Exhibit 10(d)

 

 

 

 

UNION PACIFIC CORPORATION

KEY EMPLOYEE CONTINUITY PLAN

 

 

Dated as of November 16, 2000

(as amended and restated effective as of January 1, 2009 and as further amended
February 3, 2011 and

February 6, 2014)

(The severance benefits provided under this Plan are subject to the terms and
limitation of the Board of Director’s Policy Regarding Shareholder Approval of
Future Severance Agreements, adopted on September 25, 2003)

 

 

 

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UNION PACIFIC CORPORATION

KEY EMPLOYEE CONTINUITY PLAN

(as amended and restated effective as of January 1, 2009

and as further amended February 3, 2011 and February 6, 2014)

 

The Company herebefore adopted, effective as of November 16, 2000, the Union
Pacific Corporation Key Employee Continuity Plan for the benefit of certain
employees of the Company and its Affiliates (the “Plan”). The Plan is hereby
amended and restated in its entirety, effective as of January 1, 2009, to
reflect the requirements of Section 409A of the Code. The Plan was further
amended February 3, 2011 and February 6, 2014. All capitalized terms used herein
are defined in Section 1 hereof. The Plan, as a “severance pay arrangement”
within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excepted
from the definitions of “employee pension benefit plan” and “pension plan” set
forth under Section 3(2) of ERISA, and is intended to meet the descriptive
requirements of a plan constituting a “severance pay plan” within the meaning of
regulations published by the Secretary of Labor at Title 29, Code of Federal
Regulations, § 2510.3-2(b).

 

SECTION 1.                     DEFINITIONS. As hereinafter used:

SECTION 1.1    “Affiliate” shall have the meaning set forth in Rule 12b-2 under
Section 12 of the Exchange Act.

SECTION 1.2    “Beneficial Owner” shall have the meaning set forth in Rule 13d-3
under the Exchange Act.

SECTION 1.3    “Board” means the Board of Directors of the Company.

SECTION 1.4    “Cause” means (i) the willful and continued failure by the
Eligible Employee to substantially perform the Eligible Employee’s duties with
the Employer (other than any such failure resulting from the Eligible Employee’s
incapacity due to physical or mental illness), or (ii) the willful engaging by
the Eligible Employee in conduct which is demonstrably injurious to the Company,
monetarily or otherwise. For purposes of this definition, no act, or failure to
act, on the Eligible Employee’s part shall be deemed “willful” unless done, or
omitted to be done, by the Eligible Employee not in good faith or without
reasonable belief that the Eligible Employee’s act, or failure to act, was in
the best interest of the Company.

SECTION 1.5    A “Change in Control” shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:

(i)          any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates) representing 20% or more of the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause
(A) of paragraph (iii) below; or

(ii)         the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on
November 16, 2000, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved or recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors on the
date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

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(iii)        there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than (A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) more than 50% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company or its Affiliates)
representing 20% or more of the combined voting power of the Company’s then
outstanding securities; or

(iv)        the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, more than 50% of the
combined voting power of the voting securities of which is owned by shareholders
of the Company in substantially the same proportions as their ownership of the
Company immediately prior to such sale.

SECTION 1.6    “Code” means the Internal Revenue Code of 1986, as it may be
amended from time to time.

SECTION 1.7    “Company” means Union Pacific Corporation, a Utah corporation, or
any successors thereto.

SECTION 1.8    “Eligible Employee” means any employee who is a Tier 1, Tier 2 or
Tier 3 Employee. An Eligible Employee becomes a “Severed Employee” once he or
she incurs a Severance.

SECTION 1.9    “Employer” means the Company or any of its Affiliates which is an
employer of an Eligible Employee.

SECTION 1.10  “Equity Award” shall mean stock options, restricted stock,
restricted stock units and other similar equity-based awards which are granted
to an Eligible Employee by the Company (excluding, however, restricted stock
unit awards made under the Company’s 2006 Long Term Plan, 2007 Long Term Plan,
2008 Long Term Plan, or any similar awards with performance criteria made under
a long term incentive plan adopted by the Company subsequent to the date
hereof).

