Document:

ex_321030.htm

Exhibit 10(b)

UNION PACIFIC CORPORATION

STANDARD TERMS AND CONDITIONS FOR

NONQUALIFIED STOCK OPTION

 

These Standard Terms and Conditions apply to the Option granted pursuant to the Union Pacific Corporation 2021 Stock Incentive Plan, as amended from time to time (the “Plan”), which is identified as nonqualified stock option and is evidenced by a Grant Notice that specifically refers to these Standard Terms and Conditions. In addition to these Standard Terms and Conditions, the Option shall be subject to the terms of the Plan and, if applicable, the Key Employee Continuity Plan, the Severance Policy and/or the Policy for Recoupment of Incentive Compensation, each as amended from time to time, which are incorporated into these Standard Terms and Conditions by this reference. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. For purposes of these Standard Terms and Conditions and the Grant Notice, any reference to the Company (as defined below) shall include a reference to any Subsidiary. Additionally, for purposes of these Standard Terms and Conditions, references in these Standard Terms and Conditions to “you” or “your” shall refer to the Participant named in the Grant Notice provided to said Participant herewith (the “Grant Notice”), and such Participant’s heirs and beneficiaries.

 

By electronically accepting the grant of the Option and these Standard Terms and Conditions, you acknowledge and agree to be bound by the following, which will survive your termination from employment and the vesting or forfeiture of the Option:

 

OPTION

 

1.           TERMS OF OPTION

 

Union Pacific Corporation (the “Company”), has granted to you a nonqualified stock option (the “Option”) to purchase up to the number of shares of the Company’s common stock (the “Common Stock”), set forth in the Grant Notice. The exercise price per share and the other terms and conditions of the Option are set forth in the Grant Notice, these Standard Terms and Conditions, the Plan and, if applicable, the Key Employee Continuity Plan, the Severance Policy and/or the Policy for Recoupment of Incentive Compensation, each as amended from time to time.

 

2.         NONQUALIFIED STOCK OPTION

 

The Option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and will be interpreted accordingly.

 

3.         EXERCISE OF OPTION

 

The Option shall not be exercisable as of the Grant Date set forth in the Grant Notice. After the Grant Date, to the extent not previously exercised, and subject to termination or acceleration as provided in these Standard Terms and Conditions, the Plan and, if applicable, the Key Employee Continuity Plan, the Severance Policy and/or the Policy for Recoupment of Incentive Compensation, the Option shall be exercisable only to the extent it becomes vested, as described in the Grant Notice, these Standard Terms and Conditions, the terms of the Plan and, if applicable, the Key Employee Continuity Plan, the Severance Policy and/or the Policy for Recoupment of Incentive Compensation, to purchase up to that number of shares of Common Stock as set forth in the Grant Notice, provided that (except as may be provided otherwise in Section 4 below) you remain employed with the Company and do not experience a termination of employment.

 

 

 

 

The exercise price (the “Exercise Price”) of the Option is set forth in the Grant Notice. The Company shall not be obligated to issue any shares of Common Stock until you have paid the total Exercise Price for that number of shares of Common Stock. To exercise the Option (or any part thereof), you must deliver to the Company appropriate notice specifying the number of whole shares of Common Stock you wish to purchase accompanied by valid payment in the form of (i) a check, (ii) an attestation form confirming your current ownership of whole shares of Common Stock equal in value to the total Exercise Price for that number of shares of Common Stock, and/or (iii) an authorization to sell shares equal in value to the total Exercise Price for that number of shares of Common Stock. Notices and authorizations shall be delivered and all checks shall be payable to the Company’s third party stock plan administrator, or as otherwise directed by the Company.

 

Fractional shares may not be exercised. Shares of Common Stock will be issued as soon as practicable after exercise. Notwithstanding the above, for administrative or other reasons, including, but not limited to the Company’s determination that exercisability of the Option would violate any federal, state or other applicable laws, the Company may from time to time suspend your ability to exercise an Option for limited periods of time, which suspensions shall not change the period in which the Option is exercisable, except as otherwise provided in the Plan.

