard noted that the implied premium, if calculated based upon closing prices  
of June 29, 1994, would be approximately 19.9%.                                 

 No company or transaction used in the comparable analyses is identical to SFP
Rail or the Merger. Accordingly, an analysis of the results of the foregoing is 
not entirely mathematical; rather it involves complex considerations and        
judgments concerning differences in financial and operating characteristics of  
the comparable companies and mergers and acquisitions transactions and other    
factors that could affect the acquisition or public trading values of the       
companies analyzed.                                                             

Pro Forma Merger Consequences Analysis. Lazard analyzed certain pro forma   
effects of the Merger on the earnings and capitalization of the combined        
company based on the projections provided by the managements of each of BNI and 
SFP regarding the financial performance of BNI and SFP, respectively, as well   
as the estimates by the management of BNI of the possible benefits (in the form 
of cost savings and revenue enhancements) that might be realized following the  
Merger. The BNI management estimates of the possible benefits used by Lazard    
were as follows: approximately $118 million benefit during the first year       
following the Merger, approximately $241 million benefit during the second year 
following the Merger and approximately $266 million benefit during the third    
year following the Merger. Lazard expressed no view on whether these possible   
benefits could be realized. In addition, Lazard assumed, after consultation     
with BNI management, that the Merger, among other things, (i) would be          
accounted for under the purchase method of accounting and (ii) would be         
consummated on December 31, 1995, after obtaining the approval of the ICC.      
Based on various assumptions including those described above, Lazard observed   
that the Merger would result in the initial dilution in earnings per share of   
approximately 7.0% in the first year after the Merger is consummated (which was 
assumed to be 1996) from BNI's stockholders' point of view, after taking into   
account the possible benefits anticipated by BNI management at that time to be  
realized during such year. Lazard further observed that the Merger would        
provide earnings per share accretion of approximately 4.8% and 9.8% in 1997 and 
1998, respectively, from BNI's stockholders' point of view, after taking into   
account the possible benefits anticipated to be realized during such years. In  
addition, Lazard analyzed certain pro forma credit statistics of the combined   
company and observed that the credit statistics of the combined company would   
either slightly improve or remain largely unchanged compared with those of BNI  
on a stand-alone basis.                                                         

Other Factors and Analyses. In rendering its opinions, Lazard considered    
various other factors and conducted certain additional analyses, including,     
among other things, a review of (i) the history of trading prices and volume    
for BNI Common Stock and SFP Common Stock and the relationship between          
movements of such securities and movements in the S&P Railroad Index and the    
S&P Industrials Index and (ii) the recent developments concerning the initial   
public offering of shares of SFP Gold common stock and the Gold Spinoff.        

In connection with its opinion dated the date of this Joint Proxy           
Statement/Prospectus, Lazard confirmed the appropriateness of its reliance on   
the analyses used to render its June 29, 1994 opinion by performing procedures  
to update certain of such analyses and by reviewing the assumptions on which    
such analyses were based and the factors considered in connection therewith.    
With respect to updating the pro forma merger consequences analysis, Lazard     
assumed, based upon the advice of the BNI management, that the Merger would be  
accounted for under the pooling of interests method of accounting (instead of   
the purchase method of accounting which was assumed in the same analysis in     
connection with the June 29, 1994 opinion). Except for the change in the        
accounting method, Lazard used the same set of projections and other            
assumptions as used in the pro forma merger consequences analysis in connection 
with the June 29, 1994 opinion. Based on the pooling of interests method of     
accounting and without taking into account certain post-Merger restructuring-   
related expenses which would be recognized as non-recurring charges, Lazard     
observed that the Merger would result in the initial dilution in earnings per   
share of approximately 1.6% in the first year after the Merger is consummated   
(which was assumed to be 1996) from BNI's stockholders' point of view, after    
taking into account the potential cost savings and operating efficiencies       
anticipated at that time by BNI management to be realized during such year.     
Lazard further observed that the Merger                                         

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would provide earnings per share accretions of approximately 9.8% and 14.4% in  
1997 and 1998, respectively, from BNI's stockholders' point of view, after      
taking into account the potential cost savings and operating efficiencies       
anticipated to be realized during such years. In addition, Lazard observed that 
the credit statistics of the combined company under the pooling of interests    
method of accounting would remain largely unchanged compared with those of BNI  
on a stand-alone basis.                                                         

In arriving at its written opinions dated June 29, 1994 and the date of this
Joint Proxy Statement/Prospectus, and in discussing its June 29, 1994 opinion   
with BNI's Board of Directors, Lazard performed various financial analyses,     
portions of which are summarized above. The summary set forth above does not    
purport to be a complete description of Lazard's analyses. Lazard believes that 
its analyses must be considered as a whole and that selecting portions of its   
analyses, without considering all analyses, could create an incomplete view of  
the process underlying the opinion. In performing its analyses, Lazard made     
numerous assumptions with respect to industry performance, general business and 
economic conditions and other matters, many of which are beyond the control of  
BNI or SFP. The analyses performed by Lazard are not necessarily indicative of  
actual values or actual future results, which may be significantly more or less 
favorable than suggested by such analyses. Additionally, analyses relating to   
the values of businesses do not purport to be appraisals or to reflect actual   
market valuations or trading ranges, which may vary significantly from amounts  
set forth above.                                                                

BNI retained Lazard to act as its exclusive financial advisor in connection 
with the Merger and related matters based upon its qualifications, expertise,   
and reputation in investment banking in general and mergers and acquisitions    
specifically. Lazard is an internationally recognized investment banking firm   
and is regularly engaged in the valuation of businesses and their securities in 
connection with mergers and acquisitions and for other purposes.                

 In consideration for Lazard's services in connection with the Merger, BNI has
agreed to pay Lazard fees as follows: (i) $1.5 million upon public announcement 
of the Agreement, which has been paid; (ii) an additional fee of $3.0 million   
upon receipt of the approvals of both BNI's and SFP's stockholders; and (iii)   
an additional fee of $4.5 million upon consummation of the Merger. In addition, 
BNI has agreed to reimburse Lazard for its out-of-pocket expenses and to        
indemnify Lazard and its affiliates, and their respective partners, directors,  
officers, employees, agents and controlling persons against certain expenses    
and liabilities, including liabilities under the Federal securities laws.       

Opinion of Goldman Sachs                                                      

Goldman Sachs delivered its oral opinion to the SFP Board of Directors on   
June 29, 1994 that, as of the date of such opinion, the Exchange Ratio was fair 
to the holders of SFP Common Stock. Goldman Sachs subsequently confirmed its    
June 29, 1994 opinion by delivery of its written opinion, dated as of the date  
hereof, that, as of the date hereof, the Exchange Ratio was fair to the holders 
of SFP Common Stock.                                                            

THE FULL TEXT OF THE OPINION OF GOLDMAN SACHS DATED THE DATE HEREOF, WHICH  
SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS ON THE REVIEW        
UNDERTAKEN, IS ATTACHED HERETO AS APPENDIX D TO THIS JOINT PROXY                
STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE. SUCH OPINION      
STATES THAT GOLDMAN SACHS HAVE ASSUMED, WITH THE CONSENT OF THE SFP BOARD, THAT 
IN ANALYZING THE EXCHANGE RATIO, GOLDMAN SACHS NEED NOT TAKE INTO ACCOUNT THE   
CONSIDERATION WHICH MIGHT BE RECEIVED UNDER THE UPC PROPOSAL. STOCKHOLDERS OF   
SFP ARE URGED TO, AND SHOULD, READ SUCH OPINION IN ITS ENTIRETY.                

In connection with its opinion, Goldman Sachs reviewed, among other things, 
(i) the Merger Agreement; (ii) the Joint Proxy Statement/Prospectus; (iii) the  
Annual Reports to Stockholders and Annual Reports on Form 10-K of SFP and BNI   
for the five years ended December 31, 1993 (and any amendments thereto);        
(iv) certain interim reports to stockholders and Quarterly Reports on Form 10-Q 
of SFP and BNI (and any amendments thereto); (v) certain other communications   
from SFP and BNI to their respective stockholders; (vi) certain Current Reports 
on Form 8-K of SFP and BNI; and (vii) certain internal financial analyses and   
forecasts for SFP and BNI prepared by their respective managements. Goldman     
Sachs also held discussions with members of the senior management of SFP and    
BNI regarding the past and current business operations, financial condition,    
and future prospects of their respective companies. Furthermore, Goldman Sachs  

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considered the views of the senior management of SFP regarding the strategic    
importance of, and potential synergies in the form of cost savings expected to  
be realized from, the Merger. In addition, Goldman Sachs reviewed the reported  
price and trading activity for the SFP Common Stock and the BNI Common Stock,   
compared certain financial and stock market information for SFP and BNI with    
similar information for certain other companies the securities of which are     
publicly traded, reviewed the financial terms of certain recent business        
combinations in the railroad industry specifically and in other industries      
generally and performed such other studies and analyses as it considered        
appropriate.                                                                    

Goldman Sachs relied without independent verification upon the accuracy and 
completeness of all of the financial and other information reviewed by it for   
purposes of its opinion. In addition, Goldman Sachs has not made an independent 
evaluation or appraisal of the assets and liabilities of SFP or BNI or any of   
their respective subsidiaries and Goldman Sachs has not been furnished with any 
such evaluation or appraisal.                                                   

Set forth below is a summary of certain of the financial analyses used by   
Goldman Sachs in connection with providing its oral opinion to SFP's Board of   
Directors on June 29, 1994. Goldman Sachs utilized substantially the same types 
of financial analyses in preparing its written opinion dated the date hereof.   

(i) Pro Forma Merger Analysis. Goldman Sachs prepared pro forma analyses
of the financial impact of the Merger relying on financial projections      
prepared by the managements of SFP and BNI, respectively, and estimates     
made at that time by senior management of SFP of the synergies in the form  
of cost savings expected to be realized from the Merger of $150 million in  
the first year after the Merger is consummated (which was assumed to be     
1996) and $300 million in each of 1997 and 1998. Goldman Sachs compared the 
earnings per share ("EPS") of BNI Common Stock on a stand alone basis to    
the EPS of the common stock of the combined company on a pro forma basis.   
Goldman Sachs also compared the EPS of SFP Common Stock on a stand alone    
basis to the EPS of the common stock of the combined company on a pro forma 
basis. Such analyses were prepared for the years 1996, 1997 and 1998 since  
Goldman Sachs had assumed, after consulting with SFP management, that       
approval of the ICC of the transaction might not be received until late     
1995. Goldman Sachs further assumed that the Merger would be accounted for  
using purchase accounting. These analyses showed that the Merger would      
initially dilute the EPS of BNI by approximately 4.1% but thereafter        
provide EPS accretion of approximately 7.2% and 7.9% in 1997 and 1998,      
respectively, after taking into account the synergies in the form of cost   
savings expected to be realized from the Merger in each year. Furthermore,  
Goldman Sachs' analyses showed that from the point of view of SFP           
stockholders the Merger would provide EPS accretion of approximately 38.3%, 
42.1% and 35.2% for the years 1996, 1997 and 1998, respectively, after      
taking into account the synergies in the form of cost savings expected to   
be realized from the Merger in each year.                                   

In addition, this analysis showed that SFP stockholders would receive an
additional $0.28 in dividends on a pro forma per share basis.               

In connection with its written opinion, dated as of the date of this    
Joint Proxy Statement/Prospectus, Goldman Sachs confirmed the               
appropriateness of its reliance on the analyses used to render its June 29, 
1994 oral opinion by updating certain of such analyses and by reviewing the 
assumptions on which such analyses were based and the factors considered in 
connection therewith. In updating the pro forma merger analysis, Goldman    
Sachs assumed, based upon the advice of SFP management, that the Merger     
would be accounted for as a pooling of interests (instead of being          
accounted for using purchase accounting as was assumed in connection with   
Goldman Sachs' June 29, 1994 oral opinion). With the exception of the       
change in accounting method, Goldman Sachs used the same set of projections 
and assumptions as had been used in its June 29, 1994 oral opinion. Such    
revised pro forma merger analysis showed that the Merger, after taking into 
account the synergies in the form of cost savings expected to be realized,  
would result in the initial dilution of the EPS of BNI by approximately     
0.3% in the first year after the Merger is consummated (which was assumed   
to be 1996), but that thereafter the Merger would provide EPS accretion to  
BNI stockholders of approximately 10.7% and 11.2% in 1997 and 1998,         
respectively. Furthermore, Goldman Sachs' revised analyses showed that from 
the view of SFP stockholders the Merger would provide EPS accretion of      

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approximately 43.6% in the first year after the Merger is consummated       
(which was assumed to be 1996) and that thereafter the Merger would provide 
EPS accretion to SFP stockholders of approximately 46.7% and 39.2% in 1997  
and 1998, respectively.                                                     

(ii) SFP Rail Stock Analysis. Goldman Sachs analyzed the indicated      
trading value of SFP Rail reflected in the then current trading value of    
SFP Common Stock based on estimated 1994 earnings per share for SFP Rail    
and an appropriate price earnings ratio for SFP Rail taking into            
consideration such ratios for the Selected Companies (as defined below).    
This analysis indicated an estimated trading value of SFP Rail of           
approximately $13.00 per share. Using this indicated price, Goldman Sachs   
analyzed the premium to be received by holders of SFP Common Stock pursuant 
to the Merger Agreement. This analysis showed that the price per share of   
SFP Common Stock to be paid pursuant to the Merger Agreement represented a  
premium of 12.2% based on an assumed price of $54.00 per share for BNI.     
Based on a range of historical average prices of BNI Common Stock, this     
analysis further showed that the price per share of SFP Common Stock to be  
paid pursuant to the Merger Agreement represented a premium ranging from    
12% to 24%. In addition, Goldman Sachs, as an alternative approach to       
determining the premium received by SFP stockholders in the Merger,         
analyzed the implied trading value of SFP Rail reflected in the then        
current public trading value of SFP Common Stock and SFP Gold common stock. 
This methodology suggested a trading value of SFP Rail of $11.87 based on   
closing prices of SFP Common Stock and SFP Gold common stock (assuming a 1  
for 1.7 share spin-off ratio) on June 28, 1994. Based on such implied       
trading value and an assumed price of $54.00 per share for BNI Common       
Stock, the price per share of SFP Common Stock to be paid pursuant to the   
Merger Agreement represented a premium of 22.9%.                            

(iii) Selected Companies Analysis. Goldman Sachs reviewed and compared  
certain financial information relating to SFP to corresponding financial    
information, ratios and public market multiples for nine publicly traded    
corporations: Consolidated Rail Corporation ("Conrail"), Chicago and North  
Western Holdings Corp., CSX Corporation, Illinois Central Corporation,      
Norfolk Southern Corporation, Southern Pacific Rail Corporation, Union      
Pacific Corporation, Kansas City Southern Industries, Inc. and Canadian     
Pacific Limited (the "Selected Companies"). The Selected Companies were     
chosen because they are publicly-traded companies with operations that for  
purposes of analysis may be considered similar to the operations of SFP.    
This analysis showed, among other things, that the price earnings ratio     
using estimated 1994 earnings (based on mean estimates from First Call as   
of June 17, 1994) for the Selected Companies ranged from a low of 11.6 to a 
high of 21.7, as compared to a ratio for SFP (including SFP Gold) of 17.0   
and 11.7 for BNI and the price earnings ratio using estimated 1995 earnings 
(based on mean estimates from First Call as of June 17, 1994) for the       
Selected Companies ranged from a low of 10.0 to a high of 14.2, as compared 
to a ratio for SFP of 14.4 (including SFP Gold) and 9.9 for BNI. First Call 
is a data service which monitors and publishes a compilation of earnings    
estimates produced by selected research analysts on companies of interest   
to investors.                                                               

 (iv) Contribution Analysis. Goldman Sachs reviewed certain historical and
estimated future operating and financial information (including, among      
other things, revenue, EBITDA (defined below), operating income, net        
income, operating cash flow and free cash flow) for SFP, BNI and the pro    
forma combined entity resulting from the Merger based on SFP and BNI        
managements' financial forecasts for each of SFP and BNI and the pro forma  
combined entity. The analysis indicated that the SFP stockholders would     
receive 34.5% of the outstanding common equity of the combined companies    
after the Merger. Based on financial data provided to Goldman Sachs by SFP  
and BNI managements, Goldman Sachs also analyzed the relative income        
statement contribution of SFP and BNI to the combined companies on a pro    
forma basis before taking into account any of the possible benefits that    
may be realized following the Merger. This analysis indicated that for the  
years 1994 through 1998, SFP would have contributed (i) 35.8%, 36.4%,       
37.2%, 38.2% and 39.0%, respectively, to combined revenues; (ii) 33.6%,     
33.2%, 33.7%, 34.5% and 35.2%, respectively, to combined earnings before    
interest, taxes, and depreciation ("EBITDA"); (iii) 33.0%, 32.4%, 32.9%,    
34.0% and 34.7%, respectively, to combined operating income before interest 
and special charges; and (iv) 27.2%, 27.0%, 26.8%, 28.6% and 29.8%,         
respectively, to combined net income (excluding extraordinary               
gains/losses).                                                              

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(v) Historical Stock Trading Analysis. Goldman Sachs reviewed the       
historical trading prices and volumes for the BNI Common Stock and the      
relationship between movements of such common stock and movements in (i)    
SFP Common Stock (including SFP Gold), (ii) the S&P 400, and a composite    
index of certain railroad companies (the "Composite Index"). The Composite  
Index is composed of the following companies: Burlington Northern Inc.,     
Conrail, Chicago and North Western Holdings Corp., CSX Corporation,         
Illinois Central Corporation, Norfolk Southern Corporation and Union        
Pacific Corporation. This analysis showed that the SFP Common Stock         
(including SFP Gold) outperformed the BNI Common Stock, the S&P 400 and the 
Composite Index from the period of August 1, 1993 through June 1, 1994.     

The preparation of a fairness opinion is a complex process and is not       
necessarily susceptible to partial analysis or summary description. Selecting   
portions of the analyses or of the summary set forth above, without considering 
the analysis as a whole, could create an incomplete view of the processes       
underlying Goldman Sachs' opinion. In arriving at its fairness determination,   
Goldman Sachs considered the results of all such analyses. No company or        
transaction used in the above analyses as a comparison is identical to SFP or   
BNI or the contemplated transaction. The analyses were prepared solely for      
purposes of Goldman Sachs' providing its opinion to the SFP Board of Directors  
as to the fairness of the Exchange Ratio to the holders of SFP Common Stock and 
do not purport to be appraisals or necessarily reflect the prices at which      
businesses or securities actually may be sold. Analyses based upon forecasts of 
future results are not necessarily indicative of actual future results, which   
may be significantly more or less favorable than suggested by such analyses. As 
described above, Goldman Sachs' opinion and presentation to the SFP Board of    
Directors was one of many factors taken into consideration by the SFP Board of  
Directors in making its determination to approve the Merger Agreement. The      
foregoing summary does not purport to be a complete description of the analysis 
performed by Goldman Sachs and is qualified by reference to the written opinion 
of Goldman Sachs set forth in Appendix D hereto.                                

Goldman Sachs, as part of its investment banking business, is continually   
engaged in the valuation of businesses and their securities in connection with  
mergers and acquisitions, negotiated underwritings, competitive biddings,       
secondary distributions of listed and unlisted securities, private placements,  
and valuations for estate, corporate and other purposes. Goldman Sachs is       
familiar with SFP, having performed various investment banking services for SFP 
from time to time, including having acted as managing and co-managing           
underwriter of public offerings of SFP Common Stock in October 1991 and June    
1992, respectively, having acted as financial advisor on the asset exchange     
between SFP and Hanson Natural Resources Company in June 1993, having acted as  
managing underwriter of a public offering of common stock of SFP Gold in June   
1994, and having acted as SFP's financial advisor in connection with, and       
having participated in certain of the negotiations leading to, the Merger       
Agreement. Goldman Sachs has also provided certain investment banking services  
to BNI from time to time, including acting as co-managing underwriter of a      
public offering of BNI Common Stock in November 1991, acting as managing        
underwriter of a public offering of 6 1/4% Cumulative Convertible Preferred     
Stock, Series A No Par Value in November 1992 and acting as a co-managing       
underwriter in a public offering of 7 1/2% Debentures due 2002 in July 1993,    
and may provide investment banking services to BNI in the future. SFP selected  
Goldman Sachs as its financial advisor because it is a nationally recognized    
investment banking firm that has substantial experience in transactions similar 
to the Merger.                                                                  

Pursuant to a letter agreement dated October 21, 1993 (the "Engagement      
Letter"), SFP engaged Goldman Sachs to act as its financial advisor in          
connection with the possible merger with, or sale of stock or assets to, BNI.   
Pursuant to the terms of the Engagement Letter, if the merger with, or sale of  
stock or assets to, BNI is accomplished in one or a series of transactions, SFP 
will pay Goldman Sachs upon consummation of the Merger a transaction fee of     
0.45% of the aggregate consideration paid in such transaction or series of      
transactions, with a maximum transaction fee of $15 million. As part of this    
fee, SFP will pay Goldman Sachs $5 million upon approval of the transaction by  
the stockholders of SFP and BNI (which will be credited towards the total       
transaction fee). SFP has agreed to reimburse Goldman Sachs for its reasonable  
out-of-pocket expenses, including attorney's fees, and to indemnify Goldman     
Sachs against certain liabilities, including certain liabilities under the      
Federal securities laws.                                                        

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MERGER CONSIDERATION                                                            

Pursuant to the Merger Agreement, each share of SFP Common Stock outstanding
immediately prior to the Effective Time (as defined below) and not held by SFP  
as treasury stock or owned by BNI or any of its subsidiaries, will be           
converted into the right to receive 0.27 shares of BNI Common Stock, with cash  
being paid in lieu of fractional shares of BNI Common Stock. To the extent BNI  
Rights are then outstanding, each share of BNI Common Stock issued in the       
Merger will be accompanied by one BNI Right, which will be evidenced by the     
certificate of BNI Common Stock issued in the Merger. The shares of BNI Common  
Stock, together with the associated BNI Rights, if then outstanding, are        
referred to as the "Merger Consideration." Shares of SFP Common Stock held by   
SFP as treasury stock or owned by BNI or any of its subsidiaries immediately    
prior to the Effective Time will be canceled, and no payment will be made with  
respect thereto. See "The Merger Agreement--The Merger."                        

EFFECTIVE TIME                                                                  

The Merger will become effective upon the filing of a certificate of merger 
with, and acceptance by, the Secretary of State of the State of Delaware or at  
such later time as is specified in the certificate of merger (the "Effective    
Time"). At the Effective Time, the separate existence of SFP will cease, and    
BNI will continue as the surviving corporation. The filing of a certificate of  
merger will occur promptly after the satisfaction or waiver of all conditions   
to BNI's and SFP's obligation to effect the Merger. The Merger Agreement        
provides that either party may terminate the Agreement if the Merger is not     
consummated by December 31, 1997.                                               

The approval of the ICC is required to consummate the Merger. Under existing
law, the ICC is required to enter a final order with respect to the Merger      
within 31 months after the application for such approval is filed by BNI and    
SFP. On October 5, 1994, the ICC served an order establishing a schedule that   
would result in a final ICC decision within 535 days from the filing of the     
application. The parties are filing the application on October 13, 1994. There  
can be no assurance that the ICC will issue a decision any sooner than the 31-  
month period permitted the ICC by law. An ICC approval order may be appealed    
by certain persons and the effectiveness of the order might be stayed by the    
ICC or by an appellate court while such an appeal is pending. Any appeals from  
the ICC order might not be resolved for a substantial period of time after the  
entry of the order by the ICC. ICC approval is not automatically stayed if a    
party seeks judicial review of the decision; however, it is possible that the   
approval could be stayed by the ICC or a reviewing court. If the approval is    
stayed, consummation of the Merger would be delayed. Consummation of the        
Merger, which will occur after stockholder approval, receipt of required        
regulatory approvals and satisfaction or waiver of all of the other conditions  
set forth in the Merger Agreement, may not occur for two or more years in the   
future. See "Other Matters--ICC Approval."                                      

CONVERSION OF SHARES; PROCEDURES FOR EXCHANGE OF CERTIFICATES; DIVIDENDS; NO    
FRACTIONAL SHARES                                                               

Upon consummation of the Merger, each share of SFP Common Stock outstanding 
immediately prior to the Effective Date (other than shares of SFP Common Stock  
owned by SFP as treasury stock or owned by BNI or any subsidiary of BNI         
immediately prior to the Effective Time, all of which will be canceled) will    
be converted into the right to receive 0.27 shares of BNI Common Stock, and     
will cease to be outstanding. As of October 10, 1994, the value of 0.27 shares  
of BNI Common Stock was $13.03 based on the closing price of BNI Common Stock   
on the NYSE on such date. Based upon the shares outstanding of BNI and SFP as   
of October 10, 1994 and the Exchange Ratio, it is expected that the             
stockholders of SFP immediately prior to the consummation of the Merger will    
own approximately 36.1% of the outstanding shares of BNI Common Stock           
immediately after the consummation of the Merger.                               

If any holder of shares of SFP Common Stock would be entitled to receive a  
number of shares of BNI Common Stock that includes a fraction, then, in lieu    
of a fractional share, such holder will be entitled to receive a cash payment   
representing such holder's proportionate interest in the net proceeds from the  
sale by                                                                         

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an agent appointed by BNI and reasonably satisfactory to SFP (the "Exchange     
Agent") in one or more transactions (made at such times, in such manner and on  
such terms as the Exchange Agent will determine in its reasonable discretion)   
on behalf of all holders of the aggregate of fractional shares of BNI Common    
Stock which would otherwise have been issued. The sale of such aggregate of     
fractional shares of BNI Common Stock by the Exchange Agent will be executed on 
the NYSE through one or more member firms of the NYSE and will be executed in   
round lots to the extent possible.                                              

At the Effective Time, BNI will deposit with the Exchange Agent certificates
representing the aggregate Merger Consideration to be paid in respect of shares 
of SFP Common Stock. Promptly after the Effective Time, BNI will send, or will  
cause the Exchange Agent to send, to each holder of record of SFP Common Stock  
a letter of transmittal to be used in forwarding his or her certificates        
evidencing such shares of SFP Common Stock to the Exchange Agent for surrender  
and exchange for certificates evidencing the Merger Consideration to which he   
or she has become entitled and, if applicable, cash in lieu of a fractional     
share of BNI Common Stock. Such letter of transmittal will specify that the     
delivery shall be effected, and the risk of loss and title shall pass, only     
upon proper delivery to the Exchange Agent of the certificates representing     
such holder's shares of SFP Common Stock. Upon surrender to the Exchange Agent  
of a certificate or certificates representing a holder's shares of SFP Common   
Stock, such holder will be entitled to receive the Merger Consideration and, if 
applicable, cash in lieu of a fractional share of BNI Common Stock in respect   
thereof.                                                                        

 Any portion of the Merger Consideration deposited with the Exchange Agent and
any portion of the net proceeds from the sale of the aggregate of fractional    
shares by the Exchange Agent that remains unclaimed for a period of twelve      
months after the Effective Time by the stockholders of SFP will, upon demand,   
be returned to BNI, and any such holder who has not exchanged his shares of SFP 
Common Stock for the Merger Consideration after such period will thereafter     
only look to BNI for his or her claim for BNI Common Stock, any cash in lieu of 
fractional shares of BNI Common Stock and any dividends or distributions in     
respect of BNI Common Stock, subject to applicable abandoned property laws.     

After the Effective Time, each certificate evidencing shares of SFP Common  
Stock, until so surrendered and exchanged, will be deemed, for all purposes, to 
evidence only the right to receive the Merger Consideration which the holder of 
such certificate is entitled to receive and the right to receive any cash       
payment in lieu of a fractional share of BNI Common Stock. The holder of such   
unexchanged certificate will not be entitled to receive any dividends or other  
distributions until such certificate is surrendered. Upon such surrender, there 
shall be paid, without interest, to the person in whose name the certificates   
representing the BNI Common Stock into which such shares of SFP Common Stock    
were converted are registered, (1) all dividends and other distributions in     
respect of BNI Common Stock that are payable on a date subsequent to, and the   
record date for which occurs after, the Effective Time and (2) all dividends or 
other distributions in respect of shares of SFP Common Stock that are payable   
on a date subsequent to, and the record date for which occurs before, the       
Effective Time.                                                                 

NAME OF SURVIVING ENTITY                                                        

Upon consummation of the Merger, BNI will change its name to Burlington     
Northern Santa Fe Corporation.                                                  

NYSE LISTING                                                                    

 It is a condition to SFP's obligation to effect the Merger that the shares of
BNI Common Stock issuable pursuant to the Merger Agreement shall have been      
approved for listing on the NYSE, subject to official notice of issuance.       

EXPENSES                                                                        

 Except as otherwise agreed in writing by SFP and BNI, and except for expenses
in connection with the printing and mailing of this Joint Proxy                 
Statement/Prospectus and the related Registration Statement on Form S-4 and     
experts hired jointly in connection with proceedings before the ICC, which will 
be shared                                                                       

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equally by BNI and SFP, each party shall bear its own expenses, including the   
fees and expenses of any                                                        
attorneys, accountants, investment bankers, brokers, finders or other           
intermediaries or other Persons engaged by it, incurred in connection with the  
Merger Agreement and the transactions contemplated thereby.                     

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

Directors and Officers of the Merged Entity                                   

The Merger Agreement provides that two-thirds of the initial members of the 
board of directors of the merged company will be designated by BNI, and one-    
third of the members of the board will be designated by SFP. Further, the       
parties have agreed that Mr. Gerald Grinstein, Chairman and Chief Executive     
Officer of BNI, will serve as Chairman of the merged company and Mr. Robert D.  
Krebs, Chairman, President and Chief Executive Officer of SFP, will serve as    
President and Chief Executive Officer of the merged company. Other senior       
officers of the merged entity will be selected by the merged entity's board of  
directors based upon, among other things, the recommendations of Mr. Grinstein  
and Mr. Krebs.                                                                  

SFP                                                                           

Directors and Officers Generally. Officers and directors of SFP owning SFP  
Common Stock will receive the same consideration in the Merger as other SFP     
stockholders. In the Merger Agreement, BNI has agreed that it will indemnify    
and hold harmless each person who is, or has been at any time prior to the date 
of the Merger Agreement, or who becomes prior to the Effective Time, an officer 
or director of SFP, in respect of acts or omissions occurring prior to the      
Effective Time (the "Indemnified Parties") (including but not limited to the    
transactions contemplated by the Merger Agreement) to the extent provided under 
SFP's certificate of incorporation, bylaws and (A) indemnity agreements between 
SFP and any of its officers or directors ("Indemnity Agreements") in effect on  
the date of the Merger Agreement or (B) indemnity agreements that may be        
entered into by SFP from and after the date of the Merger Agreement and prior   
to the Effective Time so long as such agreements shall contain terms and        
provisions substantially similar to Indemnity Agreements in effect as of the    
date of the Merger Agreement; provided that such indemnification shall be       
subject to any limitation imposed from time to time under applicable law. For   
six years after the Effective Time, BNI will provide, if available, officers'   
and directors' liability insurance in respect of acts or omissions occurring    
prior to the Effective Time, including but not limited to the transactions      
contemplated by the Merger Agreement, covering each such officer or director    
currently covered by SFP's officers' and directors' liability insurance policy, 
or who becomes covered by such policy prior to the Effective Time, on terms     
with respect to coverage and amount no less favorable than those of such policy 
in effect on the date of the Merger Agreement, provided that, in satisfying     
such obligation, BNI will not be obligated to pay premiums in excess of 200% of 
the amount per annum SFP paid in 1993, but provided further that BNI will       
nevertheless be obligated to provide such coverage as may be obtained for such  
amount.                                                                         

Severance Agreements. SFP has entered into thirty-one severance agreements, 
including individual executive severance agreements with each of Carol          
Beerbaum, Russell Hagberg, Thomas Hund, Steven Marlier, Donald McInnes, Jeffrey 
Moreland, Marsha Morgan, Patrick Ottensmeyer, Denis Springer, Daniel Westerbeck 
and Catherine Westphal. Such individuals are not eligible for duplicate salary  
replacement benefits under both the individual agreements and The Atchison,     
Topeka and Santa Fe Railway Company Severance Program (the "ATSF Severance      
Program") discussed below. Stockholder approval of the Merger will constitute a 
"change in control" for purposes of the individual agreements. The agreements   
generally provide that if the executive's employment is terminated (for any     
reason other than disability, death or termination by SFP for cause) or if the  
executive terminates his or her employment as the result of certain specified   
actions taken by SFP or its successors, after a change in control and prior to  
the expiration of the agreement, the executive will be entitled to certain      
severance benefits. The agreements will expire on the latest of (a) 36 months   
after the change in control, (b) the effective date of ICC approval of the      
Merger or, if later, the first anniversary of the consummation of the Merger    
(or if SFP determines that it will not consummate the Merger, the date of that  
determination), or (c) the date on which the ICC determines that it will not    
approve the Merger.                                                             

 The maximum severance benefits to which the executives will be entitled under
the individual agreements (assuming the conditions described in the preceding   
paragraph are met) are: (i) payment of full base salary through the date of     
termination, all amounts otherwise due the executive under the terms of any SFP 

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compensation plan and, at the executive's election, a lump sum payment of       
amounts deferred (and earnings thereon) under the Santa Fe Pacific Supplemental 
Retirement and Savings Plan (or any similar plan), (ii) severance payments      
equal to, as elected by the executive, the sum of (A) 200% of the executive's   
annual salary or the amount of salary replacement payments the executive would  
otherwise receive under the ATSF Severance Program, and (B) 200% of the maximum 
incentive award payable to the executive under the Annual Incentive             
Compensation Plan of SFP (or its affiliates) for the year in which the          
executive's employment terminates, and in either case, if the executive         
terminates for certain specified reasons, an additional payment necessary to    
provide such benefits on an after-tax basis, (iii) payment of outstanding       
performance awards, calculated as though all relevant performance goals have    
been met, (iv) a cash payment in settlement of all outstanding stock options,   
which options will be canceled, (v) payment of all legal fees incurred by the   
executive as a result of his termination, (vi) continuing life, disability,     
accident and group health insurance benefits for a period of 24 months after    
termination of employment, and (vii) payment of outplacement services for a     
period of twelve months following termination.                                  

Certain limitations apply to the amount of benefits payable under the       
agreements. In particular, exercisability of options and rights shall not be    
accelerated and no payment or benefit shall be accelerated under agreements to  
the extent that such acceleration of exercisability, payment or benefit, when   
aggregated with other payments or benefits to the affected individual, would    
result in "excess parachute payments" equal to or greater than three times the  
"base amount" (as defined in section 280G of the Code). The term "excess        
parachute payments" for purposes of the agreements means "parachute payments"   
(as defined in section 280G of the Code) other than (i) health and life         
insurance benefits, and (ii) payments attributable to any award, benefit or     
other compensation plan or program based upon the number of full or fractional  
months of any restricted period relating thereto which has elapsed prior to the 
date of the change in control. In addition, payments or benefits under the      
agreements shall be reduced to the extent necessary so that no portion thereof  
shall be subject to the excise tax imposed by section 4999 of the Code, but     
only if, by reason of such reduction, the executive's net after-tax benefits    
(as defined under the SFP Long Term Incentive Stock Plan (the "Incentive        
Plan")) shall exceed the net after-tax benefit if such reduction were not made. 

SFP Pipelines has entered into an individual executive severance agreement  
with Mr. Toole. Mr. Toole is not eligible for duplicate salary replacement      
benefits under both the individual agreement and the Santa Fe Pacific           
Pipelines, Inc. Severance Program (the "Pipelines Severance Program").          
Stockholder approval of the Merger will constitute a "change in control" for    
purposes of Mr. Toole's agreement. That agreement generally provides for the    
same benefits as the individual severance agreements previously described. Mr.  
Toole's agreement, however, will expire 24 months after the change in control.  
In addition, the maximum severance payments payable to Mr. Toole under his      
agreement are equal to, as elected by the executive, the sum of (A) two times   
his annual salary or the amount of salary replacement payments the executive    
would otherwise receive under the Pipelines Severance Program, (B) the maximum  
incentive award payable to the executive under the Annual Incentive             
Compensation Plan of SFP Pipelines for the year in which Mr. Toole's employment 
terminates and (C) a cash payment attributable to the cash out of Partnership   
phantom units.                                                                  

The Pipelines Severance Program must remain in effect for a period of at    
least 24 months following a change in control. Stockholder approval of the      
Merger will constitute a "change in control" for purposes of the Pipelines      
Severance Program. The executive officers of SFP other than Mr. Toole are not   
eligible for benefits under the Pipelines Severance Program. Mr. Toole,         
however, may elect salary replacement benefits under the Pipelines Severance    
Program in lieu of those provided under his individual severance agreement. The 
applicable benefits under the Pipelines Severance Program are generally the     
same as those provided under the ATSF Severance Program.                        

