1
EXHIBIT 10(d)
SUPPLEMENTAL PENSION PLAN
For Officers and Managers
of
Union Pacific Corporation
and
Affiliates
(As amended and restated in its entirety
effective as of January 1, 1976, including all
amendments adopted through May, 1990)
2
TABLE OF CONTENTS
Article Page
------- ----
One Scope of Supplemental Plan and Definitions 3
Two Total Service and Vesting Service 6
Three Amount and Payment of Pension 7
Four Manner of Payment 12
Five Vesting 13
Six Employee Transfers 14
Seven Optional Pre-Retirement Survivor's Benefit 15
Eight Administration 18
Nine Amendment or Termination 20
Ten General Provisions 21
Eleven Transfers to Non-Covered Employment 22
3
ARTICLE ONE
Scope of Supplemental Plan and Definitions
1.1 The "Union Pacific Railroad Company Pension Plan," effective May 5,
1937, as amended from time to time, and as in effect immediately prior to July
1, 1968, shall establish the rights of officers and supervisors whose
remuneration and working conditions were not subject to agreement and who
retired prior to July 1, 1968. The Prior Supplemental Plan, effective July 1,
1968, and as amended from time to time, shall establish the rights of officers
and supervisors whose remuneration and working conditions were not subject to
agreement and who retired or otherwise terminated their employment on or after
July 1, 1968 and prior to January 1, 1976. The Supplemental Plan, as set
forth herein, effective January 1, 1976, and as it may hereafter be amended
from time to time, shall establish the rights of officers and managers whose
remuneration and working conditions are not subject to agreement and who
retire or otherwise terminate their employment on or after January 1, 1976.
The rights provided to officers and managers under the Supplemental Plan shall
be in addition to, and not in lieu of, the rights, if any, provided to such
persons under the "Pension Plan for Salaried Employees of Union Pacific
Corporation and Affiliates," effective January 1, 1976, and as it may
hereafter be amended from time to time.
1.2 As used in this Supplemental Plan, the following terms have the
meanings set forth below, unless a different meaning is plainly required by
the context:
(a) "Administrator" means the Senior Vice President-Human Resources of Union
Pacific.
(b) "Average Earnings" for purposes of Sections 3.1(a) and 3.4 means the
average Earnings of a Participant for any 60 months of highest Earnings
preceding his Retirement Date; provided, however, that for purposes of
such calculation, the Earnings of such Participant following July 1,
1968 shall be deemed to be his annual Earnings as of July 1, 1968.
(c) "Company" means Union Pacific Corporation (herein called "Union
Pacific") and any Affiliate of Union Pacific which is included in the
Supplemental Plan by action of (1) its Board of Directors and (2) either
the Board of Directors or the Administrator; provided, however, if an
Affiliate of Union Pacific is included in the Plan by virtue of action
by the Administrator, unless the Board of Directors ratifies such action
not later than the first regularly scheduled meeting of the Board of
Directors held subsequent to the taking of such action by the
Administrator, such Affiliate shall cease to be so included as of the
close of business on the last day of the month in which such meeting
occurs.
(d) "Early Supplemental Pension" means the pension provided for in Section
3.4.
(e) "Effective Date" means January 1, 1976.
(f) "Excess Supplemental Pension" means the pension provided for in Section
3.6.
(g) "Incentive Compensation" means incentive compensation awarded a
Participant under the Executive Incentive Plan of Union Pacific
Corporation and Subsidiaries, as amended and restated as of January 1,
1981 and as it may thereafter be amended from time to time, but only to
4
the extent that such incentive compensation is not taken into account in
computing the Participant's Final Average Earnings under the Plan.
Awards of Incentive Compensation shall be taken into account on the
accrual basis at the time such awards are made, provided, however, that
no more than three awards of Incentive Compensation shall be taken into
account for any 36-month period.
(h) "Normal Supplemental Pension" means the pension provided for in Section
3.3.
(i) "Participant" means
(i) any person who was a Participant in the Prior
Supplemental Plan on December 31, 1975 and who
is an Employee on the Effective Date, or
(ii) any Member of the Plan who is an officer or
manager of the Company and whose remuneration
and working conditions are not subject to
agreement.
(j) "Plan" means the "Pension Plan for Salaried Employees of Union Pacific
Corporation and Affiliates", effective January 1, 1976, and as it may be
hereafter amended from time to time.
