EXHIBIT 10(l)
Union Pacific Corporation
Stock Unit Grant and Deferred Compensation Plan
for the Board of Directors
As Amended January 1, 1995
Union Pacific Corporation
Stock Unit Grant and Deferred Compensation Plan
for the Board of Directors
As Amended January 1, 1995
1. Purpose
The purpose of this Plan is to permit grants of Stock Units to Directors to
align their interests with those of stockholders, and to provide a means
for deferring payment of all or a portion of any cash compensation,
excluding expenses, payable to Directors for their service on the Board of
Directors (the "Board") of Union Pacific Corporation (the "Company") in
accordance with Article II Section 5 of the By-Laws of Union Pacific
Corporation. Such compensation eligible to be deferred, not including any
grants under paragraph 3, is referred to herein as "Compensation".
2. Eligibility
Any individual serving as a member of the Board as of the effective date of
this Plan or who subsequently becomes a member is eligible under this Plan.
3. Stock Unit Grants
Commencing in 1995, each full quarterly installment of a Director's
Compensation shall be accompanied by the grant of an amount of whole Stock
Units equal to $1500 divided by the Fair Market Value of one share of the
Company's Common Stock on the first business day of the month following
the quarter in which such Compensation was earned, plus cash in lieu of any
fractional Stock Unit resulting from such calculation. A pro-rata grant of
Stock Units will accompany any partial quarterly Compensation installment.
"Fair Market Value" on a date means the average of the high and low trading
prices per share on that date, as reported in The Wall Street Journal
listing of consolidated trading for New York Stock Exchange issues. Stock
Units and cash so granted shall be credited to such Director's Stock Unit
Account referred to in paragraph 6.
4. Election
Election to defer Compensation is to be made on or before December 31 of
any year for Compensation for services as a member of the Board for the
following and later calendar years. In addition to deferrals of 1995
Compensation elected in the previous year, at any time prior to March 31,
1995, a director may elect to defer additional Compensation to be paid for
services in the last three quarters of 1995.
Election to defer is a continuing election until changed by the Director on
or before December 31 of any year for the then following and later calendar
years. However, once an election is made (and effective), subsequent
elections will have no effect on the amounts, timing and manner of payment
covered by the previous election.
Any newly elected Director who was not a Director on the preceding
December 31 may elect, before his term begins, to defer Compensation for
services as a member of the Board for the balance of the calendar year
following such election.
Forms shall be made available to Directors each year for the purpose of
making or changing their election.
5. Amount
All or any portion, in multiples of 10%, of a Director's Compensation may
be deferred.
6. Deferred Accounts
Each Director shall have a Stock Unit Account and a Fixed Income Account
(together, the "Accounts"). Amounts deferred pursuant to paragraph 4 may
be credited to either Account, at the election of the Director made at the
time of the deferral election, in multiples of 10% of such Director's
Compensation. Amounts deferred and credited to the Stock Unit Account shall
be converted into whole Stock Units on the basis of the Fair Market Value
of the Company's Common Stock on the first business day of the month
following the quarter in which the Compensation was earned, and cash shall
be credited to the Stock Unit Account in lieu of any fractional Stock Unit.
In addition, on or prior to March 31, 1995, each Director shall have a one-
time election to transfer all or any part of the balance of his or her
Fixed Income Account to the Stock Unit Account based on the Fair Market
Value of the Company's Common Stock on April 3, 1995.
On the payment date for each cash dividend or other cash distribution with
respect to the Company's Common Stock, each Director's Stock Unit Account
shall be credited with an amount equal to the amount of the per share
dividend or distribution, multiplied by the number of Stock Units in such
Account, and, if such Director is then serving as a member of the Board,
shall be converted into whole Stock Units on the basis of the Fair Market
Value of the Company's Common Stock on the payment date for such dividend
or distribution, and cash shall be credited to the Stock Unit Account in
lieu of any fractional Stock Units. If a Director is no longer serving as
a member of the Board on the payment date for such dividend or
distribution, the amount representing such dividend or distribution shall
be paid out of the Stock Unit Account to such Director as soon
as practicable after the payment date for such dividend or distribution.
