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UNION PACIFIC CORPORATION
KEY EMPLOYEE CONTINUITY PLAN
Dated as of November 16, 2000
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UNION PACIFIC CORPORATION
KEY EMPLOYEE CONTINUITY PLAN
The Company hereby adopts the Union Pacific Corporation Key
Employee Continuity Plan for the benefit of certain employees of the Company and
its Affiliates, on the terms and conditions hereinafter stated. 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, Section 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
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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.
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SECTION 1.7 "Company" means Union Pacific Corporation, a Utah corporation, or
any successors thereto.
SECTION 1.8 "Eligible Employee" means any employee who is a Tier 1, Tier 2 or
Tier 3 Employee. An Eligible Employee becomes a "Severed Employee" once he or
she incurs a Severance.
SECTION 1.9 "Employer" means the Company or any of its Affiliates which is an
employer of an Eligible Employee.
SECTION 1.10 "Equity Award" shall mean stock options, restricted stock and other
similar equity-based awards which are granted to an Eligible Employee by the
Company (excluding, however, (i) any incentive stock options (as defined under
Section 422 of the Code) granted prior to November 16, 2000, (ii) awards made
under the Company's Executive Stock Purchase Incentive Plan, and (iii) awards
made under the Company's 2001 Long Term Plan (the "2001 LTP")).
SECTION 1.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
SECTION 1.12 "Excise Tax" shall mean any excise tax imposed under section 4999
of the Code or any successor provision thereto.
SECTION 1.13 "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
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; (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; 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.
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SECTION 1.14 "Gross-Up Payment" shall have the meaning set forth in Section 2.5
hereof.
SECTION 1.15 "Parent" shall mean the ultimate parent, if any, of the Company
after a Change in Control.
SECTION 1.16 "Parent Group" shall mean, collectively, the Parent and its
Affiliates.
SECTION 1.17 "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 1.18 "Plan" means the Union Pacific Corporation Key Employee Continuity
Plan, as set forth herein, as it may be amended from time to time.
SECTION 1.19 "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 1.20 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
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(d) the Board adopts a resolution to the effect that
a Potential Change in Control has occurred.
SECTION 1.21 "Severance" means the termination of an Eligible Employee's
employment with the Employer on or within two years following the date of the
Change in Control, (i) by the Employer, other than for Cause or pursuant to
mandatory retirement policies of the Employer that existed prior to the Change
of Control, or (ii) by the Eligible Employee for Good Reason. An Eligible
Employee will not be considered to have incurred a Severance if his or her
employment is (a) discontinued by reason of the Eligible Employee's death or a
physical or mental condition causing such Eligible Employee's inability to
substantially perform his or her duties with the Employer, including, without
limitation, such condition entitling him or her to benefits under any sick pay
or disability income policy or program of the Employer or (b) discontinued by
reason of the divestiture of a facility, sale of a business or business unit, or
the outsourcing of a business activity with which the Eligible Employee is
affiliated, if the Eligible Employee is offered comparable employment by the
entity which acquires such facility, business or business unit or which succeeds
to such outsourced business activity and such entity agrees to assume the
obligations of the Employer to the Eligible Employee under this Plan.
SECTION 1.22 "Severance Date" means the date on or after the date of the Change
in Control on which an Eligible Employee incurs a Severance.
SECTION 1.23 "Severance Payment" means the payment determined pursuant to
Section 2.1 hereof.
SECTION 1.24 "Tier 1 Employee" means any employee of the Employer designated as
such by a resolution of the Board.
SECTION 1.25 "Tier 2 Employee" means any employee of the Employer designated as
such by a resolution of the Board.
SECTION 1.26 "Tier 3 Employee" means any employee of the Employer designated as
such by a resolution of the Board.
SECTION 2. BENEFITS.
