<PAGE>
As filed with the Securities and Exchange Commission on February 28, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
Union Pacific Resources Group Inc.
(Exact name of issuer as specified in its charter)
Utah 13-2647483
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 Cherry Street
Fort Worth, Texas 76102
(817)877-6000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEE'S THRIFT PLAN AND
1995 STOCK OPTION AND RETENTION STOCK PLAN
(Full title of the plans)
---------------
Mark L. Jones
General Attorney
Union Pacific Resources
Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
(Name and address of agent for service)
(817)877-6000
(Telephone number, including area code, of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Title of securities to be Amount to be Proposed maximum Proposed maximum Amount of registration
registered registered offering price per aggregate offering fee
share(1) price (1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 3,700,000(2)(4) $24.50 $286,650,000 $86,864
value 8,000,000(3)(4)
============================================================================================================
</TABLE>
(1) Estimated pursuant to paragraph (h) of Rule 457 soley for the purpose of
calculating the registration fee based on the average of the reported high
and low sales prices for a share of Common Stock on February 25, 1997,
as reported on the New York Stock Exchange.
(2) Represents 3,700,000 shares that may be offered and sold pursuant to the
Union Pacific Resources Group Inc. Employee's Thrift Plan.
(3) Represents 8,000,000 of the 16,000,000 shares that may be offered or sold
pursuant to the 1995 Stock Option and Retention Stock Plan.
(4) Pursuant to Rule 416 under the Securities Act of 1933, this registration
statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock
dividends, recapitalizations or certain other capital adjustments.
================================================================================
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents as filed by Union Pacific Resources Group Inc.
(the "Registrant") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934 are incorporated
by reference in this registration statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
(b) The Registrant's Quarterly Report on Form 10-Q for the period ended
March 31, 1996.
(c) The Registrant's Quarterly Report on Form 10-Q for period ended June
30, 1996.
(d) The Registrant's Quarterly Report on Form 10-Q for period ended
September 30, 1996.
(e) The description of the Registrant's shares of Common Stock, no par
value (the "Common Stock") set forth in the Registrant's Registration Statement
on Form 8-A, filed by the Registrant with the Commission on August 23, 1995 to
register such securities under the Securities Exchange Act of 1934.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 after the date of this
registration statement and prior to the filing of a post-effective amendment to
this registration statement that indicates that all securities offered hereby
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any other subsequently filed document that is also
incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part hereof.
Experts.
The financial statements incorporated in this Registration Statement by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for periods
ended March 31, 1996 and 1995, June 30, 1996 and 1995 and September 30, 1996 and
1995 which is incorporated herein by reference, Deloitte & Touche LLP have
applied limited procedures in accordance with professional standards for a
review of such information. However, as stated in their reports included in the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996 and incorporated by reference herein, they
did not audit and they do not express an opinion on that interim
II-1
<PAGE>
financial information. Accordingly, the degree of reliance on their reports on
such information should be restricted in light of the limited nature of the
review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Act.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the issuance of the shares of Common Stock described
herein has been passed upon for the Registrant by Mark L. Jones, General
Attorney of the Company. Mr. Jones has less than 1% share of Common Stock of
the Registrant.
Item 6. Indemnification of Directors and Officers.
The Registrant is a Utah corporation. Section 16-10a-901 et. seq. of the
Utah Revised Business Corporation Act grants to a corporation the power to
indemnify an individual made a party to a lawsuit or other proceeding because
such party is or was a director or officer. A corporation is further empowered
under Section 16-10a-908 to purchase insurance on behalf of any person who is or
was a director or officer against any liability asserted against him or her and
incurred by him or her in such capacity or arising out of his or her status as
such. The Registrant's By-Laws provides for mandatory indemnification of its
directors, officers and employees and those of its subsidiaries, against
liability asserted against them arising out of their status as such. The
Registrant maintains insurance on behalf of directors and officers against
liability asserted against them arising out of their status as such.
The Registrant's Articles of Incorporation eliminate in certain
circumstances the personal liability of directors of the Registrant for monetary
damages for their action or failure to act as a director. These provisions do
not eliminate the liability of a director for (i) the amount of a financial
benefit received by a director to which he is not entitled, (ii) an intentional
infliction of harm on the corporation or the shareholders, (iii) a violation of
Section 16-10a-842 of the Utah Revised Business Corporation Act (relating to the
liability of directors for unlawful distributions) or (iv) an intentional
violation of criminal law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to statute, its By-laws, or otherwise, the Registrant has
been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
II-2
<PAGE>
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration statement:
Exhibit
Number Exhibit
- ------ -------
4.1 Union Pacific Resources Group Inc. Employee's Thrift Plan
4.2 1995 Stock Option and Retention Stock Plan
5 Opinion of Mark L. Jones, Esq.
15 Awareness Letter of Deloitte & Touche LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mark L. Jones, Esq.,
(included in Exhibit 5)
24 Power of Attorney
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(i)(3) of the Securities Act of 1993;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the registration statement is on
Form S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the
II-3
<PAGE>
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Worth, State of Texas, on this 28th day of
February, 1997.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ Joseph A. LaSala, Jr.
__________________________________
Joseph A. LaSala, Jr.
Title: Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on this 28th day of February, 1997,
by the following persons in the capacities indicated.
Signatures Titles
- ---------- ------
/s/ Jack L. Messman Chairman, Chief Executive Officer and Director
----------------------- (Principal Executive Officer)
Jack L. Messman
/s/ Morris B. Smith Vice President and Chief Financial Officer
----------------------- (Principal Financial Officer)
Morris B. Smith
/s/ John E. Jackson Controller (Principal Accounting Officer)
-----------------------
John E. Jackson
H. Jesse Arnelle* Director
Lynne V. Cheney* Director
Preston R. Geren III* Director
Lawrence M. Jones* Director
Drew Lewis* Director *By: /s/ Mark L. Jones
Claudine B. Malone* Director -----------------------------------
Jack L. Messman* Director (Mark L. Jones as Attorney-in-Fact)
John W. Poduska, Sr.* Director
Samuel K. Skinner* Director
James R. Thompson* Director
II-5
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Trustee for the Union Pacific Resources Group Inc. Employee's Thrift Plan have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the city of Fort Worth, state of
Texas, on February 28, 1997.
UNION PACIFIC RESOURCES GROUP INC.
EMPLOYEE'S THRIFT PLAN
By: /s/ Anne M. Franklin
-----------------------------------
Anne M. Franklin
Title: Vice President - People/Named
Fiduciary - Plan Administration
II-6
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
4.1 Union Pacific Resources Group Inc. Employee's Thrift Plan
4.2 1995 Stock Option and Retention Stock Plan
5 Opinion of Mark L. Jones, Esq.
15 Awareness Letter of Deloitte & Touche LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mark L. Jones, Esq. (included in Exhibit 5)
24 Power of Attorney
II-7
<PAGE>
Exhibit 4.1
<PAGE>
January 31, 1997
UNION PACIFIC RESOURCES GROUP INC.
EMPLOYEES' THRIFT PLAN
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
Article Subject Matter Page
- ------- -------------- ----
I Statement of Purpose 1
1.01 Background and Purpose 1
1.02 Rights Affected 1
1.03 Qualification Under the Internal Revenue Code 1
1.04 Documents 1
II Definitions 2
III Participation Eligibility 16
3.01 Eligibility to Participate 16
3.02 Procedure for Admission 16
IV Contributions and Leveraged ESOP 18
4.01 Before-Tax Contributions and After-Tax Employee Contributions 18
4.02 Matching Contributions and ESOP Loan Repayment Contributions 19
4.03 Rollover Contributions 20
4.04 Contributions With Respect to Military Service 20
4.05 Timing of Contributions 20
4.06 Contingent Nature of Contributions 20
4.07 Exclusive Benefit; Refund of Contributions 21
4.08 Leveraged ESOP 21
V Limitations on Contributions 24
5.01 Calendar Year Limitation on Before-Tax Contributions 24
5.02 Nondiscrimination Limitations on Certain Contributions 24
5.03 Correction of Discriminatory Contributions 26
5.04 Annual Additions Limitations 29
VI Investment and Valuation of Trust Fund; Maintenance of Accounts 31
6.01 Investment of Assets 31
6.02 Participant Investment Direction 31
6.03 Investment Elections 32
6.04 Change of Election 32
6.05 Transfers Between Investment Funds 33
6.06 Loan Funds 34
6.07 Individual Accounts 34
6.08 Allocations of Earnings and Losses 35
6.09 Allocation to Individual Accounts 35
6.10 Valuation for Distribution 35
6.11 Exercise of Common Stock Voting Rights 36
i
<PAGE>
6.12 Tender Offer Response on Common Stock 37
6.13 Voting and Tender of Mutual Fund Shares 37
6.14 No Withdrawal of PAYSOP Contributions 38
VII Vesting 39
7.01 Full and Immediate Vesting 39
7.02 Vesting of Company Contribution Account and Matching
Contribution Account 39
7.03 Effects of Break in Service 40
7.04 Forfeiture of Nonvested Amounts and Restoration
Upon Reemployment 40
7.05 Vesting Following In-Service Withdrawals or Payment
in Installments 41
VIII Benefit Distributions 42
8.01 Death Benefits 42
8.02 Benefits Upon Separation from Service 42
8.03 Withdrawals 43
8.04 Form of Benefit Payment 47
8.05 Beneficiary Designation Right 49
8.06 Required Distribution Dates 50
8.07 Rights of Alternate Payees 51
8.08 Post Distribution Credits 53
8.09 Suspension of Payments 53
8.10 Direct Rollovers 53
IX Participant Loans 54
9.01 In General 54
9.02 Loans as Trust Fund Investments 55
X Provisions Relating to Top-Heavy Plans 60
10.01 Definitions 60
10.02 Determination of Top-Heavy Status 62
10.03 Top-Heavy Plan Minimum Allocation 62
10.04 Top-Heavy Plan Maximum Allocations 63
10.05 Top-Heavy Vesting Schedule 63
XI Named Fiduciary-Plan Administration 65
11.01 Appointment and Tenure 65
11.02 Authority and Responsibility of the Named
Fiduciary-Plan Administration 65
11.03 Reporting and Disclosure 66
11.04 Construction of the Plan 67
11.05 Compensation of the Named Fiduciary-Plan Administration 67
ii
<PAGE>
XII Allocation and Delegation of Authority 68
12.01 Authority and Responsibilities of the Board of Directors 68
12.02 Authority and Responsibilities of the Finance Committee 68
12.03 Authority and Responsibilities of the Named
Fiduciary-Plan Administration 68
12.04 Authority and Responsibilities of the Trustee 68
12.05 Authority and Responsibilities of the Named
Fiduciary-Plan Investments 68
12.06 Limitations on Obligations of Named Fiduciaries 69
12.07 Reports to Board of Directors 69
12.08 Designation and Delegation 69
12.09 Engagement of Assistants and Advisers 70
12.10 Bonding 70
12.11 Indemnification 71
XIII Claims Procedures 72
13.01 Application for Benefits 72
13.02 Appeals of Denied Claims for Benefits 72
XIV Amendment and Termination 74
14.01 Amendment 74
14.02 Amendments to the Vesting Schedule 74
14.03 Plan Termination 75
14.04 Mergers and Consolidations of Plans 75
XV Miscellaneous Provisions 76
15.01 Nonalienation of Benefits 76
15.02 No Contract of Employment 76
15.03 Severability of Provisions 76
15.04 Heirs, Assigns and Personal Representatives 76
15.05 Headings and Captions 76
15.06 Gender and Number 76
15.07 Controlling Law 77
15.08 Funding Policy 77
15.09 Title to Assets; Source of Benefits 77
15.10 Payments to Minors, Etc. 77
15.11 Reliance on Data and Consents 77
15.12 Lost Payees 77
15.13 No Warranties 78
15.14 Notices 78
XVI Transfers Between the Plan and the Union Pacific
Corporation Thrift Plan 79
16.01 Transfer to the Plan 79
16.02 Transfer to UPC Thrift Plan 80
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<PAGE>
XVII Transfers of Certain Employees to CCPC Chemical Inc. 81
17.01 Scope 81
17.02 Vesting 81
17.03 Transfer Election 81
17.04 Effect of Transfer Election on Final Distribution 81
17.05 Effect of Transfer Election on Loans 82
17.06 Transfer of Accounts 82
17.07 Successor Employer 82
XVIII Transfers of Certain Employees to GATX Corporation 83
18.01 Scope 83
18.02 Vesting 83
18.03 Transfer Election 83
18.04 Effect of Transfer Election on Final Distribution 83
18.05 Effect of Transfer Election on Loans 83
18.06 Transfer of Accounts 84
XIX Transfers of Certain Employees to American Ultramar Limited 85
19.01 Scope 85
19.02 Vesting 85
19.03 Transfer Election 85
19.04 Effect on Right to Distribution 85
XX Distributions to Employees of USPCI, Inc. 87
20.01 Eligibility 87
20.02 Separation from Service 87
20.03 Form of Benefit Payment 87
20.04 Outstanding Loan 87
20.05 Other Distributions 87
iv
<PAGE>
ARTICLE I
STATEMENT OF PURPOSE
Sec. 1.01 Background and Purpose. The Union Pacific Resources Company (the
"Company") maintains the Union Pacific Resources Company Employees' Thrift Plan
(the "Plan") for the benefit of Covered Employees. In its original form, the
Plan was established on April 18, 1957. The purpose of the Plan is to enable
Covered Employees to increase personal long-term savings through the tax
deferral opportunities offered under section 401(k) of the Code, from
contributions made by Eligible Employees on an after-tax basis, from
contributions made by the Company and any Affiliated Companies participating in
the Plan and from the results generated by investment of the assets of the Plan
in the tax-sheltered environment offered by the Plan's trust. Since its
inception, the Plan has been amended many times. Most recently, the Plan was
amended for the purpose of complying with requirements of the Tax Reform Act of
1986 and subsequent changes in the law and to reflect the Company's spin-off
from Union Pacific Corporation. Effective January 1, 1997 (the "Effective
Date"), the Plan is amended and restated for the purpose of adding a leveraged
employee stock ownership feature and to make other desired changes.
Sec. 1.02 Rights Affected. Except as provided to the contrary herein, the
provisions of this amended and restated Plan shall apply only to Employees who
complete an Hour of Service as described in Section 2.42(a)(1) on or after the
Effective Date. The rights of any other person shall be governed by the Plan as
in effect on the date of his Separation from Service, except to the extent
expressly provided in any amendment adopted subsequently thereto.
Notwithstanding the above, the provisions of Articles VI, VIII, IX and XIII of
this amended and restated Plan shall apply to all Participants, including
Participants whose Separation from Service occurred prior to the Effective Date.
Sec. 1.03 Qualification Under the Internal Revenue Code. It is intended
that the Plan be a qualified profit-sharing plan within the meaning of section
401(a) of the Code, that the requirements of section 401(k) of the Code be
satisfied as to that portion of the Plan represented by contributions made
pursuant to Participant Before-Tax Contribution elections, that the Plan be an
employee stock ownership plan, within the meaning of section 4975(e)(7) of the
Code, with respect to (a) the portion of the Plan consisting of Participants'
PAYSOP Contribution Accounts and (b) the portion of the Plan consisting of the
leveraged employee stock ownership feature, and that the trust or other funding
vehicle associated with the Plan be exempt from federal income taxation pursuant
to the provisions of section 501(a) of the Code.
Sec. 1.04 Documents. The Plan consists of the Plan document as set forth
herein, and any amendment thereto. Certain provisions relating to the Plan and
its operation are contained in the corresponding Trust Agreement (or documents
establishing any other funding vehicle for the Plan), and any amendments,
supplements, appendices and riders to any of the foregoing.
1
<PAGE>
ARTICLE II
DEFINITIONS
Sec. 2.01 "Account" shall mean the entire interest of a Participant in the
Plan. A Participant's Account shall consist of one or more separate accounts
reflecting the various types of contributions permitted under the Plan, as
hereinafter provided.
