SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                               SCHEDULE 13D

                  Under the Securities Exchange Act of 1934
                             (Amendment No. 10)

               Chicago and North Western Transportation Company
                              (Name of Issuer)

                     Common Stock, Par Value $.01 Per Share
                         (Title of Class of Securities)

                               167155 10 0
                             (CUSIP Number)

                         Richard J. Ressler, Esq.
                         Union Pacific Corporation
                 Martin Tower, Eighth and Eaton Avenues
                      Bethlehem, Pennsylvania  18018
                             (610) 861-3200              
               (Name, Address and Telephone Number of Person
              Authorized to Receive Notices and Communications)

                                Copy to:

                            Paul T. Schnell
                   Skadden, Arps, Slate, Meagher & Flom
                            919 Third Avenue
                        New York, New York  10022
                             (212) 735-3000

                              March 13, 1995                      
          (Date of Event which Requires Filing of this Statement)

                    If the filing person has previously filed a
          statement on Schedule 13G to report the acquisition which
          is the subject of this Schedule 13D, and is filing the
          statement because of Rule 13d-1(b)(3) or (4), check the
          following box:  [   ]

                    Check the following box if a fee is being paid
          with the statement:  [  ]

                    This Amendment No. 10 filed by Union Pacific
          Corporation, a Utah corporation ("UP"), Union Pacific
          Holdings, Inc., a Utah corporation ("UP Holdings"), and
          UP Rail, Inc., a Utah corporation ("UP Rail"), amends the
          Statement on Schedule 13D, dated April 9, 1992, as
          previously amended (the "Schedule 13D"), with respect to
          the common stock, par value $.01 per share (the
          "Shares"), of Chicago and North Western Transportation
          Company, a Delaware corporation (the "Issuer"). 
          Capitalized terms used but not defined herein shall have
          the meanings ascribed thereto in the Schedule 13D.

          Item 4.   Purpose of Transaction.

                    Reference is made to the disclosure set forth
          in Item 6.

          Item 6.   Contracts, Arrangements, Understandings or
                    Relationships with Respect to Securities of the
                    Issuer.

                    Item 6 is hereby supplemented as follows:

                    On March 16, 1995, the Board of Directors of UP
          approved the previously announced acquisition of the
          Issuer and, following approval of the acquisition by the
          Issuer's Board of Directors later that day, the Issuer,
          UP Rail and UP executed an Agreement and Plan of Merger
          (the "Merger Agreement"), and the Issuer and UP Rail
          executed a Stock Option Agreement (the "Company Stock
          Option Agreement"), each dated as of March 16, 1995.  A
          copy of the Merger Agreement and Company Stock Option
          Agreement are attached hereto as Exhibits 16 and 17,
          respectively, and incorporated herein by reference.  The
          Merger Agreement provides, among other things, for the
          acquisition of all of the issued and outstanding shares
          of common stock, par value $.01 per share, of the Issuer
          (the "Shares") by UP Rail at a price of $35 per Share
          pursuant to a tender offer for all Shares and a second
          step merger.  The Company Stock Option Agreement provides
          for the grant by the Issuer to UP, subject to certain
          conditions (including that UP, together with its
          affiliates, shall own at least 85% and less than 90.01%
          of the number of Shares then outstanding (assuming
          conversion of UP's shares of non-voting stock, par value
          $.01 per share, of the Issuer into Shares)) of an
          irrevocable option to purchase at UP's election at a
          price of $35 per share such number of Shares as, when
          added to the number of Shares owned by UP and its
          affiliates immediately prior to such purchase, would
          result in UP and its affiliates owning immediately
          thereafter 90.01% of the then outstanding Shares.  A copy
          of the press release issued by UP on March 16, 1995
          announcing its Board's approval of the acquisition of the
          Issuer, and a copy of the joint press release issued by
          UP and the Issuer on March 17, 1995 announcing the
          execution of the Merger Agreement, are attached hereto as
          Exhibits 18 and 19, respectively, and are incorporated
          herein by reference.

                    Two class action complaints, copies of which
          are attached hereto as Exhibits 20 and 21 and
          incorporated herein by reference, were filed in the Court
          of Chancery in Delaware on March 13, 1995 naming as
          defendants the Issuer, the Issuer's directors, UP and
          certain other parties.  Such complaints allege, among
          other things, that various of the defendants breached
          their fiduciary duties to the shareholders of the Issuer
          by failing to act to maximize shareholder value prior to
          approving the transfer of control of the Issuer.  The
          complaints seek, among other things, damages and to
          enjoin the defendants from proceeding with a change of
          control of the Issuer.

          Item 7.   Material to be filed as Exhibits.

                    Item 7 is hereby supplemented as follows:

                    Exhibit 16.  Merger Agreement, dated as of
          March 16, 1995, among UP, UP Rail, Inc. and the Issuer.

                    Exhibit 17.  Company Stock Option Agreement,
          dated as of March 16, 1995, between UP Rail and the
          Issuer.

                    Exhibit 18.  Text of Press Release issued by UP
          on March 16, 1995.

                    Exhibit 19.  Text of Joint Press Release issued
          by UP and the Issuer on March 17, 1995.

                    Exhibit 20.  Class Action Complaint entitled
          Michael Gerber v. James E. Martin, et al. (C.A. No.
          14117), filed in the Court of Chancery in Delaware on
          March 13, 1995.

                    Exhibit 21.  Class Action Complaint entitled
          Charles Kowal and Harry W. Kent v. Chicago and North
          Western Transportation Company, et al. (C.A. No. 14115),
          filed in the Court of Chancery in Delaware on March 13,
          1995.

                                  SIGNATURE

                    After reasonable inquiry and to the best of its
          knowledge and belief, the undersigned certifies that the
          information set forth in this statement is true, complete
          and correct.

          Dated:  March 17, 1995

                                        UP RAIL, INC.

                                        By: /s/ Carl W. von Bernuth    
                                           Name:  Carl W. von Bernuth
                                           Title: Vice President and
                                                     Assistant Secretary

                                  SIGNATURE

                    After reasonable inquiry and to the best of its
          knowledge and belief, the undersigned certifies that the
          information set forth in this statement is true, complete
          and correct.

          Dated:  March 17, 1995

                                        UNION PACIFIC HOLDINGS, INC.

                                        By: /s/ Carl W. von Bernuth       
                                           Name:  Carl W. von Bernuth
                                           Title: Vice President and
                                                     Chief Legal Officer

                                  SIGNATURE

                    After reasonable inquiry and to the best of its
          knowledge and belief, the undersigned certifies that the
          information set forth in this statement is true, complete
          and correct.

          Dated:  March 17, 1995

                                        UNION PACIFIC CORPORATION

                                        By: /s/ Carl W. von Bernuth      
                                           Name:  Carl W. von Bernuth
                                           Title: Senior Vice President
                                                     and General Counsel

                                                       EXHIBIT 16

                         AGREEMENT AND PLAN OF MERGER

                                 by and among

                          UNION PACIFIC CORPORATION,

                                UP RAIL, INC.

                                     and

               CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY

                                 dated as of

                                March 16, 1995

                         AGREEMENT AND PLAN OF MERGER

                    AGREEMENT AND PLAN OF MERGER, dated as of March
          16, 1995, by and among Union Pacific Corporation, a Utah
          corporation ("Parent"), UP Rail, Inc., a Utah corporation
          and an indirect, wholly owned subsidiary of Parent (the
          "Purchaser"), and Chicago and North Western
          Transportation Company, a Delaware corporation (the
          "Company").

                    WHEREAS, the Boards of Directors of Parent, the
          Purchaser and the Company have approved, and deem it
          advisable and in the best interests of their respective
          shareholders to consummate, the acquisition of the
          Company by Parent upon the terms and subject to the
          conditions set forth herein;

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

                                  ARTICLE I

                             THE OFFER AND MERGER

                    Section 1.1  The Offer.  (a)  As promptly as
          practicable (but in no event later than five business
          days after the public announcement of the execution
          hereof), the Purchaser shall commence (within the meaning
          of Rule 14d-2 under the Securities Exchange Act of 1934,
          as amended (the "Exchange Act")) an offer (the "Offer")
          to purchase for cash all of the issued and outstanding
          shares of Common Stock, par value $.01 per share
          (referred to herein as either the "Shares" or "Company
          Common Stock"), of the Company at a price of $35.00 per
          Share, net to the seller in cash (such price, or such
          higher price per Share as may be paid in the Offer, being
          referred to herein as the "Offer Price"), subject to
          there being validly tendered and not withdrawn prior to
          the expiration of the Offer, that number of Shares which,
          together with the shares of Non-Voting Common Stock, par
          value $.01 per Share (the "Non-Voting Shares"), of the
          Company beneficially owned by Parent or the Purchaser
          (assuming conversion of such Non-Voting Shares into
          Shares), represent at least a majority of the Shares
          outstanding on a fully diluted basis (assuming conversion
          of the Non-Voting Shares into Shares) (the "Minimum
          Condition") and to the other conditions set forth in
          Annex A hereto.  The Purchaser shall, on the terms and
          subject to the prior satisfaction or waiver (except that
          the Minimum Condition may not be waived) of the
          conditions of the Offer, accept for payment and pay for
          Shares tendered as soon as practicable after it is
          permitted to do so under the Exchange Act.  The
          obligations of the Purchaser to commence the Offer and to
          accept for payment and to pay for any Shares validly
          tendered on or prior to the expiration of the Offer and
          not withdrawn shall be subject only to the Minimum
          Condition and the other conditions set forth in Annex A
          hereto.  The Offer shall be made by means of an offer to
          purchase (the "Offer to Purchase") containing the terms
          set forth in this Agreement, the Minimum Condition and
          the other conditions set forth in Annex A hereto. 
          Without the written consent of the Company (such consent
          to be authorized by the Board of Directors of the Company
          or a duly authorized committee thereof), the Purchaser
          shall not amend or waive the Minimum Condition and shall
          not decrease the Offer Price or decrease the number of
          Shares sought, or amend any other condition of the Offer
          in any manner adverse to the holders of the Shares,
          provided, however, that if on the initial scheduled
          expiration date of the Offer (as it may be extended), all
          conditions to the Offer shall not have been satisfied or
          waived, the Offer may be extended from time to time until
          June 30, 1995 without the consent of the Company.  In
          addition, the Offer Price may be increased and the Offer
          may be extended to the extent required by law in
          connection with such increase in each case without the
          consent of the Company.

                         (b)  As soon as practicable on the date
          the Offer is commenced, Parent and the Purchaser shall
          file with the United States Securities and Exchange
          Commission (the "SEC") (i) a Tender Offer Statement on
          Schedule 14D-1 with respect to the Offer (together with
          all amendments and supplements thereto and including the
          exhibits thereto, the "Schedule 14D-1") which will
          include, as exhibits, the Offer to Purchase and a form of
          letter of transmittal and summary advertisement
          (collectively, together with any amendments and
          supplements thereto, the "Offer Documents"), and (ii) a
          Rule 13e-3 Transaction Statement on Schedule 13E-3
          (together with any supplements or amendments thereto, the
          "Schedule 13E-3") with respect to the Offer.  Parent and
          the Purchaser represent that the Offer Documents and the
          Schedule 13E-3 will comply in all material respects with
          the provisions of applicable federal securities laws and,
          on the date filed with the SEC and on the date first
          published, sent or given to the Company's stockholders,
          shall not contain any untrue statement of a material fact
          or omit to state any material fact required to be stated
          therein or necessary in order to make the statements
          therein, in light of the circumstances under which they
          were made, not misleading, except that no representation
          is made by Parent or the Purchaser with respect to
          information supplied by the Company in writing for
          inclusion in the Offer Documents or the Schedule 13E-3. 
          Each of Parent and the Purchaser further agrees to take
          all steps necessary to cause the Offer Documents and the
          Schedule 13E-3 to be filed with the SEC and to be
          disseminated to holders of Shares, in each case as and to
          the extent required by applicable federal securities
          laws.  Each of Parent and the Purchaser, on the one hand,
          and the Company, on the other hand, agrees promptly to
          correct any information provided by it for use in the
          Offer Documents and/or the Schedule 13E-3 if and to the
          extent that it shall have become false and misleading in
          any material respect, and Parent and the Purchaser
          further agree to take all steps necessary to cause the
          Offer Documents and/or the Schedule 13E-3, as the case
          may be, as so corrected to be filed with the SEC and to
          be disseminated to holders of Shares, in each case as and
          to the extent required by applicable federal securities
          laws.  The Company and its counsel shall be given the
          opportunity to review the Schedule 14D-1 and the Schedule
          13E-3 before they are filed with the SEC.  In addition,
          Parent and the Purchaser agree to provide the Company and
          its counsel in writing with any comments Parent, the
          Purchaser or their counsel may receive from time to time
          from the SEC or its staff with respect to the Offer
          Documents or the Schedule 13E-3 promptly after the
          receipt of such comments.

                    Section 1.2  Company Actions.

                         (a)  The Company hereby approves of and
          consents to the Offer and represents that the Board of
          Directors, at a meeting duly called and held, has
          unanimously (with Richard K. Davidson absent and not
          voting) (i) determined that each of the Offer and the
          Merger (as defined in Section 1.4) is fair to and in the
          best interests of the Company's stockholders (other than
          Parent and the Purchaser), (ii) approved this Agreement
          and the transactions contemplated hereby, including the
          Offer and the Merger (collectively, the "Transactions"),
          (iii) resolved to recommend that the stockholders of the
          Company accept the Offer, tender their Shares thereunder
          to the Purchaser and approve and adopt this Agreement and
          the Merger; provided, however, that such recommendation
          may be withdrawn, modified or amended only to the extent
          that the Board of Directors of the Company determines,
          based on an opinion of outside legal counsel to the
          Company, that the failure to take such action would
          likely result in a breach of the Board of Directors'
          fiduciary duties under applicable laws; and (iv) to the
          extent required, approved this Agreement, the Offer, the
          Merger, the Company Stock Option Agreement (as defined in
          Section 1.9) and the transactions contemplated hereby and
          thereby for purposes of Section 203 of the Delaware
          General Corporation Law ("DGCL").  The Company further
          represents that The Blackstone Group L.P. ("Blackstone")
          has delivered to the Board of Directors of the Company
          its opinion that the cash consideration to be received by
          the holders of Shares pursuant to the Offer and the
          Merger is fair to such holders from a financial point of
          view. 

                         (b)  Concurrently with the commencement of
          the Offer, the Company shall file with the SEC a
          Solicitation/Recommendation Statement on Schedule 14D-9
          (together with all amendments and supplements thereto and
          including the exhibits thereto, the "Schedule 14D-9")
          which shall contain the recommendation referred to in
          clauses (i), (ii) and (iii) of Section 1.2(a) hereof and
          will join in the filing of the Schedule 13E-3.  The
          Company represents that the Schedule 14D-9 and the
          Schedule 13E-3 will comply in all material respects with
          the provisions of applicable federal securities laws and,
          on the date filed with the SEC and on the date first
          published, sent or given to the Company's stockholders,
          shall not contain any untrue statement of a material fact
          or omit to state any material fact required to be stated
          therein or necessary in order to make the statements
          therein, in light of the circumstances under which they
          were made, not misleading, except that no representation
          is made by the Company with respect to information
          supplied by Parent or the Purchaser for inclusion in the
          Schedule 14D-9 or the Schedule 13E-3.  The Company
          further agrees to take all steps necessary to cause the
          Schedule 14D-9 and the Schedule 13E-3 to be filed with
          the SEC and to be disseminated to holders of Shares, in
          each case as and to the extent required by applicable
          federal securities laws.  Each of the Company, on the one
          hand, and Parent and the Purchaser, on the other hand,
          agrees promptly to correct any information provided by it
          for use in the Schedule 14D-9 and the Schedule 13E-3 if
          and to the extent that it shall have become false and
          misleading in any material respect and the Company
          further agrees to take all steps necessary to cause the
          Schedule 14D-9 and the Schedule 13E-3 as so corrected to
          be filed with the SEC and to be disseminated to holders
          of the Shares, in each case as and to the extent required
          by applicable federal securities laws.  Parent and its
          counsel shall be given the opportunity to review the
          Schedule 14D-9 and the Schedule 13E-3 before it is filed
          with the SEC.  In addition, the Company agrees to provide
          Parent, the Purchaser and their counsel in writing with
          any comments the Company or its counsel may receive from
          time to time from the SEC or its staff with respect to
          the Schedule 14D-9 and the Schedule 13E-3 promptly after
          the receipt of such comments.  

                         (c)  In connection with the Offer, the
          Company will promptly furnish or cause to be furnished to
          the Purchaser mailing labels, security position listings
          and any available listing or computer file containing the
          names and addresses of the record holders of the Shares
          as of a recent date, and shall furnish the Purchaser with
          such information and assistance as the Purchaser or its
          agents may reasonably request in communicating the Offer
          to the stockholders of the Company. 

                    Section 1.3  Directors.

                         (a)  Promptly upon the purchase of and
          payment for any Shares by the Purchaser or any other
          subsidiary of Parent pursuant to the Offer which,
          together with the Non-Voting Shares, represents at least
          a majority of the outstanding shares of Company Common
          Stock (on a fully diluted basis and assuming conversion
          of the Non-Voting Shares into Shares), Parent shall be
          entitled to designate such number of directors, rounded
          up to the next whole number, on the Board of Directors of
          the Company as is equal to the product of the total
          number of directors on such Board (giving effect to the
          existing representatives of Parent serving on the Board
          of Directors, including representatives which Parent has
          the right to designate under the 1993 Agreement (as
          defined in Section 3.2), and the directors designated by
          Parent pursuant to this sentence) multiplied by the ratio
          of the aggregate number of Shares and Non-Voting Shares
          (if any) beneficially owned by the Purchaser, Parent and
          any of their affiliates to the total number of Shares and
          Non-Voting Shares (if any) then outstanding.   Promptly
          after consummation of the Offer, the Company shall, upon
          request of the Purchaser, use its best efforts promptly
          either to increase the size of its Board of Directors or,
          at the Company's election, secure the resignations of
          such number of its incumbent directors as is necessary to
          enable Parent's designees to be so elected or appointed
          to the Company's Board, and shall cause Parent's
          designees to be so elected or appointed.  At such time,
          the Company shall also cause persons designated by Parent
          to constitute the same percentage (rounded up to the next
          whole number) as is on the Company's Board of Directors
          of (i) each committee of the Company's Board of
          Directors, (ii) each board of directors (or similar body)
          of each Subsidiary (as defined in Section 3.1) of the
          Company and (iii) each committee (or similar body) of
          each such board, in each case only to the extent
          permitted by applicable law or the rules of any stock
          exchange on which the Company Common Stock is listed. 
          Notwithstanding the foregoing, until the Effective Time
          (as defined in Section 1.5 hereof), the Company and
          Parent shall use all reasonable efforts to retain as
          members of its Board of Directors at least three (3)
          directors who are directors of the Company on the date
          hereof and are not representatives of Parent (the
          "Company Directors"); provided, that subsequent to the
          purchase of and payment for Shares pursuant to the Offer,
          Parent shall always have its designees represent at least
          a majority of the entire Board of Directors.  As used in
          this Agreement, the term "Company Directors" shall
          initially mean each of Messrs. James R. Thompson, Samuel
          K. Skinner and Harold A. Poling; provided that in the
          event that any of such initial directors resigns or
          otherwise ceases to be a director for any reason, then
          the other Company Directors shall have the right, by
          majority vote, to designate a replacement for such
          directors (and such replacement shall be a "Company
          Director").  If for any reason at any time prior to the
          Effective Time no Company Directors then remain, the
          other directors shall use reasonable best efforts to
          designate three persons to be the Company Directors, none
          of whom shall be directors, officers, employees or
          affiliates of Parent or the Purchaser.  

