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                                                                   EXHIBIT 10(g)

                            UNION PACIFIC CORPORATION

                     EXECUTIVE STOCK PURCHASE INCENTIVE PLAN

1.       PURPOSE

The Union Pacific Executive Stock Purchase Incentive Plan (the "Plan") is
intended to (i) encourage and facilitate ownership of shares of the common stock
of Union Pacific Corporation (the "Company") by officers and other key
executives of the Company and its Subsidiaries, (ii) create a working
environment where participating executives of the Company and its Subsidiaries
share in the same risks and rewards as the Company's other shareholders, and
(iii) create a retention vehicle by:

o        providing participating executives of the Company and its Subsidiaries
         with an opportunity to significantly increase their ownership of common
         stock of the Company coupled with incentive awards based on the
         performance of the Company and its common stock and

o        providing this opportunity in a manner that places participating
         executives at risk in the event of inadequate Company performance.

2.       DEFINITIONS

Except where the content otherwise indicates, the following definitions apply:

"Applied Dividends" means regular cash dividends on Common Stock purchased
pursuant to a Purchase Award which are to be applied to offset (partially or
wholly) interest accruing on the Purchase Loan as required pursuant to Section
7(d)(i) and which the Company's stock transfer agent shall be irrevocably
directed by each Participant to deliver directly to the Company for such purpose
to the extent required to comply with Section 7(d)(i).

"Board" means Board of Directors of the Company.

"Cause" means the deliberate, willful or gross misconduct of the Participant, as
determined by the Committee.

"Code" means the Internal Revenue Code of 1986, as amended.

"Combination Deferred Award" means the grant to a Participant, upon the
Participant's exercise of the Purchase Award, of Deferred Performance Award #1,
Deferred Performance Award #2, Deferred Performance Award #3 and Deferred
Service Incentive Award, as described in Section 8.

"Commission" means the Securities and Exchange Commission.

"Committee" means the Compensation and Benefits Committee of the Board or such
other committee of the Board as may be designated by the Board, the Committee
being composed of not less than two persons who qualify as "disinterested
persons" as defined in Rule 16b-3(c)(2), as promulgated by the Commission under
the 1934 Act, or any successor definition adopted by the Commission.

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"Common Stock" means the Common Stock, $2.50 par value per Share, of the
Company.

"Company" means Union Pacific Corporation, a Utah corporation, or any successor
corporation.

"Deferred Performance Awards" means the following awards, as described in
Section 8: Deferred Performance Award #1, Deferred Performance Award #2 and
Deferred Performance Award #3.

"Deferred Service Incentive Award" means the award so named and described in
Section 8.

"Designated Payment Date" means the date designated by the Company for a cash
payment to a Participant (or the estate of a deceased Participant) with respect
to any part or all of a Combination Deferred Award, which date shall be no later
than January 31, 2003 and, in the case of any cash payment with respect to a
Participant's Combination Deferred Award after the Participant's Termination of
Service because of death, no later than six months after such Termination of
Service.

"Effective Date" means the date the Plan is adopted by the Board.

"Interest Rate" means the "applicable federal rate" in effect on the Purchase
Date for loans with a final maturity date of January 31, 2006 with interest
compounded annually, as determined by Section 1274(d) of the Code.

"Market Price" with respect to a Share shall mean, for any given date (or in the
event such date is not a Trading Day with respect to the Share, the last Trading
Day prior to such date), the average of the high and low trading prices per
Share on such date, as reported in The Wall Street Journal listing of composite
transactions for New York Stock Exchange issues.

"1934 Act" means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated by the Commission thereunder.

"Participant" means each eligible employee of the Company or any of its
Subsidiaries who is designated by the Committee to receive a Purchase Award.

"Performance Criteria" means the following three criteria:

         Criterion #1: For twenty consecutive calendar days during the
         Performance Period the Market Price of a Share has increased at least
         15% over the Purchase Price;

         Criterion #2:  Either of the following two events has occurred:
                  (i) The Company has achieved annual earnings per Share equal
                  to, or greater than, $5.00 per Share during any calendar year
                  in the Performance Period or
                  (ii) Criterion #3 has been achieved; and

         Criterion #3:  Either of the following two events has occurred:
                  (i) The Company has achieved annual earnings per Share equal
                  to, or greater than, $6.00 per Share during any calendar year
                  in the Performance Period or
                  (ii) The Market Price of a Share for twenty consecutive
                  calendar days during the Performance Period has equaled or
                  exceeded $85.00.

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"Performance Period" means, with respect to each Purchase Award, the period of
time beginning on the Purchase Date with respect to such Purchase Award and
ending on January 31, 2003.

"Plan" means this Union Pacific Corporation Executive Stock Purchase Incentive
Plan, as amended from time to time in accordance with the Plan's provisions.

"Purchase Award" means an award to a Participant permitting such Participant to
purchase Shares pursuant to Section 6 at the Purchase Price, together with
related Purchase Loan, Combination Deferred Award and Special Deferred Award
rights upon exercise of the Purchase Award.

"Purchase Date" means the date a Participant purchases Shares pursuant to a
Purchase Award.

"Purchase Loan" means an extension of credit to the Participant by the Company
evidenced by a Purchase Note.

"Purchase Note" means a full recourse promissory note with respect to the
Purchase Loan in substantially the same form as set forth on Exhibit A.

"Purchase Price" of a Share means fair market value of a Share on the Purchase
Date, as determined by the Committee.

"Remaining Balance" means the principal balance of the Purchase Loan (including
accrued but unpaid interest) outstanding immediately following the end of the
Performance Period and the making of any prepayments required by Section
7(d)(ii).

"Service" means employment with the Company or its Subsidiaries.

"Share" means a share of the Company's Common Stock.

"Special Criterion" means attaining a Market Price per Share which equals or
exceeds $100.00 for twenty consecutive calendar days during the Performance
Period.

"Special Deferred Award" means the grant to a Participant, upon the
Participant's exercise of the Purchase Award, of the Special Deferred Award, as
described in Section 9.

"Subsidiary" means a corporation (or partnership, joint venture, or other
enterprise) of which the Company owns or controls, directly or indirectly, 50%
or more of the outstanding shares of stock normally entitled to vote for the
election of directors (or comparable equity participation and voting power).

"Termination of Service" means a Participant's termination of Service such that
he or she is no longer an employee of either the Company or any of its
Subsidiaries for any reason whatsoever; provided, however, that, for purposes of
this Plan, a Participant who becomes subject to a long-term disability (within
the meaning of the Company's long-term disability plan (or the relevant
Subsidiary's long-term disability plan), as in effect from time to time) shall
be deemed to be continuing his or her Service during such period of long-term
disability.

"Total Purchase Price" means, with respect to each Participant, the Purchase
Price multiplied by the number of Shares purchased pursuant to the Participant's
Purchase Award.

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"Trading Day" means, with respect to the Common Stock, a day on which the Common
Stock is publicly traded on the New York Stock Exchange.

3.       SHARES SUBJECT TO THE PLAN

The aggregate number of Shares that may be issued under the Plan shall not
exceed 1,100,000 Shares.

