{"id":39881,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/executive-incentive-plan-union-pacific-corp2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"executive-incentive-plan-union-pacific-corp2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/executive-incentive-plan-union-pacific-corp2.html","title":{"rendered":"Executive Incentive Plan &#8211; Union Pacific Corp."},"content":{"rendered":"<pre>                            EXECUTIVE INCENTIVE PLAN\n\n                                       OF\n\n                            UNION PACIFIC CORPORATION\n\n                                AND SUBSIDIARIES\n\n\n                                   ----------\n\n\n                            EFFECTIVE JANUARY 1, 1971\n\n                    AMENDED AND RESTATED AS OF APRIL 15, 1988\n                            AMENDED OCTOBER 26, 1989\n                           AMENDED SEPTEMBER 24, 1992\n                           AMENDED SEPTEMBER 30, 1993\n                             AMENDED APRIL 21, 1995\n                             AMENDED APRIL 27, 1995\n                            AMENDED NOVEMBER 16, 2000\n\n\n   2\n\n\n              EXECUTIVE INCENTIVE PLAN OF UNION PACIFIC CORPORATION\n                                AND SUBSIDIARIES\n\n                            EFFECTIVE JANUARY 1, 1971\n\n\n                    AMENDED AND RESTATED AS OF APRIL 15, 1988\n                            AMENDED OCTOBER 26, 1989\n                           AMENDED SEPTEMBER 24, 1992\n                           AMENDED SEPTEMBER 30, 1993\n                             AMENDED APRIL 21, 1995\n                             AMENDED APRIL 27, 1995\n                            AMENDED NOVEMBER 16, 2000\n\n\n                                 PURPOSE OF PLAN\n\nThe purpose of this Plan is to promote the success of Union Pacific Corporation\nand Subsidiaries by providing additional compensation for services rendered\nduring any year by key executives who contribute in a significant manner to the\noperations and business of the Company and such Subsidiaries.\n\n\n                                 1. DEFINITIONS\n\nSection 1.01 The following terms shall have the following meanings:\n\n\"ACCOUNTHOLDER\" means any person who has received a Deferred Award.\n\n\"BENEFICIARY\" means any person or persons designated in writing by an\nAccountholder to the Committee on a form prescribed by it for that purpose,\nwhich designation shall be revocable at any time by the Accountholder prior to\nhis death, provided that, in the absence of such a designation or the failure of\nthe person or persons so designated to survive the Accountholder, payments or\ndistributions shall be made to the Accountholder's estate and provided further\nthat no payment or distribution shall be made during the lifetime of the\nAccountholder to his Beneficiary.\n\n\"BOARD\" means the Board of Directors of the Company.\n\n\"CODE\" means the Internal Revenue Code of 1986, as amended, or the corresponding\nprovisions of any successor statute.\n\n\"COMMITTEE\" means the Committee provided for in Section 2.01.\n\n\"COMPANY\" means Union Pacific Corporation, a Utah corporation, or any successor\ncorporation.\n\n   3\n\n\"COMPANY STOCK\" means Common Stock, $2.50 par value per share, of the Company.\n\n\"DEFERRED AWARD\" means an award under the Plan which an Executive to whom the\naward is made shall have elected to defer until after Termination or, for awards\nmade with respect to Years beginning with 1982, the earlier of either (i) a date\nor dates certain in any year or years prior to Termination (but in no event more\noften than once in each such year or years), or (ii) after Termination, all in\naccordance with Section 4.01 and which until paid shall, subject to paragraph\n(1) of Section 7.01, be represented by Investment Accounts maintained for such\nExecutive in accordance with Section 5.01.\n\n\"EXECUTIVE\" means any person who was a regular employee of the Company or a\nSubsidiary (including directors who are also such employees) for all or part of\nthe Year in respect of which awards are made under the Plan and who, in the\njudgment of the Committee, contributed in a significant manner to the operations\nand business of the Company or a Subsidiary for such Year.\n\n\"IMMEDIATE CASH AWARD\" means an award under the Plan payable in cash pursuant to\nSection 4.02 as promptly as practicable after the close of the Year for which\nthe award is made or, in the sole discretion of the Committee, in December of\nthe year for which the award is made.