                    (b)  The Company's obligations under Section
          1.3(a) shall be subject to Section 14(f) of the Exchange
          Act and Rule 14f-1 promulgated thereunder.  The Company
          shall promptly take all actions required pursuant to such
          Section 14(f) and Rule 14f-1 in order to fulfill its
          obligations under this Section 1.3(a), including mailing
          to stockholders as part of the Schedule 14D-9 the
          information required by such Section 14(f) and Rule 14f-
          1, as is necessary to enable Parent's designees to be
          elected to the Company's Board of Directors.  Parent or
          the Purchaser will supply the Company any information
          with respect to either of them and their nominees,
          officers, directors and affiliates required by such
          Section 14(f) and Rule 14f-1.  The provisions of this
          Section 1.3(a) are in addition to and shall not limit any
          rights which the Purchaser, Parent or any of their
          affiliates may have as a holder or beneficial owner of
          Shares or Non-Voting Shares as a matter of law with
          respect to the election of directors or otherwise (except
          that, as provided above, the number of directors that
          Parent shall have the right to designate pursuant to this
          Section 1.3 shall include the representatives which
          Parent has the right to designate under the 1993
          Agreement).

                         (c)  The concurrence of a majority of the
          Company Directors shall be required for any amendment or
          termination of this Agreement by the Company, any waiver
          of any of the Company's rights hereunder or otherwise
          pursuant to Section 8.3 hereof, any extension of the time
          for performance of Parent's or the Purchaser's
          obligations or other acts hereunder, or any other action
          taken by the Company's Board of Directors in connection
          with this Agreement (including actions to enforce this
          Agreement); provided, that if there shall be no such
          directors notwithstanding the reasonable best efforts of
          the other directors to appoint Company Directors, such
          actions may be effected by majority vote of the entire
          Board of Directors of the Company.

                    Section 1.4  The Merger.  Subject to the terms
          and conditions of this Agreement, at the Effective Time
          (as defined in Section 1.5 hereof), the Company and the
          Purchaser shall consummate a merger (the "Merger")
          pursuant to which (a) the Purchaser shall be merged with
          and into the Company and the separate corporate existence
          of the Purchaser shall thereupon cease, (b) the Company
          shall be the successor or surviving corporation in the
          Merger and shall continue to be governed by the laws of
          the State of Delaware, and (c) the separate corporate
          existence of the Company with all its rights, privileges,
          immunities, powers and franchises shall continue
          unaffected by the Merger.  Pursuant to the Merger, (x)
          the Restated Certificate of Incorporation of the Company,
          as in effect immediately prior to the Effective Time,
          shall be the Certificate of Incorporation of the
          Surviving Corporation (as defined below) until thereafter
          amended as provided by law and such Restated Certificate
          of Incorporation, and (y) the By-laws of the Purchaser,
          as in effect immediately prior to the Effective Time,
          shall be the By-laws of the Surviving Corporation until
          thereafter amended as provided by law, the Restated
          Certificate of Incorporation and such By-laws.  The
          corporation surviving the Merger is sometimes hereinafter
          referred to as the "Surviving Corporation."  The Merger
          shall have the effects set forth in the DGCL and the Utah
          Business Corporation Act ("UBCA").

                    Section 1.5  Effective Time.  Parent, the
          Purchaser and the Company will cause appropriate
          Certificates of Merger or, if applicable, Certificates of
          Ownership and Merger (the "Certificates of Merger") to be
          executed and filed on the date of the Closing (as defined
          in Section 1.6) (or on such other date as Parent and the
          Company may agree) with the Secretary of State of the
          State of Delaware (the "Secretary of State") as provided
          in the DGCL and with the Division of Corporations and
          Commercial Code of the State of Utah (the "Division") as
          provided in the UBCA.  The Merger shall become effective
          on the date on which the Certificates of Merger have been
          duly filed with the Secretary of State and the Division
          or such time as is agreed upon by the parties and
          specified in the Certificates of Merger, and such time is
          hereinafter referred to as the "Effective Time."

                    Section 1.6  Closing.  The closing of the
          Merger (the "Closing") will take place at 10:00 a.m., New
          York time, on a date to be specified by the parties,
          which shall be no later than the first business day after
          satisfaction or waiver of all of the conditions set forth
          in Article VI hereof (the "Closing Date"), at the offices
          of Skadden, Arps, Slate, Meagher & Flom, 919 Third
          Avenue, New York, New York  10022, unless another date or
          place is agreed to in writing by the parties hereto.

                    Section 1.7  Directors and Officers of the
          Surviving Corporation.  The directors and officers of the
          Purchaser at the Effective Time shall, from and after the
          Effective Time, be the directors and officers,
          respectively, of the Surviving Corporation until their
          successors shall have been duly elected or appointed or
          qualified or until their earlier death, resignation or
          removal in accordance with the Surviving Corporation's
          Certificate of Incorporation and By-laws.

                    Section 1.8  Stockholders' Meeting.

                         (a)  If required by applicable law in
          order to consummate the Merger, the Company, acting
          through its Board of Directors, shall, in accordance with
          applicable law:

                              (i)  duly call, give notice of,
               convene and hold a special meeting of its
               stockholders (the "Special Meeting") as soon as
               practicable following the acceptance for payment and
               purchase of Shares by the Purchaser pursuant to the
               Offer for the purpose of considering and taking
               action upon this Agreement;

                              (ii)  prepare and file with the SEC a
               preliminary proxy or information statement relating
               to the Merger and this Agreement and use its best
               efforts (x) to obtain and furnish the information
               required to be included by the SEC in the Proxy
               Statement (as hereinafter defined) and, after
               consultation with Parent, to respond promptly to any
               comments made by the SEC with respect to the
               preliminary proxy or information statement and cause
               a definitive proxy or information statement (the
               "Proxy Statement") to be mailed to its stockholders
               and (y) to obtain the necessary approvals of the
               Merger and this Agreement by its stockholders; and 

                              (iii)  subject to the fiduciary
               obligations of the Board under applicable law as
               advised by independent counsel, include in the Proxy
               Statement the recommendation of the Board that
               stockholders of the Company vote in favor of the
               approval of the Merger and the adoption of this
               Agreement.

                         (b)  Not later than promptly following the
          consummation of the Offer and receipt of the ICC Final
          Approval (as defined in Section 3.4 hereof), Parent will
          convert or cause to be converted all of its Non-Voting
          Shares into Shares.  Parent agrees that it will vote, or
          cause to be voted, all of the Shares then owned by it,
          the Purchaser or any of its other subsidiaries and
          affiliates in favor of the approval of the Merger and the
          adoption of this Agreement.

                    Section 1.9  Merger Without Meeting of
          Stockholders.  Notwithstanding Section 1.8 hereof, in the
          event that Parent, the Purchaser or any permitted
          assignee of Purchaser shall acquire at least 90% of the
          outstanding shares of the capital stock of the Company,
          pursuant to the Offer, the Company Stock Option Agreement
          (as defined below), the conversion of Non-Voting Shares
          into Shares or, subsequent to consummation of the Offer,
          by any other means, the parties hereto agree, at the
          request of Parent and subject to Article VI hereof, to
          take all necessary and appropriate action to cause the
          Merger to become effective as soon as practicable after
          such acquisition, without a meeting of stockholders of
          the Company, in accordance with Section 253 of the DGCL
          and Sections 1104 and 1107 of the UBCA.  In connection
          therewith, Parent and the Company are entering into a
          Company Stock Option Agreement, dated as of the date
          hereof (the "Company Stock Option Agreement"), pursuant
          to which, subject to Parent having previously acquired at
          least 85% of the outstanding Shares (assuming conversion
          of the Non-Voting Shares into Shares) and other
          conditions set forth therein, Parent shall have the right
          to purchase from the Company a sufficient number of
          Shares such that such Shares purchased pursuant to the
          Company Stock Option Agreement, together with all Shares
          owned by Parent or the Purchaser, would represent 90% of
          the outstanding Shares and permit the Merger to be
          effected in accordance with Section 253 of the DGCL and
          Sections 1104 and 1107 of the UBCA (a "Short-form
          Merger").  Parent agrees to effect a Short-form Merger
          promptly following the exercise of the option under the
          Company Stock Option Agreement.

                                  ARTICLE II

                             CONVERSION OF SHARES

                    Section 2.1  Conversion of Capital Stock.  As
          of the Effective Time, by virtue of the Merger and
          without any action on the part of the holders of any
          shares of Company Common Stock or common stock, par value
          $.01 per share, of the Purchaser (the "Purchaser Common
          Stock"):

                         (a)  Purchaser Common Stock.  The issued
          and outstanding shares of the Purchaser Common Stock
          shall be converted into and become such number of fully
          paid and nonassessable shares of common stock of the
          Surviving Corporation as the Company had outstanding
          immediately prior to the Effective Time.

                         (b)  Cancellation of Treasury Stock and
          Parent-Owned Stock.  All shares of Company Common Stock
          that are owned by the Company as treasury stock and any
          shares of Company Common Stock and Non-Voting Shares
          owned by Parent, the Purchaser or any other wholly owned
          Subsidiary (as defined in Section 3.1 hereof) of Parent
          shall be cancelled and retired and shall cease to exist
          and no stock of Parent or other consideration shall be
          delivered in exchange therefor.

                         (c)  Conversion of Shares.  Each issued
          and outstanding share of Company Common Stock (other than
          shares to be cancelled in accordance with Section 2.1(b))
          shall be converted into the right to receive the Offer
          Price, payable to the holder thereof, without interest
          (the "Merger Consideration"), upon surrender of the
          certificate formerly representing such share of Company
          Common Stock in the manner provided in Section 2.2.  All
          such shares of Company Common Stock, when so converted,
          shall no longer be outstanding and shall automatically be
          cancelled and retired and shall cease to exist, and each
          holder of a certificate representing any such shares
          shall cease to have any rights with respect thereto,
          except the right to receive the Merger Consideration
          therefor upon the surrender of such certificate in
          accordance with Section 2.2, without interest.

                    Section 2.2  Exchange of Certificates.

                         (a)  Paying Agent.  Parent shall designate
          a bank or trust company to act as agent for the holders
          of shares of Company Common Stock in connection with the
          Merger, which Paying Agent shall be reasonably
          satisfactory to the Company (the "Paying Agent"), to
          receive the funds to which holders of shares of Company
          Common Stock shall become entitled pursuant to Section
          2.1(c).  Such funds shall be invested by the Paying Agent
          as directed by Parent or the Surviving Corporation.

                         (b)  Exchange Procedures.  As soon as
          reasonably practicable after the Effective Time, the
          Paying Agent shall mail to each holder of record of a
          certificate or certificates, which immediately prior to
          the Effective Time represented outstanding shares of
          Company Common Stock (the "Certificates"), whose shares
          were converted pursuant to Section 2.1 into the right to
          receive the Merger Consideration (i) a letter of
          transmittal (which shall specify that delivery shall be
          effected, and risk of loss and title to the Certificates
          shall pass, only upon delivery of the Certificates to the
          Paying Agent and shall be in such form and have such
          other provisions as Parent and the Company may reasonably
          specify) and (ii) instructions for use in effecting the
          surrender of the Certificates in exchange for payment of
          the Merger Consideration.  Upon surrender of a
          Certificate for cancellation to the Paying Agent or to
          such other agent or agents as may be appointed by Parent,
          which agents shall be reasonably satisfactory to the
          Company, together with such letter of transmittal, duly
          executed, the holder of such Certificate shall be
          entitled to receive in exchange therefor the Merger
          Consideration for each share of Company Common Stock
          formerly represented by such Certificate and the
          Certificate so surrendered shall forthwith be cancelled. 
          If payment of the Merger Consideration is to be made to a
          person other than the person in whose name the
          surrendered Certificate is registered, it shall be a
          condition of payment that the Certificate so surrendered
          shall be properly endorsed or shall be otherwise in
          proper form for transfer and that the person requesting
          such payment shall have paid any transfer and other taxes
          required by reason of the payment of the Merger
          Consideration to a person other than the registered
          holder of the Certificate surrendered or shall have
          established to the satisfaction of the Surviving
          Corporation that such tax either has been paid or is not
          applicable.  Until surrendered as contemplated by this
          Section 2.2, each Certificate shall be deemed at any time
          after the Effective Time to represent only the right to
          receive the Merger Consideration in cash as contemplated
          by this Section 2.2.

                         (c)  After the Effective Time there shall
          be no transfers on the stock transfer books of the
          Surviving Corporation of the Shares which were
          outstanding immediately prior to the Effective Time.  If,
          after the Effective Time, Certificates are presented to
          the Surviving Corporation, they shall be cancelled and
          exchanged for the Merger Consideration as provided in
          this Article II.

                    Section 2.3  Company Option Plans and
          Agreements.  

                         (a)  The Company shall (i) terminate its
          1989 Equity Incentive Plan for Key Employees, 1992 Equity
          Incentive Plan and 1994 Equity Incentive Plan
          (collectively, the "Plans"), immediately prior to the
          Effective Time without prejudice to the rights of the
          holders of options awarded pursuant thereto and (ii)
          grant no additional options or similar rights under the
          Plans or otherwise on or after the date hereof.  As used
          hereafter in this Section 2.3, "Options" shall include
          each employee stock option granted by the Company,
          whether pursuant to the Plans, pursuant to certain
          Rollover Option Agreements dated as of July 14, 1989 or
          otherwise.

                         (b)  The Company shall use its best efforts
          to obtain the consent of each holder of any Options
          (whether or not then exercisable) that it does not have
          the right to cancel to the cancellation of, and shall
          cancel, his Options (irrespective of their exercise
          price), or, in the case of Options that the Company has
          the right to cancel, shall cancel such Options, such
          cancellation (whether or not consent is required therefor)
          to take effect as of the Effective Time.  The preceding
          sentence shall not apply to (i) Options with respect to
          which the holder thereof holds, and agrees, prior to
          consummation of the Offer, to exercise limited stock
          appreciation rights ("LSARs") prior to the Effective Time
          and does exercise such LSARs prior to the Effective Time,
          and (ii) Options (whether or not then exercisable) held by
          employees of the Company that Parent or its affiliates
          have agreed to employ and who agree prior to consummation
          of the Offer to cancel such Options effective as of the
          Effective Time in consideration for issuance at such time
          of Options on common stock of Parent ("Parent Options"),
          Parent being obligated with respect thereto to issue
          Parent Options to each such employee which Options cover
          common stock having an aggregate Fair Market Value on the
          date of issuance of such Options equal to the aggregate
          value at the Offer Price of stock of the Company subject
          to such Options held by such employee and having an
          aggregate spread between Fair Market Value (as defined
          below) and exercise price equal to the aggregate spread on
          such employee's Options between the Offer Price and the
          weighted average exercise price of such Options.  As soon
          as practicable after the date hereof, the Company shall
          notify each holder of Options as to the alternatives made
          available pursuant to this Section 2.3.  Parent Options
          shall have the same expiration dates as corresponding
          Options and terms and conditions (other than any reload
          feature or "Change in Control" feature) not materially
          less favorable than those of corresponding Options.  In
          consideration of each cancellation of Options (except
          those cancelled in consideration of Parent Options and
          those cancelled on exercise of LSARs), the Company shall
          pay to such holders, promptly upon such cancellation, in
          respect of each Option (whether or not then exercisable
          and whether or not the Company had the right to cancel the
          Option, provided, however, that in the case of Options
          requiring a consent to the cancellation thereof, such
          consent shall have been obtained), an amount equal to the
          excess, if any, of the Offer Price over the exercise price
          per Share subject thereto, multiplied by the number of
          Shares subject thereto.  "Fair Market Value" means the
          average closing price on the New York Stock Exchange
          Composite Tape for common stock of Parent on each of the
          ten trading days preceding the day on which the Effective
          Time occurs.

                    Section 2.4  No Dissenter's Rights.  In
          accordance with Schwabacher v. United States, 334 U.S. 192
          (1948), stockholders of the Company will not have any
          dissenter's rights; provided, however, that if (a) the
          parties, at Parent's sole discretion, elect to seek, for
          mergers within a corporate family, and obtain, a
          declaratory order that the class exemption is available
          for the Merger or (b) the Interstate Commerce Commission
          (or any successor agency) (the "ICC") or a court of
          competent jurisdiction determines that dissenter's rights
          are available to holders of Shares, then holders of Shares
          shall be provided with dissenter's rights in accordance
          with the DGCL.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                    The Company represents and warrants to Parent
          and the Purchaser that, except as disclosed (including, in
          the case of financial statements, provided for) in the
          Company's Form 10-K for the fiscal year ended December 31,
          1994 ("Form 10-K") or the Annual Report to Stockholders
          for the fiscal year ended December 31, 1994 (the "Annual
          Report"), each as heretofore filed with the SEC or
          delivered to Parent in draft form prior to the date hereof
          (including, without limitation, any financial statements
          and related notes or schedules included in such documents
          and all exhibits and schedules included or expressly
          incorporated by reference therein on or prior to the date
          hereof):

                    Section 3.1  Organization.  Each of the Company
          and its Subsidiaries is a corporation, partnership or
          other entity duly organized, validly existing, duly
          qualified or licensed to do business and in good standing
          under the laws of the jurisdiction of its incorporation or
          organization and in each jurisdiction in which the nature
          of the business conducted by it makes such qualification
          or licensing necessary, and has all requisite corporate or
          other power and authority and all necessary governmental
          approvals to own, lease and operate its properties and to
          carry on its business as now being conducted, except where
          the failure to be so organized, existing and in good
          standing or to have such power, authority, and
          governmental approvals would not have a Material Adverse
          Effect on the Company.  As used in this Agreement, the
          word "Subsidiary" means, with respect to any party, any
          corporation or other organization, whether incorporated or
          unincorporated, of which (i) such party or any other
          Subsidiary of such party is a general partner (excluding
          such partnerships where such party or any Subsidiary of
          such party do not have a majority of the voting interest
          in such partnership) or (ii) 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 party
          or by any one or more of its Subsidiaries, or by such
          party and one or more of its Subsidiaries.  As used in
          this Agreement, any reference to any event, change or
          effect having a "Material Adverse Effect" on or with
          respect to any entity means such event, change or effect,
          individually or in the aggregate with such other events,
          changes, or effects, is materially adverse to the
          financial condition or businesses of such entity and its
          Subsidiaries, taken as a whole.  Exhibit 21 to the Form
          10-K sets forth a complete list of the Company's active
          Subsidiaries.  The Company's inactive subsidiaries have no
          material operations and no liabilities which would have or
          be likely to have a Material Adverse Effect on the
          Company.