Except as provided in the preceding sentence, any cash credited to a
Director's Stock Unit Account shall be added to other cash credited to such
Account and converted into a whole Stock Unit on the date sufficient cash
exists to purchase a whole Stock Unit, based on the Fair Market Value of
the Company's Common Stock on such date. In the event of a subdivision or
combination of shares of Company Stock, the number of Stock Units credited
to the Stock Unit Accounts on the effective date of such subdivision or
combination shall be proportionately subdivided or combined as the case may
be. No adjustment shall be made in Stock Units in connection with the
issuance by the Company of any rights or options to acquire additional
shares of Company Common Stock or securities convertible into Company
Common Stock. In the event of any stock dividend or reclassification of
Company Common Stock, any merger or consolidation to which the Company is a
party, or any spinoff of shares or distribution of property other than cash
with respect to the Company Common Stock, the Committee shall cause
appropriate adjustments, if any, to be made in the Stock Units to reflect
such stock dividend, reclassification, merger or consolidation, spinoff or
distribution of property.
Amounts credited to the Fixed Income Account shall earn interest
compounded quarterly, from the date the Compensation would otherwise
have been paid until it is actually paid in full. The rate of interest
shall be the same rate as that paid on deferrals into the "Fixed Income
Account" (formerly "Investment Account A") under the Company's Executive
Incentive Plan.
7. Distribution
All distribution from Accounts shall be made in cash. For purposes of
distributions from the Stock Unit Account, each Stock Unit shall be
converted into an amount of cash equal to the Fair Market Value of one
share of the Company's Common Stock on the first business day of the month
in which such distribution is made. The Director must elect, at the same
time and on the same form he elects a deferral of Compensation, the timing
and manner of payment.
- Timing of Payment: Distributions from the Accounts shall begin
following termination from the Board for any reason, provided that in
the case of distributions from the Fixed Income Account, the Director
may elect that distributions begin following retirement from the
Director's principal occupation.
- Manner of Payment: The Director may elect to receive payment from
the Accounts in a lump sum or in a number of equal annual
installments, not to exceed ten.
The lump sum or first installment is to be paid in January of the year
following the year of termination or retirement, as elected by the
Director, and any remaining installments in January of each succeeding year
until the total balance is paid.
Distributions from the Stock Unit Account in installments shall be based on
equal numbers of Stock Units in each installment.
In the event of the death of a Director then serving as a member of the
Board or a terminated or retired Director entitled to a distribution under
this Plan, the balance of the Accounts shall be payable to the estate or
designated beneficiary in full during the January of the year following the
year of such Director's, terminated Director's or retired Director's death.
The Director may designate his beneficiary at the same time he elects
deferral of Compensation. However, the latest designated beneficiary will
be the beneficiary or beneficiaries for the total of all distributions from
the Accounts. The designated beneficiary may be changed at any time on a
form provided by the Corporate Secretary, provided that no designation will
be effective unless it is filed with the Corporate Secretary prior to the
Director's death.
8. Unfunded Plan
The liability of Union Pacific Corporation to any Director, terminated
Director, retired Director or his estate or designated beneficiary under
the Plan shall be that of a debtor only pursuant to such contractual
obligations as are created by the Plan, and no such obligation of the Union
Pacific Corporation shall be deemed to be secured by any assets, pledges,
or other encumbrances on any property of Union Pacific Corporation.
9. Inalienability of Deferred Compensation
Except to the extent of the rights of a designated beneficiary, no
distribution pursuant to, or interest in, the Plan may be transferred,
assigned, pledged or otherwise alienated and no such distribution or
interest shall be subject to legal process or attachment for the payment of
any claims against any individual entitled to receive the same.
10. Controlling State Law
All questions pertaining to the construction, regulation, validity and
effect of the Plan shall be determined in accordance with the laws of the
Commonwealth of Pennsylvania.
11. Amendment
The Board of Directors of Union Pacific Corporation at its sole discretion
may amend, suspend or terminate the Plan at any time. However, any such
amendment, suspension or termination of the Plan may not adversely affect
any Director's or his beneficiary's rights with respect to Compensation
previously deferred.
12. Administration
Administration of the Plan will be coordinated by the Corporate Finance
Department. Administration will include, but not be limited to, crediting
of deferred compensation, dividends and accrued interest to individual
Director accounts and ultimate disbursement of deferred amounts.
13. Effective Date
This Plan shall become effective December 1, 1978, applicable only to
compensation for services after December 31, 1978, provided that the
provisions hereof related to Stock Units shall be effective January 1,
1995.