4.       TERM OF THE PLAN

The Plan shall become effective upon adoption by the Board. The Plan shall be
terminated on January 31, 2003; provided, that Combination Deferred Awards,
Special Awards and Purchase Loans outstanding as of such date shall not be
affected or impaired by the termination of the Plan; provided further that no
Purchase Awards shall be granted after December 31, 1999.

5.       ELIGIBLE EMPLOYEES

All officers of the Company and other key executives of the Company and its
Subsidiaries who, in the opinion of the Committee, can materially influence the
long-term performance of the Company and/or its Subsidiaries are eligible to
receive a Purchase Award. The Committee shall have the power and complete
discretion to select those eligible employees who are to receive Purchase
Awards.

6.       STOCK PURCHASE

(a)      Grant of Purchase Award. The number of Shares purchasable under a
         Purchase Award for any Participant and the Purchase Date shall be
         determined by the Committee. The Committee shall, with respect to each
         Purchase Award, give written notice to each Participant receiving such
         Purchase Award stating (i) the maximum and minimum number (which
         numbers may be identical) of Shares that may be purchased under the
         Purchase Award, (ii) the Purchase Date and (iii) the Interest Rate and
         other terms pertaining to the Purchase Loan.

(b)      Exercise of Purchase Award. A Participant shall exercise a Purchase
         Award by delivering to the Company on the Purchase Date (or within a
         reasonable time thereafter specified by the Company) (i) a notice
         stating the number of Shares (not less than the minimum number and not
         more than the maximum number specified in the Purchase Award) such
         Participant elects to purchase on the Purchase Date, and (ii) an
         executed Purchase Note and any other documents required pursuant to the
         Plan. Any Participant who does not elect to purchase at least the
         minimum number of Shares under the Purchase Award on the Purchase Date
         (or within a reasonable time thereafter specified by the Company) shall
         forfeit any rights under the Plan with respect to such Purchase Award,
         including, without limitation, any right to receive a Purchase Loan,
         Combination Deferred Award or Special Award related to such Purchase
         Award.

(c)      Closing Time. The exercise of the Purchase Award by a Participant, the
         delivery of the Purchase Note and the issuance by the Company of the
         Shares purchased pursuant to the Purchase Award shall be effective at
         5:00 p.m., New York City time, on the Purchase Date

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         (the "Closing Time"). After the Closing Time, such Participant shall be
         a stockholder of the Company for all purposes. Notwithstanding anything
         herein to the contrary, the Committee shall have the absolute right, in
         its sole discretion, to revoke any Purchase Award, including, without
         limitation, any right to receive a Purchase Loan, Combination Deferred
         Award or Special Award related to such Purchase Award, prior to the
         Closing Time.

7.       LOAN PROVISIONS

(a)      General. The Company shall extend a Purchase Loan to a Participant upon
         exercise of a Purchase Award subject to the terms and conditions set
         forth in this Section 7. The original principal amount of the Purchase
         Loan, which shall be unsecured, shall be equal to the Total Purchase
         Price. Such Purchase Loan shall be evidenced by a Purchase Note with
         full recourse against the Participant as maker of the note. The
         obligations of the Participant under the Purchase Note shall be
         unconditional and absolute and, without limiting the generality of the
         foregoing, shall not be released, discharged or otherwise affected by
         any change in the existence, structure or ownership of the Company, or
         any insolvency, bankruptcy, reorganization or other similar proceeding
         affecting the Company or its assets or the market value of the Common
         Stock or any resulting release or discharge of any obligation of the
         Company or the existence of any claim, set-off or other rights which
         the Participant may have at any time against the Company or any other
         person, whether in connection with the Plan or with any unrelated
         transactions, provided that nothing herein shall prevent the assertion
         of any such claim by separate suit or counterclaim.

         Notwithstanding anything to the contrary in this Section 7, the Company
         shall not be required to make any Purchase Loan to a Participant if the
         making of such Purchase Loan will (i) cause the Company to violate any
         covenant or similar provision in any indenture, loan agreement or other
         agreement, or (ii) violate any applicable federal, state or local law,
         provided, that the failure to make such Purchase Loan shall be deemed
         to revoke the exercise of the related Purchase Award unless otherwise
         specified by the Participant or if the Company is not satisfied with
         the creditworthiness of the Participant.

(b)      Interest. Interest on the principal balance of the Purchase Loan shall
         accrue annually, in arrears, at the Interest Rate.

(c)      Term. The term of the Purchase Loan for any Participant shall begin on
         such Participant's Purchase Date and, subject to prepayment as provided
         in Sections 7(d) and 7(e), have a final maturity date of January 31,
         2006. The Remaining Balance of the Purchase Loan shall be payable in
         three equal annual installments on January 31, 2004, January 31, 2005
         and January 31, 2006, with the interest accruing (offset by Applied
         Dividends, if Criterion #1 was not achieved during the Performance
         Period) on the unpaid Remaining Balance payable annually, in arrears,
         on each such January 31.

(d)      Prepayments Not Related to Termination of Service.

         (i)      Dividends. To the extent the Participant is entitled to
                  regular cash dividends on Common Stock purchased under the
                  Plan, until the earlier of the achievement of Performance
                  Criterion #1 or payment in full of the Purchase Loan
                  (including accrued and unpaid interest), such dividends shall
                  be delivered by the Company's stock transfer agent to the
                  Company to offset (wholly or partially) the accrued interest
                  on

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                  the Purchase Loan, pursuant to an irrevocable written
                  direction given by the Participant. Upon and after the
                  achievement of Performance Criterion #1, all such dividends
                  shall be paid directly to the Participant. If, prior to the
                  achievement of Performance Criterion #1, the Participant is
                  entitled to regular cash dividends which exceed the accrued
                  interest on the Purchase Loan, such excess shall be paid
                  directly to the Participant.

         (ii)     Cash Payments with respect to Combination Deferred Award. In
                  the event a Participant (or the estate of a deceased
                  Participant) receives any cash payments with respect to the
                  Participant's Deferred Performance Awards or Deferred Service
                  Incentive Award or any cash payments made by the Company under
                  Section 8(h)(i) after the earlier of (i) Termination of
                  Service due to death or (ii) the end of the Performance
                  Period, the Participant (or the Participant's estate) shall
                  immediately (partially or wholly) prepay the principal balance
                  of the Purchase Loan (or the accrued and unpaid interest
                  thereon in the case of a cash payment with respect to Deferred
                  Performance Award #1), to the extent, if any, that such
                  principal balance (or such interest in the case of a cash
                  payment with respect to Deferred Performance Award #1) remains
                  unpaid at such time, with an amount equal to the full amount
                  of all such cash payments upon receipt thereof.

         (iii)    Optional Prepayments. Any Participant (or the estate of a
                  deceased Participant) may prepay all of the Purchase Loan
                  (including accrued and unpaid interest) at any time, but
                  partial prepayments shall not be permitted.

