EX-10.(g)



 Exhibit 10(g) 
  

 
  

 
  
 UNION PACIFIC CORPORATION 
 2004 STOCK INCENTIVE PLAN 

 
 Originally effective as of April 16, 2004 

Amended and restated effective as of January 1, 2009, 
 amended September 23, 2009 
 and March 1, 2013 

 
  
  

 







 UNION PACIFIC CORPORATION 

2004 STOCK INCENTIVE PLAN 

1.     PURPOSE 
 The purpose of the Union Pacific Corporation 2004 Stock Incentive Plan is to promote and closely align the interests of employees of Union Pacific Corporation and its shareholders by providing stock-based
compensation and other performance-based compensation. The Plan is intended to strengthen Union Pacific Corporation’s ability to reward performance which enhances long term shareholder value; to increase employee stock ownership through
performance-based compensation plans; and to strengthen the Company’s ability to attract and retain an outstanding employee and executive team. 
 This Plan was originally effective as of April 16, 2004 (the “Original Effective Date”). Effective as of January 1, 2009, this Plan is amended and restated to reflect the provisions of
Section 409A of the Code. 
 2.     DEFINITIONS 

The following terms shall have the following meanings: 

“Achievement Award Shares” means Shares awarded under Section 11 of the Plan. 

“Act” means the Securities Exchange Act of 1934, as amended. 

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

“Approved Leave of Absence” means a leave of absence of definite length approved by the senior human resources officer
(or such other officer with similar authority), or one of more additional officers or employees of the Company or any Subsidiary or Affiliate, to whom the Committee delegates such authority. 

“Award” means an award of Options, Stock Appreciation Rights, Retention Shares, Stock Units or Incentive Bonuses pursuant
to the Plan. 
 “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act.

 “Beneficiary” means any person or persons designated in writing by a Participant to the Committee in a form
prescribed by it for that purpose, which designation shall be revocable at any time by the Participant prior to his or her death, provided that, in the absence of such a designation or the failure of the person or persons so designated to survive
the Participant, “Beneficiary” shall mean such Participant’s estate; and further provided that no designation of Beneficiary shall be effective unless it is received by the Company before the Participant’s death. 

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

“Change in Control” means the occurrence of any one of the following: 

(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) or (B) 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 January 29, 2004, 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 

(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. 
 “Code” means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any successor statute. 

  
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 “Committee” means the Committee designated by the Board to administer the
Plan pursuant to Section 3. 
 “Common Stock” means the Common Stock, par value $2.50 per share, of the
Company. 
 “Company” means Union Pacific Corporation, a Utah corporation, and except as utilized in the
definition of Change in Control, any successor corporation. 
 “Fair Market Value” means as of any date, the
value of the Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, system or market, its Fair Market Value shall be the closing price for the Common Stock as quoted on such exchange, system or
market as reported in the Wall Street Journal or such other source as the Committee deems reliable; and (ii) in the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the
Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Committee deems appropriate. 

“Incentive Bonus” means a bonus opportunity awarded under Section 10 pursuant to which a Participant may become
entitled to receive an amount, payable in cash or Shares, based on satisfaction of such performance criteria as are specified in the Incentive Bonus Document. 
 “Incentive Bonus Document” means the agreement or other document evidencing the Award of an Incentive Bonus. 
 “Option” means a non-qualified option granted under Section 6 of the Plan. 
 “Option Document” means the agreement or other document evidencing the Award of an Option. 
 “Option Proceeds” means the cash actually received by the Company as payment of the option price upon exercise of an option plus the maximum tax benefit that could be realized by the Company as a result
of the option exercise, which shall be determined by multiplying the amount that is deductible as a result of the option exercise (currently, equal to the amount upon which the Participant’s withholding tax obligation is calculated) by the sum
of the maximum federal corporate income tax rate for the year of exercise plus an assumed 3% state income tax rate. To the extent that a Participant pays the option price and/or withholding taxes with Shares, Option Proceeds shall not be calculated
with respect to the amount paid in such manner. 
 “Participant” means any employee of the Company or a
Subsidiary (including directors who are also such employees) who is granted an Award under the Plan. 
 “Person”
shall have the meaning given in Section 3(a)(9) of the 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 

  
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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. 
 “Plan” or “SIP” means this Union Pacific Corporation 2004 Stock Incentive Plan, as amended from time to time. 

“Prior Plans” means the Union Pacific Corporation 2001 Stock Incentive Plan and the 1993 Stock Option and Retention Stock
Plan of Union Pacific Corporation. 
 “Qualifying Performance Criteria” means the criteria set forth in
Section 15. 
 “Retention Shares” means Shares subject to an Award granted under Section 8 of the
Plan. 
 “Restriction Period” means the period defined in Section 8(b)(i). 

“Retirement Status” means, (a) for a Participant who was granted Stock Units in 2006 and/or 2007 under this Plan, an
individual who, during the Unit Restriction Period for such Stock Unit Award, attained age 60 with eligibility for retirement under the provisions of the Company’s or Subsidiary’s pension plan (or who had attained such age and eligibility
at the time such Stock Unit Award was granted) (“60/10 Retirement Status”), and (b) for a Participant who was granted Stock Units in 2005, or in 2008 or any subsequent year under this Plan, or any successor thereto adopted by the
Company, an individual who, during the Unit Restriction Period for such Stock Unit Award, attained age 65 (or who had attained such age at the time such Stock Unit Award was granted) (“Age 65 Retirement Status”). 

“Separation from Service” means the termination of a Participant’s employment with the Company and all Subsidiaries
that constitutes a “separation from service” within the meaning of Treas. Reg. Section 1.409A-1(h)(1). 

“Shares” mean shares of the Company’s Common Stock. 

“Stock Administrator” means the Company’s third party stock administrator or any other person or entity designated
by the Committee to assist in the administration of this Plan. 
 “Stock Appreciation Right” means a right
granted pursuant to Section 7 of the Plan. 
 “Stock Unit” means a right to receive in the future a Share
of Common Stock or, at the option of the Committee, the value of such Common Stock in cash pursuant to an Award granted under Section 9 of the Plan. 
 “Subcommittee” means one or more separate committees appointed by the Committee pursuant to Section 3. 

  
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 “Subsidiary” means any corporation of which the Company owns directly or
indirectly at least a majority of the outstanding shares of voting stock. 
 “Unit Restriction Period” means the
period defined in Section 9. 
 “Unit Vesting Condition” means any condition to the vesting of Stock Units
established by the Committee pursuant to Section 9. 
 “Vesting Condition” means any condition to the
vesting of Retention Shares established by the Committee pursuant to Section 8. 
 3.     ADMINISTRATION

 a.     Composition of Committee. This Plan shall be administered by the
Compensation and Benefits Committee of the Board (the “Committee”), as appointed from time to time by the Board. The Board shall fill vacancies on, and from time to time may remove or add members to, the Committee. The Committee shall act
pursuant to a majority vote or unanimous written consent. The Board, in its sole discretion, may exercise any authority of the Committee under this Plan in lieu of the Committee’s exercise thereof and in such instances references herein to the
Committee shall refer to the Board. The Committee shall consist of two or more directors each of whom is a “non-employee director” (as such term is defined in Rule 16b-3 promulgated under the Act, as such Rule may be amended from time
to time) and an “outside director” (as such term is defined under Section 162(m) of the Code). The Committee may designate the senior human resources officer (or such other officer with similar authority), or one of more additional
officers or employees of the Company or any Subsidiary or Affiliate, and/or one or more agents to assist the Committee in the administration of the Plan, and may grant authority to such persons to execute agreements or other documents evidencing
Awards or Achievement Award Shares made under this Plan or other documents entered into under this Plan on behalf of the Committee or the Company. 
 b.     Powers of the Committee. Subject to the express provisions and limitations set forth in this Plan, the Committee shall be authorized and empowered to do all things
necessary or desirable, in its sole discretion, in connection with the administration of this Plan, including, without limitation, the following: 