SECTION 2.1 Each Eligible Employee who incurs a Severance shall be entitled,
subject to Section 2.9 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
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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. The Severance Payment
shall be paid to a Severed Employee in a cash lump sum, as soon as practicable
following the Severance Date, but in no event later than twenty (20) business
days immediately following the expiration of the revocation period, if any,
applicable to such Severed Employee's release described in Section 2.9 hereof.
SECTION 2.2 Each Eligible Employee who incurs a Severance and who is, at the
time of such Severance, a participant either in the Supplemental Pension Plan
for Officers and Managers of Union Pacific Corporation and Affiliates (the "UPC
SERP") or in the Overnite Transportation Company Supplemental Executive
Retirement Plan (the "Overnite SERP") shall, for purposes of the UPC SERP or the
Overnite SERP, as applicable, (i) be deemed to have accumulated an additional
thirty-six (36) months of age and service credit beyond the Severance Date (but
in no event beyond age 65 and in no event shall aggregate service under the UPC
SERP exceed forty (40) years or under the Overnite SERP exceed thirty (30)
years), and (ii) be deemed to be fully vested under such SERP.
SECTION 2.3 (a) 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 welfare benefit plans), the Company
shall provide such Severed Employee and anyone entitled to claim under or
through such Severed Employee all benefits under any medical, dental or life
insurance program (as described in subsection (b) below), or other present or
future similar group employee benefit plan or program of the Employer (but
excluding any long-term disability plan), to the same extent as if such Severed
Employee had continued to be an employee during such period; provided, however,
that benefits 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
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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.
(b) With respect to continuation of Executive Life
Insurance Plan coverage (i) for a Severed Employee who has attained the age of
fifty-two (52) years on his or her Severance Date, the Company shall pay
premiums for a life insurance policy (in amount equal to one-half (1/2) of such
Severed Employee's annual salary as in effect immediately prior to Severance
Date), until fully funded; (ii) for a Severed Employee who attains the age of
fifty-two (52) during the three-year period following his or her Severance Date,
the Company shall, for the period prior to such Severed Employee reaching the
age of fifty-two (52), treat such Severed Employee as if he or she were an
active employee of the Company, and at such time as such Severed Employee
attains the age of fifty-two (52), treat such Severed Employee in accordance
with clause (i) above; and (iii) for a Severed Employee who will not attain the
age of fifty-two (52) during the three-year period following his or her
Severance Date, the Company shall, during such period, pay premiums on such
Severed Employee's life insurance policy as though such Severed Employee were an
active employee.
SECTION 2.4 (a) In the event an Eligible Employee incurs a Severance, the
Eligible Employee shall become fully vested in all outstanding Equity Awards. In
the case of an Equity Award consisting of (1) 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; and
(2) retention stock units, the Company shall make payment of or on such units
within five (5) days following the Severed Employee's Severance Date.
(b) In the event an Eligible Employee incurs a
Severance, the Company shall make payment of or on all retention shares or
retention stock units and any cash award earned under the 2001 LTP within five
(5) days following the Severed Employee's Severance Date.
SECTION 2.5 (a) Whether or not the Eligible Employee becomes entitled to the
Severance Payment, if any payment or benefit received or to be received by the
Eligible Employee in connection with a Change in Control or the termination of
the Eligible Employee's employment (whether pursuant to the terms of this Plan
or any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person) (all such payments and benefits, including the Severance
Payment, being hereinafter called "Total Payments") will be subject (in whole or
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part) to the Excise Tax, then, subject to the provisions of subsection (b) of
this Section 2.5, the Company shall pay to the Eligible Employee an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Eligible Employee, after deduction of any Excise Tax on the Total Payments and
any federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Eligible Employee shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Eligible Employee's residence on the Severance Date
(or if there is no Severance Date, then the date on which the Gross-Up Payment
is calculated for purposes of this Section 2.5), net of the maximum reduction in
federal income tax which could be obtained from deduction of such state and
local taxes.