If payments under the individual agreements are triggered following a change
in control, the estimated amounts (based on current compensation levels and     
assuming terminations occurring during 1994) payable to SFP's five most highly  
compensated executive officers (including Mr. Krebs, who does not have an       
individual severance agreement) are as follows: Mr. Springer, $1,664,188; Mr.   
McInnes, $1,239,377; Mr. Marlier, $914,483; and Mr. Hagberg, $1,517,895. The    
estimated amounts (based on current compensation levels) payable to SFP's other 
executive officers in such circumstances range from $251,977 to                 

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$1,177,975, and the aggregate amount that would be paid to all of SFP's         
executive officers in such circumstances would be approximately $11,463,857. In 
addition, each SFP executive officer would receive non-cash and non-stock       
benefits of approximately $42,000. As of October 1, 1994, there are thirteen    
SFP executive officers. The foregoing information (i) includes certain bonus    
payments to be made in respect of restricted stock (calculated without giving   
effect to the limitations relating to section 280G of the Code described above) 
and (ii) does not include the value of stock options or restricted stock        
discussed below.                                                                

SFP and its subsidiaries maintain the ATSF Severance Program for all full-  
time salaried employees, including Mr. Krebs, who are terminated by their       
respective companies other than for cause as defined in the severance programs. 
A participant is generally entitled to an amount up to one year's pay based     
upon a participant's age, length of service and current salary, or in certain   
circumstances, supplemental payments provided that the aggregate does not       
exceed two years' pay. The ATSF Severance Program further provides that in the  
event of a change in control (which is similar to the definition used in the    
individual agreements), the program will be maintained for a 24-month period.   
Benefits under the ATSF Severance Program will not be paid if a participant     
received payments under individual agreements. Upon a covered termination       
occurring in 1994, Mr. Krebs would be entitled to a cash payment of             
approximately $760,000 and non-cash benefits with a value of approximately      
$42,000.                                                                        

 SFP executives who have individual severance agreements with SFP may elect to
receive salary replacement payments under the ATSF Severance Program instead of 
the severance payments provided by their individual severance agreements. The   
amounts payable under the ATSF Severance Program are less than the amounts      
payable under the individual severance agreements. The applicable salary        
replacement benefits under the ATSF Severance Program generally are based on    
the executive's benefit under the SFP Retirement Plan (as defined below).       
Because Mr. Krebs does not have an individual severance agreement, his only     
source of severance payments would be the ATSF Severance Program.               

If the Santa Fe Pacific Retirement Plan (the "SFP Retirement Plan") is      
terminated within three years following a "change in control," any assets       
remaining after satisfaction of all benefit liabilities to participants will be 
applied (to the extent permitted under applicable law) to the payment of        
retiree medical and life insurance benefits payable to participants and their   
beneficiaries. Any assets still remaining would be used to increase the         
retirement benefits payable to participants and their beneficiaries (to the     
extent permitted under applicable law). For purposes of the SFP Retirement      
Plan, stockholder approval of the Merger will not constitute a change in        
control. A subsequent change in the composition of the Board of Directors as a  
result of the Merger (as discussed above), however, may constitute a "change in 
control" for purposes of the plan.                                              

Stock Options and Other Stock-Based Awards. Stockholder approval of the     
Merger by the SFP stockholders will constitute a "change in control"            
accelerating the vesting of or lapse of restrictions, restricted periods and    
performance periods applicable to most outstanding stock options, restricted    
stock awards, stock appreciation rights, performance units, performance shares  
and limited stock appreciation rights under the Incentive Plan and the SFP      
Incentive Stock Compensation Plan (collectively, the "Stock Plans").            
Acceleration of awards under the Stock Plans are subject to the same            
limitations relating to section 280G of the Code as apply with respect to       
payments under the severance agreements.                                        

The following indicates the number of shares of restricted stock awarded to 
SFP's five most highly compensated executive officers, and the approximate      
value thereof (determined using a stock price of $13.00 per SFP share trading   
on a when issued basis as of September 15, 1994) with respect to which vesting  
will be accelerated upon stockholder approval of the Merger: Mr. Krebs, 36,920  
($479,960), Mr. Springer, 13,841 ($179,933), Mr. Marlier, 10,222 ($132,886),    
Mr. McInnes, 10,619 ($138,047), and Mr. Hagberg, 10,829 ($140,777). The         
aggregate number of shares awarded to all of SFP's executive officers which     
will vest upon stockholder approval of the Merger is 137,666 shares, which have 
an aggregate value of approximately $1,789,658 (determined based on a stock     
price of $13.00 per SFP share trading on a when issued basis as of September    
15, 1994). With respect to executive officers, no other benefits under the      
stock plans will be accelerated upon stockholder approval of the Merger (other  
than stock options which are discussed below).                                  

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Assuming that the Merger is approved by SFP stockholders in the fourth      
quarter of 1994, the total amount of compensation expense that will be charged  
to operations in the fourth quarter of 1994 due to accelerated vesting of       
unearned compensation relating to restricted stock will be approximately $6     
million.                                                                        

 The following indicates the number of options granted to the five most highly
compensated executive officers, and the approximate value thereof (assuming a   
stock price of $22.50 per share as of September 15, 1994), which are unvested   
as of September 30, 1994 and which would vest upon SFP stockholder approval of  
the Merger: Mr. Krebs, 332,334 ($1,006,859), Mr. Springer, 50,000 ($268,000),   
Mr. Marlier, 60,000 ($214,800), Mr. McInnes, 60,000 ($214,800), and Mr.         
Hagberg, 41,063 ($217,319). The aggregate number of options granted to all SFP  
executive officers which are unvested as of September 30, 1994 is 716,777 and   
the aggregate value of such options (assuming a stock price of $22.50 per share 
as of September 15, 1994) is approximately $2,808,544.                          

The foregoing information uses a price of $13.00 to value restricted stock  
and $22.50 to value options. The $13.00 per share stock price used to value     
restricted stock is intended to reflect the value of SFP Common Stock after the 
distribution to stockholders on September 30, 1994 in connection with the Gold  
Spinoff. The $22.50 per share stock price was used to value options because the 
options following the Gold Spinoff will continue to retain the pre-Gold Spinoff 
value (due to adjustments to the option price and number of shares subject to   
the options).                                                                   

BNI                                                                           

Severance Arrangements. BNI has entered into certain change in control      
severance agreements (the "Severance Agreements") with approximately seventy    
employees of BNI and/or its subsidiaries, including all of its executive        
officers other than Mr. Grinstein. These Severance Agreements provide for       
certain severance benefits if the individual's employment with BNI is           
terminated for certain reasons subsequent to a change in control of BNI. A      
"change in control" takes place if (i) a person acquires 20% voting power of    
BNI's stock, (ii) during any two-year period individuals who constitute the     
Board of Directors at the beginning of such period cease to constitute a        
majority thereof or (iii) BNI's stockholders approve a merger, consolidation or 
sale of substantially all BNI's assets or a plan of liquidation or dissolution  
of BNI. If the employment of a person covered by a Severance Agreement is       
terminated during the period commencing on the date of the BNI stockholders'    
approval of the Merger and ending on the second anniversary of the Effective    
Time for reasons other than death or permanent disability, cause or mandatory   
retirement or is terminated by the employee for Good Reason (as defined below), 
then the employee shall be entitled to receive the following benefits: payments 
of base compensation (annual salary rate and maximum bonus target) through the  
date of termination and all amounts otherwise owed the executive under the      
terms of any BNI compensation plan, three times the individual's base           
compensation, an amount equal to the retirement benefits and BNI's Thrift and   
Profit Sharing Plan employer contributions payable (assuming the individual     
remained an employee for three more years or until mandatory retirement, both   
based on base compensation increasing 8% per year), certain insurance benefits  
for 18 months after termination, waiver of any restricted periods on, and the   
vesting of, any outstanding awards of restricted stock or stock options, any    
legal fees incurred in enforcing the Severance Agreement and payment of any     
Federal excise taxes on certain amounts paid. For purposes of the Severance     
Agreements, "Good Reason" means the occurrence of any of the following          
circumstances: (a) the assignment of any duties inconsistent with and inferior  
to those held immediately prior to the change in control; (b) a reduction in    
the individual's base compensation; (c) the relocation of BNI's principal       
executive offices to a location outside the Fort Worth, Texas Metropolitan      
Area, requiring the individual to be based anywhere other than BNI's principal  
executive offices or where the individual was located immediately prior to such 
change in control; (d) the failure by BNI to pay to the individual any portion  
of the individual's current or deferred compensation or other benefits when     
due; (e) the failure by BNI to continue in effect any material compensation     
plan in which the individual participated immediately prior to the change in    
control or the failure by BNI to continue the individual's participation        
therein on a basis not materially less favorable, as existed at the time of the 
change in control of BNI; (f) the failure to continue to provide benefits at a  
cost substantially similar to the cost of those enjoyed under any of BNI's life 
insurance, medical, health and accident, or disability plans in which the       
individual was participating at the                                             

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time of the change in control of BNI, or the material reduction of such         
benefits; (g) any purported termination of the individual's employment that is  
not effected pursuant to the terms of the Severance Agreement; and (h) any      
material breach by BNI of any provision of the Severance Agreement. Prior to a  
change in control, the Severance Agreements impose no obligation on BNI to      
retain an individual as an employee or to make payment of any of the benefits   
mentioned therein.                                                              

Approval of the Merger by BNI stockholders will constitute a "change in     
control" under the Severance Agreements. If payments under the Severance        
Agreements are triggered following a "change in control," the estimated cash    
amounts (based on current compensation levels and assuming termination          
occurring during 1994) payable to BNI's five most highly compensated executive  
officers (including Mr. Grinstein, who does not have a Severance Agreement) are 
as follows: Mr. D.C. Anderson, $3,208,386; Mr. J.Q. Anderson, $2,602,826; Mr.   
E.W. Burke, $2,669,638; and Mr. J.T. Chain, $2,873,989. The estimated cash      
amounts (based on current compensation levels) payable to BNI's other executive 
officers in such circumstances range from $795,169 to $2,494,772. The maximum   
aggregate cash amount that could be paid pursuant to the Severance Agreements   
to all executive officers of BNI (based on current compensation levels),        
assuming all executive officers are terminated, in the circumstances outlined   
above is approximately $33,672,291. In addition, each BNI executive officer     
would receive non-cash benefits ranging from $11,000 to $15,000 with an         
estimated non-cash total of up to $242,000. The foregoing information does not  
include the value of stock options or other stock-based awards, which are       
discussed below.                                                                

BNI anticipates that, subject to board approval, it will establish a        
severance program for all full-time salaried employees of BNI and Burlington    
Northern Railroad Company (the "Proposed Severance Program") who are terminated 
by their respective companies other than for cause. The current proposal        
contemplates that participants would be generally entitled to an amount up to   
one year's salary based upon a participant's age, length of service and current 
salary, or in certain circumstances, supplemental payments provided that the    
aggregate would not exceed two years' salary. The Proposed Severance Program    
would further provide that in the event of a change in control (which           
definition would be similar to that used in the Severance Agreements) the       
Proposed Severance Program would be maintained for a 24-month period. Benefits  
under the Proposed Severance Program would not be paid if a participant         
received payments under the Severance Agreements discussed above. Mr.           
Grinstein, who does not have a Severance Agreement and who would accordingly be 
entitled to participate in the Proposed Severance Program, has elected not to   
be a participant.                                                               

 Stock Options and Other Stock-Based Awards. Approval of the Merger by the BNI
stockholders will constitute a "change in control" accelerating the vesting of  
or lapse of restrictions, restricted periods and performance periods applicable 
to all outstanding stock options, restricted stock awards, stock appreciation   
rights, performance units, performance shares and limited stock appreciation    
rights under various stock-based plans for officers and directors and certain   
other employees of BNI.                                                         

Vesting will be accelerated upon stockholder approval of the Merger with    
respect to an aggregate of 294,281 shares of restricted BNI Common Stock with   
an aggregate value of approximately $15,412,967 (determined based on a stock    
price of $52.375 per share) awarded to the following five highest compensated   
officers of BNI, all other executive officers of BNI and all other directors as 
a group as of September 15, 1994: Mr. G. Grinstein, 67,816 ($3,551,863); Mr.    
D.C. Anderson, 36,600 ($1,916,925); Mr. E.W. Burke, 23,866 ($1,249,982); Mr.    
J.T. Chain, 23,832 ($1,248,201); Mr. J.Q. Anderson, 17,299 ($906,035); all      
other executive officers as a group, 120,871 ($6,330,619); and all other        
directors as a group, 3,997 ($209,343).                                         

The following indicates the number of options granted to the five highest   
compensated officers of BNI, all other executive officers of BNI as a group and 
all other directors as a group with an approximate aggregate value of           
$4,953,354 (assuming a stock price of $52.375 per share), which will vest early 
upon stockholder approval of the Merger, as of September 15, 1994: Mr. G.       
Grinstein, 135,868 ($1,940,476); Mr. D.C. Anderson, 28,085 ($108,603); Mr. E.W. 
Burke, 36,908 ($482,742); Mr. J.T. Chain, 27,250 ($120,344); Mr. J.Q. Anderson, 
19,975 ($120,844); all other executive officers as a group, 199,045             
($2,180,346); and all other directors as a group, 8,000 ($0).                   

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Assuming that the Merger is approved by BNI stockholders in the fourth      
quarter of 1994, the total amount of compensation expense that will be charged  
to operations in the fourth quarter of 1994 due to the accelerated vesting of   
unearned compensation relating to restricted stock will be approximately $25    
million.                                                                        

Employment Agreement with Certain Persons. Since the date of its most recent
Proxy Statement, BNI has entered into employment agreements with the following  
executive officers:                                                             

Mr. Ronald A. Rittenmeyer is employed pursuant to an employment agreement   
commencing April 22, 1994 and terminating on May 29, 1996, providing for a      
minimum annual salary of $250,000 with further increases as determined by the   
Board of Directors from time to time. In February 1995, Mr. Rittenmeyer will    
receive a one-time lump sum bonus payment of a minimum of $160,000. Effective   
January 1, 1995, he will become a regular participant in BNI's annual bonus     
program. On Mr. Rittenmeyer's commencement date, he received an award of 7,800  
shares of restricted stock under the Burlington Northern Inc. Restricted Stock  
Incentive Plan and an initial award of 11,700 stock options under the           
Burlington Northern Inc. Stock Option Incentive Plan, to vest in accordance     
with said plans. If employed through the fifth anniversary of his employment,   
or if his termination prior thereto was caused by death, permanent disability   
or by BNI without cause, his pension benefits will be based upon his years of   
service with BNI plus those with his prior employer, such benefits to be offset 
by those received from his prior employer.                                      

Mr. Gregory T. Swienton is employed pursuant to an employment agreement     
commencing June 11, 1994 and terminating June 11, 1996, providing for a minimum 
annual salary of $230,000 with further increases as determined by the Board of  
Directors from time to time. In January 1995, Mr. Swienton will receive an      
incentive bonus of a minimum of $68,000. Effective January 1, 1995, Mr.         
Swienton will participate in BNI's annual bonus program. On Mr. Swienton's      
commencement date, he was granted an award of 2,800 shares of restricted stock  
under the Burlington Northern Inc. Restricted Stock Incentive Plan and 11,700   
stock options under the Burlington Northern Inc. Stock Option Incentive Plan,   
to vest in accordance with said plans.                                          

 Additional information relating to executive compensation and various benefit
arrangements of BNI and SFP is set forth in, and incorporated herein by         
reference to, BNI's and SFP's respective Annual Reports on Form 10-K. See       
"Available Information" and "Incorporation of Certain Documents by Reference."  

ACCOUNTING TREATMENT                                                            

The Merger will be accounted for under the "pooling of interests" method of 
accounting. Based on the most current information then available, at the time   
of the execution of the Merger Agreement BNI and SFP evaluated the Merger       
assuming that the "purchase" method of accounting would apply.                  

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

The following is a summary of certain material United States Federal income 
tax consequences of the Merger to BNI, SFP and the SFP stockholders. The        
summary is based upon the Internal Revenue Code of 1986, as amended to the date 
hereof (the "Code"), administrative pronouncements, judicial decisions and      
Treasury regulations, subsequent changes to any of which may affect the tax     
consequences described herein. The summary only applies to holders that hold    
shares of SFP Common Stock as capital assets and does not                       
address tax considerations which may affect the treatment of certain special    
status taxpayers such as financial institutions, broker-dealers, life insurance 
companies, tax-exempt organizations, investment companies, foreign taxpayers,   
and persons who acquired SFP stock pursuant to employee stock options or plans. 
SFP stockholders are urged to consult their own tax advisors as to the          
particular United States Federal income tax consequences to them of the Merger  
and as to the foreign, state, local and other tax consequences of the Merger.   

The Merger has been structured to qualify as a tax-free reorganization under
section 368 of the Code. The obligation of either BNI or SFP to consummate the  
Merger is conditioned on receipt of an opinion of nationally recognized tax     
counsel that the Merger so qualifies. Assuming the Merger so qualifies, the     
material tax consequences are as follows: (i) except with respect to cash       
received in lieu of fractional shares, as                                       

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discussed below, SFP stockholders will not recognize gain, income or loss upon  
the receipt of shares of BNI Common Stock in exchange for their shares of SFP   
Common Stock; (ii) no gain, income or loss will be recognized by BNI or SFP     
pursuant to the Merger; (iii) the tax basis of the shares of BNI Common Stock   
received by SFP stockholders will be the same as the tax basis of the shares of 
SFP Common Stock exchanged therefor (as previously reduced pursuant to the Gold 
Spinoff); (iv) the holding period of the shares of BNI Common Stock received by 
SFP stockholders will be the same as the holding period of the shares of SFP    
Common Stock surrendered therefor; and (v) the payment of cash in lieu of       
fractional shares will be treated as if the fractional shares were received in  
the Merger and then sold, with an SFP stockholder recognizing gain or loss to   
the extent of the difference between the cash received and the basis of the     
fractional share (as calculated pursuant to clause (iii) above).                

MANAGEMENT AND DIRECTOR STOCK OPTIONS                                           

SFP. As of October 10, 1994, there were 15,834,422 unexercised options      
outstanding under various employee stock option plans of SFP to purchase shares 
of SFP Common Stock at prices ranging from $2.61 to $14.29 per share. As of     
that date, 10,538,916 options to purchase shares of SFP Common Stock were       
exercisable and 5,295,506 options were not exercisable.                         

At the Effective Time, each outstanding option to purchase shares of SFP    
Common Stock (a "SFP Stock Option") granted under any employee stock option or  
compensation plan or arrangement of SFP will be canceled and replaced by an     
option (an "Adjusted BNI Option") to acquire BNI Common Stock. The number of    
BNI shares subject to the Adjusted BNI Option shall be determined by applying   
the Exchange Ratio to the number of SFP shares subject to the SFP Stock Option, 
and the aggregate exercise price of the options shall remain the same. In       
addition, each Adjusted BNI Option will provide the option holder with rights   
and benefits that are no less favorable to such holder than were provided under 
the SFP Stock Option for which it was substituted. At or as soon as practicable 
after the Effective Time, BNI will issue to each holder of an SFP Stock Option  
which is canceled an agreement that accurately reflects the terms of the        
Adjusted BNI Option substituted therefor.                                       

In addition, BNI will take all corporate actions necessary to reserve for   
issuance such number of shares of BNI Common Stock as will be necessary to      
satisfy exercises in full of all Adjusted BNI Options after the Effective Time, 
including: (i) as soon as practicable after the Effective Time filing with the  
Commission a Registration Statement on Form S-8 and using its reasonable best   
efforts to have such registration statement remain continuously effective under 
the Securities Act and (ii) filing with the NYSE a listing application and      
using its reasonable best efforts to have such shares admitted to trading       
thereon upon exercises of Adjusted BNI Options. BNI will also use its           
reasonable best efforts to ensure that all Adjusted BNI Options that are issued 
in substitution for SFP Stock Options that were incentive stock options (within 
the meaning of the Code) will qualify as such at all times after the Effective  
Time.                                                                           

BNI. BNI management and director stock options and other stock-based awards 
that are outstanding at the Effective Time will remain in effect in accordance  
with their terms.                                                               

See "The Merger--Interests of Certain Persons in the Merger" for information
concerning the vesting and acceleration of certain SFP and BNI stock options    
and other stock-based awards upon SFP or BNI stockholder approval of the        
Merger, as the case may be.                                                     

NO APPRAISAL RIGHTS                                                             

Under Delaware law, neither holders of BNI Common Stock nor holders of SFP  
Common Stock are entitled to appraisal rights in connection with the Merger.    

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RECENT DEVELOPMENTS 

On October 5, 1994, Mr. Drew Lewis, the Chairman and Chief Executive Officer
of Union Pacific Corporation ("UPC"), called Mr. Robert D. Krebs, the Chairman, 
President and Chief Executive Officer of SFP, and stated that UPC wished to     
acquire SFP and that Mr. Lewis wanted to meet with Mr. Krebs. Mr. Lewis further 
stated that he was going to call Mr. Gerald Grinstein, the Chairman and Chief   
Executive Officer of BNI, to request a meeting with him as well. Mr. Krebs told 
Mr. Lewis that SFP was already a party to a Merger Agreement, that it was       
unlikely that the ICC would permit a merger between SFP and UPC, and that       
therefore there was no reason to have a meeting. Mr. Lewis replied that UPC     
intended to make public a proposal if no meeting occurred and urged that a      
meeting be held. The two men then agreed that Mr. Krebs would consult his       
counsel. After doing so, Mr. Krebs called Mr. Lewis back and agreed to a        
meeting. During the conversations, Mr. Lewis told Mr. Krebs that UPC had looked 
at Southern Pacific and at SFP, and had decided that SFP was the company to     
break up. Mr. Lewis also stated that UPC would offer concessions to BNI to      
persuade it to acquiesce to UPC's proposal.                                     

Mr. Lewis then called Mr. Grinstein, stated that UPC wanted to acquire SFP  
and asked to see Mr. Grinstein. Mr. Grinstein declined to see Mr. Lewis.        

Mr. Lewis, Mr. Richard Davidson, President of UPC, Mr. Krebs, and Mr. Robert
A. Helman, SFP's counsel, had a meeting in the late afternoon of October 5. At  
the meeting, Mr. Helman stated that SFP is subject to a binding Merger          
Agreement and that it is unlikely that a UPC-SFP combination would be approved  
by the ICC. Mr. Helman also stated that UPC had misled SFP because, earlier in  
1994, when Mr. Krebs returned an unsolicited telephone call from Mr. Lewis, Mr. 
Lewis had stated that if SFP made its deal with BNI, UPC would not oppose it.   

Mr. Lewis denied having made that statement, contending that what he had    
stated was that UPC would not oppose a BNI-SFP merger subject to an evaluation  
of its merits. Mr. Lewis then placed a written proposal (the "UPC Proposal") on 
Mr. Krebs' desk and, as Mr. Lewis was leaving, stated that Mr. Krebs was making 
a mistake, that UPC would offer more--$20 per share--than the amount provided   
for in the UPC Proposal, and that UPC would consider using a voting trust for   
the proposed transaction. Mr. Lewis and Mr. Davidson then left SFP's            
headquarters, where the meeting had taken place.                                

In the UPC Proposal, UPC proposed to acquire SFP in a tax-free merger in    
which SFP stockholders would receive, for each share of SFP Common Stock, .344  
of a share of UPC common stock, having a value of $18 per SFP share based on    
the closing price on October 4, 1994 of UPC common stock. On October 10, 1994,  
.344 of a share of UPC common stock (based on the closing price on that date)   
had a value of $17.24.                                                          

The transaction contemplated in the UPC Proposal is subject to ICC approval,
the termination of the BNI-SFP Merger Agreement, execution of a definitive      
agreement and the approval of the Board of Directors and the stockholders of    
both SFP and UPC. The UPC Proposal is also conditioned upon the satisfactory    
completion of a due diligence review of SFP. UPC offered to facilitate an SFP   
due diligence review of UPC.                                                    

The UPC Proposal stated that UPC is prepared to grant conditions to Southern
Pacific, BNI or other railroads, including access to points that would          
otherwise change from two serving railroads to one, rights to handle service-   
sensitive business moving between California, Chicago and the Midwest, and      
access to the Kansas and Oklahoma grain markets. The UPC Proposal further       
stated that UPC envisions that certain members of the SFP Board would be        
invited to serve on UPC's Board. The UPC Proposal further stated that UPC was   
prepared to immediately commence negotiation of a definitive merger agreement   
containing mutually agreeable terms and conditions.                             

The SFP Board met to consider the UPC Proposal on October 5 and October 6,  
1994. At those meetings, counsel for SFP explained that SFP's directors did not 
have the right to terminate the Merger Agreement in response to the UPC         
Proposal but did have the right, to the extent required by their fiduciary      
duties under applicable law if so advised by outside counsel, (i) to engage in  
negotiations or provide any confidential information or data to UPC relating to 
the UPC Proposal and (ii) to withdraw, modify or amend their recommendation     
that SFP's stockholders approve the Merger Agreement and the Merger.            

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Mr. Krebs reminded the SFP Board of his description at prior Board meetings 
of two telephone calls he had had with Mr. Lewis earlier in the year. The       
first, on June 7, 1994, occurred when Mr. Krebs returned Mr. Lewis' unsolicited 
telephone call made on June 6. Mr. Lewis stated on June 7 that if SFP made its  
deal with BNI, UPC would not oppose it and in fact, would welcome it because    
UPC liked good competitors. Mr. Lewis went on to say that UPC also would not    
object if SFP entered into a transaction to acquire Kansas City Southern        
Railway Company. The second telephone call was shortly after the BNI-SFP Merger 
Agreement was announced on June 29, 1994. Mr. Krebs called Mr. Lewis as a       
courtesy, and Mr. Lewis stated that he had seen the press release and that UPC  
would study the matter.                                                         

After discussions at both meetings and consultation with its financial and  
legal advisors, the SFP Board unanimously decided to reject the UPC Proposal    
and reaffirm its recommendation to SFP's stockholders that they approve the     
Merger Agreement and the Merger. In reaching its decision, the SFP Board        
considered the following factors:                                               

1. Likelihood of ICC Approval. The SFP Board concluded that it is unlikely  
that a UPC-SFP combination would receive ICC approval. The SFP Board based its  
conclusion in part on its own knowledge, and the view of management, that the   
extensive market overlaps between the two railroad systems and the dominant     
position of UPC would make such a combination anticompetitive. The SFP Board    
also based its conclusion in part on advice of counsel that, given the          
anticompetitive effects of a UPC-SFP combination, the ICC was unlikely to       
approve such a combination absent concessions by UPC that would make the        
transaction untenable and the ICC might well not approve it regardless of any   
concessions made by UPC. The SFP Board noted that in the past it had, as part   
of management's strategic reviews with the SFP Board, discussed the possibility 
of a UPC-SFP combination, but had not pursued this idea because of the          
improbability of obtaining ICC approval, given the adverse effect on            
competition that such a combination would have.                                 

2. Perception of UPC Proposal. The SFP Board perceived the UPC Proposal as  
apparently designed to prevent the consummation of the BNI-SFP Merger and the   
creation of a strong competitor to UPC. The SFP Board based this perception on  
its conclusion that ICC approval of a UPC-SFP combination is unlikely and on    
the timing of the UPC Proposal. The SFP Board also took account of the          
inconsistency between UPC's present position and Mr. Lewis' earlier statement   
to Mr. Krebs that UPC would not oppose a BNI-SFP Merger.                        

3. Opinion of Financial Advisor. Goldman Sachs advised the SFP Board that   
under the circumstances described to the SFP Board by SFP's management and      
counsel, Goldman Sachs reaffirmed its opinion with respect to the Exchange      
Ratio contemplated by the BNI-SFP Merger. See the full text of the opinion of   
Goldman Sachs dated the date hereof, which sets forth certain assumptions made  
by Goldman Sachs, including the assumption that under the foregoing             
circumstances Goldman Sachs, in analyzing the Exchange Ratio, need not take     
into account the consideration which might be received under the UPC Proposal.  

4. Binding Agreement. The SFP Board noted that SFP has no right to terminate
the Merger Agreement and that it is important to avoid breaches of the Merger   
Agreement, particularly in light of the SFP Board's belief that consummation of 
the BNI-SFP Merger is in the best interest of SFP's stockholders because (1)    
the BNI-SFP Merger has significant benefits for SFP stockholders and (2) if the 
Merger Agreement is terminated and if the UPC Proposal cannot be consummated,   
SFP would be left without a strategic combination which is required to protect  
and enhance shareholder value.                                                  

The SFP Board also discussed the significance of Mr. Lewis' remarks to Mr.  
Krebs regarding the possibility of UPC offering a $20 per share price and       
establishing a voting trust. The SFP Board noted that Mr. Lewis' statements     
were inconsistent with the UPC Proposal and UPC's press release, which was      
issued after Mr. Lewis met with Mr. Krebs. However, the SFP Board decided,      
after being advised by outside counsel that its fiduciary duties under          
applicable law required such a step, that SFP should communicate to UPC that,   
if UPC were to make a proposal at a fair price and with an adequate provision   
for a voting trust that                                                         

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would substantially eliminate the regulatory risk for SFP stockholders, the SFP 
Board would consider that proposal in light of its fiduciary duties.            

On October 6, 1994, this information, along with the SFP Board's decision to
reject the UPC Proposal, was sent to UPC in a letter from Mr. Krebs to Mr.      
Lewis and in a press release issued by SFP. BNI was made aware of, and did not  
object to, the contents of the letter and press release before they were sent   
or issued.                                                                      

On October 11, 1994, in a letter addressed to Mr. Krebs, UPC expressed its  
dissatisfaction with the SFP Board's prompt rejection of the UPC Proposal. It   
emphasized the possible benefits to be attained in accepting the UPC Proposal,  
asked the SFP Board to consider UPC's analysis of ICC matters, and urged Mr.    
Krebs, along with his advisors, to meet with UPC representatives. UPC concluded 
its letter by stating that the proposed purchase price was considered by UPC to 
be a "fair price" but that UPC would be prepared to receive information from    
SFP that might justify a greater consideration. The SFP Board considered the    
October 11 letter, and decided to reaffirm its prior position but requested UPC 
to provide SFP with UPC's analysis of ICC matters.                              
BOARD OF DIRECTORS AND MANAGEMENT AFTER THE MERGER

Pursuant to a letter agreement dated June 29, 1994, a copy of which is      
attached hereto as Appendix B, between Gerald Grinstein, Chairman and Chief     
Executive Officer of BNI and Robert D. Krebs, Chairman, President and Chief     
Executive Officer of SFP, the board of directors of the merged entity initially 
will be constituted as follows: two-thirds of the directors will be designated  
by BNI, and one-third of the directors will be designated by SFP. Mr. Grinstein 
will serve as Chairman of the merged entity and Mr. Krebs will serve as         
President and Chief Executive Officer of the merged entity. Additional officers 
of the merged entity will be selected by the merged entity's board of directors 
based upon, among other things, the recommendations of Mr. Grinstein and Mr.    
Krebs.                                                                          
THE MERGER AGREEMENT

The following is a brief summary of certain provisions of the Merger        
Agreement, a copy of which is attached as Appendix A to this Joint Proxy        
Statement/Prospectus and is incorporated herein by reference. This summary does 
not purport to be complete and is qualified in its entirety by reference to the 
Merger Agreement. ALL STOCKHOLDERS OF BNI AND SFP ARE URGED TO READ THE MERGER  
AGREEMENT IN ITS ENTIRETY. Capitalized terms not defined herein shall have the  
meanings set forth in the Merger Agreement.                                     

THE MERGER                                                                      

The Merger Agreement provides that, following its approval and adoption by  
the stockholders of each of BNI and SFP, receipt of all necessary material      
regulatory approvals, including ICC approval, and the satisfaction or waiver of 
the other conditions to the Merger, SFP will be merged with and into BNI, and   
the separate existence of SFP will cease with BNI continuing as the surviving   
corporation.                                                                    

After satisfaction or waiver of the conditions to the Merger, the parties   
will file with the Secretary of State of the State of Delaware a duly executed  
certificate of merger, and the Merger will become effective upon the filing and 
acceptance thereof or at such time thereafter as is provided in the certificate 
of merger (the "Effective Time").                                               

Upon consummation of the Merger, each share of SFP Common Stock outstanding 
immediately prior to the Effective Time (other than shares of SFP Common Stock  
owned by SFP as treasury stock or owned by BNI or any Subsidiary of BNI         
immediately prior to the Effective Time, all of which will be canceled) will be 
converted into 0.27 shares of BNI Common Stock, and will cease to be            
outstanding.                                                                    

If any holder of shares of SFP Common Stock would be entitled to receive a  
number of shares of BNI Common Stock that includes a fraction, then, in lieu of 
a fractional share, such holder will be entitled to                             

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receive a cash payment representing such holder's proportionate interest in the 
net proceeds from the sale by the Exchange Agent in one or more transactions    
(made at such times, in such manner and on such terms as the Exchange Agent     
will determine in its reasonable discretion) on behalf of all holders of the    
aggregate of fractional shares of BNI Common Stock which would otherwise have   
been issued. The sale of such aggregate of fractional shares of BNI Common      
Stock by the Exchange Agent will be executed on the NYSE through one or more    
member firms of the NYSE and will be executed in round lots to the extent       
possible.                                                                       

At the Effective Time, BNI will deposit with the Exchange Agent certificates
representing the aggregate Merger Consideration to be paid in respect of shares 
of SFP Common Stock. Promptly after the Effective Time, BNI will send, or will  
cause the Exchange Agent to send, to each holder of record of SFP Common Stock  
a letter of transmittal to be used in forwarding his or her certificates        
evidencing such shares of SFP Common Stock to the Exchange Agent for surrender  
and exchange for certificates evidencing the Merger Consideration to which he   
or she has become entitled and, if applicable, cash in lieu of a fractional     
share of BNI Common Stock. Such letter of transmittal will specify that the     
delivery shall be effected, and the risk of loss and title shall pass, only     
upon proper delivery to the Exchange Agent of the certificates representing     
such holder's shares of SFP Common Stock. Upon surrender to the Exchange Agent  
of a certificate or certificates representing a holder's shares of SFP Common   
Stock, such holder will be entitled to receive the Merger Consideration in      
respect thereof.                                                                

 Any portion of the Merger Consideration deposited with the Exchange Agent and
any portion of the net proceeds from the sale of the aggregate of fractional    
shares by the Exchange Agent that remains unclaimed for a period of twelve      
months after the Effective Time by the stockholders of SFP will, upon demand,   
be returned to BNI, and any such holder who has not exchanged shares of SFP     
Common Stock for the Merger Consideration after such period will thereafter     
only look to BNI for such holder's claim for BNI Common Stock, any cash in lieu 
of fractional shares of BNI Common Stock and any dividends or distributions in  
respect of BNI Common Stock, subject to any amount paid to a public official    
pursuant to applicable abandoned property laws.                                 