Sec. 2.02 "Acquisition Loan" shall mean a loan or other extension of
credit described in section 4975(d)(3) of the Code which is used to finance the
purchase of the Company's Common Stock by the Trustee.
Sec. 2.03 "Actual Deferral Percentage" shall mean the ratio (expressed as
a percentage to the nearest one-hundredth of one percent) of (a) an Eligible
Employee's Before-Tax Contributions for the Plan Year (excluding any Before-Tax
Contributions that are (1) taken into account in determining the Contribution
Percentage described in Section 2.27, (2) distributed to an Eligible Employee
who is not a Highly Compensated Employee pursuant to a deemed claim for
distribution under Section 5.01, or (3) returned to the Participant pursuant to
Section 5.04) plus, in the case of any Highly Compensated Employee who is
simultaneously eligible to participate in more than one cash or deferred
arrangement maintained by the Employer or an Affiliated Company, elective
deferrals made on his behalf under all such arrangements (excluding those that
are not permitted to be aggregated with the Plan under Treas. Reg.
ss.1.401(k)-1(b)(3)(ii)(B)) for the Plan Year, to (b) the Employee's
Compensation for the Plan Year.
Sec. 2.04 "Affiliated Company" shall mean (a) any entity which, with any
Employer, constitutes (1) a "controlled group of corporations" within the
meaning of section 414(b) of the Code, (2) a "group of trades or businesses
under common control" within the meaning of section 414(c) of the Code, or (3)
an "affiliated service group" within the meaning of section 414(m) of the Code
or (b) is required to be aggregated with any Employer pursuant to Treasury
regulations under section 414(o) of the Code. An entity shall be considered an
Affiliated Company only with respect to such period as the relationship
described in the preceding sentence exists. When the term "Affiliated Company"
is used in Section 2.08 or 5.04, sections 414(b) and (c) of the Code shall be
deemed modified by application of the provisions of section 415(h) of the Code,
which substitutes the phrase "more than 50 percent" for the phrase "at least 80
percent" in section 1563(a)(1) of the Code, which is then incorporated by
reference in sections 414(b) and (c).
Sec. 2.05 "After-Tax Employee Contribution" shall mean an Employee
contribution made to the Plan on or after July 1, 1983 pursuant to Section
4.01(a)(1)(B) (or Article Nine of the Plan as in effect prior to January 1,
1989).
Sec. 2.06 "After-Tax Employee Contribution Account" shall mean so much of
a Participant's Account as consists of a Participant's After-Tax Employee
Contributions made to
2
<PAGE>
the Plan, including all earnings and gains attributable thereto and reduced by
all losses attributable thereto, all expenses chargeable thereagainst and by all
withdrawals and distributions therefrom.
Sec. 2.07 "Alternate Payee" shall mean the person entitled to receive
payment of benefits under the Plan pursuant to a QDRO.
Sec. 2.08 "Annual Addition" shall mean, for any Participant for any
Limitation Year, the sum of the following amounts allocated to a Participant's
accounts under the Plan and any other qualified defined contribution plan
maintained by the Employer or an Affiliated Company:
(a) Employer contributions (including Matching Contributions, Before-Tax
Contributions (except Before-Tax Contributions distributed pursuant to Section
5.01), ESOP Matching Contributions, and excess shares allocated pursuant to
Section 4.08(b)(4));
(b) the total amount of Participant contributions for the year, including
After-Tax Employee Contributions and mandatory or voluntary employee
contributions made under a qualified defined benefit plan or defined
contribution plan of the Employer or an Affiliated Company, but excluding
Rollover Contributions and amounts repaid pursuant to Section 9.02(e);
(c) forfeitures; and
(d) amounts described in section 415(l)(1) of the Code (relating to
contributions allocated to individual medical accounts which are part of a
pension or annuity plan) and section 419A(d)(2) of the Code (relating to
contributions allocated to post-retirement medical benefit accounts for key
employees).
Sec. 2.09 "Approved Absence" shall mean the period during which a person
absents himself from work without compensation, by reason of: (a) a period of
absence with the approval or at the requirement of the Employer or an Affiliated
Company, provided that such person returns to work for the Employer or such
Affiliated Company at such time as the Employer or such Affiliated Company may
reasonably require, or (b) a family or medical leave within the meaning of the
Family and Medical Leave Act of 1993. In the authorization of an Approved
Absence under subsection (a) and in the requirements set forth with respect to
assuring the return of the Employee to work within a reasonable time, the
Employer or an Affiliated Company shall treat all Employees under similar
circumstances in a like manner.
Sec. 2.10 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent) of the
Actual Deferral Percentages of a specified group of Eligible Employees.
Sec. 2.11 "Average Contribution Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent) of the
Contribution Percentages of a specified group of Eligible Employees. The Average
Contribution Percentage shall be calculated separately for purposes of Sections
5.03(b) and (c), as provided in Section 2.27.
3
<PAGE>
Sec. 2.12 "Basic Employee Contributions" shall mean the contributions made
to the Plan by an individual on his own behalf with respect to periods ending
before July 1, 1983, pursuant to the provisions of the Plan as in effect prior
to July 1, 1983, which were eligible, pursuant to such provisions, for matching
contributions by the Employer.
Sec. 2.13 "Before-Tax Contribution" shall mean the portion of a
Participant's Compensation which is reduced on or after July 1, 1983 in
accordance with Section 4.01(a)(1)(A) or 4.01(a)(2) (or Articles Five through
Eight of the Plan as in effect prior to January 1, 1989) and with respect to
which a corresponding contribution is made to the Plan by the Employer pursuant
to Section 4.01(c).
Sec. 2.14 "Before-Tax Contribution Account" shall mean so much of a
Participant's Account as consists of his Before-Tax Contributions made to the
Plan, including all earnings and gains attributable thereto, and reduced by all
losses attributable thereto, all expenses chargeable thereagainst and by all
withdrawals and distributions therefrom.
Sec. 2.15 "Beneficiary" shall mean the person or persons designated or
otherwise determined to be such in accordance with Section 8.05.
Sec. 2.16 "Benefit Payment Date" shall mean, for any Participant or
Beneficiary of a deceased Participant, the date as of which the first benefit
payment, including a single sum, from a Participant's Account is due; provided,
however, that (a) the Benefit Payment Date applicable to any amount withdrawn
pursuant to Section 8.03 shall not be taken into account in determining the
Participant's Benefit Payment Date with respect to the remainder of his Account
and (b) the Benefit Payment Date applicable to any amount paid to a Participant
pursuant to Section 8.04(h) while he is an Employee shall not be taken into
account in determining the Participant's Benefit Payment Date with respect to
the remainder of his Account for purposes of Section 8.01.
Sec. 2.17 "Board of Directors" shall mean the board of directors of the
Company.
Sec. 2.18 "Break in Service" shall mean a Computation Period in which an
Employee or former Employee is not credited with more than five hundred (500)
Hours of Service.
If an Employee is absent from work by reason of pregnancy, childbirth, or
placement in connection with adoption, or for purposes of the care of such
Employee's child immediately after birth or placement in connection with
adoption, such Employee shall be credited, solely for purposes of determining
whether he has incurred a Break in Service, with the Hours of Service with which
such Employee would have been credited but for the absence; or, if such hours
cannot be determined, with eight (8) Hours of Service per normal workday. The
total number of hours to be treated as Hours of Service under this paragraph
shall not exceed five hundred and one (501). The hours described in this
paragraph shall be credited either for the Computation Period in which the
absence from work begins, if the Employee would be prevented from incurring a
Break in Service in such Computation Period because the period of absence is
treated as Hours of Service under this paragraph, or, in any case, for the
Computation Period next following the one in which the absence from work begins.
In order for an absence to be considered as on account of the reasons described
in this paragraph, an Employee shall provide
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the Named Fiduciary-Plan Administration, in the form and manner prescribed by
the Named Fiduciary-Plan Administration, information establishing (a) that the
absence from work is for reasons set forth in this paragraph, and (b) the number
of days for which there was such an absence. Nothing in this paragraph shall be
construed as expanding or amending any maternity or paternity leave policy of
the Employer.
Sec. 2.19 "Celanese Corporation" shall mean Celanese Corporation and any
other corporation which was directly or indirectly controlled by, or was under
common control with, Celanese Corporation.
Sec. 2.20 "Code" shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time, and any successor statute of similar purpose.
Sec. 2.21 "Common Stock" shall mean shares of common stock issued by the
Company with voting power and dividend rights no less favorable than the voting
power and dividend rights of any other shares of common stock issued by the
Company.
Sec. 2.22 "Company" shall mean Union Pacific Resources Group Inc. and any
successor that adopts the Plan.
Sec. 2.23 "Company Contribution Account" shall mean so much of a
Participant's Account as consists of the account established for a Participant
pursuant to the provisions of the Plan as in effect prior to July 1, 1983 to
which were credited contributions made by the Employer to the Plan on behalf of
such Participant with respect to periods ending before July 1, 1983, including
all earnings and gains attributable thereto, and reduced by all losses
attributable thereto, all expenses chargeable thereagainst and by all
withdrawals and distributions therefrom.
Sec. 2.24 "Company Suspense Account" shall mean the account under which
Leveraged Shares are held until released and allocated pursuant to Section
4.08(b).
Sec. 2.25 "Compensation" shall mean, for any Employee, for any Plan Year
or Limitation Year as the case may be:
(a) except as otherwise provided below in this definition, the fixed and
basic salary or wage paid by the Employer to the Employee during the applicable
period, exclusive of (1) overtime, (2) compensation for work in excess of forty
(40) hours per week, (3) commissions, (4) bonuses, (5) fees, (6) retainers, (7)
incentive payments, lump sum merit awards or any other form of extra
remuneration, and (8) any amounts that the Employee receives with respect to
periods when he is not an Eligible Employee. For services rendered during the
applicable period by each hourly-wage Covered Employee who is employed on a
12-hour shift basis with a 28-day work cycle, "fixed and basic salary or wage"
shall mean the wages paid or payable by the Employer to such Employee for the
first 156-1/3 Hours of Service in such 28-day cycle. Notwithstanding the above,
Compensation shall be determined prior to giving effect to any Before-Tax
Contribution election made pursuant to the terms of this Plan, to any salary
reduction agreement pursuant to the Union Pacific Resources Group Inc. Flexible
Benefits Program or to any other salary reduction election made under section
125, 402(e)(3) or 402(h) of the Code. Compensation
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shall include vacation pay, holiday pay, jury duty pay, sick pay, bereavement
pay and pay for other similar absences, but shall not include payments in lieu
of such pay and payments for any period with respect to which the Named
Fiduciary-Plan Administration determines a person to be permanently and totally
disabled.
(b) for purposes of Article X and Sections 2.08 and 5.04, wages required
to be reported on IRS Form W-2, paid to the Employee during the applicable
period as defined in Treas. Reg. ss.1.415-2(d)(11)(i), including for purposes of
the definition of "Key Employee" in Article X, amounts that are excluded from
gross income under section 125, 402(e)(3) or 402(h) of the Code.
(c) for purposes of the definitions of "Actual Deferral Percentage" and
"Contribution Percentage," "compensation" for the applicable period, as defined
in section 414(s) of the Code as determined by the Named Fiduciary-Plan
Administration on a uniform and consistent basis for all Employees; provided,
however, that, in the sole discretion of the Named Fiduciary-Plan
Administration, Compensation may (1) include Before-Tax Contributions and other
amounts excluded from gross income under section 125, 402(e)(3), or 402(h) of
the Code and/or (2) may exclude compensation for any period during which an
Employee is not an Eligible Employee.
(d) for purposes of the definition of "Highly Compensated Employee,"
"compensation," as such word is defined in section 415(c)(3) of the Code, paid
to the Employee for the applicable period, but including amounts that are
excluded from gross income under section 125, 402(e)(3) or 402(h) of the Code.
(e) with respect to any Plan Year, only the first $150,000 (or such other
amount as may be applicable under section 401(a)(17) of the Code) of the amount
otherwise described in subsections (a), (b) and (c) of this definition shall be
counted, except that this subsection (e) shall not apply for purposes of
Sections 2.08, 5.04 and Article IX.
Sec. 2.26 "Computation Period" shall mean each twelve-consecutive-month
period that begins on an Employee's Employment Commencement Date and
anniversaries thereof; provided, however, that, for an Employee whose prior
Years of Service are not taken into account after a Break in Service in
accordance with Section 3.01(c) or 7.03(b), "Computation Period" shall mean each
twelve-consecutive-month period that begins on the Employee's Reemployment
Commencement Date and anniversaries thereof.
Sec. 2.27 "Contribution Percentage" shall mean:
(a) to determine the Average Contribution Percentage for purposes of
Section 5.02(b), the ratio (expressed as a percentage to the nearest
one-hundredth of one percent) of (a) the After-Tax Employee Contributions
(including Before-Tax Contributions recharacterized as After-Tax Employee
Contributions pursuant to Section 5.03(a)(2)) and Matching Contributions
allocated to an Eligible Employee's Account for the Plan Year (excluding any
Matching Contributions forfeited pursuant to Section 5.01(b) or 5.03(a)(2))
plus, in the case of any Highly Compensated Employee who is simultaneously
eligible to participate in more than one plan maintained by the Employer or an
Affiliated Company to which employee or matching contributions are made,
after-tax employee contributions and employer matching contributions made on his
behalf under
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all such plans (excluding those that are not permitted to be aggregated with the
Plan under Treas. Reg. ss.1.401(m)-1(b)(3)(ii)) for the Plan Year, to (b) the
Employee's Compensation for the Plan Year; and
(b) to determine the Average Contribution Percentage for purposes of
Section 5.02(c), the ratio (expressed as a percentage to the nearest
one-hundredth of one percent) of (a) the ESOP Matching Contributions allocated
to an Eligible Employee's Account for the Plan Year (excluding any ESOP Matching
Contributions forfeited pursuant to Section 5.01(b) or 5.03(a)(2)) plus, in the
case of any Highly Compensated Employee who is simultaneously eligible to
participate in more than one plan maintained by the Employer or an Affiliated
Company to which matching contributions are made as part of an employee stock
ownership plan, employer matching contributions made on his behalf under all
such plans (excluding those that are not permitted to be aggregated with the
Plan under Treas. Reg. ss.1.401(m)-1(b)(3)(ii)) for the Plan Year, to (b) the
Employee's Compensation for the Plan Year.
For purposes of determining Contribution Percentages under paragraph (a) above,
the Employer or the Named Fiduciary-Plan Administration may take Before-Tax
Contributions into account, in accordance with Treasury regulations, so long as
the requirements of Section 5.02(a) are met both when the Before-Tax
Contributions used in determining Contribution Percentages are and are not
included in determining Actual Deferral Percentages.
Sec. 2.28 "Covered Employee" shall mean each Employee in the employ of an
Employer, other than (a) any person whose terms and conditions of employment are
subject to a collective bargaining agreement, unless the collective bargaining
agreement provides for the eligibility of such person to participate in this
Plan, (b) any person who, as to the United States, is a non-resident alien with
no U.S. source income from the Employer, (c) any person who is an Employee
solely by reason of being a leased employee within the meaning of section 414(n)
or 414(o) of the Code, (d) any person who the Named Fiduciary-Plan
Administration determines to have suffered a Total Disability, (e) any student
(high school, college or graduate school) or intern who, when hired, is expected
to work on a short-term or temporary basis, and (f) any person who was engaged
in an independent contractor or similar capacity and then subsequently
classified as an Employee, unless the Employer determines otherwise.
Notwithstanding the above, the exclusion set forth in clause (b) shall not
apply (A) to any Employee who has previously qualified as a Covered Employee,
who is a United States citizen, and who is subsequently transferred so that he
is employed by the Employer within the geographical boundaries of Canada, so
long as such Employee otherwise continues to qualify as a Covered Employee after
such transfer or (B) to any person for any period for which such person's name
is carried on a United States payroll.
Sec. 2.29 "Effective Date" shall mean January 1, 1997, the effective date
of this amended and restated Plan; provided, however, that when a provision of
the Plan states an effective date other than January 1, 1997, such stated
specific effective date shall apply as to that provision.