SECTION 1.11  “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

SECTION 1.12  “Good Reason” means the occurrence, on or after the date of a
Change in Control and without the affected Eligible Employee’s written consent,
of any of the following: (i) the assignment to the Eligible Employee of duties
that are materially inconsistent with the Eligible Employee’s duties immediately
prior to the Change in Control (other than pursuant to a transfer or promotion
to a position of equal or enhanced responsibility or authority) or any material
diminution in the nature or scope of the Eligible Employee’s responsibilities
from those in effect immediately prior to the Change in Control; (ii) a
reduction by the Employer (or any member of the Parent Group) in the Eligible
Employee’s annual base salary or annual incentive opportunity from that in
effect immediately prior to the Change in Control; provided, however, that such
reduction results in a material diminution in the total package of compensation
and benefits provided to the Eligible Employee for performing services from that
in effect immediately prior to the Change in Control; (iii) a material reduction
by the Employer (or any member of the Parent Group) in the pension, thrift,
medical or long term disability benefits provided to the Eligible Employee from
those provided to the Eligible Employee immediately prior to the Change in
Control;

 

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provided, however, that such reduction results in a material diminution in the
total package of compensation and benefits provided to the Eligible Employee for
performing services from that in effect immediately prior to the Change in
Control; or (iv) the failure by any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise), to all or substantially all of
the business and/or assets of the Company, to expressly assume and agree to
perform this Plan in the same manner and to the same extent that the Company
would be required to perform it if no succession had taken place.

(a)          The Eligible Employee must notify the Employer of the existence of
the reason or condition that the Eligible Employee believes would permit a
separation from service for Good Reason within ninety (90) days of the initial
existence of such reason or condition. The Employer (or member of the Parent
Group, as applicable) shall, following receipt of such notice, have a period of
not less than thirty (30) days to cure the condition and not be required to pay
the Severance Payment or provide any other payment or benefit described in
Section 2 that is conditioned on the Eligible Employee’s Severance. The Employer
may establish procedures with respect to the notice and cure provisions
described above, consistent with Treas. Reg. § 1.409A-1(n), and may in
appropriate circumstances waive part or all of the above-described cure period.

SECTION 1.13  “Parent” shall mean the ultimate parent, if any, of the Company
after a Change in Control.

SECTION 1.14  “Parent Group” shall mean, collectively, the Parent and its
Affiliates.

SECTION 1.15  “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its Affiliates,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities or (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

SECTION 1.16  “Plan” means the Union Pacific Corporation Key Employee Continuity
Plan, as set forth herein, as it may be amended from time to time.

SECTION 1.17  “Plan Administrator” means the person or persons appointed from
time to time by the Board which appointment may be revoked at any time by the
Board.

SECTION 1.18  A “Potential Change in Control” shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

(a)          the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;

(b)          the Company or any Person publicly announces an intention to take
or to consider taking actions which, if consummated, would constitute a Change
in Control;

(c)          any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its Affiliates)
representing fifteen (15%) or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities; or

(d)          the Board adopts a resolution to the effect that a Potential Change
in Control has occurred.

 

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SECTION 1.19  “Severance” means the separation from service (as such term is
defined in section 409A of the Code and the regulations promulgated thereunder)
of an Eligible Employee from the Employer on or within two years following the
date of the Change in Control, (i) by the Employer, other than for Cause or
pursuant to mandatory retirement policies of the Employer that existed prior to
the Change of Control, or (ii) by the Eligible Employee for Good Reason. An
Eligible Employee will not be considered to have incurred a Severance if his or
her employment is (a) discontinued by reason of the Eligible Employee’s death or
a physical or mental condition causing such Eligible Employee’s inability to
substantially perform his or her duties with the Employer, including, without
limitation, such condition entitling him or her to benefits under any sick pay
or disability income policy or program of the Employer or (b) discontinued by
reason of the divestiture of a facility, sale of a business or business unit, or
the outsourcing of a business activity with which the Eligible Employee is
affiliated, if the Eligible Employee is offered comparable employment by the
entity which acquires such facility, business or business unit or which succeeds
to such outsourced business activity and such entity agrees to assume the
obligations of the Employer to the Eligible Employee under this Plan.