(e)      Prepayment Obligations Related to Termination of Service. In the event
         of a Participant's Termination of Service because of death, any
         outstanding balance (including accrued and unpaid interest) of the
         Purchase Loan shall be due and payable in full six months from the date
         of the Participant's death. In the event of a Participant's Termination
         of Service for any reason other than death, any outstanding balance
         (including accrued and unpaid interest) of the Purchase Loan shall be
         due and payable in full on the later of (i) the 90th day following such
         Termination of Service or (ii) the 90th day following the first date on
         which the Participant may sell the Common Stock purchased under the
         Plan without incurring liability under the federal securities laws,
         including Section 16 of the 1934 Act (limited, in the case of Section
         16, to liability relating to purchases or sale of Common Stock or any
         derivative security occurring prior to the Termination of Service). If
         (i) a Participant's Termination of Service is due to death during the
         Performance Period or an involuntary Termination of Service without
         Cause during the Performance Period, (ii) on the date the outstanding
         balance of the Purchase Loan becomes due and payable pursuant to this
         Section 7(e), the aggregate Market Price of the Shares acquired under
         the Participant's Purchase Award is less than the sum of (x) the
         outstanding balance of the Purchase Loan (including accrued and unpaid
         interest) on such date, as reduced by any prepayment made pursuant to
         Section 7(d), and (y) the income and employment tax liability resulting
         from any cash payments with respect to the Combination Deferred Award,
         and (iii) if all Shares so acquired are still held by the Participant
         (or the Participant's estate), then, on such date (if so requested by
         the Participant or the Participant's estate) the Company shall accept
         from the Participant (or the Participant's estate) the surrender of all
         Shares so acquired by the Participant in full satisfaction of the
         outstanding balance of the Purchase Loan (including accrued and unpaid
         interest).

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8.       COMBINATION DEFERRED AWARD - DESCRIPTION, PAYMENT AND FORFEITURE

(a)      Combination Deferred Award. Upon any Participant's exercise of the
         Participant's Purchase Award, the Company shall grant the Participant a
         Combination Deferred Award, consisting of Deferred Performance Award
         #1, Deferred Performance Award #2, Deferred Performance Award #3 and
         Deferred Service Incentive Award, subject to the terms and conditions
         set forth in this Section 8. Any payment with respect to a
         Participant's Combination Deferred Award shall be made by the Company
         on its behalf and/or on behalf of the Subsidiary by which the
         Participant was employed on the Designated Payment Date. Any Subsidiary
         which so employed the Participant shall reimburse the Company for such
         payment. No payment shall be made by the Company with respect to any
         Participant's Combination Deferred Award until the Participant has made
         arrangements with respect to any federal, state or local tax
         withholding requirements applicable to such payment which are
         satisfactory to the Company.

(b)      Deferred Performance Award #1. In the event that Criterion #1 is
         achieved, each Participant then holding a Deferred Performance Award #1
         shall become entitled to a deferred cash payment with respect thereto,
         subject to the terms and conditions set forth in this Section 8. On the
         Designated Payment Date, the Company shall pay to the Participant, with
         respect to Deferred Performance Award #1, a cash amount equal to the
         interest accrued and remaining unpaid on the Purchase Loan (after any
         application of Applied Dividends) as of the Designated Payment Date.
         Further, if Criterion #1 has been achieved during the Performance
         Period, but accrued interest on the Purchase Loan is payable on January
         31, 2004, January 31, 2005 and /or January 31, 2006 pursuant to Section
         7(c), then, on each such date, the Company shall pay to the
         Participant, with respect to Deferred Performance Award #1, a cash
         amount equal to the interest becoming payable on such date.

(c)      Deferred Performance Award #2. In the event that Criterion #2 is
         achieved, each Participant then holding a Deferred Performance Award #2
         shall become entitled to a deferred cash payment with respect thereto,
         subject to the terms and conditions set forth in this Section 8. On the
         Designated Payment Date, the Company shall pay to the Participant, with
         respect to Deferred Performance Award #2, a cash amount equal to
         one-third of the outstanding principal balance of the Purchase Loan as
         of the Designated Payment Date.

(d)      Deferred Performance Award #3. In the event that Criterion #3 is
         achieved, each Participant then holding a Deferred Performance Award #3
         shall become entitled to a deferred cash payment with respect thereto,
         subject to the terms and conditions set forth in this Section 8. On the
         Designated Payment Date, the Company shall pay to the Participant, with
         respect to Deferred Performance Award #3, a cash amount equal to
         one-third of the outstanding principal balance of the Purchase Loan as
         of the Designated Payment Date.

(e)      Deferred Service Incentive Award. If the Service of a Participant who
         holds a Deferred Service Incentive Award is continuous from the
         Effective Date to the end of the Performance Period, the Participant
         shall become entitled to a deferred cash payment with respect to such
         award, subject to the terms and conditions set forth in this Section 8.
         On the Designated Payment Date, the Company shall pay to the
         Participant, with respect to the Deferred Service Incentive Award, a
         cash amount equal to one-third of the outstanding principal balance of
         the Purchase Loan as of the Designated Payment Date.

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(f)      Forfeiture of Combination Deferred Award Upon Certain Sales of Shares
         and Certain Prepayments of Purchase Loan. Notwithstanding any other
         provision of this Section 8, a Participant's Combination Deferred Award
         shall be immediately forfeited if the Participant, during the
         Performance Period, either (i) sells any Shares acquired under a
         Purchase Award or (ii) makes an optional prepayment on the Purchase
         Loan described in Section 7(d)(iii). A transfer of a Participant's
         Shares to a revocable trust as to which the Participant retains voting
         and investment power (which powers of revocation, voting and investment
         may be shared with the Participant's spouse) or a transfer to joint
         ownership with such Participant's spouse shall not be deemed a sale for
         purposes of this Section 8(f) and, solely for the purposes of this
         Plan, such Shares shall be deemed to be owned by the Participant.

(g)      Application of Payments Made Pursuant to Section 8. Notwithstanding any
         other provision of this Section 8, an amount equal to the full amount
         of any payment made by the Company pursuant to this Section 8 with
         respect to a Deferred Performance Award and/or Deferred Service
         Incentive Award shall be immediately applied in accordance with Section
         7(d)(ii) to prepay (partially or wholly) the principal balance of the
         Purchase Loan (or the accrued and unpaid interest thereon in the case
         of a cash payment with respect to Deferred Performance Award #1), to
         the extent, if any, that such principal balance (or such interest in
         the case of a cash payment with respect to Deferred Performance Award
         #1) remains unpaid on the Designated Payment Date.

(h)      Change in Control. Upon an occurrence of a Change in Control (as
         defined in the Union Pacific Corporation Key Employee Continuity Plan,
         as amended from time to time (the "Continuity Plan")), all Performance
         Criteria shall be deemed to have been satisfied. If, on or after the
         occurrence of a Change in Control and prior to February 1, 2003, a
         Participant's employment is involuntarily terminated by the Company
         (other than for Cause, as defined in the Continuity Plan) or a
         Participant terminates his or her employment for Good Reason (as
         defined in the Continuity Plan), then such Participant shall be
         entitled to a cash payment (to be made within ninety (90) days
         following the date of termination but in no event later than the
         Designated Payment Date) with respect to (i) the Deferred Service
         Incentive Award calculated as if the Participant's Service had
         continued though the end of the Performance Period and (ii) the
         Deferred Performance Award.