\n\n\"INCENTIVE RESERVE ACCOUNT\" means the account established by the Company\npursuant to Section 3.01.\n\n\"INVESTMENT ACCOUNT\" means one of the accounts established by the Company\npursuant to Section 5.01.\n\n\"PLAN\" means this Executive Incentive Plan as amended from time to time.\n\n\"SUBSIDIARY\" means any corporation of which the Company owns directly or\nindirectly at least a majority of the outstanding shares of voting stock and\nwhich by action of its board of directors has adopted the Plan.\n\n\"TERMINATION\" means termination of employment with the Company and its\nSubsidiaries, for any reason, including retirement and death.\n\n\"VALUATION DATE\" means the last business day of each calendar quarter and each\nother interim date on which the Committee determines that a valuation of\nInvestment Accounts shall be made.\n\n\"YEAR\" means a calendar year.\n\n\n                          2. ADMINISTRATION OF THE PLAN\n\nSection 2.01. The Plan shall be administered by a Committee which shall consist\nof at least three members designated by the Board to serve at its pleasure. Such\nmembers shall be members of the Board and shall not be officers or employees of\nthe Company or any Subsidiary. The \n\n\n                                       2\n   4\n\nCommittee shall determine the Executives to whom awards are granted under the\nPlan and the amounts of awards payable to such Executives out of the Incentive\nReserve Account, and shall otherwise be responsible for the administration and\ninterpretation of the Plan. The Committee shall supervise and be responsible for\nthe maintenance of the various accounts under the Plan and for determining the\namounts and, subject to Sections 4.02 and 6.01, the times of payments or\ndistributions of awards. The Committee may delegate its authority under the Plan\nto one or more officers or employees of the Company or a Subsidiary. All\ndeterminations of the Committee shall be by a majority of its members, and its\ndeterminations shall be final. Each member of the Committee, while serving as\nsuch, shall be considered to be acting in his capacity as a Director of the\nCompany.\n\n\n                          3. INCENTIVE RESERVE ACCOUNT\n\nSection 3.01. The Company shall establish an Incentive Reserve Account to which\namounts available for awards to Executives shall be credited and which shall be\ndebited as such awards are made by the Committee. The Board may cause to be\ncredited to such Incentive Reserve Account such amount for each Year, beginning\nwith 1983 during which the Plan remains in effect as it, in its discretion, may\ndetermine provided that the amount so credited for any Year shall not exceed the\nfollowing limitation:\n\n         The maximum amount that may be credited to the Incentive Reserve\n         Account for any Year is 1.5% of Net Income for such Year when the\n         Return on Average Annual Total Stockholders' Equity is 10.0% and is\n         3.0% of Net Income for such Year when the Return on Average Annual\n         Total Stockholders' Equity is 12.0% or more. At intermediate levels of\n         Return on Average Annual Total Stockholders' Equity (between 10.0% and\n         12.0%), the maximum percentage of Net Income that may be credited to\n         the Incentive Reserve Account for such Year shall increase 0.075% for\n         each incremental 0.1% increase in the Return on Average Annual Total\n         Stockholders' Equity. Net Income is the consolidated net earnings from\n         continuing operations of the Company (before extraordinary items)\n         determined in conformity with generally accepted accounting principles\n         before giving effect to provisions for amounts to be credited to the\n         Incentive Reserve Account for such year. Average Annual Total\n         Stockholders' Equity is calculated as the average of (i) total\n         stockholders' equity, including preferred stock, as shown on the\n         consolidated financial statements of the Company at the beginning of\n         each year and (ii) total stockholders' equity, including preferred\n         stock, as shown on the consolidated financial statements of the Company\n         at the end of such year, adjusted in the case of clause (ii) to include\n         income from continuing operations before extraordinary items\n         (determined in conformity with generally accepted accounting\n         principles) and amounts to be credited to the Incentive Reserve Account\n         under the Plan for such year.