 

4.         EXPIRATION OF OPTION

 

Except as otherwise may be provided by the Committee consistent with the terms of the Plan, the Option shall expire and cease to be exercisable as of the earlier of (a) the Expiration Date set forth in the Grant Notice or (b) the date specified below in Sections 4A through 4I, as applicable.

 

A.      If your termination of employment is by reason of death or you are determined to be disabled under the provisions of the Company’s long-term disability plan, then any vesting period with respect to the Option shall be deemed to be satisfied and the Option shall become fully vested and exercisable (by you or your estate, beneficiary or legal representative, as the case may be) at the date of such termination of employment or the first day on which you are determined to be disabled under such long-term disability plan, as the case may be, until the date that is five (5) years following the date of such termination of employment or the first day of disability as determined under such long-term disability plan, as the case may be.

 

2

 

 

 

B.      If you remain continuously employed with the Company until September 30, 2022, (which shall include a period of time during which you are absent from active employment in accordance with a leave of absence policy adopted by the Company), and have a termination of employment at or after attaining 62/10 Status as defined below in this Section 4B, then the Option shall be exercisable in accordance with and at the times it becomes vested, as described in the Grant Notice, notwithstanding your termination of employment with the Company, until the date that is five (5) years following the date of such termination of employment. “62/10 Status” as to a Participant means attaining: (i) age 62; and (ii) at least 10 years of vesting service. For this purpose, vesting service shall be calculated by applying the rules for determining “Vesting Service” under the Pension Plan for Salaried Employees of Union Pacific Corporation and Affiliates (“UPC Pension Plan”), regardless of whether you were ever a participant in the UPC Pension Plan.

 

C.      In the event of a Change in Control that occurs prior to your termination of employment in which the acquiring or surviving company in the transaction does not assume or continue the Option upon the Change in Control, any vesting period with respect to the Option shall be deemed to be satisfied and the Option shall become fully vested and exercisable (provided that the Option may be canceled upon the consummation of the Change in Control without payment of any additional consideration if the exercise price of the Option is less than the consideration per Share payable to shareholders of the Company in such Change in Control) and you may exercise the Option not assumed or continued until the date that is five (5) years following the date of such Change in Control. If you terminate employment following such Change in Control for a reason described in 4I, any unexercised portion of the Option shall be immediately forfeited and canceled as of the date of such termination of employment.

 

D.      If you terminate employment and at the time of such termination of employment you are “Retirement Eligible” (i.e., at least age 65 or at least age 55 with 10 or more years of vesting service (determined as provided in Section 4B, above)), you may exercise any portion of the Option that is vested and exercisable at the time of your termination of employment until the date that is five (5) years following the date of such termination of employment.

 

E.      Except as provided in Section 4F hereof, in the event you terminate employment with the Company prior to becoming Retirement Eligible, and as a result of such termination of employment you are eligible for and entitled to payment of severance benefits under the provisions of a Severance Policy that include extension of the exercise period with respect to such Option, and provided you satisfy the conditions of the Severance Policy, you may exercise any portion of the Option that is vested and exercisable at the time of your termination of employment until the date established under the Severance Policy, provided that in no event will such date extend beyond the Expiration Date set forth in the Grant Notice.

3

 

 

 

F.      If your employment is involuntarily terminated by the Company (other than a termination as a result of disability determined under the provisions of the Company’s long-term disability plan, or cause or gross misconduct as determined by the Committee) within two (2) years following a Change in Control, any vesting period with respect to the Option shall be deemed to be satisfied and you may exercise the Option upon the date of such termination of employment, and the Option shall remain exercisable until the date that is three (3) years following the date of such termination of employment (or until the date that is five (5) years following the date of such termination of employment, in the case of a termination of employment by reason of your death or a termination of employment described in Section 4B or Section 4D hereof). Furthermore, the Option exercise period shall be as described in Section 4A in the event you are determined to be disabled under the provisions of the Company’s long-term disability plan prior to your termination of employment described in this Section 4F.