                    Section 3.2  Capitalization.  (a)  The
          authorized capital stock of the Company consists only of
          125,000,000 shares of Company Common Stock, 125,000,000
          shares of Company Non-Voting Common Stock, $0.01 par value
          (the "Non-Voting Common Stock") and 15,000,000 preferred
          shares, $0.01 par value (the "Preferred Stock").  As of
          the date hereof, (i) 31,330,631 shares of Company Common
          Stock are issued and outstanding, (ii) 12,835,304 shares
          of Non-Voting Common Stock are issued and outstanding,
          (iii) 25,479 shares of Company Common Stock and no shares
          of Company Non-Voting Common Stock are issued and held in
          the treasury of the Company, and (iv) 2,592,067 shares of
          Company Common Stock are reserved for issuance upon
          exercise of then outstanding Options granted under the
          Option Plans and 12,835,304 shares of Company Common Stock
          are reserved for issuance upon conversion of the Non-
          Voting Common Stock.  As of the date hereof, there are no
          shares of Preferred Stock issued and outstanding.  All the
          outstanding shares of the Company's capital stock are, and
          all shares which may be issued pursuant to the exercise of
          outstanding Options or upon exercise of the option under
          the Company Stock Option Agreement will be, when issued in
          accordance with the respective terms thereof, duly
          authorized, validly issued, fully paid and non-assessable. 
          As of the date hereof, the Company has no outstanding
          stock appreciation rights except for limited stock
          appreciation rights granted in tandem with Options.  There
          are no bonds, debentures, notes or other indebtedness
          having voting rights (or convertible into securities
          having such rights) ("Voting Debt") of the Company or any
          of its Subsidiaries issued and outstanding.  Except as set
          forth above and except for the transactions contemplated
          by this Agreement and the Company Stock Option Agreement
          and except as set forth in Section 3.2 of the disclosure
          schedule delivered by the Company to Parent on or prior to
          the date hereof (the "Disclosure Schedule"), as of the
          date hereof, there are no existing options, warrants,
          calls, pre-emptive rights, subscriptions or other rights,
          convertible securities, agreements, arrangements or
          commitments of any character, relating to the issued or
          unissued capital stock of the Company or any of its
          Subsidiaries, obligating the Company or any of its
          Subsidiaries to issue, transfer or sell or cause to be
          issued, transferred or sold any shares of capital stock or
          Voting Debt of, or other equity interest in, the Company
          or any of its Subsidiaries or securities convertible into
          or exchangeable for such shares or equity interests or
          obligations of the Company or any of its Subsidiaries to
          grant, extend or enter into any such option, warrant,
          call, subscription or other right, convertible security,
          agreement, arrangement or commitment.  Except as set forth
          in Section 3.2 of the Disclosure Schedule, there are no
          outstanding contractual obligations of the Company or any
          of its Subsidiaries to (i) repurchase, redeem or otherwise
          acquire any Shares or the capital stock of the Company or
          any subsidiary or affiliate of the Company or (ii) to
          provide funds to make any investment (in the form of a
          loan, capital contribution or otherwise) in (x) any
          Subsidiary which is not wholly-owned or (y) any other
          entity.  Except as permitted by this Agreement and except
          for Options which by their terms can not be cancelled as
          set forth in Section 3.2 of the Disclosure Schedule,
          following the Merger, neither the Company (or the
          Surviving Corporation) nor any of its Subsidiaries will
          have any obligation to issue, transfer or sell any shares
          of its capital stock pursuant to any employee benefit plan
          or otherwise.

                         (b)  Except as set forth in Section 3.2 of
          the Disclosure Schedule, all of the outstanding shares of
          capital stock of each of the Subsidiaries are beneficially
          owned by the Company, directly or indirectly, and all such
          shares have been validly issued and are fully paid and
          nonassessable and, except for security interests arising
          under the Credit Agreement, dated as of March 27, 1992, as 
          amended to date, among the Company, Chemical Bank, as
          agent, and the banks named therein (the "Credit
          Agreement"), the Senior Secured Note Purchase Agreement,
          dated as of March 27, 1992, as amended to date, among
          Chicago and North Western Transportation Company, the
          Company (as Guarantor), and the Purchasers listed therein
          (the "Note Agreement"), and the Pledge Agreement, dated as
          of December 20, 1990 between Chicago and North Western
          Railway Company and Citibank, N.A., as trustee, and the
          Mortgage Trust Deed and Security Agreement, dated as of
          December 20, 1990, among Citibank, N.A., as trustee, and
          Chemical Bank, as administrative agent et. al, are owned
          by either the Company or one of its Subsidiaries free and
          clear of all liens, charges, claims or encumbrances.

                         (c)  Except for the Second Amended and
          Restated Stockholders Agreement, dated as of March 30,
          1992, as amended, among the Company, Parent and certain
          other parties (the "Stockholders Agreement"), and an
          agreement, dated as of June 21, 1993 (the "1993
          Agreement") among the parties to the Stockholders
          Agreement, there are no voting trusts or other agreements
          or understandings to which the Company or any of its
          Subsidiaries is a party with respect to the voting of the
          capital stock of the Company or any of the Subsidiaries. 
          None of the Company or its Subsidiaries is required to
          redeem, repurchase or otherwise acquire shares of capital
          stock of the Company, or any of its Subsidiaries,
          respectively, as a result of the transactions contemplated
          by this Agreement.  Parent and the Company agree to
          terminate, and agree to use their reasonable best efforts
          to cause the other parties thereto to terminate, as of the
          Effective Time, the Stockholders Agreement, the 1993
          Agreement and the Registration Rights Agreement, dated
          July 14, 1989, as amended, among Parent, Blackstone
          Capital Partners L.P. and certain other parties thereto. 

                    Section 3.3  Corporate Authorization; Validity
          of Agreement; Company Action.  (a)  The Company has full
          corporate power and authority to execute and deliver this
          Agreement and, subject to obtaining any necessary approval
          of its stockholders as contemplated by Section 1.8 hereof
          with respect to the Merger, to consummate the transactions
          contemplated hereby.  The execution, delivery and
          performance by the Company of this Agreement, and the
          consummation by it of the transactions contemplated
          hereby, have been duly and validly authorized by its Board
          of Directors and, except for those actions contemplated by
          Section 1.2(a) hereof and obtaining any approval of its
          stockholders as contemplated by Section 1.8 hereof with
          respect to the Merger, no other corporate action on the
          part of the Company is necessary to authorize the
          execution and delivery by the Company of this Agreement
          and the consummation by it of the transactions
          contemplated hereby.  This Agreement has been duly
          executed and delivered by the Company and, assuming due
          authorization, execution and delivery of this Agreement by
          Parent and the Purchaser, is a valid and binding
          obligation of the Company enforceable against the Company
          in accordance with its terms, except that (i) such
          enforcement may be subject to applicable bankruptcy,
          insolvency or other similar laws, now or hereafter in
          effect, affecting creditors' rights generally, and (ii)
          the remedy of specific performance and injunctive and
          other forms of equitable relief may be subject to
          equitable defenses and to the discretion of the court
          before which any proceeding therefor may be brought.

                         (b)  The Board of Directors of the Company
          has duly and validly approved and taken all corporate
          action required to be taken by the Board of Directors for
          the consummation of the transactions contemplated by this
          Agreement, including the Offer, the acquisition of Shares
          pursuant to the Offer and the Merger or the Company Stock
          Option Agreement, including, but not limited to, all
          actions, to the extent required, necessary to render the
          provisions of Section 203 of the DGCL inapplicable to such
          transactions.  The affirmative vote of the holders of a
          majority of the Shares is the only vote of the holders of
          any class or series of Company capital stock necessary to
          approve the Merger.  Except as previously disclosed to
          Parent in writing, neither the Offer nor the Merger,
          individually or taken together, is a transaction that
          constitutes a change in control under any of the Company's
          stock option or restricted stock plans, any other benefit
          plan in which any employee of the Company or any of its
          Subsidiaries participates or any Company Agreement (as
          defined in Section 3.4).

                    Section 3.4  Consents and Approvals; No
          Violations.  Except (A) as disclosed in Section 3.4 of the
          Disclosure Schedule, (B) for filings, permits,
          authorizations, consents and approvals as may be required
          under, and other applicable requirements of, the Exchange
          Act, (C) for the filing and recordation of the Certificate
          of Merger as required by the DGCL and the UBCA, (D) for
          any applicable state takeover laws, (E) for the applicable
          requirements relating to a determination by the ICC that
          the terms of the Merger are just and reasonable, and (F)
          for the ICC's approval of Parent's application for an
          order authorizing the common control (within the meaning
          of the Interstate Commerce Act) of the rail subsidiaries
          of the Company and Parent having become final and
          effective (the "ICC Final Approval"), neither the
          execution, delivery or performance of this Agreement by
          the Company nor the consummation by the Company of the
          transactions contemplated hereby nor compliance by the
          Company with any of the provisions hereof will (i)
          conflict with or result in any breach of any provision of
          the certificate of incorporation or by-laws or similar
          organizational documents of the Company or of any of its
          Subsidiaries, (ii) require any filing with, or permit,
          authorization, consent or approval of, any court, arbitral
          tribunal, administrative agency or commission or other
          governmental or other regulatory authority or agency (a
          "Governmental Entity"), except where the failure to obtain
          such permits, authorizations, consents or approvals or to
          make such filings would not have a Material Adverse Effect
          on the Company, (iii) result in a violation or breach of,
          or constitute (with or without due notice or lapse of time
          or both) a default (or give rise to any right of
          termination, amendment, cancellation or acceleration)
          under, any of the terms, conditions or provisions of any
          note, bond, mortgage, indenture, guarantee, other evidence
          of indebtedness, lease, license, contract, agreement or
          other instrument or obligation to which the Company or any
          of its Subsidiaries is a party or by which any of them or
          any of their properties or assets may be bound (a "Company
          Agreement") or (iv) violate any order, writ, injunction,
          decree, statute, rule or regulation applicable to the
          Company, any of its Subsidiaries or any of their
          properties or assets, except in the case of (iii) or (iv)
          for such violations, breaches or defaults which would not,
          individually or in the aggregate, have a Material Adverse
          Effect on the Company, and which will not materially
          impair the ability of the Company to consummate the
          transactions contemplated hereby.

                    Section 3.5  SEC Reports and Financial
          Statements.  The Company has filed with the SEC, and has
          heretofore made available to Parent true and complete
          copies of, all forms, reports, schedules, statements and
          other documents required to be filed by it and its
          Subsidiaries since January 1, 1992 under the Exchange Act
          or the Securities Act of 1933, as amended (the "Securities
          Act") (as such documents have been filed prior to the date
          hereof, and amended since the time of their filing prior
          to the date hereof, collectively, the "Company SEC
          Documents").  As of their respective dates or, if amended,
          as of the date of the last such amendment, the Company SEC
          Documents, including, without limitation, any financial
          statements or schedules included therein (a) did not
          contain any untrue statement of a material fact or omit to
          state a material fact required to be stated therein or
          necessary in order to make the statements therein, in
          light of the circumstances under which they were made, not
          misleading and (b) complied in all material respects with
          the applicable requirements of the Exchange Act and the
          Securities Act, as the case may be, and the applicable
          rules and regulations of the SEC thereunder.  Each of the
          consolidated financial statements included in the Company
          SEC Documents have been prepared from, and are in
          accordance with, the books and records of the Company and
          its consolidated subsidiaries, comply in all material
          respects with applicable accounting requirements and with
          the published rules and regulations of the SEC with
          respect thereto, have been prepared in accordance with
          United States generally accepted accounting principles
          ("GAAP") applied on a consistent basis during the periods
          involved (except as may be indicated in the notes thereto
          including the effect of such notes on earlier financial
          statements and except that the quarterly financial
          statements contain all footnote disclosures required by
          Regulation S-X but not all footnotes required by GAAP) and
          fairly present the consolidated financial position and the
          consolidated results of operations and cash flows (and
          changes in financial position, if any) of the Company and
          its consolidated subsidiaries as at the dates thereof or
          for the periods presented therein.

                    Section 3.6  Absence of Certain Changes.  Except
          as disclosed in the Company SEC Documents filed prior to
          the date of this Agreement, from December 31, 1994 until
          the date of this Agreement, the Company and its
          Subsidiaries have conducted their respective businesses
          and operations consistent with past practice only in the
          ordinary and usual course and there have not occurred (i)
          any events, changes, or effects (including the incurrence
          of any liabilities or obligations of any nature, whether
          or not accrued, contingent or otherwise) having or, which
          would be reasonably likely to have, individually or in the
          aggregate, a Material Adverse Effect on the Company; (ii)
          except as set forth in Section 3.6 of the Disclosure
          Schedule, any declaration, setting aside or payment of any
          dividend or other distribution (whether in cash, stock or
          property) with respect to the equity interests of the
          Company or of any of its Subsidiaries; or (iii) any change
          by the Company or any of its Subsidiaries in accounting
          principles or methods, except insofar as may be required
          by a change in GAAP.  Since December 31, 1994, except as
          set forth in Section 3.6 of the Disclosure Schedule,
          neither the Company nor any of its Subsidiaries has taken
          any of the actions prohibited by Section 5.1(b),(c)(i),
          (ii) and (v), (d), (g), (h), (j) or (k) hereof.  Section
          3.6 of the Disclosure Schedule sets forth the amount of
          principal and unpaid interest outstanding under each
          instrument evidencing indebtedness of the Company and its
          Subsidiaries (other than immaterial indebtedness) which
          will accelerate or become due or result in a right of
          redemption or repurchase on the part of the holder of such
          indebtedness (with or without due notice or lapse of time)
          as a result of this Agreement, the Offer or the Merger or
          the other transactions contemplated hereby.

                    Section 3.7  Information in Proxy Statement. 
          The Proxy Statement (or any amendment thereof or
          supplement thereto) will, at the date mailed to Company
          stockholders and at the time of the meeting of Company
          stockholders to be held in connection with the Merger, not
          contain any untrue statement of a material fact or omit to
          state any material fact required to be stated therein or
          necessary in order to make the statements therein, in
          light of the circumstances under which they are made, not
          misleading, except that no representation is made by the
          Company with respect to statements made therein based on
          information supplied by Parent or the Purchaser in writing
          for inclusion in the Proxy Statement.  The Proxy Statement
          will comply in all material respects with the provisions
          of the Exchange Act and the rules and regulations
          thereunder.

                    Section 3.8  Employee Benefit Plans; ERISA.  To
          the best knowledge of the Company:

                         (a)  There are no material employee benefit
          plans, arrangements, contracts or agreements (including,
          without limitation, employment agreements, change of
          control employment agreements and severance agreements) of
          any type (including but not limited to plans described in
          section 3(2) of the Employee Retirement Income Security
          Act of 1974, as amended ("ERISA")), maintained, or
          contributed to, by the Company, any of its Subsidiaries or
          any trade or business, whether or not incorporated (an
          "ERISA Affiliate"), that together with the Company would
          be deemed a "single employer" within the meaning of
          section 4001(b)(15) of ERISA, with respect to which the
          Company or any of its Subsidiaries has or may have a
          liability, other than those listed on Section 3.8(a) of
          the Disclosure Schedule (the "Benefit Plans").  Neither
          the Company nor any ERISA Affiliate has any formal plan or
          commitment, whether legally binding or not, to create any
          additional Benefit Plan or modify or change any existing
          Benefit Plan that would affect any employee or terminated
          employee of the Company or any Subsidiary.

                         (b)  With respect to each Benefit Plan: (i)
          if intended to qualify under section 401(a), 401(k) or
          403(a) of the Internal Revenue Code of 1986, as amended,
          and the rules and regulations promulgated thereunder (the
          "Code"), such plan so qualifies, and its trust is exempt
          from taxation under section 501(a) of the Code; (ii) such
          plan has been administered in all material respects in
          accordance with its terms and applicable law; (iii) no
          breaches of fiduciary duty have occurred which might
          reasonably be expected to give rise to material liability
          on the part of the Company or the Subsidiaries; (iv) no
          disputes are pending, or, to the knowledge of the Company,
          threatened that might reasonably be expected to give rise
          to material liability on the part of the Company or the
          Subsidiaries; (v) no prohibited transaction (within the
          meaning of Section 406 of ERISA) has occurred that might
          reasonably be expected to give rise to material liability
          on the part of the Company or the Subsidiaries; and (vi)
          all contributions and premiums due as of the date hereof
          (including any extensions for such contributions and
          premiums) have been made in full.

                         (c)  Full payment has been made, or will be
          made in accordance with section 404(a)(6) of the Code, of
          all amounts which the Company or its Subsidiaries are
          required to pay under the terms of each of the Benefit
          Plans as of the last day of the most recent plan year
          thereof ended prior to the date of this Agreement, and all
          such amounts which become payable through the Effective
          Time will be paid by the Company or its Subsidiaries at or
          prior to the Effective Time, except for annual
          contributions by the Company for calendar 1994, which are
          due and payable in the ordinary course on or before the
          Company's tax return due date, including any extensions.

                         (d)  Neither the Company nor any ERISA
          Affiliate has incurred any liability under Title IV of
          ERISA since the effective date of ERISA that has not been
          satisfied in full.  Except as identified in Section 3.8(d)
          of the Disclosure Schedule, neither the Company nor any
          ERISA Affiliate maintains (or contributes to), or has
          maintained (or has contributed to) within the last six
          years, any employee benefit plan that is subject to Title
          IV of ERISA.

                         (e)  With respect to each Benefit Plan that
          is a "welfare plan" (as defined in section 3(1) of ERISA):
          except as specifically disclosed in Section 3.8 of the
          Disclosure Schedule, no such plan provides medical or
          death benefits with respect to current or former employees
          of the Company or any of its Subsidiaries beyond their
          termination of employment, other than on an employee-pay-
          all basis.  

                         (f)  Except as specifically set forth on
          Schedule 3.8, the consummation of the transactions
          contemplated by this Agreement will not (i) entitle any
          individual to severance pay or accelerate the time of
          payment or vesting, or increase the amount, of
          compensation or benefits due to any individual, (ii)
          constitute or result in a prohibited transaction under
          section 4975 of the Code or section 406 or 407 of ERISA or
          (iii) subject the Company, any of its Subsidiaries, any
          ERISA Affiliate, any of the Benefit Plans, any related
          trust, any trustee or administrator thereof, or any party
          dealing with the Benefit Plans or any such trust to either
          a civil penalty assessed pursuant to section 409 or 502(i)
          of ERISA or a tax imposed pursuant to section 4976 or
          4980B of the Code.

                         (g)  Except as set forth in Section 3.8(g)
          of the Disclosure Schedule, there is no Benefit Plan that
          is a "multiemployer plan," as such term is defined in
          section 3(37) of ERISA.

                         (h)  With respect to each Benefit Plan, the
          Company has delivered to Parent accurate and complete
          copies of all plan texts, summary plan descriptions,
          summaries of material modifications, trust agreements and
          other related agreements including all amendments to the
          foregoing; the two most recent annual reports; the most
          recent annual and periodic accounting of plan assets; the
          most recent determination letter received from the United
          States Internal Revenue Service (the "Service"); and the
          two most recent actuarial reports, to the extent any of
          the foregoing may be applicable to a particular Benefit
          Plan.

                    Section 3.9  Litigation; Compliance with Law.

                         (a)  Except as disclosed in the Company SEC
          Documents filed prior to the date of this Agreement or as
          disclosed in Section 3.9 of the Disclosure Schedule, there
          is no suit, claim, action, proceeding or investigation
          pending (other than suits, claims, actions or proceedings
          which have not been served and as to which none of the
          Chief Executive Officer, the Chief Financial Officer or
          the most senior legal officer of the Company has
          knowledge) or, to the best knowledge of the Chief
          Executive Officer, Chief Financial Officer or the most
          senior legal officer of the Company, threatened against,
          the Company or any of its Subsidiaries which, individually
          or in the aggregate, is likely, individually or in the
          aggregate, to have a Material Adverse Effect on the
          Company, or materially impair the ability of the Company
          to consummate the Offer, the Merger or the other
          transactions contemplated hereby.

                         (b)  To the best knowledge of the Company,
          the Company and its Subsidiaries have complied in a timely
          manner with all laws, statutes, regulations, rules,
          ordinances, and judgments, decrees, orders, writs and
          injunctions, of any court or governmental entity  relating
          to any of the property owned, leased or used by them, or
          applicable to their business, including, but not limited
          to, equal employment opportunity, discrimination,
          occupational safety and health, environmental, interstate
          commerce and antitrust laws, except where the failure to
          so comply would not, individually or in the aggregate,
          have a Material Adverse Effect on the Company.

                    Section 3.10  Taxes.  (a)  The Company and its
          Subsidiaries have (i) duly filed (or there has been filed
          on their behalf) with the appropriate governmental
          authorities all material Tax Returns (as hereinafter
          defined) required to be filed by them on or prior to the
          date hereof, and (ii) duly paid in full or made provision
          in accordance with GAAP (or there has been paid or
          provision has been made on their behalf) for the payment
          of all material Taxes (as hereinafter defined) for all
          periods ending through the date hereof.

                         (b)  Other than payroll tax issues being
          reviewed by the Internal Revenue Service Appeals Division,
          no federal, state, local or foreign audits or other
          administrative proceedings or court proceedings are
          presently pending with regard to any Taxes or Tax Returns
          of the Company or its Subsidiaries wherein an adverse
          determination or ruling in any one such proceeding or in
          all such proceedings in the aggregate could have a
          Material Adverse Effect on the Company.