(b) In the event that the amount of the Total
Payments exceeds 100% of, but does not exceed 110% of, the largest amount that
would result in no portion of the Total Payments being subject to the Excise Tax
(the "Safe Harbor"), then subsection (a) of this Section 2.5 shall not apply and
the Severance Payments under Section 2.1 shall be reduced (if necessary, to
zero) so that the amount of the Total Payments is equal to the Safe Harbor.
(c) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) all of the Total Payments shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, unless in the opinion of
tax counsel ("Tax Counsel") reasonably acceptable to the Eligible Employee and
selected by the accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such other payments
or benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess
parachute payments" within the meaning of section 280G(b)(l) of the Code shall
be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or in part) represent "reasonable
compensation for services actually rendered", within the meaning of section
280G(b)(4)(B) of the Code, in excess of the "base amount" within meaning of
Section 280G(b)(3) of the Code allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
Prior to the payment date set forth in Section 2.6 hereof, the Company shall
provide the Eligible Employee with its calculation of the amounts referred to in
this Section 2.5(c) and such supporting materials as are reasonably necessary
for the
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Eligible Employee to evaluate the Company's calculations. If the Eligible
Employee disputes the Company's calculations (in whole or in part), the
reasonable opinion of Tax Counsel with respect to the matter in dispute shall
prevail.
(d) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, and after giving effect to such
redetermination, the Severance Payment under Section 2.1 are to be reduced
pursuant to subsection (b) of this Section 2.5, the Eligible Employee shall
repay to the Company, within five (5) business days following the time that the
amount of such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income and employment taxes imposed on the Gross-Up Payment being repaid by the
Eligible Employee), to the extent that such repayment results in (i) no portion
of the Total Payments being subject to the Excise Tax and (ii) a
dollar-for-dollar reduction in the Eligible Employee's taxable income and wages
for purposes of federal, state and local income and employment taxes, plus
interest on the amount of such repayment at the rate provided in section
1274(b)(2)(b) of the Code. In the event that (x) the Excise Tax is finally
determined to exceed the amount taken into account hereunder at the time of the
termination of the Eligible Employee's employment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment) and (y) after giving effect to such redetermination, the
Severance Payment under Section 2.1 should not have been reduced pursuant to
subsection (b) of this Section 2.5, the Company shall make the previously
reduced Severance Payment and shall make an additional Gross-Up Payment in
respect of such excess and in respect of any portion of the Excise Tax with
respect to which the Company had not previously made a Gross-Up Payment (plus
any interest, penalties or additions payable by the Eligible Employee with
respect to such excess and such portion) within five (5) business days following
the time that the amount of such excess is finally determined.
SECTION 2.6 The payments provided in subsection (a) of Section 2.5 hereof shall
be made not later than the fifth day following the Severance Date; provided,
however, that if the amounts of such payments, and the limitations on such
payments set forth in Section 2.5 hereof, cannot be finally determined on or
before such day, the Company shall pay to the Eligible Employee on such day an
estimate of the minimum amount of such payments to which the Eligible Employee
is clearly entitled and shall pay the remainder of such payments (together with
interest on the unpaid remainder (or on all such payments to the extent the
Company fails to make such payments when due) at the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event later than the thirtieth (30th) day after the Severance Date.
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SECTION 2.7 The Company shall reimburse the Eligible Employee for all reasonable
legal fees and expenses incurred by the Eligible Employee in seeking to obtain
or enforce any benefit or right provided by this Plan, so long as the Eligible
Employee prevails in substantial part on the merits of his or her claim. The
Company shall reimburse the Eligible Employee for all reasonable legal fees and
expenses incurred by the Eligible Employee in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder.
SECTION 2.8 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 2.9 No Severed Employee shall be eligible to receive a Severance Payment
or other benefits under the Plan unless he or she first executes a written
release substantially in the form attached hereto as Schedule A.
SECTION 2.10 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.
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SECTION 3. PLAN ADMINISTRATION.