(k) "Postponed Supplemental Pension" means the pension provided for in
Section 3.5.
(l) "Prior Supplemental Plan" means the "Supplemental Pension Plan for
Officers and Supervisors of Union Pacific Railroad Company and
Affiliates" as it existed on December 31, 1975.
(m) "Supplemental Plan" means the "Supplemental Pension Plan for Officers
and Managers of Union Pacific Corporation and Affiliates," as described
herein, and as it may hereafter be amended from time to time; such term
shall also include the Prior Supplemental Plan, except where specific
reference is made to the Prior Supplemental Plan.
(n) "Surviving Spouse" means the spouse of a Participant who is legally
married to the Participant on the date of his death and
(i) where payments to the Participant under the
Supplemental Plan have not begun, who was legally
married to the Participant continuously during the
12 months immediately preceding the date of the
Participant's death, or
(ii) where payments to the Participant under the
Supplemental Plan have begun, who was legally
married to the Participant continuously during the
12 months immediately preceding the date that such
payments began.
(o) "Surviving Spouse's Pension" means the pension provided for in Section
3.7.
(p) "Total Service" means the period of service recognized for Supplemental
Plan purposes, as set forth in Section 2.1.
(q) "Vesting Service" means the period of service recognized for
Supplemental Plan purposes, as set forth in Section 2.2.
5
(r) The following terms have the respective meanings set forth in the
definition provisions of Section 1.2 of the Plan:
(i) Actuarial Equivalent
(ii) Affiliate
(iii) Board of Directors
(iv) Continuous Service
(v) Credited Service
(vi) Early Retirement Date
(vii) Early Retirement Pension
(viii) Earnings
(ix) Employment Commencement Date
(x) Employment
(xi) Final Average Earnings
(xii) Member
(xiii) Normal Retirement Date
(xiv) Normal Retirement Pension
(xv) Postponed Retirement Date
(xvi) Postponed Retirement Pension
(xvii) Retirement Date
(xviii) Year of Service
(xix) Contingent Annuitant
(xx) Hour of Service
(xxi) Retirement Pension
The masculine pronoun wherever the context so indicates shall include
the feminine. Wherever any words are used herein in the singular, they
shall be construed as though they were also used in the plural in all
cases where they shall so apply.
6
ARTICLE TWO
Total Service and Vesting Service
2.1 Total Service. (expressed in the years, including portions thereof)
shall include:
(a) all years of Credited Service (including portions thereof) as set
forth in Article Three of the Plan;
(b) such additional years of training prior to the Participant's
Employment Commencement Date, as may have, in the opinion of the
Company, especially qualified the Participant for service with the
Company, but only after approval of such additional years by the
Board of Directors and the communication of such approval to the
Participant (including any such years approved under the Prior
Supplemental Plan); and,
(c) as provided in Section 3.1(a) and in Section 3.5, but only in
respect of a Participant entitled to a Supplemental Pension pursuant
to Section 3.1(a), a Participant's entire uninterrupted period of
service with the Company, if any, subsequent to attainment of age
65.
2.2 Vesting Service. (expressed in years, including portions thereof)
shall include:
(a) all years of Continuous Service (including portions thereof) as set
forth in Article Two of the Plan; and
(b) any additional years approved under Section 2.1(b).
7
ARTICLE THREE
Amount and Payment of Pension
3.1 Normal Make-up Pension. A Participant who on July 1, 1968 had
attained age 55 and who was at that time a participant in the Prior
Supplemental Plan shall be entitled to an annual normal make-up pension
commencing on his Normal Retirement Date equal to the excess, if any, of (a)
over (b), where:
(a) equals a sum arrived at by taking 0.5% of the first
$4,800 and 1.25% of the excess of such Participant's
Average Earnings and multiplying that amount by his
Total Service included in Total Service, for this
purpose (i) in the case of Participants who attained age
65 prior to July 1, 1968, all service beyond age 65,
and (ii) in the case of Participants whose Total
Service includes the 10 years immediately preceding
Retirement Date, the period of full-time service with
any common carrier railroad company (established to the
satisfaction of the Administrator); and
(b) equals the annual Normal or Early or Postponed
Retirement Pension determined under Article Five of the
Plan without regard, however, to the limitation in
Section 5.5 thereof.