(i)     to prescribe, amend and rescind rules and regulations relating to this Plan and to
define terms not otherwise defined herein; 
 (ii)     to determine which persons are
Participants, to which of such Participants, if any, Awards shall be granted hereunder and the timing of any such Awards, and to grant Awards; 
 (iii)    to grant Awards to Participants and determine the terms and conditions thereof, including the number of Shares subject to Awards and the exercise or purchase price of such Shares and
the circumstances under which Awards become exercisable or vested or are forfeited or expire, which terms may 

  
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but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events (including events which the Board or the
Committee determine constitute a Change in Control), or other factors; 
 (iv)     to
establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; 

(v)     to prescribe and amend the terms of the agreements or other documents evidencing Awards
made under this Plan (which need not be identical) and the terms of or form of any document or notice required to be delivered to the Company by Participants under this Plan; 

(vi)     to determine whether, and the extent to which, adjustments are required pursuant to
Section 14; 
 (vii)     to interpret and construe this Plan, any rules and
regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; 

(viii)    to make all other determinations deemed necessary or advisable for the administration
of this Plan; and 
 (ix)     Notwithstanding anything in this Plan to the contrary,
with respect to any Award that is “deferred compensation” under Code section 409A, the Committee shall exercise its discretion in a manner that causes such Awards to be compliant with the requirements of such Code section. 

c.     Determinations of the Committee. All decisions, determinations and interpretations by the
Committee regarding this Plan shall be final and binding on all Participants and Beneficiaries. The Committee shall consider such factors as it deems relevant to making such decisions, determinations and interpretations including, without
limitation, the recommendations or advice of any director, officer or employee of the Company and such attorneys, consultants and accountants as it may select. 
 d.     Delegations to Subcommittees. The Committee may delegate to one or more separate committees (any such committee a “Subcommittee”) composed of one or more directors
of the Company (who may but need not be members of the Committee) the ability to grant Awards and take the other actions described in Section 3(b) with respect to non-executive employees, and such actions shall be treated for purposes of
Section 3(c) as if taken by the Committee. 
 4.     ELIGIBILITY 

To be eligible for selection by the Committee to participate in the Plan an individual must be an employee of the Company or a
Subsidiary. Directors who are not 

  
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full-time salaried employees shall not be eligible. The Committee may grant Awards of Options, Stock Appreciation Rights, Retention Shares, Stock Units or Incentive Bonuses to eligible employees.

 5.     STOCK SUBJECT TO THIS PLAN 

a.     Aggregate Limits. The aggregate number of Shares of the Company’s Common Stock that
shall be available for grant under this Plan shall be 21,000,000, plus any Shares subject to awards made under Prior Plans that are outstanding on the effective date of this Plan and become available pursuant to Section 5(c). Any Shares granted
as Options or Stock Appreciation Rights shall be counted against this limit as one (1) Share for every one (1) Share granted. Any Shares granted as Awards other than Options or Stock Appreciation Rights shall be counted against this limit
as one and four-tenths (1.4) Shares for every one (1) Share granted. The aggregate number of Shares available for grant under this Plan and the number of Shares subject to outstanding Awards shall be subject to adjustment as provided in
Section 13. In addition, the aggregate number of Shares available for grant under this Plan shall not be reduced by Shares subject to Awards granted upon the assumption of or in substitution for awards granted by a business or entity that is
acquired by, or whose assets are acquired by, the Company. The Shares issued pursuant to Awards granted under this Plan may be Shares that either were reacquired by the Company, including Shares purchased in the open market, or authorized but
unissued Shares. 
 b.     Tax Code Limits. The aggregate number of Shares that may be
granted as Options or Stock Appreciation Rights under this Plan during any consecutive 36-month period to any one Participant shall not exceed 3,000,000. The aggregate number of Shares that may be granted as Retention Shares or Stock Units under
this Plan during any consecutive 36-month period to any one Participant shall not exceed 750,000. Notwithstanding anything to the contrary in this Plan, the foregoing limitations shall be subject to adjustment under Section 14, but only to the
extent that such adjustment will not affect the status of any Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code. The foregoing limitations shall not apply to the extent that they are no
longer required in order for compensation in connection with Awards under this Plan to be treated as “performance-based compensation” under Section 162(m) of the Code. 

c.     Share Add-Backs. For purposes of this Section 5, the aggregate number of Shares
available for Awards under this Plan at any time shall not be reduced by (i) Shares subject to Awards that have been canceled, expired, forfeited or settled in cash, (ii) Shares subject to Awards that have been retained by the Company in
payment or satisfaction of the purchase price or tax withholding obligation of an Award, or (iii) Shares subject to Awards that otherwise do not result in the issuance of Shares in connection with payment or settlement of an Award. Any Shares
that again become available for grant pursuant to clauses (i) through (iii) of this Section 5(c) shall be added back as one (1) Share if such Shares were subject to Options or Stock Appreciation Rights and as one and four-tenths
(1.4) Shares if such Shares were subject to Awards other than Options and Stock Appreciation Rights. In addition, Shares that have been 

  
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delivered (either actually or constructively by attestation) to the Company in payment or satisfaction of the purchase price or tax withholding obligation of an Award or an award under any of the
Prior Plans and Shares repurchased in the open market with Option Proceeds from Awards or awards under any of the Prior Plans shall be available for Awards under this Plan; provided, however, that the increase in the aggregate number of Shares
available for grant pursuant to the repurchase of Shares with Option Proceeds shall not be greater than the amount of such proceeds divided by the Fair Market Value of a Share on the date of exercise of the option giving rise to such proceeds.
Shares subject to awards made under Prior Plans that do not result in the issuance of Shares for the reasons listed in clauses (i) through (iii) of this Section 5(c) shall be available for grant under this Plan. Each Share that again
becomes available for grant in connection with awards under Prior Plans shall be added back as one (1) Share. 