(i)      Treatment of a Termination of Service.

         (i)      Upon a Participant's Termination of Service during the
                  Performance Period for any reason except death, the
                  Participant shall forfeit the Combination Deferred Award. Upon
                  a Participant's Termination of Service during the Performance
                  Period due to death, unless the Participant shall have
                  previously forfeited the Combination Deferred Award pursuant
                  to Section 8(f), the Participant's estate shall be entitled to
                  a cash payment with respect to (i) the Deferred Service
                  Incentive Award calculated as if the Participant's Service had
                  continued through the end of the Performance Period and (ii)
                  any Deferred Performance Award as to which the related
                  Performance Criterion has been achieved before the
                  Participant's death. On the Designated Payment Date, the
                  Company shall pay, to the deceased Participant's estate, the
                  cash amount provided

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                  in this Section 8 with regard to each award described in the
                  immediately preceding sentence.

         (ii)     If a Participant's Termination of Service is due to death
                  during the Performance Period or an involuntary Termination of
                  Service without Cause during the Performance Period and the
                  Company accepts Shares acquired pursuant to the Participant's
                  Purchase Award in full satisfaction of the Purchase Loan in
                  accordance with the last sentence of Section 7(e), then, no
                  later than the fifth business day following such acceptance,
                  the Company shall pay to the Participant (or the Participant's
                  estate) the cash amount necessary for the reimbursement of any
                  income and employment taxes payable by the Participant (or the
                  Participant's estate) as a result of (i) the acceptance by the
                  Company of such Shares in satisfaction of the Purchase Loan,
                  (ii) any payment made with respect to the Combination Deferred
                  Award and (iii) the reimbursement payment made pursuant to
                  this Section 8(h)(ii).

9.       SPECIAL DEFERRED AWARD

(a)      Upon any Participant's exercise of the Participant's Purchase Award,
         the Company shall grant the Participant a Special Deferred Award,
         subject to the terms and conditions set forth in this Section 9. Any
         payment with respect to a Participant's Special Deferred Award shall be
         made by the Company on its behalf and/or on behalf of the Subsidiary by
         which the Participant was employed on the Designated Payment Date. Any
         Subsidiary which so employed the Participant shall reimburse the
         Company for such payment.

(b)      In the event that the Special Criterion is achieved, each Participant
         then holding a Special Deferred Award shall be entitled to be
         reimbursed by the Company on the Designated Payment Date for the
         federal income tax payable on the amounts paid with respect to a
         Combination Deferred Award pursuant to Section 8, subject to the terms
         and conditions set forth in this Section 9. Such reimbursement shall be
         computed using the maximum marginal rate for ordinary taxable income in
         effect on the Designated Payment Date. The reimbursement for federal
         income tax under this Section 9 shall not itself be grossed up for any
         federal income tax payable as a result of this reimbursement.

(c)      Notwithstanding any other provision of this Section 9, a Participant's
         Special Deferred Award shall be immediately forfeited if the
         Participant, during the Performance Period, either (i) sells any Shares
         acquired under a Purchase Award or (ii) makes an optional prepayment on
         the Purchase Loan described in Section 7(d)(iii). A transfer of a
         Participant's Shares to a revocable trust as to which the Participant
         retains voting and investment power (which powers of revocation, voting
         and investment may be shared with the Participant's spouse) or a
         transfer to joint ownership with such Participant's spouse shall not be
         deemed a sale for purposes of this Section 9(iii) and, solely for the
         purposes of this Plan, such Shares shall be deemed to be owned by the
         Participant.

(d)      Termination of Service.

         Upon a Participant's Termination of Service during the Performance
         Period for any reason except death, the Participant shall forfeit the
         Special Deferred Award. Upon a Participant's Termination of Service
         during the Performance Period due to death, unless the Participant
         shall have previously forfeited the Special Deferred Award pursuant to
         Section 9(c), the

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         Participant's estate shall be entitled to be reimbursed by the Company
         an amount calculated in accordance with Section 9(b) if the related
         Special Criterion has been achieved before the Participant's death. On
         the Designated Payment Date, the Company shall reimburse the deceased
         Participant's estate the amount provided in this Section 9 with regard
         to the Special Deferred Award described in the immediately preceding
         sentence.

10.      PLAN ADMINISTRATION

The Plan shall be administered by the Committee. If at any time no Committee
shall be in office, the functions of the Committee specified in the Plan shall
be exercised by the "disinterested directors" on the Board (as defined in Rule
16b-3(c)(2) under the 1934 Act). Subject to the provisions of the Plan, the
Committee shall interpret the Plan and make such rules as it deems necessary for
the proper administration of the Plan, shall make all other determinations
necessary or advisable for the administration of the Plan and shall correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent that the Committee deems desirable to carry the Plan
into effect. Among other things, the Committee shall have the authority, subject
to the terms of the Plan, to determine (i) the individuals to whom the Purchase
Awards are granted, (ii) the time or times the Purchase Awards are granted,
(iii) the Purchase Dates for such Purchase Awards, (iv) the basis for any
Termination of Service, including whether or not it was for Cause or otherwise,
(v) the forms, terms and provisions of any documents under the Plan, including
amending or modifying the terms of the Plan. Without limiting the foregoing, in
the event of a recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, spin-off or any other change in the
corporate structure or shares of the Company, the Committee may make such
adjustments as it deems appropriate in the Performance Criteria and other terms
of the Plan. Any action taken or determination made by the Committee pursuant to
this paragraph and the other paragraphs of the Plan in which the Committee is
given discretion shall be final and conclusive on all parties. The act or
determination of a majority of the Committee shall be deemed to be the act or
determination of the entire Committee. The Committee may consult with counsel,
who may be counsel to the Company, and such other advisors as the Committee may
deem necessary and/or desirable, and the members of the Committee shall not
incur any liability for any action taken in good faith in reliance upon the
advice of counsel or any other advisor.

11.      AMENDMENT AND DISCONTINUANCE OF THE PLAN

The Board, upon the recommendation of the Committee, may amend, suspend or
terminate the Plan at any time, subject to the provisions of this Section 11. No
amendment, suspension or termination of the Plan may, without the consent of a
Participant, adversely affect such Participant's rights under the Plan in any
material respect.

12.      MISCELLANEOUS PROVISIONS

(a)      Unsecured Status of Claim. Participants and their beneficiaries, heirs,
         successors and assigns shall have no legal or equitable rights,
         interests or claims in any specific property or assets of the Company.
         No assets of the Company shall be held under any trust for the benefit
         of Participants, their beneficiaries, heirs, successors or assigns, or
         held in any way as collateral security for the fulfillment of the
         Company's obligations under the Plan.

         Any and all of the Company's assets shall be, and shall remain, the
         general unpledged and unrestricted assets of the Company. The Company's
         obligations under the Plan shall be

                                       10
<PAGE>   11

         merely that of an unfunded and unsecured promise of the Company to pay
         employee compensation benefits in the future.

(b)      Employment Not Guaranteed. Nothing contained in the Plan nor any action
         taken in the administration of the Plan shall be construed as a
         contract of employment or as giving a Participant any right to be
         retained in the Service of the Company.