\n\nThe amount of Net Income and the percentage Return on Average Annual Total\nStockholders Equity shall be computed and reported to the Board and the\nCommittee at the end of each Year by the Company. The Committee shall obtain a\nreport from the Company's independent certified \n\n\n                                       3\n   5\n\npublic accountants stating that the computation of the amount credited to the\nIncentive Reserve Account at the end of the Plan Year was made in accordance\nwith the provisions of the Plan and their report shall be final and binding. Any\namounts credited to the Incentive Reserve Account which are not awarded with\nrespect to such Year may, on direction of the Committee, be awarded in future\nYears during which the Plan remains in effect.\n\n\n                            4. AWARDS UNDER THE PLAN\n\nSection 4.01. Prior to September 30 of each Year, beginning with 1984, an\nExecutive who has been granted awards under the Plan with respect to prior Years\nand who has not previously made an election under the Plan, shall file with the\nCommittee an initial election on a form prescribed by the Committee for such\npurpose specifying the percent in multiples of 10% of any award which may be\ngranted to him with respect to such Year and later Years to be in the form of an\nImmediate Cash Award or a Deferred Award in one or more Investment Accounts.\nDeferral and investment elections shall be continuing elections for all awards\nunder the Plan except that:\n\n         (i) Deferral elections shall be subject to change before September 30\n         of any Year on a form prescribed by the Committee for such purpose with\n         respect to any awards which may be granted to him for such Year and\n         later Years; and\n\n         (ii) an Accountholder, whether or not currently employed by the Company\n         or a Subsidiary, may elect to convert the value of his account, if any,\n         in any Investment Account to equivalent value accounts in any other\n         Investment Accounts as of a Valuation Date, provided that the Committee\n         has received such notice of the conversion as the Committee may\n         require, and provided further that, unless the Committee shall in its\n         sole discretion determine otherwise, an Accountholder may make\n         conversions only in such amounts and at such times as are allowable for\n         changes in investment elections under the terms of the Union Pacific\n         Corporation Thrift Plan. The Committee shall cause such conversions to\n         be effected by transferring equivalent amounts from the one such\n         account to the other, all as of such Valuation Date; otherwise, such\n         deferral and investment elections, and such changes therein, shall be\n         irrevocable.\n\nIn addition, for awards made with respect to Years beginning with 1982, an\nExecutive may also specify on a form prescribed by the Committee for such\npurpose whether he wishes payment of Deferred Awards to be made on the earlier\nof either (i) date or dates certain in any year or years prior to Termination\n(but in no event more often than once in each such year or years), such payment\nto be in full in cash on such date or dates, or (ii) upon Termination in\naccordance with the provisions of Sections 6.01 through 6.04. Elections made as\nto dates for the payment of Deferred Awards shall be subject to change by such\nExecutive before September 30 of any Year on a form prescribed by the Committee\nfor such purpose with respect to any awards made for such Year and later Years;\notherwise such elections, and such changes therein, shall be irrevocable.\n\n\n                                       4\n   6\n\nDesignation, election or change in election shall not entitle an Executive to\nany award for any Year but the form of award, if any, for any Year to such\nExecutive shall be in accordance with such election. If an Executive has not\nbeen so designated as eligible for Deferred Awards, or an election for Deferred\nAwards is not in effect for him, any award granted to him for any Year shall be\nin the form of an Immediate Cash Award.\n\nSection 4.02. As soon as practicable after the close of each Year, or in\nDecember of any Year if so determined by the Committee, beginning with 1971, the\nCommittee may grant awards payable out of the Incentive Reserve Account to such\nExecutives in such dollar amounts as it in its sole discretion shall determine,\nsubject to Section 4.03, and the amount of each such award shall be debited to\nthe Incentive Reserve Account. Except to the extent that Deferred Awards are\nelected pursuant to Section 4.01, any award under the Plan granted to an\nExecutive for any Year shall be paid to him or to his Beneficiary in a lump sum\nin cash as promptly as practicable after such award is granted.