6.     TERMS AND CONDITIONS OF OPTIONS 

The Committee may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the
Committee or automatically upon the occurrence of specified events, including, without limitation, the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Award or within the control
of others. All Options under the Plan shall be granted subject to the following terms and conditions: 

a.     Exercise Price. The exercise price per Share with respect to each Option shall be
determined by the Committee but shall not be less than 100% of the Fair Market Value of the Common Stock on the date the Option is granted, provided, however, that the exercise price per share with respect to an Option that is granted in connection
with a merger, stock exchange, or other acquisition as a substitute or replacement award for options held by optionees of the acquired entity may be less than 100% of Fair Market Value on the date the Option is granted as long as it is equal to or
greater than the fair market value of the substitute or replacement award at its date of grant. 

b.     Duration. The Committee shall establish the term of an Option, provided that in no event
shall any Option be exercisable subsequent to the tenth anniversary of the date on which it is granted. 

c.     Exercise. Except as provided in Section 6(g), the Shares covered by an Option may not
be purchased prior to the first anniversary of the date on which the Option is awarded, or such longer period or periods, and subject to such conditions, as the Committee may determine, but thereafter may be purchased at one time or in such
installments over the balance of the option period as may be provided in the Option Document. Any Shares not purchased on the applicable installment date may, unless the Committee shall have determined otherwise, be purchased thereafter at any time
prior to the final expiration of the Option. To the extent that the right to purchase Shares has accrued thereunder, Options may be exercised from time to time by notice to the 

  
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Company stating the number of Shares with respect to which the Option is being exercised. 
 d.     Payment. Except as set forth herein, Shares purchased under Options shall, at the time of purchase, be paid for in full in cash. All, or any portion, of the option price
may, at the discretion of the Committee, be paid (i) under an arrangement with the Stock Administrator where payment is made pursuant to an irrevocable direction to the Stock Administrator to deliver all or part of the proceeds from the sale of
Shares issuable under the Option to the Company or (ii) by the surrender (either actually or constructively by attestation) to the Company, at the time of exercise, of Shares of previously acquired Common Stock owned by the Participant, to the
extent that such payment does not require the surrender of a fractional share of such previously acquired Common Stock or (iii) by authorizing the Company to withhold Common Stock otherwise issuable on exercise of the Option. Such Shares
previously acquired and used to pay the option price shall be valued at Fair Market Value on the date the Option is exercised or as otherwise determined in accordance with the procedures to be established by the Committee. A Participant shall have
none of the rights of a shareholder until the Shares are issued to him or her. 
 e.    
Restrictions. The Committee shall determine, with respect to each Option, the nature and extent of the restrictions, if any, to be imposed on the Shares that may be purchased thereunder. Without limiting the generality of the
foregoing, the Committee may impose conditions restricting absolutely or conditionally the transferability of Shares acquired through the exercise of Options for such periods, and subject to such conditions, including continued employment of the
Participant by the Company or a Subsidiary, as the Committee may determine. 
 f.    
Non-Transferabilitv of Options. During a Participant’s lifetime, Options may be exercised only by the Participant and shall not be transferable, except for exercise by the Participant’s Beneficiaries following a
Participant’s death or as otherwise authorized by the Committee. 
 g.     Termination of
Employment. Unless the Committee shall determine otherwise, upon the termination of a Participant’s employment for any reason and except as provided in clause (ii), (iii) or (vi) below, Options shall expire immediately as to
those Shares for which they were not then exercisable, and as to the remaining Shares for which the Options were exercisable at the time of such termination of employment, such Options shall expire on the earlier of the expiration of the term of the
Options or according to the following schedule: 
 (i)     Retirement.
If a Participant ceases to be an employee of the Company or a Subsidiary by reason of retirement under the provisions of the Company’s or a Subsidiary’s pension plan, the Options shall expire, unless exercised, five (5) years after
such termination of employment. 
 (ii)     Death or Disability. If
(A) a Participant ceases to be an employee of the Company or a Subsidiary prior to the end of the holding period required by 

  
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Section 6(c) by reason of death or disability under the provisions of the Company’s or a Subsidiary’s long-term disability plan, and (B) upon such termination all conditions
to exercisability of the Options required pursuant to Section 6(c) other than such holding period have been satisfied, the holding period required pursuant to Section 6(c) shall automatically be deemed to have been satisfied, and the
Options shall expire, unless exercised by the Participant, or if such termination was as a result of Participant’s death, by Participant’s legal representatives or heirs, five (5) years after such termination of employment.

 (iii)     Disposition of Business. Subject to Section 6(g)(vi)
with respect to a Change in Control of the Company, in the case of a termination that is deemed to occur upon the disposition by the Company or any of its Subsidiaries of all or a part of its interest in, or the discontinuance of a business of, a
Subsidiary, division or other business unit, (A) if an Option is unexercisable because the holding period or other conditions required by Section 6(c) have not been satisfied in accordance with their original schedule, such Option shall
not be forfeited automatically, but the holding period or other conditions required by Section 6(c) shall continue in accordance with their original schedule and the Option shall expire, unless exercised, five (5) years after the date of
such termination and (B) if an Option is exercisable, the exercise period of the Option shall expire, unless exercised, five (5) years after the date of such termination; 

(iv)    Force Reduction Program. Subject to Section 6(g)(vi), in the case of
a termination (other than retirement) resulting from a force reduction program instituted by the Company or any of its Subsidiaries, the Option shall expire, unless exercised, three (3) years from the date of termination. 

(v)     Gross Misconduct. Options shall expire upon receipt by the Participant of
the notice of termination if he or she is terminated for deliberate, willful or gross misconduct as determined by the Company. 
 (vi)     Change in Control. Notwithstanding anything to the contrary in this Section 6(g), unless the Committee shall expressly provide otherwise in the Option Document at the
time of grant, in the event a Participant’s employment is involuntarily terminated by the Company or any of its Subsidiaries (other than termination as a result of disability or gross misconduct, but including a termination described in
subsection (iii) and (iv) above) within (2) years following a Change in Control, any holding period or other condition required pursuant to Section 6(c) shall automatically be deemed to have been satisfied, the Options shall
become fully vested and exercisable, and the Options shall remain exercisable for a period of three (3) years following such termination (or five (5) years following such termination in the case of a termination described in Subsection
(i), (ii) or (iii) above) but in no event after the expiration of the term of the Option. 

(vii)     All Other Terminations. Options shall expire, unless exercised, three
(3) months after the date of such termination. 

  
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 h.    Option Document. Each Option Document shall
contain provisions regarding (i) the number of Shares that may be issued upon exercise of the Option, (ii) the purchase price of the Shares and the means of payment for the Shares, (iii) the term of the Option, (iv) such terms
and conditions on the vesting and/or exercisability of an Option, (v) restrictions on the transfer of the Option and forfeiture provisions and (vi) such further terms and conditions, in each case not inconsistent with this Plan as may be
determined from time to time by the Committee. 
 i.     No Option Repricing. Without
the approval of shareholders, the Company shall not reprice any Options, except for adjustments under Section 14 as determined by the Committee. For purposes of this Plan, the term “reprice” shall mean lowering the exercise price of
previously awarded Options within the meaning of Item 402(i) under Securities and Exchange Commission Regulation S-K, and shall also include any transactions deemed “repricings” under the relevant rules of the New York Stock
Exchange. Notwithstanding the foregoing, in no event shall the Company take action to reprice any Option which constitutes (i) a modification of a stock right within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(B) so as to
constitute the grant of a new stock right, (ii) an extension of a stock right, including the addition of a feature for the deferral of compensation within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(C), or (iii) an
impermissible acceleration of a payment date or a subsequent deferral of a stock right subject to Code Section 409A within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(E). 