(c)      Nonassignability. No person shall have any right to commute, sell,
         assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
         hypothecate or convey in advance of actual receipt the deferred cash
         incentive, if any, payable under the Plan, or any part thereof, or any
         interest therein, which are, and all rights to which are, expressly
         declared to be unassignable and nontransferable. No portion of the
         amounts payable shall, prior to actual payment, be subject to seizure,
         attachment, lien or sequestration for the payment of any debts,
         judgments, alimony or separate maintenance owed by a Participant or any
         other person, nor be transferable by operation of law in the event of
         the Participant's or any other person's bankruptcy or insolvency. Any
         such transfer or attempted transfer in violation of the preceding
         provisions shall be considered null and void. In addition, no
         derivative security (as defined in Rule 16a-1(c), as promulgated by the
         Commission under the 1934 Act, or any successor definition adopted by
         the Commission) issued under the Plan shall be transferable by a
         Participant (to the extent transferable under the Plan) other than by
         will or the laws of descent and distribution or pursuant to a qualified
         domestic relations order as defined by the Code, or Title I of the
         Employee Retirement Income Security Act of 1974 or the rules
         promulgated thereunder.

(d)      Separability, Validity. Transactions under this Plan are intended to
         qualify under Rule 16b-3 of the 1934 Act. If any of the terms or
         provisions of this Plan conflict with the requirements of Rule 16b-3,
         then such terms and provisions shall be deemed inoperative to the
         extent they so conflict with such requirements. In the event that any
         provision of the Plan is held to be invalid, void or unenforceable, the
         same shall not affect, in any respect whatsoever, the validity of any
         other provision of the Plan.

(e)      Withholding Tax. The Company shall, on its behalf and on behalf of its
         Subsidiaries, withhold from all benefits due under the Plan an amount
         sufficient to satisfy any federal, state and local tax withholding
         requirements; provided, however, that each Participant shall make
         arrangements satisfactory to the Company with respect to any such
         withholding requirements applicable to the payments provided in Section
         8 with respect to the Participant's Combination Deferred Award prior to
         the making of such payments and any such withholding requirements
         applicable to any acceptance by the Company of Shares in satisfaction
         of a Participant's Purchase Loan pursuant to Section 7(e) prior to such
         acceptance.

(f)      Applicable Law. The Plan shall be governed in accordance with the laws
         of the State of Utah without regard to the application of the conflicts
         of law provisions thereof. The obligation of the Company with respect
         to the grant and exercise of Purchase Awards shall be subject to all
         applicable laws, rules and regulations and such approvals by any
         governmental agencies as may be required, including, without
         limitation, the effectiveness of any registration statement required
         under the Securities Act of 1933, as amended, and the rules and
         regulations of any securities exchange on which the Common Stock may be
         listed.

                                       11
<PAGE>   12

(g)      Inurement of Rights and Obligations. The rights and obligations under
         the Plan shall inure to the benefit of, and shall be binding upon, the
         Company, its successors and assigns, and the Participants and their
         beneficiaries.

(h)      Notice. All notices and other communications required or permitted to
         be given under this Plan shall be in writing and shall be deemed to
         have been duly given if delivered personally or mailed first class,
         postage prepaid, as follows: (A) if to the Company--at its principal
         business address to the attention of the Secretary; (B) if to any
         Participant--at the last address of the Participant known to the sender
         at the time the notice or other communication is sent.

(i)      Exclusion from Pension and other Benefit Plan Computation. By exercise
         of a Purchase Award, each Participant shall be deemed to have agreed
         that such Purchase Award and any amounts paid with respect to a
         Deferred Performance Award or a Deferred Service Incentive Award under
         Section 8, as applicable, or with respect to a Special Deferred Award
         under Section 9, are special incentive compensation that will not be
         taken into account, in any manner, as salary, compensation or bonus in
         determining the amount of any payment under any pension, retirement or
         other employee benefit plan of the Company or any of its Subsidiaries.
         In addition, the estate and each beneficiary of a deceased Participant
         shall be deemed to have agreed that such Purchase Award and any
         Deferred Performance Award, Deferred Service Incentive Award or Special
         Deferred Award, as applicable, will not affect the amount of any life
         insurance coverage, if any, provided by the Company or any of its
         Subsidiaries on the life of the Participant which is payable to such
         estate or beneficiary under any life insurance plan covering employees
         of the Company or any of its Subsidiaries.

                                       12<PAGE>   1

                                                                   EXHIBIT 10(l)

                                      1988

                     STOCK OPTION AND RESTRICTED STOCK PLAN

                                       OF

                            UNION PACIFIC CORPORATION

                           (EFFECTIVE APRIL 15, 1988 -
                AS AMENDED SEPTEMBER 26, 1991, FEBRUARY 1, 1992,
                       APRIL 24, 1997, NOVEMBER 20, 1997,
                        SEPTEMBER 24, 1998, MAY 25, 2000
                              AND NOVEMBER 16, 2000

<PAGE>   2

                   1988 STOCK OPTION AND RESTRICTED STOCK PLAN
                          OF UNION PACIFIC CORPORATION

1.       PURPOSE.

         The purpose of the 1988 Stock Option and Restricted Stock Plan of Union
Pacific Corporation (the "Plan") is to promote the interests of Union Pacific
Corporation (the "Company") and its shareholders by strengthening its ability to
attract and retain officers and key employees in the employ of the Company or of
any subsidiary of the Company by furnishing additional incentives whereby such
present and future officers and key employees may be encouraged to acquire, or
to increase their acquisition of, the Company's common stock, thus maintaining
their personal interest in the Company's continued success and progress. The
Plan provides for the grant of non-qualified stock options, incentive stock
options, stock appreciation rights and shares of Company common stock restricted
in accordance with the provisions of Section 8 below ("Restricted Shares"), all
in accordance with the terms and conditions set forth below. Unless otherwise
required by the context, the term "option" shall refer to non-qualified options,
incentive stock options and stock appreciation rights.

2.       ADMINISTRATION.

         The Plan shall be administered by a Stock Option Committee (the
"Committee"), to be designated by the Board of Directors of the Company and to
be comprised of not less than three members of the Board of Directors who are
not eligible to participate under the Plan. Members of the Committee shall be
appointed from time to time by the Board of Directors for such terms as it shall
determine, and may be removed by the Board at any time with or without cause.
The Committee shall have complete authority to construe and interpret the Plan,
to establish, amend and rescind appropriate rules and regulations relating to
the Plan, to select persons eligible to participate in the Plan, to grant
options and Restricted Shares thereunder, to administer the Plan, to make
recommendations to the Board, and to take all such steps and make all such
determinations in connection with the Plan and the options and Restricted Shares
granted thereunder as it may deem necessary or advisable. All determinations of
the Committee shall be by a majority of its members, and its determinations
shall be final. Each member of the Committee, while serving as such, shall be
considered to be acting in his capacity as a Director of the Company. Each
eligible employee (as defined below) to whom an option or Restricted Shares is
granted is hereinafter referred to as the "Optionee" or the "Participant",
respectively. The granting of an option or Restricted Shares pursuant to the
Plan shall take place when the Committee by resolution, written consent or other
appropriate action determines to grant such an option to an Optionee at a
particular price or such Restricted Shares to a Participant. Each Option or
grant of Restricted Shares shall, if required by the Committee, be evidenced by
a written agreement to be duly executed and delivered by or on behalf of the
Company and the Optionee or Participant, respectively, and contain provisions
not inconsistent with the Plan.