 

G.      Notwithstanding the foregoing Sections 4A through 4F, if you are an Eligible Employee (within the meaning of the Key Employee Continuity Plan) in the Key Employee Continuity Plan and incur a Severance (within the meaning of the Key Employee Continuity Plan), the Option shall vest and be exercisable in accordance with the terms and conditions of the Key Employee Continuity Plan.

 

H.      Except as otherwise provided in the foregoing Sections 4A through 4G: (i) you may exercise any portion of the Option that is vested and exercisable at the time of your termination of employment until the date that is three (3) months following the date of such termination of employment; and (ii) any portion of the Option that is not vested and exercisable at the time of such termination of employment shall be forfeited and canceled as of the date of such termination of employment.

 

I.      Notwithstanding any other provision of this Section 4, if your employment is terminated by the Company for deliberate, willful or gross misconduct (as determined by the Committee), the unexercised portion of the Option, whether or not then vested and exercisable, shall be immediately forfeited and canceled as of the date of such termination of employment.

 

 

PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS

 

5.         CONFIDENTIAL INFORMATION AND TRADE SECRETS

 

You acknowledge that the Company regards certain information relating to its business and operations as confidential. This includes all confidential and proprietary information concerning the assets, business or affairs of the Company or any customers thereof ("Confidential Information"). You further acknowledge that the Company has certain information that derives economic value from not being known to the general public or to others who could obtain economic value from its disclosure or use, which the Company takes reasonable efforts to protect the secrecy of ("Trade Secrets").

4

 

 

 

6.         TYPES OF CONFIDENTIAL INFORMATION OR TRADE SECRETS

 

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

 

Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act of 2016, you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

 

7.         AGREEMENT TO MAINTAIN CONFIDENTIAL INFORMATION

 

You agree to not, unless you received prior written consent from the senior human resources officer or such other person designated in writing by the Company (hereinafter collectively referred to as the "Sr. HR Officer"), or unless ordered by a court or government agency, (i) divulge, use, furnish or disclose to any subsequent employer or, except to the extent necessary to perform your job responsibilities with the Company, any other person, whether or not a competitor of the Company, any Confidential Information or Trade Secrets, or (ii) retain or take with you when you leave the Company any property of the Company or any documents (including any electronic or computer records) relating to any Confidential Information or Trade Secrets.

 

8.         PRIOR NOTICE OF EMPLOYMENT, ETC.

 

(i) You acknowledge that if you become an employee, contractor, or consultant for any other person or entity engaged in the Business of the Company as defined in Section 11, this would create a substantial risk that you would, intentionally or unintentionally, disclose or rely upon the Company’s Confidential Information or Trade Secrets for the benefit of the other person or entity to the detriment of the Company. You further acknowledge that such disclosures would be particularly damaging if made shortly after you leave the Company. You agree that while you are employed by or working for the Company and for a period of one (1) year after you leave the Company, before accepting any employment or affiliation with another person or entity you will give written notice to the Sr. HR Officer of your intention to accept such employment or affiliation. You also agree to confer in good faith with the Sr. HR Officer concerning whether your proposed employment or affiliation could reasonably be expected to be performed without improper disclosure of Confidential Information or Trade Secrets.

5

 

 

 

(ii) If you and the Sr. HR Officer are unable to reach agreement on this issue, you agree to submit this issue to arbitration as set forth in Section 14 below, for final resolution. You cannot begin to work for another person or entity engaged in the Business of the Company as defined in Section 11, until the Sr. HR Officer or an arbitrator has determined that such employment could reasonably be expected to be performed without improper disclosure of the Company’s Confidential Information or Trade Secrets.

 

9.         NON-SOLICITATION OF CUSTOMERS

 

You agree that during employment with the Company, and for a period of one (1) year following your departure from the Company, you will not (directly or in association with others or otherwise) call on or solicit any of the Company’s customers with whom you had personal contact during the period from the Grant Date of this Option until such Option has fully vested (or, if earlier, the date your employment with the Company ceased), for the purpose of providing the customers with goods and/or services similar in nature to those provided by the Company in its Business as defined below.