After the Effective Time, each certificate evidencing shares of SFP Common  
Stock, until so surrendered and exchanged, will be deemed, for all purposes, to 
evidence only the right to receive the Merger Consideration which the holder of 
such certificate is entitled to receive and the right to receive any cash       
payment in lieu of a fractional share of BNI Common Stock. The holder of such   
unexchanged certificate will not be entitled to receive any dividends or other  
distributions with respect to the BNI Common Stock constituting part of the     
Merger Consideration until such certificate is surrendered. Upon such           
surrender, there shall be paid, without interest, to the person in whose name   
the certificates representing the BNI Common Stock into which such shares of    
SFP Common Stock were converted are registered, (1) all dividends and other     
distributions in respect of BNI Common Stock that are payable on a date         
subsequent to, and the record date for which occurs after, the Effective Time   
and (2) all dividends or other distributions in respect of shares of SFP Common 
Stock that are payable on a date subsequent to, and the record date for which   
occurs before, the Effective Time.                                              

REPRESENTATIONS AND WARRANTIES                                                  

 The Merger Agreement contains customary representations and warranties of SFP
relating, with respect to SFP and its Subsidiaries, to, among other things, (a) 
organization, standing and similar corporate matters; (b) government            
authorization; (c) capital structure; (d) the authorization, execution,         
delivery, performance and enforceability of the Merger Agreement and related    
matters; (e) the non-contravention of the Merger Agreement and related          
transactions with (i) SFP and its Subsidiaries' certificates of incorporation   
or by-laws or (ii) law, regulation, judgment, injunction, order or decree       
applicable to SFP or any of its Subsidiaries; (f) the compliance as to form of  
the documents filed by SFP and its Subsidiaries with the Commission in          
connection with the Merger Agreement and related transactions and the accuracy  
of information contained therein and the absence of undisclosed liabilities;    
(g) the accuracy of information supplied by SFP in connection with this Joint   
Proxy Statement/Prospectus; (h) the absence of any material adverse effect,     
whether existing or prospective, on the financial condition, business or        
properties of SFP and its Subsidiaries                                          

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taken as a whole or on the ability of SFP to perform its obligations under the  
Merger Agreement (a "Material Adverse Effect"), since the date of the most      
recent audited financial statements of SFP filed with the Commission; (i) the   
absence of pending or threatened litigation which could reasonably be expected  
to have a Material Adverse Effect on SFP; (j) benefit plans and other matters   
relating to the Employee Retirement Income Security Act of 1974, as amended     
("ERISA"); (k) the filing of tax returns and payment of taxes; (l) the          
inapplicability of any antitakeover statute or regulation enacted under state   
or Federal laws; (m) the absence of Environmental Liabilities that would        
reasonably be expected to have a Material Adverse Effect on SFP; and (n)        
brokers' fees and expenses. In addition, SFP has made representations and       
warranties in regard to the Gold Spinoff and receipt of a private letter ruling 
from the Internal Revenue Service (the "IRS") with respect to the Gold Spinoff. 
See "Other Matters--The Gold Spinoff."                                          

The Merger Agreement also contains customary representations and warranties 
of BNI with respect to BNI and its Subsidiaries substantially identical, where  
applicable, to those of SFP set forth above. BNI also represents and warrants   
that no benefits will be received by BNI's stockholders pursuant to the BNI     
Rights Agreement as a result of the execution of the Merger Agreement or the    
consummation of the Merger.                                                     

COVENANTS                                                                       

Conduct of Business Pending the Merger                                        

The Merger Agreement contains certain reciprocal restrictions on the conduct
of the respective businesses of SFP and BNI from the date of the Merger         
Agreement to the Effective Time. Each of SFP and BNI has agreed that, during    
such period, except as permitted by the Merger Agreement, each of SFP, BNI and  
their respective Subsidiaries shall conduct their businesses in the ordinary    
course of business consistent with past practice and shall use their reasonable 
best efforts to preserve intact their business organizations and relationships  
with third parties and (a) will not adopt or propose any change to their        
respective certificates of incorporation or bylaws, except that BNI will adopt  
an amendment to its certificate of incorporation authorizing the issuance of    
additional shares of Junior Class A Preferred Stock in connection with the      
issuance of BNI Rights to former holders of SFP Common Stock; (b) except for    
the Merger and, in the case of SFP, the Gold Spinoff, will not (i) adopt a plan 
of liquidation, dissolution, merger, consolidation, restructuring,              
recapitalization or other reorganization or (ii) make any acquisition of any    
business or other assets by means of merger, consolidation or otherwise other   
than in the ordinary course of business and other than such acquisitions that   
are Customary Actions (as defined below); (c) will not sell, lease, license or  
otherwise dispose of any material assets or property except (i) pursuant to     
existing contracts or commitments, (ii) in the ordinary course of business,     
(iii) for any such transaction that is a Customary Action and (iv) in the case  
of SFP, the Gold Spinoff; (d) will not declare, set aside or pay any dividend   
or make any other distribution with respect to any shares of capital stock      
other than (i) aggregate cash dividends, in the case of SFP, not in excess of   
$0.10, $0.18, $0.20 and $0.22 per share of SFP Common Stock in 1994, 1995, 1996 
and 1997, respectively, and, in the case of BNI, not in excess of $1.20, $1.32, 
$1.48 and $1.64 per share of BNI Common Stock in 1994, 1995, 1996 and 1997,     
respectively, and (ii) in the case of SFP, the Gold Spinoff; (e) will not       
authorize or propose the issuance, delivery or sale of capital stock or voting  
debt or any securities convertible into or exchangeable for, or any rights,     
warrants or options to acquire any capital stock or voting debt except as       
otherwise permitted in the Merger Agreement; (f) will not incur any             
indebtedness for borrowed money or guarantee any such indebtedness except       
borrowings in the ordinary course of business consistent with past practice,    
borrowings that are Customary Actions or as otherwise permitted in the Merger   
Agreement; (g) will not make any loans, advances or capital contributions to,   
or investments in, any other Person except in the ordinary course of business   
consistent with past practice or in transactions that are Customary Actions;    
(h) (i) except for any of the actions that are taken in the ordinary course of  
business consistent in magnitude and character with past practice and with the  
terms of severance or termination arrangements in effect or pending on the date 
of the Merger Agreement with respect to individuals with comparable positions   
or responsibilities, and except for any of such actions which, in the           
aggregate, are not material, will not grant any severance or termination pay    
to, or enter into any termination or severance arrangement with, any of their   
respective directors, executive officers or employees and (ii) except for any   
of the actions that are taken in the ordinary course of business consistent in  
magnitude and character with past practice, and except for any of such actions  
which in the aggregate are not material, will not establish, adopt,             

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enter into, amend or take action to accelerate any rights or benefits under, or 
grant awards under, (A) any plan or arrangement providing for options, stock,   
performance awards or other forms of incentive or deferred compensation or (B)  
any collective bargaining, bonus, profit sharing, thrift, compensation,         
restricted stock, pension, retirement, deferred compensation, employment,       
termination, severance or other plan, agreement, trust, fund, policy or         
arrangement for the benefit of any of their respective directors, executive     
officers or employees. For purposes of the Merger Agreement, an action will be  
considered a "Customary Action" where such action occurs in the ordinary course 
of a Person's business and where the taking of such action is generally         
recognized as being customary and prudent for other major enterprises in such   
Person's line of business.                                                      

Stockholder Meetings                                                          

 Each of SFP and BNI shall cause a special meeting of their stockholders to be
called as soon as reasonably practicable after the date of the Merger Agreement 
to vote on the approval and adoption of the Merger Agreement and the Merger,    
with the Boards of Directors of SFP and BNI to recommend such approval and      
adoption; provided that prior to such special meetings, such recommendation may 
be withdrawn, modified or amended as necessary in accordance with fiduciary     
duties under applicable law following receipt of a Takeover Proposal. The term  
"Takeover Proposal," when used in connection with BNI or SFP, means any tender  
or exchange offer, proposal for a merger, consolidation or other business       
combination involving BNI or SFP or any Subsidiary of BNI or SFP, or any        
proposal or offer to acquire in any manner a substantial equity interest in, or 
a substantial portion of the assets of BNI or SFP or any Subsidiary of BNI or   
SFP, other than pursuant to the Merger.                                         

Access to Information                                                         

Subject to any confidentiality agreements or other confidentiality          
obligations binding upon SFP, BNI or any of their respective Subsidiaries, from 
the date of the Merger Agreement until the Effective Time, SFP and BNI will     
give each other, their counsel, financial advisors, auditors and other          
authorized representatives full access to their offices, properties, books and  
records, will furnish such financial and operating data and other information   
as such Persons may reasonably request and will instruct employees, counsel and 
financial advisors to cooperate with an investigation of their respective       
businesses; provided that no investigation pursuant to the Merger Agreement     
shall affect any representation or warranty given by SFP or BNI and provided    
further that access to certain information will require compliance with the     
protective order entered by the ICC on July 15, 1994; full access will be       
granted to such information consistent with the Merger Agreement and subject to 
the terms of such order.                                                        

Notice of Certain Events                                                      

SFP and BNI shall promptly notify each other of (i) any notice or other     
communication from any Person alleging that the consent of such Person is or    
may be required in connection with the transactions contemplated by the Merger  
Agreement; (ii) any notice or other communication from any governmental or      
regulatory agency or authority in connection with the transactions contemplated 
by the Merger Agreement including, with respect to SFP, the Gold Spinoff and    
the merger of SFP Properties, Inc. with and into SFP (the "Liquidation"); and   
(iii) any actions, suits, claims, investigations or proceedings commenced or,   
to the best of their knowledge threatened against, relating to or involving or  
otherwise affecting SFP, BNI or any of their respective Subsidiaries which, if  
pending on the date of the Merger Agreement, would have been required to have   
been disclosed or which relate to the consummation of the transactions          
contemplated by the Merger Agreement.                                           

Tax Matters                                                                   

From the date of the Merger Agreement until the Effective Time, SFP, BNI and
their respective Subsidiaries will (i) file all significant tax returns,        
statements, reports and forms (collectively, the "Post-Signing Returns")        
required to be filed with any taxing authority in accordance with all           
applicable laws; (ii) timely pay all taxes shown as due and payable on the      
Post-Signing Returns that are so filed and as of the                            

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time of filing and, in addition, the Post-Signing Returns will correctly        
reflect the facts regarding their income, business, assets, operations,         
activities and status in all material respects; (iii) make provision for all    
taxes payable for which no Post-Signing Return has yet been filed; and (iv)     
promptly notify each other of any action, suit, proceeding, investigation,      
audit or claim pending against or with respect to either party or any of their  
Subsidiaries in respect of any tax where there is a reasonable possibility of a 
determination or decision against either party which would reasonably be        
expected to have a significant adverse effect on tax liabilities or other tax   
attributes.                                                                     

No Solicitations                                                              

SFP and BNI will not, and SFP and BNI will use their reasonable best efforts
to ensure that their officers, directors, employees or other agents do not,     
directly or indirectly: initiate, solicit or encourage, or take any action to   
facilitate the making of, any offer or proposal which constitutes or is         
reasonably likely to lead to any Takeover Proposal of either party, or, in the  
event of an unsolicited Takeover Proposal of either party, except to the extent 
required by their fiduciary duties under applicable law if so advised by        
outside counsel, engage in negotiations or provide any confidential information 
or data to any Person relating to any such Takeover Proposal. SFP and BNI shall 
notify each other orally and in writing of any such inquiries, offers or        
proposals (including, without limitation, the terms and conditions of any such  
proposal and the identity of the Person making it), within 48 hours of the      
receipt thereof and shall give each other five days' advance notice of any      
agreement to be entered into with or any information to be supplied to any      
Person making such inquiry, offer or proposal.                                  

Additional SFP Covenants                                                      

SFP (i) shall, at least forty days prior to the Closing Date, deliver to BNI
a letter identifying all Persons who are, at the time of the special meeting of 
SFP stockholders, deemed to be "affiliates" of SFP for purposes of Rule 145     
under the Securities Act and SFP shall use its best efforts to cause each such  
Person to deliver an affiliate letter agreement in a form attached to the       
Merger Agreement at least thirty days prior to the Closing Date and (ii) will   
not, and will not permit any of its Subsidiaries (other than SFP Gold and its   
Subsidiaries) to, enter into or undertake any transaction, arrangement or       
agreement with SFP Gold or its Subsidiaries except for (x) transactions,        
arrangements or agreements that have been entered into on or prior to the date  
of the Merger Agreement which have been provided to BNI on or prior to such     
date, (y) the allocation to employees of SFP Gold of their share of the SFP     
employee benefit plans in accordance with applicable law or (z) such other      
transactions, arrangements or agreements that are consented to by BNI (such     
consent not to be unreasonably withheld), provided that without limiting the    
generality of the foregoing, in no event may SFP or any of its Subsidiaries pay 
any dividend, or make any distribution, to holders of SFP Common Stock directly 
or indirectly in connection with the Gold Spinoff, except for the distribution  
of SFP Gold common stock pursuant to the Gold Spinoff.                          

Additional BNI Covenants                                                      

BNI shall indemnify and hold harmless each person who is, or has been at any
time prior to the date of the Merger Agreement, or who becomes prior to the     
Effective Time, an officer or director of SFP, in respect of acts or omissions  
occurring prior to the Effective Time (the "Indemnified Parties") (including    
but not limited to the transactions contemplated by the Merger Agreement) to    
the extent provided under SFP's certificate of incorporation, bylaws and (A)    
indemnity agreements between SFP and any of its officers or directors           
("Indemnity Agreements") in effect on the date of the Merger Agreement or (B)   
Indemnity Agreements that may be entered into by SFP from and after the date of 
the Merger Agreement and prior to the Effective Time so long as such agreements 
shall contain terms and provisions substantially similar to Indemnity           
Agreements in effect as of the date of the Merger Agreement; provided that such 
indemnification shall be subject to any limitation imposed from time to time    
under applicable law. For six years after the Effective Time, BNI shall         
provide, if available, officers' and directors' liability insurance in respect  
of acts or omissions occurring prior to the Effective Time, including but not   
limited to the transactions contemplated by the Merger Agreement, covering each 
such Person currently covered by SFP's officers' and directors' liability       
insurance policy, or who becomes covered by such policy prior to the Effective  
Time, on terms with respect to coverage and amount no less favorable than those 
of such policy in effect on the date of the Merger                              

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Agreement, provided that in satisfying its obligation, BNI shall not be         
obligated to pay premiums in excess of 200% of the amount per annum SFP paid in 
its last full fiscal year, which amount has been disclosed to BNI but provided  
further that BNI shall nevertheless be obligated to provide such coverage as    
may be obtained for such amount.                                                

Joint Covenants of SFP and BNI                                                

In addition to the aforementioned reciprocal and individual covenants, SFP  
and BNI have agreed to (a) use their reasonable best efforts to do, or cause to 
be done, all things necessary, proper or advisable under applicable laws and    
regulations to consummate the transactions contemplated by the Merger           
Agreement, (b) take all such actions as are necessary to (i) cooperate with     
each other to prepare and present to the ICC as soon as practicable all filings 
and other presentations in connection with seeking any ICC approval, exemption  
or other authorization necessary to consummate the transactions contemplated by 
the Merger Agreement, (ii) prosecute such filings and other presentations with  
diligence, (iii) diligently oppose any objections to, appeals from or petitions 
to reconsider or reopen any such ICC approval by persons not party to the       
Merger Agreement, and (iv) take all such further action as reasonably may be    
necessary to obtain a final order or orders of the ICC approving such           
transactions consistent with the Merger Agreement, (c) promptly prepare and     
file with the Commission, using their reasonable best efforts to have cleared   
by the Commission and thereafter mail to their stockholders as promptly as      
practicable the respective Proxy Statements and all other proxy materials for   
the respective stockholder meetings, and use their reasonable best efforts to   
obtain the necessary approvals by their stockholders of the Merger Agreement    
and the transactions contemplated thereby (provided that, prior to the          
respective stockholder meetings, the respective boards of directors'            
recommendations may be withdrawn, modified or amended to the extent that, as a  
result of the commencement or receipt of a Takeover Proposal relating to SFP or 
BNI, the respective boards of directors deem it necessary to do so in the       
exercise of their fiduciary obligations to their respective stockholders after  
being so advised by counsel), and will otherwise comply with all legal          
requirements applicable to such meeting and make all other filings or           
recordings required under applicable Delaware law in connection with the Merger 
and, in the case of BNI, prepare and file with the Commission the registration  
statement on Form S-4 and take any action required to be taken under any        
applicable state Blue Sky law in connection with the issuance of BNI Common     
Stock, (d) consult with each other before issuing any press release with        
respect to the Merger Agreement and the transactions contemplated thereby, (e)  
authorize the officers and directors of the Surviving Corporation to execute    
and deliver, in the name and on behalf of SFP, any deeds, bills of sale,        
assignments or assurances and to take or do any other actions and things to     
vest, perfect or confirm of record or otherwise in the Surviving Corporation    
any and all right, title and interest in properties or assets of SFP acquired   
or to be acquired by the Surviving Corporation, (f) grant such approvals and    
take such actions as are necessary so that the transactions contemplated by the 
Merger Agreement may be consummated as promptly as practicable and otherwise    
act to eliminate or minimize the effects of any Takeover Statute, (g)           
coordinate and cooperate (i) with respect to the timing of their respective     
stockholder meetings to use their reasonable best efforts to hold such meetings 
on the same day, (ii) in connection with the preparation of each document       
required to be filed with the Commission in connection with the transactions    
contemplated by the Merger Agreement (the "Disclosure Documents"), (iii) in     
determining whether any action by or in respect of, or filing with, any         
governmental body, agency, official or authority is required, or any actions,   
consents, approvals or waivers are required to be obtained from parties to any  
material contracts, and (iv) in seeking any such actions, consents, approvals   
or waivers or making any such filings, furnishing information required in       
connection therewith or with their respective Disclosure Documents and timely   
seeking to obtain any such actions, consents, approvals or waivers, and (h)     
from September 30, 1995 to the Effective Time, pay all dividends declared by    
SFP and BNI to their respective stockholders on a quarterly basis, with         
identical record and payment dates, in amounts not exceeding the amounts set    
forth in the Merger Agreement.                                                  

CONDITIONS TO THE CONSUMMATION OF THE MERGER                                    

Each party's obligation to effect the Merger is subject to the satisfaction 
or waiver of various conditions which include the following:                    

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 (a) the Merger Agreement shall have been adopted by the requisite vote of
stockholders of SFP and BNI;                                                

(b) the waiting period (and any extension thereof) applicable to the    
Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as   
amended ("HSR Act"), shall have expired;                                    

 (c) no court, arbitrator or governmental body or agency or official shall
have issued any order, and there shall not be any statute, rule or          
regulation restraining or prohibiting the consummation of the Merger or the 
operation of the businesses of SFP, BNI and their respective Subsidiaries   
after the Effective Time;                                                   

(d) all actions by or in respect of or filings with any governmental    
body, agency, official, or authority required to permit the consummation of 
the Merger shall have been obtained, but excluding any consent, approval,   
clearance or confirmation, the failure to obtain which could not reasonably 
be expected to have a Material Adverse Effect on the Surviving Corporation  
after the Effective Time;                                                   

(e) the ICC shall have issued a decision (which decision shall not have 
been stayed or enjoined) that (A) constitutes a final order approving,      
exempting or otherwise authorizing consummation of the Merger and all other 
transactions contemplated by the Merger Agreement (as may require ICC       
authorization) and (B) does not (i) require the inclusion of any other rail 
carriers or material rail properties, (ii) change the Exchange Ratio or     
(iii) impose any other terms or conditions that significantly and adversely 
affect the economic benefit of the transactions contemplated by the Merger  
Agreement;                                                                  

(f) SFP and BNI shall have obtained an opinion of nationally recognized 
tax counsel to the effect that the Merger will be a tax-free reorganization 
under section 368 of the Internal Revenue Code and the regulations          
thereunder;                                                                 

 (g) the Merger shall conform to the requirements set forth in the private
letter ruling previously received by SFP in connection with the Gold        
Spinoff, and the Gold Spinoff and the Liquidation shall be tax-free         
pursuant to and in conformity with such private letter ruling;              

 (h) each of SFP and BNI shall have performed in all material respects all
of their obligations required to be performed at or prior to the Effective  
Time, and the representations and warranties of SFP and BNI shall have been 
accurate in all material respects both when made and at and as of the       
Effective Time except as otherwise provided in the Merger Agreement; and    

(i) all other statutory requirements for the valid consummation by SFP  
and BNI of the transactions contemplated by the Merger Agreement shall have 
been fulfilled.                                                             

In addition to the aforementioned reciprocal conditions to the consummation 
of the Merger, SFP's obligation to consummate the Merger is subject to the      
satisfaction or waiver of the following additional conditions:                  

(a) the BNI Common Stock required to be issued pursuant to the Merger   
Agreement shall have been approved for listing on the NYSE, subject to      
official notice of issuance; and                                            

(b) the Gold Spinoff and the Liquidation shall have been consummated.   

TERMINATION                                                                     

Notwithstanding any approval of the Merger Agreement by the stockholders of 
BNI or SFP, the Merger Agreement may be terminated and the Merger may be        
abandoned at any time prior to the Effective Time (a) by mutual written consent 
of BNI and SFP; (b) by either BNI or SFP (i) if the Merger shall not have been  
consummated by December 31, 1997; (ii) if any judgment, injunction, order or    
decree enjoining BNI or SFP from consummating the Merger is entered and such    
judgment, injunction order or decree shall become final and nonappealable; or   
(iii) if the approvals of the stockholders of BNI or SFP contemplated by the    
Merger Agreement shall not have been obtained by reason of the failure to       
obtain the required vote at a duly held                                         

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meeting of stockholders or of any adjournment thereof; (c) by BNI, if the Gold  
Spinoff has not occurred by December 31, 1994; (d) by BNI, if any Person,       
entity or "group" (as defined in Section 13(d)(3) of the Exchange Act) other    
than BNI acquires beneficial ownership of fifty percent or more of the          
outstanding SFP Common Stock; (e) by BNI, if, prior to the SFP stockholder      
meeting, the board of directors of SFP shall have withdrawn, modified or        
changed in a manner adverse to BNI its approval or recommendation of the Merger 
Agreement or the Merger; (f) by BNI, upon a breach of any representation,       
warranty, covenant or agreement of SFP, or if any representation or warranty of 
SFP shall become untrue, in either case such that certain conditions would be   
incapable of being satisfied by December 31, 1997 (or such later date           
extended), provided that a willful breach shall be deemed to cause such         
conditions to be incapable of being satisfied by such date; (g) by SFP, if any  
Person, entity or group acquires beneficial ownership of fifty percent or more  
of the outstanding BNI Common Stock; (h) by SFP, if, prior to the BNI           
stockholder meeting, the board of directors of BNI shall have withdrawn,        
modified or changed in a manner adverse to SFP its approval or recommendation   
of the Merger Agreement or the Merger; and (i) by SFP, upon a breach of any     
representation, warranty, covenant or agreement of BNI, or if any               
representation or warranty of BNI shall become untrue, in either case such that 
certain conditions would be incapable of being satisfied by December 31, 1997   
(or as otherwise extended), provided that a willful breach shall be deemed to   
cause such conditions to be incapable of being satisfied by such date.          

SURVIVAL OF REPRESENTATIONS AND WARRANTIES                                      

The representations and warranties and agreements contained in the Merger   
Agreement shall not survive the Effective Time or the termination of the Merger 
Agreement, except that certain agreements set forth in the Merger Agreement     
will survive a termination of the Merger Agreement.                             

AMENDMENTS; NO WAIVERS                                                          

Any provision of the Merger Agreement may be amended or waived prior to the 
Effective Time if, and only if, such amendment or waiver is in writing and      
signed, in the case of an amendment, by SFP and BNI or, in the case of a        
waiver, by the party against whom the waiver is to be effective; provided that  
after the adoption of the Merger Agreement by the stockholders of SFP, no such  
amendment or waiver shall, without the further approval of such stockholders,   
alter or change (i) the amount or kind of consideration to be received in       
exchange for any shares of capital stock of SFP, (ii) any term of the           
certificate of incorporation of the Surviving Corporation or (iii) any of the   
terms or conditions of the Merger Agreement if such alteration or change would  
adversely affect the holders of any shares of capital stock of SFP.             

EXPENSES                                                                        

Except as otherwise agreed in writing by SFP and BNI, each party shall bear 
its own expenses, including the fees and expenses of any attorneys,             
accountants, investment bankers, brokers, finders or other intermediaries or    
other Persons engaged by it, incurred in connection with the Merger Agreement   
and the transactions contemplated thereby. See "The Merger--Expenses," for      
information concerning the expenses shared by BNI and SFP.                      

GOVERNING LAW                                                                   

The Merger Agreement shall be construed in accordance with and governed by  
the law of the State of Delaware (without regard to principles of conflict of   
laws).                                                                          

JURISDICTION                                                                    

Any suit, action or proceeding seeking to enforce any provision of, or based
on any matter arising out of or in connection with, the Merger Agreement or the 
transactions contemplated thereby may be brought against any of the parties in  
the United States District Court for the District of Delaware or any state      
court sitting in the City of Wilmington, Delaware, and each of the parties has  
consented to the exclusive jurisdiction of such courts (and of the appropriate  
appellate courts) in any such suit, action or proceeding and has waived any     
objection to venue laid therein. Process in any such suit, action or proceeding 
may be served on any party anywhere in the world, whether within or without the 
State of Delaware.                                                              

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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 

The following unaudited pro forma combined financial statements give effect 
to the exchange of 0.27 shares of BNI Common Stock for each share of SFP Common 
Stock pursuant to the Merger Agreement, with the Merger accounted for under the 
pooling of interests method. The pro forma adjustments do not reflect any       
potential increases in operating income which may arise from the Merger or      
adjustments to conform BNI and SFP accounting practices. See Note 3--Conforming 
accounting practices and "Other Matters--Additional Financial Considerations."  

The unaudited pro forma combined balance sheet as of June 30, 1994 combines 
the historical consolidated balance sheets of BNI and SFP giving effect to the  
Merger as if it had been consummated on that date. The unaudited pro forma      
combined statements of operations for the six months ended June 30, 1994 and    
1993, and for each of the three years in the period ended December 31, 1993,    
combine the historical consolidated statements of operations of BNI and SFP     
giving effect to the Merger as if it had been consummated on January 1, 1991.   

The unaudited pro forma combined financial statements are prepared for      
illustrative purposes only and are not necessarily indicative of the financial  
position or results of operations that might have occurred had the Merger       
actually taken place on the dates indicated, or of future results of operations 
or financial position of the combined company. Consummation of the Merger is    
conditioned upon, among other things, approval of both BNI and SFP stockholders 
and the approval of the ICC. See "Other Matters--ICC Approval" and "The Merger  
Agreement--Conditions to the Consummation of the Merger."                       

The unaudited pro forma combined financial statements are based on the      
historical consolidated financial statements of BNI and SFP and should be read  
in conjunction with such historical financial statements and the notes thereto, 
which are incorporated by reference in this Joint Proxy Statement/Prospectus,   
and in conjunction with the selected historical financial data and unaudited    
selected pro forma financial data, including the notes thereto, appearing       
elsewhere in this Joint Proxy Statement/Prospectus. See "Incorporation of       
Certain Documents by Reference," "Selected Historical Financial Data," and      
"Unaudited Selected Pro Forma Financial Data."                                  

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UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 1994 
(DOLLARS IN MILLIONS) 

                                                                [Download Table]

                           HISTORICAL AMOUNTS                                       
                         ----------------------                  BURLINGTON NORTHERN
                         BURLINGTON  SANTA FE    PRO FORMA            SANTA FE      
                          NORTHERN    PACIFIC   ADJUSTMENTS          CORPORATION    
                            INC.    CORPORATION  (NOTE 2)             PRO FORMA     
                         ---------- ----------- -----------      -------------------
                                                                                    
         ASSETS                                                                     
Current assets                                                                      
  Cash and cash                                                                     
   equivalents..........   $   18     $   15       $  --               $    33      
  Accounts receivable,                                                              
   net..................      569         94          --                   663      
  Net assets of                                                                     
   discontinued                                                                     
   operations...........       --        504        (504)(A)                --      
  Other current assets..      449        292          --                   741      
                           ------     ------       -----               -------      
    Total current                                                                   
     assets.............    1,036        905        (504)                1,437      
Property and equipment,                                                             
 net....................    6,074      4,542          --                10,616      
Other assets............      284        270          --                   554      
                           ------     ------       -----               -------      
    Total assets........   $7,394     $5,717       $(504)              $12,607      
                           ======     ======       =====               =======      
LIABILITIES AND STOCKHOLDERS'                                                       
 EQUITY                                                                             
Current liabilities                                                                 
  Accounts payable......   $  509     $  266       $  48 (C)           $   823      
  Dividend payable--gold                                                            
   distribution.........       --        504        (504)(A)                --      
  Other current                                                                     
   liabilities..........      791        431         (23)(C)             1,199      
  Current portion of                                                                
   long-term debt and                                                               
   commercial paper.....      240        173          --                   413      
                           ------     ------       -----               -------      
    Total current                                                                   
     liabilities........    1,540      1,374        (479)                2,435      
Long-term debt..........    1,694        932          --                 2,626      
Deferred income taxes...    1,388      1,148           5 (C)             2,541      
Other liabilities.......      742      1,107          --                 1,849      
                           ------     ------       -----               -------      
    Total liabilities...    5,364      4,561        (474)                9,451      
                           ------     ------       -----               -------      
Stockholders' equity                                                                
  Convertible preferred                                                             
   stock................      337         --          --                   337      
  Common stock..........        1        190        (190)(B)                 1      
  Paid-in capital.......    1,442        858          92 (B),(C)         2,392      
  Retained earnings.....      293        212         (61)(C)               444      
  Treasury stock........       (5)      (104)        104 (B)                (5)     
  Other.................      (38)        --          25 (C)               (13)     
                           ------     ------       -----               -------      
  Total stockholders'                                                               
   equity...............    2,030      1,156         (30)                3,156      
                           ------     ------       -----               -------      
    Total liabilities                                                               
     and stockholders'                                                              
     equity.............   $7,394     $5,717       $(504)              $12,607      
                           ======     ======       =====               =======      

(See accompanying notes to unaudited pro forma combined financial statements) 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1994
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                                [Download Table]

                                 HISTORICAL AMOUNTS                           
                               ---------------------- BURLINGTON NORTHERN     
                               BURLINGTON  SANTA FE        SANTA FE           
                                NORTHERN    PACIFIC       CORPORATION         
                                  INC.    CORPORATION      PRO FORMA          
                               ---------- ----------- -------------------     
                                                                              
Revenues......................   $2,402      $1,290          $3,692           
Operating expenses                                                            
  Compensation and benefits...      873         417           1,290           
  Fuel........................      172         120             292           
  Materials...................      155          65             220           
  Equipment rents.............      217         122             339           
  Purchased services..........      232         178             410           
  Depreciation................      176          99             275           
  Other.......................      217         101             318           
                                 ------     -------         -------           
    Total operating expenses..    2,042       1,102           3,144           
                                 ------     -------         -------           
Operating income..............      360         188             548           
Interest expense..............       78          60             138           
Other income (expense), net...       (6)         50              44           
                                 ------     -------         -------           
Income before income taxes....      276         178             454           
Income tax expense............      107          75             182           
                                 ------     -------         -------           
Income from continuing                                                        
 operations...................   $  169      $  103          $  272           
                                 ======     =======         =======           
Earnings per common share                                                     
  Income from continuing                                                      
   operations.................   $ 1.75      $  .54          $ 1.85 Note 2 (D)
                                 ======     =======         =======           
Number of shares used in                                                      
 computation of earnings per                                                  
 common share (in thousands)..   90,286     189,800         141,532 Note 2 (D)

(See accompanying notes to unaudited pro forma combined financial statements) 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1993
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                                [Download Table]

                                 HISTORICAL AMOUNTS                           
                               ---------------------- BURLINGTON NORTHERN     
                               BURLINGTON  SANTA FE        SANTA FE           
                                NORTHERN    PACIFIC       CORPORATION         
                                  INC.    CORPORATION      PRO FORMA          
                               ---------- ----------- -------------------     
                                                                              
Revenues......................   $2,312      $1,192          $3,504           
Operating expenses                                                            
  Compensation and benefits...      857         405           1,262           
  Fuel........................      177         119             296           
  Materials...................      154          64             218           
  Equipment rents.............      188         105             293           
  Purchased services..........      222         154             376           
  Depreciation................      172          93             265           
  Other.......................      226          99             325           
                                 ------     -------         -------           
    Total operating expenses..    1,996       1,039           3,035           
                                 ------     -------         -------           
Operating income..............      316         153             469           
Interest expense..............       69          70             139           
Gain on sale of California                                                    
 lines........................       --         145             145           
Other income, net.............       --           2               2           
                                 ------     -------         -------           
Income before income taxes....      247         230             477           
Income tax expense............       93          95             188           
                                 ------     -------         -------           
Income from continuing                                                        
 operations...................   $  154      $  135          $  289           
                                 ======     =======         =======           
Earnings per common share                                                     
  Income from continuing                                                      
   operations.................   $ 1.60      $  .72          $ 1.99 Note 2 (D)
                                 ======     =======         =======           
Number of shares used in                                                      
 computation of earnings per                                                  
 common share (in thousands)..   89,439     186,300         139,740 Note 2 (D)

(See accompanying notes to unaudited pro forma combined financial statements) 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1993
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                                [Download Table]

                                 HISTORICAL AMOUNTS                           
                               ---------------------- BURLINGTON NORTHERN     
                               BURLINGTON  SANTA FE        SANTA FE           
                                NORTHERN    PACIFIC       CORPORATION         
                                  INC.    CORPORATION      PRO FORMA          
                               ---------- ----------- -------------------     
                                                                              
Revenues......................   $4,699     $ 2,409         $ 7,108           
Operating expenses                                                            
  Compensation and benefits...    1,709         800           2,509           
  Fuel........................      362         239             601           
  Materials...................      300         128             428           
  Equipment rents.............      395         229             624           
  Purchased services..........      457         322             779           
  Depreciation................      352         188             540           
  Other.......................      463         185             648           
                                 ------     -------         -------           
    Total operating expenses..    4,038       2,091           6,129           
                                 ------     -------         -------           
Operating income..............      661         318             979           
Interest expense..............      145         133             278           
Gain on sale of California                                                    
 lines........................       --         145             145           
Other income, net.............        5          24              29           
                                 ------     -------         -------           
Income before income taxes....      521         354             875           
Income tax expense............      225         177             402           
                                 ------     -------         -------           
Income from continuing                                                        
 operations...................   $  296     $   177         $   473           
                                 ======     =======         =======           
Earnings per common share                                                     
  Income from continuing                                                      
   operations.................   $ 3.06     $   .95         $  3.22 Note 2 (D)
                                 ======     =======         =======           
Number of shares used in                                                      
 computation of earnings per                                                  
 common share (in thousands)..   89,672     187,200         140,216 Note 2 (D)

(See accompanying notes to unaudited pro forma combined financial statements) 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1992
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                                [Download Table]

                                 HISTORICAL AMOUNTS                           
                               ----------------------                         
                                                      BURLINGTON NORTHERN     
                               BURLINGTON  SANTA FE        SANTA FE           
                                NORTHERN    PACIFIC       CORPORATION         
                                  INC.    CORPORATION      PRO FORMA          
                               ---------- ----------- -------------------     
                                                                              
Revenues......................   $4,630     $ 2,252         $ 6,882           
Operating expenses                                                            
  Compensation and benefits...    1,709         799           2,508           
  Fuel........................      348         206             554           
  Materials...................      295         128             423           
  Equipment rents.............      389         186             575           
  Purchased services..........      449         277             726           
  Depreciation................      338         181             519           
  Other.......................      505         178             683           
  Special charge..............       --         320             320           
                                 ------     -------         -------           
    Total operating expenses..    4,033       2,275           6,308           
                                 ------     -------         -------           
Operating income (loss).......      597         (23)            574           
Interest expense..............      186         165             351           
Gain on sale of California                                                    
 lines........................       --         205             205           
Other income, net.............       41          24              65           
                                 ------     -------         -------           
Income before income taxes....      452          41             493           
Income tax expense............      153          20             173           
                                 ------     -------         -------           
Income from continuing                                                        
 operations...................   $  299     $    21         $   320           
                                 ======     =======         =======           
Earnings per common share                                                     
  Income from continuing                                                      
   operations.................   $ 3.35     $   .11         $  2.29 Note 2 (D)
                                 ======     =======         =======           
Number of shares used in                                                      
 computation of earnings per                                                  
 common share (in thousands)..   88,617     184,800         138,513 Note 2 (D)

(See accompanying notes to unaudited pro forma combined financial statements) 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1991
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                 HISTORICAL AMOUNTS                            
                                               ----------------------                          
                                                                      BURLINGTON NORTHERN      
                                               BURLINGTON  SANTA FE        SANTA FE            
                                                NORTHERN    PACIFIC       CORPORATION          
                                                  INC.    CORPORATION      PRO FORMA           
                                               ---------- ----------- -------------------      
                                                                                               
Revenues......................................   $4,559     $ 2,154         $ 6,713            
Operating expenses                                                                             
  Compensation and benefits...................    1,756         782           2,538            
  Fuel........................................      368         207             575            
  Materials...................................      283         135             418            
  Equipment rents.............................      401         162             563            
  Purchased services..........................      442         232             674            
  Depreciation................................      347         184             531            
  Other.......................................      493         197             690            
  Special charge..............................      708          --             708            
                                                 ------     -------         -------            
    Total operating expenses..................    4,798       1,899           6,697            
                                                 ------     -------         -------            
Operating income (loss).......................     (239)        255              16            
Interest expense..............................      226         209             435            
Other income (expense), net...................      (25)         53              28            
                                                 ------     -------         -------            
Income (loss) before income taxes.............     (490)         99            (391)           
Income tax expense (benefit)..................     (184)         37            (147)           
                                                 ------     -------         -------            
Income (loss) from continuing operations......   $ (306)    $    62         $  (244)           
                                                 ======     =======         =======            
Earnings (loss) per common share                                                               
  Income (loss) from continuing operations....   $(3.96)    $   .35         $ (1.95) Note 2 (D)
                                                 ======     =======         =======            
Number of shares used in computation of                                                        
 earnings                                                                                      
 (loss) per common share (in thousands).......   77,462     178,000         125,522  Note 2 (D)

(See accompanying notes to unaudited pro forma combined financial statements) 

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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

NOTE 1.  BASIS OF PRESENTATION                                                  

Pursuant to the Merger Agreement, each share of SFP Common Stock outstanding
at the Effective Time will be converted into 0.27 shares of BNI Common Stock.   
The Merger will be accounted for under the pooling of interests method.         
Accordingly, recorded assets and liabilities are carried forward to the         
combined company at their historical values.                                    

The accompanying unaudited pro forma combined financial statements are      
presented for illustrative purposes only and do not give effect to any          
potential increases in operating income which may arise from the Merger. See    
"Other Matters--Additional Financial Considerations." Additionally, the         
unaudited pro forma combined financial statements exclude the nonrecurring      
costs and expenses associated with integrating the operations of the            
businesses. Such nonrecurring costs are expected to relate to the elimination   
of duplicate facilities, computer systems and other assets, as well as employee 
related payments. Additionally, no provision has been made for any make-whole   
premium payable in connection with certain of SFP's debt securities upon        
consummation of the Merger. See "Other Matters--Acceleration of Certain Debt    
Obligations of SFP."                                                            

For consistency of presentation, certain amounts in the historical financial
statements have been reclassified in the unaudited pro forma combined financial 
statements.                                                                     

NOTE 2.  PRO FORMA ADJUSTMENTS                                                  

(A) Discontinued operations                                                   

 Net assets of discontinued operations and dividend payable--gold distribution
have been eliminated to reflect SFP's distribution of SFP Gold's common stock   
to SFP stockholders, effective September 30, 1994.                              

(B) Stockholders' equity                                                      

Common stock has been reduced by $190 million, paid-in capital has been     
increased by $86 million and treasury stock has been decreased by $104 million  
to reflect the combination of BNI and SFP through the exchange of approximately 
50 million shares of BNI Common Stock for all outstanding shares of SFP Common  
Stock at an exchange ratio of 0.27 shares of BNI Common Stock for each share of 
SFP Common Stock.                                                               

(C) Costs of the Merger and accelerated vesting of restricted stock           

Accounts payable have been increased by $48 million for the cost of the     
Merger as if they have been accrued. Additionally, paid-in capital and other    
equity have been increased by $6 million and $25 million, respectively, as if   
compensation expense totaling $31 million had been recorded for the lapse of    
restrictions on restricted stock of BNI and SFP. Deferred income taxes and      
current tax liabilities have been adjusted by $18 million for the tax effects   
of these entries. The result is a net reduction in retained earnings of $61     
million.                                                                        

Compensation expense related to restricted stock, as well as certain other  
costs of the Merger, will be charged to operations upon stockholder approval of 
the Merger. Other costs of the Merger will be recorded periodically as charges  
to operations between stockholder approval and the consummation of the Merger.  