3.2 Normal Additional Years of Service and/or Incentive Compensation
Pension. A Participant whose Total Service includes additional years under
Section 2.1(b) beyond the years of Credited Service recognized under Article
Three of the Plan and/or who has been awarded Incentive Compensation within
the 10-year period immediately preceding his Retirement Date will be entitled
to an annual additional years of service and/or incentive compensation
pension, commencing on his Normal Retirement Date, equal to the excess of (i)
the annual Normal Retirement Pension computed on the basis of the formula
provided in Section 5.1 of the Plan, including in the Participant's Final
Average Earnings under such formula the Incentive Compensation awarded such
Participant and utilizing all such additional years included in Total Service,
but not beyond an aggregate of 40 years of Total Service, over (ii) the annual
Normal or Early or Postponed Retirement Pension determined under Article Five
of the Plan without regard, however, to the limitation in Section 5.5 thereof.
3.3 Normal Supplemental Pension. A Participant who is entitled to
receive a normal make-up pension as provided in Section 3.1 and is also
entitled to receive a normal additional years of service and/or incentive
compensation pension as provided in Section 3.2, shall receive whichever
furnishes the higher Normal Supplemental Pension.
3.4 Early Supplemental Pension. A Participant retired on an Early
Retirement Date shall be entitled to receive a supplemental pension commencing
at Normal Retirement Date, computed in accordance with Section 3.3, based upon
Total Service rendered and/or Incentive Compensation awarded, and for purposes
of Section 3.1(a), if applicable, Average Earnings prior to his Early
Retirement Date. In lieu thereof, such Participant may elect to receive a
reduced supplemental pension, commencing on his Early Retirement Date, which
is the Normal Supplemental Pension accrued under the Supplemental Plan to his
Early Retirement Date multiplied by the early retirement factor determined
from the table below (prorated on a monthly basis for fractions of a year).
8
EARLY RETIREMENT FACTORS
Age on Early
Retirement Date Percentage Factor
--------------- -----------------
55 60
56 65
57 70
58 75
59 80
60 85
61 88
62 91
63 94
64 97
3.5 Postponed Supplemental Pension. A Participant who at the request of
the Company retires on a Postponed Retirement Date shall be entitled to a
supplemental pension, commencing on his Postponed Retirement Date, which is
the Normal Supplemental Pension; provided, however, that, in the case of a
Participant entitled to a Normal Make-up Pension as provided in Section 3.1,
Normal Supplemental Pension shall be calculated on the basis of including in
Total Service for the purpose of Section 3.1(a) all years beyond Normal
Retirement Date.
3.6 Excess Supplemental Pension. A Participant whose Normal or Early or
Postponed Retirement Pension is reduced as a result of the application of the
limitation in Section 5.5 of the Plan shall be entitled to a supplemental
pension, commencing on his Retirement Date, equal to the amount of such
reduction.
3.7 Surviving Spouse's Pension. The Surviving Spouse of a Participant
having attained age 55, and having retired on or after July 1, 1974, or of a
Participant having attained age 65 on or after July 1, 1974 shall be entitled
to a Surviving Spouse's Pension equal to one-half of the normal form of the
Normal or Early or Postponed or Excess Supplemental Pension payable to such
deceased Participant under the Supplemental Plan. Such Surviving Spouse's
Pension shall be payable to such Spouse in equal monthly installments for
life, commencing on the first day of the month immediately following the death
of such Participant. In no event shall the Surviving Spouse who was also
designated as the Participant's Contingent Annuitant under the Plan receive
more than 100% of the retirement income payable to the Participant under the
Contingent Annuitant Option under the Plan.
3.8 Involuntary Termination Supplemental Pension.
(a) In addition to a Normal Supplemental Pension determined
under Section 3.3, if the employment of any Participant
(i) who is elected officer, and (ii) whose highest
annual Earnings (plus Incentive Compensation) is not
less than $200,000, is involuntarily terminated prior
to the 5th anniversary date of a "change in control"
(as hereinafter defined) and prior to his Normal
Retirement Date, and if, at the time of such
involuntary termination, such Participant has completed
10 or more years of Continuous Service and is within
the 10-year period immediately preceding his Normal
Retirement Date, such Participant shall be entitled to
an Involuntary Termination Supplemental Pension
commencing on his Normal Retirement Date, equal to the
excess of (i) the Normal Supplemental Pension computed
in accordance with Section 3.3, based on Total Service
9
rendered and as projected to be rendered to the 5th
anniversary of such change in control (or, if earlier,
his Normal Retirement Date) over (ii) the Normal
Supplemental Pension determined under Section 3.3. In
lieu thereof, such Participant shall, in the event he
elects an Early Retirement Date, receive an Involuntary
Termination Supplemental Pension commencing on such
Early Retirement Date, equal to the excess of (i) the
Early Supplemental Pension computed in accordance with
Section 3.4, based on Total Service rendered and as
projected to be rendered to the 5th anniversary of such
change in control (or, if earlier, his Normal
Retirement Date) multiplied by the early retirement
factor determined from the table set forth in Section
3.4, but based on the Participant's projected age on
the 5th anniversary date of such change in control (or,
if earlier, his Normal Retirement Date), over (ii) the
Early Supplemental Pension determined under Section
3.4.