<PAGE>   3

3.       ELIGIBILITY.

         To be eligible for selection by the Committee to participate in the
Plan an individual must be an officer or key employee of the Company, or of any
subsidiary of the Company, as of the date on which the Committee grants to such
individual an option or Restricted Shares (hereinafter collectively referred to
as "eligible employees"). Those Directors who are not full-time salaried
officers or employees shall not be eligible. Subject to the provisions of this
Plan, options or Restricted Shares may be granted to eligible employees in such
number and at such times during the term of this Plan as the Committee shall
determine, the Committee taking into account the duties of the respective
employees, their present and potential contributions to the success of the
Company, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.

4.       STOCK SUBJECT TO THE PLAN.

         Subject to the provisions of Section 10 hereof, the maximum number and
kind of shares as to which options or Restricted Shares may at any time be
granted under the Plan are 8,400,000 shares of common stock of the Company of
the par value of $2.50 per share ("Common Stock") of which shares no more than
400,000 shares of Common Stock may be issued as grants of Restricted Shares
under the Plan. Shares of Common Stock subject to options or granted as
Restricted Shares under the Plan may, in the discretion of the Board of
Directors of the Company, be either authorized but unissued shares or shares
previously issued and reacquired by the Company. Upon the expiration,
termination or cancellation (in whole or in part) of unexercised options, shares
of Common Stock subject thereto shall again be available for option or grant as
Restricted Shares under the Plan. Shares of Common Stock covered by an option,
or portion thereof, which is surrendered upon the exercise of a stock
appreciation right, shall thereafter be unavailable for option or grant as
Restricted Shares under the Plan. Upon the forfeiture (in whole or in part) of a
grant of Restricted Shares, the shares of Common Stock subject to such
forfeiture shall again be available for option or grant as Restricted Shares
under the Plan.

5.       TERMS AND CONDITIONS OF NON-QUALIFIED OPTIONS.

         All non-qualified options under the Plan shall be granted subject to
the following terms and conditions:

         (a) Option Price. The option 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,
such fair market value to be determined in accordance with the procedures to be
established by the Committee.

         (b) Duration of Options. Options shall be exercisable at such times and
under such conditions as set forth in the written agreement evidencing such
option, but in no event shall any option be exercisable subsequent to the tenth
anniversary of the date on which the option is granted.

                                       2
<PAGE>   4

         (c) Exercise of Option. The shares of Common Stock covered by an option
may not be purchased prior to the first anniversary of the date on which the
option is granted (unless the Committee shall determine otherwise), or such
longer period as the Committee may determine in a particular case, 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. Any shares not purchased
on the applicable installment date may 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 Company stating the number of shares with respect to which the
option is being exercised.

         (d) Payment. Shares of Common Stock purchased under options shall, at
the time of purchase, be paid for in full. All, or any portion, of the option
exercise price may, at the discretion of the Committee, be paid by the surrender
to the Company, at the time of exercise, of shares of previously acquired Common
Stock owned by the Optionee, to the extent that such payment does not require
the surrender of a fractional share of such previously acquired Common Stock. In
addition, to the extent permitted by the Committee, the option exercise price
may be paid by authorizing the Company to withhold Common Stock otherwise
issuable upon exercise of the option. Such shares previously acquired or shares
withheld to pay the option exercise price shall be valued at fair market value
on the date the option is exercised in accordance with the procedures to be
established by the Committee. No shares shall be issued or delivered until full
payment therefor has been made. A holder of an option shall have none of the
rights of a stockholder until the shares of Common Stock are issued to him. If
an amount is payable by an Optionee to the Company under applicable income tax
laws in connection with the exercise of non-qualified options, the Committee
may, in its discretion and subject to such rules as it may adopt, permit the
Optionee to make such payment, in whole or in part, by electing to authorize the
Company to withhold or accept shares of Common Stock having a fair market value
equal to the amount to be paid under such income tax laws.

         (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 of Common Stock which may be purchased thereunder including restrictions
on the transferability of such shares acquired through the exercise of such
option. Without limiting the generality of the foregoing, the Committee may
impose conditions restricting absolutely the transferability of shares acquired
through the exercise of options for such periods as the Committee may determine
and, further, that in the event the Optionee's employment by the Company or a
subsidiary terminates during the period in which such shares are
non-transferable, the Optionee shall be required to sell such shares back to the
Company at such price as the Committee may specify in the option.

         (f) Purchase for Investment. The Committee shall have the right to
require that each Optionee or other person who shall exercise an option under
the Plan, and each person into whose name shares of Common Stock shall be
issued, pursuant to the exercise of an option, jointly with that of any
Optionee, represent and agree that any and all shares of Common Stock of the
Company purchased pursuant to such option will be purchased for investment and
not with a view to the distribution or resale thereof or that such shares will
not be sold except in accordance with such restrictions or limitations as may be
set forth in the written agreement granting such option; provided, however, that
the foregoing provisions of this subparagraph (f) shall be

                                       3
<PAGE>   5

inoperative during any period of time when the Company has obtained all
necessary or advisable approvals from any governmental agency and has completed
all necessary or advisable registrations or other qualification of shares of
Common Stock as to which options may from time to time be granted, all as
contemplated by Section 9 hereof.

         (g) Non-Transferability of Options. During an Optionee's lifetime, the
option may be exercised only by him. Options shall not be transferable, except
for exercise by the Optionee's legal representatives or beneficiaries.

         (h) Termination of Employment. Upon the termination of an Optionee's
employment, for any reason other than death, then, except as provided below, the
option shall be exercisable only as to those shares of Common Stock which were
then subject to the exercise of such option (unless the Committee shall
determine in a specific case that particular limitations and restrictions under
the Plan shall not apply) and such option shall expire according to the
following schedule:

                  (i)      Retirement. Option shall expire, unless exercised,
                           five (5) years after the Optionee's retirement from
                           the Company or any subsidiary of the Company under
                           the provisions of the Company's or a subsidiary's
                           pension plans.

                  (ii)     Disability. Option shall expire, unless exercised,
                           five (5) years after the date the Optionee is
                           eligible to receive disability benefits under the
                           provisions of the Company's or a subsidiary's
                           long-term disability plan.

                  (iii)    Disposition of Business. In the case of a termination
                           resulting from 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, the
                           option shall expire, unless exercised, five (5) years
                           after the date of termination;

                  (iv)     Force Reduction Program. In the case of 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, at the later of (A) three (3) years from
                           the date of termination, or (B) the earlier of (x)
                           three (3) years from the date the option becomes
                           exercisable and (y) five (5) years from the date of
                           termination.

                  (v)      Gross Misconduct. Option shall expire upon receipt by
                           Optionee of the notice of termination if he is
                           terminated for deliberate, willful or gross
                           misconduct as determined by the Company.