(D) Earnings (loss) per common share                                          

Pro forma weighted average shares outstanding represent the conversion at an
exchange ratio of 0.27 of SFP common shares to BNI common shares. Earnings      
(loss) per common share are determined by dividing income (loss) from           
continuing operations, after deduction of preferred stock dividends, by the     
weighted average number of common shares outstanding and common share           
equivalents.                                                                    

NOTE 3.  CONFORMING ACCOUNTING PRACTICES                                        

 No adjustments to conform the accounting practices of BNI and SFP have been
made in these unaudited pro forma combined financial statements for             
capitalization of assets, depreciation and other areas. The effects of these    
changes are not presently determinable but will be recorded after the           
consummation date.                                                              

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OTHER MATTERS 

ICC APPROVAL                                                                    

The approval of the ICC on several issues must be obtained to consummate the
Merger. Under the Interstate Commerce Act, the ICC is required to approve the   
Merger if it finds that the Merger is consistent with the public interest. In   
making that determination, the ICC must consider at least the following         
factors:                                                                        

(A) the effect of the proposed transaction on the adequacy of           
transportation to the public;                                               

(B) the effect on the public interest of including, or failing to       
include, other rail carriers in the area involved in the proposed           
transaction;                                                                

(C) the total fixed charges that result from the proposed transaction;  

(D) the interest of carrier employees affected by the proposed          
transaction; and                                                            

(E) whether the proposed transaction would have an adverse effect on    
competition among rail carriers in the affected region.                     

The ICC is required to enter a final order with respect to the Merger within
31 months after the application for such approval is filed by BNI and SFP.      
However, BNI and SFP have requested the ICC to decide the case on an expedited  
basis and the parties expect that the final ICC decision will be made on a time 
frame significantly shorter than the 31-month period required by law. On        
October 5, 1994, the ICC served an order establishing a schedule that would     
result in a final ICC decision within 535 days from the filing of the           
application. The parties are filing the application on October 13, 1994.        
Notwithstanding this schedule, there can be no assurance that the ICC will      
issue a decision any sooner than the 31-month period permitted the ICC by law.  

Interested parties, including other railroads, shippers, state and federal  
agencies, and BNI or SFP stockholders may seek to participate in the ICC        
proceeding on the Merger, consistent with applicable ICC rules, regulations,    
decisions and orders, and may participate to support, oppose, or seek to have   
conditions imposed on the transaction or, in the case of other railroads, to be 
included in the Merger. Under applicable statutory provisions, interested       
parties have 45 days from the date on which the ICC publishes its notice of     
acceptance of the application in the Federal Register to submit their comments  
in order to participate in the ICC proceeding. An ICC approval order exempts    
the parties from Federal, state and local law, including laws governing         
contract rights, as necessary to permit them to carry out the transaction.      

An ICC approval order may be appealed by certain persons and the            
effectiveness of the order could be stayed by the ICC or by an appellate court  
while such an appeal is pending. Any appeals from the ICC order might not be    
resolved for a substantial period of time after the entry of the order by the   
ICC. ICC approval is not automatically stayed if a party seeks judicial review  
of the decision; however, it is possible that the approval could be stayed by   
the ICC or a reviewing court. If the approval is stayed, consummation of the    
Merger would be delayed. Consummation of the Merger, which will occur after     
stockholder approval, receipt of required regulatory approvals and satisfaction 
or waiver of all of the other conditions set forth in the Merger Agreement, may 
not occur for two or more years in the future.                                  

Either BNI or SFP may terminate the Agreement if the ICC disapproves the    
Merger, changes the Exchange Ratio, requires the inclusion of other rail        
carriers or properties, or imposes other terms and conditions, including, but   
not limited to, employee protective conditions other than those which are now   

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currently standard, that, in the reasonable opinion of either BNI or SFP,       
significantly and adversely affect the economic benefits of the Merger.         

OTHER REGULATORY APPROVALS                                                      

The consummation of the Merger, as it relates to SFP's pipeline operations, 
is also subject to the expiration or termination of any applicable waiting      
period under the HSR Act.                                                       

 Certain aspects of the Merger will require notification to, and filings with,
various securities and other authorities in certain states, including           
jurisdictions where SFP and BNI currently operate.                              

ADDITIONAL FINANCIAL CONSIDERATIONS                                             

 BNI and SFP are filing an application for approval of the Merger with the ICC
on October 13, 1994. See "Other Matters--ICC Approval." As part of that         
application, BNI and SFP indicate to the ICC that, in their views, the Merger   
will yield a significant increase in operating income. This anticipated         
increase in operating income from the Merger is expected to result from both    
operating efficiencies and increased revenues. The application to the ICC       
states that the expected annual increase in operating income will be            
approximately $560 million per year. This increase is expected to be achieved   
over a number of years, with substantially all of the increase to be achieved   
in the first three years following consummation of the Merger.                  

The ICC application also states that significant savings will be achieved in
the general and administrative, overhead and support functions of the merged    
company by eliminating duplicative activities and improving productivity        
through rationalization and specialization of functions. The application        
identifies approximately $350 million annually in savings in traditional        
general and administrative functions primarily located in the corporate and     
administrative headquarters of each of BNI and SFP, as well as field management 
of certain operating, maintenance and other departments.                        

The ICC application also states that a number of opportunities for          
significant reduction in operating costs exist. These operating efficiencies    
are expected to be achieved through operations and transportation savings,      
reduced costs and delays at interchange, maintenance of way and equipment       
savings, and shorter routing of cars. The ICC application indicates that these  
operational savings will be in excess of $100 million annually.                 

The ICC application also states that freight revenues will increase as a    
result of the Merger. Studies in support of the ICC application demonstrate     
significant opportunities for increased traffic that the new system expects to  
attract from shippers currently using other railroads and from trucks. The ICC  
application also projects increased traffic as a result of extending the hauls  
of shippers currently using either SFP Rail or BN Railroad. It is expected that 
the increased traffic will result in increased revenues of more than $300       
million annually for the new system, which are expected to increase operating   
income by over $100 million annually.                                           

 In order to achieve these increases in operating revenue, it is expected that
certain nonrecurring cash costs would be incurred, which would include          
relocation, employee separation and retraining and capital improvement costs.   
The ICC application states that such costs are approximately $350 million, a    
substantial portion of which will be incurred during the first year following   
consummation of the Merger.                                                     

The ICC application utilizes a base year of 1993, adjusted to reflect the   
impact of the above cost efficiencies and reductions as well as the increase in 
revenues. This information shows that when these benefits are realized, the     
combined operating income will exceed $1.5 billion per year and the combined    
operating ratio will be approximately 79%.                                      

The ICC application projections do not include normal business and other    
revenue growth occurring after the 1993 base year not related to the Merger,    
cost initiatives which each of BNI and SFP anticipates to achieve not related   
to the Merger, and future general economic conditions. If these items were      
included, BNI and SFP believe further improvements in operating income and the  
operating ratio would result.                                                   

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The material assumptions underlying the projected savings in operating costs
are the following. Operating savings would result from the changes described in 
the operating plan as set forth in the ICC application (the "Operating Plan")   
for the merged entity. The Operating Plan describes the anticipated internal    
rerouting of rail traffic, consolidation of common point facilities and         
rationalization of system facilities. The Operating Plan also describes the     
savings expected to be achieved through these operational changes, reduced      
costs and delays at interchange, maintenance of way and equipment savings, and  
shorter routing of cars. The Operating Plan indicates a savings of 34 million   
car miles, 2 billion gross ton miles, 1.7 million locomotive unit miles and 1.5 
million switches. The total estimated operational savings are in excess of $100 
million annually.                                                               

 The material assumptions underlying the savings to be achieved in general and
administrative, overhead and support functions are the following: estimates of  
cost reductions that are projected by eliminating duplicative activity,         
improvements in productivity through rationalization, centralization or the     
specialization of functions, including executive offices, transportation        
overheads, maintenance of way and equipment support, purchasing functions,      
operating support, management information systems, general business unit        
overheads, as well as other general and administrative functions. It is         
projected that savings in this category will amount to approximately $350       
million.                                                                        

The material assumptions underlying the projected revenue increases are the 
following. Traffic will increase because the combined BN Railroad/SFP Rail      
system would provide new single-line service and related efficiencies that      
would attract both rail and intermodal truck traffic to the combined system.    
BNI and SFP have conducted three traffic studies that estimate the traffic      
gains and resulting revenues that could be achieved by the combined BN          
Railroad/SFP Rail system. A study was conducted by BNI and SFP marketing        
personnel to determine whether a combined BN Railroad/SFP Rail system could     
extend its haul on interline movements in which they participated in 1993. A    
second study was conducted to determine whether a combined BN Railroad/SFP Rail 
system, with its expanded single-line service and other improvements resulting  
from the consolidation, could attract rail traffic that moved over other        
carriers in 1993. A third study was conducted to identify intermodal traffic    
that could be diverted to rail from truck. The total estimated increase in      
traffic that could be drawn to the new combined system from these three sources 
represents more than $300 million in additional revenue. After deducting the    
costs associated with handling the increased traffic, this additional revenue   
represents more than $100 million in net contribution to the merged system.     

The ICC application is available for public inspection at the ICC Records   
Control Branch, Room 1221, 12th Street and Constitution Avenue, N.W.,           
Washington, D.C. 20423.                                                         

 NEITHER BNI NOR SFP AS A MATTER OF COURSE PUBLICLY DISCLOSES ITS EXPECTATIONS
OF ITS FUTURE PERFORMANCE OR OF THE PERFORMANCE OF ANY PARTICULAR TRANSACTION   
IT MAY UNDERTAKE. THE ESTIMATES SUBMITTED TO THE ICC ARE BASED UPON A VARIETY   
OF ASSUMPTIONS INVOLVING JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE  
ECONOMIC, FINANCIAL, COMPETITIVE AND REGULATORY CONDITIONS, ALL OF WHICH ARE    
BEYOND THE CONTROL OF BNI AND SFP. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT  
THE INCREASE IN OPERATING INCOME REFERRED TO ABOVE WILL BE REALIZED, AND THE    
ACTUAL INCREASE IN OPERATING INCOME, IF ANY, REALIZED FROM THE MERGER MAY VARY  
MATERIALLY FROM THE ESTIMATES SHOWN ABOVE. SIMILARLY, THERE CAN BE NO ASSURANCE 
THAT THE NONRECURRING CASH COSTS REFERRED TO ABOVE WILL NOT EXCEED THE          
FOREGOING ESTIMATES. FURTHERMORE, THERE CAN BE NO ASSURANCE THAT THE ESTIMATED  
INCREASE IN OPERATING INCOME SET FORTH ABOVE WILL BE ACCEPTED BY THE ICC OR     
THAT THE ICC WILL NOT IMPOSE CONDITIONS ON THE OPERATION OF THE MERGED COMPANY  
THAT WILL AFFECT THE ABILITY OF THE COMPANY TO REALIZE THE ACTUAL INCREASE IN   
OPERATING INCOME OR WILL IMPOSE ADDITIONAL CASH COSTS ON THE MERGED COMPANY. IN 
LIGHT OF THE UNCERTAINTIES INHERENT IN ESTIMATES OF THIS TYPE, THE INCLUSION OF 
SUCH                                                                            

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ESTIMATES HEREIN SHOULD NOT BE REGARDED AS A REPRESENTATION BY BNI, SFP OR ANY  
OTHER PERSON THAT SUCH INCREASE IN OPERATING INCOME WILL BE ACHIEVED OR THAT    
NONRECURRING CASH COSTS WILL NOT EXCEED THE FOREGOING ESTIMATES. INVESTORS ARE  
ADVISED NOT TO PLACE UNDUE RELIANCE ON THESE ESTIMATES.                         

The estimated increase in operating income and the estimated nonrecurring   
cash costs submitted to the ICC has been calculated in accordance with ICC      
regulations and not in accordance with the public guidelines of the Securities  
and Exchange Commission for estimates of this type. Neither SFP nor BNI intends 
publicly to update or otherwise publicly revise the estimates set forth above   
(except as part of the ICC application process) even if experience or future    
changes make it clear that the expected increase in operating income will not   
be realized or that the actual costs to be incurred will exceed the foregoing   
estimates.                                                                      

ACCELERATION OF CERTAIN DEBT OBLIGATIONS OF SFP                                 

 The consummation of the Merger will be a "change in control event" within the
meaning of the indenture relating to SFP's $200 million 12.65% Senior Notes due 
October 1, 2000 (the "Notes"). Upon the occurrence of a change in control       
event, SFP must offer to prepay all the outstanding Notes in full, together     
with accrued interest and a make-whole premium based on market interest rates   
at the time of the Merger and the then-remaining weighted average life of the   
Notes. Each holder of Notes has the right to accept or reject SFP's offer,      
without regard to whether any other Noteholder accepts or rejects the offer.    

It is not possible at this time to calculate the amount of the make-whole   
premium or to determine whether any of the Noteholders will accept SFP's offer  
to prepay the Notes. However, based upon the assumptions that the Merger occurs 
December 31, 1995, all Noteholders accept the prepayment offer and interest     
rates do not change until the Merger, the amount SFP would be required to pay   
under the terms of the indenture would be approximately $35 million.            

THE GOLD SPINOFF                                                                

The obligation of SFP to consummate the Merger is subject to, among other   
things, the consummation of the Gold Spinoff. Under the terms of the Merger     
Agreement and prior to the Effective Time, BNI may terminate the Merger         
Agreement and abandon the Merger if the Gold Spinoff has not been completed by  
December 31, 1994. The SFP Board has declared and set September 30, 1994 as the 
distribution date of the dividend to holders of record of SFP Common Stock as   
of September 12, 1994. The Gold Spinoff was completed as planned on September   
30, 1994.                                                                       

CERTAIN PENDING LITIGATION                                                      

Four purported stockholder class action suits have been filed arising out of
SFP's proposed participation in the Merger with BNI. On June 30, 1994, shortly  
after announcement of the proposed merger, two purported stockholder class      
action suits were filed in the Court of Chancery of the State of Delaware       
(Miller v. Santa Fe Pacific Corporation, C.A. No. 13587; Cosentino v. Santa Fe  
Pacific Corporation, C.A. No. 13588). On July 1, 1994, two additional purported 
stockholder class action suits were filed in the Court of Chancery of the State 
of Delaware (Fielding v. Santa Fe Pacific Corporation, C.A. No. 13591;          
Wadsworth v. Santa Fe Pacific Corporation, C.A. No. 13597).                     

The actions name as defendants SFP, the individual members of the SFP Board 
of Directors and BNI. In general, the actions variously allege that SFP's       
directors breached their fiduciary duties to the stockholders by agreeing to    
the proposed merger for allegedly "grossly inadequate" consideration in light   
of recent operating results of SFP, recent trading prices of SFP's common stock 
and other alleged factors, by allegedly failing to take all necessary steps to  
ensure that stockholders will receive the maximum value realizable for their    
shares (including allegedly failing to actively pursue the acquisition of SFP   
by other companies or conducting an adequate "market check") and by allegedly   
failing to disclose to stockholders the full extent of the future earnings      
potential of SFP, as well as the current value of its assets. The Miller and    
Fielding cases further allege that the proposed merger is unfairly timed and    
structured and, if consummated, would allegedly unfairly deprive the            
stockholders of standing to pursue certain pending stockholder derivative       
litigation.                                                                     

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Plaintiffs also have alleged that BNI is responsible for aiding and abetting    
the alleged breach of fiduciary duty committed by the SFP Board. The actions    
seek certification of a class action on behalf of SFP's stockholders. In        
addition, the actions seek injunctive relief against consummation of the Merger 
and, in the event that the Merger is consummated, the rescission of the Merger, 
an award of compensatory or rescissory damages and other damages, including     
court costs and attorneys' fees, an accounting by defendants of all profits     
realized by them as a result of the Merger and various other forms of relief.   

On October 6, 1994, shortly after UPC issued a press release in which it    
announced the UPC Proposal, plaintiffs in the four lawsuits described above     
filed in the Court of Chancery of the State of Delaware a Consolidated Amended  
Complaint. (Miller v. Santa Fe Pacific Corporation, C.A. No. 13587). In their   
Consolidated Amended Complaint, plaintiffs repeat the allegations contained in  
their earlier lawsuits and further allege that, in light of the UPC Proposal,   
SFP's directors have breached their fiduciary duties by failing to fully inform 
themselves about available alternatives to the Merger with BNI, including the   
alternative of a merger transaction with UPC, and by failing to fully inform    
themselves about the value of SFP. The Consolidated Amended Complaint seeks the 
same relief sought in plaintiffs' earlier lawsuits and, in addition, requests   
that SFP's directors be ordered to explore alternative transactions and to      
negotiate in good faith with all interested persons, including UPC.             

Also on October 6, 1994, UPC filed in the Court of Chancery of the State of 
Delaware a lawsuit against SFP, SFP's directors and BNI (Union Pacific          
Corporation v. Santa Fe Pacific Corporation, C.A. No. 13778). In its Complaint, 
UPC alleges that SFP's management purportedly rejected the UPC Proposal "out-   
of-hand" without regard to the facts of the UPC Proposal, and that SFP's        
directors have breached their fiduciary duties by purportedly refusing to       
negotiate with UPC regarding the UPC Proposal. UPC seeks injunctive relief      
mandating SFP to negotiate with UPC regarding the UPC Proposal, a declaration   
that UPC has not tortiously interfered with defendants' contractual or other    
legal rights, an injunction against defendants from bringing or maintaining any 
action against UPC alleging that UPC has tortiously interfered with defendants' 
contractual or other legal rights, a declaration that the Merger Agreement with 
BNI permits SFP to terminate the Merger Agreement in order to accept the UPC    
Proposal or, in the alternative, that the Merger Agreement with BNI is invalid  
and unenforceable for failing to include such a provision, and an award of      
UPC's costs in bringing its lawsuit, including reasonable attorneys' fees.      

Also, on October 6, 1994, five additional purported stockholder class action
suits relating to SFP's proposed participation in the Merger with BNI were      
filed in the Court of Chancery of the State of Delaware (Weiss v. Santa Fe      
Pacific Corporation, C.A. No. 13779; Lifshitz v. Krebs, C.A. No 13780; Stein v. 
Santa Fe Pacific Corporation, C.A. No. 13782; Lewis v. Santa Fe Pacific         
Corporation, C.A. No. 13783; Abramson v. Lindig, C.A. No. 13784). On October 7, 
1994, three more purported stockholder class action suits relating to SFP's     
proposed participation in the Merger with BNI were filed in the Court of        
Chancery of the State of Delaware (Graulich v. Santa Fe Pacific Corporation,    
C.A. No. 13786; Anderson v. Santa Fe Pacific Corporation, C.A. No. 13787; Green 
v. Santa Fe Pacific Corporation, C.A. No. 13788). All of these lawsuits name as 
defendants SFP and the individual members of the SFP Board of Directors; the    
Lifshitz case further names BNI as a defendant. In general, these actions       
variously allege that, in light of SFP's recent operating results and the UPC   
merger proposal, SFP's directors have breached their fiduciary duties to        
shareholders by purportedly not taking the necessary steps to ensure that SFP's 
stockholders will receive "maximum value" for their shares of SFP stock,        
including purportedly refusing to negotiate with UPC or to "seriously consider" 
the UPC merger proposal and failing to announce any active auction or open      
bidding procedures. The actions generally seek relief that is materially        
identical to the relief sought in the Miller case, and in addition seek entry   
of an order requiring SFP's directors to immediately undertake an evaluation of 
SFP's worth as a merger/acquisition candidate and to establish a process        
designed to obtain the highest possible price for SFP, including taking steps   
to "effectively expose" SFP to the marketplace in an effort to create an        
"active auction" in SFP. The Weiss case further seeks entry of an order         
enjoining SFP's directors from implementing any poison pill or other device     
designed to thwart UPC's merger proposal or any other person's proposal to      
acquire SFP.                                                                    

Defendants believe that all of these lawsuits are meritless and intend to   
oppose them vigorously.                                                         

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DESCRIPTION OF BNI CAPITAL STOCK

The authorized capital stock of BNI consists of 300,000,000 shares of BNI   
Common Stock, 25,000,000 shares of No Par Value Preferred Stock ("No Par Value  
Preferred"), including 6,900,000 shares of BNI's 6 1/4% Cumulative Convertible  
Preferred Stock, Series A No Par Value ("6 1/4% Convertible Preferred Stock"),  
and 50,000,000 shares of Class A Preferred Stock, No Par Value (the "Class A    
Preferred Stock"), including 800,000 shares of Series A Junior Participating    
Class A Preferred Stock, No Par Value (the "Junior Class A Preferred Stock").   
The following description of BNI's capital stock does not purport to be         
complete and is qualified in its entirety by reference to the General           
Corporation Law of the State of Delaware (the "Delaware Corporation Law") and   
BNI's Certificate of Incorporation (including the Certificate of Designation    
for the 6 1/4% Convertible Preferred Stock).                                    

BNI COMMON STOCK                                                                

At October 10, 1994, there were 89,224,101 shares of BNI Common Stock       
outstanding. All of the outstanding shares of BNI Common Stock are fully paid   
and nonassessable, and the shares of BNI Common Stock to be issued in the       
Merger, when issued pursuant to the Merger Agreement, will be fully paid and    
nonassessable. Each holder of BNI Common Stock is entitled to one vote per      
share in the election of directors and on all other matters submitted to a vote 
of stockholders. Subject to the rights and preferences of BNI's preferred       
stock, each share of BNI Common Stock is entitled to receive dividends as may   
be declared by the Board of Directors out of funds legally available therefor   
and to share ratably in all assets available for distribution to stockholders   
upon dissolution or liquidation. No holder of BNI Common Stock has any          
preemptive right to subscribe for any securities of BNI.                        

6 1/4% CONVERTIBLE PREFERRED STOCK                                              

As of October 10, 1994, 6,900,000 shares of 6 1/4% Convertible Preferred    
Stock were outstanding.                                                         

Rank                                                                          

The 6 1/4% Convertible Preferred Stock has a liquidation preference of $50  
per share and ranks, as to dividends and liquidation, prior to the BNI Common   
Stock. Without the requisite vote of holders of the 6 1/4% Convertible          
Preferred Stock as described below, no class or series of capital stock can be  
created ranking senior to the 6 1/4% Convertible Preferred Stock as to dividend 
rights, liquidation preference or voting rights. However, BNI may create        
additional classes of preferred stock, increase the authorized number of shares 
of preferred stock or issue series of preferred stock ranking on a parity with  
the 6 1/4% Convertible Preferred Stock with respect, in each case, to the       
payment of dividends and amounts upon liquidation, dissolution and winding up   
and voting rights without the consent of any holder of 6 1/4% Convertible       
Preferred Stock.                                                                

Dividend Rights                                                               

The holders of the 6 1/4% Convertible Preferred Stock are entitled to       
receive, when, as and if declared by BNI's Board of Directors, cumulative cash  
dividends at the rate of 6 1/4% per annum per share, payable quarterly.         

With limited exceptions, unless full cumulative dividends on the 6 1/4%     
Convertible Preferred Stock have been paid or declared in full and sums set     
aside for the payment thereof, no dividends (other than dividends in BNI Common 
Stock or other shares of the BNI's capital stock ranking junior to the 6 1/4%   
Convertible Preferred Stock as to dividends) may be paid or declared and set    
aside for the payment or other distribution made upon the BNI Common Stock or,  
except as provided above, on any other capital stock of BNI ranking junior to   
or on a parity with the 6 1/4% Convertible Preferred Stock as to dividends, nor 
may any BNI Common Stock or any other capital stock ranking junior to or on a   
parity with the 6 1/4% Convertible Preferred Stock as to dividends be redeemed, 
purchased or otherwise acquired for any consideration by BNI or any subsidiary  
of BNI (except by conversion into or exchange for capital stock of BNI ranking  
junior to the 6 1/4% Convertible Preferred Stock as to dividends).              

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Conversion Rights                                                             

 Holders of the 6 1/4% Convertible Preferred Stock have the right, exercisable
at any time and from time to time, to convert all or any 6 1/4% Convertible     
Preferred Stock into such number of whole shares of BNI Common Stock as is      
equal to the aggregate liquidation preference amount of the shares of 6 1/4%    
Convertible Preferred Stock surrendered for conversion divided by the           
conversion price of $47 per share of BNI Common Stock (equivalent to a          
conversion rate of approximately 1.064 shares of BNI Common Stock per share of  
6 1/4% Convertible Preferred Stock). The conversion rate is subject to          
adjustment upon the occurrence of certain events.                               

Liquidation Preference                                                        

In the event of any liquidation, dissolution or winding up of the affairs of
BNI, whether voluntary or otherwise, after payment or provision for payment of  
BNI's debts and other liabilities, the holders of the 6 1/4% Convertible        
Preferred Stock will be entitled to receive, out of the remaining net assets of 
BNI, the amount of $50 in cash for each share of 6 1/4% Convertible Preferred   
Stock, plus an amount in cash equal to all dividends accrued and unpaid on each 
such share up to the date fixed for distribution, before any distribution is    
made to the holders of BNI Common Stock or any other capital stock of BNI       
ranking (as to any such distribution) junior to the 6 1/4% Convertible          
Preferred Stock. If upon any liquidation, dissolution or winding up of BNI, the 
assets distributable among the holders of shares of 6 1/4% Convertible          
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% Convertible 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 BNI thus distributable will be distributed ratably among the holders  
of the 6 1/4% Convertible Preferred Stock and of all classes and series of      
preferred stock ranking (as to any such distribution) on a parity with the 6    
1/4% Convertible Preferred Stock.                                               

For purposes of the foregoing, a distribution of assets in any dissolution, 
winding up or liquidation will not include (i) any consolidation or merger of   
BNI with or into any other corporation or (ii) a sale or other disposition of   
all or substantially all of BNI's assets to another corporation.                

Optional Redemption                                                           

The 6 1/4% Convertible Preferred Stock is not redeemable prior to December  
26, 1995. On and after such date, the 6 1/4% Convertible Preferred Stock is     
redeemable at the option of BNI, in whole or in part, at specified redemption   
prices for specified periods, plus, in each case, all accrued and unpaid        
dividends up to the date fixed for redemption.                                  

Voting Rights                                                                 

 Except as set forth below or required under the Delaware Corporation Law, the
holders of the 6 1/4% Convertible Preferred Stock are not entitled to vote on   
any question or in any proceedings or to be represented at or to receive notice 
of any meeting of stockholders of BNI; provided that the holders of the 6 1/4%  
Convertible Preferred Stock will have voting rights (i) as provided under       
"Limitations" below and (ii) in the event BNI shall have failed to declare and  
pay or set apart for payment in full the preferential dividends accumulated on  
the outstanding 6 1/4% Convertible Preferred Stock for any six quarterly        
dividend payment periods, whether or not consecutive (a "Dividend Non-          
Payment"). Except as required by law, the holders of 6 1/4% Convertible         
Preferred Stock will not be entitled to vote on any merger or consolidation     
involving BNI or a sale of all or substantially all of the assets of BNI.       
Consequently, these holders are not entitled to vote on the Merger. In the      
event of a Dividend Non-Payment, the number of directors of BNI will be         
increased by two and the holders of the outstanding 6 1/4% Convertible          
Preferred Stock, voting together as a class with all other series of No Par     
Value Preferred ranking on a parity with the 6 1/4% Convertible Preferred Stock 
with respect to dividends or distribution of assets upon liquidation and then   
entitled to vote on the election                                                

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of such additional directors, will be entitled to elect, as a single class      
separately from the holders of any other class of stock of BNI, such two        
additional directors until the full dividends accumulated on all outstanding 6  
1/4% Convertible Preferred Stock shall have been declared and paid or set apart 
for payment.                                                                    

Limitations                                                                   

In addition to any other rights provided by applicable law, so long as any  
shares of the 6 1/4% Convertible Preferred Stock are outstanding, BNI will not, 
without the affirmative vote of the holders of at least two-thirds of the       
outstanding shares of the 6 1/4% Convertible Preferred Stock, voting as a       
single class:                                                                   

(a) 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% Convertible Preferred Stock as to payment of dividends, in             
distribution of assets upon liquidation or in voting rights; or             

(b) change the preferences, rights or powers with respect to the 6 1/4% 
Convertible Preferred Stock so as to affect such capital stock adversely.   

Except as may otherwise be required by applicable law, such a class vote or 
consent is not required (i) in connection with any increase in the total number 
of authorized shares of BNI 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% Convertible Preferred Stock. BNI may issue its presently   
authorized but unissued shares of capital stock, or bonds, notes, mortgages,    
debentures, and other obligations, and incur indebtedness to banks and to other 
lenders, without such consent or class vote.                                    

Preemptive Rights                                                             

No holder of the 6 1/4% Convertible Preferred Stock will have preemptive    
rights to subscribe for any securities of BNI.                                  

ADDITIONAL CLASSES OF PREFERRED STOCK                                           

No additional No Par Value Preferred or Class A Preferred is outstanding.   
Under BNI's Certificate of Incorporation, BNI's Board of Directors has the      
authority to issue up to the authorized number of such classes of preferred     
stock in one or more series, to fix the number of shares of each series and to  
fix the designations, rights and powers of each series. Any series of either    
class of preferred stock may be issued without stockholder approval. However,   
pursuant to the Merger Agreement, BNI may not authorize or propose the          
issuance, delivery or sale of any BNI capital stock except in connection with   
the issuance of BNI Rights to SFP stockholders in the Merger.                   

BNI RIGHTS; JUNIOR CLASS A PREFERRED STOCK                                      

 See "Comparison of Rights of Stockholders of BNI and SFP--Rights Plans" for a
description of the BNI Rights and BNI's Junior Class A Preferred Stock.         

COMPARISON OF RIGHTS OF STOCKHOLDERS OF BNI AND SFP 

Upon the consummation of the Merger, stockholders of SFP will become        
stockholders of BNI whose rights will be governed by the Delaware Corporation   
Law and BNI's Certificate of Incorporation and Bylaws.                          

The following is a summary of the material differences of the rights of     
stockholders of SFP, on the one hand, and stockholders of BNI, on the other     
hand. As both BNI and SFP are Delaware corporations, these differences arise    
principally from provisions of the certificate of incorporation and bylaws of   
each of BNI and SFP, as well as the existence of BNI's Rights Agreement.        

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The following summaries do not purport to be complete statements of the     
rights of SFP stockholders under SFP's Certificate of Incorporation and Bylaws  
as compared with the rights of BNI stockholders under BNI's Certificate of      
Incorporation, Bylaws and Rights Agreement or a complete description of the     
specific provisions referred to herein. The identification of specific          
differences is not meant to indicate that other equally or more significant     
differences do not exist. These summaries are qualified in their entirety by    
reference to the Delaware Corporation Law and the governing corporate           
instruments of BNI and SFP, to which stockholders are referred. The terms of    
BNI's capital stock are described under "Description of BNI Capital Stock."     

BOARD OF DIRECTORS                                                              

Classified Board                                                              

The board of directors of BNI is elected by the BNI stockholders at each    
annual meeting of stockholders for a term of one year. BNI's entire board of    
directors stands for election at each annual meeting.                           

The SFP Board is divided into three classes. Each class is to consist, as   
nearly as possible, of one-third of the total number of SFP Directors. At each  
annual meeting of SFP stockholders, successors to the class of directors whose  
term expired as of the annual meeting are elected for a three-year term.        

Classification of directors has the effect of making it more difficult for  
stockholders to change the composition of the SFP Board. At least two annual    
meetings, rather than one, will generally be required to effect a change in the 
majority of the SFP Board.                                                      

Removal of Directors                                                          

Any BNI Director may be removed, with or without cause, at any special      
meeting of stockholders called for that purpose, by the affirmative vote of the 
holders of a majority in number of shares of BNI 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.                            

SFP's Certificate of Incorporation and Bylaws make no provision for the     
removal of directors. However, Section 141(k) of the Delaware Corporation Law   
provides that, in the case of a corporation whose board is classified,          
stockholders may effect a removal only for cause.                               

Number of Directors                                                           

The BNI Board is to consist of not less than three nor more than 21         
directors. A majority of the BNI Board may fix from time to time the precise    
number of directors on the board. BNI's Board of Directors currently consists   
of nine members.                                                                

The SFP Board is to consist of not less than three nor more than 36         
directors. A majority of the SFP Board may fix from time to time the precise    
number of directors on the board. The SFP Board currently consists of ten       
members.                                                                        

For information concerning the composition of the board of directors of the 
entity surviving the Merger, see "The Merger--Interests of Certain Persons in   
the Merger."                                                                    

SPECIAL MEETINGS OF STOCKHOLDERS                                                

Special meetings of the stockholders of BNI may be called for any purpose at
any time by a majority of the board of directors or by the chairman of the      
board and shall be called by the secretary of BNI at the request of the holders 
of not less than fifty-one percent of all issued and outstanding shares of BNI  
entitled to vote at the meeting.                                                

Special meetings of the stockholders of SFP may be called only by the board 
of directors or the executive committee thereof, or the chairman or a vice      
chairman of the board or the president of SFP.                                  

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NO STOCKHOLDER ACTION BY WRITTEN CONSENT                                        

Article SEVENTH of BNI's Certificate of Incorporation prohibits BNI         
stockholders from acting by written consent in lieu of a meeting; provided that 
the provisions of Article SEVENTH may be amended with the affirmative vote of   
not less than 51% of the BNI Voting Stock, excluding any BNI Voting Stock held  
by an "Interested Stockholder." The term "BNI Voting Stock" means all stock of  
BNI entitled to vote for the election of directors. The term "Interested        
Stockholder" is defined as a person other than BNI who is (i) the beneficial    
owner of ten percent or more of the BNI Voting Stock or (ii) an affiliate of    
BNI and (A) at any time within a two-year period prior to the record date to    
vote on a Business Combination to which it is a party (as defined below) was    
the beneficial owner of ten percent or more of the BNI Voting Stock or (B) at   
the completion of the Business Combination will be the beneficial owner of ten  
percent or more of the BNI Voting Stock.                                        

Article SIXTH of SFP's Certificate of Incorporation prohibits SFP           
stockholders from acting by written consent in lieu of a meeting; provided that 
the provisions of Article SIXTH may be amended with the affirmative vote of the 
holders of 80% or more of the aggregate voting power of all outstanding shares  
of capital stock entitled to vote generally for the election of directors.      

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS                             

BNI's Bylaws do not contain any provisions requiring advance notification of
proposals to be brought before stockholder meetings.                            

SFP's Bylaws provide that, for business to be properly brought before an    
annual meeting by a stockholder, a stockholder's notice (setting forth certain  
specified information) must be delivered to SFP not less than 50 days nor more  
than 75 days prior to the meeting; provided that in the event that less than 65 
days' notice or 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 fifteen days following the date on which notice of the annual        
meeting was mailed or such public disclosure was made, whichever first occurs.  

VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS                                 

The affirmative vote of not less than 51% of the BNI Voting Stock, excluding
the Voting Stock of an Interested Stockholder who is a party to the Business    
Combination, shall be required for the adoption or authorization of a Business  
Combination, unless the Disinterested Directors determine that (a) the          
Interested Stockholder is the beneficial owner of not less than eighty percent  
of the BNI Voting Stock and has declared its intention to vote in favor of or   
approve such Business Combination; or (b)(i) the fair market value of the       
consideration per share to be received or retained by the holders of each class 
or series of stock of BNI in a Business Combination is equal to or greater than 
the consideration per share (including brokerage commissions and soliciting     
dealer's fees) paid by such Interested Stockholder in acquiring the largest     
number of shares of such class of stock previously acquired in any one          
transaction or series of related transactions, whether before or after the      
Interested Stockholder became an Interested Stockholder and (ii) the Interested 
Stockholder shall not have received the benefit, directly or indirectly (except 
proportionately as a stockholder), of any loans, advances, guarantees, pledges  
or other financial assistance provided by BNI, whether in anticipation of or in 
connection with such Business Combination or otherwise.                         

For purposes of the foregoing the following terms have the following        
meanings:                                                                       

"Disinterested Director" means a member of the board of directors of BNI    
(other than the Interested Stockholder) who was director prior to the time the  
Interested Stockholder became an Interested Stockholder, or any director who    
was recommended for election by the Disinterested Directors. Any action to be   
taken by the Disinterested Directors shall require the affirmative vote of at   
least two-thirds of the Disinterested Directors.                                

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"Business Combination" means (i) a merger or consolidation of BNI or any of 
its subsidiaries with an Interested Stockholder; (ii) the sale, lease,          
exchange, pledge, transfer or other disposition (A) by BNI or any of its        
subsidiaries of all or a Substantial Part of the corporation's Assets to an     
Interested Stockholder, or (B) by an Interested Stockholder of any of its       
assets, except in the ordinary course of business, to BNI or any of its         
subsidiaries; (iii) the issuance of stock or other securities of BNI or any of  
its subsidiaries to an Interested Stockholder, other than on a pro rata basis   
to all holders of Voting Stock of the same class held by the Interested         
Stockholder pursuant to a stock split, stock dividend or distribution of        
warrants or rights; (iv) the adoption of any plan or proposal for the           
liquidation or dissolution of BNI proposed by or on behalf of an Interested     
Stockholder; (v) any reclassification of securities, recapitalization, merger   
or consolidation or other transaction which has the effect, directly or         
indirectly, of increasing the proportionate share of any Voting Stock           
beneficially owned by an Interested Stockholder; or (vi) any agreement,         
contract or other arrangement providing for any of the foregoing transactions.  

"Substantial Part of the corporation's Assets" means assets of BNI or any of
its subsidiaries in an amount equal to 20 percent or more of the fair market    
value, as determined by the Disinterested Directors, of the total consolidated  
assets of BNI and its subsidiaries taken as a whole as of the end of its most   
recent fiscal year ended prior to the time the determination is made.           

There are no provisions in SFP's Certificate of Incorporation or Bylaws     
addressing the stockholder voting requirements for business combinations.       
Section 251(c) of the Delaware Corporation Law requires that the affirmative    
vote of a majority of the outstanding stock of the corporation entitled to vote 
thereon is necessary for the adoption of a business combination.                