SECTION 1.20  “Severance Date” means the date on or after the date of the Change
in Control on which an Eligible Employee incurs a Severance.

SECTION 1.21  “Severance Payment” means the payment determined pursuant to
Section 2.1 hereof.

SECTION 1.22  “Tier 1 Employee” means any employee of the Employer designated as
such by a resolution of the Board.

SECTION 1.23  “Tier 2 Employee” means any employee of the Employer designated as
such by a resolution of the Board.

SECTION 1.24  “Tier 3 Employee” means any employee of the Employer designated as
such by a resolution of the Board.

 

SECTION 2.                    BENEFITS.

SECTION 2.1    (a)         Each Eligible Employee who incurs a Severance shall
be entitled, subject to Section 2.6 hereof, to receive a Severance Payment equal
to the product of (i) the sum of (A) such Eligible Employee’s annual base salary
as in effect immediately prior to such Severance, plus (B) the average annual
incentive compensation earned (or foregone at the election of the Eligible
Employee) by such Eligible Employee in respect of the three (or fewer, as
hereinafter described) annual incentive compensation determinations (including
determinations that no annual incentive compensation will be awarded)
immediately preceding the Severance (or, if higher, in respect of the three (or
fewer, as hereinafter described) annual incentive compensation determinations
immediately preceding the Change in Control) multiplied by (ii) in the case of a
Tier 1 Employee, three (3), in the case of a Tier 2 Employee, two (2); and in
the case of a Tier 3 Employee, one and one-half (1.5). For purposes of clause
(A) above, annual base salary shall be determined immediately prior to the
Severance (without regard to any reductions therein which constitute Good
Reason) and for purposes of clause (B) above, annual incentive compensation
determinations prior to 2000 (with respect to annual incentive compensation
earned for plan years prior to 1999) shall be disregarded.

(b)        The Severance Payment shall be paid to a Severed Employee in a cash
lump sum, within twenty (20) business days immediately following the expiration
of the revocation period, if any, applicable to such Severed Employee’s release
described in Section 2.6; but in no event later than March 15th of the year
following the calendar year in which the Severance Date occurs.

SECTION 2.2    Each Eligible Employee who incurs a Severance and who is, at the
time of such Severance, a participant in the Supplemental Pension Plan for
Officers and Managers of Union Pacific

 

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Corporation and Affiliates (the “UPC SERP”) shall, for purposes of the UPC SERP,
(i) be deemed to have accumulated an additional thirty-six (36) months of age
and service credit beyond the Severance Date solely for purposes of determining
the amount of any UPC SERP benefit (but in no event beyond age 65 and in no
event shall aggregate service under the UPC SERP exceed forty (40) years), and
(ii) be deemed to be fully vested under such SERP.

SECTION 2.3    For a period of three years following a Severed Employee’s
Severance Date (or, if sooner, until such Severed Employee attains the age of
fifty-two (52), at which time the Severed Employee shall become entitled to
receive benefits under the Company’s retiree medical benefit plans if such
Severed Employee’s original hire date with (A) the Company or (B) any Affiliate
that on December 31, 2003 was a participating employer in the Flexible Benefits
Program for Full-Time Salaried and Full-Time Hourly Employees of Union Pacific
Corporation and Affiliates, is before January 1, 2004), the Company shall
provide such Severed Employee and anyone entitled to claim under or through such
Severed Employee all benefits under any medical or dental program to the same
extent as if such Severed Employee had continued to be an employee during such
period; provided, however, (a) that such Severed Employee shall pay the fair
market value for such coverage (active or retiree, as applicable), as determined
under section 61 of the Code and the regulations promulgated thereunder, and
(b) the benefit amounts otherwise receivable by or in respect of a Severed
Employee hereunder shall be reduced to the extent benefits of the same type are
received by such Severed Employee from a subsequent employer (and the Severed
Employee shall report the receipt of such benefits to the Company). The coverage
period for purposes of the group health continuation requirements of section
4980B of the Code shall commence on the Severance Date.