                         (c)  The federal income Tax Returns of the
          Company and its Subsidiaries have been examined by the
          Internal Revenue Service (or the applicable statutes of
          limitation for the assessment of federal income Taxes for
          such periods have expired) for all periods through and
          including December 31, 1990 (except for the 1985, 
          1987 and 1989B tax years), and no material deficiencies
          were asserted as a result of such examinations which have
          not been resolved and fully paid.

                         (d)  "Taxes" shall mean all federal, state,
          local and foreign taxes, and other assessments of a
          similar nature (whether imposed directly or through
          withholding), including any interest, additions to tax, or
          penalties applicable thereto.  "Tax Returns" shall mean
          all federal, state, local and foreign tax returns,
          declarations, statements, reports, schedules, forms and
          information returns and any amended Tax Returns relating
          to Taxes.

                    Section 3.11.  Environmental Matters.  (a) 
          Except as set forth in the Company SEC Documents or
          otherwise previously disclosed in writing by the Company
          to Parent, to the best knowledge of the Chief Executive
          Officer, Chief Financial Officer, the most senior legal
          officer, and the most senior legal officer directly in
          charge of environmental matters of the Company, there are
          no Environmental Liabilities (as defined below) of the
          Company that have had or are likely to have a Material
          Adverse Effect on the Company.

                         (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 relating to 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 date of this Agreement. 
          "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 3.12  Opinion of Financial Advisors. The
          Company has received an opinion from Blackstone to the
          effect that the cash consideration to be received by the
          holders of Shares pursuant to the Offer and the Merger is
          fair to such holders from a financial point of view, a
          copy of which opinion will be delivered to Parent.

                                  ARTICLE IV

          REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER

                    Parent and the Purchaser represent and warrant
          to the Company as follows:

                    Section 4.1  Organization.  Each of Parent and
          the Purchaser is a corporation duly organized, validly
          existing and in good standing under the laws of Utah and
          has all requisite corporate or other power and authority
          and all necessary governmental approvals to own, lease
          and operate its properties and to carry on its business
          as now being conducted, except where the failure to be so
          organized, existing and in good standing or to have such
          power, authority, and governmental approvals would not
          have a Material Adverse Effect on Parent.  Parent and
          each of its Subsidiaries is duly qualified or licensed to
          do business and in good standing in each jurisdiction in
          which the property owned, leased or operated by it or the
          nature of the business conducted by it makes such
          qualification or licensing necessary, except where the
          failure to be so duly qualified or licensed and in good
          standing would not, in the aggregate, have a Material
          Adverse Effect on Parent.

                    Section 4.2  Authorization; Validity of
          Agreement; Necessary Action.  Each of Parent and the
          Purchaser has full corporate power and authority to
          execute and deliver this Agreement and to consummate the
          transactions contemplated hereby.  The execution,
          delivery and performance of this Agreement and the
          consummation of the Merger and of the other transactions
          contemplated hereby have been duly authorized by all
          necessary corporate action on the part of Parent and the
          Purchaser and no other corporate proceedings on the part
          of Parent and the Purchaser are necessary to authorize
          this Agreement or to consummate the transactions so
          contemplated.  This Agreement has been duly executed and
          delivered by Parent and the Purchaser, as the case may
          be, and, assuming due authorization, execution and
          delivery of this Agreement by the Company, is a valid and
          binding obligation of each of Parent and the Purchaser,
          as the case may be, enforceable against them in
          accordance with its respective terms, except that (i)
          such enforcement may be subject to applicable bankruptcy,
          insolvency or other similar laws, now or hereafter in
          effect, affecting creditors' rights generally, and (ii)
          the remedy of specific performance and injunctive and
          other forms of equitable relief may be subject to
          equitable defenses and to the discretion of the court
          before which any proceeding therefor may be brought.

                    Section 4.3  Consents and Approvals; No
          Violations.  Except (A) for filings, permits,
          authorizations, consents and approvals as may be required
          under, and other applicable requirements of, the Exchange
          Act, (B) the filing and recordation of the Certificate of
          Merger as required by the DGCL and the UBCA, (C) any
          applicable state takeover laws, (D) the applicable
          requirements relating to a determination by the ICC that
          the terms of the Merger are just and reasonable, and (E)
          the ICC Final Approval, neither the execution, delivery
          or performance of this Agreement by Parent and the
          Purchaser nor the consummation by Parent and the
          Purchaser of the transactions contemplated hereby nor
          compliance by Parent and the Purchaser with any of the
          provisions hereof will (i) conflict with or result in any
          breach of any provision of the respective articles of
          incorporation or by-laws of Parent and the Purchaser,
          (ii) require any filing with, or permit, authorization,
          consent or approval of, any Governmental Entity (except
          where the failure to obtain such permits, authorizations,
          consents or approvals or to make such filings would not
          have a material adverse effect on Parent and its
          Subsidiaries taken as a whole), (iii) result in a
          violation or breach of, or constitute (with or without
          due notice or lapse of time or both) a default (or give
          rise to any right of termination, cancellation or
          acceleration) under, any of the terms, conditions or
          provisions of any material note, bond, mortgage,
          indenture, license, lease, contract, agreement or other
          instrument or obligation to which Parent or any of its
          Subsidiaries is a party or by which any of them or any of
          their properties or assets may be bound or (iv) violate
          any order, writ, injunction, decree, statute, rule or
          regulation applicable to Parent, any of its Subsidiaries
          or any of their properties or assets, except in the case
          of (iii) and (iv) for violations, breaches or defaults
          which would not, individually or in the aggregate,
          materially impair the ability of Parent or Purchaser to
          consummate the Offer, the Merger or the other
          transactions contemplated hereby.

                    Section 4.4  Information in Proxy Statement;
          Schedule 14D-9.  None of the information supplied by
          Parent or the Purchaser for inclusion or incorporation by
          reference in the Proxy Statement or the Schedule 14D-9
          will, at the date mailed to stockholders and at the time
          of the meeting of stockholders to be held in connection
          with the Merger, contain any untrue statement of a
          material fact or omit to state any material fact required
          to be stated therein or necessary in order to make the
          statements therein, in light of the circumstances under
          which they are made, not misleading.

                    Section 4.5  Financing.  Either Parent or the 
          Purchaser has, or will have prior to the satisfaction of
          the conditions to the Offer, sufficient funds available
          (through existing credit arrangements or otherwise) to
          purchase all of the Shares outstanding on a fully diluted
          basis and to refinance the indebtedness referred to in
          Section 3.6 of the Disclosure Schedule.

                                  ARTICLE V

                                  COVENANTS

                    Section 5.1  Interim Operations of the Company. 
          The Company covenants and agrees that, except (i) as
          expressly provided in this Agreement, or (ii) with the
          prior written consent of Parent after the date hereof,
          and prior to the time the directors of the Purchaser have
          been elected to, and shall constitute a majority of, the
          Board of Directors of the Company pursuant to Section 1.3
          (the "Appointment Date"):

                         (a)  the business of the Company and its
          Subsidiaries shall be conducted only in the ordinary and
          usual course consistent with past practice and, to the
          extent consistent therewith, each of the Company and its
          Subsidiaries shall use its reasonable best efforts to
          preserve its business organization intact and maintain
          its existing relations with customers, suppliers,
          employees, creditors and business partners;

                         (b)  the Company will not, directly or
          indirectly, split, combine or reclassify the outstanding
          Company Common Stock, Non-Voting Common Stock or any
          outstanding capital stock of any of the Subsidiaries of
          the Company;

                         (c)  neither the Company nor any of its
          Subsidiaries shall: (i) amend its articles of
          incorporation or by-laws or similar organizational
          documents; (ii) except as set forth in Section 5.1(c) of
          the Disclosure Schedule, declare, set aside or pay any
          dividend or other distribution payable in cash, stock or
          property with respect to its capital stock (other than
          dividends paid by a wholly-owned Subsidiary in the
          ordinary course of business consistent with past
          practice); (iii) issue, sell, transfer, pledge, dispose
          of or encumber any additional shares of, or securities
          convertible into or exchangeable for, or options,
          warrants, calls, commitments or rights of any kind to
          acquire, any shares of capital stock of any class of the
          Company or its Subsidiaries, other than issuances
          pursuant to the exercise of Options outstanding on the
          date hereof or pursuant to the conversion of the Non-
          Voting Shares into Shares; (iv) transfer, lease, license,
          sell, mortgage, pledge, dispose of, or encumber any
          material assets other than in the ordinary and usual
          course of business and consistent with past practice, or
          incur or modify any material indebtedness; or (v) except
          as set forth in Section 5.1(c) of the Disclosure
          Schedule, redeem, purchase or otherwise acquire directly
          or indirectly any of its capital stock;

                         (d)  neither the Company nor any of its
          Subsidiaries shall:  (i) except as set forth in Section
          5.1(d) of the Disclosure Schedule, promote any employee
          or grant any increase in the compensation payable or to
          become payable by the Company or any of its Subsidiaries
          to any employee, provided, however, the Company may
          increase compensation (x) as required pursuant to
          collective bargaining agreements and (y) for employees
          other than executive officers, on the anniversary date of
          the employee whose compensation is being increased
          provided that such employee's compensation has not been
          increased since his prior anniversary date and provided
          further that the percentage increase on his 1995
          anniversary date does not exceed 4% or (A) adopt any new,
          or (B) amend or otherwise increase, or accelerate the
          payment or vesting of the amounts payable or to become
          payable under any existing, bonus, incentive
          compensation, deferred compensation, severance, profit
          sharing, stock option, stock purchase, insurance,
          pension, retirement or other employee benefit plan
          agreement or arrangement; or (ii) enter into any, or
          amend any existing, employment or severance agreement
          with or, except in accordance with the existing written
          policies of the Company, grant any severance or
          termination pay to any officer, director or employee of
          the Company or any of its Subsidiaries;

                         (e)  neither the Company nor any of its
          Subsidiaries shall modify, amend or terminate any of its
          material Company Agreements or waive, release or assign
          any material rights or claims, except in the ordinary
          course of business and consistent with past practice;

                         (f)  neither the Company nor any of its
          Subsidiaries shall permit any material insurance policy
          naming it as a beneficiary or a loss payable payee to be
          cancelled or terminated without notice to Parent, except
          in the ordinary course of business and consistent with
          past practice;

                         (g)  neither the Company nor any of its
          Subsidiaries shall: (i) incur or assume any long-term
          debt in excess of $1,000,000 in the aggregate, or except
          in the ordinary course of business, incur or assume any
          short-term indebtedness in amounts not consistent with
          past practice; (ii) assume, guarantee, endorse or
          otherwise become liable or responsible (whether directly,
          contingently or otherwise) for the obligations of any
          other person, except in the ordinary course of business
          and consistent with past practice; (iii) make any loans,
          advances or capital contributions to, or investments in,
          any other person (other than to wholly owned Subsidiaries
          of the Company or customary loans or advances to
          employees in accordance with past practice); or (iv)
          except as disclosed in Section 5.1(g) of the Disclosure
          Schedule enter into any material commitment or
          transaction (including, but not limited to, any
          borrowing, capital expenditure or purchase, sale or lease
          of assets) other than capital expenditures pursuant to
          the Company's capital expenditures budget that aggregate
          since December 31, 1994 not more than $75,000,000; 

                         (h)  neither the Company nor any of its
          Subsidiaries shall change any of the accounting
          principles used by it unless required by GAAP;

                         (i)  neither the Company nor any of its
          Subsidiaries shall pay, discharge or satisfy any claims,
          liabilities or obligations (absolute, accrued, asserted
          or unasserted, contingent or otherwise), other than the
          payment, discharge or satisfaction of any such claims,
          liabilities or obligations, (x) in the ordinary course of
          business and consistent with past practice, of claims,
          liabilities or obligations reflected or reserved against
          in, or contemplated by, the consolidated financial
          statements (or the notes thereto) of the Company and its
          consolidated Subsidiaries, (y) incurred in the ordinary
          course of business and consistent with past practice or
          (z) which are legally required to be paid, discharged or
          satisfied (provided that if such claims, liabilities or
          obligations referred to in this clause (z) are legally
          required to be paid and are also not otherwise payable in
          accordance with clauses (x) or (y) above, the Company
          will notify Parent in writing if such claims, liabilities
          or obligations exceed, individually or in the aggregate,
          $10 million in value, reasonably in advance of their
          payment); 

                         (j)  neither the Company nor any of its
          Subsidiaries will adopt a plan of complete or partial
          liquidation, dissolution, merger, consolidation,
          restructuring, recapitalization or other reorganization
          of the Company or any of its Subsidiaries or any
          agreement relating to a Takeover Proposal (as hereafter
          defined) (other than the Merger); and 

                         (k)  neither the Company nor any of its
          Subsidiaries will enter into an agreement, contract,
          commitment or arrangement to do any of the foregoing, or
          to authorize, recommend, propose or announce an intention
          to do any of the foregoing.

                    Section 5.2  Access to Information.  The
          Company shall (and shall cause each of its Subsidiaries
          to) afford to the officers, employees, accountants,
          counsel, financing sources and other representatives of
          Parent, access, during normal business hours, during the
          period prior to the Effective Time, to all of its and its
          Subsidiaries' properties, books, contracts, commitments
          and records and, during such period, the Company shall
          (and shall cause each of its Subsidiaries to) furnish
          promptly to the Parent (a) a copy of each report,
          schedule, registration statement and other document filed
          or received by it during such period pursuant to the
          requirements of federal securities laws and (b) all other
          information concerning its business, properties and
          personnel as Parent may reasonably request.  Until the
          Effective Time, Parent will hold any such information
          which is nonpublic in confidence in accordance with the
          provisions of the confidentiality agreement between the
          Company and the Parent (the "Confidentiality Agreement"),
          subject to the requirements of applicable law. 
          Notwithstanding anything in the Confidentiality Agreement
          to the contrary, materials furnished to Parent pursuant
          to this Section 5.2 may be used by Parent for strategic
          and integration planning purposes.

                    Section 5.3  Consents and Approvals.  Each of
          the Company, Parent and the Purchaser will take all
          reasonable actions necessary to comply promptly with all
          legal requirements which may be imposed on it with
          respect to this Agreement and the transactions
          contemplated hereby (which actions shall include, without
          limitation, furnishing all information in connection with
          approvals of or filings with any Governmental Entity) and
          will promptly cooperate with and furnish information to
          each other in connection with any such requirements
          imposed upon any of them or any of their Subsidiaries in
          connection with this Agreement and the transactions
          contemplated hereby.  Each of the Company, Parent and the
          Purchaser will, and will cause its Subsidiaries to, take
          all reasonable actions necessary to obtain (and will
          cooperate with each other in obtaining) any consent,
          authorization, order or approval of, or any exemption by,
          any Governmental Entity or other public or private third
          party required to be obtained or made by Parent, the
          Purchaser, the Company or any of their Subsidiaries in
          connection with the Offer or the Merger or the taking of
          any action contemplated thereby or by this Agreement.

                    Section 5.4  Employee Benefits.

                    With respect to employee benefits matters,
          Parent, Purchaser and Company agree as follows:

                    (a)  Parent agrees to cause the Surviving
          Corporation and its Subsidiaries to honor and assume the
          Change of Control Employment Agreements listed on
          Schedule 5.4(a) hereto.  If Parent shall notify Company
          prior to the Effective Time that Parent wishes to
          substitute alternate contractual arrangements (to become
          effective as of the Effective Time) with one or more of
          the employees who currently have Change of Control
          Employment Agreements, the Company agrees to use its best
          efforts to facilitate Parent's negotiations with any such
          employee and to cooperate in making any such contractual
          changes which are agreed-upon by Parent and such
          employee.  Each individual employee who (i) receives a
          lump sum payment in cash of all benefits under Section
          5(a) of a Change of Control Employment Agreement, (ii)
          agrees to amend the Second Amended and Restated
          Stockholders Agreement, dated as of March 30, 1992, as
          amended, an agreement, dated as of June 21, 1993 among
          the parties to such Stockholders Agreement, and the
          Registration Rights Agreement, dated July 14, 1989, as
          amended (collectively, the "Three Agreements"), to
          provide that they shall terminate upon the Effective Time
          of the Merger and to waive (effective as of the Effective
          Time) any and all rights under each of the Three
          Agreements to which such employee is a party, and (iii)
          waives any claims such employee may have against the
          Company except for routine benefit claims under the
          Company's benefit plans pursuant to their terms and any
          rights to indemnification by the Company under Section
          5.9 of this Agreement, will also receive a separate
          payment ("Extra Payment") from the Company representing
          his or her individual share of $15 million on a pro rata
          basis in the proportion that his or her individual 1995
          annualized compensation (current salary and maximum
          bonus) bears to the total 1995 annualized compensation
          (current salary and maximum bonus) of all of the 27
          executives who have Change of Control Employment
          Agreements, provided that if the amount an employee would
          receive from the sum of amounts paid ("Relevant
          Compensation") under the Change of Control Employment
          Agreement, the Extra Payment and all other compensation
          and benefits paid to the employee which would not be
          deductible (in whole or in part) as a result of Section
          280G of the Code, net of all applicable federal, state
          and local income and excise taxes ("Applicable Taxes")
          thereon, would be smaller than the amount such employee
          would receive from Relevant Compensation net of
          Applicable Taxes if the amount of the Extra Payment were
          reduced, then the Extra Payment shall be reduced (but not
          below zero) to the amount which results in the employee
          receiving the largest possible amount from Relevant
          Compensation net of Applicable Taxes.

                    (b)  No employee of the Company who is not an
          executive officer of the Company and whose compensation
          or benefits are not the subject of a collective
          bargaining agreement, and who has not entered into a
          Change of Control Employment Agreement with the Company
          shall be terminated during the 18-month period following
          the Effective Date for the sole purpose of a reduction in
          force without being permitted to participate in a two-
          part cash severance program (voluntary and involuntary)
          consistent with, and no less generous than, that offered
          by Parent to certain of its employees in December 1994,
          under the Union Pacific Railroad Company Marketing and
          Sales Department 1994 Voluntary Force Reduction Program.

                    (c)  With respect to the Chicago and North
          Western Railway Company Supplemental Pension Plan (the
          "Pension Plan"), the Chicago and North Western Railway
          Company Profit Sharing and Retirement Savings Program
          (the "Savings Program"), the Chicago and North Western
          Transportation Company Executive Retirement Plan (the
          "Executive Retirement Plan"), and the Chicago and North
          Western Transportation Company Excess Benefit Retirement
          Plan (the "Excess Benefit Plan"), hereinafter referred to
          collectively as the "Retirement Plans," Parent, the
          Purchaser, and the Company agree as follows:

                         (i)  Each employee of the Company who, as
               of the date hereof, is eligible to participate in
               one or more of the Retirement Plans shall, until
               December 31, 1995, continue to be eligible to
               participate in each Retirement Plan in which he was
               eligible to participate as of the date hereof,
               subject to the terms and conditions of the
               applicable Retirement Plan as in effect from time to
               time (which, until December 31, 1995, shall remain,
               to the extent lawful (and, where applicable,
               consistent with the tax qualification of the
               Retirement Plan), consistent in all material
               respects with the terms and conditions of the
               Retirement Plan in effect at the Effective Time). 
               Under the Savings Program the Company contribution
               for 1995 shall be equal to the 1995 Company
               contribution which would occur if the Company
               Contribution Base (as defined under the Savings
               Program) for 1995 equalled the Company Contribution
               Base for the calendar quarter ending March 31, 1995
               (excluding any expenses of the transaction
               contemplated by the Agreement) multiplied by four
               (4).

                         (ii)  Each of the Retirement Plans shall
               be amended to provide that no benefits shall accrue
               thereunder after December 31, 1995.