 

 

10.       NON-SOLICITATION OF EMPLOYEES

 

You agree that during employment with the Company, and for a period of one (1) year following your departure from the Company, you will not (directly or indirectly, in association with others or otherwise), participate in hiring or attempting to hire away a Company employee or contractor, or induce or encourage any employees or contractors of the Company to terminate their relationship with the Company, without prior written consent of the Sr. HR Officer.

 

11.       NON-COMPETITION

 

You agree that during employment with the Company, and for a period of one (1) year following your departure from the Company, you will not (directly or indirectly, in association with others or otherwise) engage in any activity which is the same or substantially the same as or competitive with the Business (as defined below) including, without limitation, engagement as an officer, director, proprietor, employee, partner, manager, member, investor (other than as a holder of less than 2% of the outstanding capital stock of a publicly traded corporation), guarantor, consultant, advisor, agent, sales representative or other participant, in any market in which the Company conducts its Business. For purposes of these Standard Terms and Conditions, the term “Business” means the transportation of goods in interstate commerce and related services in or through or for any state in which the Company or any of its affiliates provides such services directly or indirectly and any other activity that supports such operations including by the way of example but not limitation, marketing, information systems, logistics, technology development or implementation, terminal services and any other activity of the Company or any of its affiliates. This Section 11 is not intended to prevent you from engaging in any activity that is not substantially the same as or competitive with the Business.

6

 

 

 

12.       INJUNCTIVE RELIEF

 

You agree that each of the restraints contained herein is necessary for the protection of the goodwill, Confidential Information, Trade Secrets and other legitimate interests of the Company; that each and every one of these restraints is reasonable in respect to subject matter, length of time and geographic area; and that these restraints, neither individually nor in the aggregate, will not prevent you from obtaining other suitable employment during the period in which you are bound by such restraints. You further acknowledge that, if you breach any of the covenants contained in Sections 5, 6, 7, 8, 9, 10 or 11, the damage to the Company would be irreparable. You therefore agree that the Company, in addition to any other remedies available to it, including, without limitation, the remedies set forth in Sections 13 and 14, shall be entitled to injunctive relief against your breach or threaten breach of said covenants. You and the Company further agree that, in the event that any one or more of the provisions of Sections 5, 6, 7, 8, 9, 10 or 11 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being overly broad as to time and/or scope, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law.

 

13.       VIOLATION OF PROMISES

 

You agree that if you violate any one or more of your promises set forth in Sections 5, 6, 7, 8, 9, 10 or 11, then, in lieu of or in addition to any other remedies available to Company as permitted by applicable law, the Option, to the extent then unexercised, whether vested or unvested, shall be immediately forfeited and cancelled. If at any time the Committee or Sr. HR Officer notifies (the date such notice is provided, the “Notice Date”) the Company that they believe that you have violated any one or more of the promises set forth in Sections 5, 6, 7, 8, 9, 10 or 11, the vesting of your Option may be suspended pending a determination of whether you violated any such provision by a tribunal specified in Section 14 and 16 below. In addition, in lieu of or in addition to any remedy provided for in Section 12, at any time the Company may seek in any such proceeding that you be required to immediately deliver to the Company an amount (in cash or in shares of Common Stock) equal to the market value (on the date of exercise) of any shares of Common Stock acquired on exercise of the Option less the exercise price paid for such shares acquired by you upon exercise of the Option at any time during the three (3) full fiscal years preceding the Notice Date. You agree that you will deliver such shares of Common Stock (or the fair market value thereof) to the Company on such terms and conditions as may be required by the Company. You further agree that the Company will be entitled to enforce this repayment obligation by all legal means available, including, without limitation, to set off the market value of any such shares of Common Stock against any amount that might be owed to you by the Company.