Sec. 2.30 "Election Date" shall mean the first day of any calendar month.
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Sec. 2.31 "Eligible Employee" shall mean a Covered Employee who has become
an Eligible Employee as set forth in Section 3.01, whether or not he is an
Active Participant.
Sec. 2.32 "Employee" shall mean a person who (a) is working for an
Employer or an Affiliated Company and (b) at the time of hire is classified by
the Employer or Affiliated Company as an employee. If a person is engaged in an
independent contractor or similar capacity and is subsequently classified by the
Employer, an Affiliated Company, the Internal Revenue Service or a court as an
employee, such person, for purposes of this Plan, shall be deemed an employee
from the actual (and not the effective) date of such classification, unless
expressly provided otherwise by the Employer or Affiliated Company. A person
shall be deemed to be an Employee if he is a leased employee with respect to
whose services such Employer or Affiliated Company is the recipient, within the
meaning of section 414(n) or 414(o) of the Code, but to whom section 414(n)(5)
of the Code does not apply.
Sec. 2.33 "Employee Contribution Account" shall mean so much of a
Participant's Account as consists of the account established for a Participant
pursuant to the provisions of the Plan as in effect prior to July 1, 1983 to
which were credited such Participant's Basic Employee Contributions and
Supplemental Employee Contributions with respect to periods ending before July
1, 1983, including all earnings and gains attributable thereto and reduced by
all losses attributable thereto, all expenses chargeable thereagainst and by all
withdrawals and distributions therefrom.
Sec. 2.34 "Employer" shall mean the Company and any Affiliated Company
which adopts this Plan and joins in the corresponding Trust Agreement by action
of (a) its board of directors and (b) either the Board of Directors or the Named
Fiduciary-Plan Administration; provided, however, that if an Affiliated Company,
which would not remain an Affiliated Company if the phrase "100 percent" were
substituted for the phrase "at least 80 percent" in Section 1563(a)(1) of the
Code, becomes an Employer by action of the Named Fiduciary-Plan Administration,
unless the Board of Directors ratifies such action not later than the first
regularly scheduled meeting of the Board of Directors, such Affiliated Company
shall cease to be an Employer as of the end of the month in which such meeting
occurs.
Sec. 2.35 "Employment Commencement Date" shall mean, with respect to any
person, the first date on which that person performs an Hour of Service as
described in Section 2.42(a)(1).
Sec. 2.36 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time, and any successor statute
of similar purpose.
Sec. 2.37 "ESOP Loan Repayment Contributions" shall mean an Employer
contribution made pursuant to Section 4.02(b).
Sec. 2.38 "ESOP Matching Contribution" shall mean an Employer contribution
made pursuant to Section 4.02(a)(1).
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Sec. 2.39 "ESOP Matching Contribution Account" shall mean so much of a
Participant's Account as consists of Leveraged Shares allocated pursuant to
Section 4.08(b), including excess shares allocated pursuant to Section
4.08(b)(4), including all earnings and gains attributable thereto and reduced by
all losses attributable thereto, all expenses chargeable thereagainst and by all
withdrawals and distributions therefrom.
Sec. 2.40 "Finance Committee" shall mean such committee as shall be
designated by the Board of Directors.
Sec. 2.41 "Highly Compensated Employee" shall mean as follows:
(a) The term "Highly Compensated Employee" generally means an Employee
who:
(1) was at any time a five-percent (5%) owner, as defined in section
416(i) of the Code, at any time during the Plan Year or the immediately
preceding Plan Year; or
(2) for the immediately preceding Plan Year --
(A) received Compensation from the Employer or an Affiliated
Company in excess of $80,000, as adjusted by the Secretary of the Treasury in
accordance with section 414(q) of the Code; and
(B) if the Employer elects the application of this clause in
accordance with Treasury regulations, was a member of the group consisting of
the top twenty percent (20%) of the Employees when ranked on the basis of
Compensation paid during the Plan Year for which such determination is being
made.
(b) A former Employee shall be treated as a Highly Compensated Employee,
if such Employee was a Highly Compensated Employee while an active Employee in
either the Plan Year in which such Employee separated from service or in any
Plan Year ending on or after his 55th birthday.
Sec. 2.42 "Hour of Service" shall mean, for any Employee:
(a) except as provided in subsection (b),
(1) each hour for which he is directly or indirectly paid or
entitled to payment by an Employer or an Affiliated Company for the performance
of employment duties; provided, however, that an Employee shall be credited with
one hundred ninety (190) Hours of Service for each calendar month during which
such Employee is credited with one Hour of Service described in this paragraph
(a)(1); or
(2) each hour for which he is entitled, either by award or
agreement, to back pay from an Employer or an Affiliated Company, irrespective
of mitigation of damages; or
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(3) each hour for which he is directly or indirectly paid or
entitled to payment by an Employer or an Affiliated Company on account of a
period of time during which no duties are performed due to vacation, holiday,
illness, incapacity (including disability), jury duty, layoff, leave of absence,
or military duty; or
(4) each hour for which he is absent for military service under
leave granted by the Employer or Affiliated Company or required by law, provided
the Employee returns to service with the Employer or Affiliated Company within
such period as his right to reemployment is protected by law.
(b) Anything to the contrary in subsection (a) notwithstanding:
(1) No Hours of Service shall be credited to an Employee for any
period merely because, during such period, payments are made or due him under a
plan maintained solely for the purpose of complying with applicable workers'
compensation, unemployment compensation, or disability insurance laws.
(2) For the period of an Approved Absence or a temporary layoff on
account of reduction in force (provided that the person returns to work with the
Employer or an Affiliated Company at the first available opportunity), such
person shall be credited with that number of Hours of Service with which such
person would have been credited had such person, for such period, instead been
compensated for services rendered to the Employer or an Affiliated Company on
the same basis as such person had rendered services to the Employer or an
Affiliated Company during the last period in which such person rendered such
services prior to the commencement of such Approved Absence or temporary layoff,
disregarding for this purpose, however, any overtime or other services which
such person was not regularly scheduled to render.
(3) No Hours of Service shall be credited to an Employee with
respect to payments solely to reimburse for medical or medically related
expenses.
(4) No Hours of Service shall be credited twice.
(5) Hours of Service shall be credited at least as liberally as
required by the rules set forth in Department of Labor Reg. ss.2530.200b-2(b)
and (c).
(6) In the case of an Employee who is such solely by reason of
service as a leased employee within the meaning of section 414(n) or 414(o) of
the Code, Hours of Service shall be credited as if such Employee were employed
and paid with respect to such service (or with respect to any related absences
or entitlements) by the Employer or Affiliated Company that is the recipient
thereof.
(7) Notwithstanding anything in the Plan to the contrary, Hours of
Service for periods of qualified military service shall be provided in
accordance with section 414(u) of the Code.
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Sec. 2.43 "Investment Fund" shall mean any of the funds established
pursuant to Section 6.02 for the investment of the assets of the Trust Fund.
Sec. 2.44 "Investment Manager" shall mean any fiduciary (other than the
Trustee or Named Fiduciary) who has the power to manage, acquire, or dispose of
any asset of the Plan and who has qualified as an "investment manager" within
the meaning of section 3(38) of ERISA.
Sec. 2.45 "Leveraged Shares" shall mean shares of Common Stock acquired by
the Trustee with the proceeds of an Acquisition Loan pursuant to Section
4.08(a).
Sec. 2.46 "Limitation Year" shall mean the Plan Year unless a different
"Limitation Year" is designated by the Board of Directors by resolution.
Sec. 2.47 "Loan Fund" shall mean the separate fund established in
connection with a loan to a Participant pursuant to Article IX.
Sec. 2.48 "Long Term Disability Plan" shall mean the Union Pacific
Resources Group Inc. Long Term Disability Plan, effective January 1, 1971, and
as it may have heretofore been or may hereafter be amended from time to time.
Sec. 2.49 "Matching Contribution" shall mean an Employer contribution made
on or after January 1, 1997 pursuant to Section 4.02(a)(2).
Sec. 2.50 "Matching Contribution Account" shall mean so much of a
Participant's Account as consists of amounts attributable to Employer matching
contributions allocated to such Participant's Account prior to the Effective
Date and Matching Contributions allocated to such Participant's Account after
the Effective Date, including all earnings and gains attributable thereto and
reduced by all losses attributable thereto, all expenses chargeable thereagainst
and by all withdrawals and distributions therefrom.
Sec. 2.51 "Named Fiduciary" shall mean the Board of Directors, the Finance
Committee, the Trustee, the Named Fiduciary-Plan Investments, and the Named
Fiduciary-Plan Administration. Each Named Fiduciary shall have only those
particular powers, duties, responsibilities and obligations as are specifically
delegated to him under the Plan or the Trust Agreement. Any fiduciary, if so
appointed, may serve in more than one fiduciary capacity.
Sec. 2.52 "Named Fiduciary-Plan Administration" shall mean the Vice
President-People or, in the event there is no such person, the person or persons
named as such pursuant to the provisions of Article XI or, in the absence of any
such appointment, the Company.
Sec. 2.53 "Named Fiduciary-Plan Investments" shall mean such committee as
shall be designated by the Board of Directors. In the event that there is no
such Investment Committee, the Named Fiduciary-Plan Investments shall be the
person or persons designated as such by the Board of Directors.
Sec. 2.54 "Normal Retirement Age" shall mean a Participant's 65th
birthday.
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Sec. 2.55 "Participant" shall mean any person who has been or who is an
Eligible Employee and who has been admitted to participation in the Plan
pursuant to the provisions of Article III. The term "Participant" shall include
Active Participants (those Participants who are currently Eligible Employees and
for whom an election is in effect pursuant to Section 4.01(a)), Inactive
Participants (those Employees who previously were Active Participants but
currently are not because they are no longer employed in an "Eligible Employee"
status or have no election in effect under Section 4.01(a)), and Vested
Participants (those former Active or Inactive Participants who have a vested
interest under the Plan).
Sec. 2.56 "PAYSOP Contributions" shall mean the Employer contributions
made to the Plan on behalf of Participants with respect to a Plan Year ending
prior to January 1, 1987 pursuant to the provisions of the Plan as in effect
prior to such date and which are attributable to the payroll-based tax credit
under section 41 of the Code for such Plan Year.
Sec. 2.57 "PAYSOP Contribution Account" shall mean so much of a
Participant's Account as consists of amounts attributable to PAYSOP
Contributions allocated to such Participant's Account during Plan Years ending
prior to January 1, 1987, including all earnings and gains attributable thereto
and reduced by all losses attributable thereto, all expenses chargeable
thereagainst and by all withdrawals and distributions therefrom.
Sec. 2.58 "Plan" shall mean the Union Pacific Resources Group Inc.
Employees' Thrift Plan (previously known as the "Union Pacific Resources Company
Employees' Thrift Plan" and the "Champlin Petroleum Company Employees' Thrift
Plan") as set forth herein, and as the same may from time to time hereafter be
amended.
Sec. 2.59 "Plan Year" shall mean the calendar year.
Sec. 2.60 "QDRO" shall mean a "qualified domestic relations order" within
the meaning of Section 206(d)(3)(B) of ERISA and section 414(p) of the Code.
Sec. 2.61 "Reemployment Commencement Date" shall mean, with respect to any
person, the first date following a Break in Service on which that person
performs an Hour of Service as described in Section 2.42(a)(1).
Sec. 2.62 "Required Beginning Date" shall mean
(a) in the case of a Participant who is a five-percent (5%) owner (within
the meaning of section 416(i) of the Code) April 1 of the calendar year
following the calendar year in which the Participant attains age 70-1/2; and
(b) in the case of a Participant who is not a five-percent (5%) owner
(within the meaning of section 416(i) of the Code) April 1 of the calendar year
following the later of (1) the calendar year in which the Participant attains
age 70-1/2, or (2) the calendar year in which the Participant has a Separation
from Service; and
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(c) in the case of a Participant who is not a five-percent (5%) owner
(within the meaning of section 416(i) of the Code), who attained age 70-1/2 in
1996 and who had not had a Separation from Service as of January 1, 1997, April
1 of the calendar year following the calendar year in which the Participant has
a Separation from Service.
If a Participant described in subsection (b) or (c) becomes a five-percent (5%)
owner at any time after attaining age 70-1/2, his Required Beginning Date shall
be April 1 of the calendar year following the calendar year in which he becomes
a five-percent (5%) owner.
Notwithstanding the foregoing, if a Participant, prior to January 1, 1984, made
the election permitted by section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act of 1982, and such election remains in force, his Required
Beginning Date shall not be earlier than the Benefit Payment Date provided for
pursuant to that election.
Sec. 2.63 "Retire," "Retired" or "Retirement" shall mean a Separation from
Service occurring after (a) the Participant has either (1) attained age 55 and
completed ten (10) Years of Service or (2) suffered a Total Disability while an
Employee or (b) the Participant has attained Normal Retirement Age. For purposes
of Section 8.02 only, "Retire," "Retired" or "Retirement" shall also mean
retirement under the 1992 Union Pacific Resources Company Voluntary Retirement
Incentive Plan.
Sec. 2.64 "Rollover Account" shall mean so much of a Participant's Account
as consists of his Rollover Contributions, including all earnings and gains
attributable thereto, and reduced by all losses attributable thereto, all
expenses chargeable thereagainst and by all withdrawals and distributions
therefrom.
Sec. 2.65 "Rollover Contributions" shall mean amounts contributed by a
Covered Employee pursuant to Section 4.03.
Sec. 2.66 "Separation from Service" shall mean, for any Employee, his
death, retirement, resignation, discharge, Total Disability or any absence that
causes him to cease to be an Employee (which shall not include an Approved
Absence or a temporary layoff on account of reduction in force, provided that
there is a return to work with the Employer or an Affiliated Company at the
first available opportunity).
Sec. 2.67 "Supplemental Employee Contributions" shall mean the
contributions made to the Plan by a Participant on his own behalf with respect
to periods ending before July 1, 1983, pursuant to the provisions of the Plan as
in effect prior to July 1, 1983, which were not Basic Employee Contributions.
Sec. 2.68 "Total Disability" shall mean a disability for which a
Participant (a) is eligible for and is receiving disability benefits under the
Long Term Disability Plan or (b) would be eligible for and would be receiving
such benefits if such Participant were in a class of Employees covered by the
Long Term Disability Plan.
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Sec. 2.69 "Trust Agreement" shall mean the trust instrument approved by
the Finance Committee and the Trustee for purposes of providing a vehicle for
investment of the assets of the Plan.
Sec. 2.70 "Trustee" shall mean the party or parties appointed by the
Finance Committee and each of their respective successors.
Sec. 2.71 "Trust Fund" shall mean all of the assets of the Plan held by
the Trustee under the Trust Agreement.
Sec. 2.72 "Valuation Date" shall mean the last day of each calendar month
during the Plan Year and each other interim date during the Plan Year on which
the Named Fiduciary-Plan Administration determines that a valuation of the Trust
Fund shall be made.
Sec. 2.73 "Year of Participation" shall mean a Plan Year during any part
of which (a) a Participant made contributions to the Plan on his own behalf with
respect to periods ending before July 1, 1983 pursuant to the provisions of the
Plan as in effect prior to July 1, 1983 or (b) a Before-Tax Contribution or
After-Tax Employee Contribution election is in effect for such Participant,
adjusted to avoid duplication for any Plan Year. A Year of Participation shall
be considered to have been completed only on the day following the last day in
such Plan Year.
Sec. 2.74 "Year of Service" shall mean a Computation Period during which
an Employee is credited with at least 1,000 Hours of Service. Notwithstanding
any provision of the Plan to the contrary:
(a) Each Covered Employee who was an Employee on April 30, 1976 and May 1,
1976 shall be credited with Years of Service with respect to his employment with
the Employer and all Affiliated Companies prior to May 1, 1976 in an amount not
less than the amount determined pursuant to the provisions of the Plan as in
effect prior to July 1, 1983.