                         (iii)  Effective January 1, 1996, each
               employee of the Company on that date who was an
               active participant in the Pension Plan as of
               December 31, 1995 shall become a participant in the
               Pension Plan for Salaried Employees of Union Pacific
               Corporation and Affiliates (the "UPPP") and shall be
               credited thereunder (A) with compensation paid by
               the Company before January 1, 1996, as determined in
               accordance with the terms of the Pension Plan as in
               effect on the date of this Agreement, (B) for
               eligibility, vesting, retirement eligibility, and
               benefit accrual purposes, with the service with
               which he was credited for such purposes under the
               Pension Plan as of December 31, 1995, and (C) with
               compensation and service from and after January 1,
               1996, in accordance with the applicable provisions
               of the UPPP; provided that the benefits to which
               each such employee shall be entitled under the UPPP
               shall be reduced by the actuarial equivalent of the
               benefits to which the employee is entitled, as of
               December 31, 1995, under the Pension Plan and the
               actuarial equivalent of the amount described in
               Article 2.1(c) and (d) of the Pension Plan as in
               effect on the date of this Agreement, and determined
               as of December 31, 1995.  For purposes of this
               paragraph (iii), actuarial equivalence shall be
               determined in accordance with the applicable
               provisions of Appendix I to the Pension Plan as in
               effect on the date of this Agreement.

                         (iv)  Effective January 1, 1996, each
               employee of the Company on that date who was an
               active participant in the Savings Program as of
               December 31, 1995 shall be eligible to participate
               in the Union Pacific Corporation Thrift Plan (the
               "Thrift Plan") in accordance with the terms of the
               Thrift Plan as in effect from time to time and shall
               be credited thereunder, for eligibility and vesting
               purposes, with the service he was credited with for
               such purposes under the Savings Program as of
               December 31, 1995, and for service from and after
               January 1, 1996, in accordance with the terms of the
               Thrift Plan as in effect from time to time.

                         (v)  From and after January 1, 1996, each
               employee of the Company on that date who was an
               active participant in the Executive Retirement Plan,
               the Excess Benefit Plan, or both as of December 31,
               1995 shall be entitled to participate in any excess
               benefit or other unfunded deferred compensation plan
               that supplements the UPPP or the Thrift Plan and in
               which similarly situated employees of Parent are
               then entitled to participate.

                    (d)  Each of the Company's employee benefit
          plans shall be amended to provide that if an employee of
          the Company as of the date hereof, whose compensation or
          benefits at such date are not the subject of a collective
          bargaining agreement (a "Nonagreement Employee"), is
          transferred to employment with the Parent or the
          Purchaser after such date and before January 1, 1996, the
          Nonagreement Employee shall be permitted to participate
          in the plan pursuant to the terms of the plan and shall
          not be prohibited from such participation solely by
          reason of such transfer, provided that the Nonagreement
          Employee is otherwise eligible to participate in the plan
          in accordance with the terms and conditions thereof.

                    (e)  Except to the extent otherwise provided in
          this Agreement, from and after January 1, 1996, each
          Nonagreement Employee of the Company at the Effective
          Time who is a Nonagreement Employee of the Parent,
          Company, or Purchaser on January 1, 1996 shall be
          entitled to participate in, and to receive benefits
          under, the employee benefit plans of the Company, Parent,
          and the Purchaser, in accordance with terms and
          conditions that are comparable to the terms and
          conditions that apply to similarly situated employees of
          the Purchaser or Parent.  Except with respect to the
          Retirement Plans, each such employee of the Company whose
          compensation or benefits are not subject to a collective
          bargaining agreement shall at all times on and after
          January 1, 1996 be given full credit for all past service
          under all employee benefit plans of Parent, Purchaser and
          all affiliates to the extent to which credit is given for
          such service under the Company's similar benefit plans,
          subject to reduction for any benefits to which such
          employee is entitled from the Company under its similar
          benefit plans.

                    (f)  The Company will pay, as soon as
          reasonably practical after the date of Closing, bonuses
          under its Bonus Plan in an amount determined by
          projecting to December 31, 1995 the Company's performance
          (measured using the performance measures established by
          the Compensation Committee for 1995, calculating such
          bonuses without giving effect to the expenses of the
          transaction contemplated by the Agreement) through the
          date of Closing and prorating the resulting bonus amounts
          to the date of Closing.

                    Section 5.5  No Solicitation.  (a)  The Company
          (and its Subsidiaries and affiliates) will not, and the
          Company (and its Subsidiaries and affiliates) will use
          their best efforts to ensure that their respective
          officers, directors, employees, investment bankers,
          attorneys, accountants and other agents do not, directly
          or indirectly:  (i) 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 (as defined below) of the
          Company or any Subsidiary or affiliate or an inquiry with
          respect thereto, or, (ii) in the event of an unsolicited
          Takeover Proposal for the Company or any Subsidiary or
          affiliate, engage in negotiations or discussions with, or
          provide any information or data to any Person relating to
          any Takeover Proposal, except to the extent that the
          Company's Board of Directors determines, based on the
          opinion of outside legal counsel to the Company, that the
          failure to engage in such negotiation or discussions or
          provide such information would likely result in a breach
          of the Board of Directors' fiduciary duties under
          applicable law.  The Company shall notify Parent and the
          Purchaser orally and in writing of any such offers,
          proposals or Takeover Proposals (including, without
          limitation, the terms and conditions thereof and the
          identity of the Person making it), within 24 hours of the
          receipt thereof, unless the Company's Board of Directors
          determines, based on the opinion of outside legal counsel
          to the Company, that giving such notice would result in a
          breach of the Board of Directors' fiduciary duties under
          applicable law.  The Company shall, and shall cause its
          Subsidiaries and affiliates, and their respective
          officers, directors, employees, investment bankers,
          attorneys, accountants and other agents to, 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 relating
          to the Company.  Notwithstanding anything to the
          contrary, nothing contained in this Section 5.5 shall
          prohibit the Company or its Board of Directors from (i)
          issuing a press release or otherwise publicly disclosing
          the terms of any Takeover Proposal; (ii) communicating to
          the Company's stockholders a position as required by Rule
          14e-2 promulgated under the Exchange Act; or (iii) making
          any disclosure to the Company's stockholders which the
          Board of Directors of the Company determines, based on
          the opinion of outside legal counsel to the Company, that
          the Company would likely be required to make under
          applicable law (including, without limitation, laws
          relating to the fiduciary duties of directors). 

                         (b)  As used in this Agreement, "Takeover
          Proposal" when used in connection with any Person shall
          mean any tender or exchange offer involving such Person,
          any proposal for a merger, consolidation or other
          business combination involving such Person or any
          Subsidiary of such Person, any proposal or offer to
          acquire in any manner a substantial equity interest in,
          or a substantial portion of the business or assets of,
          such Person or any Subsidiary of such Person, any
          proposal or offer with respect to any recapitalization or
          restructuring with respect to such Person or any
          Subsidiary of such Person or any proposal or offer with
          respect to any other transaction similar to any of the
          foregoing with respect to such Person or any Subsidiary
          of such Person; provided, however, that, as used in this
          Agreement, the term "Takeover Proposal" shall not apply
          to any transaction of the type described in this
          subsection (b) involving Parent, the Purchaser or their
          affiliates.  As used in this Agreement, "Person" shall
          mean any corporation, partnership, person or other entity
          or group (including the Company and its affiliates and
          representatives, but excluding Parent or any of its
          affiliates or representatives).

                    Section 5.6  Additional Agreements.  Subject to
          the terms and conditions herein provided, each of the
          parties hereto agrees to use all reasonable efforts to
          take, or cause to be taken, all action and to do, or
          cause to be done, all things necessary, proper or
          advisable, whether under applicable laws and regulations
          or otherwise, and to remove any injunctions or other
          impediments or delays, legal or otherwise, to consummate
          and make effective the Merger and the other transactions
          contemplated by this Agreement.  In case at any time
          after the Effective Time any further action is necessary
          or desirable to carry out the purposes of this Agreement,
          the proper officers and directors of the Company and
          Parent shall use all reasonable efforts to take, or cause
          to be taken, all such necessary actions.  Parent and the
          Company further agree to use their reasonable best
          efforts to make final and effective the ICC Final
          Approval.

                    Section 5.7  Publicity.  So long as this
          Agreement is in effect and subject to Section 5.5 hereof,
          neither the Company, Parent nor any of their respective
          affiliates shall issue or cause the publication of any
          press release or other announcement with respect to the
          Merger, this Agreement or the other transactions
          contemplated hereby without the prior consultation of the
          other party, except as may be required by law or by any
          listing agreement with a national securities exchange. 
          Nothing contained in this Section 5.7 shall prohibit
          Parent or its affiliates from issuing a press release or
          otherwise publicly commenting on, without prior
          consultation, any matter disclosed by the Company or its
          Board of Directors without prior consultation pursuant to
          clause (iii) of the last sentence of Section 5.5(a)
          hereof.

                    Section 5.8  Notification of Certain Matters. 
          The Company shall give prompt notice to Parent and Parent
          shall give prompt notice to the Company, of (i) the
          occurrence or non-occurrence of any event the occurrence
          or non-occurrence of which would cause any representation
          or warranty contained in this Agreement to be untrue or
          inaccurate in any material respect at or prior to the
          Effective Time and (ii) any material failure of the
          Company or Parent, as the case may be, to comply with or
          satisfy any covenant, condition or agreement to be
          complied with or satisfied by it hereunder; provided,
          however, that the delivery of any notice pursuant to this
          Section 5.8 shall not limit or otherwise affect the
          remedies available hereunder to the party receiving such
          notice.

                    Section 5.9  Directors' and Officers' Insurance
          and Indemnification.  Parent agrees that at all times
          after consummation of the Offer, it shall indemnify, or
          shall cause the Company (or the Surviving Corporation if
          after the Effective Time) and its Subsidiaries to
          indemnify, each person who is now, or has been at any
          time prior to the date hereof, an employee, agent,
          director or officer of the Company or of any of the
          Company's Subsidiaries, successors and assigns
          (individually an "Indemnified Party" and collectively the
          "Indemnified Parties"), to the same extent and in the
          same manner as is now provided in the respective charters
          or by-laws of the Company and such Subsidiaries or
          otherwise in effect on the date hereof, with respect to
          any claim, liability loss, damage, cost or expense
          (whenever asserted or claimed) ("Indemnified Liability")
          based in whole or in part on, or arising in whole or in
          part out of, any matter existing or occurring at or prior
          to the Effective Time.  Parent shall, and shall cause the
          Company (or the Surviving Corporation if after the
          Effective Time) to, maintain in effect for not less than
          6 years after consummation of the Offer the current
          policies of directors' and officers' liability insurance
          maintained by the Company and its Subsidiaries on the
          date hereof (provided that Parent may substitute therefor
          policies having at least the same coverage and containing
          terms and conditions which are no less advantageous to
          the persons currently covered by such policies as
          insured) with respect to matters existing or occurring at
          or prior to the Effective Time; provided, however, that
          if the aggregate annual premiums for such insurance at
          any time during such period shall exceed 300% of the per
          annum rate of premium currently paid by the Company and
          its Subsidiaries for such insurance on the date of this
          Agreement, then Parent shall cause the Company (or the
          Surviving Corporation if after the Effective Time) to,
          and the Company (or the Surviving Corporation if after
          the Effective Time) shall, provide the maximum coverage
          that shall then be available at an annual premium equal
          to 300% of such rate, and Parent, in addition to the
          indemnification provided above in this Section 5.9, shall
          indemnify the Indemnified Parties for the balance of such
          insurance coverage on the same terms and conditions as
          though Parent were the insurer under those policies. 
          Without limiting the foregoing, in the event any
          Indemnified Party becomes involved in any capacity in any
          action, proceeding or investigation based in whole or in
          part on, or arising in whole or in part out of, any
          matter, including the transactions contemplated hereby,
          existing or occurring at or prior to the Effective Time,
          then to the extent permitted by law Parent shall, or
          shall cause the Company (or the Surviving Corporation if
          after the Effective Time) to, periodically advance to
          such Indemnified Party its legal and other expenses
          (including the cost of any investigation and preparation
          incurred in connection therewith), subject to the
          provision by such Indemnified Party of an undertaking to
          reimburse the amounts so advanced in the event of a final
          determination by a court of competent jurisdiction that
          such Indemnified Party is not entitled thereto.  Promptly
          after receipt by an Indemnified Party of notice of the
          assertion (an "Assertion") of any claim or the
          commencement of any action against him in respect to
          which indemnity or reimbursement may be sought against
          Parent, the Company, the Surviving Corporation or a
          Subsidiary of the Company or the Surviving Corporation
          ("Indemnitors") hereunder, such Indemnified Party shall
          notify any Indemnitor in writing of the Assertion, but
          the failure to so notify any Indemnitor shall not relieve
          any Indemnitor of any liability it may have to such
          Indemnified Party hereunder except to the extent that
          such failure shall have materially and irreversibly
          prejudiced Indemnitor in defending against such
          Assertion.  Indemnitors shall be entitled to participate
          in and, to the extent Indemnitors elect by written notice
          to such Indemnified Party within 30 days after receipt by
          any Indemnitor of notice of such Assertion, to assume the
          defense of such Assertion, at their own expense, with
          counsel chosen by Indemnitors and reasonably satisfactory
          to such Indemnified Party.  Notwithstanding that
          Indemnitors shall have elected by such written notice to
          assume the defense of any Assertion, such Indemnified
          Party shall have the right to participate in the
          investigation and defense thereof, with separate counsel
          chosen by such Indemnified Party, but in such event the
          fees and expenses of such counsel shall be paid by such
          Indemnified Party unless such separate counsel is
          required due to a conflict of interest, in which case the
          Indemnitors shall be responsible for the fees and
          expenses of one separate counsel for all such Indemnified
          Parties.  No Indemnified Party shall settle any Assertion
          without the prior written consent of Parent, nor shall
          Parent settle any Assertion without either (i) the
          written consent of all Indemnified Parties against whom
          such Assertion was made, or (ii) obtaining a general
          release from the party making the Assertion for all
          Indemnified Parties as a condition of such settlement. 
          The provisions of this Section 5.9 are intended for the
          benefit of, and shall be enforceable by, the respective
          Indemnified Parties.

                    Section 5.10  Conversion of Non-Voting Common
          Stock.  The Company agrees to acquiesce in the two
          conditions contained in the ICC's decision in Finance
          Docket No. 32133 served on March 7, 1995, subject to the
          consummation of the Offer.  The Company agrees to
          cooperate with Parent, and join in any filings or
          submissions to the ICC, in connection with obtaining the
          ICC Final Approval; provided, however, that
          notwithstanding the foregoing, prior to consummation of
          the Offer, neither party shall be deemed to waive any
          rights under Section 9 of the Stockholders Agreement with
          respect to any conditions in the ICC Final Approval.  On
          or after April 6, 1995 (provided no stays have been
          entered by any court or by the ICC prior to such time in
          connection with Parent's application with the ICC for an
          order authorizing the common control of the rail
          subsidiaries of Parent and the Company) or on such later
          date that the parties shall receive the ICC Final
          Approval, and provided that Purchaser shall have
          consummated the Offer or, if the Offer shall not have
          been consummated, the provisions of Section 9 of the
          Stockholders Agreement relating to the conditions of the
          ICC Final Approval shall have been satisfied, the Company
          shall, not later than the next business day immediately
          following the receipt of the request of Parent or the
          Purchaser, accompanied by delivery to the Company's
          transfer agent of certificates representing Purchaser's
          shares of Non-Voting Common Stock, convert Purchaser's
          shares of Non-Voting Common Stock into shares of Company
          Common Stock and appoint two Parent designees to the
          Board of Directors of the Company.

                    Section 5.11  ICC Determination.  The Company
          agrees to support, and if requested by Parent, to join
          in, the application of Parent to the ICC requesting a
          determination that the terms of the Merger are just and
          reasonable or, alternatively, a declaratory order of the
          ICC that no such determination is required, and the
          Company agrees to take such further action as is
          necessary or desirable to obtain such determination or
          order.

                                  ARTICLE VI

                                  CONDITIONS

                    Section 6.1  Conditions to Each Party's
          Obligation To Effect the Merger.  The respective
          obligation of each party to effect the Merger shall be
          subject to the satisfaction on or prior to the Closing
          Date of each of the following conditions:

                         (a)  Stockholder Approval.  This Agreement
          shall have been approved and adopted by the requisite
          vote of the holders of Company Common Stock, if required
          by applicable law and the Restated Certificate of
          Incorporation, in order to consummate the Merger;

                         (b)  Statutes; Consents.  No statute,
          rule, order, decree or regulation shall have been enacted
          or promulgated by any foreign or domestic government or
          any governmental agency or authority of competent
          jurisdiction which prohibits the consummation of the
          Merger and all foreign or domestic governmental consents,
          orders and approvals required for the consummation of the
          Merger and the transactions contemplated hereby shall
          have been obtained and shall be in effect at the
          Effective Time;

                         (c)  Injunctions.  There shall be no order
          or injunction of a foreign or United States federal or
          state court or other governmental authority of competent
          jurisdiction in effect precluding, restraining, enjoining
          or prohibiting consummation of the Merger and there shall
          be no suit, action, proceeding or investigation by a
          Governmental Entity seeking to restrain, enjoin or
          prohibit the Merger; and

                         (d)  Purchase of Shares in Offer.  Parent,
          the Purchaser or their affiliates shall have purchased
          shares of Company Common Stock pursuant to the Offer.

                    Section 6.2  Conditions to Parent's Obligation
          to Effect the Merger.  The obligation of Parent to effect
          the Merger shall be subject to the ICC having made a
          determination that the terms of the Merger are just and
          reasonable or having issued a declaratory order that no
          such determination is required.

                                 ARTICLE VII

                                 TERMINATION

                    Section 7.1  Termination.  Anything herein or
          elsewhere to the contrary notwithstanding, this Agreement
          may be terminated and the Merger contemplated herein may
          be abandoned at any time prior to the Effective Time,
          whether before or after stockholder approval thereof:

                         (a)  By the mutual consent of the Board of
          Directors of Parent and the Board of Directors of the
          Company.

                         (b)  By either of the Board of Directors
          of the Company or the Board of Directors of Parent:

                              (i)  if shares of Company Common
               Stock shall not have been purchased pursuant to the
               Offer on or prior to June 30, 1995; provided,
               however, that the right to terminate this Agreement
               under this Section 7.1(b)(i) shall not be available
               to any party whose failure to fulfill any material
               obligation under this Agreement has been the cause
               of, or resulted in, the failure of Parent or the
               Purchaser, as the case may be, to purchase shares of
               Company Common Stock pursuant to the Offer on or
               prior to such date; or

                              (ii)  if any Governmental Entity
               shall have issued an order, decree or ruling or
               taken any other action (which order, decree, ruling
               or other action the parties hereto shall use their
               reasonable efforts to lift), in each case
               permanently restraining, enjoining or otherwise
               prohibiting the transactions contemplated by this
               Agreement and such order, decree, ruling or other
               action shall have become final and non-appealable.