7.     TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 

A “Stock Appreciation Right” means a right that entitles the Participant to receive, in cash or Shares (as determined by
the Committee), value equal to or otherwise based on the excess of,(i) the Fair Market Value of a specified number of Shares at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of
grant. Stock Appreciation Rights may be granted to Participants either alone (“freestanding”) or in addition to or in tandem with other Awards granted under the Plan and may, but need not, relate to a specific Option granted under
Section 6. The provisions of Stock Appreciation Rights need not be the same with respect to each grant or each recipient. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at
any time thereafter before exercise or expiration of such Option. All Stock Appreciation Rights under the Plan shall be granted subject to the same terms and conditions applicable to Options as set forth in Section 6, including without
limitation the terms and conditions set forth in Sections 6(a), 6(b) and 6(c) relating to option price, duration and exercise conditions; provided, however, that Stock Appreciation Rights granted in tandem with a previously granted Option shall
have the terms and conditions of such Option. Subject to the provisions of Section 6, the Committee may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be
settled in Shares or cash as determined by the Committee. 

  
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 8.     TERMS AND CONDITIONS OF AWARDS OF RETENTION SHARES 

a.     General. Retention Shares may be granted to reward the attainment of individual, Company
or Subsidiary goals, or to attract or retain officers or other employees of the Company or any Subsidiary, and shall be granted subject to the attainment of performance goals unless the Committee shall determine otherwise. The Committee may specify
that the grant, vesting or retention of any or all Retention Shares is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code, provided that the performance criteria for the grant,
vesting or retention of any such Retention Shares shall be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified at the time the Retention Shares are granted. The Committee shall certify the extent to
which any Qualifying Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment of any Retention Shares that are intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code. 
 b.     Restrictions. 

(i)     Restriction Period and Vesting Conditions. With respect to each grant of
Retention Shares under the Plan, the Committee shall determine the period or periods, including any conditions for determining such period or periods, during which the restrictions set forth in Section 8(b) shall apply, provided that in no
event, other than as provided in Section 8(c), shall such restrictions terminate prior to three (3) years after the date of grant (the “Restriction Period”), and the Committee may also specify any other terms or conditions,
including the attainment of performance goals, to the right of the Participant to receive such Retention Shares (“Vesting Conditions”). Subject to Section 8(c) and any such Vesting Condition, a grant of Retention Shares shall be
effective for the Restriction Period and may not be revoked; provided, however, in the event of a Change in Control of the Company (i) with respect to Retention Shares (other than Retention Shares granted pursuant to any future long term
incentive plan (“LTP”)), the Restriction Period shall end with respect to that number of such Retention Shares calculated by multiplying the total number of such Retention Shares by the fraction obtained by dividing the number of full
months from the commencement of such Restriction Period through the date of such Change in Control by the total number of months contained in such Restriction Period (determined without regard to this proviso), and (ii) any Retention Shares
granted to such Participant pursuant to an LTP shall be subject to the terms of the applicable agreement issued under an LTP. In the event a payment becomes due, the Committee may, in its sole discretion, elect to make such payment either in cash,
in Shares, in shares of equity securities of the entity (or its parent) resulting from such Change in Control or in any combination of the foregoing. 

(ii)     Rights in Retention Shares. At the time of grant of Retention Shares to
a Participant, an electronic account representing the number of Shares 

  
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granted shall be registered in the Participant’s name but shall be held by the Company for his or her account. The Participant shall have the entire beneficial ownership interest in, and all
rights and privileges of a shareholder as to, such Retention Shares, including the right to vote such Retention Shares and, unless the Committee shall determine otherwise, the right to receive dividends thereon, subject to the following
restrictions, except as provided by Sections 8(b) and 8(c): (A) the Participant shall not be entitled to delivery of the Shares until the expiration of the Restriction Period and the satisfaction of any Vesting Conditions; (B) none of
the Retention Shares may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restriction Period or prior to the satisfaction of any Vesting Conditions; and (C) all of the Retention Shares shall be
forfeited and all rights of the Participant to such Retention Shares shall terminate without further obligation on the part of the Company unless the Participant remains in the continuous employment of the Company or a Subsidiary for the entire
Restriction Period and any applicable Vesting Conditions have been satisfied. Any Shares or other securities or property received as a result of a transaction listed in Section 14 shall be subject to the same restrictions as such Retention
Shares unless the Committee shall determine otherwise. 
 If the grant of Retention Shares includes a right to receive
dividends, the payment of dividends with respect to Retention Shares shall be made, on and after the date of grant without regard to whether the Participant has satisfied the Restriction Period and Vesting Condition requirements, and shall be paid
(prior to vesting and delivery of the Retention Shares) within thirty (30) days of the date such dividends are declared. 
 c.     Termination of Employment. Unless the Committee shall determine otherwise, upon the termination of a Participant’s employment, Retention Shares shall be treated as provided
below: 
 (i)     Retirement. If (A) a Participant ceases to be an
employee of the Company or a Subsidiary prior to the end of a Restriction Period, by reason of retirement under the provisions of the Company’s or a Subsidiary’s pension plan at or after actual age 65, and (B) all Vesting Conditions
have been satisfied, the Retention Shares granted to such Participant shall immediately vest and all restrictions applicable to such Retention Shares shall lapse. The Shares shall be delivered to the Participant in accordance with the provisions of
Section 8(d). 
 (ii)     Death or Disability. If (A) a
Participant ceases to be an employee of the Company or a Subsidiary prior to the end of a Restriction Period by reason of death or disability under the provisions of the Company’s or a Subsidiary’s long-term disability plan, and
(B) all Vesting Conditions have been satisfied, the Retention Shares granted to such Participant shall immediately vest for the Participant or in his or her Beneficiary, as the case may be, and all restrictions applicable to such Retention
Shares shall lapse. The Shares shall be delivered to the Participant’s Beneficiary in accordance with the provisions of Section 8(d). 

  
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 (iii)     Vesting Conditions. If a
Participant ceases to be an employee of the Company or a Subsidiary for any reason prior to the satisfaction of any Vesting Conditions (other than as a result of a Change in Control as described in subsection (iv) below), the Participant shall
immediately forfeit all Retention Shares then subject to the restrictions of Section 8(b) in accordance with the provisions thereof, except that the Committee may, if it finds that the circumstances in the particular case so warrant, allow a
Participant whose employment has so terminated to retain any or all of the Retention Shares then subject to the restrictions of Section 8(b) and all restrictions applicable to such Retention Shares shall lapse. The Shares shall be delivered to
the Participant in accordance with the provisions of Section 8(d). 
 (iv)    
Change in Control. Notwithstanding anything to the contrary in this Section 8(c), unless the Committee shall expressly provide otherwise in the document(s) evidencing Retention Shares at the time of grant, in the event a
Participant’s employment is involuntarily terminated by the Company or any of its Subsidiaries (other than a termination as a result of gross misconduct, but including a termination described in subsection (i) and (ii) above) within
two (2) years following a Change in Control, the remaining restrictions with respect to Retention Shares, Original Retention Shares and Premium Retention Shares, including any remaining Restriction Period, or Vesting Conditions, shall lapse and
the Committee may, in its sole discretion, elect to satisfy its obligations either in cash, in Shares, in shares of equity securities of the entity (or its parent) resulting from such Change in Control or in any combination of the foregoing.