(b) Each Employee who had been employed by Celanese Corporation and who
was an Employee on or before June 1, 1970 and on May 1, 1976 shall be credited
with Years of Service with respect to the period of his employment with Celanese
Corporation in an amount not less than the amount determined pursuant to the
provisions of Section 2.4 of the Plan as in effect prior to July 1, 1983.
(c) (1) Each Employee (A) who was employed by either the Missouri Pacific
Corporation, the Missouri Pacific Railroad Company (or any of its subsidiaries
or affiliates) or The Western Pacific Railroad Company (or any of its
subsidiaries or affiliates) (collectively referred to as the "Acquired
Corporations") and (B) during the period commencing after December 31, 1981 and
ending prior to January 1, 1983 terminated employment (voluntarily or otherwise)
with an Acquired Corporation and immediately thereafter became employed by the
Company or an Affiliated Company shall be credited with Years of Service for his
uninterrupted periods of continuous service with the Acquired Corporations
immediately before becoming employed by the Company or an Affiliated Company.
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(2) Each Employee who was employed by an Acquired Corporation on
December 31, 1982 and who became employed by the Company or an Affiliated
Company on January 1, 1983 shall be credited with Years of Service for his
uninterrupted periods of continuous service with the Acquired Corporations
immediately before becoming employed by the Company or an Affiliated Company.
(d) Each person who (1) was employed by Plant Operations, Inc. on July 31,
1986 and (2) became eligible to participate in this Plan on August 1, 1986 shall
be credited with Years of Service for his continuous, uninterrupted period of
service with Plant Operations, Inc. prior to August 1, 1986.
(e) Each person who was employed by the Missouri-Kansas-Texas Railroad
Company or any subsidiary or affiliate thereof (collectively the "MKT") on
August 11, 1988 and who became employed by the Company or an Affiliated Company
on August 12, 1988 shall be credited with Years of Service by treating all
periods of employment of such person with MKT as periods during which such
person rendered services for, and was entitled to compensation from, the Company
or an Affiliated Company.
(f) Each person who was employed by Amax Oil & Gas, Inc. on March 31, 1994
and who became employed by the Company or an Affiliated Company on April 1, 1994
shall be credited with Years of Service by treating all periods of employment
counted under the Amax, Inc. Thrift Plan for Salaried Employees as periods
during which such person rendered services for, and was entitled to compensation
from, the Company or an Affiliated Company.
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ARTICLE III
PARTICIPATION ELIGIBILITY
Sec. 3.01 Eligibility to Participate.
(a) (1) Each Covered Employee who is classified as a regular, full-time
Employee shall become an Eligible Employee as of the Election Date coincident
with or next following the date on which he first completes an Hour of Service
as a regular, full-time Covered Employee.
(2) Each Covered Employee who is classified as other than a regular,
full-time Employee shall become an Eligible Employee as of the Election Date
coincident with or next following the end of the Eligibility Computation Period
during which he completes 1,000 Hours of Service. For purposes of this paragraph
(a)(2), the term "Eligibility Computation Period" shall mean the 12 month period
ending on the anniversary of the date on which the Employee first completed an
Hour of Service or the 12 month period ending on the date immediately preceding
each Election Date thereafter.
(b) (1) If a person is not a Covered Employee on the Election Date on
which he would otherwise become an Eligible Employee under subsection (a), by
Separation from Service or otherwise, and later becomes a Covered Employee, the
person shall become an Eligible Employee in accordance with subsection (a)
above. Notwithstanding the foregoing, if such a person had completed 1,000 Hours
of Service during an Eligibility Computation Period, he shall become an Eligible
Employee on the Election Date coincident with or next following the date on
which he completes an Hour of Service as a Covered Employee, if on such Election
Date he is a Covered Employee.
(2) If a person who has become an Eligible Employee ceases to be a
Covered Employee, by Separation from Service or otherwise, and later becomes a
Covered Employee, the person shall become an Eligible Employee on the Election
Date coincident with or next following the date on which he again completes an
Hour of Service as a Covered Employee.
(c) Notwithstanding any provision of this Plan to the contrary, an
Employee shall not be credited with any Years of Service for service (1) prior
to the date on which the vesting rules contained in ERISA and the Code, as
amended by ERISA, become effective with respect to the Plan, or (2) prior to the
first day of the first Plan Year beginning on or after January 1, 1985, if such
service would have been disregarded under the rules of the Plan with regard to
breaks in service as in effect on the applicable date.
Sec. 3.02 Procedure for Admission. Each Eligible Employee shall become an
Active Participant by electing to make Before-Tax Contributions and/or After-Tax
Employee Contributions pursuant to Section 4.01 and by completing such forms and
providing such data as are reasonably required by the Named Fiduciary-Plan
Administration at such time in advance as the Named Fiduciary-Plan
Administration may prescribe. If the Eligible Employee declines to make
Before-Tax Contributions and After-Tax Employee Contributions pursuant to
Section 4.01
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when he first becomes (or again becomes) an Eligible Employee, he may thereafter
elect to make Before-Tax Contributions and/or After-Tax Employee Contributions
and become an Active Participant in accordance with procedures prescribed by the
Named Fiduciary-Plan Administration.
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ARTICLE IV
CONTRIBUTIONS AND LEVERAGED ESOP
Sec. 4.01 Before-Tax Contributions and After-Tax Employee Contributions.
(a) Elections.
(1) Subject to Section 3.02 and the limitations set forth in Article
V:
(A) each Eligible Employee may execute a Before-Tax
Contribution election on a form prescribed by the Named Fiduciary-Plan
Administration pursuant to which such Employee may elect to reduce his
Compensation received on and after the effective date of the election through
payroll reductions by an amount, in whole percentages, of his Compensation
payable with respect to any pay period from one percent (1%) to thirteen percent
(13%);
(B) in addition, each Eligible Employee may elect, on a form
prescribed by the Named Fiduciary-Plan Administration, to contribute to the Plan
as After-Tax Employee Contributions through payroll deductions, an amount, in
whole percentages, of his Compensation payable with respect to any pay period
from one percent (1%) to thirteen percent (13%);
provided, however, that (i) the aggregate of a Participant's elections pursuant
to (A) and (B) above in effect as of any given day may not exceed thirteen
percent (13%) of the Participant's Compensation and (ii) in the event that a
Participant's Before-Tax Contribution election pursuant to (A) above would
result in Before-Tax Contributions in excess of the limit described in Section
5.01(a) for any year, such excess shall be contributed instead as an After-Tax
Employee Contribution made to the Plan pursuant to (B) above.
(2) The Before-Tax Contribution and After-Tax Employee Contribution
amounts set forth in a Participant's elections shall be tentative and shall
become final only after the Employer or the Named Fiduciary-Plan Administration
has made such adjustments thereto as they (or either of them) deem necessary to
maintain the qualified status of the Plan and to satisfy all requirements of
section 401(k) or 401(m) of the Code.
(b) Increase in or Reduction of Before-Tax Contributions or After-Tax
Employee Contributions. Each Participant may, on a daily basis, elect to
increase, reduce or totally suspend the rate of his Before-Tax Contributions and
After-Tax Employee Contributions, or change the type of contribution being made,
within the limits described in Section 4.01. A Participant shall make an
election described in the preceding sentence by completing such forms and
providing such data as are reasonably required by the Named Fiduciary-Plan
Administration at such time in advance as the Named Fiduciary-Plan
Administration may prescribe.
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(c) Contribution and Allocation of Before-Tax Contributions and After-Tax
Employee Contributions.
(1) The Employer shall contribute to the Plan with respect to each
Plan Year an amount equal to the Before-Tax Contributions of its Eligible
Employees for such Plan Year, as determined pursuant to Before-Tax Contribution
elections in force pursuant to subparagraph (a)(1)(A). There shall be allocated
to the Before-Tax Contribution Account of each Participant the Before-Tax
Contributions contributed by the Employer to the Plan by reason of any Before-
Tax Contribution election in force with respect to that Participant.
(2) The Employer shall contribute to the Plan with respect to each
Plan Year an amount equal to the After-Tax Employee Contributions of its
Eligible Employees for such Plan Year, as determined pursuant to After-Tax
Employee Contribution elections in force pursuant to subparagraph (a)(1)(B).
There shall be allocated to the After-Tax Employee Contribution Account of each
Participant the After-Tax Employee Contributions contributed by the Employer to
the Plan by reason of any After-Tax Employee Contribution election in force with
respect to that Participant.
Sec. 4.02 Matching Contributions and ESOP Loan Repayment Contributions.
(a) Amount of Matching Contributions.
(1) ESOP Matching Contributions. Subject to the limitations in
Article V, with respect to each pay period during which there are Leveraged
Shares in the Company Suspense Account, the Employer shall contribute to the
Plan, on behalf of each Participant who is an Employee of the Employer at any
time during such pay period, an amount which, when combined with dividends on
(A) Leveraged Shares which are unallocated or (B) Leveraged Shares which are
allocated but not necessary to meet the requirements of Section 4.08(b)(3)(B),
will result in the allocation of Leveraged Shares to a Participant's ESOP
Matching Contribution Account in an amount equal the "200 Percent Requirement"
(as defined in paragraph (a)(3) below).
(2) Matching Contributions. Subject to the limitations in Article V,
with respect to each pay period during which there are no Leveraged Shares in
the Company Suspension Account, the Employer shall contribute to the Plan on
behalf of each Participant who is an Employee of the Employer at any time during
such pay period, an amount equal to the 200 Percent Requirement.
(3) Definition of "200 Percent Requirement". For purposes of this
Section 4.02(a), the "200 Percent Requirement" means the following: an amount
equal to two hundred percent (200%) of (A) the Participant's Before-Tax
Contributions for the pay period which are not in excess of the three percent
(3%) of the Participant's Compensation for such pay period, plus (B) in the
event such Before-Tax Contributions for the pay period equal less than three
percent (3%) of the Participant's Compensation for such pay period, the
Participant's After-Tax Employee Contributions for the pay period, to the extent
that total Before-Tax Contributions and
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After-Tax Employee Contributions taken into account for such Participant for the
pay period do not exceed three percent (3%) of the Participant's Compensation
for such pay period.
(b) ESOP Loan Repayment Contributions. With respect to a Plan Year during
which there are Leveraged Shares in the Company Suspense Account, the Employer
shall make ESOP Loan Repayment Contributions in an amount sufficient to enable
the Trustee, when combined with ESOP Matching Contributions, Matching
Contributions and dividends on Leveraged Shares (whether or not allocated) to
pay any currently maturing obligation under an Acquisition Loan, without regard
to the accumulated earnings and profits of the Employer. Leveraged Shares shall
initially be credited to the Company Suspense Account and shall be allocated to
Participant Accounts pursuant to Section 4.08(b).
Sec. 4.03 Rollover Contributions. The Plan shall accept, as "Rollover
Contributions" made on behalf of any Covered Employee, cash equal to (a) all or
a portion of the amount received by the Covered Employee as a distribution from
(either directly or through a conduit individual retirement account), or (b) an
amount transferred directly to the Plan (pursuant to section 401(a)(31) of the
Code) on the Covered Employee's behalf by the trustee of another qualified trust
forming a part of a plan described in section 401(a) of the Code, but only if
the deposit qualifies as a tax-free rollover as defined in section 402 of the
Code as determined in accordance with procedures established by the Named
Fiduciary-Plan Administration. If the amount received does not qualify as a
tax-free rollover, the amount shall be refunded to the Covered Employee.
Rollover amounts shall be allocated to the Covered Employee's Rollover Account
and invested in accordance with the provisions of Article VI. A Covered Employee
who is not yet an Eligible Employee shall be deemed a Participant only with
respect to amounts, if any, in his Rollover Account.
Sec. 4.04 Contributions With Respect to Military Service. Notwithstanding
any provision of the Plan to the contrary, contributions with respect to
qualified military service shall be provided in accordance with section 414(u)
of the Code.
Sec. 4.05 Timing of Contributions. ESOP Loan Repayment Contributions, ESOP
Matching Contributions and Matching Contributions for any Plan Year under this
Article shall be made no later than the last date on which amounts so paid may
be deducted for federal income tax purposes for the taxable year of the Employer
in which the Plan Year ends. Amounts contributed as Before-Tax Contributions,
After-Tax Employee Contributions or Rollover Contributions will be remitted to
the Trustee as soon as practicable, but no later than the fifteenth (15th)
business day of the month following the month in which such contributions were
received or withheld from the Participant's Compensation.
Sec. 4.06 Contingent Nature of Contributions. All contributions made by
the Employer pursuant to the provisions of Sections 4.01 and 4.02 are hereby
made expressly contingent on the deductibility thereof for federal income tax
purposes for the fiscal year with respect to which such contributions are made,
and no such contribution shall be made for any year to the extent it would
exceed the deductible limit for such year as set forth in section 404 of the
Code.
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Sec. 4.07 Exclusive Benefit; Refund of Contributions. All contributions
made to the Plan are made for the exclusive benefit of the Participants and
their Beneficiaries, and such contributions shall not be used for, nor diverted
to, purposes other than for the exclusive benefit of the Participants and their
Beneficiaries (including the costs of maintaining and administering the Plan and
corresponding trust). Notwithstanding the foregoing, to the extent that such
refunds do not, in themselves, deprive the Plan of its qualified status, refunds
of contributions shall be made to the Employer under the following circumstances
and subject to the following limitations:
(a) Disallowance of Deduction. To the extent that a federal income tax
deduction is disallowed for any contribution made by an Employer, the Trustee
shall refund to the Employer the amount so disallowed within one (1) year of the
date of such disallowance.
(b) Mistake of Fact. In the case of a contribution which is made in whole
or in part by reason of a mistake of fact, so much of the Employer contribution
as is attributable to the mistake of fact shall be returnable to the Employer
upon demand, upon presentation of evidence of the mistake of fact to the Trustee
and of calculations as to the impact of such mistake. Demand and repayment must
be effectuated within one (1) year after the payment of the contribution to
which the mistake applies.
In the event that any refund is paid to the Employer hereunder, such
refund shall be made without regard to net investment gains attributable to the
contribution, but shall be reduced to reflect net investment losses attributable
thereto.
Sec. 4.08 Leveraged ESOP.
(a) Acquisition Loan.
(1) At the direction of the Named Fiduciary-Plan Administration, the
Trustee may borrow funds, enter into a purchase-money transaction or enter into
an extension of credit transaction for the purpose of purchasing Common Stock
from any party, including the Company, if the following provisions with respect
to any such transaction are met:
(A) The Acquisition Loan must be at a reasonable rate of
interest and for a specific term.
(B) Any collateral pledged to the creditor by the Trust shall
consist only of the shares of Common Stock purchased with the Acquisition Loan
and dividends thereon (although, in addition to such collateral, the Company may
guarantee repayment of the Acquisition Loan) and such assets shall constitute
assets of the Plan for all other purposes.
(C) Under the terms of the Acquisition Loan, the creditor
shall have no recourse against the Trust, except with respect to the collateral,
or against the Trustee.
(D) Upon payment of any portion of the principal amount and
interest due on the Acquisition Loan for any Plan Year, Leveraged Shares shall
be released pursuant to Section
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4.08(b); provided, however, that the number of future years under the
Acquisition Loan must be definitely ascertainable and shall be determined
without taking into account any possible extensions or renewal periods; and,
provided, further, that if the Acquisition Loan provides for annual payments of
principal and interest at a cumulative rate not less rapid at any time than
level annual payments of such amounts for ten (10) years taking into account
renewals and extensions, then, if the Named Fiduciary-Plan Administration so
determines, in its sole discretion, interest paid, which would constitute
interest under a standard amortization table, may be ignored in determining the
number of Leveraged Shares to be released. If the interest rate under the
Acquisition Loan is variable, the interest to be paid in future years shall be
computed by using the interest rate applicable as of the end of the Plan Year.
(2) Except as required by section 409(h) of the Code and by Treas.
Reg. ss.ss. 54.4975-7(b)(9) and (10), or as otherwise required by applicable
law, no Leveraged Shares may be subject to a put, call or other option, or
buy-sell or similar arrangement while held by, and when distributed from, the
Plan, whether or not the Plan is an employee stock ownership plan within the
meaning of section 4975(e)(7) of the Code at that time.
