Exhibit 10(b)

STOCK UNIT AGREEMENT

Dated: January 26, 2006

This Letter Agreement (the “Agreement”) will confirm an award to you of stock
units (“Stock Units”), as of the date hereof, by Union Pacific Corporation (the
“Company”), under the 2004 Stock Incentive Plan of the Company (the “Plan”), a
copy of which is included in this database and made a part hereof.

STOCK UNITS

1. GRANT OF UNITS. The Company hereby awards to you the number of Stock Units
shown on Exhibit A of this Agreement, each unit evidencing the right to receive,
upon the terms and subject to the conditions set forth in this Agreement and the
Plan, (i) one share of Common Stock of the Company, $2.50 par value per share
(“Common Stock”) and (ii) a payment in cash equal to the amount of dividends
that would have been payable on one share of Common Stock (“Dividend Equivalent
Payments”).

2. RESTRICTION PERIOD. The restriction period shall be 48 months, commencing on
the date hereof and terminating on January 26, 2010 unless sooner terminated
under provisions of the Plan (the “Restriction Period”).

3. DIVIDEND EQUIVALENT RIGHTS. During the Restriction Period, unless otherwise
determined by Compensation and Benefits Committee of the Company’s Board of
Directors (the “Committee”), you shall be entitled to receive Dividend
Equivalent Payments.

4. RESTRICTIONS. (i) Subject to Section 8(c) of the Plan, you shall not be
entitled to delivery of the stock until the expiration of the Restriction
Period; (ii) none of the Stock Units may be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of; (iii) your right to receive
Dividend Equivalent Payments shall terminate without further obligation on the
part of the Company at the earlier of your termination of employment with the
Company or a Subsidiary (as defined in the Plan), or at the end of the
Restriction Period; and (iv) all of the Stock Units shall be forfeited and all
of your rights to such Stock Units and the right to receive Common Stock shall
terminate without further obligation on the part of the Company unless you
remain in the continuous employment of the Company or a Subsidiary, as defined
in the Plan, for the entire Restriction Period, except as provided by
Section 8(c) of the Plan modified as follows: Section 8(c)(i) of the Plan
pertaining to the vesting of Stock Units upon retirement at or after actual age
65 shall not be applicable. However, if you remain continuously employed and
retire at or after actual age 60 under the provisions of the Company’s or a

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

Subsidiary’s pension plan, on the date or dates identified below, the Stock
Units shown on Exhibit A of this Agreement shall vest according to the following
schedule: One-fourth of the total number of Stock Units shown on Exhibit A of
this Agreement shall vest on January 26, 2007; one-fourth of the total number of
Stock Units shown on Exhibit A of this Agreement shall vest on January 26, 2008;
one-fourth of the total number of Stock Units shown on Exhibit A of this
Agreement shall vest on January 26, 2009; and one-fourth of the Stock Units
shown on Exhibit A of this Agreement shall vest on January 26, 2010.

5. PAYMENT OF STOCK UNITS. At the end of the Restriction Period or at such
earlier time as provided for in Section 8(c) of the Plan (as modified by
Section 4 hereof), and subject to Section 6 hereof, shares of Common Stock equal
to the number of Stock Units shall be delivered to you (through your account at
the Company’s third party stock plan administrator, if applicable) or your
beneficiary or estate, as the case may be, free of all restrictions. Any payment
of Common Stock shall occur on or before the 15th day of the third month of the
calendar year following the calendar year in which you become entitled to such
payment, except as provided in Section 6 hereof.

6. DEFERRAL. You may be provided with an opportunity to elect to defer receipt
under a deferred compensation program established by the Committee that complies
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
of any payment of Common Stock under Section 5 hereof. Regardless of whether you
elect to defer receipt of payment of any such Common Stock, if the Company
reasonably anticipates that its deduction with respect to such payment would be
limited or eliminated by Section 162(m) of the Code, receipt of any payment of
such Common Stock shall be deferred until after you have separated from service
as determined in accordance with Section 409A of the Code.

7. WITHHOLDING. Upon payment of the Stock Units, you must arrange for the
payment to the Company (through the Company’s third party stock plan
administrator, if applicable) of all applicable withholding taxes resulting
therefrom promptly after notification of the amount thereof. You may elect to
have shares withheld to pay withholding taxes if a proper election to pay
withholding taxes in this manner is made.