7

 

 

 

GENERAL

 

14.       DISPUTE RESOLUTION

 

You and the Company each agree that any controversy, claim, or dispute arising out of or relating to these Standard Terms and Conditions or arising out of or relating to your employment relationship with the Company or any of its affiliates, the termination of such relationship, or your conduct following the termination of such relationship, shall be resolved by binding arbitration before a neutral arbitrator on an individual basis only, and not in any form of class, collective, or private attorney general representative proceeding. By way of example only, claims subject to this agreement to arbitrate include claims litigated under federal, state and local statutory or common law, such as the Family Medical Leave Act, the Age Discrimination in Employment Act of 1967, Older Workers Benefit Protection Act of 1990,, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1990, the Americans with Disabilities Act, the Federal Employers Liability Act, the Federal Railway Safety Act, the Worker Adjustment and Retraining Notification Act, the Genetic Information Nondiscrimination Act, the law of contract and the law of tort. You and the Company each agree that such claims may be brought in an appropriate administrative forum, but at the point at which you or the Company seek a judicial forum to resolve the matter, this agreement for binding arbitration becomes effective, and you and the Company each hereby knowingly and voluntarily waive any right to have any such dispute tried and adjudicated by a judge or jury.

 

The parties will submit the dispute, within 30 business days following service of notice of such dispute by one party on the other, to the American Arbitration Association (AAA) for prompt resolution in Salt Lake City, Utah, under its rules for employment disputes. There shall be a single arbitrator, chosen in accordance with such rules, who at such time shall be on AAA’s Judicial Panel. The decision of the arbitrator will be final and binding upon the parties, and judgment may be entered thereon in accordance with applicable law in any court having jurisdiction. The arbitrator shall have the authority to make an award of monetary damages and interest thereon. The arbitrator shall have no authority to award, and the parties hereby waive any right to seek or receive, specific performance or an injunction, punitive or exemplary damages. The arbitrator will have no authority to order a modification or amendment of these Standard Terms and Conditions. The arbitrator shall have the authority to award costs of arbitration, including reasonable attorney’s fees, to the prevailing party, but in the absence of such award the parties shall bear their own attorney and filing fees, unless otherwise agreed upon mutually by the parties or required by law. The Company shall bear the cost of the arbitrator’s fees.

 

Notwithstanding the foregoing, the Company may seek to enforce the employee covenants set forth in Sections 5, 6, 7, 8, 9, 10, 11 or 13 above, in any court of competent jurisdiction as set forth in Section 16 below.

 

15.       SEVERABILITY

 

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

8

 

 

 

16.       CHOICE OF LAW; JURISDICTION

 

All questions pertaining to the construction, regulation, validity, and effect of these Standard Terms and Conditions shall be determined in accordance with the laws of the State of Utah, without regard to the conflict of laws doctrine. With respect to any claim or dispute involving your grant of the Option and/or these Standard Terms and Conditions that is not subject to arbitration pursuant to Section 14 hereof, you and the Company each hereby consent and submit to the personal jurisdiction and venue of any state or federal court located in the county of Salt Lake City within the State of Utah and, recognizing the appropriateness of the State of Utah for any such matters due to the Company being incorporated in Utah, you and the Company hereby agree and consent to the state and federal courts located in the county of Salt Lake City within the State of Utah as the sole and exclusive forum for resolution of any and all claims, causes of action or disputes arising out of or related to your grant of the Option and these Standard Terms and Conditions (including all terms incorporated by reference into these Standard Terms and Conditions). With respect to employees who are subject to California law, Sections 8(ii), 9 and 11 shall not apply.         

 

17.       AMENDMENTS

 

The Plan and these Standard Terms and Conditions may be amended or altered by the Committee or the Company’s Board of Directors to the extent provided in the Plan.

 

18.       RESTRICTIONS ON RESALES OF SHARES ACQUIRED PURSUANT TO OPTION EXERCISE

 

The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by you or other subsequent transfers by you of any Common Stock issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by you and other optionholders and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

 

19.       INCOME TAXES

 

The Company shall not deliver shares of Common Stock in respect of the exercise of any Option unless and until you have made satisfactory arrangements to pay or otherwise satisfy all applicable tax withholding obligations. Unless you pay the tax withholding obligations to the Company by cash or check in connection with the exercise of the Option, tax withholding may be effected, at the Company’s option, by withholding Common Stock issuable in connection with the exercise of the Option (provided that shares of Common Stock may be withheld only to the extent that such tax withholding will not result in adverse accounting treatment for the Company). You acknowledge that the Company shall have the right to deduct any taxes required to be withheld by law in connection with the exercise of the Option from any amounts payable by it to you (including, without limitation, future cash wages).