(3) In the event an Acquisition Loan is repaid, or the Plan ceases
to be an employee stock ownership plan as defined in Treas. Reg. ss.
54.4975-7(b)(1)(i), the protections and rights described in subsections (a) and
(b) hereof relating to Leveraged Shares shall continue to be applicable in
accordance with the provisions of those Sections.
(b) Allocation of Leveraged Shares.
(1) General. The number of Leveraged Shares to be released from the
Company Suspense Account as soon as practicable following any amortization of an
Acquisition Loan shall equal the number of Leveraged Shares in the Company
Suspense Account immediately before release multiplied by a fraction. The
numerator of the fraction shall be the amount of the payment of principal and
interest on the Acquisition Loan (which payment shall include monies received by
the Plan as ESOP Loan Repayment Contributions, ESOP Matching Contributions and
dividends on Leveraged Shares (whether or not allocated)). The denominator of
the fraction shall be the sum of the numerator plus the principal and interest
to be paid for all future periods over the duration of the Acquisition Loan
repayment period.
(2) Pre-Allocation Account. Leveraged Shares released from the
Company Suspense Account pursuant to paragraph (b)(1) above shall first be
released to a separate holding account (the "Pre-Allocation Account") and
thereafter allocated to Participant Accounts as provided in paragraphs (b)(3)
and (4) below.
(3) Allocation of Leveraged Shares to Participant ESOP Matching
Contribution Accounts. Leveraged Shares held in the Pre-Allocation Account shall
be allocated to a Participant's ESOP Matching Contribution Account as follows:
(A) in amounts necessary to meet the 200 Percent Requirement as described in
Section 4.02(a) and (B) in amounts necessary to replace the value of any
dividends on Leveraged Shares allocated to the Participant's ESOP Matching
Contribution Account which were used to repay the Acquisition Loan.
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(4) Allocation of Excess Shares. If, at the close of any Plan Year,
there remain any Leveraged Shares in the Pre-Allocation Account which are not to
be allocated to Participant ESOP Matching Contribution Accounts under (c) above,
such Leveraged Shares shall be allocated to Participants and Eligible Employees
in a nondiscriminatory manner as determined by the Company.
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ARTICLE V
LIMITATIONS ON CONTRIBUTIONS
Sec. 5.01 Calendar Year Limitation on Before-Tax Contributions.
(a) Notwithstanding anything contained herein to the contrary, Before-Tax
Contributions made on behalf of an Eligible Employee under this Plan together
with elective deferrals (as defined in section 402(g) of the Code) under any
other plan or arrangement maintained by the Employer or an Affiliated Company
shall not exceed $7,000 (as adjusted in accordance with section 402(g) of the
Code and Treasury regulations thereunder). Furthermore, should a Participant
claim that his Before-Tax Contributions under this Plan when added to his other
elective deferrals under any other plan or arrangement (whether or not
maintained by an Employer or an Affiliated Company) exceed the limit imposed by
section 402(g) of the Code for the calendar year in which the deferrals
occurred, the Named Fiduciary-Plan Administration notwithstanding any other
provision of the Plan shall distribute, by April 15 of the following calendar
year, the amount of Before-Tax Contributions specified in the Participant's
claim, plus income thereon determined in the manner described in Section (c).
The Participant's claim shall be in writing and shall be submitted to the Named
Fiduciary-Plan Administration no later than the March 1 following the calendar
year in which such deferrals occurred. Notwithstanding anything in this Section
5.01 to the contrary, a Participant shall be deemed to have made a claim for
distribution of excess deferrals from the Plan to the extent that his Before-Tax
Contributions together with his elective deferrals under any other plan or
arrangement maintained by the Employer or an Affiliated Company exceed the limit
imposed by section 402(g) of the Code for the calendar year. For purposes of
determining the necessary reduction, (1) Before-Tax Contributions previously
distributed or recharacterized pursuant to Section 5.03(a) or returned to the
Participant pursuant to Section 5.04 shall be treated as distributed under this
Section 5.01 and (2) Before-Tax Contributions not taken into account in
determining ESOP Matching Contributions or Matching Contributions under Section
4.02(a) shall be reduced first.
(b) In the event a Participant receives a distribution of excess
Before-Tax Contributions pursuant to subsection (a), the Participant shall
forfeit any ESOP Matching Contributions and Matching Contributions (plus income
thereon determined as described in Section 5.03(d)) allocated to the Participant
by reason of the distributed Before-Tax Contributions. Amounts forfeited shall
be used to reduce future ESOP Matching Contributions or Matching Contributions
made pursuant to Section 4.02(a). For purposes of determining the necessary
forfeiture, ESOP Matching Contributions or Matching Contributions previously
distributed pursuant to Section 5.03(b) or (c), whichever is applicable, shall
be treated as forfeited under this Section 5.01.
Sec. 5.02 Nondiscrimination Limitations on Certain Contributions.
(a) Before-Tax Contribution Limitations. With respect to Before-Tax
Contributions for any Plan Year, one of the following tests must be satisfied:
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(1) The Average Actual Deferral Percentage for Eligible Employees
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for all other Eligible Employees for the
preceding Plan Year multiplied by 1.25; or
(2) The Average Actual Deferral Percentage for Eligible Employees
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for all other Eligible Employees for the
preceding Plan Year multiplied by two (2), provided that the Average Actual
Deferral Percentage for such Highly Compensated Employees does not exceed the
Average Actual Deferral Percentage for all other Eligible Employees by more than
two (2) percentage points.
(b) After-Tax Employee and Matching Contribution Limitations. With respect
to After-Tax Employee and Matching Contributions for any Plan Year, one of the
following tests must be satisfied:
(1) The Average Contribution Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for all other Eligible Employees for the preceding Plan
Year multiplied by 1.25; or
(2) The Average Contribution Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for all other Eligible Employees for the preceding Plan
Year multiplied by two (2), provided that the Average Contribution Percentage
for such Highly Compensated Employees does not exceed the Average Contribution
Percentage for all other Eligible Employees by more than two (2) percentage
points.
(c) ESOP Matching Contribution Limitations. With respect to ESOP Matching
Contributions for any Plan Year, one of the following tests must be satisfied:
(1) The Average Contribution Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for all other Eligible Employees for the preceding Plan
Year multiplied by 1.25; or
(2) The Average Contribution Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for all other Eligible Employees for the preceding Plan
Year multiplied by two (2), provided that the Average Contribution Percentage
for such Highly Compensated Employees does not exceed the Average Contribution
Percentage for all other Eligible Employees by more than two (2) percentage
points.
(d) Aggregate Limitation. For any Plan Year in which both the limitations
in Sections 5.02(a)(1) and (b)(1) are exceeded, the sum of the Average Actual
Deferral Percentage and the Average Contribution Percentage for Eligible
Employees who are Highly Compensated Employees (determined after adjustments are
made under Sections 5.03(a) and (b) for purposes of satisfying the limitations
described in Sections 5.02(a) and (b)) shall not exceed the greater of:
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(1) the sum of (A) the greater of the Average Actual Deferral
Percentage or the Average Contribution Percentage for all other Eligible
Employees multiplied by 1.25, plus (B) the lesser of (i) two (2) multiplied by
the lesser of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees, or (ii) two percent (2%) plus the
lesser of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees; or
(2) the sum of (A) the lesser of the Average Actual Deferral
Percentage or the Average Contribution Percentage for all other Eligible
Employees multiplied by 1.25, plus (B) the lesser of (i) two (2) multiplied by
the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees, or (ii) two percent
(2%) plus the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees.
(e) For purposes of subsections (a) through (d), this Plan shall be
aggregated and treated as a single plan with other plans maintained by the
Employer or an Affiliated Company to the extent that this Plan is aggregated
with any such other plan for purposes of satisfying section 410(b) (other than
section 410(b)(2)(A)(ii)) of the Code.
(f) The determination and treatment of the Before-Tax Contributions,
After-Tax Employee Contributions, ESOP Matching Contributions, Matching
Contributions, Actual Deferral Percentage and Contribution Percentage of any
Employee shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(g) In accordance with Treasury regulations, the Employer may elect to
apply subsections (a) through (d) based upon the Plan Year rather than the
preceding Plan Year.
Sec. 5.03 Correction of Discriminatory Contributions.
(a) (1) Should the nondiscrimination tests of Section 5.02(a) not be
satisfied with respect to Before-Tax Contributions for any Plan Year, the
"Excess Contributions" (as defined in paragraph (a)(3), below) shall be
distributed from the Before-Tax Contribution Account of the Highly Compensated
Employee with the greatest amount of Before-Tax Contributions for the Plan Year
or until the Before-Tax Contributions of such Highly Compensated Employee is
equal to the Before-Tax Contributions made by the Highly Compensated Employee
with the next greatest amount of Before-Tax Contributions for the Plan Year.
This process shall be repeated until all Excess Contributions have been
distributed.
(2) Before-Tax Contributions that must be distributed pursuant to
paragraph (a)(1) shall be distributed (A) first, by distributing Before-Tax
Contributions not taken into account in determining ESOP Matching Contributions
or Matching Contributions under Section 4.02(a), and (B) then, by distributing
Before-Tax Contributions not described in (A) within twelve (12) months of the
close of the Plan Year with respect to which the distribution applies and the
provisions of Section 5.01(b) regarding the forfeiture of related ESOP Matching
Contributions or Matching Contributions shall apply. For purposes of determining
the Excess Contributions, Before-Tax Contributions previously distributed
pursuant to Section 5.01 shall be treated as
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distributed under this Section 5.03(a). Notwithstanding the foregoing, at the
election of the Named Fiduciary-Plan Administration and in accordance with rules
uniformly applicable to all affected Participants, the Actual Deferral
Percentage reduction described in this Section may be accomplished, in whole or
in part, by recharacterizing excess Before-Tax Contributions as After-Tax
Employee Contributions, to the extent permitted under applicable Treasury
Regulations, not later than two and one-half (2-1/2) months following the close
of the Plan Year for which the Before-Tax Contributions were made.
(3) For purposes of this Section 5.03(a), "Excess Contributions"
shall be an amount determined by multiplying the Compensation of Eligible
Employees who are Highly Compensated Employees for the Plan Year by the
difference between (A) the Average Actual Deferral Percentage for such Highly
Compensated Employees for such Plan Year and (B) the highest Average Actual
Deferral Percentage that would have permitted the Plan to satisfy the
nondiscrimination test of Section 5.02(a) or (d), as determined in accordance
with sections 401(k) and 401(m) of the Code and applicable Treasury Regulations.
(b) (1) Should the nondiscrimination tests of Section 5.02(b) not be
satisfied with respect to After-Tax Contributions and Matching Contributions for
any Plan Year, the "Excess Aggregate Contributions" (as defined in paragraph
(b)(3), below) shall be distributed from the After-Tax Contribution Account or
Matching Contribution Account of the Highly Compensated Employee with the
greatest amount of After-Tax Contributions or Matching Contributions, whichever
is applicable, for the Plan Year or until the After-Tax Contributions or
Matching Contributions, whichever is applicable, of such Highly Compensated
Employee is equal to the After-Tax Contributions or Matching Contributions,
whichever is applicable, made by or on behalf of the Highly Compensated Employee
with the next greatest amount of After-Tax Contributions or Matching
Contributions for the Plan Year. This process shall be repeated until all Excess
Aggregate Contributions have been distributed.
(2) After-Tax Contributions and Matching Contributions which must be
distributed pursuant to paragraph (b)(1) shall be distributed, within twelve
(12) months of the close of the Plan Year with respect to which the distribution
applies, (A) first, by distributing the Highly Compensated Employee's After-Tax
Employee Contributions to the extent such contributions do not form the basis
for determining the Employee's Matching Contributions under Section 4.02(a), (B)
then, by distributing the Employee's excess Matching Contributions, and (C)
then, by distributing the Highly Compensated Employee's After-Tax Employee
Contributions not described in clause (A).
(3) For purposes of this Section 5.03(b), "Excess Aggregate
Contributions" shall be an amount determined by multiplying the Compensation of
Eligible Employees who are Highly Compensated Employees for the Plan Year by the
difference between (A) the Average Contribution Percentage for such Highly
Compensated Employees for such Plan Year and (B) the highest Average
Contribution Percentage that would have permitted the Plan to satisfy the
nondiscrimination test of Section 5.02(b) or (d), as determined in accordance
with section 401(m) of the Code and applicable Treasury Regulations.
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(c) (1) Should the nondiscrimination tests of Section 5.02(c) not be
satisfied with respect to ESOP Matching Contributions for any Plan Year, the
"Excess Aggregate Contributions" (as defined in paragraph (c)(3), below) shall
be distributed from the ESOP Matching Contribution Account of the Highly
Compensated Employee with the greatest amount of ESOP Matching Contributions for
the Plan Year or until the ESOP Matching Contributions of such Highly
Compensated Employee is equal to the ESOP Matching Contributions made on behalf
of the Highly Compensated Employee with the next greatest amount of ESOP
Matching Contributions for the Plan Year. This process shall be repeated until
all Excess Aggregate Contributions have been distributed.
(2) ESOP Matching Contributions which must be distributed pursuant
to paragraph (c)(1) shall be distributed within twelve (12) months of the close
of the Plan Year with respect to which the distribution applies.
(3) For purposes of this Section 5.03(c), "Excess Aggregate
Contributions" shall be an amount determined by multiplying the Compensation of
Eligible Employees who are Highly Compensated Employees for the Plan Year by the
difference between (A) the Average Contribution Percentage for such Highly
Compensated Employees for such Plan Year and (B) the highest Average
Contribution Percentage that would have permitted the Plan to satisfy the
nondiscrimination test of Section 5.02(c), as determined in accordance with
section 401(m) of the Code and applicable Treasury Regulations.
(d) Any distribution, forfeiture or recharacterization of Before-Tax
Contributions, After-Tax Employee Contributions, ESOP Matching Contributions or
Matching Contributions necessary pursuant to subsections (a), (b) or (c) shall
include a distribution, forfeiture or recharacterization of the income, if any,
allocable to such contributions. Such income shall be equal to the sum of the
allocable gain or loss for the Plan Year and shall be determined by the Named
Fiduciary-Plan Administration in a manner uniformly applicable to all
Participants and consistent with Treasury regulations.
(e) For purposes of satisfying the nondiscrimination test described in
Section 5.02(d), the Matching Contributions and After-Tax Employee Contributions
or ESOP Matching Contributions, as applicable, of all Highly Compensated
Employees shall be reduced as described in subsections (b) and (c).
(f) Notwithstanding anything in this Section to the contrary, for any
Highly Compensated Employee who is an Active Participant in the Plan while
simultaneously eligible to participate in any other qualified retirement plan
maintained by the Employer or an Affiliated Company (excluding any such plan
which is not permitted to be aggregated with the Plan pursuant to Treas. Reg.
ss.1.401(k)-1(b)(3)(ii)(B) or ss.1.401(m)-1(b)(3)(ii)) under which the Employee
has made employee contributions or elective deferrals, or is credited with
employer matching contributions for the year, the Named Fiduciary-Plan
Administration shall coordinate corrective actions under this Plan and such
other plan for the year.
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Sec. 5.04 Annual Additions Limitations.
(a) In no event shall the Annual Addition on behalf of any Participant for
any Limitation Year exceed the lesser of:
(1) $30,000 (or, if greater, one-fourth of the defined benefit
dollar limit set forth in section 415(b)(l)(A) of the Code as in effect for the
Limitation Year), or
(2) twenty-five percent (25%) of such Participant's Compensation for
the Limitation Year.
The limitation referred to in Section 5.04(a)(2) shall not apply to any
contribution for medical benefits within the meaning of section 401(h) or
section 419A(f)(2) of the Code which is otherwise treated as an Annual Addition
under section 415(l)(1) or 419A(d)(2) of the Code.