\n\nSection 4.03. No Covered Executive shall receive an award for any Year in excess\nof (i) .25% of Covered Income for such Year, in the case of the Chief Executive\nOfficer of the Company, and (ii) .15% of Covered Income for such Year, in the\ncase of any other Covered Executive. Covered Executive means an Executive whose\ncompensation is subject to the limitations on deductibility set forth in Section\n162(m) of the Code. Covered Income for a Year is the greater of (a) the\nconsolidated net earnings from continuing operations of the Company for such\nYear, before extraordinary items, special charges and the cumulative effect of\naccounting changes, determined in accordance with generally accepted accounting\nprinciples, and (b) such net earnings for the first eleven months of such Year.\n\n\n                               5. DEFERRED AWARDS\n\nSection 5.01. The Company shall from time to time establish on its books one or\nmore Investment Accounts. In the case of each Executive, if and when a Deferred\nAward is granted to him, the Committee shall credit to an account maintained for\nhim in one or more Investment Accounts the equivalent amount of such award in\naccordance with his election. Each Investment Account shall have such name, and\nbe charged or credited pursuant to such method, as the Committee shall determine\nupon establishment of such Investment Account, provided such method is\nconsistent with the requirements of Section 162(m) of the Code for\nperformance-based compensation. The Committee may change such names or methods\nfor any Investment Account, but no such change shall reduce any amount\npreviously accrued in an Accountholder's account. The Committee shall cause each\nInvestment Account to be valued as of each Valuation Date by such person or\npersons as it in its sole discretion shall determine and such valuation shall be\nconclusive for all purposes of the Plan. The value of any Investment Account for\nthe purpose of making payment of a Deferred Award shall be the value of such\nInvestment Account as of the Valuation Date last preceding such payment.\nCompensation paid in respect of any Investment Account shall result in\ncorresponding reduction in the value of such accounts. The amounts credited in\nInvestment Accounts shall represent general liabilities of the Company and shall\nnot constitute a trust fund or otherwise create any property interest in any\nAccountholder or his Beneficiary.\n\n\n                                       5\n   7\n\nSection 5.02. The provisions of Section 5.01 shall be subject to the provisions\nof paragraph (1) of Section 7.01.\n\n\n                    6. PAYMENT OR DELIVERY OF DEFERRED AWARDS\n\nSection 6.01. Upon termination of an Executive, the Committee shall cause cash\nin respect of any balances in the accounts maintained for such Executive in any\nInvestment Account to be paid or delivered to him or his Beneficiary in the sole\ndiscretion of the Committee as follows:\n\n         (i) in a single distribution, an amount in cash equal to the value of\n         the accounts maintained for him in all Investment Accounts, all such\n         cash being paid in the Year of his Termination or in January of the\n         following Year, as determined by the Committee; or,\n\n         (ii) over such number of Years as are fixed by the Committee but not\n         exceeding fifteen, in annual installments of an aggregate amount of\n         cash equal in value at the time of each installment payment to the\n         value of the accounts maintained for him in all Investment Accounts at\n         the Valuation Date next preceding payment divided by the remaining\n         number of such annual installments, the first of such installments to\n         be paid or delivered in the month following the month of his\n         Termination, or at the discretion of the Committee not later than 12\n         months following the date of Termination and subsequent installments to\n         be paid or delivered in January of each subsequent Year; or\n\n         (iii) in the event of retirement or death of a currently employed\n         Executive, at a specified future date not to exceed 15 years from the\n         date of such retirement or death in a single distribution, an amount of\n         cash equal to the value of the accounts maintained for him in all\n         Investment Accounts. Income in respect of Investment Accounts would be\n         paid in cash quarterly to such Executive or his Beneficiary commencing\n         with the first day of the month subsequent to such Executive's\n         retirement or death. In the case of retirement, the single distribution\n         referred to above will be paid on the date specified or upon death,\n         whichever occurs first.