SECTION 2.4    (a)          Subject to Section 2.6 hereof, in the event an
Eligible Employee incurs a Severance, the Eligible Employee shall become fully
vested in all outstanding Equity Awards that are, at the Severance Date,
unvested or subject to forfeiture restrictions. In the case of an Equity Award
consisting of a stock option, such option shall continue to be exercisable for a
period of three years from the Severance Date (or such longer period as may be
prescribed in the plan or agreement governing such option), but in no event
later than the expiration date of such option. In the case of an Equity Award
consisting of restricted stock, the Company shall make payment of such
restricted stock within five (5) business days following lapse of any revocation
period for the release contemplated by Section 2.6.

            (b)           In the case of an Equity Award (or any part thereof)
that is a Stock Unit (as defined in the Company’s 2004 Stock Incentive Plan, as
amended (or any subsequent stock incentive plan adopted by the Company) (the
“Stock Plan”)) granted to an Eligible Employee who incurs a Severance under this
Plan, such Stock Unit shall, subject to Section 2.6 and the final sentence of
this paragraph (b) regarding deferrals, be paid within five (5) business days
following lapse of any revocation period for the release contemplated by
Section 2.6. Notwithstanding the foregoing, in the event that such a Severed
Employee has attained Retirement Status (as defined below) prior to the Exempt
Date (as defined below), the Stock Unit shall not be paid until sixty (60) days
after the Severance Date, subject to Section 2.6 and the final sentence of this
paragraph (b) regarding deferrals. “Retirement Status” means, (i) for Eligible
Employees who were granted Stock Unit Equity Awards in 2006 and/or 2007 under
the Stock Plan, an individual who, during the Restriction Period for such Equity
Award, attained age 60 with eligibility for retirement under the provisions of
the Company’s or a subsidiary’s pension plan (or who had attained such age and
eligibility at the time the Stock Unit Equity Award was granted), (ii) for
Eligible Employees who were granted Stock Unit Equity Awards in 2005 or in any
year 2008-2010, an individual who, during the Restriction Period for such Equity
Award, attained age 65 (or who had attained such age at the time the Stock Unit
Equity Award was granted), (iii) for Eligible Employees who were granted a Stock
Unit Equity Award in 2011, an individual who was continually employed with the
Company or a subsidiary until September 30, 2011 and during the Restriction
Period for such Equity Award and while continually employed with the Company or
a subsidiary, attained age 62 with 10 years of service under the provisions of
the Company’s or a subsidiary’s pension plan (or who had attained such age and
service at the time the Stock Unit Equity Award was granted), and (iv) for
Eligible Employees who are granted a Stock Unit Equity Award in a year
subsequent to 2011 under the Stock Plan or any successor

 

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thereto adopted by the Company, “Retirement Status” shall be defined in
accordance with and to the extent such term is defined under the Stock Plan (or
successor thereto) or the grant notice or other document evidencing such Stock
Unit Equity Award (“Stock Unit Agreement”). “Exempt Date” means January 1 of the
calendar year in which the Restriction Period ends, or, in the case of a
Restriction Period that ends such that payment would be made by March 15 of the
calendar year in which such Restriction Period ends, January 1 of the preceding
year. If a Severed Employee has previously elected to defer receipt of a Stock
Unit to a date beyond the applicable payment date referenced herein, payment of
such Stock Unit will be made on the later of (A) the deferred payment date of
the Stock Unit determined in accordance with the deferred compensation plan
under which the Stock Units are deferred (which, for this purpose, will be the
first deferred payment date in the event the Stock Units, in accordance with
such deferred compensation plan, are paid in installment payments) and (B) the
date otherwise established for payment in this subparagraph (b).