If the amount otherwise allocable to the Account of a Participant would
exceed the amount described above as a result of the reallocation of
forfeitures, a reasonable error in estimating the Participant's Compensation, a
reasonable error in determining the amount of elective deferrals (within the
meaning of section 402(g) of the Code) that may be made under the limitations of
section 415 of the Code, or such other circumstances as permitted by law, the
Named Fiduciary-Plan Administration shall determine which portion, if any, of
such excess amount is attributable to the Participant's Before-Tax Contributions
and/or After-Tax Employee Contributions and/or ESOP Matching Contributions
(including excess shares allocated pursuant to Section 4.08(b)(4)), and/or
Matching Contributions, if any, until such amount has been exhausted. To the
extent any portion of a Participant's Before-Tax Contributions or After-Tax
Employee Contributions are determined to be excess under this Section, such
Before-Tax Contributions and/or After-Tax Employee Contributions, with income
thereon, shall be returned to the Participant as soon as administratively
practicable. To the extent any portion of the ESOP Matching Contributions
(including excess shares allocated pursuant to Section 4.08(b)(4)) and/or
Matching Contributions allocable to a Participant are determined to be excess
under this Section, while the Participant remains a Covered Employee, his excess
ESOP Matching Contributions (including excess shares allocated pursuant to
Section 4.08(b)(4)) and/or Matching Contributions shall be held in a suspense
account (which shall share in investment gains and losses of the Fund) by the
Trustee until the following Plan Year (or any succeeding Plan Years), at which
time such amounts shall be allocated to the Participant's Account before any
ESOP Matching Contributions (including excess shares allocated pursuant to
Section 4.08(b)(4)) and/or Matching Contributions are made on his behalf for the
Plan Year. When the Participant ceases to be a Covered Employee, his excess ESOP
Matching Contributions (including excess shares allocated pursuant to Section
4.08(b)(4)) and/or Matching Contributions held in the suspense account shall be
allocated in the following Plan Year (or any succeeding Plan Years) to the
Accounts of other Participants in the Plan. Furthermore, the Named
Fiduciary-Plan Administration shall perform any other actions as may be
necessary to preserve the Plan's status as a qualified plan.
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(b) In no event shall the amount allocated to the Account of any
Participant for any Limitation Year beginning prior to January 1, 2000 cause the
sum of the "defined contribution fraction" and the "defined benefit fraction,"
as such terms are defined in section 415(e) of the Code, to exceed 1.0, or such
other limitation as may be applicable under section 415 of the Code with respect
to any combination of qualified plans without disqualification of any such plan.
In the event that the amount tentatively available for allocation to the Account
of any Participant in any Limitation Year exceeds the maximum amount permissible
hereunder, benefits under the defined benefit plan or plans in which the
Participant is participating shall be adjusted to the extent necessary to
satisfy the requirements of section 415(e) of the Code.
Notwithstanding anything in this subsection (b) to the contrary, if the
Plan satisfied section 415 of the Code as in effect for the last Limitation Year
beginning prior to January 1, 1987, an amount shall be subtracted permanently
from the numerator of the defined contribution fraction (not exceeding such
numerator) as prescribed by the Secretary of the Treasury so that the sum of the
defined benefit and defined contribution fractions computed under section
415(e)(1) of the Code as amended effective January 1, 1987 does not exceed 1.0
for such Limitation Year.
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ARTICLE VI
INVESTMENT AND VALUATION OF TRUST FUND;
MAINTENANCE OF ACCOUNTS
Sec. 6.01 Investment of Assets. All existing assets of the Trust Fund and
all future contributions shall be invested by the Trustee in accordance with the
terms of the Trust Agreement. All assets of the Trust Fund may be commingled for
investment purposes with the assets of any retirement plan which is maintained
by the Company or an Affiliated Company and which qualifies under section 401(a)
of the Code and may be held as a single fund under one or more trust
instruments, provided that the value of each plan's assets can be determined at
any time. The assets allocable to each such plan shall in no event be used for
the benefit of participants in the other plans.
Sec. 6.02 Participant Investment Direction. The available Investment Funds
are as follows:
(a) UPR Fixed Income Fund - a fixed income fund invested and reinvested in
(1) guaranteed investment contracts issued by insurance companies or banks, (2)
fixed income securities, including corporate debt securities (excluding any such
securities of the Company or any Affiliated Company), U.S. Treasury and
Government agency obligations, bank obligations and commercial paper (excluding
any such paper of the Company or any Affiliated Company) or mutual funds
invested in such securities (including any such securities of the Company or any
Affiliated Company) or repurchase agreements collateralized by such securities
(including any such securities of the Company or any Affiliated Company); and
(3) investments in money market instruments or money market funds, with the
quantitative and qualitative composition of the Fund to be determined by the
Named Fiduciary-Plan Investments;
(b) Vanguard Index Trust 500 Portfolio - a diversified fund invested and
reinvested in shares of (1) stock (excluding any shares of the Union Pacific
Corporation) or (2) stock mutual funds (including mutual funds that invest in
shares of stock of the Union Pacific Corporation) and designed to replicate the
investment performance of the Standard & Poor's 500 Composite Stock Price Index,
with the quantitative and qualitative composition of the fund to be determined
by the Named Fiduciary-Plan Investments;
(c) Union Pacific Common Stock Fund - a fund invested and reinvested
entirely in shares of common stock of Union Pacific Corporation but to include
such money market instruments or money market funds as are necessary or
appropriate to administer the Fund, with the quantitative and qualitative
composition of the Fund to be determined by the Named Fiduciary-Plan
Investments;
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(d) Vanguard Bond Market Fund - a diversified fixed income fund invested
and reinvested with the objective of matching the total return of the Salomon
Brothers Broad Investment-Grade Bond Index;
(e) Vanguard Money Market Reserves - Prime Portfolio - a diversified money
market investment fund invested and reinvested in high quality certificates of
deposit, bankers' acceptances, commercial paper, U.S. Government securities, and
other short-term obligations with the objective of preserving principal while
producing income;
(f) Wellington Fund - a diversified fund invested and reinvested in both
equities and fixed income securities with the objectives of conserving
principal, generating reasonable income returns and obtaining profits without
undue risks;
(g) Vanguard World Fund - U.S. Growth Portfolio - a diversified equity
fund invested and reinvested in shares of stock with above-average growth
potential;
(h) Vanguard World Fund - International Growth Portfolio - a diversified
equity fund invested and reinvested in shares of stock in companies based
outside the United States with the objective of producing long-term growth; and
(i) UPR Common Stock Fund - a fund invested and reinvested entirely in
shares of Common Stock but to include such money market instruments or money
market funds as are necessary or appropriate to administer the Fund, with the
quantitative and qualitative composition of the Fund to be determined by the
Named Fiduciary-Plan Investments.
The Trustee may temporarily hold cash or make short-term investments in
any of the Investment Funds or any commingled fund maintained by the Trustee
pending ultimate investment as contemplated above.
Sec. 6.03 Investment Elections. Each Participant upon becoming such shall
direct in writing, on a form and at the time or times prescribed by the Named
Fiduciary-Plan Administration, the percentage, in whole integer multiples of
five percent (5%) of (a) the aggregate amount of his Before-Tax Contributions
and After-Tax Employee Contributions and (b) the amount of his Rollover
Contributions, to be invested in any one or more of the available Investment
Funds (but not the Union Pacific Common Stock Fund or the UPR Common Stock
Fund), subject to such limitations as the Named Fiduciary-Plan Administration
may prescribe. In addition, (a) a Participant's PAYSOP Contribution Account, (b)
Matching Contributions made on behalf of a Participant on or after March 1, 1996
and (b) ESOP Matching Contributions (including excess shares allocated pursuant
to Section 4.08(b)(4)) made on behalf of a Participant, will be invested
exclusively in the UPR Common Stock Fund subject to such limitations as the
Named Fiduciary-Plan Administration may prescribe.
Sec. 6.04 Change of Election. Each Participant may change his investment
election pursuant to this Section, daily, by making a new election within the
limits prescribed by Section
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6.03 in such form, at such time in advance, and in accordance with other
procedures and subject to such restrictions as the Named Fiduciary-Plan
Administration or its delegate may prescribe.
Sec. 6.05 Transfers Between Investment Funds.
(a) Each Participant or Beneficiary of a deceased Participant may elect to
transfer all or a portion, in whole integer multiples of five percent (5%) or in
flat dollar amounts, of his interest in any Investment Fund, determined as of
the Valuation Date immediately preceding such transfer, to any other available
Investment Fund at the time or times prescribed by the Named Fiduciary-Plan
Administration, by making a transfer election in such form and at such time in
advance as the Named Fiduciary-Plan Administration may prescribe; provided,
however, that
(1) no amounts attributable to a Participant's Before-Tax
Contribution Account, After-Tax Employee Contribution Account, Employee
Contribution Account or Rollover Account may be transferred to the Union Pacific
Common Stock Fund or the UPR Common Stock Fund;
(2) no amounts attributable to a Participant's Account may be
transferred to the Union Pacific Common Stock Fund; and
(3) no amounts attributable to (A) Matching Contributions (including
earnings thereon) made to the UPR Common Stock Fund on or after March 1, 1996 or
(B) ESOP Matching Contributions (including excess shares allocated pursuant to
Section 4.08(b)(4)) may be transferred to any other Investment Fund; provided,
however, that Matching Contributions (including earnings thereon) made prior to
March 1, 1996 may be transferred to any available Investment Fund other than the
Union Pacific Common Stock Fund.
Each Participant or Beneficiary of a deceased Participant may elect to transfer
all or a portion of his interest in any Investment Fund, as described above,
daily. Transfers between Investment Funds under this Section 6.05 shall be
subject to such further limitations and restrictions as may be imposed by the
Named Fiduciary-Plan Administration or any insurance company contract or other
instrument governing investments in any Investment Fund. A Participant or
Beneficiary of a deceased Participant shall not be permitted to change the
Investment Fund in which the Participant's PAYSOP Contribution Account is
invested, except as provided in subsection (b).
(b) A "Qualified Participant" may elect within ninety (90) days after each
December 31 Valuation Date in the "Qualified Election Period" to direct the
reinvestment to Investment Funds other than the UPR Common Stock Fund of up to
the number of shares of Common Stock in his PAYSOP Contribution Account to which
this election applies as of such Valuation Date as determined in accordance with
this Section. Upon receipt of such an election from a Qualified Participant, the
Named Fiduciary-Plan Administration shall direct the Trustee to reinvest, within
ninety (90) days after the end of the Participant's 90-day election period, the
number of shares of Common Stock the Participant has elected to reinvest in
accordance with such election. The maximum number of shares of Common Stock
which a Qualified Participant may elect to
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reinvest as of any December 31 Valuation Date during his Qualified Election
Period shall be that number of such shares (rounded to the nearest whole number)
which is equal to the result determined by the formula (25% x (A + B)) - B, when
A is the number of shares of Common Stock which are allocated to his Account as
of that Valuation Date and B is the number of shares of Common Stock, if any,
previously reinvested by the Participant pursuant to this Section, provided that
for purposes of determining such maximum number of shares for the last December
31 Valuation Date in a Qualified Election Period, fifty percent (50%) shall be
substituted for twenty-five percent (25%). For purposes of this Section, the
following terms shall have the following meaning:
(1) "Qualified Election Period" shall mean the six-Plan-Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
(2) "Qualified Participant" shall mean any Participant who has
completed at least ten (10) years of participation in the Plan and has attained
age 55. For purposes of this definition, "year of participation" shall mean a
Plan Year for which an employer contribution or forfeiture was allocated to the
Participant's PAYSOP Contribution Account. (A year of participation shall be
considered to have been completed only on the day following the last day in such
Plan Year.)
(c) A "Qualified Participant" may also elect to direct the reinvestment to
Investment Funds other than the UPR Common Stock Fund with respect to Leveraged
Shares allocated to his ESOP Matching Contribution Account pursuant to Section
4.08(b). Such reinvestment shall be made in a manner consistent with procedures
and limitations applicable to section 6.05(b) except that "Qualified
Participant" for these purposes shall mean any Participant who, commencing on or
after the Effective Date, has completed at least ten (10) years of participation
in the ESOP feature of this Plan (i.e., has been an Eligible Employee with
respect to ESOP Matching Contributions) and has attained age 55.
Sec. 6.06 Loan Funds. Notwithstanding anything in this Article to the
contrary, the provisions of Sections 6.02 through 6.05 shall not apply to a
Participant's Accounts in a Loan Fund established pursuant to Article IX.
Sec. 6.07 Individual Accounts. There shall be maintained on the books of
the Plan with respect to each Participant, as applicable, a Before-Tax
Contribution Account, an After-Tax Employee Contribution Account, an ESOP
Matching Contribution Account, a Matching Contribution Account, a Company
Contribution Account, an Employee Contribution Account, a PAYSOP Contribution
Account and a Rollover Account. Each such Account shall separately reflect the
Participant's interest in each Investment Fund relating to such Account. Each
Participant shall receive, at least annually, a statement of his Account showing
the balances in each Investment Fund. A Participant's interest in any Investment
Fund shall be determined and accounted for based on his beneficial interest in
any such fund, and no Participant shall have any interest in or rights to any
specific asset of any Investment Fund.
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Sec. 6.08 Allocation of Earnings and Losses.
(a) The dividends, capital gains distributions, and other earnings
received on any share or unit of an Investment Fund that is specifically
credited or earmarked to a Participant's Account under the Plan in accordance
with the directed investment provisions of this Article VI shall be allocated to
such Account and immediately reinvested, to the extent practicable, in
additional shares or units of such Investment Fund, except that dividends
credited to the Union Pacific Common Stock Fund shall be reinvested in the UPR
Fixed Income Fund.
(b) Any Plan earnings or losses attributable to the investment of a
Participant's Accounts under the Plan in a loan to the Participant under Article
IX shall be allocated to the Participant's Accounts in accordance with Section
9.02(g).
(c) To the extent not otherwise provided in subsection (a) or (b) above,
the assets of each Investment Fund shall be valued by the Trustee at their
current fair market value as of each Valuation Date, and the earnings and losses
of the Investment Fund since the immediately preceding Valuation Date shall be
allocated to the Accounts of all Participants with interests in that Investment
Fund in the ratio that the fair market value of each such interest as of the
immediately preceding Valuation Date, reduced by any distributions or
withdrawals therefrom since such preceding Valuation Date, bears to the total
fair market value of all such interests as of the immediately preceding
Valuation Date, reduced by any distributions or withdrawals therefrom since such
preceding Valuation Date. Notwithstanding the foregoing, in valuing any
Investment Fund, the Trustee shall consider any valuation rules imposed by any
investment held by such Investment Fund. Further, with respect to the Union
Pacific Common Stock Fund and the UPR Common Stock Fund, the Trustee shall value
transactions with regard to the execution prices realized on stock in the
respective Funds whenever the Named Fiduciary-Plan Investments in its discretion
has determined that extraordinary activity in the underlying stock in the
respective Funds on a Valuation Date could adversely impact a Participant or the
Union Pacific Common Stock Fund or the UPR Common Stock Fund in its entirety.
Sec. 6.09 Allocation to Individual Accounts. The Accounts of each
Participant shall be adjusted as of each Valuation Date by (a) reducing such
Accounts by any payments made therefrom since the preceding Valuation Date, and
then (b) increasing or reducing such Accounts by the Participant's allocable
share of earnings and losses, determined pursuant to Section 6.08, and
reasonable fees charged against such Accounts at the direction of the Named
Fiduciary-Plan Investments reflecting the expense of administering Participant
investment elections since the preceding Valuation Date, and (c) crediting such
Accounts with any contributions made thereto since the preceding Valuation Date.
Sec. 6.10 Valuation for Distribution. For the purposes of paying the
amounts to be distributed to a Participant or Beneficiary pursuant to Article
VIII, the value of the Participant's interest shall be determined in accordance
with the provisions of this Article as of the Valuation Date related to the
Benefit Payment Date.
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Sec. 6.11 Exercise of Common Stock Voting Rights.