 (v)     All Other Terminations. If a Participant ceases to be an
employee of the Company or a Subsidiary prior to the end of a Restriction Period for any reason other than death, disability or retirement at or after actual age 65 as provided in Section 8(c)(i) and (ii) or a termination pursuant to
Section 8(c)(iv), the Participant shall immediately forfeit all Retention Shares then subject to the restrictions of Section 8(b) in accordance with the provisions thereof, except that the Committee may, if it finds that the circumstances
in the particular case so warrant, allow a Participant whose employment has so terminated to retain any or all of the Retention Shares to the extent that the Restriction Period set forth in Section 8(b) has been satisfied and all Vesting
Conditions applicable to such Retention Shares shall lapse the Shares shall be delivered to the Participant in accordance with the provisions of Section 8(d). 

d.     Payment of Retention Shares. At the end of the Restriction Period and after all Vesting
Conditions have been satisfied, or at such earlier time as provided for in Section 8(c), all restrictions applicable to the Retention Shares shall lapse, and the Shares equal to the number of Retention Shares, free of all restrictions, shall be
delivered to the Participant or his or her Beneficiary, as the case may be, within thirty (30) days of the date all such restrictions applicable to the Retention Shares lapsed. 

  
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 9.     STOCK UNITS 

a.     Grant of Stock Units. The Committee may also grant Awards of Stock Units
under the Plan. With respect to each grant of Stock Units, the Committee shall determine the period or periods, including any conditions for determining such period or periods, during which any restrictions on vesting shall apply, provided that in
no event, except as otherwise provided in Sections 9(c), 9(d) or 9(e), shall such period or periods be less than three (3) years (the “Unit Restriction Period”). The Committee may also make any Award of Stock Units subject to the
satisfaction of other conditions, including the attainment of performance goals, or contingencies (“Unit Vesting Condition”), in order for a Participant to receive payment of such Stock Unit Award, which shall be established by the
Committee at the time of the Stock Unit Award. The Committee may specify that the grant, vesting or retention of any or all Stock Units is intended to satisfy the requirements for “performance-based compensation” under Section 162(m)
of the Code, provided that the performance criteria for the grant, vesting or retention of any such Stock Units shall be a measure based on one or more Qualifying Performance Criteria selected by the Committee and specified at the time the Stock
Units are granted. The Committee shall certify the extent to which any Qualifying Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment of any Stock Units that are intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code. Awards of Stock Units shall be payable in Shares or cash as determined by the Committee. For any Stock Unit Award which is intended to satisfy the requirements for
“performance-based compensation” under section 162(m) of the Code, no such Award shall be considered vested unless and until the Qualifying Performance Criteria and Unit Restriction Period (as may be modified in Subsections 9(c),
(d) or (e)) have been satisfied. 
 (i)     Affect of Unit Restriction
Period. Except as provided by Section 9(c), (d) or (e), (A) the Participant shall not be entitled to payment of the Stock Units until the expiration of the Unit Restriction Period and the satisfaction of any Unit Vesting
Conditions; (B) none of the Stock Units may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Unit Restriction Period or prior to the satisfaction of any Unit Vesting Conditions; and (C) all of the
Stock Units shall be forfeited and all rights of the Participant to such Stock Units shall terminate without future obligation on the part of the Company or a Subsidiary unless the Participant remains in the continuous employment of the Company or a
Subsidiary for the entire Unit Restriction Period and any applicable Unit Vesting Conditions have been satisfied. If the number of a Participant’s Stock Units are adjusted as the result of a transaction listed in Section 14, such adjusted
Stock Units shall be subject to the same restrictions as had applied prior to such adjustment, unless the Committee shall determine otherwise consistent with the requirements of that Section. 

  
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 (ii)     Dividend Equivalents. If the award
of Stock Units includes a right to receive dividend equivalents, the payment of such dividend equivalents shall be as provided for in the agreement describing the Stock Unit Award, subject to Section 12 hereof; provided that such right to
receive dividend equivalents conforms to the requirements of Section 409A of the Code and the regulations thereunder, and shall be deemed modified to the extent necessary to conform to such requirements. 

b.     Deferral. A Participant may elect to defer receipt of payment of an Award of Stock Units
pursuant to the terms of the Deferred Compensation Plan of Union Pacific Corporation with respect to the SIP. 

c.     Separation from Service. Unless the Committee provides otherwise at the time an Award of
Stock Units to a Participant is made, Stock Units shall be treated as provided below: 

(i)     Death or Disability. 

(A) If a Participant has a Separation from Service prior to the end of a Unit Restriction Period by reason of
death and all Unit Vesting Conditions have been satisfied, the Stock Units granted to such Participant shall immediately vest in his or her Beneficiary, and all restrictions applicable to such Stock Units shall lapse. The Stock Unit Award shall be
paid to the Participant’s Beneficiary within thirty (30) days of the Participant’s death. 

(B)     If a Participant ceases to be an employee of the Company or a Subsidiary prior to the
end of a Unit Restriction Period by reason of disability under the provisions of the Company’s or a Subsidiary’s long-term disability plan, and all Unit Vesting Conditions have been satisfied, the Stock Units granted to such Participant
shall immediately vest for the Participant and all restrictions applicable to such Stock Units shall lapse and, in the event such Participant did not make a deferral election with respect to such Stock Unit, it shall be paid as follows: 

(1)     in the event the Participant has not attained Retirement Status before qualifying for
long-term disability benefits under the Company’s or a Subsidiary’s long-term disability plan, then such Stock Unit shall be paid to the Participant within thirty (30) days of such Participant’s qualifying for long-term
disability under the Company’s or Subsidiary’s long-term disability plan; and 

(2)     in the event the Participant has attained Retirement Status before qualifying for
long-term disability benefits under the Company’s or a Subsidiary’s long-term disability plan: (X) if such Stock Unit is nonetheless “deferred compensation” under Code Section 409A, then such Stock Unit shall be paid in
accordance with Subsection 9(f)(iii); or (Y) if such Stock 

  
 16 








 
Unit is not “deferred compensation” under Code Section 409A, such Stock Unit shall be paid to the Participant within thirty (30) days of such Participant’s qualifying for
long-term disability under the Company’s or Subsidiary’s long-term disability plan. 

(ii)     Unit Vesting Conditions. If a Participant has a Separation from Service
with the Company or a Subsidiary for any reason prior to the satisfaction of any Unit Vesting Conditions (other than as a result of a Change in Control as described in subsection (d)(ii) below), the Participant shall immediately forfeit all Stock
Units then subject to the restrictions of Subsection 9(a) in accordance with the provisions thereof, except that the Committee may, if it finds that the circumstances in the particular case so warrant, allow a Participant who has had a
Separation from Service to retain any or all of the Stock Units then subject to the restrictions of Subsection 9(a) and all restrictions applicable to such Stock Units shall lapse. The Stock Unit Award shall be paid in accordance with
provisions of Subsection 9(f). 
 (iii)     All Other Separations from
Service. If a Participant has a Separation from Service prior to the end of a Unit Restriction Period for any reason other than (A) a Separation from Service after attaining Retirement Status described in subsection 9(e) below, (B) a
Separation from Service described in subsection (c)(i) above, or (C) a Separation from Service pursuant to Section 9(d)(ii), the Participant shall immediately forfeit all Stock Units then subject to the restrictions of Section 9(a) in
accordance with the provisions thereof, except that the Committee may, if it finds that the circumstances in the particular case so warrant, allow a Participant who has a Separation from Service to retain any or all of the Stock Units to the extent
that the Unit Restriction Period set forth in Section 9(a) has been satisfied and all Unit Vesting Conditions applicable to such Stock Units shall lapse. The Stock Unit Award shall be paid in accordance with provisions of Subsection 9(f).

 d.     Change in Control. 