In addition, the provisions of section 203 of the Delaware Corporation Law  
are applicable to both BNI and SFP. Section 203 provides that, subject to       
certain exceptions specified therein, a corporation shall not engage in any     
business combination with any "interested stockholder" for a three-year period  
following the date that such stockholder becomes an interested stockholder      
unless (i) prior to such date, the board of directors of the corporation        
approved either the business combination or the transaction which resulted in   
the stockholder becoming an interested stockholder, (ii) upon consummation of   
the transaction which resulted in the stockholder becoming an interested        
stockholder, the interested stockholder owned at least 85% of the voting stock  
of the corporation outstanding at the time the transaction commenced (excluding 
shares held by directors who are also officers and employee stock purchase      
plans in which employee participants do not have the right to determine         
confidentially whether plan shares will be tendered in a tender or exchange     
offer) or (iii) on or subsequent to such date, the business combination is      
approved by the board of directors of the corporation and by the affirmative    
vote at an annual or special meeting, and not by written consent, of at least   
66 2/3% of the outstanding voting stock which is not owned by the interested    
stockholder. Except as specified in section 203 of the Delaware Corporation     
Law, an interested stockholder is defined to include (a) any person that is the 
owner of fifteen percent or more of the outstanding voting stock of the         
corporation or is an affiliate or associate of the corporation and was the      
owner of fifteen percent or more of the outstanding voting stock of the         
corporation at any time within three years immediately prior to the relevant    
date and (b) the affiliates and associates of any such person.                  

INDEMNIFICATION OF DIRECTORS AND OFFICERS                                       

The BNI Bylaws provide that BNI shall indemnify any officer or director to  
whom, and to the extent, indemnification may be granted pursuant to the         
Delaware Corporation Law and further provides that a person who was or is made  
a party to, or is involved in any action, suit or proceeding by reason of the   
fact that he is or was a director, officer or employee of BNI will be           
indemnified by BNI against all expenses and liabilities, including counsel      
fees, reasonably incurred by or imposed upon such person. The BNI Bylaws also   
provide that the foregoing right of indemnification shall be in addition to and 
not exclusive of all other rights to which such director, officer or employee   
may be entitled. The SFP Bylaws contain substantially similar provisions with   
respect to indemnification.                                                     

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RIGHTS PLANS                                                                    

SFP does not have a rights plan.                                            

 The following is a summary of BNI's rights plan. The BNI rights plan will not
be triggered by the Merger. The summary does not purport to be complete and is  
qualified in its entirety to BNI's Registration Statement on Form 8-A dated     
July 15, 1986, including the Rights Agreement included as an exhibit thereto.   

On July 10, 1986, the Board of Directors of BNI declared a dividend         
distribution of one BNI Right for each outstanding share of BNI Common Stock to 
stockholders of record at the close of business on July 24, 1986 (the "Rights   
Record Date"). Except as set forth below, each BNI Right, when exercisable,     
entitles the registered holder to purchase from BNI one one-hundredth of a      
share of Junior Class A Preferred Stock at a price of $190 per one one-         
hundredth of a share (the "Purchase Price"), subject to adjustment.             

Initially, the BNI Rights will be attached to all BNI Common Stock          
certificates representing shares then outstanding, and no separate BNI Rights   
certificates will be distributed. Until the earlier to occur of (i) ten days    
following a public announcement that, without the prior consent of BNI, a       
person or group of affiliated or associated persons (an "Acquiring Person") has 
acquired, or obtained the right to acquire, beneficial ownership of securities  
having twenty percent or more of the voting power of all outstanding voting     
securities of BNI (the "Stock Acquisition Date"), or (ii) ten days following    
the commencement of (or a public announcement of an intention to make) a tender 
offer or exchange offer which would result in any person or group and related   
persons having beneficial ownership of securities having twenty percent or more 
of such voting power, without the prior consent of BNI (the earlier of such     
dates being called the "Distribution Date"), the BNI Rights will be evidenced,  
with respect to any of the BNI Common Stock certificates outstanding as of the  
Rights Record Date, by such BNI Common Stock certificate. The Rights Agreement  
provides that, until the Distribution Date, the Rights will be transferred with 
and only with BNI Common Stock certificates. From as soon as practicable after  
the Rights Record Date and until the Distribution Date (or earlier redemption   
or expiration of the BNI Rights), new BNI Common Stock certificates issued      
after the Rights Record Date upon transfer or new issuance of the BNI Common    
Stock will contain a notation incorporating the Rights Agreement by reference.  
Until the Distribution Date (or earlier redemption or expiration of the         
Rights), the surrender for transfer of any certificates for BNI Common Stock    
outstanding as of the Rights Record Date will also constitute the transfer of   
the BNI Rights associated with the BNI Common Stock represented by such         
certificate. As soon as practicable following the Distribution Date, separate   
certificates evidencing the BNI Rights ("Rights Certificates") will be mailed   
to holders of record of the BNI Common Stock as of the close of business on the 
Distribution Date, and the separate Rights Certificates alone will evidence the 
BNI Rights.                                                                     

The BNI Rights are not exercisable until the Distribution Date. The BNI     
Rights will expire on July 24, 1996, unless earlier redeemed or the term of the 
BNI Rights Agreement is extended by BNI as described below.                     

The Purchase Price payable, and the number of shares of the Junior Class A  
Preferred Stock or other securities or property issuable, upon exercise of the  
BNI Rights are subject to adjustment from time to time to prevent dilution (i)  
in the event of a stock dividend on, or a subdivision, combination or           
reclassification of, the Junior Class A Preferred Stock, (ii) upon the grant to 
holders of the Junior Class A Preferred Stock of certain rights or warrants to  
subscribe for Junior Class A Preferred Stock, certain convertible securities or 
securities having the same or more favorable rights, privileges and preferences 
as the Junior Class A Preferred Stock at less than the current market price of  
the Junior Class A Preferred Stock or (iii) upon the distribution to holders of 
the Junior Class A Preferred Stock of evidences of indebtedness or assets       
(excluding regular quarterly cash dividends out of earnings or retained         
earnings and dividends payable in Junior Class A Preferred Stock) or of         
subscription rights or warrants (other than those referred to above).           

In the event that BNI is acquired in a merger or other business combination 
transaction where BNI is not the surviving corporation or where the BNI Common  
Stock is exchanged or changed or fifty percent or more of its assets or earning 
power are sold (in one transaction or a series of transactions), proper         
provision shall be made so that each holder of a BNI Right shall thereafter     
have the right to receive, upon the exercise                                    

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thereof at the then current exercise price of the BNI Right, that number of     
shares of common stock of the acquiring company (or, in the event there is more 
than one acquiring company, the acquiring company receiving the greatest        
portion of the assets or earning power transferred) which at the time of such   
transaction would have a market value of two times the exercise price of the    
BNI Right (such right being called the "Merger Right"). In the event that BNI   
is the surviving corporation in a merger and the BNI Common Stock is not        
changed or exchanged, or in the event that an Acquiring Person engages in one   
of a number of self-dealing transactions specified in the Rights Agreement, or  
an Acquiring Person becomes the beneficial owner of securities having 25% or    
more of the voting power of all then outstanding voting securities of BNI       
(unless pursuant to an all-cash tender offer for all outstanding shares of BNI  
Common Stock), proper provision shall be made so that each holder of a BNI      
Right will for a 60-day period thereafter have the right to receive upon        
exercise that number of shares (or fractional shares) of Junior Class A         
Preferred Stock having a market value of two times the exercise price of the    
BNI Right, subject to the availability of a sufficient number of treasury       
shares on authorized but unissued shares (such right being called the           
"Subscription Right"). The holder of a BNI Right will continue to have the      
Merger Right whether or not such holder exercises the Subscription Right. Upon  
the occurrence of any of the events giving rise to the exercisability of the    
Subscription Right or the Merger Right, any BNI Rights that are or were at any  
time owned by an Acquiring Person engaging in any of such transactions or       
receiving the benefits thereof on or after the time the Acquiring Person        
becomes such shall become void insofar as they relate to the Subscription Right 
or the Merger Right.                                                            

With certain exceptions, no adjustments in the Purchase Price will be       
required until cumulative adjustments require an adjustment of at least one     
percent in such Purchase Price. No fractions of shares (other than fractional   
shares of Junior Class A Preferred Stock that are integral multiples of one     
one-hundredth of a share) will be issued and, in lieu thereof, an adjustment in 
cash will be made based on the market price of the Junior Class A Preferred     
Stock on the last trading date prior to the date of exercise.                   

 At any time prior to the earlier to occur of (i) the close of business on the
Stock Acquisition Date or (ii) the expiration of the BNI Rights, BNI may redeem 
the BNI Rights in whole, but not in part, at a price of $.05 per BNI Right (the 
"Redemption Price"), which redemption shall be effective upon the action of the 
BNI Board of Directors. Additionally, BNI may thereafter redeem the then        
outstanding BNI Rights in whole, but not in part, at the Redemption Price,      
provided that such redemption is incidental to a merger or other business       
combination transaction or series of transactions involving BNI but not         
involving an Acquiring Person or any person who was an Acquiring Person or      
following an event giving rise to, and the expiration of the exercise period    
for, the Subscription Right if and for as long as an Acquiring Person           
beneficially owns securities representing less than twenty percent of the       
voting power of BNI's voting securities. BNI's right to redeem the BNI Rights   
may be reinstated if an Acquiring Person reduces his beneficial ownership of    
securities to those having less than five percent of the voting power of all    
then outstanding voting securities of BNI in a transaction or series of         
transactions not involving BNI. The redemption of BNI Rights described in the   
two preceding sentences shall be effective only as of such time when the        
Subscription Right is not exercisable, and in any event, only after ten         
business days prior notice. Upon the effective date of the redemption of the    
BNI Rights, the right to exercise the BNI Rights will terminate and the only    
right of the holders of BNI Rights will be to receive the Redemption Price.     

The Junior Class A Preferred Stock purchasable upon exercise of the BNI     
Rights will be nonredeemable and junior to any other series of preferred stock  
BNI may issue (unless otherwise provided in the terms of such stock). Each      
share of Junior Class A Preferred Stock will have a preferential quarterly      
dividend in an amount equal to the greater of $10.00 and 100 times the dividend 
declared on each share of BNI Common Stock. In the event of liquidation, the    
holders of Junior Class A Preferred Stock will receive a preferred liquidation  
payment equal to the greater of $19,000 and 100 times the payment made per      
share of BNI Common Stock. Each share of Junior Class A Preferred Stock will    
have 100 votes, voting together with the shares of BNI Common Stock. In the     
event of any merger, consolidation or other transaction in which shares of BNI  
Common Stock are exchanged, each share of Junior Class A Preferred Stock will   
be entitled to receive                                                          

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100 times the amount and type of consideration received per share of BNI Common 
Stock. The rights of the Junior Class A Preferred Stock as to dividends,        
liquidation and voting, and in the event of merger and consolidations, are      
protected by customary anti-dilution provisions. Fractional shares of Junior    
Class A Preferred Stock in integral multiples of one one-hundredth of a share   
of Junior Class A Preferred Stock will be issuable; however, BNI may elect to   
distribute depositary receipts in lieu of such fractional shares. In lieu of    
fractional shares other than fractions that are integral multiples of one one-  
hundredth of a share, an adjustment in cash will be made based on the market    
price of the Junior Class A Preferred Stock on the last trading date prior to   
the date of exercise.                                                           

Until a BNI Right is exercised, the holder thereof, as such, will have no   
rights as a stockholder of BNI, including, without limitation, the right to     
vote or to receive dividends.                                                   

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EXPERTS 

 The consolidated financial statements of BNI as of December 31, 1993 and 1992
and for each of the three years in the period ended December 31, 1993,          
incorporated by reference in this Joint Proxy Statement/Prospectus, have been   
incorporated herein by reference in reliance on the report of Coopers & Lybrand 
L.L.P., independent accountants, given on the authority of that firm as experts 
in accounting and auditing.                                                     

 The consolidated financial statements of SFP as of December 31, 1993 and 1992
and for each of the three years in the period ended December 31, 1993,          
incorporated by reference in this Joint Proxy Statement/Prospectus to SFP's     
Form 8-K/A dated October 5, 1994, have been so incorporated in reliance on the  
reports of Price Waterhouse LLP, independent accountants, given on the          
authority of said firm as experts in auditing and accounting.                   

 Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
BNI Special Meeting and representatives of Price Waterhouse LLP are expected to 
be present at the SFP Special Meeting, where they will have the opportunity to  
make a statement if they desire to do so and will be available to respond to    
appropriate questions.                                                          

LEGAL MATTERS 

The validity of the BNI Common Stock offered hereby will be passed upon by  
Francis T. Kelly, Esq., Securities and Finance Counsel of BNI. Mr. Kelly owns   
4,030 shares of BNI Common Stock (2,788 shares subject to risk of forfeiture)   
and holds options to purchase 7,381 shares of BNI Common Stock.                 

OTHER BUSINESS AT THE SPECIAL MEETINGS; 
STOCKHOLDER PROPOSALS 

BNI management and SFP management know of no other matters that may properly
be, or which are likely to be, brought before the BNI Special Meeting or the    
SFP Special Meeting, respectively. However, if any other matters are properly   
brought before such Special Meetings, the persons named in the enclosed proxy   
or their substitutes will vote the proxies in accordance with the               
recommendations of management.                                                  

In order to be considered for inclusion in the proxy statement for the next 
annual meeting of stockholders of BNI, any stockholder proposal intended to be  
presented at the meeting must have been received by BNI at its executive        
offices on or before November 19, 1994.                                         

In order to be considered for inclusion in the proxy statement for the 1995 
annual meeting of stockholders of SFP, any stockholder proposal intended to be  
presented at the meeting must have been received by SFP at its executive        
offices no later than November 15, 1994.                                        

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                                                                      APPENDIX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF 

JUNE 29, 1994 

BETWEEN 

BURLINGTON NORTHERN INC.

AND 

SANTA FE PACIFIC CORPORATION

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TABLE OF CONTENTS(/1/)

                                                                            PAGE
ARTICLE I 

THE MERGER

 1.1.The Merger............................................................  A-1
 1.2.Conversion of Shares..................................................  A-1
 1.3.Surrender and Payment.................................................  A-2
 1.4.Stock Options.........................................................  A-3
 1.5.Adjustments...........................................................  A-3
 1.6.Closing...............................................................  A-3
 1.7.Fractional Shares.....................................................  A-4

ARTICLE II

CERTAIN MATTERS RELATING TO BNI 
AND THE SURVIVING CORPORATION 

 2.1.Directors of the Surviving Corporation................................  A-4
 2.2.Certificate of Incorporation and Bylaws of the Surviving Corporation..  A-4

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF SFP 

 3.1.Corporate Existence and Power.........................................  A-4
 3.2.Corporate Authorization...............................................  A-5
 3.3.Governmental Authorization............................................  A-5
 3.4.Non-Contravention.....................................................  A-5
 3.5.Capitalization........................................................  A-5
 3.6.Material Subsidiaries.................................................  A-6
 3.7.SEC Filings...........................................................  A-6
 3.8.Financial Statements..................................................  A-7
 3.9.Disclosure Documents..................................................  A-7
 3.10. Information Supplied................................................  A-8
 3.11.No Material Adverse Changes..........................................  A-8
 3.12.Undisclosed Material Liabilities.....................................  A-8
 3.13.Litigation...........................................................  A-8
 3.14.Taxes................................................................  A-8
 3.15. ERISA...............................................................  A-9
 3.16. Finders' Fees......................................................  A-11
 3.17. Environmental Matters..............................................  A-11
 3.18. Takeover Statutes..................................................  A-11
 3.19. Compliance With Laws...............................................  A-11
--------                                                                        
(/1/)The Table of Contents is not a part of this Agreement.                     

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 3.20. Spinoff Dividend...................................................  A-11
 3.21. Private Letter Ruling..............................................  A-11
 3.22. Excess Loss Accounts...............................................  A-12

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BNI 

 4.1. Corporate Existence and Power.......................................  A-12
 4.2. Corporate Authorization.............................................  A-12
 4.3. Governmental Authorization..........................................  A-12
 4.4. Non-Contravention...................................................  A-12
 4.5. Capitalization......................................................  A-13
 4.6. Material Subsidiaries...............................................  A-13
 4.7. SEC Filings.........................................................  A-14
 4.8. Financial Statements................................................  A-14
 4.9. Disclosure Documents................................................  A-14
 4.10. Information Supplied...............................................  A-15
 4.11. No Material Adverse Changes........................................  A-15
 4.12. Undisclosed Material Liabilities...................................  A-15
 4.13. Litigation.........................................................  A-15
 4.14. Taxes..............................................................  A-15
 4.15. ERISA..............................................................  A-16
 4.16. Finders' Fees......................................................  A-18
 4.17. Environmental Matters..............................................  A-18
 4.18. Takeover Statutes..................................................  A-18
 4.19. Compliance with Laws...............................................  A-18
 4.20. BNI Rights Agreement...............................................  A-18

ARTICLE V 

COVENANTS OF SFP

 5.1. Conduct of SFP......................................................  A-18
 5.2. Stockholder Meeting.................................................  A-19
 5.3. Access to Information...............................................  A-20
 5.4. Notices of Certain Events...........................................  A-20
 5.5. Tax Matters.........................................................  A-20
 5.6. Rule 145 Affiliates.................................................  A-20
 5.7. The Spinoff.........................................................  A-20
 5.8. No Solicitations....................................................  A-21

ARTICLE VI

COVENANTS OF BNI

 6.1. Conduct of BNI......................................................  A-21
 6.2. Stockholder Meeting.................................................  A-23
 6.3. Access to Information...............................................  A-23
 6.4. Notices of Certain Events...........................................  A-23
 6.5. Tax Matters.........................................................  A-23

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 6.6. Director and Officer Liability......................................  A-23
 6.7. No Solicitations....................................................  A-24

ARTICLE VII 

COVENANTS OF BNI AND SFP

 7.1. Reasonable Best Efforts.............................................  A-24
 7.2. ICC Approval........................................................  A-24
 7.3. Certain Filings; Proxy Materials....................................  A-25
 7.4. Public Announcements................................................  A-25
 7.5. Further Assurances..................................................  A-25
 7.6. Antitakeover Statutes...............................................  A-25
 7.7. Cooperation.........................................................  A-25
 7.8. Dividends...........................................................  A-26

ARTICLE VIII

[INTENTIONALLY OMITTED] 

ARTICLE IX

CONDITIONS TO THE MERGER

 9.1. Conditions to the Obligations of Each Party.........................  A-26
 9.2. Conditions to the Obligations of BNI................................  A-27
 9.3. Conditions to the Obligations of SFP................................  A-27

ARTICLE X 

TERMINATION 

10.1. Termination.........................................................  A-27
10.2. Effect of Termination...............................................  A-28

ARTICLE XI

MISCELLANEOUS 

11.1. Notices.............................................................  A-29
11.2. Entire Agreement; Survival of Representations and Warranties......... A-29
11.3. Amendments; No Waivers..............................................  A-30
11.4. Expenses............................................................  A-30
11.5. Successors and Assigns..............................................  A-30
11.6. Governing Law.......................................................  A-30
11.7. Jurisdiction........................................................  A-30
11.8. Counterparts; Effectiveness.........................................  A-31

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TABLE OF DEFINITIONS

                                                                [Download Table]

TERM                                                                    SECTION 
----                                                                    --------
                                                                                
1933 Act............................................................... 1.4(c)  
1933 Act Affiliates.................................................... 5.6     
6- 1/4% Convertible Preferred Stock.................................... 4.5(a)  
Agreement.............................................................. Recitals
Acquiring Person....................................................... 4.20    
Balance Sheet Date..................................................... 3.8     
BNI.................................................................... Recitals
BNI Balance Sheet...................................................... 4.8     
BNI Benefit Arrangements............................................... 4.16(e) 
BNI Common Stock....................................................... 1.2(a)  
BNI Disclosure Documents............................................... 4.9     
BNI Employee Plans..................................................... 4.15(a) 
BNI Form 10-K.......................................................... 4.7(a)  
BNI Form 10-Q.......................................................... 4.7(a)  
BNI Material Subsidiary................................................ 4.6(a)  
BNI Option............................................................. 1.4(a)  
BNI Pension Plans...................................................... 4.15(b) 
BNI Post-Signing Returns............................................... 6.5     
BNI Proxy Statement.................................................... 4.9     
BNI Returns............................................................ 4.14    
BNI Rights Agreement................................................... 4.20    
BNI Securities......................................................... 4.5(a)  
BNI Stockholder Meeting................................................ 6.2     
BNI Subsidiary Securities.............................................. 4.6(b)  
BNI Voting Debt........................................................ 4.5(b)  
Class A Preferred Stock................................................ 4.5(a)  
Closing................................................................ 1.6     
Closing Date........................................................... 1.6     
Code................................................................... Recitals
Common Shares Trust.................................................... 1.7     
Confidentiality Agreement.............................................. 11.2    
Customary Action....................................................... 5.1     
Distribution Date...................................................... 4.20    
DGCL................................................................... 3.18    
Effective Time......................................................... 1.1(b)  
Environmental Laws..................................................... 3.17(b) 
Environmental Liabilities.............................................. 3.17(b) 
ERISA.................................................................. 3.15(a) 
ERISA Affiliate........................................................ 3.15(a) 
Excess Shares.......................................................... 1.7     
Exchange Act........................................................... 1.2(d)  
Exchange Agent......................................................... 1.3(a)  
Exchange Ratio......................................................... 1.2(a)  
Form 10................................................................ 3.9(b)  
Form S-1............................................................... 3.9(b)  
Form S-4............................................................... 7.3(a)  
Hazardous Substances................................................... 3.17(b) 

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                                                                [Download Table]

TERM                                                                    SECTION 
----                                                                    --------
                                                                                
HSR Act................................................................ 3.3     
ICC.................................................................... 3.3     
Indemnified Parties.................................................... 6.6     
Indemnity Agreements................................................... 6.6     
Lien................................................................... 3.4     
Liquidation............................................................ 3.21    
Material............................................................... 6.1(h)  
Material Adverse Effect................................................ 3.1     
Merger................................................................. 1.1(a)  
Merger Consideration................................................... 1.2(b)  
Multiemployer Plan..................................................... 3.16(b) 
NYSE................................................................... 1.4(c)  
PBGC................................................................... 3.16(b) 
Person................................................................. 1.2(d)  
Private Letter Ruling.................................................. 3.21    
Properties............................................................. 3.21    
SEC.................................................................... 1.4(c)  
SFP.................................................................... Recitals
SFP Balance Sheet...................................................... 3.8     
SFP Common Stock....................................................... 1.2(a)  
SFP Disclosure Documents............................................... 3.9(a)  
SFP Employee Plans..................................................... 3.15(a) 
SFP Form 10-K.......................................................... 3.7(a)  
SFP Form 10-Q.......................................................... 3.7(a)  
SFP Material Subsidiary................................................ 3.6(a)  
SFP Pension Plans...................................................... 3.15(b) 
SFP Post-Signing Returns............................................... 5.5     
SFP Preferred Stock.................................................... 3.5(a)  
SFP Proxy Statement.................................................... 3.9(a)  
SFP Properties......................................................... 5.2     
SFP Returns............................................................ 3.14(i) 
SFP Securities......................................................... 3.5(a)  
SFP Stock Option....................................................... 1.4(a)  
SFP Stockholder Meeting................................................ 5.2     
SFP Subsidiary Securities.............................................. 3.6(b)  
SFP Voting Debt........................................................ 3.5(b)  
Share.................................................................. 1.2(a)  
Shares................................................................. 1.2(a)  
Spinoff................................................................ Recitals
Spinoff Company........................................................ Recitals
Spinoff Dividend....................................................... Recitals
Spinoff Registration Documents......................................... 3.9(b)  
Stock Acquisition Date................................................. 4.20    
Subsidiary............................................................. 1.2(c)  
Surviving Corporation.................................................. 1.1(a)  
Takeover Proposal...................................................... 5.8     
Takeover Statute....................................................... 3.18    

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of June 29, 1994 (this "Agreement")   
between Burlington Northern Inc., a Delaware corporation ("BNI"), and Santa Fe  
Pacific Corporation, a Delaware corporation ("SFP").                            

WHEREAS, the respective Boards of Directors of BNI and SFP have determined  
that it is in the best interests of their respective stockholders to consummate 
the merger provided for herein;                                                 

WHEREAS, the respective Boards of Directors of BNI and SFP have determined  
that this Agreement is in the best interests of BNI or SFP, as the case may be, 
and its respective stockholders and have duly approved this Agreement and       
authorized its execution and delivery;                                          

WHEREAS, the respective Boards of Directors of BNI and SFP have received the
opinions of Lazard Freres & Co. and Goldman, Sachs & Co., respectively, that    
the Exchange Ratio (as defined in Section 1.2(a)(i)) is fair to their           
respective stockholders from a financial point of view;                         

WHEREAS, BNI has been informed that (a) as a result of an initial public    
offering of shares of common stock of SFP Gold Corporation (the "Spinoff        
Company"), SFP presently owns approximately 85% of the outstanding capital      
stock of the Spinoff Company, (b) the Board of Directors of SFP has declared,   
pursuant to resolutions substantially in the form provided to BNI prior to the  
date hereof, a dividend (the "Spinoff Dividend") of the stock of the Spinoff    
Company owned by SFP, to be issued on September 30, 1994 to SFP shareholders of 
record as of September 12, 1994 (the issuance of the Spinoff Dividend shall be  
referred to as the "Spinoff"), and (c) SFP has received a private letter ruling 
from the Internal Revenue Service to the effect that the Spinoff qualifies as a 
tax-free distribution within the meaning of Section 355 of the Internal Revenue 
Code of 1986, as amended (the "Code"); and                                      

WHEREAS, it is the intention of the parties to this Agreement that for      
Federal income tax purposes the Merger shall qualify as a "reorganization"      
within the meaning of Section 368 of the Code.                                  

NOW, THEREFORE, in consideration of the premises and of the representations,
warranties, covenants and agreements set forth herein, the parties hereto       
hereby agree as follows:                                                        

ARTICLE I 

THE MERGER

SECTION 1.1. The Merger. (a) At the Effective Time (as defined in Section   
1.1(b)), SFP shall be merged with and into BNI in accordance with Delaware Law  
(the "Merger"), whereupon the separate existence of SFP shall cease, and BNI    
shall be the surviving corporation (the "Surviving Corporation").               

(b) The Merger shall become effective at such time as the certificate of    
merger is duly filed with the Secretary of State of the State of Delaware or at 
such later time as is specified in the certificate of merger (the "Effective    
Time"); such filing shall be made as soon as practicable after the Closing, as  
defined in Section 1.6 of this Agreement.                                       

(c) From and after the Effective Time, the Surviving Corporation shall      
possess all the rights, privileges, powers and franchises and be subject to all 
of the restrictions, disabilities and duties of SFP and BNI, all as provided    
under Delaware Law.                                                             

SECTION 1.2. Conversion of Shares. (a) At the Effective Time:               

(i) each share (a "Share" and, collectively, the "Shares") of SFP common    
stock, par value $1.00 per share (the "SFP Common Stock"), outstanding  
immediately prior to the Effective Time shall, except                   

A-1 

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 as otherwise provided in Section 1.2(a)(ii) below, be converted into 0.27
 shares of the common stock, no par value (the "BNI Common Stock"), of BNI
(0.27 being defined herein as the "Exchange Ratio"); and                

(ii) each Share held by SFP as treasury stock or owned by BNI or any        
 Subsidiary (as defined in Section 1.2(c)) of BNI immediately prior to the
Effective Time shall be canceled, and no payment shall be made with     
respect thereto.                                                        

(b) The BNI Common Stock (accompanied by rights issued pursuant to the BNI  
Rights Agreement (as defined in Section 4.20)) to be received as consideration  
pursuant to the Merger by each holder of Shares is referred to herein as the    
"Merger Consideration".                                                         

(c) For purposes of this Agreement, the word "Subsidiary" when used with    
respect to any Person means any corporation or other organization, whether      
incorporated or unincorporated, of which (i) at least a majority of the         
securities or other interests having by their terms ordinary voting power to    
elect a majority of the board of directors or others performing similar         
functions with respect to such corporation or other organization is directly or 
indirectly owned or controlled by such Person or by any one or more of its      
Subsidiaries or (ii) such Person or any other Subsidiary of such Person is a    
general partner, it being understood that representations and warranties of a   
Person concerning any former Subsidiary of such Person shall be deemed to       
relate only to the periods during which such former Subsidiary was a Subsidiary 
of such Person.                                                                 

(d) For purposes of this Agreement, the word "Person" means an individual, a
corporation, a partnership, an association, a trust or any other entity or      
organization, including a government or political subdivision or any agency or  
instrumentality thereof, or any affiliate (as that term is defined in the       
Securities Exchange Act of 1934 and the rules and regulations promulgated       
thereunder (the "Exchange Act")) of any of the foregoing.                       

SECTION 1.3. Surrender and Payment. (a) Prior to the Effective Time, BNI    
shall appoint an agent reasonably satisfactory to SFP (the "Exchange Agent")    
for the purpose of exchanging certificates representing Shares as provided in   
Section 1.2(a)(i). At the Effective Time, BNI will deposit with the Exchange    
Agent certificates representing the aggregate Merger Consideration to be paid   
in respect of the Shares. Promptly after the Effective Time, BNI will send, or  
will cause the Exchange Agent to send, to each holder of Shares at the          
Effective Time a letter of transmittal for use in such exchange (which shall    
specify that the delivery shall be effected, and risk of loss and title shall   
pass, only upon proper delivery of the certificates representing Shares to the  
Exchange Agent).                                                                

(b) Each holder of Shares that have been converted into a right to receive  
the Merger Consideration, upon surrender to the Exchange Agent of a certificate 
or certificates representing such Shares, together with a properly completed    
letter of transmittal covering such Shares, will be entitled to receive the     
Merger Consideration payable in respect of such Shares. Until so surrendered,   
each such certificate shall, after the Effective Time, represent for all        
purposes only the right to receive such Merger Consideration.                   

(c) If any portion of the Merger Consideration is to be paid to a Person    
other than the registered holder of the Shares represented by the certificate   
or certificates surrendered in exchange therefor, it shall be a condition to    
such payment that the certificate or certificates so surrendered shall be       
properly endorsed or otherwise be in proper form for transfer and that the      
Person requesting such payment shall pay to the Exchange Agent any transfer or  
other taxes required as a result of such payment to a Person other than the     
registered holder of such Shares or establish to the satisfaction of the        
Exchange Agent that such tax has been paid or is not payable.                   

(d) After the Effective Time, there shall be no further registration of     
transfers of Shares. If, after the Effective Time, certificates representing    
Shares are presented to the Surviving Corporation, they shall be                

A-2 

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canceled and exchanged for the Merger Consideration in accordance with the      
procedures set forth in this Article I.                                         

 (e) Any portion of the Merger Consideration deposited with the Exchange Agent
pursuant to Section 1.3(a), and any portion of the Common Shares Trust (as      
defined in Section 1.7) that remains unclaimed by the holders of Shares twelve  
months after the Effective Time shall be returned to BNI, upon demand, and any  
such holder who has not exchanged his Shares for the Merger Consideration in    
accordance with this Article I prior to that time shall thereafter look only to 
BNI for his claim for BNI Common Stock, any cash in lieu of fractional shares   
of BNI Common Stock and any dividends or distributions with respect to BNI      
Common Stock. Notwithstanding the foregoing, BNI shall not be liable to any     
holder of Shares for any amount paid to a public official pursuant to           
applicable abandoned property laws.                                             

(f) No dividends or other distributions with respect to the BNI Common Stock
constituting part of the Merger Consideration shall be paid to the holder of    
any unsurrendered certificates representing Shares until such certificates are  
surrendered as provided in this Section 1.3. Upon such surrender, there shall   
be paid, without interest, to the person in whose name the certificates         
representing the BNI Common Stock into which such Shares were converted are     
registered, (1) all dividends and other distributions in respect of BNI Common  
Stock that are payable on a date subsequent to, and the record date for which   
occurs after, the Effective Time and (2) all dividends or other distributions   
in respect of Shares that are payable on a date subsequent to, and the record   
date for which occurs before, the Effective Time.                               

SECTION 1.4. Stock Options. (a) At the Effective Time, each outstanding     
option to purchase shares of SFP Common Stock (a "SFP Stock Option") granted    
under any employee stock option or compensation plan or arrangement of SFP      
shall be canceled and substituted with an option (a "BNI Option") to acquire    
BNI Common Stock. Such cancellation and substitution shall comply in all        
respects with, and shall be performed in accordance with, the methodology       
prescribed by the provisions of Section 424(a) of the Code and the regulations  
thereunder, and each BNI Option shall provide the option holder with rights and 
benefits that are no less favorable to him than were provided under the SFP     
Stock Option for which it was substituted.                                      

 (b) At or as soon as practicable after the Effective Time, BNI shall issue to
each holder of an SFP Stock Option which is cancelled pursuant to Section       
1.4(a) an agreement that accurately reflects the terms of the BNI Option        
substituted therefor as contemplated by Section 1.4(a).                         

(c) BNI shall take all corporate actions necessary to reserve for issuance  
such number of shares of BNI Common Stock as will be necessary to satisfy       
exercises in full of all BNI Options after the Effective Time. With respect to  
such BNI Common Stock, BNI shall (i) as soon as practicable after the Effective 
Time file with the Securities and Exchange Commission ("SEC") a Registration    
Statement on Form S-8 and use its reasonable best efforts to have such          
registration statement become and remain continuously effective under the       
Securities Act of 1933, as amended (the "1933 Act") and (ii) file with the New  
York Stock Exchange, Inc. (the "NYSE") a listing application and use its        
reasonable best efforts to have such shares admitted to trading thereon upon    
exercises of BNI Options. BNI shall also use its reasonable best efforts to     
ensure that all incentive stock options within the meaning of the Code continue 
to qualify as such at all times after the Effective Time.                       

 SECTION 1.5. Adjustments. If, prior to the Effective Time, BNI or SFP (as the
case may be) should split or combine the BNI Common Stock or the SFP Common     
Stock, or pay a stock dividend or other stock distribution in BNI Common Stock  
or SFP Common Stock, or otherwise change the BNI Common Stock or SFP Common     
Stock into any other securities, or make any other dividend or distribution in  
respect of the BNI Common Stock or the SFP Common Stock (other than the         
Spinoff, stock options permitted or contemplated by this Agreement, and normal  
dividends as the same may be adjusted from time to time in accordance with this 
Agreement), then the Exchange Ratio will be appropriately adjusted to reflect   
such split, combination, dividend or other distribution or change.              

SECTION 1.6. Closing. The closing of the Merger (the "Closing") shall take  
place (i) at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New    
York, New York, at 10:00 A.M. on the second business                            

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day after all the conditions set forth in Article IX (other than those that are 
waived by the party or parties for whose benefit such conditions exist) are     
satisfied or (ii) at such other place and/or time and/or on such other date as  
the parties may agree. The date upon which the Closing shall occur is herein    
called the "Closing Date".                                                      

SECTION 1.7. Fractional Shares. No certificates or scrip representing       
fractional shares of BNI Common Stock will be issued in the Merger, but in lieu 
thereof each holder of Shares otherwise entitled to a fractional share of BNI   
Common Stock will be entitled to receive, from the Exchange Agent in accordance 
with the provisions of this Section 1.7, a cash payment in lieu of such         
fractional shares of BNI Common Stock representing such holder's proportionate  
interest in the net proceeds from the sale by the Exchange Agent in one or more 
transactions (which sale transactions shall be made at such times, in such      
manner and on such terms as the Exchange Agent shall determine in its           
reasonable discretion) on behalf of all such holders of the aggregate of the    
fractional shares of BNI Common Stock which would otherwise have been issued    
(the "Excess Shares"). The sale of the Excess Shares by the Exchange Agent      
shall be executed on the NYSE through one or more member firms of the NYSE and  
shall be executed in round lots to the extent practicable. Until the net        
proceeds of such sale or sales have been distributed to the holders of Shares,  
the Exchange Agent will hold such proceeds in trust (the "Common Shares Trust") 
for the holders of the Shares. BNI shall pay all commissions, transfer taxes    
and other out-of-pocket transaction costs, including the expenses and           
compensation of the Exchange Agent, incurred in connection with this sale of    
the Excess Shares. The Exchange Agent shall determine the portion of the Common 
Shares Trust to which each holder of Shares shall be entitled, if any, by       
multiplying the amount of the aggregate net proceeds comprising the Common      
Shares Trust by a fraction the numerator of which is the amount of the          
fractional BNI Common Stock Interest to which such holder of Shares is entitled 
and the denominator of which is the aggregate amount of fractional share        
interests to which all holders of Shares are entitled. As soon as practicable   
after the determination of the amount of cash, if any, to be paid to holders of 
Shares in lieu of any fractional shares of BNI Common Stock, the Exchange Agent 
shall make available such amounts to such holders of Shares without interest.   

ARTICLE II

CERTAIN MATTERS RELATING TO BNI 
AND THE SURVIVING CORPORATION 

SECTION 2.1. Directors of the Surviving Corporation. The board of directors 
of the Surviving Corporation will be constituted as follows: two-thirds of the  
directors will be designated by BNI, and one-third of the directors will be     
designated by SFP.                                                              

SECTION 2.2. Certificate of Incorporation and Bylaws of the Surviving       
Corporation. (a) The certificate of incorporation of BNI in effect at the       
Effective Time shall be the certificate of incorporation of the Surviving       
Corporation until amended in accordance with applicable law.                    

(b) The bylaws of BNI in effect at the Effective Time shall be the bylaws of
the Surviving Corporation until amended in accordance with applicable law.      

