Exhibit 10
1993
STOCK OPTION AND RETENTION STOCK
PLAN
of
UNION PACIFIC
CORPORATION
(Effective April 16, 1993
-
As Amended September 30,
1993,
July 28,
1994, April 24, 1997,
November 20,
1997, September 24, 1998¸ May 27,
1999,
May 25,
2000, November 16, 2000, January 25, 2001 and
November 16, 2006)
1993 STOCK OPTION AND RETENTION
STOCK PLAN
OF UNION PACIFIC
CORPORATION
The purpose of the 1993 Stock Option
and Retention Stock Plan of Union Pacific Corporation is to promote
and closely align the interests of employees of Union Pacific
Corporation and its shareholders by providing stock based
compensation. The Plan is intended to strengthen Union Pacific
Corporation’s ability to reward performance which enhances
long term shareholder value; to increase employee stock ownership
through performance based compensation plans; and to strengthen the
company’s ability to attract and retain an outstanding
employee and executive team.
The following terms shall have the
following meanings:
“Act” means the
Securities Exchange Act of 1934, as amended.
“Affiliate” shall have
the meaning set forth in Rule 12b-2 under Section 12 of the
Act.
“Approved Leave of
Absence” means a leave of absence of definite length approved
by the Senior Vice President—Human Resources of the Company,
or by any other officer of the Company to whom the Committee
delegates such authority.
“Award” means an award
of Retention Shares or Stock Units pursuant to the Plan.
“Beneficial Owner” shall
have the meaning set forth in Rule 13d-3 under the Act.
“Beneficiary” means any
person or persons designated in writing by a Participant to the
Committee on a form prescribed by it for that purpose, which
designation shall be revocable at any time by the Participant prior
to his or her death, provided that, in the absence of such a
designation or the failure of the person or persons so designated
to survive the Participant, “Beneficiary” shall mean
such Participant’s estate; and further provided that no
designation of Beneficiary shall be effective unless it is received
by the Company before the Participant’s death.
“Board” means the Board
of Directors of the Company.
“Change in Control”
means the occurrence of any one of the following:
|
(i)
|
any Person is
or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 20% or more of the
combined voting power of the Company’s then outstanding
securities, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause
(A) of paragraph (iii) below; or
|
|
(ii)
|
the following
individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on
November 16, 2000, constitute the Board and any new director
(other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election
of directors of the Company) whose appointment or election by the
Board or nomination for election by the Company’s
shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
|
|
(iii)
|
there is
consummated a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company with any other corporation,
other than (A) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior
to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) more than 50% of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such
Person any securities acquired directly from the Company or its
Affiliates) representing 20% or more of the combined voting power
of the Company’s then outstanding securities; or
|
|
(iv)
|
the
shareholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than a sale or disposition
by the Company of all or substantially all of the Company’s
assets to an entity, more than 50% of the combined voting power of
the voting securities of which is owned by shareholders of the
Company in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
|
“Code” means the
Internal Revenue Code of 1986, as amended, or the corresponding
provisions of any successor statute.
“Committee” means the
Committee designated by the Board to administer the Plan pursuant
to Section 3.
“Common Stock” means the
Common Stock, par value $2.50 per share, of the Company.
“Company” means Union
Pacific Corporation, a Utah corporation, or any successor
corporation.
“Option” means each
non-qualified stock option, incentive stock option and stock
appreciation right granted under the Plan.
2
“Optionee” means any
employee of the Company or a Subsidiary (including directors who
are also such employees) who is granted an Option under the
Plan.
“Participant” means any
employee of the Company or a Subsidiary (including directors who
are also such employees) who is granted an Award under the
Plan.
“Person” shall have the
meaning given in Section 3(a)(9) of the 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.
“Plan” means this 1993
Stock Option and Retention Stock Plan, as amended from time to
time.
“Retention Shares” means
shares of Common Stock subject to an Award granted under the
Plan.
“Restriction Period”
means the period defined in Section 9(a).
“Stock Unit” means the
right to receive in the future a share of Common Stock.
“Subsidiary” means any
corporation of which the Company owns directly or indirectly at
least a majority of the outstanding shares of voting
stock.
“Unit Restriction
Period” means the period defined in
Section 10.
“Unit Vesting Condition”
means any condition to the vesting of Stock Units established by
the Committee pursuant to Section 10.
“Vesting Condition”
means any condition to the vesting of Retention Shares established
by the Committee pursuant to Section 9.