(a) Each Participant or Beneficiary of a deceased Participant shall have
the right to direct the Trustee as to the exercise of voting rights with respect
to Common Stock and shares of Union Pacific Corporation stock, including
fractional shares, allocated to such Participant's Account (other than his
PAYSOP Contribution Account). As soon as practicable prior to the occasion for
the exercise of such voting rights, the Trustee shall deliver or cause to be
delivered to each Participant and Beneficiary of a deceased Participant all
notices, prospectuses, financial statements, proxies and proxy soliciting
material relating to Common Stock and shares of Union Pacific Corporation stock
allocated to the Participant's Account. Instructions by Participants and
Beneficiaries to the Trustee shall be in such form and pursuant to such
regulations as the Named Fiduciary-Plan Administration shall prescribe. Any such
instructions shall remain in the strict confidence of the Trustee. Any shares of
Union Pacific Corporation stock for which no instructions are received by the
Trustee within such time specified by notice and any shares which are not
allocated to Participants' Accounts shall be voted by the Trustee in the same
proportion that the shares for which instructions are received are voted. Any
shares of Common Stock for which no instructions are received by the Trustee
within such time specified by notice and any shares which are not allocated to
Participants' Accounts (including, but not limited to, shares in the Suspense
Account and Pre-Allocation Account) shall be voted by the Trustee in the manner
directed by the independent fiduciary appointed by the Named Fiduciary-Plan
Investments and, if no independent fiduciary has been so appointed, then by the
Named Fiduciary-Plan Investments. With respect to fractional shares for which
instructions are received by the Trustee, the Trustee shall aggregate all such
fractional shares for which the same instructions are received into whole shares
and shall vote such whole shares as instructed. Any remaining fractional shares
shall be voted by the Trustee in the same proportion that the shares for which
instructions are received are voted.
(b) Each Participant or Beneficiary of a deceased Participant shall have
the right to direct the Trustee as to the exercise of voting rights with respect
to the Common Stock, including fractional shares, allocated to the Participant's
PAYSOP Contribution Account. As soon as practicable prior to the occasion for
the exercise of such voting rights, the Trustee shall deliver or cause to be
delivered to each such Participant and Beneficiary all notices, prospectuses,
financial statements, proxies and proxy soliciting materials relating to the
Common Stock allocated to the Participant's PAYSOP Contribution Account.
Instructions by Participants and Beneficiaries to the Trustee shall be in such
form and pursuant to such regulations as the Named Fiduciary-Plan Administration
shall prescribe. Any such instructions shall remain in the strict confidence of
the Trustee. Any shares or fractional shares of Common Stock for which no
instructions are received by the Trustee within such time specified by notice
shall not be voted. With respect to fractional shares for which instructions are
received by the Trustee, the Trustee shall aggregate all such fractional shares
for which the same instructions are received into whole shares and shall vote
such whole shares as instructed. Any remaining fractional shares shall not be
voted.
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Sec. 6.12 Tender Offer Response on Common Stock.
(a) In the event of a tender offer for any Common Stock or shares of Union
Pacific Corporation stock held in the Plan, the Trustee shall as promptly as
practicable request of each Participant or Beneficiary of a deceased Participant
instructions as to the tender offer response desired by that Participant or
Beneficiary in connection with the shares of Common Stock or shares of Union
Pacific Corporation stock allocated to the Account of such Participant or
Beneficiary (other than shares allocated to this PAYSOP Contribution Account)
and the Trustee shall be bound by the instructions received. Any such
instructions shall remain in the strict confidence of the Trustee. With respect
to shares of Union Pacific Corporation stock, the Trustee shall not tender (1)
shares held for a Participant or Beneficiary who fails to give instructions or
(2) shares which are not allocated to Participants' Accounts. With respect to
shares of Common Stock, the Trustee shall tender (1) all allocated shares for
which no instructions are given and (2) all unallocated shares (including, but
not limited to, shares held in the Suspense Account or the Pre-Allocation
Account) in the manner directed by the independent fiduciary appointed by the
Named Fiduciary-Plan Investments and, if no independent fiduciary has been so
appointed, then by the Named Fiduciary-Plan Investments. With respect to
fractional shares for which instructions are received by the Trustee, the
Trustee shall aggregate all such fractional shares for which instructions to
tender are received into whole shares and shall tender such whole shares as
instructed. Any remaining fractional shares shall not be tendered.
(b) In the event of a tender offer for any Common Stock held in the Plan,
the Trustee shall as promptly as possible request of each Participant or
Beneficiary of a deceased Participant instructions as to the tender offer
response desired by that Participant or Beneficiary in connection with the
shares of Common Stock allocated to the PAYSOP Contribution Account of the
Participant and the Trustee shall be bound by the instructions received. Any
such instructions shall remain in the strict confidence of the Trustee. The
Trustee shall not tender shares held in a PAYSOP Contribution Account for a
Participant or Beneficiary who fails to give instructions. With respect to
fractional shares for which instructions are received by the Trustee, the
Trustee shall aggregate all such fractional shares for which instructions to
tender are received into whole shares and shall tender such whole shares as
instructed. Any remaining fractional shares shall not be tendered.
Sec. 6.13 Voting and Tender of Mutual Fund Shares. To the extent that
shares of one or more of the regulated investment companies offered by The
Vanguard Group, Inc. (the "Vanguard Funds") are allocated to Participants'
Accounts, the Trustee shall vote or tender such shares solely in accordance with
written instructions furnished to it by each Participant (or Beneficiary of a
deceased Participant); provided that the Trustee shall be responsible for
delivery to each Participant (or Beneficiary of a deceased Participant) of all
notices, proxies and proxy soliciting materials related to any such shares of
the Vanguard Funds. Any such instructions shall remain in the strict confidence
of the Trustee. Shares, including fractional shares, for which voting or tender
instructions are not received shall not be voted or tendered.
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Sec. 6.14 No Withdrawal of PAYSOP Contributions. Amounts which have been
contributed to the Plan by the Employer as PAYSOP Contributions because of the
requirements of section 41 of the Code shall remain in the Plan (and, if
allocated under the Plan shall remain so allocated) even if part or all of the
tax credit under section 41 of the Code is recaptured or redetermined.
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ARTICLE VII
VESTING
Sec. 7.01 Full and Immediate Vesting. A Participant, at all times, shall
have a fully (100%) vested and nonforfeitable interest in the balance of his
Before-Tax Contribution Account, After-Tax Employee Contribution Account, PAYSOP
Contribution Account, Employee Contribution Account, Rollover Account, and, with
respect to Employer contributions made on or after the Effective Date, his ESOP
Matching Contribution Account or, subsequent to the repayment of the Acquisition
Loan, his Matching Contribution Account.
Sec. 7.02 Vesting of Company Contribution Account and Matching
Contribution Account.
(a) A Participant's interest in his Company Contribution Account and his
Matching Contribution Account shall vest based on his Years of Service in
accordance with the following schedule:
Years of Vested Percentage
-------- -----------------
Less than 5 0%
5 or more 100%
Notwithstanding the foregoing, a Participant will become fully (100%)
vested upon (1) his Retirement, (2) his attainment of Normal Retirement Age
while an Employee, (3) his death while an Employee, (4) the Named Fiduciary-Plan
Administration's determination that he has suffered a Total Disability while an
Employee, provided that, prior to July 1, 1983, the Participant was not
receiving benefits under the Long Term Disability Plan, a disability pension
under the Pension Plan for Non-Exempt Salaried and Hourly Employees of Union
Pacific Resources Company, as amended, or benefits under the Union Pacific
Resources Company Long Term Disability Plan for the Corpus Christi Texas
Refinery, or (5) his Separation from Service, if, at the time of such
separation, contributions to the Plan required to be made by the Employer have
been temporarily suspended in whole or in part. In addition, a Participant shall
be one hundred percent (100%) vested in his Company Contribution Account and
Matching Contribution Account during any period with respect to which Matching
Contributions have been temporarily suspended in whole or in part, but only to
the extent that such Accounts are attributable to contributions made on behalf
of such Participant by the Employer for periods beginning prior to the beginning
of such temporary suspension.
(b) Notwithstanding the above, a Participant who ceased to be an Employee
on March 31, 1994 and became an Employee of Tidelands Oil Production Company on
April 1, 1994 is fully (100%) vested in his Company Contribution Account and
Matching Contribution Account.
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Sec. 7.03 Effects of Break in Service.
(a) Except as provided in subsection (c), if a Participant had a vested
interest in any of his Accounts (other than his Rollover Account, After-Tax
Employee Contribution Account, or Employee Contribution Account) at the time he
incurred a Break in Service, his pre-break Years of Service shall be aggregated
with the Years of Service he completes after the Break in Service for purposes
of determining his vested percentage under Section 7.02.
(b) Except as provided in subsection (c) or in Section 3.01(c), if a
Participant or Employee had no vested interest in any of his Accounts (other
than his Rollover Account, After-Tax Employee Contribution Account, or Employee
Contribution Account) at the time he incurred a Break in Service, his pre-break
Years of Service shall be counted in determining his vested percentage under
Section 7.02 after his Reemployment Commencement Date if he again completes an
Hour of Service at a time when his consecutive Breaks in Service do not equal or
exceed the greater of (1) five (5) or (2) the number of Years of Service he had
to his credit prior to his Break in Service. Otherwise, such Participant's
pre-break Years of Service shall be canceled.
(c) Notwithstanding the above, a Participant's Years of Service after any
Break in Service shall not increase his vested interest in his pre-break Account
balance unless the Participant again completes an Hour of Service prior to
incurring five (5) consecutive Breaks in Service and only if his pre-break
Account balance is restored as described in Section 7.04, if the vested amount
was previously distributed.
Sec. 7.04 Forfeiture of Nonvested Amounts and Restoration Upon
Reemployment.
(a) The Account of a Participant who has had a Separation from Service
shall be closed, and the forfeitable amount held therein shall be forfeited on
the earlier of:
(1) the date on which he receives a distribution of his entire
vested interest in his Account, which is less than one hundred percent (100%);
or
(2) the date on which he incurs his fifth consecutive Break in
Service.
(b) Amounts forfeited from a Participant's Account under subsection (a)
shall be used to reduce future ESOP Matching Contributions or Matching
Contributions made pursuant to Section 4.02(a).
(c) If a Participant who has received a distribution described in
paragraph (a)(1) of this Section, whereby any part of his Account has been
forfeited, again becomes a Covered Employee prior to incurring five (5)
consecutive Breaks in Service, the amount so forfeited shall be restored to his
Account. Amounts restored under this subsection shall be funded through current
forfeitures or additional contributions by the Participant's Employer.
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(d) If a Participant does not again become a Covered Employee before he
has had five (5) consecutive Breaks in Service, the amount forfeited under
subsection (a) shall not be restored to his Account under any circumstances.
Sec. 7.05 Vesting Following In-Service Withdrawals or Payment in
Installments. If a Participant has received a distribution described in Section
8.03, 8.04(a)(2) or 8.04(a)(3) from his Matching Contribution Account or his
Company Contribution Account at a time when he has less than a one hundred
percent (100%) vested interest in such Accounts, his vested interest in such
Accounts at all times prior to the date on which he incurs his fifth consecutive
Break in Service, shall be an amount "X" determined by the formula X=P(AB+(RxD))
- - (RxD), when:
"P" = the Participant's vested percentage as determined under Section 7.02
on the date of reference.
"AB" = the balance, as of the date of reference, of the Participant's
Matching Contribution Account and Company Contribution Account.
"D" = the amount of the distribution.
"R" = the ratio of AB to the balance, immediately following the
distribution, of the Participant's Matching Contribution Account and
Company Contribution Account.
In the event that the Participant has received more than one such distribution,
his vested interest in such Accounts shall be an amount "X(n)" determined by the
formula
X(n)=P[AB+((R(1)xD(1))+(R(2)xD(2))+...+(R(n)xD(n))]-[(R(1)xD(1))+(R(2)xD(2))+...
+(R(n)xD(n))],
when D(1) is the amount of the first such distribution, D(2) is the amount of
the second such distribution, and so forth, and R(1) is the ratio of AB to the
balance of the appropriate Accounts immediately following the first
distribution, R(2) is the ratio of AB to the balance of the appropriate Accounts
immediately following the second distribution, and so forth.
Immediately after the Participant has five (5) consecutive Breaks in
Service, his vested interest in his Matching Contribution Account and his
Company Contribution Account determined under this Section, if in excess of
zero, shall be established as a separate account, and he shall at all times have
a vested interest therein. If the Participant is later reemployed as a Covered
Employee, any allocations of Matching Contributions to him shall be credited to
a new account, and his vested interest therein shall be determined under Section
7.02.
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ARTICLE VIII
BENEFIT DISTRIBUTIONS
Sec. 8.01 Death Benefits. Subject to Section 8.06 and Section 9.02(h), in
the event of a Participant's death before his Benefit Payment Date, his
Beneficiary shall be entitled to receive a death benefit equal to the vested
portion of the balance of his Account determined as of the Valuation Date
related to the Benefit Payment Date for the Participant's Beneficiary (which
Valuation Date shall be selected by the Named Fiduciary-Plan Administration and
shall not be earlier than the Valuation Date coincident with or next following
the Participant's date of death (or the Beneficiary's request for payment for
deaths occurring prior to January 1, 1993) nor later than the Valuation Date
coincident with or next preceding the Benefit Payment Date). With respect to
deaths occurring on or after January 1, 1993, such death benefit shall be paid
to the Participant's Beneficiary as soon as administratively practical after the
Participant's death with or without the Beneficiary's request for payment.
Sec. 8.02 Benefits Upon Separation from Service. Subject to Section 8.06
and Section 9.02(h), the Plan benefit payable to a Participant upon such
Participant's Separation from Service for reasons other than death shall be
equal to the vested portion of the balance of his Account, determined as of the
Valuation Date related to the Benefit Payment Date for the Participant (which
Valuation Date shall be selected by the Named Fiduciary-Plan Administration and
shall not be earlier than the Valuation Date coincident with or next following
the Participant's Separation from Service nor later than the Valuation Date
coincident with or next preceding the Benefit Payment Date). Payment of such
benefit shall begin as soon as practicable after the Separation from Service
first above mentioned; provided, however, that in the case of a Participant
whose vested Account balance exceeds $3,500 (or, in the case of a Participant
who has not reached Normal Retirement Age, has ever exceeded $3,500 at the time
of any prior distribution), no distribution shall begin at such time without the
written consent of the Participant. If the Participant does not so consent, then
distribution will be deferred until any subsequent date elected by the
Participant in writing pursuant to such procedures as the Named Fiduciary-Plan
Administration may impose, but not later than (a) the date he attains Normal
Retirement Age if the Participant has a Separation from Service prior to
Retirement or (b) the date he reaches his Required Beginning Date, if the
Participant has Retired, in which case the value of the vested balance of his
Account shall be determined as of the Valuation Date related to his Benefit
Payment Date (which Valuation Date shall be selected by the Named Fiduciary-Plan
Administration and shall not be earlier than the Valuation Date coincident with
or next following the date the Participant consents to the distribution nor
later than the Valuation Date coincident with or next preceding the Benefit
Payment Date). A Participant's election to commence payment prior to the date he
attains Normal Retirement Age must be made within the ninety (90) day period
ending on the Benefit Payment Date elected by the Participant and in no event
earlier than the date the Named Fiduciary-Plan Administration provides the
Participant with written information relating to his right to defer payment
until his Normal Retirement Age, the modes of payment available to him, the
relative values of each and his right to make a direct rollover as
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described in Section 8.10. Such information must be supplied not less than
thirty (30) days nor more than ninety (90) days prior to the Benefit Payment
Date. Notwithstanding the preceding sentence, a Participant's Benefit Payment
Date may occur less than thirty (30) days after such information has been
supplied to the Participant, provided that after the Participant has received
such information and has been advised of his right to a thirty (30) day period
to make a decision regarding the distribution, the Participant affirmatively
elects a distribution.
Sec. 8.03 Withdrawals. A Participant may request a withdrawal from his
Account in accordance with the following rules:
(a) Non-Hardship Withdrawals. As of any Valuation Date, each Participant
shall have the right to withdraw from the Plan all or a part of the amount
described in paragraph (1), paragraph (2) or paragraph (3) below; provided,
however, that the Participant has not withdrawn any amount under this subsection
(a) within the twelve (12) month period preceding such Valuation Date.