            (c)           If the payment terms of the Stock Plan (or any
successor thereto) or the payment provisions of an Eligible Employee’s Stock
Unit Agreement should conflict with the terms of this Plan, the terms of this
Plan shall control and Stock Units shall be paid in accordance with
Section 2.4(b) hereof.

            (d)           The amount of any cash incentive bonus awarded under
any Company long-term incentive plan or program shall be calculated in
accordance with the applicable plan document and paid, subject to Section 2.6,
to an Eligible Employee who has a Severance within five (5) business days
following the lapse of any revocation period for the release contemplated by
Section 2.6, or, in the event such cash incentive bonus is “deferred
compensation” under Section 409A of the Code because the Eligible Employee
elected to defer payment of such bonus in accordance with the terms of a
deferral program applicable to such bonus, at such other date as provided under
the terms of the Eligible Employee’s payment election made in accordance with
such deferral program.

SECTION 2.5    In the event of a claim for benefits hereunder by an Eligible
Employee, such Eligible Employee shall present the reason for his or her claim
in writing to the Plan Administrator. The Plan Administrator shall, within
thirty (30) days after receipt of such written claim, send a written
notification to the Eligible Employee as to its disposition. In the event the
claim is wholly or partially denied, such written notification shall (a) state
the specific reason or reasons for the denial, (b) make specific reference to
pertinent Plan provisions on which the denial is based, (c) provide a
description of any additional material or information necessary for the Eligible
Employee to perfect the claim and an explanation of why such material or
information is necessary, and (d) set forth the procedure by which the Eligible
Employee may appeal the denial of his or her claim. In the event an Eligible
Employee wishes to appeal the denial of his or her claim, he or she may request
a review of such denial by making application in writing to the Plan
Administrator within sixty (60) days after receipt of such denial. Such Eligible
Employee (or his or her duly authorized legal representative) may, upon written
request to the Plan Administrator, review any documents pertinent to his or her
claim, and submit in writing, issues and comments in support of his or her
position. Within forty-five (45) days after receipt of a written appeal (unless
special circumstances, such as the need to hold a hearing, require an extension
of time, but in no event more than one hundred twenty (120) days after such
receipt), the Plan Administrator shall notify the Eligible Employee of the final
decision. The final decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan provisions on which the
decision is based.

SECTION 2.6    No Severed Employee shall be eligible to receive a Severance
Payment or other benefits under the Plan that are subject to this Section 2.6
unless he or she first executes a written release substantially in the form
attached hereto as Schedule A. Payments made under this Plan that are contingent
on the Severed Employee’s execution of the release shall in all events be paid
no later than two and one-half months following the end of the calendar year in
which the Severance Date, or other triggering event for the payment, occurs;
except that with respect to any benefits under the Plan that are “deferred
compensation” under section 409A of the Code, payment shall be made sixty
(60) days after

 

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the Severance Date, unless the Severed Employee is a “specified employee” (as
determined in accordance with a uniform policy adopted by the Company with
respect to all arrangements subject to section 409A of the Code maintained by
the Company and its Affiliates), in which case such deferred compensation shall
be paid six months plus one day following such employee’s “separation from
service” as defined in the regulations promulgated under section 409A of the
Code. In order to ensure compliance with the foregoing, the Company shall
provide the release described in this Section 2.6 to the Severed Employee in
sufficient time so that the Severed Employee can consider the release for the
full consideration period required by applicable law, and have the ability to
revoke such release during the revocation period(s) required by applicable law,
before payment is made by the applicable deadline.

SECTION 2.7    An Employer shall be entitled to withhold from amounts to be paid
to the Severed Employee hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold.

 

SECTION 3.                    PLAN ADMINISTRATION.

SECTION 3.1    The Plan Administrator shall administer the Plan and may
interpret the Plan, prescribe, amend and rescind rules and regulations under the
Plan and make all other determinations necessary or advisable for the
administration of the Plan, subject to all of the provisions of the Plan.