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF SFP 

SFP represents and warrants to BNI that, except as disclosed in Schedule III
hereto:                                                                         

SECTION 3.1. Corporate Existence and Power. SFP is a corporation duly       
incorporated, validly existing and in good standing under the laws of the State 
of Delaware, and has all corporate powers and all material governmental         
licenses, authorizations, consents and approvals required to carry on its       
business as now conducted. SFP is duly qualified to do business as a foreign    
corporation and is in good standing in each                                     

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jurisdiction where the character of the property owned or leased by it or the   
nature of its activities makes such qualification necessary, except for those   
jurisdictions where the failure to be so qualified would not, individually or   
in the aggregate, have a Material Adverse Effect on SFP. SFP has heretofore     
delivered to BNI true and complete copies of SFP's certificate of incorporation 
and bylaws as currently in effect. For purposes of this Agreement, a "Material  
Adverse Effect" means, with respect to any Person, a material adverse effect,   
whether existing or prospective, on the financial condition, business or        
properties of such Person and its Subsidiaries taken as a whole or on the       
ability of such Person to perform its obligations hereunder. For purposes of    
this Agreement, any reference to any event, change or effect being "material"   
with respect to any Person means an event, change or effect, whether existing   
or prospective, which is material in relation to the financial condition,       
business or properties of such Person and its Subsidiaries taken as a whole or  
on the ability of such Person to perform its obligations hereunder.             

 SECTION 3.2. Corporate Authorization. The execution, delivery and performance
by SFP of this Agreement and the consummation by SFP of the transactions        
contemplated hereby are within SFP's corporate powers and, except as set forth  
in the next sentence, have been duly authorized by all necessary corporate      
action. The affirmative vote of the holders of a majority of the outstanding    
shares of SFP Common Stock entitled to vote thereon is the only vote of any     
class or series of SFP capital stock necessary to approve this Agreement and    
the transactions contemplated hereby. This Agreement constitutes a valid and    
binding agreement of SFP.                                                       

SECTION 3.3. Governmental Authorization. The execution, delivery and        
performance by SFP of this Agreement and the consummation of the Merger by SFP  
require no action by or in respect of, or filing with, any governmental body,   
agency, official or authority other than (i) the filing of a certificate of     
merger in accordance with Delaware Law; (ii) compliance with any applicable     
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the   
"HSR Act"); (iii) compliance with any applicable requirements relating to       
approval of the Merger by the Interstate Commerce Commission (the "ICC"); (iv)  
compliance with any applicable requirements of the Exchange Act; (v) compliance 
with any applicable requirements of the 1933 Act; (vi) compliance with any      
applicable foreign or state securities or Blue Sky Laws; and (vii) immaterial   
actions or filings relating to ordinary operational matters.                    

SECTION 3.4. Non-Contravention. The execution, delivery and performance by  
SFP of this Agreement and the consummation by SFP of the transactions           
contemplated hereby do not and will not (except in the case of clauses (ii),    
(iii) and (iv) of this Section 3.4, for any such matters that singly or in the  
aggregate have not had, and would not reasonably be expected to have, a         
Material Adverse Effect on SFP) (i) contravene or conflict with the certificate 
of incorporation or bylaws of SFP, (ii) assuming compliance with the matters    
referred to in Section 3.3. contravene or conflict with or constitute a         
violation of any provision of any law, regulation, judgment, injunction, order  
or decree binding upon or applicable to SFP or any of its Subsidiaries, (iii)   
constitute a default under or give rise to a right of termination, cancellation 
or acceleration of any right or obligation of SFP or any of its Subsidiaries or 
to a loss of any benefit to which SFP or any of its Subsidiaries is entitled    
under any provision of any agreement, contract or other instrument binding upon 
SFP or any of its Subsidiaries or any license, franchise, permit or other       
similar authorization held by SFP or any of its Subsidiaries, or (iv) result in 
the creation or imposition of any Lien on any asset of SFP or any of its        
Subsidiaries. For purposes of this Agreement, "Lien" means, with respect to any 
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of  
any kind in respect of such asset.                                              

 SECTION 3.5. Capitalization. (a) The authorized capital stock of SFP consists
of six hundred million (600,000,000) shares of SFP Common Stock and two hundred 
million (200,000,000) shares of preferred stock, $1.00 par value per share      
("SFP Preferred Stock"). As of May 31, 1994, there were outstanding (i)         
186,391,459 shares of SFP Common Stock, and 12,000,000 shares were reserved for 
issuance pursuant to the SFP Long-Term Incentive Stock Plan, of which 5,281,405 
were available for grant and 3,629,728 shares were held in treasury, (ii) no    
shares of SFP Preferred Stock and (iii) employee stock options to purchase an   
aggregate of 9,953,575 Shares (of which options to purchase an aggregate of     
7,004,884 Shares were                                                           

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exercisable). All outstanding shares of capital stock of SFP have been duly     
authorized and validly issued and are fully paid and nonassessable. Except as   
set forth in this Section or as contemplated by Section 5.1 and except for the  
exercise of employee stock options outstanding on May 31, 1994 or issued since  
that date in accordance with Section 5.1, there are outstanding (x) no shares   
of capital stock or other voting securities of SFP, (y) no securities of SFP or 
any of its Subsidiaries convertible into or exchangeable for shares of capital  
stock or voting securities of SFP and (z) no options or other rights to acquire 
from SFP or any of its Subsidiaries, and no obligation of SFP or any of its     
Subsidiaries to issue, any capital stock, voting securities or securities       
convertible into or exchangeable for capital stock or voting securities of SFP  
(the items in clauses (x), (y) and (z) being referred to collectively as the    
"SFP Securities"). There are no outstanding obligations of SFP or any of its    
Subsidiaries to repurchase, redeem or otherwise acquire any SFP Securities.     

(b) As of the date hereof, there are no outstanding bonds, debentures, notes
or other indebtedness of SFP having the right to vote (or convertible into or   
exercisable for SFP Securities having the right to vote) on any matters upon    
which holders of SFP Common Stock may vote (collectively, "SFP Voting Debt").   

 SECTION 3.6. Material Subsidiaries. (a) Each Subsidiary of SFP as of the date
of this Agreement is identified on Schedule 3.6(a). For purposes of this        
Agreement, the term "SFP Material Subsidiary" means each Subsidiary of SFP      
identified as material on Schedule 3.6(a). Each SFP Material Subsidiary is      
either (i) a corporation that is duly incorporated, validly existing and in     
good standing under the laws of its jurisdiction of incorporation, has all      
corporate powers and all material governmental licenses, authorizations,        
consents and approvals required to carry on its business as now conducted and   
is duly qualified to do business as a foreign corporation and is in good        
standing in each jurisdiction where the character of the property owned or      
leased by it or the nature of its activities makes such qualification           
necessary, except for those jurisdictions where failure to be so qualified      
would not, individually or in the aggregate, have a Material Adverse Effect on  
SFP, or (ii) a partnership that is duly formed and in good standing under the   
laws of its jurisdiction of formation and has all material governmental         
licenses, authorizations, consents and approvals required to carry on its       
business as now conducted and is duly qualified to do business and is in good   
standing in each jurisdiction where the character of the property owned or      
leased by it or the nature of its activities makes such qualification           
necessary, except for those jurisdictions where failure to be so qualified      
would not, individually or in the aggregate, have a Material Adverse Effect on  
SFP.                                                                            

 (b) Except as set forth in the SFP Form 10-K (as defined in Section 3.7), all
of the outstanding capital stock of, or other ownership interests in, each SFP  
Subsidiary is owned by SFP, directly or indirectly, free and clear of any Lien  
and free of any other limitation or restriction (including any restriction on   
the right to vote, sell or otherwise dispose of such capital stock or other     
ownership interests). Other than the Variable Rate Exchangeable Debentures Due  
2010 issued by SFP Pipeline Holdings, Inc. and those obligations identified on  
Schedule 3.6(b), there are no outstanding (i) securities of SFP or any of its   
Subsidiaries convertible into or exchangeable for shares of capital stock or    
other voting securities or ownership interests in any Subsidiary of SFP, or     
(ii) options or other rights to acquire from SFP or any of its Subsidiaries,    
and no other obligation of SFP or any of its Subsidiaries to issue, any capital 
stock, voting securities or other ownership interests in, or any securities     
convertible into or exchangeable for any capital stock, voting securities or    
ownership interests in, any SFP Subsidiary (the capital stock of each           
Subsidiary of SFP, together with the items in clauses (i) and (ii), being       
referred to collectively as the "SFP Subsidiary Securities"). There are no      
outstanding obligations of SFP or any Subsidiary of SFP to repurchase, redeem   
or otherwise acquire any outstanding SFP Subsidiary Securities.                 

 SECTION 3.7. SEC Filings. (a) SFP has delivered to BNI (i) its annual reports
on Form 10-K for its fiscal years ended December 31, 1989, December 31, 1990,   
December 31, 1991, December 31, 1992, and December 31, 1993 (this latest Form   
10-K being referred to herein as the "SFP Form 10-K"), (ii) its quarterly       
report on Form 10-Q for its fiscal quarter ending March 31, 1994 (this Form 10- 
Q being referred to herein as the "SFP Form 10-Q"), (iii) its proxy statements  
(as defined in Regulation 14A issued pursuant to the Exchange Act) relating to  
meetings of the stockholders of SFP held since January 1, 1989, (iv) its report 
on                                                                              

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Form 8-K dated June 25, 1993, as amended, and (v) all other reports,            
statements, schedules and registration statements filed by SFP and its          
Subsidiaries with the SEC since January 1, 1989 and through the date of this    
Agreement, but including only such pre-effective amendments to such             
registration statements as contain material information not fully reflected in  
any subsequent amendment to such registration statements (or to any prospectus  
included therein) delivered to BNI pursuant to this Section 3.7.                

(b) As of its filing date, each such report or statement, as supplemented or
amended, if applicable, filed pursuant to the Exchange Act did not contain any  
untrue statement of a material fact or omit to state any material fact          
necessary in order to make the statements made therein, in light of the         
circumstances under which they were made, not misleading.                       

(c) Each such registration statement, as supplemented or amended, if        
applicable, filed pursuant to the 1933 Act as of the date such statement or     
amendment became effective did not contain any untrue statement of a material   
fact or omit to state any material fact required to be stated therein or        
necessary to make the statements therein not misleading.                        

SECTION 3.8. Financial Statements. The audited consolidated financial       
statements and unaudited consolidated interim financial statements of SFP       
included in the SFP Form 10-K and the SFP Form 10-Q fairly present, in          
conformity with generally accepted accounting principles applied on a           
consistent basis (except as may be indicated in the notes thereto), the         
consolidated financial position of SFP and its consolidated Subsidiaries as of  
the dates thereof, their consolidated results of operations and cash flows for  
the periods then ended (subject to normal year-end adjustments in the case of   
the unaudited consolidated interim financial statements) and, in the case of    
the SFP Form 10-K, stockholders' equity. For purposes of this Agreement, "SFP   
Balance Sheet" means the Consolidated Balance Sheet of SFP as of December 31,   
1993 set forth in the SFP Form 10-K, and "Balance Sheet Date" means December    
31, 1993.                                                                       

SECTION 3.9. Disclosure Documents. (a) Each document required to be filed by
SFP with the SEC in connection with the transactions contemplated by this       
Agreement (the "SFP Disclosure Documents"), including, without limitation, the  
definitive proxy statement of SFP (the "SFP Proxy Statement") to be filed with  
the SEC in connection with the Merger, and any amendments or supplements        
thereto, will, when filed, comply as to form in all material respects with the  
applicable requirements of the Exchange Act. At the time the SFP Proxy          
Statement or any amendment or supplement thereto is first mailed to             
stockholders of SFP and at the time such stockholders vote on adoption of this  
Agreement, the SFP Proxy Statement, as supplemented or amended, if applicable,  
will not contain any untrue statement of a material fact or omit to state any   
material fact necessary in order to make the statements made therein, in light  
of the circumstances under which they were made, not misleading. At the time of 
the filing of any SFP Disclosure Document other than the SFP Proxy Statement    
and at the time of any distribution thereof, such SFP Disclosure Document will  
not contain any untrue statement of a material fact or omit to state a material 
fact necessary in order to make the statements made therein, in light of the    
circumstances under which they were made, not misleading. The representations   
and warranties contained in this Section 3.9(a) will not apply to statements or 
omissions included in SFP Disclosure Documents based upon information furnished 
to SFP in writing by BNI specifically for use therein.                          

(b) The registration statements on Form S-1 (the "Form S-1") and the        
registration statement on Form 10 (the "Form 10") filed by SFP in connection    
with the Spinoff, and any amendments or supplements thereto, or other           
appropriate filings made to register the stock of the Spinoff Company under the 
1933 Act or the Exchange Act, as amended and supplemented (the "Spinoff         
Registration Documents"), when they became effective, complied as to form in    
all material respects with the applicable requirements of the 1933 Act and the  
Exchange Act. At the time of the effectiveness and at the time that the sale of 
securities pursuant to the Spinoff Registration Documents was consummated, the  
Spinoff Registration Documents did not contain any untrue statement of a        
material fact or omit to state any material fact necessary in order to make the 
statements made therein, in light of the circumstances under which they were    
made, not misleading. The representations                                       

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and warranties contained in this Section 3.9(b) shall not apply to statements   
or omissions included in the Spinoff Registration Documents based upon          
information furnished to SFP in writing by BNI specifically for use therein.    

SECTION 3.10. Information Supplied. The information supplied or to be       
supplied by SFP for inclusion or incorporation by reference in (i) the BNI      
Proxy Statement (as defined in Section 4.9) or any amendment or supplement      
thereto will not, at the time the BNI Proxy Statement is first mailed to        
stockholders of BNI and at the time such stockholders vote on adoption of this  
Agreement, contain any untrue statement of a material fact or omit to state any 
material fact necessary in order to make the statements made therein, in light  
of the circumstances under which they were made, not misleading, (ii) any BNI   
Disclosure Document (as defined in Section 4.9) (other than the BNI Proxy       
Statement will not, at the time of effectiveness of such BNI Disclosure         
Document and at the time of any distribution thereof contain any untrue         
statement of a material fact or omit to state a material fact necessary in      
order to make the statements made therein, in light of the circumstances under  
which they were made, not misleading, and (iii) the Form S-4 (as defined in     
Section 7.3(a)) will not, at the time the Form S-4 becomes effective under the  
1933 Act and at the Effective Time, contain any untrue statement of a material  
fact or omit to state a material fact necessary in order to make the statements 
made therein, in light of the circumstances under which they were made, not     
misleading.                                                                     

SECTION 3.11. No Material Adverse Changes. Except as contemplated by this   
Agreement or as publicly disclosed prior to the date of this Agreement, and     
except as set forth in Schedule 3.11, since the Balance Sheet Date, SFP and the 
SFP Material Subsidiaries have conducted their business in the ordinary course  
consistent with past practice and there has not been:                           

(a) any event, occurrence or development of a state of circumstances or 
facts which has had or reasonably could be expected to have a Material      
Adverse Effect on SFP (other than as a result of (i) changes in conditions, 
including economic or political developments, applicable to the railroad    
industry generally and (ii) the Spinoff); or                                

(b) any declaration, setting aside or payment of any dividend or other  
distribution with respect to any shares of SFP capital stock (other than    
(x) aggregate cash dividends on the Shares not in excess of $0.10 per Share 
in 1994, $0.18 per Share in 1995, $0.20 per Share in 1996 and $0.22 per     
Share in 1997, in each case having record and payment dates determined in   
accordance with Section 7.8 and (y) the Spinoff).                           

SECTION 3.12. Undisclosed Material Liabilities. Except for (i) liabilities  
reflected in the SEC Reports listed in Section 3.7 and (ii) liabilities         
incurred in the ordinary course of business of SFP and its Subsidiaries         
consistent with past practice subsequent to the Balance Sheet Date, SFP and its 
Subsidiaries have no liabilities that are material to SFP and there is no       
existing condition or set of circumstances which would reasonably be expected   
to result in such a liability; provided, however, that this representation does 
not cover, and shall not be deemed to be breached as a result of, any such      
liability that results primarily from a Customary Action (as defined in Section 
5.1 below).                                                                     

 SECTION 3.13. Litigation. Except as set forth in the SFP Form 10-K or the SFP
Form 10-Q (i) there is no action, suit, investigation or proceeding (or any     
basis therefor) pending against, or to the knowledge of SFP threatened against  
or affecting, SFP or any of its Subsidiaries or any of their respective         
properties before any court or arbitrator or any governmental body, agency or   
official where there is a reasonable probability of a determination adverse to  
SFP or any of its Subsidiaries which could reasonably be expected to have a     
Material Adverse Effect on SFP and (ii) as of the date of this Agreement, there 
is no such action, suit, investigation or proceeding which in any manner        
challenges or seeks to prevent, enjoin, alter or materially delay the Merger,   
the Spinoff or any of the other transactions contemplated hereby.               

SECTION 3.14. Taxes. Except as set forth in the SFP Balance Sheet (including
the notes thereto) or on Schedule 3.14, (i) all material tax returns,           
statements, reports and forms (collectively, the "SFP Returns")                 

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required to be filed with any taxing authority as of the date hereof by, or     
with respect to, SFP and its Subsidiaries have been filed in accordance with    
all applicable laws; (ii) SFP and its Subsidiaries have timely paid all taxes   
shown as due and payable on the SFP Returns that have been so filed and as of   
the time of filing the SFP Returns correctly reflected the facts regarding the  
income, business, assets, operations, activities and the status of SFP and its  
Subsidiaries in all material respects; (iii) SFP and its Subsidiaries have made 
provision for all material taxes payable by SFP and its Subsidiaries for which  
no Return has yet been filed or in respect of which a final determination has   
been made; (iv) the charges, accruals and reserves for taxes with respect to    
SFP and its Subsidiaries reflected in the SFP Balance Sheet are adequate under  
generally accepted accounting principles to cover the tax liabilities accruing  
through the date thereof; and (v) as of the date of this Agreement, there is no 
action, suit, proceeding, investigation, audit or claim now proposed or pending 
against or with respect to SFP or any of its Subsidiaries in respect of any tax 
where there is a reasonable possibility of a determination or decision against  
SFP or any of its Subsidiaries which would reasonably be expected to have a     
Material Adverse Effect on SFP.                                                 

SECTION 3.15. ERISA. (a) Schedule III identifies (i) each "employee benefit 
plan", as defined in Section 3(3) of the Employee Retirement Income Security    
Act of 1974 ("ERISA") (other than multiemployer plans (as defined in Section    
3(37) of ERISA)), and (ii) each employment, severance or other similar          
contract, arrangement or policy and each retirement or deferred compensation    
plan, stock plan, incentive compensation plan, vacation pay, severance pay,     
bonus or benefit arrangement, insurance (including self-insured arrangements)   
or hospitalization program, workers' compensation program, disability program,  
supplemental unemployment program or fringe benefit arrangement, whether        
maintained pursuant to contract or informal understanding, which does not       
constitute an "employee benefit plan" (as defined in Section 3(3) of ERISA),    
which, in the case of items described in both clauses (i) and (ii), is          
maintained, administered or contributed to by SFP or any of its ERISA           
Affiliates (as defined below), and covers any employee or former employee of    
SFP or any of its Subsidiaries or with respect to which SFP or any of its ERISA 
Affiliates has any liability (collectively, the "SFP Employee Plans"). True and 
correct copies of each of the SFP Employee Plans, all amendments thereto, any   
written interpretations thereof distributed to employees, and all contracts     
relating thereto or the funding thereof, including, without limitation, all     
trust agreements, insurance contracts, administration contracts, investment     
management agreements, subscription and participation agreements, recordkeeping 
agreements and summary plan descriptions, all as currently in effect, have been 
furnished or made available to BNI. SFP has supplied or made available to BNI   
an accurate description of any SFP Employee Plan that is not in written form.   
To the extent applicable, true and correct copies of the three most recent      
annual reports (Form 5500 including, if applicable, Schedule B thereto)         
prepared in connection with any SFP Employee Plan and the most recent actuarial 
valuation report prepared in connection with any such plan have been furnished  
or made available to BNI. For purposes of this Agreement, "ERISA Affiliate" of  
any Person means any other Person which, together with such Person, would be    
treated as a single employer under Section 414 of the Code. SFP has made        
available to BNI with complete age, salary, service and related data as of the  
most recent practical date for employees and former employees of SFP and any of 
its Subsidiaries covered under the SFP Employee Plans.                          

(b) The only SFP Employee Plans that are subject to Title IV of ERISA (the  
"SFP Pension Plans") are identified in the list of such plans provided or made  
available to BNI by SFP in accordance with Section 3.15(a). As of the most      
recent valuation date of each SFP Pension Plan, the present value of all        
benefits accrued under each SFP Pension Plan determined on a termination basis  
using the assumptions established by the Pension Benefit Guaranty Corporation   
(the "PBGC") as in effect on such date was exceeded by the fair market value of 
the assets of such SFP Pension Plan (excluding for these purposes any accrued   
but unpaid contributions). No "accumulated funding deficiency", as defined in   
Section 412 of the Code, has been incurred with respect to any SFP Pension      
Plan, whether or not waived. SFP knows of no "reportable event", within the     
meaning of Section 4043 of ERISA and the regulations promulgated thereunder,    
and no event described in Section 4041 (other than a standard termination),     
4042, 4062 or 4063 of ERISA has occurred in connection with any SFP Pension     
Plan, other than a "reportable event" that will not have a Material Adverse     
Effect on SFP. No condition exists and no event has occurred that could         
constitute grounds for termination of or the                                    

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appointment of a trustee to administer any SFP Pension Plan under Section 4042  
of ERISA and, to SFP's knowledge, neither SFP nor any of its ERISA Affiliates   
has engaged in, or is a successor or parent corporation to an entity that has   
engaged in, a transaction for which SFP or any of its ERISA Affiliates would    
have liability under Section 4069 or 4212(c) of ERISA. To SFP's knowledge,      
nothing done or omitted to be done and no transaction or holding of any asset   
under or in connection with any SFP Employee Plan has or will make SFP or any   
of its ERISA Affiliates or any officer or director of SFP or any of its ERISA   
Affiliates subject to any liability under Title I or Section 4071 of ERISA or   
liable for any tax pursuant to Section 4975 or Chapters 43, 47, or 68 of the    
Code that could have a Material Adverse Effect.                                 

(c) Each SFP Employee Plan which is intended to be qualified under Section  
401(a) of the Code is so qualified and has been so qualified during the period  
from its adoption to date, and each trust forming a part thereof is exempt from 
tax pursuant to Section 501(a) of the Code. SFP has furnished or made available 
to BNI copies of the most recent Internal Revenue Service determination letters 
with respect to each such SFP Employee Plan. Each SFP Employee Plan has been    
maintained in substantial compliance with its terms and with the requirements   
prescribed by any and all statutes, orders, rules and regulations, including    
but not limited to ERISA and the Code, which are applicable to such SFP         
Employee Plan.                                                                  

 (d) None of the payments contemplated by the contracts, plans or arrangements
covering any employee or former employee of SFP or any of its ERISA Affiliates  
and arising solely as a result of the transactions contemplated hereby would,   
in the aggregate, constitute excess parachute payments as defined in Section    
280G of the Code (without regard to subsection (b)(4) thereof).                 

(e) Except for obligations arising pursuant to any collective bargaining    
agreements, no condition exists that would prevent SFP or any of its            
Subsidiaries from amending or terminating any SFP Employee Plan providing       
health or medical benefits in respect of any active or former employees of SFP  
and its Subsidiaries.                                                           

(f) There has been no amendment to, written interpretation or announcement  
(whether or not written) by SFP or any of its ERISA Affiliates relating to, or  
change in employee participation or coverage under, any SFP Employee Plan which 
would increase materially the expense of maintaining such SFP Employee Plan     
above the level of the expense incurred in respect thereof for the fiscal year  
ended on the Balance Sheet Date.                                                

(g) To the extent applicable, each SFP Employee Plan which constitutes a    
"group health plan" (as defined in Section 607(1) of ERISA or Section           
4980B(g)(2) of the Code), including any plans of current or former affiliates   
which must be taken into account under Sections 4980B and 414(t) of the Code or 
Section 601 of ERISA, has been operated in substantial compliance with          
applicable law, including the group health plan continuation coverage           
requirements of Section 4980B of the Code and Section 601 of ERISA.             

(h) There are no actions, suits or claims (other than routine claims for    
benefits) pending or, to SFP's knowledge, threatened involving any SFP Employee 
Plan or the assets thereof and no facts exist with could give rise to any such  
actions, suits or claims (other than routine claims for benefits).              

(i) SFP has provided or will promptly provide BNI with a list of each       
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a  
multiemployer plan with respect to which SFP or any of its ERISA Affiliates may 
have any liability (including any liability attributable to a current or former 
member of SFP's or any of its ERISA Affiliates' "controlled group" (as defined  
in Section 4001(a)(14) of ERISA)) and the maximum amount of such liability      
(determined as if a complete withdrawal occurred with respect to each such plan 
immediately after the Effective Time). With respect to each such plan, (i) all  
contributions have been made as required by the terms of the plans, the terms   
of any collective bargaining agreements and applicable law, (ii) neither SFP    
nor any of its ERISA Affiliates has withdrawn, partially withdrawn or received  
any notice of any claim or demand for withdrawal liability or partial           
withdrawal liability that would have a Material Adverse Effect, and (iii)       
neither SFP nor any of its ERISA Affiliates has received any notice             

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that any such plan is in reorganization, that increased contributions may be    
required to avoid a reduction in plan benefits or the imposition of any excise  
tax, that any such plan is or has been funded at a rate less than that required 
under Section 412 of the Code or that any plan is or may become insolvent.      

(j) As of the Balance Sheet Date, the Expected Postretirement Benefit       
Obligation (as defined in Statement of Financial Accounting Standards No. 106)  
in respect of postretirement health and medical benefits for current and former 
employees of SFP or any of its Subsidiaries calculated by SFP's actuary using   
reasonable actuarial assumptions was $291,200,000.                              

 SECTION 3.16. Finders' Fees. Except for Goldman, Sachs & Co., a copy of whose
engagement agreement has been or will be provided to BNI, there is no           
investment banker, broker, finder or other intermediary which has been retained 
by or is authorized to act on behalf of SFP or any of its Subsidiaries who      
might be entitled to any fee or commission from BNI or any of its affiliates    
upon consummation of the transactions contemplated by this Agreement.           

SECTION 3.17. Environmental Matters. (a) Except as set forth in the SFP Form
10-K or otherwise previously disclosed in writing by SFP to BNI, there are no   
Environmental Liabilities (as defined below) of SFP that, individually or in    
the aggregate, have had or would reasonably be expected to have a Material      
Adverse Effect on SFP.                                                          

(b) As used in this Agreement, "Environmental Laws" means any and all       
federal, state, local and foreign statutes, laws, judicial decisions,           
regulations, ordinances, rules, judgments, orders, decrees, codes, plans,       
injunctions, permits, concessions, grants, franchises, licenses, agreements and 
governmental restrictions, whether now or hereafter in effect, relating to      
human health, the environment or to emissions, discharges or releases of        
pollutants, contaminants, Hazardous Substances or wastes into the environment,  
including without limitation ambient air, surface water, ground water or land,  
or otherwise relating to the manufacture, processing, distribution, use,        
treatment, storage, disposal, transport or handling of pollutants,              
contaminants, Hazardous Substances or wastes or the clean-up or other           
remediation thereof. "Environmental Liabilities" with respect to any Person     
means any and all liabilities of or relating to such Person or any of its       
Subsidiaries (including any entity which is, in whole or in part, a predecessor 
of such Person or any of its Subsidiaries), whether vested or unvested,         
contingent or fixed, actual or potential, known or unknown, which (i) arise     
under or relate to matters covered by Environmental Laws and (ii) relate to     
actions occurring or conditions existing on or prior to the Closing Date.       
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise       
hazardous substance, including petroleum, its derivatives, by-products and      
other hydrocarbons, or any substance having any constituent elements displaying 
any of the foregoing characteristics, including, without limitation, any        
substance regulated under Environmental Laws.                                   

SECTION 3.18. Takeover Statutes. No "fair price", "moratorium", "control    
share acquisition" or other similar antitakeover statute or regulation enacted  
under state or federal laws in the United States (each a "Takeover Statute"),   
including, without limitation, Section 203 of the Delaware General Corporation  
Law (the "DGCL"), applicable to SFP or any of its Subsidiaries is applicable to 
the Merger or the other transactions contemplated hereby.                       

SECTION 3.19. Compliance With Laws. Except as publicly disclosed, and except
for any matter that would not reasonably be expected to have a Material Adverse 
Effect on SFP, neither SFP nor any of its Subsidiaries is in violation of, or   
has violated, any applicable provisions of any laws, statutes, ordinances or    
regulations.                                                                    

SECTION 3.20. Spinoff Dividend. The board of directors of SFP has declared  
the Spinoff Dividend, and the Liquidation of Properties (as those terms are     
defined in Section 3.21 below) has occurred prior to the date of this Agreement 
in conformity with the Private Letter Ruling (as defined below).                

SECTION 3.21. Private Letter Ruling. SFP has received from the Internal     
Revenue Service a valid and effective private letter ruling dated February 16,  
1994 (and supplemented on May 18, 1994) (the "Private                           

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Letter Ruling") to the effect that (i) the Spinoff qualifies as a tax-free      
distribution under Section 355 of the Code and (ii) the merger of SFP           
Properties, Inc. ("Properties") with and into SFP (the "Liquidation") will be   
treated as a distribution by Properties to SFP in complete liquidation of       
Properties within the meaning of Section 322 of the Code. A copy of the Private 
Letter Ruling has been provided to BNI.                                         

SECTION 3.22. Excess Loss Accounts. The income that will be recognized, for 
federal income tax purposes, upon the Spinoff arising from excess loss accounts 
in the stock of the Spinoff Company and its subsidiaries will be approximately  
$30 million.                                                                    

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BNI 

BNI represents and warrants to SFP that, except as disclosed in Schedule IV 
hereto:                                                                         

SECTION 4.1. Corporate Existence and Power. BNI is a corporation duly       
incorporated, validly existing and in good standing under the laws of its       
jurisdiction of incorporation and has all corporate powers and all material     
governmental licenses, authorizations, consents and approvals required to carry 
on its business as now conducted. BNI is duly qualified to do business as a     
foreign corporation and is in good standing in each jurisdiction where the      
character of the property owned or leased by it or the nature of its activities 
makes such qualification necessary, except for those jurisdictions where the    
failure to be so qualified would not, individually or in the aggregate, have a  
Material Adverse Effect on BNI. BNI has heretofore delivered to SFP true and    
complete copies of the certificates of incorporation and bylaws of BNI as       
currently in effect.                                                            

 SECTION 4.2. Corporate Authorization. The execution, delivery and performance
by BNI of this Agreement and the consummation by BNI of the transactions        
contemplated hereby are within the corporate powers of BNI and, except as set   
forth in the next sentence, have been duly authorized by all necessary          
corporate action. The affirmative vote of the holders of a majority of the      
outstanding shares of BNI Common Stock entitled to vote thereon is the only     
vote of any class or series of BNI capital stock necessary to approve this      
Agreement and the transactions contemplated hereby. This Agreement constitutes  
a valid and binding agreement of BNI.                                           

SECTION 4.3. Governmental Authorization. The execution, delivery and        
performance by BNI of this Agreement and the consummation of the Merger by BNI  
require no action by or in respect of, or filing with, any governmental body,   
agency, official or authority other than (i) the filing of a certificate of     
merger in accordance with Delaware Law; (ii) compliance with any applicable     
requirements of the HSR Act; (iii) compliance with any applicable requirements  
relating to approval of the Merger by the ICC; (iv) compliance with any         
applicable requirements of the Exchange Act; (v) compliance with the applicable 
requirements of the 1933 Act; (vi) compliance with any applicable foreign or    
state securities or Blue Sky laws; and (vii) immaterial actions or filings      
relating to ordinary operational matters.                                       

SECTION 4.4. Non-Contravention. The execution, delivery and performance by  
BNI of this Agreement and the consummation by BNI of the transactions           
contemplated hereby do not and will not (except, in the case of clauses (ii),   
(iii) and (iv) of this Section 4.4, for any such matters that singly or in the  
aggregate have not had, and would not reasonably be expected to have, a         
Material Adverse Effect on BNI) (i) contravene or conflict with the certificate 
of incorporation or bylaws of BNI, (ii) assuming compliance with the matters    
referred to in Section 4.3, contravene or conflict with or constitute a         
violation of any provision of any law, regulation, judgment, injunction, order  
or decree binding upon or applicable to BNI or any Subsidiary of BNI, (iii)     
constitute a default under or give rise to any right of termination,            
cancellation or acceleration of any right or obligation of BNI or any of its    
Subsidiaries or to a loss of any benefit to which BNI or any of its             
Subsidiaries is entitled under any agreement, contract or other instrument      
binding upon BNI or any of its Subsidiaries or any license, franchise, permit   
or other similar authorization held by BNI or                                   

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any of its Subsidiaries, or (iv) result in the creation or imposition of any    
Lien on any asset of BNI or any Subsidiary of BNI.                              

 SECTION 4.5. Capitalization. (a) The authorized capital stock of BNI consists
of three hundred million (300,000,000) shares of BNI Common Stock and twenty-   
five million (25,000,000) shares of No Par Value Preferred Stock, including six 
million nine hundred thousand (6,900,000) shares of 6 1/4% Cumulative           
Convertible Preferred Stock, Series A No Par Value ("6 1/4% Convertible         
Preferred Stock") and fifty million (50,000,000) shares of Class A Preferred    
Stock, No Par Value ("Class A Preferred Stock"). As of May 31, 1994 there were  
outstanding (i) 89,208,870 shares of BNI Common Stock (including 7,800 shares   
issued after May 31, 1994 with effect prior to such date), 15,104,280 shares    
were reserved for issuance pursuant to stock option plans, 303,532 shares were  
reserved for issuance pursuant to "restricted stock" plans and 94,572 shares    
were held in the treasury, (ii) six million nine hundred thousand (6,900,000)   
shares of 6 1/4% Convertible Preferred Stock, (iii) no shares of Class A        
Preferred Stock, and (iv) employee stock options to purchase an aggregate of    
4,170,536 shares of BNI Common Stock (of which options to purchase an aggregate 
of 2,925,611 shares were exercisable). All outstanding shares of capital stock  
of BNI have been duly authorized and validly issued and are fully paid and      
nonassessable. Except as set forth in this Section or as contemplated by        
Section 6.1, except for the exercise of employee stock options outstanding on   
May 31, 1994 or issued since that date in accordance with Section 6.1 and       
except for changes since that date resulting from the conversion of shares of   
the 6 1/4% Convertible Preferred Stock, there are outstanding (x) no shares of  
capital stock or other voting securities of BNI, (y) no securities of BNI or    
any of its Subsidiaries convertible into or exchangeable for shares of capital  
stock or voting securities of BNI and (z) no options or other rights to acquire 
from BNI or any of its Subsidiaries, and no obligation of BNI or any of its     
Subsidiaries to issue, any capital stock, voting securities or securities       
convertible into or exchangeable for capital stock or voting securities of BNI  
(the items in clauses (x), (y) and (z) being referred to collectively as the    
"BNI Securities"). There are no outstanding obligations of BNI or any           
Subsidiary of BNI to repurchase, redeem or otherwise acquire any BNI            
Securities.                                                                     

(b) As of the date hereof, there are no outstanding bonds, debentures, notes
or other indebtedness of BNI having the right to vote (or convertible into or   
exercisable for BNI Securities having the right to vote) on any matters on      
which holders of BNI Common Stock may vote (collectively, "BNI Voting Debt").   

SECTION 4.6. Material Subsidiaries. (a) Each Subsidiary of BNI is identified
on Schedule 4.6(a). For purposes of this Agreement, the term "BNI Material      
Subsidiary" means each Subsidiary of BNI identified as material on Schedule     
4.6(a). Each BNI Material Subsidiary is either (i) a corporation that is duly   
incorporated, validly existing and in good standing under the laws of its       
jurisdiction of incorporation, has all corporate powers and all material        
governmental licenses, authorizations, consents and approvals required to carry 
on its business as now conducted and is duly qualified to do business as a      
foreign corporation and is in good standing in each jurisdiction where the      
character of the property owned or leased by it or the nature of its activities 
makes such qualification necessary, except for those jurisdictions where        
failure to be so qualified would not, individually or in the aggregate, have a  
Material Adverse Effect on BNI, or (ii) a partnership that is duly formed and   
in good standing under the laws of its jurisdiction of formation and has all    
material governmental licenses, authorizations, consents and approvals required 
to carry on its business as now conducted and is duly qualified to do business  
and is in good standing in each jurisdiction where the character of the         
property owned or leased by it or the nature of its activities makes such       
qualification necessary, except for those jurisdictions where failure to be so  
qualified would not, individually or in the aggregate, have a Material Adverse  
Effect on BNI.                                                                  

(b) Except as set forth in the BNI Form 10-K (as defined in Section 4.7(a)),
all of the outstanding capital stock of, or other ownership interests in, each  
BNI Subsidiary, is owned by BNI, directly or indirectly, free and clear of any  
Lien and free of any other limitation or restriction (including any restriction 
on the right to vote, sell or otherwise dispose of such capital stock or other  
ownership interests). Other than those obligations identified on Schedule       
4.6(b), there are no outstanding (i) securities of BNI or any of its            
Subsidiaries convertible into or exchangeable for shares of capital stock or    
other voting securities or ownership interests                                  

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in any Subsidiary of BNI, and (ii) options or other rights to acquire from BNI  
or any of its Subsidiaries, and no other obligation of BNI or any of its        
Subsidiaries to issue, any capital stock, voting securities or other ownership  
interests in, or any securities convertible into or exchangeable for any        
capital stock, voting securities or ownership interests in, any Subsidiary of   
BNI (the capital stock of each Subsidiary of BNI, together with the items in    
clauses (i) and (ii), being referred to collectively as the "BNI Subsidiary     
Securities"). There are no outstanding obligations of BNI or any Subsidiary of  
BNI to repurchase, redeem or otherwise acquire any outstanding BNI Subsidiary   
Securities.                                                                     

 SECTION 4.7. SEC Filings. (a) BNI has delivered to SFP (i) the annual reports
on Form 10-K for its fiscal years ended December 31, 1989, December 31, 1990,   
December 31, 1991, December 31, 1992, and December 31, 1993 (this latest form   
10-K being referred to herein as the "BNI Form 10-K"), (ii) its quarterly       
report on Form 10-Q for its fiscal quarter ending March 31, 1994 (this Form 10- 
Q being referred to herein as the "BNI Form 10-Q"), (iii) its proxy statements  
(as defined in Regulation 14A issued pursuant to the Exchange Act) relating to  
meetings of the stockholders of BNI held since January 1, 1989, and (iv) all    
other reports, statements, schedules and registration statements filed by BNI   
and its Subsidiaries with the SEC since January 1, 1989 and through the date of 
this Agreement, but including only such pre-effective amendments and such       
registration statements as contain material information not fully reflected in  
any subsequent amendments to such registration statements (or any prospectus    
included therein) delivered to SFP pursuant to this Section 4.7.                