9

 

 

 

20.         NON-TRANSFERABILITY OF OPTION

 

You understand, acknowledge and agree that, except as permitted under the Plan, you may not assign or transfer the Option to anyone other than by will or the laws of descent and distribution and the Option shall be exercisable only by you during your lifetime or, following your death, by your beneficiary. The Company may cancel your Option if you attempt to assign or transfer it in a manner inconsistent with this Section 20. Your beneficiaries and anyone claiming an interest in the Option through you are subject to all of the terms and conditions applicable to you, other than the covenants set forth in Sections 5, 6, 7, 8, 9, 10 and 11.

 

21.         CLAWBACK AND RECOUPMENT

 

If you are or become a Covered Person under the Company’s Policy for Recoupment of Incentive Compensation, you agree that your Option, and shares issuable upon exercise of the Option, are subject to recoupment, including in connection with a financial restatement or any detrimental conduct, pursuant to and in accordance with the Company’s Policy for Recoupment of Incentive Compensation, as amended from time to time, and pursuant to any other policy the Company may adopt pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, other applicable law, or stock exchange listing standard. No recovery of compensation under such a clawback policy shall be treated as an event giving rise to a right to terminate employment for “good reason” or “constructive termination” (or any similar term) under any agreement with the Company.

 

22.         LIMITATION OF INTEREST IN SHARES SUBJECT TO OPTION

 

Neither you (individually or as a member of a group) nor any beneficiary or other person claiming under or through you shall have any right, title, interest, or privilege in or to any shares of Common Stock allocated or reserved for the purpose of the Plan or subject to the Grant Notice or these Standard Terms and Conditions except as to such shares of Common Stock, if any, as shall have been issued to such person upon exercise of the Option or any part of it, which shares shall remain subject to the conditions set forth in these Standard Terms and Conditions. Nothing in the Plan, in the Grant Notice, these Standard Terms and Conditions or any other instrument executed pursuant to the Plan shall confer upon you any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate your employment at any time for any reason.

 

23.         OTHER AGREEMENTS SUPERSEDED

 

The Grant Notice, these Standard Terms and Conditions and the Plan constitute the entire understanding between you and the Company regarding the Option. Any prior agreements, commitments or negotiations concerning the Option are superseded.

 

10ex_321031.htm

Exhibit 10(c)

 

 

____________________________________________________________________

 

 

 

 

 

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, February 6, 2014 and December 10, 2021)

 

(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)

 

 

____________________________________________________________________

 

 

 

 

 

UNION PACIFIC CORPORATION

KEY EMPLOYEE CONTINUITY PLAN

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

and as further amended February 3, 2011, February 6, 2014 and December 10, 2021)

 

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, February 6, 2014 and December 10, 2021. 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

 

(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.

 

 

3

 

 

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 (or, if higher, immediately preceding any such reduction); 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, if higher, immediately preceding any such reduction); (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; 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, if higher, immediately preceding any such reduction); 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.

 

4

 

 

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.

 

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

 

5

 

 

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.

 

6

 

 

SECTION 2.2               Each Eligible Employee who incurs a Severance that occurs prior to November 1 in any calendar year shall be entitled, subject to Section 2.6 hereof, to receive a pro-rated (through the Severance Date) portion of the payment such Eligible Employee would have received under the Company’s executive incentive plan (the “EIP”) for the fiscal year in which the Severance Date occurs based on the actual level of performance for the year (or if the actual level of performance cannot be determined, the target level of performance). The amount of the incentive award determined under this Section 2.2 shall be paid, subject to Section 2.6, to such Eligible Employee at the same time as such other executives receive payments under the EIP for such year. For the avoidance of doubt, an Eligible Employee who incurs a Severance on or after November 1 of a calendar year shall continue to be eligible to participate in the EIP for such calendar year under the terms of the EIP.