SECTION 3.1 The Plan Administrator shall administer the Plan and may interpret
the Plan, prescribe, amend and rescind rules and regulations under the Plan and
make all other determinations necessary or advisable for the administration of
the Plan, subject to all of the provisions of the Plan.
SECTION 3.2 The Plan Administrator may delegate any of its duties hereunder to
such person or persons from time to time as it may designate.
SECTION 3.3 The Plan Administrator is empowered, on behalf of the Plan, to
engage accountants, legal counsel and such other personnel as it deems necessary
or advisable to assist it in the performance of its duties under the Plan. The
functions of any such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan. Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable expenses thereof
shall be borne by the Employer.
SECTION 4. PLAN MODIFICATION OR TERMINATION.
The Plan may be amended or terminated by the Board at any time;
provided, however, that, during the following periods, the Plan may not be
terminated nor may the Plan be amended in any manner adverse to the interests of
any Eligible Employee (including, without limitation, any adverse changes to a
person's status as an Eligible Employee) without such Eligible Employee's
written consent (and any such termination or amendment shall be void and of no
force and effect): (i) within one year preceding a Potential Change in Control
(in the case of any action (other than in connection with a termination of
employment) pursuant to which an individual ceases to be designated as an
Eligible Employee or is designated in a lower tier of Eligible Employee) or
within 90 days preceding a Potential Change in Control (in the case of
termination of the Plan or any other amendment which is adverse to the interests
of any Eligible Employee), (ii) during the pendency of or within 90 days
following the cessation of a Potential Change in Control or (iii) within two
years following a Change in Control. This Plan shall terminate automatically two
years and one day after a Change in Control. No Plan termination shall, without
such Eligible Employee's written consent, adversely affect any rights of any
Eligible Employee which accrued under this Plan prior to such termination.
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SECTION 5. GENERAL PROVISIONS.
SECTION 5.1 Except as otherwise provided herein or by law, no right or interest
of any Eligible Employee under the Plan shall be assignable or transferable, in
whole or in part, either directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment, attachment, pledge or in any
manner; no attempted assignment or transfer thereof shall be effective; and no
right or interest of any Eligible Employee under the Plan shall be liable for,
or subject to, any obligation or liability of such Eligible Employee. When a
payment is due under this Plan to a Severed Employee who is unable to care for
his or her affairs, payment may be made directly to his or her legal guardian or
personal representative.
SECTION 5.2 If an Employer is obligated by law, contract, policy or otherwise to
pay severance pay, a termination indemnity, notice pay, or the like, or if an
Employer is obligated by law to provide advance notice of separation ("Notice
Period"), then any Severance Payment hereunder shall be reduced by the amount of
any such severance pay, termination indemnity, notice pay or the like, as
applicable, and by the amount of any compensation received during any Notice
Period.
SECTION 5.3 Neither the establishment of the Plan, nor any modification thereof,
nor the creation of any fund, trust or account, nor the payment of any benefits
shall be construed as giving any Eligible Employee, or any person whomsoever,
the right to be retained in the service of the Employer, and all Eligible
Employees shall remain subject to discharge to the same extent as if the Plan
had never been adopted.
SECTION 5.4 If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.
SECTION 5.5 This Plan shall inure to the benefit of and be binding upon the
heirs, executors, administrators, successors and assigns of the parties,
including each Eligible Employee, present and future, and any successor to the
Employer. If a Severed Employee shall die while any amount would still be
payable to such Severed Employee hereunder if the Severed Employee had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to the executor, personal representative
or administrators of the Severed Employee's estate.
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SECTION 5.6 The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.
SECTION 5.7 The Plan shall not be funded. No Eligible Employee shall have any
right to, or interest in, any assets of any Employer which may be applied by the
Employer to the payment of benefits or other rights under this Plan.
SECTION 5.8 Any notice or other communication required or permitted pursuant to
the terms hereof shall have been duly given when delivered or mailed by United
States mail, first class, postage prepaid, addressed to the intended recipient
at his, her or its last known address.