(i)     In the event of a Change in Control of the Company (i) with respect to Stock Units
(other than Stock Units granted pursuant to any current or future long term incentive plan (“LTP”)), the Unit Restriction Period shall end with respect to that number of such Stock Units calculated by multiplying the total number of such
Stock Units by the fraction obtained by dividing the number of full months from the commencement of such Unit Restriction Period through the date of such Change in Control by the total number of months contained in such Unit Restriction Period
(determined without regard to this proviso), and (ii) any Stock Units granted to such Participant pursuant to an LTP shall be subject to the terms of the applicable agreement issued under an LTP. In the event a Stock Unit becomes payable under
this subparagraph (d)(i) and the Participant did not make 

  
 17 








 
a deferral election with respect to such Stock Unit, such Stock Unit shall be paid as follows: 
 (A)     in the event the Participant has not attained Retirement Status before the date on which the Change in Control occurs, then such Stock Unit shall be paid to the Participant within thirty
(30) days of the date on which the Change in Control occurs; and 
 (B)     in the event the
Participant has attained Retirement Status before the date on which the Change in Control occurs: (X) if such Stock Unit is nonetheless “deferred compensation” under Code Section 409A, then such Stock Unit Award shall be paid in
accordance with Subsection 9(f)(iii); or (Y) if such Stock Unit is not “deferred compensation” under Code Section 409A, then such Stock Unit shall be paid to the Participant within thirty (30) days of the date on which the
Change in Control occurs. 
 The Committee may, in its sole discretion, elect to make such payment either in cash, in
Shares, in shares of equity securities of the entity (or its parent) resulting from such Change in Control or in any combination of the foregoing. 

(ii)     Notwithstanding anything to the contrary in Section 9(c), unless the Committee
shall expressly provide otherwise in the document(s) evidencing Stock Unit Awards at the time of grant, in the event a Participant has an involuntary Separation from Service from the Company or any of its Subsidiaries (other than a Separation from
Service as a result of gross misconduct, but including a Separation from Service after attaining Retirement Status described in subsection 9(e) below and a Separation from Service described in subsection (c)(i) above) within two (2) years
following a Change in Control, the remaining restrictions with respect to Stock Units, including any remaining Unit Restriction Period, or Unit Vesting Conditions, shall lapse. Unless the Participant made a deferral election with respect to such
Stock Units, the Stock Units shall be paid within thirty (30) days of the Participant’s Separation from Service, subject to Subsection 9(f)(iv). The Committee may, in its sole discretion, elect to satisfy its obligations either in cash, in
Shares, in shares of equity securities of the entity (or its parent) resulting from such Change in Control or in any combination of the foregoing. 
 e.     Attainment of Retirement Status. Unless the Committee provides otherwise at the time an Award of Stock Units to a Participant is made: 

(i)     In the event a Participant attains Age 65 Retirement Status while in the employ of the
Company or a Subsidiary, the Unit Restriction Period with respect to the applicable Stock Units granted to such Participant shall be deemed satisfied on the date Age 65 Retirement Status is attained. 

(ii)     In the event a Participant attains 60/10 Retirement Status while in the employ of the
Company or a Subsidiary, the Unit Restriction Period with 

  
 18 








 
respect to the applicable Stock Unit grant shall be deemed satisfied as provided in accordance with the terms of the 2006 Stock Unit Agreement and 2006 Long Term Plan Stock Unit Agreement, each
dated January 26, 2006, as amended from time to time and/or the 2007 Stock Unit Agreement and 2007 Long Term Plan Stock Unit Agreement, each dated January 30, 2007 as amended from time to time, as applicable. 

(iii)     Assuming and to the extent that any Unit Vesting Conditions have been satisfied,
payment of the Stock Units for which Retirement Status has been attained in accordance with subparagraphs 9(e)(i) or 9(e)(ii) shall be made in accordance with Subsection 9(f). 

f.     Payment. Except as otherwise provided in Subsections 9(c) or 9(d), payment of Stock Unit
Awards shall be made as follows: 
 (i)     Payment if Stock Unit Award Not
Deferred Compensation. If the Participant has not elected to defer payment of a Stock Unit Award and the Stock Unit Award is not otherwise “deferred compensation” under Code Section 409A (“Non-409A Stock Unit
Award”): 
 (A) the Non-409A Stock Unit Award will be paid as soon as practicable following the date
the Unit Restriction Period has been satisfied and all Unit Vesting Conditions have been satisfied, but in no event later than two and one-half
(2 1/2) months following the end of the calendar year that includes the date that all such restrictions applicable to the Non-409A Stock Unit Award lapsed. 

(B)     Notwithstanding the foregoing, if the Participant has attained Retirement Status during
the Unit Restriction Period for such Non-409A Stock Unit Award, but remains employed, the Stock Unit Award shall, assuming all Unit Vesting Conditions have been satisfied, be paid within thirty (30) days of the earlier of (A) the
Participant’s Separation from Service or (B) the date the Unit Restriction Period would have otherwise ended, but for the application of the special rules in Subsection 9(e). 

(ii)     Payment if deferred. If the Participant has elected to defer payment of
the Stock Unit Award, then the Award will (provided the Unit Restriction Period has been satisfied and all Unit Vesting Conditions have been satisfied) be paid in accordance with the Participant’s deferral consistent with the terms of the
Deferred Compensation Plan of Union Pacific Corporation. 
 (iii)     Payment if
Stock Unit Award Is Deferred Compensation. If the Participant has not made a deferral election with respect to a Stock Unit Award but such Stock Unit Award is nevertheless “deferred compensation” under Code Section 409A and
assuming the Unit Restriction Period has been satisfied and all Unit Vesting Conditions have been satisfied, such Stock Unit Award shall be paid within thirty (30) days of the earlier of (A) the Participant’s Separation from Service
or (B) the date the Unit Restriction Period would have otherwise ended 

  
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but for the application of the special rules in Subsections 9(c), 9(d) or 9(e), as applicable, subject to the Specified Employee Restriction described in Section 9(f)(iv). 

(iv)     Specified Employee Restriction. Notwithstanding anything in this Plan to
the contrary, no payment of a Stock Unit that is “deferred compensation” under Code Section 409A triggered by Separation from Service shall be made to 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 Affiliated Companies) until six (6) months plus one day following such specified employee’s Separation from
Service (the “Specified Employee Restriction”); provided, however, in the event of the specified employee’s death before the date a Stock Unit Award payable under this Section 9 is paid, this provision shall not prevent payment
of such Stock Unit Award at the time otherwise prescribed in this Section 9. 
 10.     TERMS AND CONDITIONS
OF INCENTIVE BONUSES 
 Each Incentive Bonus Award will confer upon the Participant the opportunity to earn a future
payment tied to the level of achievement with respect to one or more performance criteria established for a performance period established by the Committee. 
 a.     Incentive Bonus Document. Each Incentive Bonus Document shall contain provisions regarding (i) the target and maximum amount payable to the Participant as an Incentive
Bonus, (ii) the performance criteria and level of achievement versus these criteria that shall determine the amount of such payment, (iii) the term of the performance period as to which performance shall be measured for determining the
amount of any payment, (iv) the timing of any payment earned by virtue of performance, (v) restrictions on the alienation or transfer of the Incentive Bonus prior to actual payment, (vi) forfeiture provisions and (vii) such
further terms and conditions, in each case not inconsistent with this Plan, as may be determined from time to time by the Committee. 
 b.     Performance Criteria. The Committee shall establish the performance criteria and level of achievement versus these criteria that shall determine the target and maximum
amount payable under an Incentive Bonus Award, which criteria may be based on financial performance and/or personal performance evaluations. The maximum amount payable as an Incentive Bonus may be a multiple of the target amount payable. The maximum
amount payable as an Incentive Bonus under this Plan during any calendar year to any one Participant shall not exceed $10 million unless such limitation is no longer required under Section 162(m) of the Code. The Committee may specify the
percentage of the target Incentive Bonus that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code, provided that the performance criteria for any portion of an Incentive Bonus
that is intended by the Committee to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code shall be a measure based on one or 