(b) In addition to any supplemental pension determined
under Section 5.2, if the employment of any Participant
(other than a Participant described in (a) above (i)
who is an elected officer and (ii) whose highest annual
Earnings (including Incentive Compensation) is not less
than $200,000) is involuntarily terminated prior to the
5th anniversary date of a change in control and prior
to his Normal Retirement Date, and if such Participant
would have attained age 55 and been credited with at
least 15 years of Vesting Service had he continued to
be employed to such 5th anniversary date, such
Participant shall be entitled to an Involuntary
Termination Supplemental Pension commencing on the date
his supplemental pension under Section 5.2 commences,
equal to the excess of (i) the supplemental pension
computed in accordance with Section 5.2, based on Total
Service rendered and as projected to be rendered to the
5th anniversary of such change in control (or, if
earlier, his Normal Retirement Date), provided that, in
the event such Participant elects to receive his
supplemental pension commencing on a date prior to his
Normal Retirement Date, the Actuarial Equivalent
referred to in Section 5.2 shall be based on the
Participant's projected age on the 5th anniversary date
of such change of control (or, if earlier, his Normal
Retirement Date), over (ii) the supplemental pension
determined under Section 5.2
(c) For purposes of this Section 3.8, the term "involuntary
termination" means any action taken subsequent to a
change in control by the Company or any successor to,
or assignee of, its obligations under this Supplemental
Plan, terminating employment for other than an unlawful
act or, without the consent of a Participant, adversely
affecting the employment status by reducing earnings or
demoting in title, or lessening of authority or
responsibilities, or changing the situs of employment
which requires a change of residence, of such
Participant.
(d) For purposes of this Section 3.8, a change in control
shall occur if (i) any person (within the meaning of
10
Section 13(d) of the Securities Exchange Act of 1934
(the "Act")), other than Union Pacific Corporation or a
subsidiary of Union Pacific Corporation or any employee
benefit plan sponsored by Union Pacific Corporation or
a subsidiary of Union Pacific Corporation, shall become
the beneficial owner (as such term is defined in Rule
13d-3 under the Act) directly or indirectly of thirty
percent or more of the outstanding stock of Union
Pacific Corporation (calculated as provided in
paragraph (d) of Rule 13d-3 under the Act in the case
of rights to acquire common stock), (ii) the
shareholders of Union Pacific Corporation shall approve
(A) any consolidation or merger of Union Pacific
Corporation in which Union Pacific Corporation is not
the continuing or surviving corporation or pursuant to
which shares of common stock of Union Pacific
Corporation would be converted into cash, securities or
other property, other than a merger of Union Pacific
Corporation in which holders of common stock of Union
Pacific Corporation immediately prior to the merger
have the same proportionate ownership of common stock
of the surviving corporation immediately after the
merger as immediately before or (B) any sale, lease,
exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially
all the assets of Union Pacific Corporation or (iii)
there shall have been a change in the composition of
the Board of Directors of Union Pacific Corporation
such that within any period of two consecutive years or
less individuals who at the beginning of such period
constituted such Board, together with any new directors
whose election, or nomination for election by Union
Pacific Corporation's stockholders, was approved by a
vote of at least two-thirds of the directors then in
office who were directors at the beginning of such
period, shall for any reason no longer constitute a
majority of the directors of Union Pacific Corporation.
(e) In the event any amount paid or benefit otherwise
received by a Participant under the Supplemental Plan
shall be determined by the Internal Revenue Service to
constitute an "excess parachute payment" as such term
is defined in Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), and to be subject to
an excise tax under Section 4999 of the Code, or any
successor provision thereto (collectively, "Excise
Tax"), the Company shall pay to the Participant an
additional amount such that after taking into account
taxes, including interest and penalties with respect
thereto, incurred by the Participant on the receipt of
such additional amount, the Participant is left with
the same after-tax amount the Participant would have
been left with had no Excise Tax been imposed.