SECTION 3.2    The Plan Administrator may delegate any of its duties hereunder
to such person or persons from time to time as it may designate.

SECTION 3.3    The Plan Administrator is empowered, on behalf of the Plan, to
engage accountants, legal counsel and such other personnel as it deems necessary
or advisable to assist it in the performance of its duties under the Plan. The
functions of any such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan. Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable expenses thereof
shall be borne by the Employer.

SECTION 4.                    PLAN MODIFICATION OR TERMINATION.

The Plan may be amended or terminated by the Board at any time; provided,
however, that, during the following periods, the Plan may not be terminated nor
may the Plan be amended in any manner adverse to the interests of any Eligible
Employee (including, without limitation, any adverse changes to a person’s
status as an Eligible Employee) without such Eligible Employee’s written consent
(and any such termination or amendment shall be void and of no force and
effect): (i) within one year preceding a Potential Change in Control (in the
case of any action (other than in connection with a separation from service)
pursuant to which an individual ceases to be designated as an Eligible Employee
or is designated in a lower tier of Eligible Employee) or within 90 days
preceding a Potential Change in Control (in the case of termination of the Plan
or any other amendment which is adverse to the interests of any Eligible
Employee), (ii) during the pendency of or within 90 days following the cessation
of a Potential Change in Control or (iii) within two years following a Change in
Control. This Plan shall terminate automatically two years and one day after a
Change in Control. No Plan termination shall, without such Eligible Employee’s
written consent, adversely affect any rights of any Eligible Employee which
accrued under this Plan prior to such termination.

 

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SECTION 5.                    GENERAL PROVISIONS.

SECTION 5.1    Except as otherwise provided herein or by law, no right or
interest of any Eligible Employee under the Plan shall be assignable or
transferable, in whole or in part, either directly or by operation of law or
otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer thereof
shall be effective; and no right or interest of any Eligible Employee under the
Plan shall be liable for, or subject to, any obligation or liability of such
Eligible Employee. When a payment is due under this Plan to a Severed Employee
who is unable to care for his or her affairs, payment may be made directly to
his or her legal guardian or personal representative.

SECTION 5.2    If an Employer is obligated by law, contract, policy or otherwise
to pay severance pay, a termination indemnity, notice pay, or the like, or if an
Employer is obligated by law to provide advance notice of separation (“Notice
Period”), then any Severance Payment hereunder shall be reduced by the amount of
any such severance pay, termination indemnity, notice pay or the like, as
applicable, and by the amount of any compensation received during any Notice
Period.

SECTION 5.3    Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Eligible Employee, or any person
whomsoever, the right to be retained in the service of the Employer, and all
Eligible Employees shall remain subject to discharge to the same extent as if
the Plan had never been adopted.

SECTION 5.4    If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.

SECTION 5.5    This Plan shall inure to the benefit of and be binding upon the
heirs, executors, administrators, successors and assigns of the parties,
including each Eligible Employee, present and future, and any successor to the
Employer. If a Severed Employee shall die while any amount would still be
payable to such Severed Employee hereunder if the Severed Employee had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to the executor, personal representative
or administrators of the Severed Employee’s estate.

SECTION 5.6    The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.

SECTION 5.7    The Plan shall not be funded. No Eligible Employee shall have any
right to, or interest in, any assets of any Employer which may be applied by the
Employer to the payment of benefits or other rights under this Plan.

SECTION 5.8    Any notice or other communication required or permitted pursuant
to the terms hereof shall have been duly given when delivered or mailed by
United States mail, first class, postage prepaid, addressed to the intended
recipient at his, her or its last known address.

SECTION 5.9    This Plan shall be construed and enforced according to the laws
of Nebraska, to the extent not preempted by federal law, which shall otherwise
control.

 

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SCHEDULE A

WAIVER AND RELEASE OF CLAIMS AGREEMENT

YOU HAVE BEEN ADVISED TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.