(b) As of its filing date, each such report or statement, as supplemented or
amended, if applicable, filed pursuant to the Exchange Act did not contain any  
untrue statement of a material fact or omit to state any material fact          
necessary in order to make the statements made therein, in light of the         
circumstances under which they were made, not misleading.                       

(c) Each such registration statement, as supplemented or amended, if        
applicable, filed pursuant to the 1933 Act as of the date such statement or     
amendment became effective did not contain any untrue statement of a material   
fact or omit to state any material fact required to be stated therein or        
necessary to make the statements therein not misleading.                        

SECTION 4.8. Financial Statements. The audited consolidated financial       
statements and unaudited consolidated interim financial statements of BNI       
included in the BNI Form 10-K and the BNI Form 10-Q fairly present, in          
conformity with generally accepted accounting principles applied on a           
consistent basis (except as may be indicated in the notes thereto), the         
consolidated financial position of BNI and its consolidated Subsidiaries as of  
the dates thereof, their consolidated results of operations and cash flows for  
the periods then ended (subject to normal year-end adjustments in the case of   
the unaudited consolidated interim financial statements) and, in the case of    
the BNI Form 10-K, stockholders' equity. For purposes of this Agreement, "BNI   
Balance Sheet" means the Consolidated Balance Sheet of BNI as of the Balance    
Sheet Date set forth in the BNI Form 10-K.                                      

SECTION 4.9. Disclosure Documents. Each document required to be filed by BNI
with the SEC in connection with the transactions contemplated by this Agreement 
(the "BNI Disclosure Documents"), including, without limitation the definitive  
proxy statement of BNI (the "BNI Proxy Statement") to be filed with the SEC in  
connection with the Merger, and any amendments or supplements thereto, will,    
when filed, comply as to form in all material respects with the applicable      
requirements of the Exchange Act. At the time the BNI Proxy Statement or any    
amendment or supplement thereto is first mailed to stockholders of BNI and at   
the time such stockholders vote on adoption of this Agreement, the BNI Proxy    
Statement, as supplemented or amended, if applicable, will not contain any      
untrue statement of a material fact or omit to state any material fact          
necessary in order to make the statements made therein, in light of the         
circumstances under which they were made, not misleading. At the time of the    
filing of any BNI Disclosure Document other than the BNI Proxy Statement and at 
the time of any distribution thereof, such BNI Disclosure Document will not     
contain any untrue statement of a material fact or omit to state a material     
fact necessary in order to make the statements made therein, in light of the    
circumstances under which they were made, not                                   

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misleading. The representations and warranties contained in this Section 4.9    
will not apply to statements or omissions included in the BNI Disclosure        
Documents based upon information furnished to BNI in writing by SFP             
specifically for use therein.                                                   

SECTION 4.10. Information Supplied. The information supplied or to be       
supplied by BNI for inclusion or incorporation by reference in (i) the SFP      
Proxy Statement or any amendment or supplement thereto will not, at the time    
the SFP Proxy Statement is first mailed to stockholders of SFP and at the time  
such stockholders vote on adoption of this Agreement contain any untrue         
statement of a material fact or omit to state any material fact necessary in    
order to make the statements made therein, in light of the circumstances under  
which they were made, not misleading, and (ii) any SFP Disclosure Document      
(other than the SFP Proxy Statement) will not, at the time of effectiveness of  
such SFP Disclosure Document and at the time of any distribution thereof        
contain any untrue statement of a material fact or omit to state a material     
fact necessary in order to make the statements made therein, in light of the    
circumstances under which they were made, not misleading.                       

SECTION 4.11. No Material Adverse Changes. Except as contemplated by this   
Agreement or as publicly disclosed prior to the date of this Agreement, and     
except as set forth in Schedule 4.11, since the Balance Sheet Date, BNI and the 
BNI Material Subsidiaries have conducted their business in the ordinary course  
consistent with past practice and there has not been:                           

(a) any event, occurrence or development of a state of circumstances or 
facts which has had or reasonably could be expected to have a Material      
Adverse Effect on BNI (other than as a result of changes in conditions,     
including economic or political developments, applicable to the railroad    
industry generally); or                                                     

(b) any declaration, setting aside or payment of any dividend or other  
distribution with respect to any shares of BNI Common Stock (other than     
aggregate cash dividends not in excess of $1.20 per share in 1994, $1.32    
per share in 1995, $1.48 per share in 1996, and $1.64 per share in 1997, in 
each case having record and payment dates determined in accordance with     
Section 7.8).                                                               

SECTION 4.12. Undisclosed Material Liabilities. Except for (i) liabilities  
reflected in the SEC Reports listed in Section 4.7 and (ii) liabilities         
incurred in the ordinary course of business of BNI and its Subsidiaries         
subsequent to the Balance Sheet Date, BNI and its Subsidiaries have no          
liabilities that are material to BNI and there is no existing condition or set  
of circumstances which could reasonably be expected to result in such a         
liability; provided, however, that this representation does not cover, and      
shall not be deemed to be breached as a result of, any such liability that      
primarily results from a Customary Action (as defined in Section 5.1 below).    

 SECTION 4.13. Litigation. Except as set forth in the BNI Form 10-K or the BNI
Form 10-Q, (i) there is no action, suit, investigation or proceeding (or any    
basis therefor) pending against, or to the knowledge of BNI threatened against  
or affecting, BNI or any of its Subsidiaries or any of their respective         
properties before any court or arbitrator or any governmental body, agency or   
official where there is a reasonable probability of a determination adverse to  
BNI or any of its Subsidiaries which could reasonably be expected to have a     
Material Adverse Effect on BNI and (ii) as of the date of this Agreement, there 
is no such action, suit, investigation or proceeding which in any manner        
challenges or seeks to prevent, enjoin, alter or materially delay the Merger or 
any of the other transactions contemplated hereby.                              

SECTION 4.14. Taxes. Except as set forth in the BNI Balance Sheet(including 
the notes thereto) or on Schedule 4.14, (i) all material tax returns,           
statements, reports and forms (collectively, the "BNI Returns") required to be  
filed with any taxing authority as of the date hereof by, or with respect to,   
BNI and its Subsidiaries have been filed in accordance with all applicable      
laws; (ii) BNI and its Subsidiaries have timely paid all taxes shown as due and 
payable on the BNI Returns that have been so filed and as of the time of        

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filing the BNI Returns correctly reflected the facts regarding the income,      
business, assets, operations, activities and the status of BNI and its          
Subsidiaries in all material respects; (iii) BNI and its Subsidiaries have made 
provision for all material taxes payable by BNI and its Subsidiaries for which  
no Return has yet been filed or in respect of which a final determination has   
been made; (iv) the charges, accruals and reserves for taxes with respect to    
BNI and its Subsidiaries reflected on the BNI Balance Sheet are adequate under  
generally accepted accounting principles to cover the tax liabilities accruing  
through the date thereof; and (v) as of the date of this Agreement there is no  
action, suit, proceeding, investigation, audit or claim now proposed or pending 
against or with respect to BNI or any of its Subsidiaries in respect of any tax 
where there is a reasonable possibility of a determination or decision against  
BNI or any of its Subsidiaries which would reasonably be expected to have a     
Material Adverse Effect on BNI.                                                 

SECTION 4.15. ERISA. (a) Schedule IV identifies (i) each "employee benefit  
plan", as defined in Section 3(3) of ERISA (other than multiemployer plans (as  
defined in Section 3(37) of ERISA)), and (ii) each employment, severance or     
other similar contract, arrangement or policy and each retirement or deferred   
compensation plan, stock plan, incentive compensation plan, vacation pay,       
severance pay, bonus or benefit arrangement, insurance (including self-insured  
arrangements) or hospitalization program, workers' compensation program,        
disability program, supplemental unemployment program or fringe benefit         
arrangement, whether maintained pursuant to contract or informal understanding, 
which does not constitute an "employee benefit plan" (as defined in Section     
3(3) of ERISA), which, in the case, of items described in both clauses (i) and  
(ii) is maintained, administered or contributed to by BNI or any of its ERISA   
Affiliates and covers any employee or former employee of BNI or any of its      
Subsidiaries or with respect to which BNI or any of its ERISA Affiliates has    
any liability (collectively, the "BNI Employee Plans"). True and correct copies 
of each of the BNI Employee Plans, all amendments thereto, any written          
interpretations thereof distributed to employees, and all contracts relating    
thereto or the funding thereof, including, without limitation, all trust        
agreements, insurance contracts, administration contracts, investment           
management agreements, subscription and participation agreements, recordkeeping 
agreements and summary plan descriptions, all as currently in effect, have been 
furnished or made available to SFP. BNI has supplied or made available to SFP   
an accurate description of any BNI Employee Plan that is not in written form.   
To the extent applicable, true and correct copies of the three most recent      
annual reports (Form 5500 including, if applicable, Schedule B thereto)         
prepared in connection with any BNI Employee Plan and the most recent actuarial 
valuation report prepared in connection with any such plan have been furnished  
or made available to SFP. BNI has made available to SFP complete age, salary,   
service and related data as of the most recent practical date for employees and 
former employees of BNI and any of its Subsidiaries covered under the BNI       
Employee Plans.                                                                 

(b) The only BNI Employee Plans that are subject to Title IV of ERISA (the  
"BNI Pension Plans") are identified in the list of such Plans provided or made  
available to SFP by BNI in accordance with Section 4.15(a). As of the most      
recent valuation date of each BNI Pension Plan, the present value of all        
benefits accrued under each BNI Pension Plan, determined on a termination basis 
using the assumptions established by the PBGC as in effect on such date was     
exceeded by the fair market value of the assets of such BNI Pension Plan,       
(excluding for these purposes any accrued but unpaid contributions). No         
"accumulated funding deficiency", as defined in Section 412 of the Code, has    
been incurred with respect to any BNI Pension Plan, whether or not waived. BNI  
knows of no "reportable event", within the meaning of Section 4043 of ERISA and 
the regulations promulgated thereunder, and no event described in Sections 4041 
(other than a standard termination), 4042, 4062 or 4063 of ERISA has occurred   
in connection with any BNI Pension Plan, other than a "reportable event" that   
will not have a Material Adverse Effect on BNI. No condition exists and no      
event has occurred that could constitute grounds for termination of or the      
appointment of a trustee to administer any BNI Pension Plan under Section 4042  
of ERISA and, to BNI's knowledge, neither BNI nor any of its ERISA Affiliates   
has engaged in, or is a successor parent corporation to an entity that has      
engaged in, a transaction for which BNI or any of its ERISA Affiliates would    
have liability under Sections 4069 or 4212(c) of ERISA. To BNI's knowledge      
nothing done or omitted to be done and no transaction or holding of any asset   
under or in connection with any BNI Employee Plan has or will make BNI or any   
of its ERISA                                                                    

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Affiliates, any officer or director of BNI or any of its ERISA Affiliates       
subject to any liability under Title I or Section 4071 of ERISA or liable for   
any tax pursuant to Section 4975 or Chapters 43, 47 or 68 of the Code that      
could have a Material Adverse Effect.                                           

(c) Each BNI Employee Plan which is intended to be qualified under Section  
401(a) of the Code is so qualified and has been so qualified during the period  
from its adoption to date, and each trust forming a part thereof is exempt from 
tax pursuant to Section 501(a) of the Code. BNI has furnished or made available 
to SFP copies of the most recent Internal Revenue Service determination letters 
with respect to each such BNI Employee Plan. Each BNI Employee Plan has been    
maintained in substantial compliance with its terms and with the requirements   
prescribed by any and all statutes, orders, rules and regulations, including    
but not limited to ERISA and the Code, which are applicable to such BNI Plan.   

 (d) None of the payments contemplated by the contracts, plans or arrangements
covering any employee or former employee of BNI or any of its ERISA Affiliates  
and arising solely as a result of the transactions contemplated hereby would,   
in the aggregate, constitute excess parachute payments as defined in Section    
280G of the Code (without regard to subsection (b)(4) thereof).                 

(e) Except for obligations arising pursuant to any collective bargaining    
agreements, no condition exists that would prevent BNI or any of its            
Subsidiaries from amending or terminating any BNI Employee Plan providing       
health or medical benefits in respect of any active or former employees of BNI  
and its Subsidiaries.                                                           

(f) There has been no amendment to, written interpretation or announcement  
(whether or not written) by BNI or any of its ERISA Affiliates relating to, or  
change in employee participation or coverage under, any BNI Employee Plan which 
would increase materially the expense of maintaining such BNI Employee Plan     
above the level of the expense incurred in respect thereof for the fiscal year  
ended on the Balance Sheet Date.                                                

(g) To the extent applicable, each BNI Employee Plan which constitutes a    
"group health plan" (as defined in Section 607(1) of ERISA or Section           
4980B(g)(2) of the Code), including any plans of current or former affiliates   
which must be taken into account under Sections 4980B and 414(t) of the Code or 
Section 601 of ERISA, has been operated in substantial compliance with          
applicable law, including the group health plan continuation coverage           
requirements of Section 4980B of the Code and Section 601 of ERISA.             

(h) There are no actions, suits or claims (other than routine claims for    
benefits) pending or, to BNI's knowledge, threatened involving any BNI Employee 
Plan or the assets thereof and no facts exist which could give rise to any such 
actions, suits or claims (other than routine claims for benefits).              

(i) BNI has provided or will promptly provide SFP with a list of each       
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a  
multiemployer plan with respect to which BNI or any of its ERISA Affiliates may 
have any liability (including any liability attributable to a current or former 
member of BNI's or any of its ERISA Affiliates' "controlled group" (as defined  
in Section 4001(a)(14) of ERISA)) and the maximum amount of such liability      
(determined as if a complete withdrawal occurred with respect to each such plan 
immediately after the Effective Time). With respect to each such plan, (i) all  
contributions have been made as required by the terms of the plans, the terms   
of any collective bargaining agreements and applicable law, (ii) neither BNI    
nor any of its ERISA Affiliates has withdrawn, partially withdrawn or received  
any notice of any claim or demand for withdrawal liability or partial           
withdrawal liability that would have a Material Adverse Effect, and (iii)       
neither BNI nor any of its ERISA Affiliates has received any notice that any    
such plan is in reorganization, that increased contributions may be required to 
avoid a reduction in plan benefits or the imposition of any excise tax, that    
any such plan is or has been funded at a rate less than that required under     
Section 412 of the Code or that any plan is or may become insolvent.            

(j) As of the Balance Sheet Date, the Expected Postretirement Benefit       
Obligation (as defined in Statement of Financial Accounting Standards No. 106)  
in respect of postretirement life, health and medical                           

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insurance benefits for current and former employees of BNI or any of its        
Subsidiaries calculated by BNI's actuary using reasonable actuarial assumptions 
was $17,000,000.                                                                

SECTION 4.16. Finders' Fees. Except for Lazard Freres & Co., a copy of whose
engagement agreement has been or will be provided to SFP and whose fees will be 
paid by BNI, there is no investment banker, broker, finder or other             
intermediary which has been retained by or is authorized to act on behalf of    
BNI, the Surviving Corporation or any Subsidiary of BNI who might be entitled   
to any fee or commission from BNI, the Surviving Corporation or any Subsidiary  
of BNI upon consummation of the transactions contemplated by this Agreement.    

 SECTION 4.17. Environmental Matters. Except as set forth in the BNI Form 10-K
or otherwise previously disclosed in writing by BNI to SFP, there are no        
Environmental Liabilities of BNI that, individually or in the aggregate, have   
had or would reasonably be expected to have a Material Adverse Effect on BNI.   

SECTION 4.18. Takeover Statutes. No Takeover Statute, including, without    
limitation, Section 203 of the DGCL, applicable to BNI or any of its            
Subsidiaries is applicable to the Merger or the other transactions contemplated 
hereby.                                                                         

SECTION 4.19. Compliance with Laws. Except as publicly disclosed, and except
for any matter that would not reasonably be expected to have a Material Adverse 
Effect on BNI, neither BNI nor any of its Subsidiaries is in violation of, or   
has violated, any applicable provisions of any laws, statutes, ordinances or    
regulations.                                                                    

SECTION 4.20. BNI Rights Agreement. Under the Rights Agreement between BNI  
and The First National Bank of Boston, dated as of July 14, 1986 (the "BNI      
Rights Agreement"), SFP will not become an "Acquiring Person", no "Stock        
Acquisition Date" or "Distribution Date" (as such terms are defined in the BNI  
Rights Agreement) will occur, and BNI's shareholders will not be entitled to    
receive any benefits under the BNI Rights Agreement as a result of the          
approval, execution or delivery of this Agreement or the consummation of the    
Merger.                                                                         

ARTICLE V 

COVENANTS OF SFP

SFP agrees that:                                                            

SECTION 5.1. Conduct of SFP. From the date hereof until the Effective Time, 
except as provided in Schedule V, SFP and the SFP Material Subsidiaries shall   
conduct their business in the ordinary course of business consistent with past  
practice and shall use their reasonable best efforts to preserve intact their   
business organizations and relationships with third parties; provided that      
nothing in this Section shall be deemed to prevent SFP and its Subsidiaries     
from undertaking any action necessary, proper or advisable to effectuate the    
Spinoff and all related transactions in accordance with and subject to the      
conditions set forth in this Agreement; and provided further that nothing in    
this Section shall be deemed to prevent SFP and its Subsidiaries from taking    
any action referred to in clauses (b)(ii), (c), (f) or (g) of this Section 5.1  
where the taking of such action is not consistent with the past practices of    
SFP and its Subsidiaries if, but only if, such action is a Customary Action.    
For purposes of this Agreement, an action shall be considered a "Customary      
Action" where such action occurs in the ordinary course of the relevant         
Person's business and where the taking of such action is generally recognized   
as being customary and prudent for other major enterprises in such Person's     
line of business. Without limiting the generality of the foregoing, from the    
date hereof until the Effective Time:                                           

(a) SFP will not adopt or propose any change in its certificate of      
incorporation or bylaws;                                                    

(b) Except for the Merger and the Spinoff, SFP will not, and will not   
permit any Subsidiary of SFP, (i) to adopt a plan of complete or partial    
liquidation, dissolution, merger, consolidation, restructuring,             

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recapitalization or other reorganization or (ii) make any acquisition of    
any business or other assets, whether by means of merger, consolidation or  
otherwise, other than in the ordinary course of business consistent with    
past practices and other than acquisitions that are Customary Actions;      

(c) SFP will not, and will not permit any Subsidiary of SFP to, sell,   
lease, license or otherwise dispose of any material assets or property      
except (i) the Spinoff, (ii) pursuant to existing contracts or commitments, 
(iii) in the ordinary course of business consistent with past practice and  
(iv) any such sale, lease, license or other disposition that is a Customary 
Action;                                                                     

(d) SFP will not, and will not permit any Subsidiary of SFP to, declare,
set aside, or pay any dividend or make any other distribution with respect  
to any shares of SFP capital stock other than (i) cash dividends on SFP     
Common Stock not in excess of the amounts set forth in Section 3.11(b) and  
having record and payment dates determined as set forth in Section 7.8, and 
(ii) the Spinoff;                                                           

 (e) Except (i) as expressly permitted by this Section 5.1, Section 5.7 or
(ii) pursuant to existing contracts or commitments, SFP will not, and will  
not permit any Subsidiary of SFP to, issue, deliver or sell, or authorize   
or propose the issuance, delivery or sale of, any SFP Securities, any SFP   
Voting Debt, any SFP Subsidiary Securities or any securities convertible    
into or exchangeable for, or any rights, warrants or options to acquire,    
any SFP Securities, SFP Voting Debt or SFP Subsidiary Securities;           

(f) Except for (i) borrowings under existing credit facilities,         
replacements therefor and refinancings thereof, (ii) borrowings in the      
ordinary course of business consistent with past practice or (iii)          
borrowings that are Customary Actions, SFP will not, and will not permit    
any Subsidiary of SFP to, incur any indebtedness for borrowed money or      
guarantee any such indebtedness;                                            

 (g) Except for loans, advances, capital contributions or investments made
in the ordinary course of business consistent with past practice and except 
for loans, advances, capital contributions or investments that are          
Customary Actions, SFP will not, and will not permit any Subsidiary of SFP  
to, make any loans, advances or capital contributions to, or investments    
in, any other Person (other than to SFP or any Subsidiary of SFP);          

 (h) (i) Except for any of the actions referred to in this clause (i) that
is taken in the ordinary course of business consistent in magnitude and     
character with past practice and with the terms of severance or termination 
arrangements in effect or pending on the date hereof with respect to        
individuals with comparable positions or responsibilities, and except for   
any of such actions which, in the aggregate, are not material, as           
hereinafter defined, SFP will not, and will not permit any of its           
Subsidiaries to, grant any severance or termination pay to, or enter into   
any termination or severance arrangement with, any of its directors,        
executive officers or employees and (ii) except for any of the actions      
referred to in this clause (ii) that is taken in the ordinary course of     
business consistent in aggregate in magnitude and character with past       
practice, and except for any of such actions which in the aggregate are not 
material, as hereinafter defined, SFP will not, and will not permit any of  
its Subsidiaries to, establish, adopt, enter into, amend or take action to  
accelerate any rights or benefits under, or grant awards under, (A) any     
plan or arrangement providing for options, stock, performance awards or     
other forms of incentive or deferred compensation or (B) any collective     
bargaining, bonus, profit sharing, thrift, compensation, restricted stock,  
pension, retirement, deferred compensation, employment, termination,        
severance or other plan, agreement, trust, fund, policy or arrangement for  
the benefit of any of its directors, executive officers or employees. For   
purposes of this subsection (h), "material" shall mean material in relation 
to the overall compensation costs of SFP and its Subsidiaries.              

(i) SFP will not, and will not permit any Subsidiary of SFP to, agree or
commit to do any of the actions prohibited by Sections 5.1(a) through       
5.1(h).                                                                     

SECTION 5.2. Stockholder Meeting. SFP shall cause a special meeting of its  
stockholders (the "SFP Stockholder Meeting") to be duly called and held as soon 
as reasonably practicable after the date of this Agreement for the purpose of   
voting on the approval and adoption of this Agreement and the Merger. The board 
of directors of SFP shall recommend approval and adoption of this Agreement and 
the Merger by its                                                               

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stockholders; provided, however, that prior to the SFP Stockholder Meeting such 
recommendation may be withdrawn, modified or amended to the extent that, as a   
result of the commencement or receipt of a Takeover Proposal (as defined in     
Section 5.8) relating to SFP, the board of directors of SFP deems it necessary  
to do so in the exercise of its fiduciary obligations to SFP stockholders after 
being so advised by counsel.                                                    

 SECTION 5.3. Access to Information. Subject to any confidentiality agreements
or other confidentiality obligations binding upon SFP or any of its             
Subsidiaries, from the date hereof until the Effective Time, SFP will give BNI, 
its counsel, financial advisors, auditors and other authorized representatives  
full access to the offices, properties, books and records of SFP and its        
Subsidiaries, will furnish to BNI, its counsel, financial advisors, auditors    
and other authorized representatives such financial and operating data and      
other information as such Persons may reasonably request and will instruct      
SFP's employees, counsel and financial advisors to cooperate with BNI in its    
investigation of the business of SFP and its Subsidiaries; provided that no     
investigation pursuant to this Section shall affect any representation or       
warranty given by SFP to BNI hereunder; and provided further that access to     
certain information will require the entry of a protective order by the ICC,    
after which date full access will be granted to such information consistent     
with this paragraph and subject to the terms of such order.                     

SECTION 5.4. Notices of Certain Events. SFP shall promptly notify BNI of:   

(i) any notice or other communication from any person alleging that the 
consent of such Person is or may be required in connection with the         
transactions contemplated by this Agreement;                                

(ii) any notice or other communication from any governmental or         
regulatory agency or authority in connection with the transactions          
contemplated by this Agreement including, without limitation, the Spinoff   
and the Liquidation; and                                                    

 (iii) any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or         
involving or otherwise affecting SFP or any Subsidiary of SFP which, if     
pending on the date of this Agreement, would have been required to have     
been disclosed pursuant to Section 3.13 or which relate to the consummation 
of the transactions contemplated by this Agreement.                         

SECTION 5.5. Tax Matters. From the date hereof until the Effective Time, (i)
SFP and its Subsidiaries will file all significant tax returns, statements,     
reports and forms (collectively, the "SFP Post-Signing Returns") required to be 
filed with any taxing authority in accordance with all applicable laws; (ii)    
SFP and its Subsidiaries will timely pay all taxes shown as due and payable on  
the SFP Post-Signing Returns that are so filed and as of the time of filing,    
the SFP Post-Signing Returns will correctly reflect the facts regarding the     
income, business, assets, operations activities and the status of SFP and its   
Subsidiaries in all material respects; (iii) SFP and its Subsidiaries will make 
provision for all taxes payable by SFP and its Subsidiaries for which no SFP    
Post-Signing Return is due prior to the Effective Time; and (iv) SFP and its    
Subsidiaries will promptly notify BNI of any action, suit, proceeding,          
investigation, audit or claim pending against or with respect to SFP or any of  
its Subsidiaries in respect of any tax where there is a reasonable possibility  
of a determination or decision against SFP which would reasonably be expected   
to have a significant adverse effect on SFP's tax liabilities or other tax      
attributes.                                                                     

 SECTION 5.6. Rule 145 Affiliates. At least 40 days prior to the Closing Date,
SFP shall deliver to BNI a letter identifying all persons who are, at the time  
of the meeting of SFP Stockholders Meeting, deemed to be "affiliates" of SFP    
for purposes of Rule 145 under the 1933 Act (the "1933 Act Affiliates"). SFP    
shall use its reasonable best efforts to cause each Person who is identified as 
a possible 1933 Act Affiliate to deliver to BNI at least 30 days prior to the   
Closing Date an agreement substantially in the form of Exhibit A to this        
Agreement.                                                                      

SECTION 5.7. The Spinoff. SFP will not, and will not permit any of its      
Subsidiaries (other than the Spinoff Company and its Subsidiaries) to, enter    
into or undertake any transaction, arrangement or agreement                     

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with the Spinoff Company or its Subsidiaries except for (i) transactions,       
arrangements or agreements that have been entered into on or prior to the date  
of this Agreement which have been provided to BNI on or prior to the date       
hereof, (ii) the allocation to employees of the Spinoff Company of their share  
of the SFP employee benefit plans in accordance with applicable law or (iii)    
such other transactions, arrangements or agreements that are consented to by    
BNI (such consent not to be unreasonably withheld). Without limiting the        
generality of the foregoing, in no event may SFP or any of its Subsidiaries pay 
any dividend, or make any distribution, to holders of SFP Common Stock directly 
or indirectly in connection with the Spinoff, except for the Spinoff Dividend.  
Nothing in this Section 5.7 shall prevent SFP or the Spinoff Company from       
taking actions (including, but not limited to filings with and no-action        
requests of the SEC, communications with shareholders, and the liquidation of   
subsidiaries of the Spinoff Company) reasonably necessary to effectuate the     
Spinoff. It shall not be a breach of this Agreement for SFP to pay any taxes    
arising from excess loss accounts (not materially greater than the amount       
represented in Section 3.22) in the stock of the Spinoff Company or its         
subsidiaries. SFP will use its reasonable best efforts to ensure that the       
conditions specified in the Private Letter Ruling are satisfied.                

SECTION 5.8. No Solicitations. SFP will not, and SFP will use its reasonable
best efforts to ensure that its officers, directors, employees or other agents  
of SFP do not, directly or indirectly: initiate, solicit or encourage, or take  
any action to facilitate the making of, any offer or proposal which constitutes 
or is reasonably likely to lead to any Takeover Proposal of SFP, or, in the     
event of an unsolicited Takeover Proposal of SFP, except to the extent required 
by their fiduciary duties under applicable law if so advised by outside         
counsel, engage in negotiations or provide any confidential information or data 
to any Person relating to any such Takeover Proposal. SFP shall notify BNI      
orally and in writing of any such inquiries, offers or proposals (including,    
without limitation, the terms and conditions of any such proposal and the       
identity of the person making it), within 48 hours of the receipt thereof and   
shall give BNI five days' advance notice of any agreement to be entered into    
with or any information to be supplied to any Person making such inquiry, offer 
or proposal. SFP shall immediately cease and cause to be terminated all         
existing discussions and negotiations, if any, with any parties conducted       
heretofore with respect to any Takeover Proposal of SFP. As used in this        
Agreement, "Takeover Proposal" when used in connection with any Person shall    
mean any tender or exchange offer, proposal for a merger, consolidation or      
other business combination involving such Person or any Subsidiary of such      
Person, or any proposal or offer to acquire in any manner a substantial equity  
interest in, or a substantial portion of the assets of such Person or any       
Subsidiary of such Person, other than pursuant to the transactions contemplated 
by this Agreement.                                                              

ARTICLE VI

COVENANTS OF BNI

BNI AGREES THAT:                                                            

SECTION 6.1. Conduct of BNI. From the date hereof until the Effective Time, 
except as provided in Schedule VI, BNI and the BNI Material Subsidiaries shall  
conduct their business in the ordinary course of business consistent with past  
practice and shall use their reasonable best efforts to preserve intact their   
business organizations and relationships with third parties; provided that      
nothing in this Section shall be deemed to prevent BNI and its Subsidiaries     
from taking any action referred to in clauses (b)(ii), (c), (f) or (g) of this  
Section 6.1 where the taking of such action is not consistent with the past     
practices of BNI and its Subsidiaries if, but only if, such action is a         
Customary Action. Without limiting the generality of the foregoing, from the    
date hereof until the Effective Time:                                           

(a) BNI will not adopt or propose any change in its certificate of      
incorporation or bylaws, except for an amendment to its certificate of      
incorporation authorizing the issuance of additional shares of Class A      
Preferred Stock in connection with the issuance of Rights to former holders 
of SFP Common Stock upon consummation of the Merger;                        

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(b) Except for the Merger, BNI will not, and will not permit any        
Subsidiary of BNI, (i) to adopt a plan of complete or partial liquidation,  
dissolution, merger, consolidation, restructuring, recapitalization or      
other reorganization or (ii) make any acquisition, by means of merger,      
consolidation or otherwise, other than in the ordinary course of business   
consistent with past practices and other than acquisitions that are         
Customary Actions;                                                          

(c) BNI will not, and will not permit any Subsidiary of BNI to, sell,   
lease, license or otherwise dispose of any material assets or property      
except (i) pursuant to existing contracts or commitments, (ii) in the       
ordinary course of business consistent with past practice and (iii) any     
such sale, lease, license or other disposition that is a Customary Action;  

(d) BNI will not, and will not permit any Subsidiary of BNI to, declare,
set aside, or pay any dividend or make any other distribution with respect  
to any shares of BNI capital stock (other than cash dividends on BNI Common 
Stock not in excess of the amounts set forth in Section 4.11(b) and having  
record and payment dates determined as set forth in Section 7.8);           

(e) Except (i) as expressly permitted by this Section 6.1, (ii) as      
necessary in connection with the transactions contemplated hereby           
(including the issuance of Rights to former holders of SFP Common Stock     
upon consummation of the Merger) or (iii) pursuant to existing contracts    
and commitments, BNI will not, and will not permit any Subsidiary of BNI    
to, issue, deliver or sell, or authorize or propose the issuance, delivery  
or sale of, any BNI Securities, any BNI Voting Debt or any securities       
convertible into or exchangeable for, or any rights, warrants or options to 
acquire, any BNI Securities or BNI Voting Debt;                             

(f) Except for (i) borrowings under existing credit facilities,         
replacements therefor and refinancings thereof (ii) borrowings in the       
ordinary course of business consistent with past practice or (iii)          
borrowings that are Customary Actions, BNI will not, and will not permit    
any Subsidiary of BNI to, incur any indebtedness for borrowed money or      
guarantee any such indebtedness;                                            

 (g) Except for loans, advances, capital contributions or investments made
in the ordinary course of business consistent with past practice and except 
for loans, advances, capital contributions or investments that are          
Customary Actions, BNI will not, and will not permit any Subsidiary of BNI  
to, make any loans, advances or capital contributions to, or investments    
in, any other Person (other than to BNI or any Subsidiary of BNI);          

 (h) (i) except for any of the actions referred to in this clause (i) that
is taken in the ordinary course of business consistent in magnitude and     
character with past practice and with the terms of severance or termination 
arrangements in effect or pending on the date hereof with respect to        
individuals with comparable positions or responsibilities, and except for   
any of such actions which, in the aggregate, are not material, as           
hereinafter defined, BNI will not, and will not permit any of its           
Subsidiaries to, grant any severance or termination pay to, or enter into   
any termination or severance arrangement with, any of its directors,        
executive officers or employees and (ii) except for any of the actions      
referred to in this clause (ii) that is taken in the ordinary course of     
business consistent in aggregate in magnitude and character with past       
practice, and except for any of such actions which in the aggregate are not 
material, as hereinafter defined, BNI will not, and will not permit any of  
its Subsidiaries to, establish, adopt, enter into, amend or take action to  
accelerate any rights or benefits under, or grant awards under, (A) any     
plan or arrangement providing for options, stock, performance awards or     
other forms of incentive or deferred compensation or (B) any collective     
bargaining, bonus, profit sharing, thrift, compensation, restricted stock,  
pension, retirement, deferred compensation, employment, termination,        
severance or other plan, agreement, trust, fund, policy or arrangement for  
the benefit of any of its directors, executive officers or employees. For   
purposes of this subsection (h), "material" shall mean material in relation 
to the overall compensation costs of BNI and its Subsidiaries.              

(i) BNI will not, and will not permit any Subsidiary of BNI to, agree or
commit to do any of the actions prohibited by Sections 6.1(a) through       
6.1(h).                                                                     

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SECTION 6.2. Stockholder Meeting. BNI shall cause a special meeting of its  
stockholders (the "BNI Stockholder Meeting") to be duly called and held as soon 
as reasonably practicable after the date of this Agreement for the purpose of   
voting on the approval and adoption of this Agreement and the Merger. The board 
of directors of BNI shall recommend approval and adoption of this Agreement and 
the Merger by its stockholders; provided that prior to the BNI Stockholder      
Meeting such recommendation may be withdrawn, modified or amended to the extent 
that, as a result of the commencement or receipt of a Takeover Proposal (as     
defined in Section 5.8) relating to BNI, the board of directors of BNI deems it 
necessary to do so in the exercise of its fiduciary obligations to BNI          
stockholders after being so advised by counsel.                                 

 SECTION 6.3. Access to Information. Subject to any confidentiality agreements
or other confidentiality obligations binding upon BNI or any of its             
Subsidiaries, from the date hereof until the Effective Time, BNI will give SFP, 
its counsel, financial advisors, auditors and other authorized representatives  
full access to the offices, properties, books and records of BNI and its        
Subsidiaries, will furnish to SFP, its counsel, financial advisors, auditors    
and other authorized representatives such financial and operating data and      
other information as such Persons may reasonably request and will instruct      
BNI's employees, counsel and financial advisors to cooperate with SFP in its    
investigation of the business of BNI and its Subsidiaries; provided that no     
investigation pursuant to this Section shall affect any representation or       
warranty given by BNI to SFP hereunder; and provided further that access to     
certain information will require the entry of a protective order by the ICC,    
after which date full access will be granted to such information consistent     
with this paragraph and subject to the terms of such order.                     

SECTION 6.4. Notices of Certain Events. BNI shall promptly notify SFP of:   

(i) any notice or other communication from any Person alleging that the 
consent of such Person is or may be required in connection with the         
transactions contemplated by this Agreement;                                

(ii) any notice or other communication from any governmental or         
regulatory agency or authority in connection with the transactions          
contemplated by this Agreement; and                                         

 (iii) any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or         
involving or otherwise affecting BNI or any BNI Material Subsidiary which,  
if pending on the date of this Agreement, would have been required to have  
been disclosed pursuant to Section 4.13 or which relate to the consummation 
of the transactions contemplated by this Agreement.                         

SECTION 6.5. Tax Matters. From the date hereof until the Effective Time, BNI
and its Subsidiaries will file all significant tax returns, statements, reports 
and forms (collectively, the "BNI Post-Signing Returns") required to be filed   
with any taxing authority in accordance with all applicable laws; (ii) BNI and  
its Subsidiaries will timely pay all taxes shown as due and payable on the BNI  
Post-Signing Returns that are so filed and as of the time of filing, the BNI    
Post-Signing Returns will correctly reflect the facts regarding the income,     
business, assets, operations, activities and the status of BNI and its          
Subsidiaries in all material respects; (iii) BNI and its Subsidiaries will make 
provision for all taxes payable by BNI and its Subsidiaries for which no BNI    
Post-Signing Return has yet been filed; and (iv) BNI and its Subsidiaries will  
promptly notify SFP of any action, suit, proceeding, investigation, audit or    
claim pending against or with respect to BNI or any of its subsidiaries in      
respect of any tax where there is a reasonable possibility of a determination   
or decision against BNI which would reasonably be expected to have a            
significant adverse effect on BNI's tax liabilities or tax attributes.          