3.9 Pre-Termination Age and Service Grant. The pension to which a
Participant would otherwise be entitled hereunder shall be redetermined by
including in Total Service such additional years as may be approved by the
Chief Executive Officer of Union Pacific Corporation prior to termination of
Employment or by adding to such Participant's age such additional years as may
then be approved by the Chief Executive Officer of Union Pacific Corporation,
or both, but not in excess of five years in either case. All rights of a
11
Participant or his beneficiaries hereunder shall be determined on the basis of
such additional years. For purposes of Section 3.4 and Section 3.7, the age
of any Participant shall be determined by adding to such Participant's age
such additional years as were granted to such person under the Plan.
3.10 Suspension of Benefits. Notwithstanding any provisions of Article
Three or Article Five to the contrary, the payment of the supplemental pension
to which a Participant is otherwise entitled under the Supplemental Plan shall
be suspended during any period for which payment of the Retirement Pension to
which such Participant is otherwise entitled under the Plan is suspended under
the terms of the Plan due to such Participant's return to Employment. Upon
the resumption of payment of such supplemental pension to such Participant, no
actuarial or other adjustment shall be made to the amounts otherwise payable
to such Participant under the Supplemental Plan so as to reflect such
suspension.
12
ARTICLE FOUR
Manner of Payment
4.1 The supplemental pension to which a Participant is entitled under
Section 3.3, 3.4, 3.5 or 3.6 shall be paid to him in the same form as the
manner of payment in effect for him under Article Six of the Plan.
13
ARTICLE FIVE
Vesting
5.1 Termination Prior to Vesting. A Participant who terminates his
Employment prior to his Early or Normal Retirement Date and prior to his
completion of 3 years of Continuous Service shall not be entitled to any of
the benefits herein provided. If the Chief Executive Officer of Union Pacific
Corporation determines that the requirement set forth in the preceding
sentence of the completion of 3 years of Continuous Service would be
disadvantageous to the Company in the case of any Participant, such
requirement shall be increased to the completion of 5 years of Continuous
Service by the Participant. The Chief Executive Officer of Union Pacific
Corporation shall make his determination by the date the Participant
terminates his Employment.
5.2 Termination after Vesting. Except as provided in Section 6.2, a
Participant who terminates his Employment prior to his Normal or Early
Retirement Date but after his completion of 3 years or 5 years of Continuous
Service, whichever is applicable to him as determined under Section 5.1, shall
be entitled to receive, commencing on his Normal Retirement Date, the
supplemental pension accrued under the Supplemental Plan to the date he
terminated his Employment. In lieu thereof, such Participant may elect to
receive such supplemental pension commencing on the first day of any month
within the 10-year period preceding his Normal Retirement Date, in which case
such supplemental pension shall be the Actuarial Equivalent of the
supplemental pension which would have been payable on his Normal Retirement
Date, based upon the difference in age between the Participant's age when such
supplemental pension is to begin and his Normal Retirement Date.
5.3 Normal Form of Vested Benefit. The supplemental pension credited to
a vested terminated Participant shall be paid in equal monthly installments as
follows:
(a) If the Participant is married at the time payment is to
begin, his supplemental pension shall be paid in the
form of a 50% Contingent Annuitant Option calculated in
accordance with Section 6.3 of the Plan, with his
spouse as Contingent Annuitant.
(b) If the Participant is not married at the time payment
is to begin, his supplemental pension shall be in the
form of a life income pension, payable in equal
installments to him for life.
5.4 Optional Form of Vested Benefit. A vested terminated Participant
included in Section 5.3(a) above may elect at any time 90 or more days before
payment is to begin to receive his supplemental pension in the form of a life
income pension, payable in equal installments for life. If the vested
terminated Participant makes such election, no amount shall be payable to
his spouse under Section 5.3(a).
14
ARTICLE SIX
Employee Transfers
6.1 Transfers into Supplemental Plan from Other Supplemental Plan. If
any employee who is a participant in any other supplemental pension plan of an
Affiliate is transferred to the Company and is a Participant in this
Supplemental Plan after such transfer, such employee shall retain no rights in
the other supplemental pension plan from which he is transferred and shall
receive all benefits to which he is entitled under this Supplemental Plan,
based upon his Total Service which shall include as to such employee any
service used in determining his benefits under such other supplemental pension
plan.