The Plan shall be administered by
the Committee, which shall be comprised of not less than three
members of the Board, none of whom shall be employees of the
Company or any Subsidiary. The Committee shall (i) grant
Options to Optionees and make Awards of Retention Shares and Stock
Units to Participants, and (ii) determine the terms and
conditions of such Options and Awards of Retention Shares and Stock
Units, all in accordance with the provisions of the Plan. The
Committee shall have full authority to construe and interpret the
Plan, to establish, amend and rescind rules and regulations
relating to the Plan, to administer the Plan, and to take all such
steps and make all such determinations in connection with the Plan
and Options and Awards granted thereunder as it may deem necessary
or advisable. Each Option and grant of Retention Shares or Stock
Units shall, if required by the Committee, be evidenced by
an
3
agreement to be executed by the Company and the
Optionee or Participant, respectively, and contain provisions not
inconsistent with the Plan. All determinations of the Committee
shall be by a majority of its members and shall be evidenced by
resolution, written consent or other appropriate action, and the
Committee’s determinations shall be final. Each member of the
Committee, while serving as such, shall be considered to be acting
in his or her capacity as a director of the Company.
To be eligible for selection by the
Committee to participate in the Plan an individual must be an
employee of the Company or a Subsidiary. Directors who are not
full-time salaried employees shall not be eligible. In granting
Options or Awards of Retention Shares or Stock Units to eligible
employees, the Committee shall take into account the duties of the
respective employees, their present and potential contributions to
the success of the Company or a Subsidiary, and such other factors
as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan.
|
5.
|
STOCK SUBJECT
TO THE PLAN
|
Subject to the provisions of
Section 13 hereof, the maximum number and kind of shares as to
which Options, or Retention Shares or Stock Units may at any time
be granted under the Plan are 16 million shares of Common
Stock. Shares of Common Stock subject to Options or Awards under
the Plan may 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 Retention Shares or Stock
Units 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 Retention Shares or Stock Units under the Plan.
Upon the forfeiture (in whole or in part) of a grant of Retention
Shares or Stock Units, the shares of Common Stock subject to such
forfeiture shall again be available for option or grant as
Retention Shares or Stock Units under the Plan if no dividends have
been paid on the forfeited shares, and otherwise shall be
unavailable for such an option or grant.
|
6.
|
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 time or times and under such
conditions as set forth in the written agreement evidencing such
option, but in no event
4
shall any option be exercisable subsequent to
the tenth anniversary of the date on which the option is
granted.
c. Exercise of Option .
Except as provided in Section 6(h), 6(i), 8(c) or 8(d), 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 or periods, and subject to such conditions, as the
Committee may determine, 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, unless the Committee shall have
determined otherwise, 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 on 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.
A holder of an option shall have none of the rights of a
stockholder until the shares of Common Stock are issued to him or
her. If an amount is payable by an Optionee to the Company or a
Subsidiary under applicable withholding 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 withholding 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 that 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 or conditionally the transferability of shares acquired
through the exercise of options for such periods, and subject to
such conditions, including continued employment of the Optionee by
the Company or a Subsidiary, as the Committee may
determine.
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 represent
and agree that any shares of Common Stock 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
5
sold except in accordance with such restrictions
or limitations as may be set forth in the written agreement
granting such option.
g. Non-Transferability of
Options . During an Optionee’s lifetime, the option may
be exercised only by the Optionee. Options shall not be
transferable, except for exercise by the Optionee’s legal
representatives or heirs.
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 (provided that the
Committee may determine that particular limitations and
restrictions under the Plan shall not apply) and such option shall
expire according to the following schedule (unless the Committee
shall provide for shorter periods at the time the option is
granted):
|
|
(i)
|
Retirement. Option shall expire, unless exercised, five
(5) years after the Optionee’s retirement from the
Company or any Subsidiary under the provisions of the
Company’s or a Subsidiary’s pension plan.
|
|
|
(ii)
|
Disability. Any holding period required by Section 6(c)
shall automatically be deemed to be satisfied and 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, unvested options shall not be forfeited, but any
holding period required by Section 6(c) shall be satisfied in
accordance with its original schedule (including any holding period
associated with an option that becomes a non-qualified option in
accordance with Section 8(c)) and Option shall expire, unless
exercised, five (5) years after the date of
termination;
|
|
|
(iv)
|
Force
Reduction Program. In the
case of a 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, three
(3) years from the date of termination.
|
|
|
(v)
|
Gross
Misconduct. Option shall
expire upon receipt by the Optionee of the notice of termination if
he or she 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
|
6
|
|
Change in Control all options
shall become fully vested and the option 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 or her period of employment,
the 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 or her death, provided that (i) any holding period
required by Section 6(c) shall automatically be deemed to be
satisfied and (ii) the Co