SECTION 5.9 This Plan shall be construed and enforced according to the laws of
Nebraska, to the extent not preempted by federal law, which shall otherwise
control.
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SCHEDULE A
WAIVER AND RELEASE OF CLAIMS AGREEMENT
YOU HAVE BEEN ADVISED TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.
YOU HAVE [FORTY-FIVE] [TWENTY-ONE] DAYS AFTER RECEIVING THIS
AGREEMENT TO CONSIDER WHETHER TO SIGN IT.
AFTER SIGNING THIS AGREEMENT, YOU HAVE ANOTHER SEVEN DAYS IN
WHICH TO REVOKE IT, AND IT DOES NOT TAKE EFFECT UNTIL THOSE SEVEN DAYS HAVE
ENDED.
In consideration of, and subject to, the payments to be made
to me by [Name of Employer Corporation] ("Union Pacific") or any of its
subsidiaries, pursuant to the Union Pacific Corporation Key Employee Continuity
Plan (the "Plan"), which I acknowledge that I would not otherwise be entitled to
receive, I hereby waive any claims I may have for employment or re-employment by
Union Pacific or any subsidiary or parent of Union Pacific after the date
hereof, and I further agree to and do release and forever discharge Union
Pacific or any subsidiary or parent of Union Pacific and their respective past
and present officers, directors, shareholders, employees and agents from any and
all claims and causes of action, known or unknown, arising out of or relating to
my employment with Union Pacific or any subsidiary or parent of Union Pacific or
the termination thereof, including, but not limited to, by reason of any event,
matter, cause or thing which has occurred to the date of execution of this
Release relating in any way to my employment relationship with Union Pacific or
to my termination of employment thereof, whether for severance or based on
statutory or common law claims for employment discrimination, wrongful
discharge, breach of contract or any other theory, whether legal or equitable,
or arising under any statute or regulation, including the Age Discrimination in
Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974, and the Family Medical Leave Act of
1993, each as amended, or any other federal, state or local law, regulation,
ordinance or common law.
Notwithstanding the foregoing or any other provision hereof,
nothing in this Waiver and Release of Claims Agreement shall adversely affect
(i) my rights under the Plan; (ii) my rights to benefits other than severance
benefits under plans,
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programs and arrangements of Union Pacific or any subsidiary or parent of Union
Pacific; or (iii) my rights to indemnification under any indemnification
agreement, applicable law and the certificates of incorporation and bylaws of
Union Pacific and any subsidiary or parent of Union Pacific, and my rights under
any director's and officer's liability insurance policy covering me.
I acknowledge that I have signed this Waiver and Release of
Claims Agreement voluntarily, knowingly, of my own free will and without
reservation or duress, and that no promises or representations, written or oral,
have been made to me by any person to induce me to do so other than the promise
of payment set forth in the first paragraph above and Union Pacific's
acknowledgment of my rights reserved under the second paragraph above.
I understand that this release will be deemed to be an
application for benefits under the Plan, and that my entitlement thereto shall
be governed by the terms and conditions of the Plan, and I expressly hereby
consent to such terms and conditions.
I acknowledge that I have been given not less than [forty-five
(45)] [twenty-one (21)] days to review and consider this Waiver and Release of
Claims Agreement, and that I have had the opportunity to consult with an
attorney or other advisor of my choice and have been advised by Union Pacific to
do so if I choose. I may revoke this Waiver and Release of Claims Agreement
seven days or less after its execution by providing written notice to Union
Pacific.
Finally, I acknowledge that I have carefully read this Waiver
and Release of Claims Agreement and understand all of its terms. This is the
entire Agreement between the parties and is legally binding and enforceable.
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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]
---------------------------------
By:
Date Signed by Employee: ---------------------------
--------------------------------- Title:
------------------------
Seven-Day Revocation Period Ends:
---------------------------------
Signed: Date:
-------------------------- -------------------------
---------------------------------
(Print Employee's Name)
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Key Employee Continuity Plan - Union Pacific Corp.
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