8. SUBJECT TO PLAN. The award confirmed by this Agreement is subject to the
terms and conditions of the Plan, as the same may be amended from time to time
in accordance with Section 19 thereof.

PROTECTION OF CONFIDENTIALITY

9. CONFIDENTIAL INFORMATION; TRADE SECRETS. By electronically signing Exhibit A
to this Agreement, you acknowledge that the Company regards certain information
relating to its business and operations as confidential. This includes all
information that the Company could reasonably be expected to keep confidential
and whose disclosure to

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

third parties would likely be disparaging or detrimental to the Company
(“Confidential Information”). Your electronic signature also acknowledges that
the Company has certain information that derives economic value from not being
known to the general public or to others who could obtain economic value from
its disclosure or use, which the Company takes reasonable efforts to protect the
secrecy of (“Trade Secrets”).

10. TYPES OF CONFIDENTIAL INFORMATION OR TRADE SECRETS. By electronically
signing Exhibit A, you acknowledge that you developed or have had or will have
access to one or more of the following types of Confidential Information or
Trade Secrets: information about rates or costs; customer or supplier agreements
and negotiations; business opportunities; scheduling and delivery methods;
business and marketing plans; financial information or plans; communications
within the attorney-client privilege or other privileges; operating procedures
and methods; construction methods and plans; proprietary computer systems
design, programming or software; strategic plans; succession plans; proprietary
company training programs; employee performance, compensation or benefits;
negotiations or strategies relating to collective bargaining agreements and/or
labor disputes; and internal or external claims or complaints regarding personal
injuries, employment laws or policies, environmental protection, or hazardous
materials. By electronically signing Exhibit A, you agree that any disclosures
by you to any third party of such Confidential Information or Trade Secrets
would constitute gross misconduct within the meaning of the Plan.

11. PRIOR CONSENT REQUIRED. By electronically signing Exhibit A, you agree that
you will not, unless you receive prior consent from the Company’s Senior Vice
President, Human Resources & Secretary or such other person designated by the
Company (hereinafter collectively referred to as the “Sr. VP-HR & S”), or unless
ordered by a court or government agency, (i) disclose to any subsequent employer
or unauthorized person any Confidential Information or Trade Secrets, or
(ii) retain or take with you when you leave the Company any property of the
Company or any documents (including any electronic or computer records) relating
to any Confidential Information or Trade Secrets.

12. PRIOR NOTICE OF EMPLOYMENT, ETC. By electronically signing Exhibit A, you
acknowledge that if you become an employee, contractor, or consultant for any
other railroad, this would create a substantial risk that you would,
intentionally or unintentionally, disclose or rely upon the Company’s
Confidential Information or Trade Secrets for the benefit of the other railroad
to the detriment of the Company. You further acknowledge that such disclosures
would be particularly damaging if made shortly after you leave the Company.
Therefore, by electronically signing Exhibit A, you agree that for a period of
one-year after you leave the Company, before accepting any employment or
affiliation with another railroad you will give written notice to the Sr.
VP-HR & S of your intention to accept such

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

employment or affiliation. You also agree to confer in good faith with the Sr.
VP-HR & S concerning whether your proposed employment or affiliation could
reasonably be expected to be performed without improper disclosure of
Confidential Information or Trade Secrets. If the Sr. VP-HR & S and you are
unable to reach agreement on this issue, you agree to submit this issue to
arbitration, to be conducted under the rules of the American Arbitration
Association, for final resolution. You also agree that you will not begin to
work for another railroad until the Sr. VP-HR & S or an arbitrator has
determined that such employment could reasonably be expected to be performed
without improper disclosure of the Company’s Confidential Information or Trade
Secrets.

13. FAILURE TO COMPLY. By electronically signing Exhibit A, you agree that, if
you fail to comply with any of the promises that you made in Section 11 or 12
above, you will return to the Company any shares of Common Stock (or the market
value of any shares of Common Stock received) which you received at any time
from 180 days prior to the earlier of (i) the date when you leave the Company or
(ii) the date you fail to comply with any such promise you made in Section 11 or
12 to 180 days after the date when the Company learns that you have not complied
with any such promise. You agree that you will return such shares of Common
Stock to the Company on such terms and conditions as may be required by the
Company. You further agree that the Company will be entitled to set off the
market value of any such shares of Common Stock against any amount that might be
owed to you by the Company.