6.2 Transfers to Other Supplemental Plans. If a Participant is
transferred to an Affiliate and becomes a participant in a supplemental
pension plan of the Affiliate after such transfer, such Participant shall
retain no rights in this Supplemental Plan if such other supplemental pension
plan has provisions that substantially conform to the transfer provisions for
the protection of transferees that are contained in this Article Six.
6.3 No Duplication of Benefits. There shall under no circumstances be
any duplication of benefits under this Supplemental Plan or any supplemental
pension plan of an Affiliate by reason of the same period of employment.
15
ARTICLE SEVEN
Optional Pre-Retirement Survivor's Benefit
7.1 Eligibility
(a) General - The Surviving Spouse of a Participant who had
at least one Hour of Service after August 22, 1984 and
who either (i) terminated Employment due to death prior
to his Normal Retirement Date or (ii) (A) terminated
Employment other than due to death after his completion
of 3 years or 5 years of Continuous Service, whichever
is applicable to him as determined under Section 5.1,
but prior to the 10-year period immediately preceding
his Normal Retirement Date and (B) died prior to the
time payment of the supplemental pension credited to
such Participant would otherwise have begun pursuant to
Section 5.3, shall, except to the extent provided in
subsection (b) of this Section 7.1, receive the benefit
determined pursuant to Section 7.2
(b) Waiver - The Surviving Spouse of a Participant
described in subsection (a) of this Section 7.1 shall
not receive that benefit determined pursuant to Section
7.2 if there is in effect, for purposes of Section 8.1
of the Plan, on the date of such Participant's death a
waiver with respect to such Participant complying with
the requirements of subsection (b) of Section 8.1 of
the Plan.
7.2 Benefit -
(a) General - The benefit payable to the Surviving Spouse
of a Participant described in Clause "(i)" of
subsection (a) of Section 7.1 shall be equal to 50% of
the supplemental pension, reduced to the extent
required pursuant to subsection (c) of this Section
7.2, such Participant would have received determined,
to the extent otherwise applicable, in accordance with
Section 3.4 had such Participant received a
supplemental pension (i) commencing as of the later of
(A) the earliest date on which such Participant's Early
Retirement Date could have occurred, had such
Participant not died prior thereto, based upon the
Total Service actually credited to such Participant, or
(B) the first day of the month immediately following
the date of such Member's death and (ii) in the form of
a 50% Contingent Annuitant Option calculated in
accordance with Section 6.3 of the Plan, with his
Surviving Spouse as Contingent Annuitant. The benefit
payable to the Surviving Spouse of a Participant
described in clause "(ii)" of subsection (a) of Section
7.1 shall be equal to 50% of the supplemental pension,
reduced to the extent required pursuant to subsection
(c) of this Section 7.2, such Participant would have
received determined, to the extent otherwise
applicable, under Section 5.2 had such Participant
commenced receiving a supplemental pension (i)
commencing as of the later of (A) the earliest date on
which such Participant could have commenced receiving
16
his supplemental pension pursuant to Section 5.2, had
such Participant not died prior thereto, based upon the
Total Service actually credited to such Participant or
(B) the first day of the month immediately following
the date of such Participant's death and (ii) in the
form of 50% Contingent Annuitant Option, calculated in
accordance with Section 6.3 of the Plan, with his
Surviving Spouse as Contingent Annuitant.
(b) Timing - The benefit a Surviving Spouse of a
Participant shall be entitled to pursuant to subsection
(a) of the Section 7.2 shall be paid monthly to such
Surviving Spouse, commencing as of the later of (i) the
earliest date on which (A) such Member's Early
Retirement Date could have occurred or (B) such
Participant could have commenced receiving his
supplemental pension pursuant to Section 5.2, as the
case may be, had such Participant not died prior
thereto or (ii) the first day of the month immediately
following the date of such Participant's death and
shall continue thereafter with the last payment being
made on the first day of the month in which the
Surviving Spouse dies.