 

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.

 

7

 

 

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 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.

 

8

 

 

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, and complies with all of the terms and conditions therein, including the restrictive covenants. 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, (A) in the event the Severed Employee previously elected to defer receipt of such benefit, payment shall be made on the deferred payment date of the benefit determined in accordance with the deferred compensation plan under which the benefit is deferred (which, for this purpose, will be the first deferred payment date in the event the benefit, in accordance with such deferred compensation plan, is paid in installment payments) and (B) benefits the Severed Employee did not elect to defer receipt but are nevertheless deferred compensation under section 409A shall be paid sixty (60) days after the Severance Date. Notwithstanding the foregoing, if 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), the benefit that is deferred compensation shall be paid on the later of: (Y) the payment date determined under (A) or (B) above, as applicable or (Z) 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

 

9

 

 

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 2.8             Notwithstanding anything to the contrary in the Plan, if a Severed Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for under the Plan, together with any other payments and benefits which a Severed Employee has the right to receive from the Company and its Affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for under the Plan shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by a Severed Employee from the Company and its Affiliates will be $1.00 less than three times a Severed Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by a Severed Employee shall be subject to the excise tax imposed by Section 4999 of the Code, or (b) paid in full, whichever produces the better net after-tax position to a Severed Employee (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). To the extent any benefits and payments provided for in the Plan are “deferred compensation” within the meaning of Section 409A of the Code, any reduction shall be made in a manner consistent with the requirements of Section 409A of the Code. The determination as to whether any reduction in the amount of the payments provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment is made or provided and through error or otherwise that payment, when aggregated with other payments and benefits from the Employer used in determining if a parachute payment exists, exceeds $1.00 less than three times a Severed Employee’s base amount, then a Severed Employee shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in the Plan shall require the Company to be responsible for, or have any liability or obligation with respect to, a Severed Employee’s excise tax liabilities under Section 4999 of the Code.

 

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

 

10

 

 

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.

 

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.

 

11

 

 

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.

 

12

 

 

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.

 

 

1

 

 

In addition, in consideration of, and subject to, the payments to be made to me by Union Pacific, pursuant to the Plan, I hereby agree to the following restrictive covenants:

 

NON-SOLICITATION OF CUSTOMERS. I agree that for a period of twelve (12) months following the Severance Date (as defined in the Plan) (the “Restriction Period”), I will not (directly or indirectly, in association with others or otherwise) call on or solicit any of the Company’s customers with whom I had personal contact during my employment with the Company, for the purpose of providing the customers with goods and/or services similar in nature to those provided by the Company in its Business as defined below.

 

NON-SOLICITITATION OF EMPLOYEES. I agree that during the Restriction Period, I will not (directly or indirectly, in association with others or otherwise), participate in hiring or attempting to hire away a Company employee or contractor, or induce or encourage any employees or contractors of the Company to terminate their relationship with the Company, without prior written consent of the Company.

 

NON-COMPETITION. I agree that during the Restriction Period, I will not (directly or indirectly, in association with others or otherwise) engage in any activity which is the same and/or substantially the same as or competitive with the Business (as defined below) including, without limitation, engagement as an officer, director, proprietor, employee, partner, manager, member, investor (other than as a holder of less than 2% of the outstanding capital stock of a publicly traded corporation), guarantor, consultant, advisor, agent, sales representative or other participant, in any market in which the Company conducts its Business. For these purposes, the term “Business” means the transportation of goods in interstate commerce and related services in or through or for any state in which the Company or any of its affiliates provides such services directly or indirectly and any other activity that supports such operations including by the way of example but not limitation, marketing, information systems, logistics, technology development or implementation, terminal services and any other activity of the Company or any of its affiliates.

 

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 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.

 

2

 

 

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)

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00339-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00339-of-00352.parquet"}]]