NO DIRECT COMPETITION

14. SOLICITATION OF CUSTOMERS; NO EMPLOYMENT WITH WESTERN ROADS. By
electronically signing Exhibit A, you agree that for a period of one year
following your departure from the Company, you will not (directly or in
association with others) call on or solicit the business of any of the Company’s
customers with whom you actually did business or otherwise had personal contact
while you were employed by the Company, for the purpose of providing the
customers with goods and/or services similar in nature to those provided by the
Company in the states in which the Company now operates. You further agree that
for the same time period, you will not become an employee, contractor or
consultant for any of the following companies, which compete directly with the
Company: Burlington Northern Santa Fe Corporation; Kansas City Southern
Industries, Inc.; Dakota, Minnesota & Eastern Railway Company; Illinois Central
Corporation; and Texas Mexican Railway Company (including their respective
affiliates and subsidiaries or any company which acquires or is acquired by any
such company) (the “Western Roads”). This Section 14 is not intended to prevent
you from working for any employer other than a Western Road. This Section does
not apply to employees who work in California at the time when this Agreement is
electronically signed or when their employment with the Company ends.

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

15. ACKNOWLEDGMENT; INJUNCTIVE RELIEF. By electronically signing Exhibit A, you
acknowledge that Section 14 will not prevent you from being gainfully employed
after you leave the Company, because you will remain free to work in any
occupation, profession, trade, or business so long as you comply with your
promises in Section 14. You also agree that because money damages would not be
adequate to compensate the Company if you violate any of your promises in
Section 14, the Company would be entitled to an injunction from a Court to
enforce those promises.

16. VIOLATION OF PROMISES. By electronically signing Exhibit A, you agree that
if you violate any of your promises in Section 14, then you will return to the
Company any shares of Common Stock (or the fair market value thereof) granted to
you by this Agreement which you received at any time from 180 days prior to the
date when you leave the Company to 180 days after the date when the Company
learns that you have not complied with the promises you made in Section 14. You
agree that you will return such shares of Common Stock (or the fair market value
thereof) to the Company on such terms and conditions as may be required by the
Company. You further agree that the Company will be entitled to set off the
market value of any such shares of Common Stock against any amount that might be
owed to you by the Company.

GENERAL

17. SEVERABILITY. If any provision of this Agreement is, becomes, or is deemed
to be invalid, illegal, or unenforceable in any jurisdiction, such provision
shall be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Company, it shall be stricken and
the remainder of the Agreement shall remain in force and effect.

18. CHOICE OF LAW. All questions pertaining to the construction, regulation,
validity, and effect of this Agreement shall be determined in accordance with
the laws of the State of Utah, without regard to the conflict of laws doctrine.

19. EMPLOYMENT AT WILL. In accordance with Section 21(a) of the Plan, this
Agreement shall not be construed to confer upon any person any right to be
continued in the employ of the Company or a Subsidiary.

 

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

To confirm acceptance of the foregoing, kindly click on Button 2 “Retention Unit
Award (Exhibit A)” and select “I accept the above award and the related
Agreement”.

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

Sincerely,

UNION PACIFIC CORPORATION

    By:  

/s/ Richard K. Davidson

   

By:

 

/s/ James R. Young

Richard K. Davidson

   

James R. Young

Chairman

   

President and Chief Executive Officer

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

Retention Unit Award (Exhibit A)

January 26, 2006

Please verify the following information:

First name:

Middle initial/name:

Last name:

ID:

Company:

If any of the above information is not correct, please check the box below:

 

¨ Incorrect Personal Information

Type of grant:                     Retention Units

Number of retention units granted:

Restriction period:

Restriction commencement date:

Restriction termination date:

By executing this Exhibit A, I acknowledge that I am bound by all of the terms
of the Union Pacific Corporation 2004 Stock Incentive Plan and the Agreement
delivered herewith, each of which is incorporated by reference in this Exhibit
A.

Please make a choice below:

 

¨ I accept the above award and the related Agreement

 

¨ I do not accept this award and/or the related Agreement

After making a choice please click the SEND button above.

For general tax purposes, Stock Units are valued at the time of vesting. When
preparing tax calculations at the time of vesting, the Fair Market Value (FMV),
the average of the high and low trading prices of the stock on the day after the
restrictions lapse as reported in The Wall Street Journal listing of composite
transactions for New York Stock Exchange issues, is used.