\n\nAll payments or distributions attributable to each Deferred Award of an\nExecutive after his Termination shall be made by the Company on its behalf or on\nbehalf of the Subsidiary or Subsidiaries by which he was employed during the\nYear in which such Deferred Award was earned. The Subsidiary shall reimburse the\nCompany in the amount of such paid Deferred Awards.\n\nSection 6.02. Deferred Awards elected to be paid on a date or dates certain in\nany year or years prior to Termination shall be paid to the Executive in full in\ncash on such date or dates.\n\nSection 6.03. At any time before or after Termination of an Executive who shall\nhave elected to receive one or more Deferred Awards, the Committee, if it finds\nin its sole discretion that \n\n\n                                       6\n   8\n\ncontinued deferral of such Awards would result in undue hardship to such\nExecutive or his Beneficiary, may accelerate and pay in cash all or any part of\nsuch Deferred Award or Deferred Awards by converting the value of the accounts\nmaintained for him in Investment Accounts into the cash equivalent thereof on\nthe same basis as if a payment in cash were being made as provided in Section\n6.01. On the death of an Executive after his Termination, the Committee, in its\nsole discretion, may accelerate one or more installments, and change the form of\npayment or distribution in accordance with Section 6.01, of any balance of his\nDeferred Awards and, in the event of relevant changes in the Federal income tax\nlaws, regulations and rulings or on termination of the Plan, the Committee may,\nin its sole discretion, so accelerate or change the form of payment or\ndistribution of any or all Deferred Awards.\n\nSection 6.04. If a Change in Control shall be deemed to have occurred under the\nUnion Pacific Key Employee Continuity Plan, then each Executive with an account\nmaintained for him in an Investment Account shall be entitled to receive, at his\noption, in a single distribution on the Valuation Date next following such\nChange in Control, an amount of cash equal to the value of the accounts\nmaintained for him in all Investment Accounts less 10%.\n\nSection 6.05. The provisions of Sections 6.01, 6.02 and 6.03 shall be subject to\nthe provisions of paragraph (1) of Section 7.01.\n\n\n                              7. GENERAL PROVISIONS\n\nSection 7.01.\n\n(1) Anything in the Plan otherwise to the contrary notwithstanding, the Board\nmay at any time under such circumstances as it in its sole discretion may\ndetermine, convert all the accounts of Accountholders in the Investment Accounts\ninto cash credits, with future credits to the accounts of Accountholders being\nmade solely in cash. Accounts shall be so converted on the basis of the value\nthereof as of the last preceding Valuation Date. Any such cash credits to the\naccounts of Accountholders shall, after such conversion, solely bear interest\nuntil paid to the Accountholder or his Beneficiary compounded annually at such\nannual rate of interest as may be fixed by the Board. The granting and payment\nof Deferred Awards in respect of such cash credits shall otherwise be in\naccordance with the other provisions of the Plan with such adjustments therein\nas the Committee may deem appropriate.\n\n(2) Neither the Plan nor the payment of benefits hereunder nor any action by the\nCompany, any Subsidiary or the Committee shall be held or construed to confer\nupon any person any right to be continued in the employ of the Company or of a\nSubsidiary and the Company and each Subsidiary expressly reserves the right to\ndischarge, without liability, any Executive whenever in its sole discretion its\ninterest may so require.\n\n(3) No member of the Board or the Board of Directors of any Subsidiary or of the\nCommittee or any person to whom the Committee has delegated its authority\nhereunder shall be liable for any action, or action hereunder, whether of\ncommission or omission, except in circumstances involving his bad faith, for\nanything done or omitted to be done by himself.