                  (vi)     Change in Control. In the event an Optionee's
                           employment is involuntarily terminated by the Company
                           (other than termination as a result of disability or
                           gross misconduct, but including a termination
                           described in subsection (iii) and (iv) above) within
                           two years following a Change in Control (as defined
                           in the Union Pacific Corporation Key Employee

                                       4
<PAGE>   6

                           Continuity Plan), all 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), (iii) or (iv) above) but in no event
                           after the expiration of the option, and the option
                           shall expire thereafter.

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

         (i) Death of Optionee. Upon the death of an Optionee during his period
of employment, his option shall be exercisable only as to those shares of Common
Stock which were subject to the exercise of such option at the time of his death
(unless the Committee shall determine in a specific case that particular
limitations and restrictions under the Plan shall not apply) and such option
shall expire, unless exercised by his legal representatives or beneficiaries,
five (5) years after the date of his death.

         (j) The Committee may permit an Optionee to elect to defer receipt of
all or part of the Common Stock issuable upon the exercise of an option,
pursuant to rules and regulations adopted by the Committee. The Committee may
permit the payment of cash in lieu of Common Stock upon payment of the deferred
amount.

In no event, however, shall any option be exercisable pursuant to Sections 5(h)
and (i) subsequent to the tenth anniversary of the date on which it is granted.

6.       TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

         (a) General. The Committee may also grant a stock appreciation right in
connection with a non-qualified option, either at the time of grant or by
amendment. Such stock appreciation right shall cover the same shares covered by
such option (or such lesser number of shares of Common Stock as the Committee
may determine) and shall, except for the provisions of Section 5(d) hereof, be
subject to the same terms and conditions as the related non-qualified option.

         (b) Exercise and Payment. Each stock appreciation right shall entitle
the Optionee to surrender to the Company unexercised the related option, or any
portion thereof, and to receive from the Company in exchange therefor an amount
equal to the excess of the fair market value of one share of Common Stock over
the option price per share times the number of shares covered by the option, or
portion thereof, which is surrendered. Payment shall be made in shares of Common
Stock valued at fair market value, or in cash, or partly in shares and partly in
cash, all as shall be determined by the Committee. The fair market value shall
be the value determined in accordance with procedures established by the
Committee. Stock appreciation rights may be exercised from time to time upon
actual receipt by the Company of written notice stating the number of shares of
Common Stock with respect to which the stock appreciation right is being
exercised. No fractional shares shall be issued but instead cash shall be paid
for a fraction or, if the Committee should so determine, the number of shares
shall be rounded downward to the next whole share. If an amount is payable by an
Optionee to the Company under applicable income tax laws in connection with
exercises of stock appreciation rights, the Committee may, in its

                                       5
<PAGE>   7

discretion and subject to such rules as it may adopt, permit the Optionee to
make such payment, in whole or in part, by electing to authorize the Company to
withhold or accept shares of Common Stock having a fair market value equal to
the amount to be paid under such income tax laws.

         (c) Restrictions. The obligation of the Company to satisfy any stock
appreciation right exercised by an Optionee subject to Section 16 of the
Securities Exchange Act of 1934, as amended, shall be conditioned upon the prior
receipt by the Company of an opinion of counsel to the Company that any such
satisfaction will not create an obligation on the part of such Optionee pursuant
to Section 16(b) of such Act to reimburse the Company for any statutory profit
which might be held to result from such satisfaction.

7.       TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.

         (a) General. The Committee may also grant incentive stock options as
defined under Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"). All incentive stock options issued under the Plan shall, except for the
provisions of Sections 5(h) and (i) and Section 6 hereof, be subject to the same
terms and conditions as the non-qualified options granted under the Plan
provided that the third sentence of Section 5(d) shall not apply to incentive
stock options granted prior to February 1, 1992. In addition, incentive stock
options shall be subject to the conditions of Sections 7(b), (c) and (d).

         (b) Limitation of Exercise. The aggregate fair market value (determined
as of the date the incentive stock option is granted) of the shares of stock
with respect to which incentive stock options are exercisable for the first time
by such Optionee during any calendar year, under this Plan or any other stock
option plans adopted by the Company, its Subsidiaries or any predecessor
companies thereof, shall not exceed $100,000.

         (c) Termination of Employment. Upon the termination of an Optionee's
employment, for any reason other than death, his incentive stock option shall be
exercisable only as to those shares of Common Stock which were then subject to
the exercise of such option (unless the Committee shall determine in a specific
case that particular limitations and restrictions under the Plan shall not
apply), and such option shall expire as an incentive stock option (but shall
remain a non-qualified option exercisable pursuant to the terms of Section 5
hereof less the time period already elapsed under such Section), according to
the following schedule:

                  (i)      Retirement. An incentive stock option shall expire,
                           unless exercised, three (3) months after the
                           Optionee's retirement from the Company or any
                           Subsidiary of the Company under the provisions of the
                           Company's or a subsidiary's pension plans.

                  (ii)     Disability. In the case of an Optionee who is
                           disabled within the meaning of Section 22(e)(3) of
                           the Code, an incentive stock option shall expire,
                           unless exercised, twelve (12) months after the date
                           the Optionee terminates employment or the date the
                           Optionee is eligible to receive

                                       6
<PAGE>   8

                           disability benefits under the provisions of the
                           Company's or a subsidiary's long-term disability
                           plan, whichever is earlier.

                  (iii)    Gross Misconduct. An incentive stock option shall
                           expire upon receipt by an Optionee of the notice of
                           termination if he is terminated for deliberate,
                           willful or gross misconduct as determined by the
                           Company.

                  (iv)     All Other Terminations. An incentive stock option
                           shall expire, unless exercised, three (3) months
                           after the date of such termination.

         In the case of incentive stock options granted after April 24, 1997,
the Committee may extend the period during which an incentive stock option may
be exercised as a non-qualified stock option to up to three (3) years from the
date of a termination not due to retirement, disability or gross misconduct or,
if later, three (3) years from the date the option becomes exercisable but not
more than five years after the date of such a termination.

         (d) Death of Optionee. Upon the death of an Optionee during his period
of employment, his incentive stock option shall be exercisable as an incentive
stock option only as to those shares of Common Stock which were subject to the
exercise of such option at the time of his death (unless the Committee shall
determine in a specific case that particular limitations and restrictions under
the Plan shall not apply), and such option shall expire, unless exercised by his
legal representatives or beneficiaries, five (5) years after the date of his
death.

In no event, however, shall any incentive stock option be exercisable pursuant
to Sections 7(c) and (d) subsequent to the tenth anniversary of the date on
which it was granted.

8.       TERMS AND CONDITIONS OF RESTRICTED SHARES.

         (a) General. With respect to each grant of Restricted Shares under the
Plan, the Committee, in its sole discretion, shall determine the period during
which the restrictions set forth in Section 8(b) shall apply to such Restricted
Shares (the "Restricted Period"). The Restricted Period shall not be less than
36 nor more than 60 consecutive months commencing with the first day of the
month in which the Restricted Shares are granted. Subject to the provisions of
Section 8(c), a grant of Restricted Shares shall be effective for the Restricted
Period and may not be revoked. Approved leaves of absence of one year or less
shall not be deemed terminations or interruptions in continuous service under
this Section 8. Leaves of absence of more than one year will be deemed to be
terminations under this Section unless the Committee determines otherwise.