                         (c)  By the Board of Directors of the
          Company:

                              (i)  if, prior to the purchase of
               shares of Company Common Stock pursuant to the
               Offer, the Board of Directors of the Company shall
               have (A) withdrawn, or modified or changed in a
               manner adverse to Parent or the Purchaser its
               approval or recommendation of the Offer, this
               Agreement or the Merger in order to approve and
               permit the Company to execute a definitive agreement
               relating to a Takeover Proposal, and (B) determined,
               based on an opinion of outside legal counsel to the
               Company, that the failure to take such action as set
               forth in the preceding clause (A) would likely
               result in a breach of the Board of Directors'
               fiduciary duties under applicable law; or

                              (ii)  if, prior to the purchase of
               Company Common Stock pursuant to the Offer, Parent
               or the Purchaser breaches or fails in any material
               respect to perform or comply with any of its
               material covenants and agreements contained herein
               or breaches its representations and warranties in
               any material respect; or

                              (iii)  if Parent or the Purchaser
               shall have terminated the Offer, or the Offer shall
               have expired, without Parent or the Purchaser, as
               the case may be, purchasing any shares of Company
               Common Stock pursuant thereto; provided that the
               Company may not terminate this Agreement pursuant to
               this Section 7.1(c)(iii) if the Company is in
               material breach of this Agreement; or

                              (iv)  if, due to an occurrence that
               if occurring after the commencement of the Offer
               would result in a failure to satisfy any of the
               conditions set forth in Annex A hereto, Parent, the
               Purchaser or any of their affiliates shall have
               failed to commence the Offer on or prior to five
               business days following the date of the initial
               public announcement of the Offer; provided, that the
               Company may not terminate this Agreement pursuant to
               this Section 7.1(c)(iv) if the Company is in
               material breach of this Agreement.

                         (d)  By the Board of Directors of Parent:

                              (i)  if, due to an occurrence that if
               occurring after the commencement of the Offer would
               result in a failure to satisfy any of the conditions
               set forth in Annex A hereto, Parent, the Purchaser,
               or any of their affiliates shall have failed to
               commence the Offer on or prior to five business days
               following the date of the initial public
               announcement of the Offer; provided that Parent may
               not terminate this Agreement pursuant to this
               Section 7.1(d)(i) if Parent is in material breach of
               this Agreement; or

                              (ii)  if (A) prior to the purchase of
               shares of Company Common Stock pursuant to the
               Offer, the Board of Directors of the Company shall
               have withdrawn, or modified or changed (including by
               amendment of the Schedule 14D-9) in a manner adverse
               to Parent or the Purchaser its approval or
               recommendation of the Offer, this Agreement or the
               Merger or shall have recommended a Takeover
               Proposal, or shall have executed an agreement in
               principle (or similar agreement) or definitive
               agreement providing for a Takeover Proposal or other
               business combination with a person or entity other
               than Parent, the Purchaser or their affiliates (or
               the Board of Directors of the Company resolves to do
               any of the foregoing), or (B) it shall have been
               publicly disclosed or Parent or the Purchaser shall
               have learned that any person, entity or "group" (as
               that term is defined in Section 13(d)(3) of the
               Exchange Act) (an "Acquiring Person"), other than
               Parent or its affiliates or any group of which any
               of them is a member, shall have acquired beneficial
               ownership (determined pursuant to Rule 13d-3
               promulgated under the Exchange Act) of more than 30%
               of any class or series of capital stock of the
               Company (including the Shares), through the
               acquisition of stock, the formation of a group or
               otherwise, or shall have been granted an option,
               right, or warrant, conditional or otherwise, to
               acquire beneficial ownership of more than 30% of any
               class or series of capital stock of the Company
               (including the Shares); or

                              (iii)  if Parent or the Purchaser, as
               the case may be, shall have terminated the Offer, or
               the Offer shall have expired without Parent or the
               Purchaser, as the case may be, purchasing any shares
               of Company Common Stock thereunder, provided that
               Parent may not terminate this Agreement pursuant to
               this Section 7.1(d)(iii) if it or the Purchaser has
               failed to purchase shares of Company Common Stock in
               the Offer in violation of the material terms thereof.

                    Section 7.2  Effect of Termination.  In the
          event of the termination of this Agreement as provided in
          Section 7.1, written notice thereof shall forthwith be
          given to the other party or parties specifying the
          provision hereof pursuant to which such termination is
          made, and this Agreement shall forthwith become null and
          void, and there shall be no liability on the part of the
          Parent, the Purchaser or the Company except (A) for fraud
          or for material breach of this Agreement and (B) as set
          forth in Sections 8.1 and 8.2 hereof.

                                 ARTICLE VIII

                                MISCELLANEOUS

                    Section 8.1  Fees and Expenses.  (a)  Except as
          contemplated by this Agreement, including Section 8.1(b)
          hereof, all costs and expenses incurred in connection
          with this Agreement and the consummation of the
          transactions contemplated hereby shall be paid by the
          party incurring such expenses.

                         (b)  If (w) the Board of Directors of the
          Company shall terminate this Agreement pursuant to
          Section 7.1(c)(i) hereof, (x) the Board of Directors of
          Parent shall terminate this Agreement pursuant to Section
          7.1(d)(ii) hereof, (y) the Board of Directors of the
          Company shall terminate this Agreement pursuant to
          Section 7.1(c) (iii) or 7.1(c)(iv) or the Board of
          Directors or Parent shall terminate this Agreement
          pursuant to Section 7.1(d)(iii) and within one (1) year
          of any such termination under this clause (y), a Person
          shall acquire or beneficially own a majority of the then
          outstanding shares of Company Common Stock or shall have
          obtained representation on the Company's Board of
          Directors or shall enter into a definitive agreement with
          the Company with respect to a Takeover Proposal or
          similar business combination or (z) the Board of
          Directors of Parent shall terminate this Agreement
          pursuant to Section 7.1(d)(i) due to (I) a material
          breach of the representations and warranties of the
          Company set forth in this Agreement or (II) a material
          breach of, or failure to perform or comply with, any
          material obligation, agreement or covenant contained in
          this Agreement, including but not limited to the
          covenants contained in Section 5.1 hereof, by the
          Company, then in any such case as described in clause
          (w), (x), (y) or (z) (each such case of termination being
          referred to as a "Trigger Event"), the Company agrees
          that it shall promptly assume and pay, or reimburse
          Parent for, all reasonable fees and expenses incurred, or
          to be incurred by Parent, the Purchaser and their
          affiliates (including the fees and expenses of legal
          counsel, accountants, financial advisors, other
          consultants, financial printers and financing sources) in
          connection with the Offer, the Merger and the
          consummation of the transactions contemplated by this
          Agreement, in an amount not to exceed $3 million in the
          aggregate.

                    Section 8.2  Finders' Fees.  (a)  Except for
          Blackstone, a copy of whose engagement agreement has been
          or will be provided to Parent and whose fees will be paid
          by the Company, there is no investment banker, broker,
          finder or other intermediary which has been retained by
          or is authorized to act on behalf of the Company or any
          of its Subsidiaries who might be entitled to any fee or
          commission from the Company or any of its Subsidiaries
          upon consummation of the transactions contemplated by
          this Agreement.

                         (b)  Except for CS First Boston
          Corporation, a copy of whose engagement agreement has
          been or will be provided to the Company and whose fees
          will be paid by Parent, there is no investment banker,
          broker, finder or other intermediary which has been
          retained by or is authorized to act on behalf of Parent
          or any of its Subsidiaries who might be entitled to any
          fee or commission from Parent or any of its Subsidiaries
          upon consummation of the transactions contemplated by
          this Agreement.

                    Section 8.3  Amendment and Modification. 
          Subject to applicable law, this Agreement may be amended,
          modified and supplemented in any and all respects,
          whether before or after any vote of the stockholders of
          the Company contemplated hereby, by written agreement of
          the parties hereto, by action taken by their respective
          Boards of Directors (which in the case of the Company
          shall include approvals as contemplated in Section
          1.3(c)), at any time prior to the Closing Date with
          respect to any of the terms contained herein; provided,
          however, that after the approval of this Agreement by the
          stockholders of the Company, no such amendment,
          modification or supplement shall reduce or change the
          Merger Consideration.

                    Section 8.4  Nonsurvival of Representations and
          Warranties.  None of the representations and warranties
          in this Agreement or in any schedule, instrument or other
          document delivered pursuant to this Agreement shall
          survive the Effective Time.

                    Section 8.5  Notices.  All notices and other
          communications hereunder shall be in writing and shall be
          deemed given if delivered personally, telecopied (which
          is confirmed) or sent by an overnight courier service,
          such as Federal Express, to the parties at the following
          addresses (or at such other address for a party as shall
          be specified by like notice):

                         (a)  if to Parent or the Purchaser, to:

                              Union Pacific Corporation
                              Martin Tower, Eighth and
                                Eaton Avenues
                              Bethlehem, Pennsylvania  18018
                              Attention:  Chairman and Chief
                                          Executive Officer
                              Telephone No.:  (610) 861-3200
                              Telecopy No.:   (610) 861-3111

                              with a copy to:

                              Paul T. Schnell, Esq.
                              Skadden, Arps, Slate, Meagher & Flom
                              919 Third Avenue
                              New York, New York 10022
                              Telephone No.:  (212) 735-3000
                              Telecopy No.:   (212) 735-2001

                              and

                         (b)  if to the Company, to:

                              Chicago and North Western
                                Transportation Company
                              165 North Canal Street
                              Chicago, Illinois  60606
                              Attention:  Chairman and Chief
                                          Executive Officer
                              Telephone No.:  (312) 559-6172
                              Telecopy No.:   (312) 559-7169

                              with a copy to:

                              Paul J. Miller, Esq.
                              Sonnenschein, Nath & Rosenthal
                              8000 Sears Tower
                              Chicago, Illinois  60606-6404
                              Telephone No.:  (312) 876-8000
                              Telecopy No.:   (312) 876-7934

                    Section 8.6  Interpretation.  When a reference
          is made in this Agreement to Sections, such reference
          shall be to a Section of this Agreement unless otherwise
          indicated.  Whenever the words "include", "includes" or
          "including" are used in this Agreement they shall be
          deemed to be followed by the words "without limitation". 
          The phrase "made available" in this Agreement shall mean
          that the information referred to has been made available
          if requested by the party to whom such information is to
          be made available.  The phrases "the date of this
          Agreement", "the date hereof", and terms of similar
          import, unless the context otherwise requires, shall be
          deemed to refer to March 16, 1995.  As used in this
          Agreement, the term "affiliate(s)" shall have the meaning
          set forth in Rule l2b-2 of the Exchange Act.

                    Section 8.7  Counterparts.  This Agreement may
          be executed in two or more counterparts, all of which
          shall be considered one and the same agreement and shall
          become effective when two or more counterparts have been
          signed by each of the parties and delivered to the other
          parties, it being understood that all parties need not
          sign the same counterpart.

                    Section 8.8  Entire Agreement; No Third Party
          Beneficiaries; Rights of Ownership.  This Agreement and
          the Confidentiality Agreement (including the documents
          and the instruments referred to herein and therein except
          to the extent superseded hereby):  (a) constitutes the
          entire agreement and supersedes all prior agreements and
          understandings, both written and oral, among the parties
          with respect to the subject matter hereof, and (b) except
          as provided in Section 5.9 are not intended to confer
          upon any person other than the parties hereto any rights
          or remedies hereunder.

                    Section 8.9  Severability.  If any term,
          provision, covenant or restriction of this Agreement is
          held by a court of competent jurisdiction or other
          authority to be invalid, void, unenforceable or against
          its regulatory policy, the remainder of the terms,
          provisions, covenants and restrictions of this Agreement
          shall remain in full force and effect and shall in no way
          be affected, impaired or invalidated.

                    Section 8.10  Governing Law.  This Agreement
          shall be governed and construed in accordance with the
          laws of the State of Delaware without giving effect to
          the principles of conflicts of law thereof.

                    Section 8.11  Assignment.  Neither this
          Agreement nor any of the rights, interests or obligations
          hereunder shall be assigned by any of the parties hereto
          (whether by operation of law or otherwise) without the
          prior written consent of the other parties, except that
          the Purchaser may assign, in its sole discretion, any or
          all of its rights, interests and obligations hereunder to
          Parent or to any direct or indirect wholly owned
          Subsidiary of Parent.  Subject to the preceding sentence,
          this Agreement will be binding upon, inure to the benefit
          of and be enforceable by the parties and their respective
          successors and assigns.

                    IN WITNESS WHEREOF, Parent, the Purchaser and
          the Company have caused this Agreement to be signed by
          their respective officers thereunto duly authorized as of
          the date first written above.

                                        UNION PACIFIC CORPORATION

                                        By: /s/ Drew Lewis 
                                           Name:
                                           Title:

                                        UP RAIL, INC.

                                        By: /s/ Carl W. von Bernuth 
                                           Name:
                                           Title:

                                        CHICAGO AND NORTH WESTERN
                                          TRANSPORTATION COMPANY

                                        By: /s/ Robert Schmiege
                                           Name: Robert Schmiege
                                           Title: Chairman, President & 
                                                    Chief Executive Officer

                                                                ANNEX A

                          CONDITIONS TO THE TENDER OFFER

                    Notwithstanding any other provisions of the Offer,
          and in addition to (and not in limitation of) the Purchaser's
          rights to extend and amend the Offer at any time in its sole
          discretion (subject to the provisions of the Merger
          Agreement), the Purchaser shall not be required to accept for
          payment or, subject to any applicable rules and regulations
          of the SEC, including Rule 14e-1(c) under the Exchange Act
          (relating to the Purchaser's obligation to pay for or return
          tendered Shares promptly after termination or withdrawal of
          the Offer), pay for, and may delay the acceptance for payment
          of or, subject to the restriction referred to above, the
          payment for, any tendered Shares, and may terminate the Offer
          as to any Shares not then paid for, if (i) the Minimum
          Condition has not been satisfied prior to the expiration of
          the Offer, (ii) the Interstate Commerce Commission's ("ICC")
          approval of Parent's application for an order authorizing the
          common control, within the meaning of the Interstate Commerce
          Act, of the rail subsidiaries of the Company and Parent shall
          not have become final and effective prior to the expiration
          of the Offer, or (iii) at any time on or after March 16, 1995
          and prior to the acceptance for payment of any such Shares,
          any of the following events shall occur or shall be
          determined by the Purchaser to have occurred:

                         (a)  there shall have been instituted or
          pending any action, proceeding, application, claim or suit,
          or any statute, rule, regulation, judgment, order or
          injunction promulgated, entered, enforced, enacted, proposed,
          issued or applicable to the Offer or the Merger by any
          domestic or foreign federal, state or local governmental
          regulatory or administrative agency or authority or court or
          legislative body or commission which directly or indirectly
          (l) prohibits or makes illegal, or imposes any material
          adverse limitations on, Parent's or the Purchaser's ownership
          or operation of all or a material portion of the businesses
          or assets of the Company and its Subsidiaries, taken as a
          whole, or compels Parent or the Purchaser or their respective
          Subsidiaries and affiliates to dispose of or hold separate
          any material portion of the business or assets of the Company
          or its Subsidiaries, in each case taken as a whole, (2)
          prohibits, or makes illegal the acceptance for payment,
          payment for or purchase of Shares or the consummation of the
          Offer or the Merger, (3) restricts the ability of the
          Purchaser, or renders the Purchaser unable, to accept for
          payment, pay for or purchase some or all of the Shares, (4)
          imposes material limitations on the ability of the Purchaser
          or Parent effectively to exercise full rights of ownership of
          the Shares, including, without limitation, the right to vote
          the Shares purchased by it on all matters properly presented
          to the Company's stockholders, (5) prohibits, restricts,
          results in a delay, or imposes material limitations on the
          ability of Purchaser to convert the Non-Voting Shares into
          Shares, or (6) otherwise materially adversely affects the
          financial condition, businesses or results of operations of
          the Company and its Subsidiaries, taken as a whole; provided
          that in each such case Parent shall have used all reasonable
          efforts to cause any such judgment, order or injunction to be
          vacated or lifted;

                         (b)  the representations and warranties of the
          Company set forth in the Merger Agreement shall not have been
          true and correct when made, except (i) those representations
          and warranties that address matters only as of a particular
          date are true and correct as of such date, and (ii) where the
          failure of such representations and warranties to have been
          true and correct when made (without giving effect to any
          limitation as to "materiality" or "material adverse effect"
          set forth therein), does not have, and is not likely to have,
          individually or in the aggregate, a Material Adverse Effect
          on the Company and its Subsidiaries, taken as a whole, or the
          Company shall have breached or failed in any material respect
          to perform or comply with any material obligation, agreement
          or covenant required by the Merger Agreement to be performed
          or complied with by it;

                         (c)  (i) it shall have been publicly disclosed
          or Parent or the Purchaser shall have otherwise learned that
          any person, entity or "group" (as defined in Section 13(d)(3)
          of the Exchange Act), other than Parent or its affiliates or
          any group of which any of them is a member, shall have
          acquired beneficial ownership (determined pursuant to Rule
          13d-3 promulgated under the Exchange Act) of more than 30% of
          the outstanding shares of any class or series of capital
          stock of the Company (including the Shares), through the
          acquisition of stock, the formation of a group or otherwise,
          or shall have been granted an option, right or warrant,
          conditional or otherwise, to acquire beneficial ownership of
          more than 30% of any class or series of capital stock of the
          Company (including the Shares); or (ii) any person or group
          shall have entered into a definitive agreement or agreement
          in principle with the Company with respect to a Takeover
          Proposal or other business combination with the Company; 

                         (d)  the Company's Board of Directors shall
          have withdrawn, or modified or changed in a manner adverse to
          Parent or the Purchaser (including by amendment of the
          Schedule 14D-9) its recommendation of the Offer, the Merger
          Agreement, or the Merger, or recommended another proposal or
          offer, or shall have resolved to do any of the foregoing; or

                         (e)  the Merger Agreement shall have been
          terminated in accordance with its terms;

          which in the sole judgment of Parent or the Purchaser, in any
          such case, and regardless of the circumstances (including any
          action or inaction by Parent or the Purchaser giving rise to
          such condition) makes it inadvisable to proceed with the
          Offer or with such acceptance for payment or payments.

                    The foregoing conditions are for the sole benefit
          of the Purchaser and Parent and may be waived by Parent or
          the Purchaser, in whole or in part at any time and from time
          to time in the sole discretion of Parent or the Purchaser. 
          The failure by Parent or the Purchaser at any time to
          exercise any of the foregoing rights shall not be deemed a
          waiver of any such right and each such right shall be deemed
          an ongoing right which may be asserted at any time and from
          time to time.