\n\n\n                                       7\n   9\n\n(4) The Company or any Subsidiary shall not be required to segregate cash for\nany Investment Account.\n\n(5) Notwithstanding the fact that an Investment Account may use Company Stock to\ndetermine amounts credited or debited thereto, no Executive shall have voting or\nother rights with respect to shares of such Company Stock.\n\n(6) The Company or any Subsidiary shall not, by virtue of any provisions of this\nPlan or by any action by any person hereunder, be deemed to be a trustee or\nother fiduciary of any property for any Accountholder or any Beneficiary of an\nAccountholder and the liabilities of the Company or of any Subsidiary to any\nAccountholder or his Beneficiary pursuant to the Plan shall be those of a debtor\nonly pursuant to such contractual obligations as are created by the Plan, and no\nsuch obligation of the Company or of any Subsidiary shall be deemed to be\nsecured by any pledge or other encumbrance on any property of the Company or of\nany Subsidiary.\n\n(7) Except to the extent of the rights of the Beneficiary of an Accountholder,\nno benefit payable under, or interest in, the Plan shall be subject in any\nmanner to anticipation, alienation, sale, transfer, assignment, pledge,\nencumbrance or charge, and any such attempted action shall be void; and no such\nbenefit or interest shall be in any manner liable for or subject to the debts,\ncontracts, liabilities, engagements or torts of any Accountholder, former\nAccountholder or his Beneficiary. If any Accountholder, former Accountholder or\nBeneficiary shall become bankrupt or shall attempt to anticipate, alienate,\nsell, transfer, assign, pledge, encumber or charge any benefit payable under, or\ninterest in, the Plan, then the Committee in its discretion may hold or apply\nsuch benefit or interest or any part thereof to or for the benefit of such\nAccountholder, former Accountholder, or his Beneficiary, his spouse, children,\nblood relatives or other dependents, or any of them, in such manner and in such\nproportions as the Committee may consider proper.\n\n(8) The Company shall on its behalf and on behalf of its Subsidiaries withhold\nfrom payment of distribution of the Awards the required amounts of income and\nother taxes.\n\n(9) No member of the Committee shall be eligible for an award under the Plan.\n\n(10) All questions pertaining to the construction, regulation, validity and\neffect of the Plan shall be determined in accordance with the laws of the State\nof New York.\n\n\n               8. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN\n\nSection 8.01. The Board may from time to time amend, suspend or terminate the\nPlan in whole or in part, and, if suspended or terminated, may reinstate any of\nor all of its provisions, except that without the consent of the Executive, or,\nif he is not living, his Beneficiary, no amendment, suspension or termination of\nthe Plan shall be made which materially adversely affects his rights with\nrespect to awards previously made to him and except that the limitations set\nforth in Section 3.01 with respect to the amount of awards which may be granted\nunder the Plan may be \n\n\n                                       8\n   10\n\nincreased only with the approval of a majority of the stockholders of the\nCompany present, in person or by proxy, at a meeting of such stockholders at\nwhich a quorum is present. In the absence of action by the stockholders of the\nCompany, no awards shall be made under the Plan with respect to years after the\ncalendar year 2005 and the Plan shall automatically terminate after all Deferred\nAwards made prior thereto shall have been paid or distributed. Notwithstanding\nthe foregoing, no amendment which is material for purposes of the shareholder\napproval requirement of Section 162(m) of the Code shall be effective in the\nabsence of action by the stockholders of the Company.\n\n\n\n\n\n                                       9\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9154],"corporate_contracts_industries":[9524],"corporate_contracts_types":[9539,9546],"class_list":["post-39881","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-union-pacific-corp","corporate_contracts_industries-transportation__railroads","corporate_contracts_types-compensation","corporate_contracts_types-compensation__incentive"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39881"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39881"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39881"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}