YOU HAVE [FORTY-FIVE] [TWENTY-ONE] DAYS AFTER RECEIVING THIS AGREEMENT TO
CONSIDER WHETHER TO SIGN IT.

AFTER SIGNING THIS AGREEMENT, YOU HAVE ANOTHER SEVEN DAYS IN WHICH TO REVOKE IT,
AND IT DOES NOT TAKE EFFECT UNTIL THOSE SEVEN DAYS HAVE ENDED.

In consideration of, and subject to, the payments to be made to me by [Name of
Employer Corporation] (“Union Pacific”) or any of its subsidiaries, pursuant to
the Union Pacific Corporation Key Employee Continuity Plan (the “Plan”), which I
acknowledge that I would not otherwise be entitled to receive, I hereby waive
any claims I may have for employment or re-employment by Union Pacific or any
subsidiary or parent of Union Pacific after the date hereof, and I further agree
to and do release and forever discharge Union Pacific or any subsidiary or
parent of Union Pacific and their respective past and present officers,
directors, shareholders, employees and agents from any and all claims and causes
of action, known or unknown, arising out of or relating to my employment with
Union Pacific or any subsidiary or parent of Union Pacific or the termination
thereof, including, but not limited to, by reason of any event, matter, cause or
thing which has occurred to the date of execution of this Release relating in
any way to my employment relationship with Union Pacific or to my termination of
employment thereof, whether for severance or based on statutory or common law
claims for employment discrimination, wrongful discharge, breach of contract or
any other theory, whether legal or equitable, or arising under any statute or
regulation, including the Age Discrimination in Employment Act of 1967, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act of 1990, the Employee Retirement Income Security Act of
1974, and the Family Medical Leave Act of 1993, each as amended, or any other
federal, state or local law, regulation, ordinance or common law.

Notwithstanding the foregoing or any other provision hereof, nothing in this
Waiver and Release of Claims Agreement shall adversely affect (i) my rights
under the Plan; (ii) my rights to benefits other than severance benefits under
plans, programs and arrangements of Union Pacific or any subsidiary or parent of
Union Pacific; or (iii) my rights to indemnification under any indemnification
agreement, applicable law and the certificates of incorporation and bylaws of
Union Pacific and any subsidiary or parent of Union Pacific, and my rights under
any director’s and officer’s liability insurance policy covering me.

I acknowledge that I have signed this Waiver and Release of Claims Agreement
voluntarily, knowingly, of my own free will and without reservation or duress,
and that no promises or representations, written or oral, have been made to me
by any person to induce me to do so other than the promise of payment set forth
in the first paragraph above and Union Pacific’s acknowledgment of my rights
reserved under the second paragraph above.

I understand that this release will be deemed to be an application for benefits
under the Plan, and that my entitlement thereto shall be governed by the terms
and conditions of the Plan, and I expressly hereby consent to such terms and
conditions.

I acknowledge that I have been given not less than [forty-five (45)] [twenty-one
(21)] days to review and consider this Waiver and Release of Claims Agreement,
and that I have had the opportunity to consult with an attorney or other advisor
of my choice and have been advised by Union Pacific to do so

 

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if I choose. I may revoke this Waiver and Release of Claims Agreement seven days
or less after its execution by providing written notice to Union Pacific.

Finally, I acknowledge that I have carefully read this Waiver and Release of
Claims Agreement and understand all of its terms. This is the entire Agreement
between the parties and is legally binding and enforceable.

This Waiver and Release of Claims Agreement shall be governed and interpreted
under federal law and the laws of Nebraska.

I knowingly and voluntarily sign this Waiver and Release of Claims Agreement.

 

Date Delivered to Employee:

 

              [Name of Employer Corporation]

                                                   

 

Date Signed by Employee:

 

              By:                                               

 

                                                   

 

Title:                                                 

 

Seven-Day Revocation Period Ends:

   

                                                   

   

Signed:                                         

 

Date:                                                 

 

 

 

 

    (Print Employee’s Name)

 

 

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