 SECTION 6.6. Director and Officer Liability. (a) BNI shall indemnify and hold
harmless each person who is, or has been at any time prior to the date hereof   
or who becomes prior to the Effective Time, an officer or director of SFP, in   
respect of acts or omissions occurring prior to the Effective Time (the         
"Indemnified Parties") (including but not limited to the transactions           
contemplated by this Agreement) to the extent provided under SFP's certificate  
of incorporation, bylaws and (A) indemnity agreements between SFP and any of    
its officers or directors ("Indemnity Agreements") in effect on the date hereof 
or (B) Indemnity                                                                

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Agreements that may be entered into by SFP from and after the date hereof and   
prior to the Effective Time so long as such Agreements shall contain terms and  
provisions substantially similar to Indemnity Agreements in effect as of the    
date hereof; provided that such indemnification shall be subject to any         
limitation imposed from time to time under applicable law. For six years after  
the Effective Time, BNI shall provide, if available, officers' and directors'   
liability insurance in respect of acts or omissions occurring prior to the      
Effective Time, including but not limited to the transactions contemplated by   
this Agreement, covering each such Person currently covered by SFP's officers'  
and directors' liability insurance policy, or who becomes covered by such       
policy prior to the Effective Time, on terms with respect to coverage and       
amount no less favorable than those of such policy in effect on the date        
hereof, provided that in satisfying its obligation under this Section, BNI      
shall not be obligated to pay premiums in excess of two-hundred percent (200%)  
of the amount per annum SFP paid in its last full fiscal year, which amount has 
been disclosed to BNI but provided further that BNI shall nevertheless be       
obligated to provide such coverage as may be obtained for such amount.          

(b) Any determination to be made as to whether any Indemnified Party has met
any standard of conduct imposed by law shall be made by legal counsel           
reasonably acceptable to such Indemnified Party and BNI, retained at BNI's      
expense.                                                                        

(c) This Section 6.6 is intended to benefit the Indemnified Parties, their  
heirs, executors and personal representatives and shall be binding on           
successors and assigns of BNI.                                                  

SECTION 6.7. No Solicitations. BNI will not, and BNI will use its reasonable
best efforts to ensure that its officers, directors, employees or other agents  
of BNI do not, directly or indirectly: initiate, solicit or encourage, or take  
any action to facilitate the making of, any offer or proposal which constitutes 
or is reasonably likely to lead to any Takeover Proposal of BNI, or, in the     
event of an unsolicited Takeover Proposal of BNI, except to the extent required 
by their fiduciary duties under applicable law if so advised by outside         
counsel, engage in negotiations or provide any confidential information or data 
to any Person relating to any such Takeover Proposal. BNI shall notify SFP      
orally and in writing of any such inquiries, offers or proposals (including,    
without limitation, the terms and conditions of any such proposal and the       
identity of the person making it), within 48 hours of the receipt thereof and   
shall give SFP five days' advance notice of any agreement to be entered into    
with or any information to be supplied to any Person making such inquiry, offer 
or proposal. BNI shall immediately cease and cause to be terminated all         
existing discussions and negotiations, if any, with any parties conducted       
heretofore with respect to any Takeover Proposal of BNI.                        

ARTICLE VII 

COVENANTS OF BNI AND SFP

The parties hereto agree that:                                              

SECTION 7.1. Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each party will use its reasonable best efforts to take, or     
cause to be taken, all actions and to do, or cause to be done, all things       
necessary, proper or advisable under applicable laws and regulations to         
consummate the transactions contemplated by this Agreement.                     

SECTION 7.2. ICC Approval. BNI and SFP shall, and each shall cause each of  
its Subsidiaries to, take all such actions as are necessary to (i) cooperate    
with one another to prepare and present to the ICC as soon as practicable all   
filings and other presentations in connection with seeking any ICC approval,    
exemption or other authorization necessary to consummate the transactions       
contemplated by this Agreement (including, without limitation, the matters      
contemplated by Sections 5.3 and 6.3), (ii) prosecute such filings and other    
presentations with diligence, (iii) diligently oppose any objections to,        
appeals from or petitions to reconsider or reopen any such ICC approval by      
persons not party to this Agreement, and (iv) take all such further action as   
reasonably may be necessary to obtain a final order or orders of the ICC        
approving such transactions consistent with this Agreement.                     

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SECTION 7.3. Certain Filings; Proxy Materials. (a) BNI (i) will promptly    
prepare and file with the SEC, will use its reasonable best efforts to have     
cleared by the SEC and will thereafter mail to its stockholders as promptly as  
practicable the BNI Proxy Statement and all other proxy materials for the BNI   
Stockholder Meeting, (ii) will use its reasonable best efforts to obtain the    
necessary approvals by its stockholders of this Agreement and the transactions  
contemplated hereby (provided that prior to the BNI Stockholder Meeting the BNI 
Board's recommendation may be withdrawn, modified or amended to the extent      
that, as a result of the commencement or receipt of a Takeover Proposal         
relating to BNI, the board of directors of BNI deems it necessary to do so in   
the exercise of its fiduciary obligations to BNI stockholders after being so    
advised by counsel), (iii) will otherwise comply with all legal requirements    
applicable to such meeting and (iv) will make all other filings or recordings   
required under applicable Delaware law in connection with the Merger. BNI will  
prepare and file with the SEC the registration statement on Form S-4 (the "Form 
S-4") (in which the BNI Proxy Statement will be included as a prospectus) and   
will take any action (other than qualifying to do business in any jurisdiction  
in which it is now not so qualified) required to be taken under any applicable  
state Blue Sky law in connection with the issuance of BNI Common Stock.         

(b) SFP (i) will promptly prepare and file with the SEC, will use its       
reasonable best efforts to have cleared by the SEC and will thereafter mail to  
its stockholders as promptly as practicable the SFP Proxy Statement and all     
other proxy materials for the SFP Stockholder Meeting, (ii) will use its        
reasonable best efforts to obtain the necessary approvals by its stockholders   
of this Agreement and the transactions contemplated hereby (provided that prior 
to the SFP Stockholder Meeting the SFP Board's recommendation may be withdrawn, 
modified or amended to the extent that, as a result of the commencement or      
receipt of a Takeover Proposal relating to SFP, the board of directors of SFP   
deems it necessary to do so in the exercise of its fiduciary obligations to SFP 
stockholders after being so advised by counsel), (iii) will otherwise comply    
with all legal requirements applicable to such meeting and (iv) will make all   
other filings or recordings required under applicable Delaware law in           
connection with the Merger.                                                     

SECTION 7.4. Public Announcements. BNI and SFP will consult with each other 
before issuing any press release with respect to this Agreement and the         
transactions contemplated hereby and, except as may be required by applicable   
law or any listing agreement with any national securities exchange, will not    
issue any such press release prior to such consultation.                        

SECTION 7.5. Further Assurances. At and after the Effective Time, the       
officers and directors of the Surviving Corporation will be authorized to       
execute and deliver, in the name and on behalf of SFP, any deeds, bills of      
sale, assignments or assurances and to take and do, in the name and on behalf   
of SFP, any other actions and things to vest, perfect or confirm of record or   
otherwise in the Surviving Corporation any and all right, title and interest    
in, to and under any of the rights, properties or assets of SFP acquired or to  
be acquired by the Surviving Corporation as a result of, or in connection with, 
the Merger.                                                                     

SECTION 7.6. Antitakeover Statutes. If any Takeover Statute is or may become
applicable to the transactions contemplated hereby, each of BNI and SFP and the 
members of their respective Boards of Directors will grant such approvals and   
take such actions as are necessary so that the transactions contemplated by     
this Agreement may be consummated as promptly as practicable on the terms       
contemplated hereby and thereby and otherwise act to eliminate or minimize the  
effects of any Takeover Statute on any of the transactions contemplated by this 
Agreement.                                                                      

SECTION 7.7. Cooperation. BNI and SFP shall together, or pursuant to an     
allocation of responsibility to be agreed between them, coordinate and          
cooperate (i) with respect to the timing of the BNI Stockholder Meeting and the 
SFP Stockholder Meeting and shall use their reasonable best efforts to hold     
such meetings on the same day, (ii) in connection with the preparation of the   
SFP Disclosure Documents and the BNI Disclosure Documents, (iii) in determining 
whether any action by or in respect of, or filing with, any governmental body,  
agency, official or authority is required, or any actions, consents, approvals  
or waivers are required to be obtained from parties to any material contracts,  
in connection with the                                                          

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consummation of the transactions contemplated by this Agreement, and (iv) in    
seeking any such actions, consents, approvals or waivers or making any such     
filings, furnishing information required in connection therewith or with the    
SFP Disclosure Documents and the BNI Disclosure Documents and timely seeking to 
obtain any such actions, consents, approvals or waivers. Subject to the terms   
and conditions of this Agreement, BNI and SFP will each use its reasonable best 
efforts to have the Form S-4 declared effective under the 1933 Act as promptly  
as practicable after the Form S-4 is filed, and (v) shall, subject to           
applicable law, confer on a regular and frequent basis with one or more         
representatives of one another to report operational matters of significance to 
the Merger and the general status of ongoing operations insofar as relevant to  
the Merger, provided that the parties will not confer on any matter to the      
extent inconsistent with law.                                                   

SECTION 7.8. Dividends. From September 30, 1995 to the Effective Time, all  
dividends paid by SFP and BNI to their respective stockholders shall be paid on 
a quarterly basis, with identical record and payment dates, in amounts not      
exceeding the amounts set forth in Section 5.1(d) or Section 6.1(d), as the     
case may be.                                                                    

ARTICLE VIII

[INTENTIONALLY OMITTED] 

ARTICLE IX

CONDITIONS TO THE MERGER

SECTION 9.1. Conditions to the Obligations of Each Party. The obligations of
SFP and BNI to consummate the Merger are subject to the satisfaction (or waiver 
by the party for whose benefit such conditions exist) of the following          
conditions:                                                                     

 (i) this Agreement shall have been adopted by the stockholders of SFP and
BNI in accordance with Delaware Law;                                        

(ii) any applicable waiting period under the HSR Act relating to the    
Merger shall have expired;                                                  

 (iii) no court, arbitrator or governmental body, agency or official shall
have issued any order, and there shall not be any statute, rule or          
regulation, restraining or prohibiting the consummation of the Merger or    
the effective operation of the business of BNI, SFP and their respective    
Subsidiaries after the Effective Time;                                      

(iv) all actions by or in respect of or filings with any governmental   
body, agency, official, or authority required to permit the consummation of 
the Merger (other than ICC approval, which is addressed in clause (v)       
below) shall have been obtained, but excluding any consent, approval,       
clearance or confirmation the failure to obtain which could not reasonably  
be expected to have a Material Adverse Effect on the Surviving Corporation  
after the Effective Time;                                                   

(v) the ICC shall have issued a decision (which decision shall not have 
been stayed or enjoined) that (A) constitutes a final order approving,      
exempting or otherwise authorizing consummation of the Merger and all other 
transactions contemplated by this Agreement (or subsequently presented to   
the ICC by agreement of BNI and SFP) as may require such authorization and  
(B) does not (1) require the inclusion of any other rail carriers or rail   
properties material to the parties, (2) change the Exchange Ratio or (3)    
impose on BNI, SFP or any of their respective Subsidiaries any other terms  
or conditions (including, without limitation, labor protective provisions   
but excluding conditions heretofore imposed                                 

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by the ICC in New York Dock Railway--Control--Brooklyn Eastern District,    
360 I.C.C. 60 (1979)) that in the reasonable opinion of the board of        
directors of BNI or of SFP, respectively, significantly and adversely       
affect the economic benefits of the transactions contemplated by this       
Agreement to BNI and its stockholders or SFP and its stockholders, as the   
case may be;                                                                

(vi) SFP and BNI shall have obtained an opinion of nationally recognized
tax counsel to the effect that the Merger will be a tax-free reorganization 
under Section 368 of the Code and the regulations thereunder; and           

(vii) the Merger shall conform to the requirements set forth in the     
Private Letter Ruling, and the Spinoff and the Liquidation shall be tax-    
free pursuant to and in conformity with the Private Letter Ruling.          

SECTION 9.2. Conditions to the Obligations of BNI. The obligations of BNI to
consummate the Merger are subject to the satisfaction (or waiver by BNI) of the 
following further conditions:                                                   

(i) SFP shall have performed in all material respects all of its        
obligations hereunder required to be performed by it at or prior to the     
Effective Time, and the representations and warranties of SFP shall have    
been accurate in all material respects both when made and at and as of the  
Effective Time as if made at and as of such time, except for the            
representations and warranties of SFP contained in Section 3.5(a), which    
shall be accurate in all respects both when made and at and as of the       
Effective Time as if made at and as of that time;                           

(ii) all other statutory requirements for the valid consummation by SFP 
of the transactions contemplated by this Agreement (including without       
limitation the Spinoff and the Liquidation) shall have been fulfilled.      

SECTION 9.3. Conditions to the Obligations of SFP. The obligations of SFP to
consummate the Merger are subject to the satisfaction (or waiver by SFP) of the 
following further conditions:                                                   

(i) BNI shall have performed in all material respects all of its        
respective obligations hereunder required to be performed by it at or prior 
to the Effective Time, and (A) the representations and warranties of BNI    
shall have been accurate in all material respects both when made and at and 
as of the Effective Time as if made at and as of such time, except for the  
representations and warranties of BNI in Section 4.5(a), which shall be     
accurate in all respects when made and at and as of the Effective Time as   
if made at and as of that time;                                             

 (ii) the BNI Common Stock required to be issued hereunder shall have been
approved for listing on the New York Stock Exchange, subject to official    
notice of issuance;                                                         

(iii) all other statutory requirements for the valid consummation by SFP
of the transactions contemplated by this Agreement shall have been          
fulfilled; and                                                              

(iv) the Spinoff shall have been consummated.                           

ARTICLE X 

TERMINATION 

SECTION 10.1. Termination. This Agreement may be terminated and the Merger  
may be abandoned at any time prior to the Effective Time (notwithstanding any   
approval of this Agreement by the stockholders of BNI or SFP):                  

(i) by mutual written consent of BNI and SFP;                           

(ii) by either BNI or SFP, if the Merger has not been consummated by    
December 31, 1997;                                                          

(iii) by either BNI or SFP, if any judgment, injunction, order or decree
enjoining BNI or SFP from consummating the Merger is entered and such       
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(iv) by BNI, if the Spinoff has not been completed by December 31, 1994 
(it is understood that if BNI does not exercise the right to terminate      
pursuant to this Section 10.1(iv) by January 30, 1995 this provision will   
be deemed to be waived);                                                    

(v) by BNI, if any Person, entity or "group" (as defined in Section     
13(d)(3) of the Exchange Act) other than BNI acquires beneficial ownership  
of 50% or more of the outstanding Shares;                                   

 (vi) by SFP, if any Person, entity or group acquires beneficial ownership
of 50% or more of the outstanding BNI Common Stock;                         

 (vii) by either BNI or SFP if the approvals of the stockholders of BNI or
SFP contemplated by this Agreement shall not have been obtained by reason   
of the failure to obtain the required vote at a duly held meeting of        
stockholders or of any adjournment thereof;                                 

(viii) by BNI, if, prior to the SFP Stockholder Meeting, the board of   
directors of SFP shall have withdrawn, modified or changed in a manner      
adverse to BNI its approval or recommendation of this Agreement or the      
Merger;                                                                     

(ix) by SFP, if, prior to the BNI Stockholder Meeting, the board of     
directors of BNI shall have withdrawn, modified or changed in a manner      
adverse to SFP its approval or recommendation of this Agreement or the      
Merger;                                                                     

(x) by BNI, upon a breach of any representation, warranty, covenant or  
agreement of SFP, or if any representation or warranty of SFP shall become  
untrue, in either case such that the conditions set forth in Section 9.2(i) 
would be incapable of being satisfied by December 31, 1997 (or such later   
date extended), provided that a wilful breach shall be deemed to cause such 
conditions to be incapable of being satisfied by such date; and             

(xi) by SFP, upon a breach of any representation, warranty, covenant or 
agreement of BNI, or if any representation or warranty of BNI shall become  
untrue, in either case such that the conditions set forth in Section 9.3(i) 
would be incapable of being satisfied by December 31, 1997 (or as otherwise 
extended), provided that a wilful breach shall be deemed to cause such      
conditions to be incapable of being satisfied by such date.                 

 SECTION 10.2. Effect of Termination. If this Agreement is terminated pursuant
to Section 10.1, this Agreement shall become void and of no effect with no      
liability on the part of any party hereto, except that (a) the agreements       
contained in Sections 3.16, 4.16 and 11.4 shall survive the termination hereof  
and (b) no such termination shall relieve any party of any liability or damages 
resulting from any breach by that party of this Agreement.                      

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ARTICLE XI

MISCELLANEOUS 

SECTION 11.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including telecopy or similar writing) and 
shall be given,                                                                 

if to BNI, to:                                                              

Burlington Northern Inc. Attn: Douglas J. Babb, Esq. 3800 Continental   
Place 777 Main Street Fort Worth, Texas 76102 Telecopy: (817) 333-2377  

with a copy to:                                                         
Dennis S. Hersch, Esq. Davis Polk & Wardwell 450 Lexington Avenue   
New York, New York 10017 Telecopy: (212) 450-4800                   

if to SFP, to:                                                              

Santa Fe Pacific Corporation Attn: Jeffrey R. Moreland 1700 East Golf   
Road Schaumburg, Illinois 60173 Telecopy: (708) 995-6847                

with a copy to:                                                         
Robert A. Helman, Esq. Mayer, Brown & Platt 190 South La Salle      
Street Chicago, Illinois 60603-3441 Telecopy: (312) 701-7711        

or such other address or telecopy number as such party may hereafter specify    
for the purpose by notice to the other parties hereto. Each such notice,        
request or other communication shall be effective (i) if given by telecopy,     
when such telecopy is transmitted to the telecopy number specified in this      
Section and the appropriate confirmation is received or (ii) if given by any    
other means, when delivered at the address specified in this Section.           

SECTION 11.2. Entire Agreement; Survival of Representations and             
Warranties. (a) This Agreement (and any other agreements contemplated hereby or 
executed by the parties or their designees as of the date of this Agreement),   
and the Confidentiality and Standstill Agreement dated July 28, 1993 between    
SFP and BNI (the "Confidentiality Agreement") constitute the entire agreement   
among the parties with respect to the subject matter hereof and thereof and     
supersede all prior agreements, understandings and negotiations, both written   
and oral, between the parties with respect to such subject matter. No           
representation, inducement, promise, understanding, condition or warranty not   
set forth herein has been made or relied upon by any party hereto. None of this 
Agreement, the Confidentiality Agreement or any other agreement contemplated    
hereby or executed by the parties or their designees as of the date of this     
Agreement (or any provision hereof or thereof) is intended to confer upon any   
Person other than the parties hereto any rights or remedies (except that        
Section 6.6, is intended to confer rights and remedies on SFP's officers and    
directors).                                                                     

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(b) The representations and warranties and agreements contained herein shall
not survive the Effective Time or the termination of this Agreement except for  
the agreements set forth in Sections 6.6 and 11.4.                              

 SECTION 11.3. Amendments; No Waivers. (a) Any provision of this Agreement may
be amended or waived prior to the Effective Time if, and only if, such          
amendment or waiver is in writing and signed, in the case of an amendment, by   
SFP and BNI or in the case of a waiver, by the party against whom the waiver is 
to be effective; provided that after the adoption of this Agreement by the      
stockholders of SFP, no such amendment or waiver shall, without the further     
approval of such stockholders, alter or change (i) the amount or kind of        
consideration to be received in exchange for any shares of capital stock of     
SFP, (ii) any term of the certificate of incorporation of the Surviving         
Corporation or (iii) any of the terms or conditions of this Agreement if such   
alteration or change would adversely affect the holders of any shares of        
capital stock of SFP.                                                           

(b) No failure or delay by any party in exercising any right, power or      
privilege hereunder shall operate as a waiver thereof nor shall any single or   
partial exercise thereof preclude any other or further exercise thereof or the  
exercise of any other right, power or privilege. The rights and remedies herein 
provided shall be cumulative and not exclusive of any rights or remedies        
provided by law.                                                                

 SECTION 11.4. Expenses. Except as otherwise agreed in writing by the parties,
each party shall bear its own expenses, including the fees and expenses of any  
attorneys, accountants, investment bankers, brokers, finders or other           
intermediaries or other Persons engage by it, incurred in connection with this  
Agreement and the transactions contemplated hereby.                             

SECTION 11.5. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their        
respective successors and assigns, provided that no party may assign, delegate  
or otherwise transfer any of its rights or obligations under this Agreement     
without the consent of the other parties hereto.                                

SECTION 11.6. Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of Delaware (without regard to        
principles of conflict of laws).                                                

 SECTION 11.7. Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,  
this Agreement or the transactions contemplated hereby may be brought against   
any of the parties in the United States District Court for the District of      
Delaware or any state court sitting in the City of Wilmington, Delaware, and    
each of the parties hereby consents to the exclusive jurisdiction of such       
courts (and of the appropriate appellate courts) in any such suit, action or    
proceeding and waives any objection to venue laid therein. Process in any such  
suit, action or proceeding may be served on any party anywhere in the world,    
whether within or without the State of Delaware. Without limiting the           
foregoing, each of the parties hereto agrees that service of process upon such  
party at the address referred in Section 11.1, together with written notice of  
such service to such party, shall be deemed effective service of process upon   
such party.                                                                     

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SECTION 11.8. Counterparts; Effectiveness. This Agreement may be signed in  
any number of counterparts, each of which shall be an original, with the same   
effect as if the signatures thereto and hereto were upon the same instrument.   
This Agreement shall become effective when each party hereto shall have         
received counterparts hereof signed by all of the other parties hereto.         

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first   
above written.                                                                  

                            Burlington Northern Inc.

                                      /s/ Gerald Grinstein
                                         By: _________________________________
                                 Title: Chairman and Chief
                         Executive Officer

                                Santa Fe Pacific Corporation

                                       /s/ Robert D. Krebs
                                         By: _________________________________
                                      Title: Chairman, President and
                                       Chief Executive Officer

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                                                                      APPENDIX B

LETTER AGREEMENT

BETWEEN 

BURLINGTON NORTHERN INC.

AND 

SANTA FE PACIFIC CORPORATION

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(LETTERHEAD OF BURLINGTON NORTHERN INC. APPEARS HERE) 

                                                                   June 29, 1994

Mr. Robert D. Krebs                                                             
Chairman, President and Chief Executive Officer                                 
Santa Fe Pacific Corporation 1700 E. Golf Road                                  
Schaumburg, IL 60173                                                            

Dear Rob:                                                                       

This letter will confirm our mutual agreement regarding corporate governance
issues after the merger between Burlington Northern Inc. ("BNI") and Santa Fe   
Pacific Corporation ("SFP"):                                                    

1. The Board of Directors of the merged company will be constituted as  
follows: two-thirds of the Directors will be designated by BNI, and one-    
third of the Directors will be designated by SFP. These designations will   
be made before the merger is consummated.                                   

2. I will serve as Chairman of the Board of the merged company, and you 
will be the President and Chief Executive Officer of the merged company.    

3. We will thoroughly review who would be best suited to be the officers
of the merged company and its subsidiaries. We will then submit our mutual  
recommendations to the Board of Directors of the merged company, which will 
be responsible for the careful selection of the officers to be elected or   
appointed.                                                                  

 This mutual agreement has been authorized by each of our respective Boards of
Directors at meetings today. We acknowledge that this is an agreement           
contemplated by the Merger Agreement between our respective companies.          

                    Sincerely yours,

                        /s/ Gerald Grinstein
                                         -------------------------------------
                    Gerald Grinstein
           for BNI

Agreed and accepted:                                                            

/s/ Robert D. Krebs                                                             
-------------------------------------                                           
Robert D. Krebs                                                                 
for SFP                                                                         

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                                                                      APPENDIX C

OPINION OF LAZARD FRERES & CO.

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                                                                October 12, 1994

The Board of Directors                                                          
Burlington Northern Inc.                                                        
3800 Continental Plaza                                                          
777 Main Street                                                                 
Fort Worth, Texas 76102                                                         

Dear Members of the Board:                                                      

We understand that Burlington Northern Inc. ("BN") and Santa Fe Pacific     
Corporation ("SF") have entered into an Agreement and Plan of Merger dated as   
of June 29, 1994 (the "Agreement"), pursuant to which, among other things, SF   
shall be merged with and into BN, with BN as the surviving corporation (the     
"Merger"). Under the terms of the Agreement, upon consummation of the Merger,   
each share of Common Stock, par value $1.00 per share (the "SF Common Stock"),  
of SF, outstanding immediately prior to the effective time of the Merger, shall 
be converted into .27 of a share of Common Stock, no par value (the "BN Common  
Stock"), of BN (the "Exchange Ratio"). We further understand that the board of  
directors of SF has declared a special dividend of the stock of Santa Fe        
Pacific Gold Corporation owned by SF which was distributed on September 30,     
1994 to SF shareholders (the "Spinoff") and that SF has received a private      
letter ruling from the Internal Revenue Service to the effect that the Spinoff  
qualifies as a tax-free distribution within the meaning of Section 355 of the   
Internal Revenue Code of 1986, as amended. The terms and conditions of the      
Merger are more fully set forth in the Agreement.                               

You have requested our opinion as to the fairness, from a financial point of
view, to the holders of BN Common Stock, of the Exchange Ratio pursuant to the  
Agreement.                                                                      

Lazard Freres & Co. has acted as financial advisor to BN in connection with 
this transaction and will receive a fee for our services, a portion of which is 
contingent upon closing of the transaction. In connection with this opinion, we 
have, among other things:                                                       

(i) reviewed the terms and conditions of the Agreement;                 

(ii) analyzed certain historical business and financial information     
relating to BN and SF, including the Annual Reports to Stockholders and     
Annual Reports on Form 10-K of BN and SF for each of the fiscal years ended 
December 31, 1989 through 1993 (and any amendments thereto), Quarterly      
Reports on Form 10-Q of BN and SF for the quarters ended March 31, June 30  
and September 30 for each of the same fiscal years and for the quarters     
ended March 31 and June 30, 1994 (and any amendments thereto), Current      
Reports on Form 8-K of BN dated June 29 and October 6, 1994 and Current     
Reports on Form 8-K of SF dated June 29, August 3 and October 5, 1994 (and  
any amendments thereto);                                                    

(iii) reviewed certain financial forecasts and other data provided to us
by BN and SF relating to their respective businesses;                       

(iv) held discussions with members of the senior management of BN and SF
with respect to the businesses and prospects of BN and SF, respectively,    
the strategic objectives of each, and possible benefits which might be      
realized following the Merger;                                              

(v) reviewed public information with respect to certain other companies 
in lines of businesses we believe to be comparable to the businesses of BN  
and SF;                                                                     

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 (vi) reviewed the financial terms of certain recent business combinations
involving companies in lines of businesses we believe to be comparable to   
those of BN and SF, and in other industries generally;                      

 (vii) analyzed the pro forma financial impact of the Merger on BN and SF;

 (viii) reviewed the historical stock prices and trading volumes of the BN
Common Stock and SF Common Stock; and                                       

 (ix) reviewed the Joint Proxy Statement/Prospectus dated the date hereof;
and                                                                         

(x) conducted such other financial studies, analyses and investigations 
as we deemed appropriate.                                                   

We have relied upon the accuracy and completeness of the financial and other
information provided by BN and SF to us and have not assumed any responsibility 
for independent verification of such information or any independent valuation   
or appraisal of any of the assets of BN or SF. With respect to the financial    
forecasts referred to above, we have assumed that they have been reasonably     
prepared on bases reflecting the best currently available estimates and         
judgments of the respective managements of BN and SF as to the future financial 
performance of their businesses. Further, our opinion is necessarily based on   
economic, monetary, market and other conditions as in effect on, and the        
information made available to us as of, the date hereof.                        

In rendering our opinion, we have also assumed that obtaining the necessary 
regulatory and governmental approvals for the Merger, including approval of the 
Interstate Commerce Commission, may significantly delay the consummation of the 
Merger, and that, in the course of obtaining such approvals, no restriction     
will be imposed that will have a material adverse effect on the contemplated    
benefits of the Merger to BN.                                                   

 Our engagement and the opinion expressed herein are solely for the benefit of
BN's Board of Directors and are not on behalf of, and are not intended to       
confer rights or remedies upon, SF, any stockholders of BN of SF or any other   
person other than BN's Board of Directors. It is understood that, except for    
inclusion in a proxy statement relating to the Merger, this letter may not be   
disclosed or otherwise referred to without our prior written consent, except as 
may otherwise be required by law or by a court of competent jurisdiction.       

Based on and subject to the foregoing and such other factors as we deem     
relevant, we are of the opinion that, as of the date hereof, the Exchange Ratio 
is fair to the holders of BN Common Stock from a financial point of view.       

                     Very truly yours,

                       LAZARD FRERES & CO.

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                                                                      APPENDIX D

OPINION OF GOLDMAN, SACHS & CO. 

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PERSONAL AND CONFIDENTIAL                                                       

                                                                October 12, 1994

Board of Directors                                                              
Santa Fe Pacific Corporation                                                    
1700 East Golf Road                                                             
Schaumburg, Illinois 60173-5860                                                 

Gentlemen and Madame:                                                           

You have requested our opinion as to the fairness to the holders of the         
outstanding shares of common stock, par value $1.00 per share (the "Common      
Stock"), of Santa Fe Pacific Corporation (the "Company") of the exchange ratio  
of 0.27 shares of common stock, with no par value, of Burlington Northern, Inc. 
("BNI Common Stock") to be received for each share of Common Stock (the         
"Exchange Ratio") pursuant to the Agreement and Plan of Merger, dated as of     
June 29, 1994, among Burlington Northern, Inc. ("BNI") and the Company (the     
"Agreement") in connection with the merger of the Company with and into BNI     
(the "Merger").                                                                 

Goldman, Sachs & Co., as part of its investment banking business, is            
continually engaged in the valuation of businesses and their securities in      
connection with mergers and acquisitions, negotiated underwritings, competitive 
biddings, secondary distributions of listed and unlisted securities, private    
placements and valuations for estate, corporate and other purposes. We are      
familiar with the Company having performed various investment banking services  
for the Company from time to time, including having acted as managing and co-   
managing underwriter of public offerings of Common Stock of the Company in      
October 1991 and June 1992, respectively, having acted as financial advisor on  
the asset exchange between the Company and Hanson Natural Resources Company in  
June 1993, having acted as managing underwriter of a public offering of Common  
Stock of Santa Fe Pacific Gold Corporation, a subsidiary of the Company, in     
June of 1994 as well as having acted as the Company's financial advisor in      
connection with, and having participated in certain of the negotiations leading 
to, the Agreement. We also have provided certain investment banking services to 
BNI from time to time, including acting as co-managing underwriter of a public  
offering of BNI Common Stock in November 1991, acting as managing underwriter   
of a public offering of 6 1/4% Cumulative Convertible Preferred Stock in        
November 1992, acting as a co-managing underwriter in a public offering of 7    
1/2% Debentures due 2002 in July 1993 and may provide investment banking        
services to BNI in the future.                                                  

In connection with this opinion, we have reviewed, among other things, the      
Agreement; the Joint Proxy Statement/Prospectus; Annual Reports to Stockholders 
and Annual Reports on Form 10-K of the Company and BNI for the five years ended 
December 31, 1993 (and any amendments thereto); certain interim reports to      
stockholders and Quarterly Reports on Form 10-Q of the Company and BNI (and any 
amendments thereto); certain other communications from the Company and BNI to   
their respective stockholders; certain Current Reports on Form 8-K of the       
Company and BNI; and certain internal financial analyses and forecasts for the  
Company and BNI prepared by their respective managements. We also have held     
discussions with members of the senior management of the Company and BNI        
regarding the past and current business operations, financial condition and     
future prospects of their respective companies. Furthermore, we have considered 
the views of the senior management of the Company regarding the strategic       
importance of, and potential synergies in the form of cost savings expected to  
be realized from, the Merger. In addition, we have reviewed the reported price  
and trading activity for the Common Stock and BNI Common Stock, compared        
certain financial and stock market information for the Company and BNI with     
similar information for certain other companies the securities of which are     
publicly traded, reviewed the financial terms of certain recent business        
combinations in the railroad industry specifically and in other industries      
generally and performed such other studies and analyses as we considered        
appropriate.                                                                    

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Santa Fe Pacific Corporation                                                    
October 12, 1994                                                                
Page Two                                                                        

We have relied without independent verification upon the accuracy and           
completeness of all of the financial and other information reviewed by us for   
purposes of this opinion. In addition, we have not made an independent          
evaluation or appraisal of the assets and liabilities of the Company or BNI or  
any of their respective subsidiaries and we have not been furnished with any    
such evaluation or appraisal. We have assumed with your consent that the Merger 
will be accounted for as a pooling of interests under generally accepted        
accounting principles and that the transaction will receive regulatory approval 
in the manner contemplated by the Agreement.                                    

Management of the Company has advised us that in its opinion there are          
significant contingencies associated with the proposal, dated October 5, 1994,  
from Union Pacific Corporation (the "UPC Proposal") and counsel to the Company  
has advised the Company's Board of Directors and management that there are      
significant legal uncertainties relating to the consummation of such proposal.  
We have assumed with your consent that this advice was correct and that in      
analyzing the Exchange Ratio we need not take into account the consideration    
which might be received under the UPC Proposal.                                 

Based upon and subject to the foregoing and based upon such other matters as we 
consider relevant, it is our opinion that as of the date hereof the Exchange    
Ratio pursuant to the Agreement is fair to the holders of outstanding shares of 
Common Stock.                                                                   

                     Very truly yours,

        LOGO

                        GOLDMAN, SACHS & CO.

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                                                                      BURLINGTON
                                              NORTHERN
                                          INC.
--------------------------------------------------------------------------------

         NOTICE OF

YOUR VOTE IS IMPORTANT                  SPECIAL MEETING                         
YOUR MANAGEMENT WILL APPRECIATE THE     OF STOCKHOLDERS                         
PROMPT RETURN OF YOUR SIGNED PROXY SO   AND                                     
THE SHARES YOU OWN WILL BE REPRESENTED  PROXY STATEMENT                         
AT THE SPECIAL MEETING OF STOCKHOLDERS.                                         
--------------------------------------------------------------------------------

             TO BE HELD AT
                                    BURLINGTON NORTHERN RAILROAD COMPANY
                   3017 LOU MENK DRIVE
                 FORT WORTH, TEXAS
                 NOVEMBER 18, 1994
                          10:00 A.M. FORT WORTH TIME

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                                          SANTA FE
                                         PACIFIC
                                             CORPORATION
--------------------------------------------------------------------------------

         NOTICE OF

YOUR VOTE IS IMPORTANT                  SPECIAL MEETING                         
YOUR MANAGEMENT WILL APPRECIATE THE     OF STOCKHOLDERS                         
PROMPT RETURN OF YOUR SIGNED PROXY SO   AND                                     
THE SHARES YOU OWN WILL BE REPRESENTED  PROXY STATEMENT                         
AT THE SPECIAL MEETING OF STOCKHOLDERS.                                         
--------------------------------------------------------------------------------

             TO BE HELD AT
                    HYATT REGENCY O"HARE
                          9300 WEST BRYN MAWR AVENUE
                  ROSEMONT, ILLINOIS
                 NOVEMBER 18, 1994
                      3:00 P.M. CHICAGO TIME

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B4’ Filing		Date		First		Last			Other Filings
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		12/31/97		17		117
		7/24/96		9		80
		6/11/96		49
		5/29/96		49
		12/31/95		37		72			10-K
		12/26/95		75
		9/30/95		58		115			10-Q
		1/30/95		117					DEFA14A
		1/1/95		49
		12/31/94		35		117			10-K
		11/19/94		83
		11/18/94		1		130			8-K
		11/15/94		83					DEFA14A
		11/9/94		11					DEFA14A
		10/19/94		5		30
Filed on:		10/14/94
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		10/12/94		1		128			S-4
		10/11/94		20		53			8-K
		10/10/94		15		74
		10/7/94		73
		10/6/94		10		124			8-K
		10/5/94		10		128			10-K/A,  10-Q/A
		10/4/94		19		51
		10/3/94		21
		10/1/94		46
		9/30/94		14		124			10-Q
		9/15/94		46		48
		9/12/94		21		90
		8/3/94		10
		7/29/94		10
		7/15/94		56
		7/1/94		72
		6/30/94		10		124			10-Q,  10-Q/A
		6/29/94		5		127			8-K
		6/28/94		40
		6/27/94		36
		6/24/94		32
		6/23/94		21		36
		6/17/94		40
		6/16/94		21
		6/11/94		49
		6/7/94		19		52
		6/1/94		41
		5/31/94		94		102
		5/24/94		32					8-K
		5/18/94		100
		4/22/94		49
		3/31/94		95		103			10-Q,  10-Q/A
		2/16/94		100
		2/15/94		32
		1/31/94		32
		12/31/93		10		127			10-K,  10-K/A
		11/29/93		32
		10/21/93		41
		8/10/93		23
		8/1/93		41
		7/28/93		31		118
		7/16/93		31
		6/30/93		22		64
		6/25/93		96
		1/1/93		23
		12/31/92		66		103
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