  
 20 








 
more Qualifying Performance Criteria selected by the Committee and specified at the time the Incentive Bonus Award is granted. The Committee shall certify the extent to which any Qualifying
Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment of any Incentive Bonus that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the
Code. 
 c.     Timing and Form of Payment. The Committee shall determine the timing of
payment of any Incentive Bonus; provided, however, that Incentive Bonuses shall be paid to the Participant as soon as practicable following the satisfaction of the performance criteria (including the satisfaction of any Qualifying Performance
Criteria as certified by the Committee) and/or performance period as set forth in the Incentive Bonus Document (the “Performance End Date”), but in no event later than two and one-half (2 1/2) 
months following the end of the calendar year that includes the Performance End Date. An Incentive Bonus may be payable in Shares or in cash. Any Incentive Bonus that is paid in cash shall not affect the number of Shares otherwise available for
issuance under this Plan. 
 (i)     Deferrals. A Participant may
elect to defer receipt of payment of all or part of any Incentive Bonus pursuant to the terms of the Deferred Compensation Plan of Union Pacific Compensation with respect to the SIP. 

d.     Discretionary Adjustments. Notwithstanding satisfaction of any performance goals, the
amount paid under an Incentive Bonus Award on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee shall determine. 

11.     ACHIEVEMENT AWARD SHARES 

  The Committee may, in its sole discretion, grant Achievement Award Shares to employees who are non-executive employees
to reward specific and unique achievements that exceed normal job expectations. Subject to Section 4, the Committee may determine and designate from time to time those non-executive employees who will be granted Achievement Award Shares. Shares
granted under this Section 11 shall not be subject to a vesting or holding period, unless the Committee provides otherwise at the time of grant. The total number of Shares to be awarded under this Section 11 shall not exceed 200,000
Shares, and in any calendar year no employee may be granted more than 50 Shares (or such other number as the Committee may determine). 

  
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 12.     DIVIDENDS AND DIVIDEND EQUIVALENTS 

  Any Award, other than an Option or Stock Appreciation Right, may provide the Participant with the right to receive
dividend payments or dividend equivalent payments on the Common Stock subject to the Award, whether or not such Award has been exercised or is vested. Except as described in subsection (a), such payments shall be made in cash or Shares on the
payment date established by the Board for the underlying dividends. Such payments may be subject to such conditions and contingencies as the Committee may establish, provided however, that such payments shall in all events satisfy the
“short-term deferral” exception to Code Section 409A described in Treas. Reg. § 1.409A-(a)(4). 

  a.     If Stock Units are Deferred. Notwithstanding the foregoing, if a Participant
elects to defer receipt of payment of an Award of Stock Units pursuant to the terms of the Deferred Compensation Plan of Union Pacific Corporation (the “Deferred Compensation Plan”), dividend equivalents with respect to such deferred Stock
Unit Award which relate to dividends paid on and after the date of the deferral of such Stock Unit Award (i.e., the date that the Stock Unit Award would have been payable to the Participant under this Plan had such amount not been deferred under the
Deferred Compensation Plan) shall be reinvested as part of the Award Account under the Deferred Compensation Plan, and shall be deferred for payment at the same time as the Award Account is paid under the terms of the Deferred Compensation Plan.

 13.     REGULATORY APPROVALS AND LISTING 

  The Company shall not be required to issue to a Participant or a Beneficiary, as the case may be, any certificate for
any Shares upon exercise of an Option or Stock Appreciation Right or for any Retention Shares granted under this Plan or to make any payment with respect to any Incentive Bonus or Stock Unit granted under this Plan prior to (a) the obtaining of
any approval from any governmental agency which the Company, in its sole discretion, shall determine to be necessary or advisable, (b) the admission of such Shares to listing on any stock exchange on which the Common Stock may then be listed,
and (c) the completion of any registration or other qualification of such Shares under any state or federal law or rulings or regulations of any governmental body which the Company, in its sole discretion, shall determine to be necessary or
advisable. 
 14.     CHANGES IN CAPITAL STRUCTURE 

  a.     Corporate Actions Unimpaired. The existence of outstanding Awards (including
any Options) shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, exchanges, or other changes in the Company’s capital structure or
its business, or any merger or consolidation of the Company, or any issuance of Shares or other securities or subscription rights thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Shares or
other securities of the Company or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act 

  
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or proceeding, whether of a similar character or otherwise. Further, except as expressly provided herein or by the Committee, (i) the issuance by the Company of shares of stock or any class
of securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, (ii) the payment of a dividend in property other than Shares, or (iii) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of Shares subject to Options or other Awards theretofore granted or the purchase price per Share, unless the Committee shall determine, in its sole discretion, that an adjustment
is necessary to provide equitable treatment to a Participant. 
   b.     Adjustments
Upon Certain Events. If the outstanding Shares or other securities of the Company, or both, for which the Award is then exercisable or as to which the Award is to be settled shall at any time be changed or exchanged by declaration of a stock
dividend, stock split, combination of shares, extraordinary dividend of cash and/or assets, recapitalization, or reorganization, the Committee may, and if such event occurs after a Change of Control, the Committee shall, appropriately and equitably
adjust the number and kind of Shares or other securities which are subject to this Plan or subject to any Awards theretofore granted, and the exercise or settlement prices of such Awards, so as to maintain the proportionate number of Shares or other
securities without changing the aggregate exercise or settlement price. The Committee’s adjustment shall be effective and binding for all purposes of this Plan, provided that no such adjustment shall constitute (i) a modification of a
stock right within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(B) so as to constitute the grant of a new stock right, (ii) an extension of a stock right, including the addition of any feature for the deferral of compensation
within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(C), or (iii) an impermissible acceleration of a payment date or a subsequent deferral of a stock right subject to Code Section 409A within the meaning of Treas. Reg.
Section 1.409A-1(b)(5)(v)(E). Furthermore, no adjustment as the result of a change in capitalization shall cause the exercise price to be less than the Fair Market Value of such shares (as adjusted to reflect the change in capitalization) on
the date of grant, and any adjustment as the result of the substitution of a new stock right or the assumption of an outstanding stock right pursuant to a corporate transaction shall satisfy the conditions described in Treas. Reg.
Section 1.409A-1(b)(5)(v)(D). 
 15.     QUALIFYING PERFORMANCE CRITERIA 

  For purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any one or more of the
following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either
annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee in the Award:
(a) cash flow (before or after dividends), (b) earnings per share (including earnings before interest, taxes, 