(c) Cost of Benefit - For purposes of determining the
benefit payable pursuant to subsection (a) of this
Section 7.2 to the Surviving Spouse of a Participant
described in subsection (a) of Section 7.1, the
supplemental pension such Participant would have
received as of the date which is relevant under
subsection (a) of this Section 7.2 in determining the
amount of the benefit payable to such Surviving Spouse,
determined under whichever provisions of the
Supplemental Plan would have been applicable with
respect to such Participant, shall be reduced by the
sum of:
(i) if such Participant had attained at least 55 years
of age and completed at least 10 years of Vesting
Service (including in such Vesting Service not
less than 5 years of Continuous Service) prior to
August 23, 1984, 1/24 of 1% for each calendar
month or part thereof prior to August 23, 1984 for
which such Participant had in effect an election
prior to the amendment and restatement of such
Article effective as of August 22, 1984 and
(ii) 1/24 of 1% for each calendar month or part thereof
subsequent to December 31, 1986 with respect to
which a 1/24 of 1% per month reduction is imposed
under Article Eight of the Plan in determining the
benefit payable to such Surviving Spouse under
such Article Eight or would be so imposed under
such Article Eight were the number of such
Participant's years of Continuous Service under
the Plan equal to the number of such Participant's
years of Total Service.
7.3 Reduction in Participant's Retirement Pension - Notwithstanding any
other provision of the Supplemental Plan to the contrary, a Participant who
has at least one Hour of Service after August 22, 1984 shall have such
Participant's supplemental pension, determined under whichever provisions of
17
the Supplemental Plan shall be applicable to such Participant, reduced for all
purposes of the Supplemental Plan in an amount equal to the reduction which
would have occurred under subsection (c) of Section 7.2 with respect to such
Participant's supplemental pension had such Participant died on the day
immediately preceding the earlier of (i) the date on which such Participant
attains age 65, (ii) the date with respect to which payment of the
supplemental pension credited to such Participant shall commence or (iii) if
such Participant terminates Employment within the 10-year period immediately
preceding his Normal Retirement Date, the date such Member terminates
Employment.
18
ARTICLE EIGHT
Administration
8.1 Administration. To the extent herein provided, the Senior Vice
President-Human Resources of Union Pacific shall have authority to control and
manage the operation and administration of the Supplemental Plan. For
purposes of the Supplemental Plan, the Senior Vice President-Human Resources
of Union Pacific shall be referred to as the Administrator.
8.2 Responsibilities and Powers of Administrator. Except for the
responsibilities and powers elsewhere herein given specifically to the Board
of Directors, the Administrator shall have all responsibilities for the
operation and administration of the Supplemental Plan and shall have all
powers necessary to carry out his responsibilities hereunder. Without
limiting the generality of the foregoing, the Administrator shall have the
responsibility and power to:
(a) keep and maintain such accounts and records with
respect to Participants as he may deem necessary or
proper;
(b) determine all questions of the eligibility and of the
status and rights of Participants and any other person
hereunder and interpret and construe the Supplemental
Plan in connection therewith; and,
(c) adopt from time to time mortality and other tables and
interest rates upon which all actuarial calculations
shall be based, including the determination of the
appropriate factors for the adjustment of pension
payments.
The Administrator shall carry out all his responsibilities and exercise all
his powers in accordance with the terms of the Supplemental Plan. The
determination of the Administrator as to any questions involving his
responsibilities hereunder shall be conclusive and binding on all persons.
8.3 Certification and Payment of Benefits. The Administrator shall
compute the amount and manner of payment of benefits to which the
Participants, retired Participants, Surviving Spouses and beneficiaries become
entitled. All payments of benefits shall be made directly by the Company upon
the instructions of the Administrator.
8.4 Reports to Board of Directors. As he deems necessary or proper or
as the Board of Directors may require, but in any event at least once during
each calendar year, the Administrator shall report to the Board of Directors
on the operation and administration of the Supplemental Plan and on any other
matter concerning the Supplemental Plan he deems advisable or required by the
Board of Directors.
8.5 Designation and Delegation. The Administrator may designate other
persons to carry out such of his responsibilities hereunder for the operation
and administration of the Supplemental Plan as he deems advisable and delegate
to the persons so designated such of his powers as he deems necessary to carry
out such responsibilities. Such designation and delegation shall be subject
to such terms and conditions as the Administrator deems necessary or proper.
Any action or determination made or taken in carrying out responsibilities
19
hereunder by the persons so designated by the Administrator shall have the
same force and effect for all purposes as if such action or determination had
been made or taken by the Administrator.