         (b) Restrictions. At the time of grant of Restricted Shares to a
Participant, a certificate representing the number of shares of Common Stock
granted shall be registered in his name but shall be held by the Company for the
account of the Participant. The Participant shall have the entire beneficial
ownership interest in, and all rights and privileges of a stockholder as to,
such Restricted Shares, including the right to receive dividends and the right
to vote such Restricted Shares, subject to the following restrictions: (i)
subject to Section 8(c) hereof, the Participant shall not be entitled to
delivery of the stock certificate until the expiration of the

                                       7
<PAGE>   9

Restricted Period; (ii) none of the Restricted Shares may be sold, transferred,
assigned, pledged, or otherwise encumbered or disposed of during the Restricted
Period; and (iii) all of the Restricted Shares shall be forfeited and all rights
of the Participant to such Restricted 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 Restricted
Period in relation to which such Restricted Shares were granted, except as
provided by Section 8(c) hereof. Any shares of Common Stock received as a result
of a transaction listed in Section 10 hereof shall be subject to the same
restrictions as such Restricted Shares unless the Committee shall determine
otherwise.

         (c) Termination of Employment.

                  (i)      Disability and Retirement. If a Participant ceases to
                           be an employee of the Company or a subsidiary prior
                           to the end of a Restricted Period by reason of
                           disability (as defined in Section 5(h)(ii) hereof) or
                           retirement (as defined in Section 5(h)(i) hereof),
                           the number of Restricted Shares granted to such
                           Participant for such Restricted Period shall be
                           reduced in proportion to the Restricted Period
                           (determined on a monthly basis) remaining after the
                           Participant ceases to be an employee and all
                           restrictions on such reduced number of shares shall
                           lapse. A certificate for such shares shall be
                           delivered to the Participant in accordance with the
                           provisions of Section 8(d) hereof. The Committee may,
                           if it deems appropriate, direct that the Participant
                           receive a greater number of shares of Common Stock
                           free of all restrictions but not exceeding the number
                           of Restricted Shares then subject to the restrictions
                           of Section 8(b).

                  (ii)     Death. If a Participant ceases to be an employee
                           prior to the end of a Restricted Period by reason of
                           death, the Restricted Shares granted to such
                           participant shall immediately vest in his beneficiary
                           or estate and all restrictions applicable to such
                           shares shall lapse. A certificate for such shares
                           shall be delivered to the Participant's beneficiary
                           or estate in accordance with the provisions of
                           Section 8(d) hereof.

                  (iii)    All Other Terminations. If a Participant ceases to be
                           an employee prior to the end of a Restricted Period
                           for any reason other than death, disability or
                           retirement, the Participant shall immediately forfeit
                           all Restricted Shares then subject to the
                           restrictions of Section 8(b) hereof 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 Restricted Shares then subject to the
                           restrictions of Section 8(b) and all restrictions
                           applicable to such retained shares shall lapse. A
                           certificate for such retained shares shall be
                           delivered to the Participant in accordance with the
                           provisions of Section 8(d) hereof.

                                       8
<PAGE>   10

         (d) Payment of Restricted Shares. At the end of the Restricted Period
or at such earlier time as provided for in Section 8(c) hereof or as the
Committee may determine, all restrictions applicable to the Restricted Shares
shall lapse and a stock certificate for a number of shares of Common Stock equal
to the number of Restricted Shares, free of all restrictions, shall be delivered
to the Participant or his beneficiary or estate, as the case may be. The Company
shall not be required to deliver any fractional share of Common Stock but shall
pay, in lieu thereof, the fair market value (measured as of the date the
restrictions lapse) of such fractional share to the Participant or his
beneficiary or estate, as the case may be. If an amount is payable by a
Participant to the Company under applicable income tax laws in connection with
the lapse of such restrictions, the Committee may, in its discretion and subject
to such rules as it may adopt, permit the Participant to make such payment, in
whole or in part, by electing to authorize the Company to transfer to the
Company Restricted Shares otherwise deliverable to the Participant having a fair
market value equal to the amount to be paid under such income tax laws.

9.       REGULATORY APPROVALS AND LISTING.

         The Company shall not be required to issue any certificate or
certificates for shares of Common Stock upon the exercise of an option or a
stock appreciation right or the vesting of Restricted Shares granted under the
Plan prior to (i) the obtaining of any approval from any governmental agency
which the Company shall, in its sole discretion, determine to be necessary or
advisable, (ii) the admission of such shares to listing on any stock exchange on
which the Common Stock may then be listed, and (iii) 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 shall,
in its sole discretion, determine to be necessary or advisable.

10.      ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION.

         In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate
structure or shares of the Company, the Board of Directors of the Company, upon
recommendation of the Committee, may make such equitable adjustments, designed
to protect against dilution, as it may deem appropriate in the number and kind
of shares authorized by the Plan thereby and in the option price and, with
respect to grants of Restricted Shares, in the number and kind of shares covered
thereby.

11.      TERM OF PLAN.

         No non-qualified option, incentive stock option, stock appreciation
right or Restricted Shares shall be granted pursuant to this Plan after April
14, 1998, but non-qualified options, incentive stock options, stock appreciation
rights and grants of Restricted Shares theretofore granted may extend beyond
that date and the terms and conditions of this Plan shall continue to apply
thereto and to shares of Common Stock acquired upon exercise of such options or
stock appreciation rights.

                                       9
<PAGE>   11

12.      TERMINATION OR AMENDMENT OF THE PLAN.

         The Board of Directors may at any time terminate the Plan with respect
to any shares of the Company not at the time subject to option or the provisions
of Section 8, and may from time to time alter or amend the Plan or any part
thereof (including, but without limiting the generality of the foregoing, any
amendment deemed necessary to ensure that the Company may obtain any regulatory
approval, referred to in clause (i) of Section 9 hereof), provided that no
change in any option or Restricted Shares theretofore granted may be made which
would impair the rights of an Optionee or a Participant, respectively, without
the consent of such Optionee or Participant and, further, that without the
approval of stockholders, no alteration or amendment may be made which would (i)
increase the maximum number of shares of Common Stock subject to the Plan as set
forth in Section 4 (except by operation of Section 10), (ii) extend the term of
the Plan or extend the term of options granted thereunder to beyond the tenth
anniversary of the date of grant, (iii) reduce the option price at which options
may be granted, or (iv) change the class of eligible employees who may receive
options or Restricted Shares under the Plan. The Committee may amend the Plan to
extend the exercise period following an Optionee's termination of an option
granted prior to September 24, 1998, but not beyond (i) in the case of a
termination resulting from the disposition by the Company of all or a part of
its interest in, or the discontinuance of the business of, a subsidiary,
division or other business unit of the Company, five years from the date of
termination and (ii) in the case of all other terminations, not more than three
years from the date of termination, or, if later, three years from the date the
option becomes exercisable but not more than five years after the date of such
termination.

13.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective April 15, 1988 upon approval of the
shareholders of the Company.

                                       10

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