Written Description of Premium Exchange Program Pursuant to 1993 Stock Option
                           and Retention Stock Plan of
                            Union Pacific Corporation


On September 30, 1999 the Union Pacific  Corporation  ("UPC") Board of Directors
approved the Executive  Incentive Premium Exchange Program (the "EIPEP").  Under
the EIPEP,  an  executive  eligible to receive an award under the Union  Pacific
Corporation  Executive Incentive Plan (the "EIP") may elect to exchange all or a
portion  of his or her right to  receive  an award  under the EIP for  grants of
retention stock units under the Union Pacific  Corporation 1993 Stock Option and
Retention  Stock  Plan  equal to 150% of the  incentive  amount  foregone,  with
retention stock units valued at the fair market value of UPC Common Stock on the
day incentive awards are approved. Retention stock units granted under the EIPEP
are  generally  subject  to a  three-year  vesting  period.  If a  participant's
employment is involuntarily  terminated before the three-year period is met, the
participant  retains the retention  stock units equal to the original  incentive
award  foregone,  plus a pro rata  number of premium  stock  units  based on the
number of full months the participant was employed during the three-year vesting
period. If a participant dies, the retention stock units vest immediately. Until
the retention  stock units are vested,  an amount equal to dividends are paid in
cash to the participant.
Retention stock units are paid out in shares of UPC Common Stock.