8.6 Outside Services. The Administrator may engage counsel and such
clerical, medical, financial, actuarial, accounting and other specialized
services as he may deem necessary or desirable for the operation and
administration of the Supplemental Plan. The Administrator and persons
designated by him under Section 8.5 shall be entitled to rely, and shall
be fully protected in any action or determination or omission taken or made or
omitted in good faith in so relying, upon any opinions, reports or other
advice which is furnished by counsel or their specialist engaged for that
purpose.
8.7 Expenses. All expenses, including any fees for outside services
under Section 8.6, incurred by the Administrator and by persons designated by
him under Section 8.5 in the operation and administration of the Supplemental
Plan shall be paid by the Company. Neither the Administrator nor any
other person who is an Employee shall receive any compensation solely for
services in carrying out any responsibility hereunder.
8.8 Bonding. No bond or other security shall be required of the
Administrator or of any person designated by him under Section 8.5.
8.9 Liability. The Administrator and persons designated by him under
Section 8.5 shall use ordinary care and diligence in the performance of their
duties. The Company shall indemnify the Administrator and each other person
designated by him under Section 8.5 against any and all claims, loss,
damages, expense (including reasonable counsel fees), and liability arising
from any action or failure to act or other conduct in their official capacity,
except when the same is due to the gross negligence or willful misconduct of
the Administrator or other persons.
20
ARTICLE NINE
Amendment or Termination
9.1 Amendment or Termination - The Board of Directions reserves the
right to modify, alter, amend or terminate the Supplemental Plan from time
to time and to modify, withdraw or terminate any pension granted under the
Supplemental Plan, to any extent that it may deem advisable; provided, that no
such modification, alteration, amendment or termination shall impair any
rights which have accrued to Participants hereunder to the date of such
modification, alteration, amendment or termination.
21
ARTICLE TEN
General Provisions
10.1 No Right To Employment. Nothing herein contained shall be deemed
to give any Participant the right to be retained in the Employment of the
Company or to interfere with the rights of the Company to discharge any
Participant at any time.
10.2 Alienability of Benefits. Pension payments under the Supplemental
Plan may not be assigned or hypothecated, and to the extent permitted by law,
no such payments shall be subject to legal process or attachment for the
payment of any claims against any person entitled to receive the same.
10.3 Payment Due an Incompetent. If it shall be found that any person
to whom a payment is due hereunder is unable to care for his affairs
because of physical or mental disability, as determined by a licensed
physician, the Administrator shall have the authority to cause the payments
becoming due such person to be made to the legally appointed guardian of any
such person or to the spouse, brother, sister, or other person as it shall
determine. Payments made pursuant to such power shall operate as a complete
discharge of the Company.
10.4 Controlling State Law. The Plan shall be construed, regulated and
administered according to the laws of the State of Utah.
10.5 Successors. This Supplemental Plan shall be binding upon 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 in the same manner and to the same extent that the Company would be
bound to perform if no such succession had taken place.
22
ARTICLE ELEVEN
Transfers to Non-Covered Employment
11.1 Notwithstanding any of the provisions of the Supplemental Plan to
the contrary, if an executive participating in the Plan is transferred to
the employment of a member of the controlled group of corporations of which
Union Pacific Corporation is the common parent that has not adopted either the
Plan or the Pension Plan for Employees of Union Pacific Resources Company
("non-covered employment"), upon the approval of the Chief Executive Officer
of Union Pacific Corporation, any benefits to which such executive would be
entitled under the Plan or the Supplemental Plan, or both, by treating such
executive's non-covered employment as if it were service covered by such Plans
and by aggregating such service with such executive's other service
covered by such plans shall be provided to such executive pursuant to the
provisions of this Article Eleven to the extent that such benefits exceed such
executive's benefits under the Plan, such executive benefits under the
Supplemental Plan determined without regard to the provisions of this Article
Eleven and such executive benefits under any other pension plan that are based
upon such executive benefits under any other pension plan that are based upon
such executive's non-covered employment. If any beneficiary would be entitled
to any benefits under the Plan or the Supplemental Plan, or both, as a result
of treating such executive's non-covered employment as if it were service
covered by such Plans and by aggregating such service with such executive's
other service covered by such Plans, such benefits shall be provided to such
beneficiary pursuant to the provisions of this Article Eleven to the extent
that such benefits exceed such beneficiary's benefits under the Plan, such
beneficiary's benefits under the Supplemental Plan determined without regard
to the provisions of this Article Eleven and such beneficiary's benefits under
any other pension plan that are based upon such executive's non-covered
employment.