Exhibit 10.1
   
                                                          
   September 8, 1998
   
   
   
   PERSONAL AND CONFIDENTIAL
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   Mr. Ivor J. Evans
   13108 Conway Grove Lane
   St. Louis, MO  63141
   
   Dear Ike:
   
   As we discussed in connection with your joining us as President and Chief
   Operating Officer of Union Pacific Railroad, this confirms that you are
   guaranteed a bonus of $300,000 for 1999, payable following the end of the
   year.  In addition, in the event you are involuntarily terminated within
   three years of the date you commence employment, otherwise than for cause,
   you will be entitled to a severance payment of two years' salary and bonus
   (not including signing bonus) and early vesting of the Retention Stock
   awarded to you in connection with your joining Union Pacific.  For this
   purpose, cause shall mean the willful engaging in conduct that is
   demonstrably and materially injurious to the Company, monetarily or
   otherwise.
   
   If you concur with the above, please sign the second copy of this letter
   and return it to me.
   
   Sincerely,
   
   
   /s/  Dick Davidson
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   DICK DAVIDSON
   

   
   
   Approved:   /s/ IVOR J. EVANS           Dated:      September 8, 1998
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