  
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depreciation and amortization), (c) stock price, (d) return on equity, (e) total shareholder return, (f) return on capital (including return on total capital or return on
invested capital), (g) return on assets or net assets, (h) market capitalization, (i) total enterprise value (market capitalization plus debt), (j) economic value added, (k) debt leverage (debt to capital), (1) revenue,
(m) income or net income, (n) operating income, (o) operating profit or net operating profit, (p) operating margin or profit margin, (q) return on operating revenue, (r) cash from operations, (s) operating ratio,
(t) commodity or operating revenue, (u) market share, (v) customer service index, (w) service delivery index, (x) productivity and (y) safety. To the extent consistent with Section 162(m) of the Code, the Committee
may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occurs during a performance period: (z) asset write-downs, (aa) litigation, claims, judgments or
settlements, (bb) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (cc) accruals for reorganization and restructuring programs and (dd) any extraordinary, unusual or
non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Annual Report to shareholders
for the applicable year. 
 16.     TANDEM STOCK OR CASH RIGHTS 

  Either at the time an Award is granted or by subsequent action, the Committee may, but need not, provide that an Award
shall contain as a term thereof, a right, either in tandem with the other rights under the Award or as an alternative thereto, of the Participant to receive, without payment to the Company, a number of Shares, cash or a combination thereof, the
amount of which is determined by reference to the value of the Award; provided, however, that no such tandem stock or cash rights shall be made in connection with an Option or Stock Appreciation Right. 

17.     TAXES 
   a.     Withholding Requirements. The Committee may make such provisions or impose such conditions as it may deem appropriate for the withholding or payment by a
Participant or Beneficiary of any taxes that the Committee determines are required in connection with the grant, vesting, exercise, payment or settlement of any Award under this Plan, and a Participant’s or Beneficiary’s rights in any
Award and in any Shares or other benefits thereunder shall be subject to satisfaction of such conditions. 

  b.     Payment of Withholding Taxes. Notwithstanding the terms of Section 17(a),
the Committee may provide in the agreement or other document evidencing an Award or otherwise that all or any portion of the taxes required to be withheld or, if and to the extent permitted by the Committee, desired to be paid by the Participant, in
connection with the exercise, vesting, settlement or transfer of any Award may be paid by withholding Shares otherwise issuable or subject to such Award, or by the Participant’s delivering previously acquired Shares (either actually or
constructively by attestation), in each case having a Fair Market Value equal to the amount required or elected to be withheld or paid, or by the Stock Administrator paying such amount 

  
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pursuant to an irrevocable commitment by the Stock Administrator to deliver to the Company proceeds from the sale of the Shares issuable under the Award. Any such election is subject to such
conditions or procedures as may be established by the Committee and may be subject to approval by the Committee. 

18.     TRANSFERABILITY 
   Unless the agreement or other document evidencing an Award (or an amendment thereto authorized by the Committee) expressly states that the Award is transferable as provided hereunder, no Award granted
under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner prior to the vesting or lapse of any and all restrictions applicable thereto, other than by will
or the laws of descent and distribution. Further, any Stock Units deferred under Section 9, or Incentive Bonuses deferred under Section 10(c) shall not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in
any manner. 
 19.     TERM OF THIS PLAN 

  No Awards shall be granted pursuant to the Plan after April 16, 2014, but any Award theretofore granted may
extend beyond that date and the terms and conditions of this Plan shall continue to apply thereto. 
 20.    
TERMINATION OR AMENDMENT OF THIS PLAN 
   The Board may amend, alter or discontinue the Plan and the Board
or the Committee may to the extent permitted by the Plan amend any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the anti-dilution adjustment provisions of Section 14(b), no such
amendment shall, without the approval of the shareholders of the Company: 
 (a)    
increase the maximum number of Shares for which Awards may be granted under this Plan; 

(b)     reduce the price at which Options may be granted below the price provided for in
Section 6(a); 
 (c)     reduce the option price of outstanding Options;

 (d)     extend the term of this Plan; 

(e)     change the class of persons eligible to be Participants; 

(f)     add a new type of award to this Plan; or 

(g)     increase the individual maximum limits in Sections 5(b) and 10(b). 

  
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   The Board may amend, alter or discontinue the Plan and the Board or the
Committee may to the extent permitted by the Plan amend any agreement evidencing an Award made under this Plan, but no amendment or alteration shall be made which would impair the rights of any Participant, without such Participant’s consent,
under any Award theretofore granted, provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any Change in Control that such amendment or alteration either (i) is required or
advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such
Award, or that any such diminishment has been adequately compensated. 
 21. LEAVE OF ABSENCE 

  Except as is necessary to comply with Code Section 409A, unless the Committee shall determine otherwise, a leave
of absence other than an Approved Leave of Absence shall be deemed a termination of employment for purposes of this Plan. An Approved Leave of Absence shall not be deemed a termination of employment for purposes of this Plan, but the period of such
Approved Leave of Absence shall not be counted toward satisfaction of any Restriction Period or Unit Restriction Period or any holding period described in Section 6(c). 
 22.     GENERAL PROVISIONS 

  a.     Employment At Will. Neither the Plan nor the grant of any Award nor any action
by the Company, any Subsidiary or the Committee shall be held or construed to confer upon any person any right to be continued in the employ of the Company or a Subsidiary. The Company and each Subsidiary expressly reserve the right to discharge,
without liability but subject to his or her rights under this Plan, any Participant whenever in the sole discretion of the Company or a Subsidiary, as the case may be, its interest may so require. 

  b.     Governing Law. This Plan and any agreements or other documents hereunder shall
be interpreted and construed in accordance with the laws of the State of Utah and applicable federal law. The Committee may provide that any dispute as to any Award shall be presented and determined in such forum as the Committee may specify,
including through binding arbitration. Any reference in this Plan or in the agreement or other document evidencing any Award to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar
effect or applicability. 
   c.     Resale or Transfer of Shares. The
Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares received in connection with
an Award, including without limitation (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and other 

  
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participants and (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers. 
 23.     NON-EXCLUSIVITY OF PLAN 
   Neither the
adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements
as either may deem desirable, including without limitation, the granting of stock options, stock appreciation rights, restricted stock, stock units or incentive bonuses otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases. 
 24.     COMPLIANCE WITH OTHER LAWS AND REGULATIONS

   This Plan, the grant and exercise of Awards thereunder, and the obligation of the Company to sell,
issue or deliver Shares under such Awards, shall be subject to all applicable federal, state and local laws, rules and regulations and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required
to register in a Participant’s name or deliver any Shares prior to the completion of any registration or qualification of such Shares under any federal, state or local law or any ruling or regulation of any government body which the Committee
shall determine to be necessary or advisable. This Plan is intended to constitute an unfunded arrangement for a select group of management and other key employees. No Option shall be exercisable unless a registration statement with respect to the
Option is effective or the Company has determined that such registration is unnecessary. Unless the Awards and Shares covered by this Plan have been registered under the Securities Act of 1933, as amended, or the Company has determined that such
registration is unnecessary, each person receiving an Award and/or Shares pursuant to any Award may be required by the Company to give a representation in writing that such person is acquiring such Shares for his or her own account for investment
and not with a view to, or for sale in connection with, the distribution of any part thereof. 
 25.     LIABILITY
OF COMPANY 
   The Company and any Affiliate which is in existence or hereafter comes into existence shall
not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder; and (b) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Option or other Award granted
hereunder. 
 26.     EFFECTIVE DATE 

  The Plan became effective on the Original Effective Date. 

  
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