                             TABLE OF CONTENTS

                                                                  Page

     ARTICLE I         THE OFFER AND MERGER  . . . . . . . . . . .   1

        Section 1.1    The Offer . . . . . . . . . . . . . . . . .   1
        Section 1.2    Company Actions . . . . . . . . . . . . . .   3
        Section 1.3    Directors . . . . . . . . . . . . . . . . .   5
        Section 1.4    The Merger  . . . . . . . . . . . . . . . .   7
        Section 1.5    Effective Time  . . . . . . . . . . . . . .   8
        Section 1.6    Closing . . . . . . . . . . . . . . . . . .   8
        Section 1.7    Directors and Officers of the
                         Surviving Corporation . . . . . . . . . .   9
        Section 1.8    Stockholders' Meeting . . . . . . . . . . .   9
        Section 1.9    Merger Without Meeting of
                         Stockholders  . . . . . . . . . . . . .    10

     ARTICLE II        CONVERSION OF SHARES  . . . . . . . . . . .  11

        Section 2.1    Conversion of Capital Stock . . . . . . . .  11
        Section 2.2    Exchange of Certificates  . . . . . . . . .  12
        Section 2.3    Company Option Plans and
                         Agreements  . . . . . . . . . . . . . . .  13
        Section 2.4    No Dissenter's Rights . . . . . . . . . . .  14

     ARTICLE III       REPRESENTATIONS AND WARRANTIES
                         OF THE COMPANY  . . . . . . . . . . . . .  15

        Section 3.1    Organization  . . . . . . . . . . . . . . .  15
        Section 3.2    Capitalization  . . . . . . . . . . . . . .  16
        Section 3.3    Corporate Authorization;
                         Validity of Agreement; Company
                         Action  . . . . . . . . . . . . . . . . .  18
        Section 3.4    Consents and Approvals; No
                         Violations  . . . . . . . . . . . . . . .  19
        Section 3.5    SEC Reports and Financial
                         Statements  . . . . . . . . . . . . . . .  20
        Section 3.6    Absence of Certain Changes  . . . . . . . .  21
        Section 3.7    Information in Proxy Statement  . . . . . .  22
        Section 3.8    Employee Benefit Plans; ERISA . . . . . . .  22
        Section 3.9    Litigation; Compliance with Law . . . . . .  25
        Section 3.10   Taxes . . . . . . . . . . . . . . . . . . .  25
        Section 3.11   Environmental Matters . . . . . . . . . . .  26
        Section 3.12   Opinion of Financial Advisors . . . . . . .  27

     ARTICLE IV        REPRESENTATIONS AND WARRANTIES
                         OF PARENT AND THE PURCHASER . . . . . . .  28
        Section 4.1    Organization  . . . . . . . . . . . . . . .  28
        Section 4.2    Authorization; Validity of
                         Agreement; Necessary Action . . . . . . .  28
        Section 4.3    Consents and Approvals; No
                         Violations  . . . . . . . . . . . . . . .  29
        Section 4.4    Information in Proxy Statement;
                         Schedule 14D-9  . . . . . . . . . . . . .  30
        Section 4.5    Financing . . . . . . . . . . . . . . . . .  30

     ARTICLE V         COVENANTS . . . . . . . . . . . . . . . . .  30

        Section 5.1    Interim Operations of the
                         Company . . . . . . . . . . . . . . . . .  30
        Section 5.2    Access to Information . . . . . . . . . . .  33
        Section 5.3    Consents and Approvals  . . . . . . . . . .  34
        Section 5.4    Employee Benefits . . . . . . . . . . . . .  34
        Section 5.5    No Solicitation . . . . . . . . . . . . . .  39
        Section 5.6    Additional Agreements . . . . . . . . . . .  40
        Section 5.7    Publicity . . . . . . . . . . . . . . . . .  41
        Section 5.8    Notification of Certain Matters . . . . . .  41
        Section 5.9    Directors' and Officers'
                         Insurance and Indemnification . . . . . .  41
        Section 5.10   Conversion of Non-Voting Common
                       Stock . . . . . . . . . . . . . . . . . . .  44
        Section 5.11   ICC Determination . . . . . . . . . . . . .  44

     ARTICLE VI        CONDITIONS  . . . . . . . . . . . . . . . .  45

        Section 6.1    Conditions to Each Party's
                         Obligation To Effect the
                         Merger  . . . . . . . . . . . . . . . . .  45
        Section 6.2    Conditions to Parent's
                         Obligation To Effect the
                         Merger  . . . . . . . . . . . . . . . . .  45

     ARTICLE VII       TERMINATION . . . . . . . . . . . . . . . .  46

        Section 7.1    Termination . . . . . . . . . . . . . . . .  46
        Section 7.2    Effect of Termination . . . . . . . . . . .  49

     ARTICLE VIII      MISCELLANEOUS . . . . . . . . . . . . . . .  49

        Section 8.1    Fees and Expenses . . . . . . . . . . . . .  49
        Section 8.2    Finders' Fees.  . . . . . . . . . . . . . .  50
        Section 8.3    Amendment and Modification  . . . . . . . .  50
        Section 8.4    Nonsurvival of Representations
                         and Warranties  . . . . . . . . . . . . .  51
        Section 8.5    Notices . . . . . . . . . . . . . . . . . .  51
        Section 8.6    Interpretation  . . . . . . . . . . . . . .  52
        Section 8.7    Counterparts  . . . . . . . . . . . . . . .  52
        Section 8.8    Entire Agreement; No Third Party 
                         Beneficiaries; Rights of
                         Ownership . . . . . . . . . . . . . . . .  52
        Section 8.9    Severability  . . . . . . . . . . . . . . .  53
        Section 8.10   Governing Law . . . . . . . . . . . . . . .  53
        Section 8.11   Assignment  . . . . . . . . . . . . . . . .  53

     CONDITIONS TO THE TENDER OFFER  . . . . . . . . . . . . . Annex A

                                                      EXHIBIT 17

                        COMPANY STOCK OPTION AGREEMENT

                    COMPANY STOCK OPTION AGREEMENT, dated as of
          March 16, 1995, by and between UP RAIL, INC., a Utah
          corporation (the "Purchaser"), and CHICAGO AND NORTH
          WESTERN TRANSPORTATION COMPANY, a Delaware corporation
          (the "Company").

                    WHEREAS, concurrently with the execution and
          delivery of this Agreement, the Purchaser, Union Pacific
          Corporation, a Utah corporation and the indirect parent
          of the Purchaser ("Parent"), and the Company are entering
          into an Agreement and Plan of Merger (the "Merger
          Agreement") providing, among other things, for the
          acquisition by Parent of the Company through a tender
          offer by the Purchaser (the "Offer") for all of the
          outstanding shares of Common Stock, $.01 par value per
          Share, of the Company (the "Shares") and the subsequent
          merger (the "Merger") of the Purchaser with and into the
          Company;

                    NOW, THEREFORE, in consideration of the
          respective representations, warranties, covenants and
          agreements set forth herein, the adequacy of which is
          hereby acknowledged, and intending to be legally bound
          hereby, the parties hereto agree as follows:

                    1.   Grant of Option.  The Company hereby
          grants the Purchaser an irrevocable option (the "Option")
          at its election to purchase at the price per Share paid
          by the Purchaser in the Offer (the "Option Price") such
          number of authorized but unissued Shares (the "Option
          Shares") as, when added to the number of Shares owned by
          Parent and its affiliates immediately prior to such
          purchase, would result in Parent and its affiliates
          owning immediately thereafter 90.01% of the then
          outstanding Shares (assuming conversion of the
          Purchaser's non-voting shares of Common Stock of the
          Company into Shares); provided, however, that the Option
          is subject to the conditions that (a) the Purchaser shall
          have accepted all Shares validly tendered pursuant to the
          Offer for payment; (b) the Purchaser, together with its
          affiliates, shall own at least 85% and less than 90.01%
          of the number of Shares then outstanding (assuming
          conversion of the Purchaser's non-voting shares of Common
          Stock of the Company into Shares); and (c) as a result of
          the exercise of the Option the Purchaser and its
          affiliates shall own at least 90.01% of the outstanding
          Shares (assuming conversion of the Purchaser's non-voting
          shares of Common Stock of the Company into Shares).

                    2.   Closing.  Provided that the Purchaser
          exercises the Option, and that the conditions thereto in
          Section 1 above are satisfied, the purchase and sale
          hereunder shall occur at a closing (the "Closing") as
          promptly as practicable following the purchase of Shares
          by the Purchaser pursuant to the Offer

                    3.   Expiration of Option.  The Option shall
          expire at the Effective Time (as defined in the Merger
          Agreement).

                    4.   Payment of Option Price and Delivery of
          Certificates for Shares.  At the Closing, (a) the Company
          will deliver to the Purchaser a certificate or
          certificates representing the number of Option Shares
          being purchased upon exercise of the Option, registered
          in the name of the Purchaser or such subsidiary thereof
          as the Purchaser shall designate, and (b) in full payment
          for the Option Shares, the Purchaser will deliver to the
          Company the aggregate price for the Option Shares being
          purchased by wire transfer of immediately available funds
          or certified or bank check.

                    5.   Representations and Warranties of the
          Company.  The Company represents and warrants to the
          Purchaser that (a) the Company is a corporation duly
          organized, validly existing and in good standing under
          the laws of the State of Delaware and has the corporate
          power and authority to enter into this Agreement and to
          consummate the transactions contemplated hereby; (b) the
          execution and delivery of this Agreement by the Company
          and the consummation of the transactions contemplated
          hereby have been duly authorized by all necessary
          corporate action on the part of the Company and no other
          proceedings on the part of the Company are necessary to
          authorize this Agreement or any of the transactions
          contemplated hereby; and (c) this Agreement has been duly
          executed and delivered by the Company and, assuming due
          authorization, execution and delivery of this Agreement
          by the Purchaser, constitutes a valid and binding
          obligation of the Company, enforceable against the
          Company in accordance with its terms.

                    6.   Representations and Warranties of the
          Purchaser.  The Purchaser represents and warrants to the
          Company that (a) the Purchaser is a corporation duly
          organized, validly existing and in good standing under
          the laws of the State of Utah and has the corporate power
          and authority to enter into this Agreement and to
          consummate the transactions contemplated hereby; (b) the
          execution and delivery of this Agreement by the Purchaser
          and the consummation by the Purchaser of the transactions
          contemplated hereby have been duly authorized by all
          necessary corporate action on the part of the Purchaser
          and no other proceedings on the part of the Purchaser are
          necessary to authorize this Agreement or any of the
          transactions contemplated hereby; and (c) this Agreement
          has been duly executed and delivered by the Purchaser
          and, assuming due authorization, execution and delivery
          of this Agreement by the Company, constitutes a valid and
          binding obligation of the Purchaser, enforceable against
          the Purchaser in accordance with its terms.

                    7.   Filings and Consents.  The Purchaser and
          the Company each will use its best efforts to make all
          filings with, and to obtain consents of, all third
          parties and governmental authorities necessary to the
          consummation of the transactions contemplated by this
          Agreement.

                    8.   Covenant of the Company.  The Company
          shall not engage in any action or omit to take any action
          which would have the effect of preventing or disabling
          the Company from delivering the Option Shares to the
          Purchaser upon exercise of the Option or otherwise
          performing its obligations under this Agreement.

                    9.   Parties in Interest; Assignment.  No party
          to this Agreement may assign any of its rights or
          obligations under this Agreement without the prior
          written consent of the other party hereto, except that
          the rights and obligations of the Purchaser hereunder may
          be assigned by the Purchaser to any direct or indirect
          wholly-owned subsidiary or Parent of the Purchaser, but
          no such assignment shall relieve the Purchaser of its
          obligations hereunder.  This Agreement shall be binding
          upon, inure to the benefit of, and be enforceable by, the
          successors and permitted assigns of the parties hereto.

                    10.  Specific Performance.  The parties hereto
          agree that irreparable damage would occur in the event
          any of the provisions of this Agreement were not
          performed in accordance with the terms hereof or were
          otherwise breached and that each party shall be entitled
          to specific performance of the terms hereof, in addition
          to any other remedy at law or equity.

                    11.  Entire Agreement; Amendment.  This
          Agreement, and the documents referred to herein or
          delivered pursuant hereto which form a part hereof,
          contain the entire understanding of the parties hereto
          with respect to its subject matter.  There are no
          restrictions, agreements, promises, warranties, covenants
          or undertakings with respect to the subject matter hereof
          other than those expressly set forth herein or therein.
          This Agreement supersedes all prior agreements and
          understandings between the parties with respect to its
          subject matter.  This Agreement may not be amended except
          by an instrument in writing duly executed on behalf of
          both parties.

                    12.  Notices.  All notices, requests, claims,
          demands and other communications hereunder shall be in
          writing and shall be deemed given if delivered personally
          or by telex or telegram or mailed by registered or
          certified mail (postage prepaid, return receipt
          requested) to the respective parties as follows:

                    (a)  If to the Company:

                         Chicago and North Western
                           Transportation Company
                         165 North Canal Street
                         Chicago, IL  60606

                         Attention:   Chairman and Chief 
                                        Executive Officer

                         with copies to:

                         Sonnenschein Nath & Rosenthal
                         8000 Sears Tower
                         Chicago, IL  60606

                         Attention:   Paul J. Miller, Esq.

                    (b)  If to the Purchaser:

                         Union Pacific Corporation
                         Martin Tower
                         Eighth & Eaton Avenues
                         Bethlehem, PA  18018

                         Attention:   Chairman and Chief
                                        Executive Officer

                         with a copy to:

                         Skadden, Arps, Slate, Meagher & Flom
                         919 Third Avenue
                         New York, New York  10022

                         Attention:  Paul T. Schnell, Esq.

          or to such other address as either party may have
          furnished to the other in writing in accordance herewith,
          except that notices of changes of address shall only be
          effective upon receipt.

                    13.  Governing Law.  This Agreement shall be
          governed by and construed in accordance with the laws of
          the State of Delaware without giving effect to the
          provisions thereof relating to conflicts of law.

                    14.  Severability of Provisions.  If any term,
          provision, covenant or restriction of this Agreement is
          held by a court of competent jurisdiction to be invalid,
          void or unenforceable, the remainder of the terms,
          provisions, covenants and restrictions of this Agreement
          shall remain in full force and effect and shall in no way
          be affected, impaired or invalidated.

                    15.  Further Assurances.  From time to time, at
          the other party's request and without further
          consideration, the Company and the Purchaser will execute
          and deliver all such further documents and instruments
          and take all such further action as may be necessary in
          order to consummate the transactions contemplated hereby,
          including, without limitation, to vest in the Purchaser
          good title to the Option Shares purchased hereunder.

                    16.  Descriptive Headings.  The headings
          contained in this Agreement are for reference purposes
          only and shall not affect in any way the meaning or

          interpretation of this Agreement.

                    17.  Counterparts.  This Agreement may be

          executed in counterparts, each of which shall be deemed
          to be an original but both of which together shall
          constitute one and the same document.

                    IN WITNESS WHEREOF, the Purchaser and the
          Company have caused this Agreement to be signed by their
          respective officers thereunto duly authorized as of the
          date first written above.

                                   UP RAIL, INC.

                                   By:  /s/ Carl W. von Bernuth
                                       Name:  
                                       Title: 

                                   CHICAGO AND NORTH WESTERN
                                   TRANSPORTATION COMPANY

                                   By: /s/ Robert Schmiege
                                       Name:   Robert Schmiege  
                                       Title:  Chairman, President &
                                                 Chief Executive Officer

                                                    EXHIBIT 18

                    UNION PACIFIC ANNOUNCES BOARD APPROVAL
                              OF CNW ACQUISITION

          Bethlehem, PA, March 16, 1995 -- Union Pacific
          Corporation (NYSE: UNP) announced today that its Board of
          Directors has approved the previously announced
          acquisition of Chicago and North Western Transportation
          Company (NYSE: CNW) at a price of $35 per share in cash.

          Union Pacific said that it understands that CNW's Board
          of Directors will be meeting later today to consider
          approval of the transaction.

 
                                                     EXHIBIT 19

          CNW Contact:   Michael W. Payette
                         (312) 633-4310

                                              FOR IMMEDIATE RELEASE

          BETHLEHEM, MARCH 17, 1995 - Union Pacific Corporation
          (UNP) and Chicago and North Western Transportation
          Company (CNW) announced today that they have executed a
          definitive agreement reflecting the previously announced
          transaction in which Union Pacific will acquire 100
          percent of CNW's common stock at a price of $35 per share
          in cash.  Union Pacific will shortly commence a tender
          offer for all CNW shares.  Following the consummation of
          the tender offer, Union Pacific will acquire the
          remaining outstanding CNW shares in a merger for $35 per
          share in cash.

               "This acquisition will strengthen our capacity to
          compete in the key western freight corridors," said Drew
          Lewis, Union Pacific chairman and CEO.  "It will increase
          Union Pacific's growing intermodal traffic from the major
          West Coast ports to the Midwest and enhance our low-
          sulfur coal shipments out of the Powder River Basin in
          Wyoming to the Mississippi Valley and the East.  We are
          delighted to have this fine railroad joining the Union
          Pacific family."

               "In addition to providing a substantial premium for
          our shareholders," said Robert Schmiege, chairman,
          president and CEO of the CNW, "this merger offers an
          opportunity for our customers and virtually all of our
          employees to participate in a larger railroad with
          broader horizons, greater resources and enhanced
          opportunities for the marketing of our customers'
          products and our employees' professional growth."

               Union Pacific Corporation is a transportation and
          natural resource company based in Bethlehem,
          Pennsylvania, with sales of approximately $8 billion.

               The Chicago and North Western Transportation Company
          is the holding company for the Chicago and North Western
          Railway Company, a leading railroad freight hauler in the
          central transcontinental corridor and major transporter
          of coal, grain and double-stack containers.

                                                           EXHIBIT 20

              IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                         IN AND FOR NEW CASTLE COUNTY

          -------------------------------------------X
          MICHAEL GERBER, individually and on        :
          behalf of all others similarly situated,   :
                                                     :
                                   Plaintiff,        :
                                                     :
                    v.                               :
                                                     :  C.A. No. 14117
          JAMES E. MARTIN, JAMES J. MOSSMAN,         :
          JAMES R. THOMPSON, ROBERT SCHMIEGE,        :
          RICHARD K. DAVIDSON, HAROLD A. POLING,     :
          SAMUEL K. SKINNER, CHICAGO &               :
          NORTHWESTERN TRANSPORTATION COMPANY,       :
          UNION PACIFIC COMPANY and UP RAIL          :
          INC.,                                      :
                                   Defendants.       :
          -------------------------------------------X

                            CLASS ACTION COMPLAINT

                    Plaintiff, as and for its complaint, alleges upon
          information and belief except as to paragraph 2 which is
          alleged upon knowledge, as follows:

                               NATURE OF THE ACTION

                    1.   Plaintiff brings this action on behalf of
          himself and all other public shareholders of Chicago &
          Northwestern Transportation Company ("CNW" or the "Company")
          who are threatened with the deprivation of the opportunity to
          maximize the value of their shares by the wrongful acts of
          the defendant described herein.

                        THE PARTIES AND CERTAIN AFFILIATES

                    2.   Plaintiff is and was at all times relevant to
          this action the owner of shares of common stock of CNW.

                    3.   CNW is a Delaware corporation with its
          principal place of business in Chicago, Illinois.  CNW
          provides railroad freight transportation and commuter
          services.  As of October 15, 1994, CNW had approximately 44
          million shares of common stock outstanding.  Approximately
          29% of the outstanding stock of CNW is controlled by
          defendant Union Pacific Company ("Union Pacific"), identified
          below.  Union Pacific owns all the shares of UP Holdings,
          inc. which, in turn, owns all the shares of UP Rail, Inc., a
          Delaware corporation, which owns the CNW shares.

                    4.   Each individual defendant was a director of
          CNW at all times relevant hereto and owed fiduciary duties to
          its stockholders.  In addition, defendant Richard K. Davidson
          is and at all relevant times was Chairman and Chief Executive
          Officer of Union Pacific.

                    5.   Defendant Union Pacific is a Utah corporation
          with its headquarters in Bethlehem, Pennsylvania.  Union
          Pacific is a holding company with interests in transportation
          and oil and gas, among other things.  Union Pacific controls
          approximately 29% of the outstanding stock of CNW.

                    6.   By virtue of its control over CNW, at all
          times relevant hereto, defendant Union Pacific was a
          fiduciary of CNW and its stockholders and owed them the
          duties of good faith, fair dealing, due care and candor.

                    7.   Union Pacific's conduct, as more fully
          described herein, wrongfully utilized its position to deprive
          CNW's shareholders of an opportunity to maximize their
          investment in CNW.

                             CLASS ACTION ALLEGATIONS

                    8.   Plaintiff brings this action pursuant to Rule
          23 of the Rules of the Court of Chancery on behalf of himself
          and all other stockholders of the Company (except defendant
          and any person, firm, trust, corporation, or other entity
          related to or affiliated with any defendant), who are or will
          be threatened with injury arising from defendants' actions as
          more fully described herein (the "Class").

                    9.   This action is properly maintainable as a
          class action for the following reasons:

                         (a)  The Class is so numerous that joinder of
          all members is impracticable.  As of October 15, 1994, CNW
          had approximately 44 million shares of common stock
          outstanding.

                         (b)  The members of the Class are scattered
          throughout the United States and are so numerous as to make
          it impracticable to bring them all before this Court.

                         (c)  There are questions of law and fact which
          are common to the Class and which predominate over questions
          affecting any individual Class member.  The common questions
          include, inter alia, the following:

                              (i)  whether defendants have breached
          their fiduciary and other common law duties which they owe to
          plaintiff and the other members of the Class; and

                              (ii) whether plaintiff and the other
          members of the Class are being irreparably damaged.

                         (d)  The claims of plaintiff are typical of
          the claims of the Class in that all members of the Class will
          be damaged by defendants' actions.

                         (e)  Plaintiff is committed to prosecuting
          this action and has retained competent counsel experienced in
          litigation of this nature.  Plaintiff is an adequate
          representative of the class.

                         (f)  The prosecution of separate actions by
          individual members of the Class would create a risk of
          inconsistent or varying adjudications with respect to
          individual members of the Class.

                         (g)  Defendants have acted or refused to act
          on grounds generally applicable to the Class, thereby making
          appropriate injunctive relief and/or corresponding
          declaratory relief with respect to the Class as a whole.

                                FACTUAL BACKGROUND

                    10.  On March 10, 1995, defendants announced that
          CNW and Union Pacific had agreed, subject to execution of a
          definitive merger agreement and Board approval, that Union
          Pacific would buy CNW for $35 per share in cash.

                    11.  Union Pacific already controls 29% of CNW's
          stock, precluding any competing bid not approved by Union
          Pacific.

                    12.  The proposal grossly undervalues CNW.  It
          fails to adequately account for CNW's expected future
          profitability and the synergies between the companies.

                    13.  Because of Union Pacific's control of 29% of
          CNW, no third party could be successful in any competing
          offer for CNW if Union Pacific refused to sell its stock. 
          Union Pacific therefore controls the terms of any buyout
          transaction.

                    14.  Due to Union Pacific's control of CNW, no bona
          fide negotiations can or will occur and a transaction will be
          consummated which is not in the best interests of the members
          of the Class, absent judicial intervention.

                    15.  By failing to take appropriate actions to
          ensure that the public stockholders' interests are protected,
          defendants have violated their fiduciary duties owed to the
          public stockholders of CNW and have acted to put their own
          interests ahead of those of CNW's public stockholders.  Union
          Pacific is using its position as controlling stockholder for
          the purpose of benefitting itself to the detriment of
          plaintiff and the other members of the Class.

                    16.  Because Union Pacific is in possession of
          private corporate information concerning CNW's assets,
          businesses and future prospects, there exists an imbalance
          and disparity of knowledge and economic power between it and
          the public stockholders of CNW which makes it inherently
          unfair for it to effect the transaction complained of herein.

                    17.  By reason of the foregoing acts, practices and
          course of conduct, defendants have failed to exercise
          ordinary care and diligence in the exercise of their
          fiduciary obligations toward plaintiff and the other CNW
          public stockholders.

                    18.  As a result of the actions of defendants,
          plaintiff and the other members of the Class have been and
          will be damaged in that they have not received and will not
          receive their fair proportion of the value of CNW's assets
          and businesses.

                    19.  Unless enjoined by this Court, defendants will
          continue to breach their fiduciary duties owed to plaintiff
          and the other members of the Class.

                    20.  Plaintiff and the other members of the Class
          have no adequate remedy at law.

                    WHEREFORE, plaintiff prays for judgment and relief,
          as follows:

                    A.   Declaring this to be a proper class action;

                    B.   Ordering defendants to carry out their
          fiduciary duties to plaintiff and the other members of the
          Class, including those of due care, loyalty and candor;

                    C.   Preliminarily and permanently enjoining the
          proposed transaction or any similar unfair transaction
          proposed by Pacific Union;

                    D.   Ordering defendants to pay to plaintiff and
          the Class all damages suffered and to be suffered by them as
          a result of the acts alleged herein;

                    E.   Awarding plaintiff the costs and disbursements
          of this action, including allowance for plaintiff's
          reasonable attorneys' and experts' fees; and

                    F.   Granting such other and further relief as may
          be just and proper in the premises.

          Dated:  March 13, 1995

                              ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.

                         By:                                           
                              First Federal Plaza, Suite 214
                              P.O. Box 1070
                              Wilmington, DE 19899
                              (302) 656-4433
                              Attorneys for Plaintiff

          OF COUNSEL:

          ABBEY & ELLIS
          212 East 39th Street
          New York, New York  10016
          (212) 889-3700

          KAUFMAN, MALCHMAN, KAUFMANN,
            & KIRBY
          919 Third Avenue
          New York, New York  10022

          FARUQI and FARUQI
          415 Madison Avenue
          New York, New York  10017
          (212) 986-1074

                                                            EXHIBIT 21

              IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                         IN AND FOR NEW CASTLE COUNTY

          -------------------------------------------X
          CHARLES KOWAL AND HARRY W. KENT,           :
          in his Individual Retirement Account,      :
          on their own behalf and on behalf of       :
          all others similarly situated,             :
                                                     :
                                   Plaintiffs,       :
                                                     :  C.A. No. 14115
                    -against-                        :
                                                     :
          CHICAGO AND NORTHWESTERN TRANSPORTATION    :  CLASS ACTION
          COMPANY, UNION PACIFIC CORPORATION,        :  COMPLAINT
          RICHARD K. DAVIDSON, JAMES E. MARTIN,      :
          JAMES J. MOSSMAN, JAMES R. THOMPSON,       :
          ROBERT SCHMIEGE, HAROLD A. POLING, and     :
          SAMUEL K. SKINNER,                         :
                                                     :
                                   Defendants.       :
          -------------------------------------------X

                    Plaintiffs, by their attorneys, for their complaint
          against defendants, allege upon information and belief, except
          for paragraphs 1 and 2 hereof, which are alleged upon knowledge,
          as follows:

                    1.   Plaintiffs bring this action pursuant to Rule 23
          of the Rules of the Court of Chancery on their behalf and as a
          class action on behalf of all persons, other than the defendants
          and those in privity with them, who own common stock of Chicago
          And North Western Transportation Company ("CNW" or the
          "Company").

                    2.   Plaintiffs are, and have been at all relevant
          times, the owners of the common stock of the Company.

                    3.   Defendant CNW is a corporation duly organized and
          existing under the laws of the State of Delaware.  The Company
          is the holding company for the Chicago and North Western Railway
          Company, a leading railroad freight hauler in the central
          transcontinental corridor and major transporter of coal, grain
          and double-stack containers.  The Company's common stock is
          traded on the New York Stock Exchange under the symbol CNW.  The
          Company maintains its principal corporate offices at 165 North
          Canal Street, Chicago, Illinois 60606.

                    4.   Defendant Union Pacific Corporation ("Union
          Pacific") is a publicly-held corporation with the symbol "UNP." 
          Union Pacific is a transportation and natural resource company
          based in Bethlehem, Pennsylvania, with sales of approximately $8
          billion.  Union Pacific beneficially owns 29% of CNW and has
          three seats on CNW's board.

                    5.   Defendant Richard K. Davidson ("Davidson") is,
          and at all relevant times, has been a director of the Company. 
          Davidson is Chairman and Chief Executive Officer of Union
          Pacific Railroad Co., a subsidiary of Union Pacific.

                    6.   Defendant James E. Martin ("Martin") is, and at
          all relevant times, has been a director of the Company.

                    7.   Defendant James J. Mossman ("Mossman") is, and at
          all relevant times, has been a director of the Company.

                    8.   Defendant James R. Thompson ("Thompson") is, and
          at all relevant times, has been a director of the Company.

                    9.   Defendant Robert Schmiege ("Schmiege") is, and at
          all relevant time, has been a Chairman, Chief Executive Officer
          and President of the Company.

                    10.  Defendant Harold A. Poling ("Poling") is, and at
          all relevant times, has been a director of the Company.

                    11.  Defendant Samuel K. Skinner ("Skinner") is, and
          at all relevant times, has been a director of the Company.

                    12.  The defendants named in paragraphs 5 through 11
          may be referred to herein as the "individual defendants."

                    13.  The individual defendants are members of the
          board of CNW.  Certain of the individual defendants are members
          of the board of directors of Union Pacific.  Union Pacific, by
          virtue of its 29% interest in CNW and its three seats on CNW's
          board, is a controlling shareholder of CNW and orchestrated the
          merger at issue for its own benefit, at the expense of CNW's
          minority shareholders.

                    14.  The individual defendants, by reason of their
          corporate directorships, stand in a fiduciary position relative
          to the Company's public shareholders, whose fiduciary duties, at
          all times relevant herein, require them to exercise their best
          judgment, and to act in a prudent manner, and in the best
          interests of the Company's minority shareholders.  Said
          defendants owe the public shareholders, of CNW, including the
          plaintiffs, the highest duty of good faith, fair dealing, due
          care, loyalty, and full, candid and adequate disclosure.

                    15.  Each defendant herein is sued individually as an
          aider and abettor, as well as in his capacity as a director of
          the Company (in the case of the individual defendants), or as a
          control person and the liability of each arises from the fact
          that he has engaged in all or part of the unlawful acts, plans,
          schemes, or transactions herein.

                              CLASS ACTION ALLEGATIONS

                    16.  Plaintiffs bring this action on their own behalf
          and as a class action, pursuant to Rule 23 of the Rules of the
          Court of Chancery, on behalf of all security holders of the
          common stock of the Company (except the defendants herein and
          any person, firm, trust, corporation, or other entity related to
          or affiliated with any of the defendants) and their successors
          in interest, who are or will be threatened with injury arising
          from defendants' actions as more fully described herein.

                    17.  This action is properly maintainable as a class
          action.

                    18.  The class is so numerous that joinder of all
          members is impracticable.  As of Mach 23, 1994, there were
          43,786,787 shares of CNW common stock outstanding.

                    19.  A class action is superior to other methods for
          the fair and efficient adjudication of the claims herein
          asserted, and no unusual difficulties are likely to be
          encountered in the management of this class action.  The
          likelihood of individual class members prosecuting separate
          claims is remote.

                    20.  There are questions of law and fact which are
          common to the class and which predominate over questions
          affecting any individual class member.  The common questions
          include, inter alia, the following:

                         (a)  whether defendants have breached their
          fiduciary and other common law duties owed by them to plaintiff
          and the members of the class;

                         (b)  whether defendants are pursuing a scheme and
          course of conduct designed to eliminate the public securities
          holders of CNW in violation of the laws of the State of Delaware
          in order to benefit from a proposed acquisition of CNW by Union
          Pacific at the expense and to the detriment of the plaintiffs
          and the other public stockholders who are members of the class;

                         (c)  whether defendants are acting on both sides
          of the possible going-private transaction, thus presenting a
          conflict of interest, self-dealing and overreaching;

                         (d)  whether the said proposed acquisition,
          hereinafter described, constitutes a breach of the duty of fair
          dealing with respect to the members of the class; and,

                         (e)  whether the class is entitled to injunctive
          relief or damages as a result of the wrongful conduct of the
          defendants.

                    21.  Plaintiffs are committed to prosecuting this
          action and have retained competent counsel experienced in
          litigation of this nature.  The claims of the plaintiffs are
          typical of the claims of other members of the class and
          plaintiffs have the same interests as the other members of the
          class.  A class action is superior to any other type of
          adjudication of this controversy.

                    22.  Defendants have acted in a manner which affects
          plaintiffs and all members of the class, thereby making
          appropriate injunctive relief and/or corresponding declaratory
          relief with respect to the class as a whole.

                               SUBSTANTIVE ALLEGATIONS

                    23.  CNW's prospects have been improving over the last
          several quarters as the economy has come out of recession.

                    24.  On November 4, 1994, CNW said it completed ahead
          of schedule more than ten miles of track capacity expansion on
          the joint line of its Western Railroad Properties Inc. coal-
          hauling subsidiary.  In addition, the Company said that it
          planned to add another 27.2 miles of double-track on both the
          joint and connector lines by the end of 1994.  The Company said
          the coal line track expansion project will continue throughout
          1995 when $29.5 million is scheduled to be invested.  CNW stated
          that its growth would continue as its Western Railroad unit was
          expected to haul 88 million tons of coal in 1994 and increase up
          to 100 million tons in 1995.

                    25.  On December 13, 1994, Union Pacific declared that
          it was taking control of CNW.  Union Pacific reported that an
          Interstate Commerce Commission ("ICC") ruling allowed it to take
          control of CNW's railway subsidiary.  The ICC said that Union
          Pacific can convert its 29.5% stake in CNW from non-voting to
          voting shares and that Union Pacific will be allowed to take
          three seats on CNW's nine member board.  Prior to the ICC
          ruling, Union Pacific had one seat on CNW's seven member board.

                    26.  In January, 1995, Railway Age reported on Union
          Pacific's control of CNW.  According to Union Pacific Chairman
          and Chief Executive Officer, Dick Davidson, joint marketing and
          operating efforts are expected to produce benefits of
          approximately $23 million this year and $75 million annually by
          1997.  Davidson stated that if full integration was proposed,
          annual benefits of $184 million would be possible.

                    27.  On January 26, 1995, CNW reported lower fourth
          quarter 1994 earnings, $0.43 per share compared to 1993's $0.54
          per share, but said that capacity expansion and increased
          business on its core railroad had positioned it for future
          growth.  The number of loads hauled rose nine percent in 1994 to
          2,563,750 loads.  Coal shipments grew by 16% on the railway's
          coal hauling subsidiary in Wyoming and grew by 16% on the core
          railroad.

                    28.  On February 22, 1995, only three weeks before the
          merger with Union Pacific was announced, CNW stated that it
          expects its 1995 net income to be 30 to 35 percent above its
          1994 net income.  The Company had expected its net income to
          rise by 15 to 20 percent over the prior year but due to a
          better-than-anticipated operating performance, the Company
          raised its estimates.  The Company also said that its improved
          performance will permit an additional $40 million to $50 million
          of long-term debt to be retired this year.

                    29.  On February 23, 1995, Bear Stearns analyst Gary
          Schneider confirmed that he upgraded CNW to "attractive" from
          "neutral."  He raised his 1995 earnings estimate to $2.62 from
          $2.20.

                    30.  Due to the Company's vast growth opportunities,
          and an improved economy in its markets, CNW is on the verge of
          increased and sustained profitability.

                    31.  However, just as CNW was establishing its growth
          position, Union Pacific shocked the market with its proposal to
          merge CNW into Union Pacific.  On March 10, 1995, Union Pacific
          announced that it plans to increase its existing stake in CNW
          from 29% to 100%.  Union Pacific plans to pay $35 per share in
          cash.  The transaction is subject, among other things, to
          negotiation and execution of a mutually satisfactory definitive
          purchase agreement and approvals by the companies' respective
          boards of directors.  Union Pacific Chairman and Chief Executive
          Officer Drew Lewis stated:

               I am very excited about this transaction.  The Chicago
               and North Western is an excellent managed and
               maintained railroad with a great route to Chicago. 
               This is a strategic move that will make Union Pacific
               an even greater mover of southern Powder River Basin
               coal, grain, intermodal and other products.

                    32.  The proposed plan in which Union Pacific will pay
          $35 in cash for each share of CNW outstanding at the time of the
          merger does not represent the true value of the assets and
          future prospects underlying each share of CNW.

                    33.  By virtue of its dominance and control over CNW,
          Union Pacific, together with the individual defendants, has
          engaged in a plan involving acts which are grossly unfair to
          plaintiffs and the other members of the class.  The purpose of
          the plan is to enable Union Pacific to acquire 100% equity
          ownership of CNW and its assets for its own benefit, and at the
          expense of the other CNW stockholders who would be deprived of
          their equity investment and the benefits to accrue thereafter,
          for a grossly inadequate price.

                    34.  Defendants' announcement of the proposed bid
          fails to disclose whether, prior to making the offer, they
          obtained an unconditional opinion of an independent investment
          banker regarding the fair value of the CNW stock.  Nor does the
          merger announcement make any mention of the improving prospects
          for CNW due to the improving economy in its markets and track
          capacity expansion, the cost of which was partially borne by the
          minority shareholders.  The merger announcement does not mention
          that CNW is on the verge of reporting sustained and significant
          profits.

                    35.  Because of Union Pacific's 29% equity power,
          seats on CNW's Board and overwhelming control over CNW, all of
          CNW's directors who will be considering the offer, and the
          entire board of directors, no third party, as a practical
          matter, can attempt any competing bid for CNW, as the success of
          any such bid would require the consent and cooperation of Union
          Pacific.  In fact, because of the predominant control of CNW by
          Union Pacific, it is a foregone conclusion that whatever Union
          Pacific may offer, such offer will be accepted.

                    36.  The proposed transaction serves no legitimate
          business purpose of CNW but rather is an attempt by defendants
          to unfairly benefit Union Pacific from the transaction at the
          expense of CNW's public stockholders.  The proposed plan will
          deny plaintiffs and the other members of the class their right
          to share proportionately in the future success and growth in
          profitability of CNW and its valuable assets, while permitting
          defendants to reap huge benefits from the contemplated
          transaction.

                    37.  The price of $35 per share of CNW to be paid to
          the class members is unconscionable, unfair and grossly
          inadequate.  The terms of the proposed merger constitute a fraud
          upon the minority stockholders because, among other things:

                         (a)  the intrinsic value of each share of CNW is
          materially in excess of $35, giving due consideration to the
          possibilities of growth and profitability of CNW in light of its
          business, earnings and power, present and future.

                         (b)  the $35 for each share of CNW stock is not
          the result of arm's length negotiations and was not based upon
          any independent evaluation of the current value of CNW shares,
          assets or business, but was fixed arbitrarily by defendants, as
          part of a plan by Union Pacific to obtain complete ownership of
          CNW's assets and business at the lowest possible price, to
          obtain for itself benefits disproportionate with those to be
          received by the public stockholders, which facts were not and
          perhaps will not be disclosed since it is not in defendants'
          interests to disclose such facts.

                    38.  Because the defendants are in possession of
          corporate information concerning CNW's assets, businesses and
          future financial prospects, the degree of knowledge and economic
          power between defendants and the public stockholders is unequal,
          making it grossly and inherently unfair for Union Pacific to
          obtain ownership of CNW's assets from the public common
          shareholders.

                    39.  By reason of the foregoing acts, practices and
          course of conduct, Union Pacific has breached and continues to
          breach its duty as a controlling stockholder of CNW and the
          individual defendants have breached and continue to breach their
          duties as directors of CNW, to the remaining stockholders
          including plaintiff and the other members of the class herein.

                    40.  Plaintiffs and the class will suffer irreparable
          damage unless defendants are enjoined from continuing to breach
          their fiduciary duties and from carrying out the aforesaid plan
          and scheme.

                    41.  Plaintiffs and other members of the class have no
          adequate remedy at law.

                    WHEREFORE, plaintiffs demand judgment against the
          defendants jointly and severally, as follows:

                         (1)  declaring this action to be a class action
          and certifying plaintiffs as the class representatives, and
          their counsel as class counsel;

                         (2)  enjoining, preliminarily and permanently,
          Union Pacific's offer for acquisition of the CNW stock owned by
          plaintiffs and the other members of the class;

                         (3)  to the extent, if any, that the contemplated
          transaction or transactions complained of are consummated prior
          to the entry of this Court's final judgment, rescinding such
          transaction or transactions, and granting, inter alia,
          rescissionary damages;

                         (4)  directing that defendants pay to plaintiffs
          and the other members of the class all damages caused to them
          and account for all profits and any special benefits obtained as
          a result of their unlawful conduct;

                         (5)  awarding to plaintiffs the costs and
          disbursements of this action, including a reasonable allowance
          for the fees and expenses of plaintiffs' attorneys and experts;
          and

                        (6)  granting plaintiffs and the other members of
          the class such other and further relief as may be just and
          proper.

          Dated:  March 13, 1995

                                      MORRIS and MORRIS

                                      By:                                 

                                      Suite 1600
                                      1105 North Market Street
                                      Wilmington, Delaware  19801
                                      (302) 426-0400

                                      Attorneys for Plaintiffs

          Of Counsel:

          STULL, STULL & BRODY
          Jules Brody
          6 East 45th Street
          New York, New York 10017
          (212) 687-7230

          LAW OFFICES OF JOSEPH H. WEISS
          Joseph H. Weiss
          319 Fifth Avenue
          New York, New York 10016
          (212) 532-4171