(1) Type A Withdrawal. Under a Type A withdrawal, a Participant may
withdraw, in whole integer multiples of one percent (1%) or a flat dollar
amount, all or a part of his Employee Contribution and After-Tax Employee
Contribution Accounts to the extent attributable to contributions made to such
Accounts prior to January 1, 1987, and from his Company Contribution, Matching
Contribution and ESOP Matching Contribution Accounts, to the extent vested (but
the last source of funds will be post-February 29, 1996 Matching Contributions
and then ESOP Matching Contributions); provided that the aggregate withdrawal
under this paragraph (1) shall not exceed the amount of after-tax contributions
made by the Participant prior to January 1, 1987 which had not been considered
previously distributed to such Participant.
(2) Type B Withdrawal. Under a Type B withdrawal, a Participant may
withdraw the entire amount described in paragraph (1) above plus, in whole
integer multiples of one percent (1%) or a flat dollar amount, all or a part of
the Participant's After-Tax Employee Contribution Account, to the extent
attributable to contributions made to such Account subsequent to December 31,
1986, but excluding After-Tax Employee Contributions which are recharacterized
Before-Tax Contributions as described in Section 5.03(a)(2).
(3) Type C Withdrawal. Under a Type C withdrawal, a Participant may
withdraw the entire amount described in paragraphs (1) and (2) above, plus the
Participant's entire remaining interest (in whole integer multiples of one
percent (1%), or a flat dollar amount), if any, in his Employee Contribution and
After-Tax Employee Contribution Accounts to the extent attributable to
contributions made to such Accounts prior to January 1, 1987 plus, in whole
integer multiples of one percent (1%), or a flat dollar amount, all or a part of
the amount of his vested interest in his Company Contribution, Matching
Contribution and ESOP Matching Contribution Accounts available for withdrawal
under paragraph (e)(2) plus, in whole integer multiples of one percent (1%), or
a flat dollar amount, or all or a part of the amount in his Rollover Account.
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(b) Hardship Withdrawals. As of any Valuation Date, each Participant shall
have the right to make a withdrawal from the Plan on account of hardship;
provided, however, that the Participant has not withdrawn any amount under this
subsection (b) within the twelve (12) month period preceding such Valuation
Date. If the Named Fiduciary-Plan Administration determines, on a uniform,
nondiscriminatory basis, and on the basis of all relevant facts and
circumstances, that a requested withdrawal is on account of an immediate and
heavy financial need of the Participant, and the withdrawal is necessary to
satisfy such financial need, the Named Fiduciary-Plan Administration shall
permit the Participant to withdraw the amounts described in subsection (a), the
vested portion of his Matching Contribution and ESOP Matching Contribution
Accounts not available under subsection (a) (due to application of paragraph
(e)(2)), plus, subject to subsection (e), his Before-Tax Contribution Account
and the remainder of his After-Tax Employee Contribution Account. Withdrawals
pursuant to this subsection (b) shall be subject to the following additional
rules:
(1) A distribution shall be deemed to be on account of an immediate
and heavy financial need of a Participant when the distribution is on account
of:
(A) expenses for medical care described in section 213(d) of
the Code incurred by the Participant, the Participant's spouse, or any
dependents of the Participant as defined in section 152 of the Code (or the
distribution is necessary for such persons to obtain such medical care);
(B) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
(C) payment of tuition, room and board, and related
educational fees for the next twelve (12) months of post-secondary education for
the Participant, his spouse, children or dependents;
(D) the need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of his principal
residence; or
(E) such other circumstances or events as may be prescribed by
the Secretary of the Treasury or his delegate.
(2) A withdrawal shall be deemed necessary to satisfy the financial
need of a Participant if the amount of the withdrawal does not exceed the amount
of the Participant's immediate and heavy financial need, including, at the
election of the Participant, any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution. A distribution generally may be treated as necessary to satisfy a
financial need if the Participant has obtained all currently permissible
distributions (other than hardship distributions of elective deferrals) under
this and all other qualified retirement plans maintained by the Employer and all
Affiliated Companies and, unless Participant is age 59-1/2 or older on the date
of withdrawal, the Named Fiduciary-Plan Administration relies on the
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Participant's representation (unless the Named Fiduciary-Plan Administration has
actual knowledge to the contrary) that the need cannot be relieved:
(A) through reimbursement or compensation by insurance or
otherwise;
(B) by reasonable liquidation of the Participant's assets, to
the extent such liquidation would not itself cause an immediate and heavy
financial need;
(C) by cessation of Before-Tax and After-Tax Employee
Contributions; or
(D) by borrowing from the Plan or another employer's plan or
other commercial sources on reasonable commercial grounds, to the extent such
loan would not itself cause an immediate and heavy financial need.
A Participant's resources shall include the resources of the Participant's
spouse and minor children, to the extent that those resources are reasonably
available to the Participant.
(c) All withdrawals shall be made by filing a written request with the
Named Fiduciary-Plan Administration on such form and at such times as the Named
Fiduciary-Plan Administration may prescribe.
(d) All withdrawals shall be deemed to be made from the Investment Funds
in which the affected Accounts of the Participant are then invested as elected
by the Participant.
(e) Notwithstanding anything in this Section to the contrary:
(1) the aggregate amount of a Participant's withdrawals prior to age
59-1/2 from his Before-Tax Contribution Account and from the portion of his
After-Tax Employee Contribution Account that is attributable to recharacterized
Before-Tax Contributions as described in Section 5.03(a)(2) shall not exceed the
balance of his Before-Tax Contribution Account determined as of December 31,
1988, plus the sum of his Before-Tax Contributions and the sum of his
recharacterized Before-Tax Contributions made on and after January 1, 1989;
(2) (i) a Participant's withdrawals under subsection (a) from his
Matching Contribution and ESOP Matching Contribution Accounts may not include
contributions allocated within twenty-four (24) months prior to the date of
withdrawal, unless the Participant has completed five (5) Years of
Participation;
(ii) a Participant's withdrawals under paragraph (a)(3) (i.e.,
a Type C Withdrawal) shall not include post-February 29, 1996 Matching
Contributions or ESOP Matching Contributions (including excess shares allocated
pursuant to Section 4.08(b)(4)), including earnings thereon;
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(iii) a Participant's withdrawals under subsection (b) (i.e.,
Hardship Withdrawals) from his Matching Contribution or ESOP Matching
Contribution Account shall be allowed, but only to the extent all other sources
of Hardship Withdrawals have been exhausted other than his Before-Tax
Contribution Account. Amounts allocated to the Participant's Matching
Contribution Account shall be exhausted before withdrawals may be made from his
ESOP Matching Contribution Account.
(f) Withdrawals shall be made:
(1) first, from amounts described in Section 8.03(a)(1);
(2) then, from amounts described in Section 8.03(a)(2);
(3) then, from amounts described in Section 8.03(a)(3);
(4) then, from the remainder of his vested Matching Contribution
Account;
(5) then, from the remainder of his ESOP Matching Contribution
Account; and
(6) then, from the Participant's Before-Tax Contribution Account and
the remainder of his After-Tax Employee Contribution Account.
(g) All distributions of amounts withdrawn pursuant to this Section shall
be made in the form of a single sum as soon as practicable following the
Valuation Date as of which such withdrawal is made. Such distributions shall be
in cash, provided that a Participant shall have the right to elect to take any
withdrawal of amounts invested in the Union Pacific Common Stock Fund or the UPR
Common Stock Fund, which are not withdrawn pursuant to subsection (b) for
purposes of satisfying a hardship, in whole shares of stock, with any fractional
shares converted to and distributed in cash. If as a result of the Participant's
election all or part of a withdrawal including amounts described in Section
8.03(a) is in the form of shares of stock, such withdrawal shall include that
number of full shares of stock, the cost of which to the Union Pacific Common
Stock Fund or the UPR Common Stock Fund, as the case may be, is attributable
solely to the amount which such Participant contributed to the Plan on his own
behalf with respect to periods ending prior to July 1, 1983 and to the amount of
such Participant's After-Tax Employee Contributions, but not including earnings
on either such amount, such that the aggregate cost to the Union Pacific Common
Stock Fund or the UPR Common Stock Fund, as the case may be, of such shares of
stock plus (1) the amount of cash, if any, included in such withdrawal and (2)
the value of the number of shares of Common Stock, if any, included in such
withdrawal whose cost to the Union Pacific Common Stock Fund or the UPR Common
Stock Fund, as the case may be, is not attributable to such contributions equals
the amount of cash which would have been withdrawn if such withdrawal had been
solely in cash.
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(h) No withdrawal, other than a hardship withdrawal, shall be made to a
Participant while he has a loan outstanding pursuant to Article IX of the Plan.
Notwithstanding anything in this Section to the contrary, no Participant shall
be permitted to withdraw any portion of his Account that is allocated to the
Participant's Loan Fund.
(i) In the event that the Participant submits a request for a non-hardship
withdrawal while a loan application is pending for such Participant pursuant to
Section 9.01(b), the request for withdrawal shall be processed first. In the
event that the Participant submits a request for a hardship withdrawal while a
loan application is pending for such Participant pursuant to Section 9.01(b),
the loan application shall be processed first.
Sec. 8.04 Form of Benefit Payment.
(a) A Participant may make separate written elections with respect to form
of payment of (1) his PAYSOP Contribution Account and (2) the vested interest in
the portion of his Account other than his PAYSOP Contribution Account. Except as
otherwise provided in this Article, the Participant may elect to have such
amounts paid to him in accordance with any of the following forms of payment:
(1) a single sum payment; or
(2) annual installments over a period not to exceed the lesser of
(A) ten (10) years or (B) the life expectancy of the Participant or the life
expectancy of the Participant and his Beneficiary (determined in accordance with
applicable Treasury regulations with no recalculation), with each such
installment determined by dividing the value of the Participant's vested Account
balance on the Valuation Date to which such installment pertains by the number
of installments remaining to be paid. The Participant shall elect in writing on
a form prescribed by the Named Fiduciary-Plan Administration, the calendar month
in which the annual installments are to be received and once having made such
"calendar month" election, the election may not be changed for subsequent annual
installments. Notwithstanding the above, at any time after his Benefit Payment
Date, the Participant may elect in writing on a form prescribed by the Named
Fiduciary-Plan Administration, to cancel the remaining annual installment
payments and receive the balance of the Participant's vested interest in a
single sum as soon as practicable after such election is made; or
(3) monthly installments over a period not to exceed the lesser of
(A) one hundred twenty (120) months or (B) the life expectancy of the
Participant or the life expectancy of the Participant and his Beneficiary
(determined in accordance with applicable Treasury regulations with no
recalculation), with each such installment determined by dividing the value of
the Participant's vested Account balance on the Valuation Date to which such
installment pertains by the number of installments remaining to be paid.
Notwithstanding the above, at any time after his Benefit Payment Date the
Participant may elect, in writing on a form prescribed by the Named
Fiduciary-Plan Administration, to cancel the remaining monthly installment
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payments and receive the balance of the Participant's vested interest in a
single sum as soon as practicable after such election is made.
(b) Except as otherwise provided in this Article, a Beneficiary entitled
to benefits under Section 8.01 shall receive payment of the deceased
Participant's vested interest in his Account in the form of a single sum.
(c) If a Participant dies on or after his benefit has commenced to be paid
in the form described in paragraph (a)(2) or (a)(3), his vested interest under
the Plan, if any, shall continue to be paid to his Beneficiary in the same
manner as in effect prior to the Participant's death, except that with respect
to benefits paid in the form described in paragraphs (a)(2) or (a)(3), if the
Participant's death occurs prior to his Required Beginning Date, the
Participant's entire vested interest remaining upon his death shall be paid to
his Beneficiary, at least as rapidly as is required to satisfy section 401(a)(9)
of the Code and Treasury regulations thereunder. Notwithstanding the above, the
Beneficiary may elect, in writing on a form prescribed by the Named Fiduciary-
Plan Administration, to cancel the remaining installment payments pursuant to
paragraph (a)(2) or (a)(3) and receive the balance of the Participant's vested
interest in a single sum as soon as practicable after such election is made.
(d) Notwithstanding anything in this Section to the contrary, if the
Participant's vested interest in his Account as of his Separation from Service
or death, whichever applies, does not exceed $3,500, and in the case of a
Participant who has not reached Normal Retirement Age has never exceeded $3,500
at the time of any prior distribution, the vested interest of such Participant
shall be paid to the Participant (or to his Beneficiary, if the Participant is
deceased) in a single sum.
(e) A Participant may elect the form of payment for his Account at any
time prior to the Benefit Payment Date. Such election shall be on a form
prescribed by the Named Fiduciary-Plan Administration.
(f) Each distribution from a Participant's Account (other than his PAYSOP
Contribution Account and ESOP Matching Contribution Account) shall be in cash,
except that, in the event the Participant or his Beneficiary receives payment in
a single sum, such Participant or Beneficiary may elect, in lieu of having such
distribution entirely in cash, to have the portion of the Participant's vested
Account which is invested in the Union Pacific Common Stock Fund and the UPR
Common Stock Fund, distributed in full shares of stock, with any fractional
shares of stock in such Account distributed in cash.
(g) The portion of a Participant's PAYSOP Contribution Account and ESOP
Matching Contribution Account invested in the UPR Common Stock Fund shall be
distributed in full shares of Common Stock; provided, however, that the
Participant or Beneficiary may elect to take such distribution in cash in the
amount realized from converting such full shares of Common Stock in the
Participant's PAYSOP Contribution Account and ESOP Matching Contribution Account
to cash, and; provided further, that if the Participant or Beneficiary elects
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to receive the distribution in either annual or monthly installments under
paragraphs (a)(2) or (a)(3), respectively, such distribution must be taken in
cash. Any fractional shares of Common Stock shall be distributed in cash. Any
portion of a Participant's PAYSOP Contribution Account and ESOP Matching
Contribution Account, which is not invested in the UPR Common Stock Fund due to
the Participant's election pursuant to Section 6.05(b) or (c), shall be
distributed in cash.
(h) Notwithstanding anything in this Section to the contrary, in the event
a Participant's benefit is required to commence pursuant to Section 8.06(c)
while he is an Employee, the balance of the Participant's Account shall be paid
in a single sum as of his Required Beginning Date and as of the last day of each
Plan Year thereafter during which he remains an Employee.
Sec. 8.05 Beneficiary Designation Right.
(a) Spouse as Beneficiary. The Beneficiary of a death benefit payable
pursuant to Section 8.01 or Section 8.04(c) shall be the Participant's spouse as
defined in subsection (d); provided, however, that the Participant may designate
a Beneficiary other than his spouse pursuant to subsection (b) if:
(1) the spouse has waived the spouse's right to be the Participant's
Beneficiary in accordance with subsection (c), or
(2) the Participant has no spouse, or
(3) the Named Fiduciary-Plan Administration determines that the
spouse cannot be located or such other circumstances exist under which spousal
consent is not required, as prescribed by Treasury regulations.
(b) Beneficiary Designation Right. Each Participant who is permitted to
designate a Beneficiary other than his spouse pursuant to subsection (a) shall
have the right to designate one or more primary and one or more secondary
Beneficiaries to receive any benefit becoming payable upon the Participant's
death. All Beneficiary designations shall be in writing in a form satisfactory
to the Named Fiduciary-Plan Administration. Each Participant shall be entitled
to change his Beneficiaries at any time and from time to time by filing written
notice of such change with the Named Fiduciary-Plan Administration. However, the
Participant's spouse must again consent in writing to any such change, unless
(1) the prior consent of the spouse expressly permits designations by the
Participant without any requirement of further consent by the spouse or (2) one
of the exceptions described in paragraphs (a)(2) and (3) applies.
A Participant's designation of his spouse as Beneficiary under Section
8.01 shall be automatically revoked upon the death of such spouse or the
Participant's divorce from such spouse. In the event that the Participant fails
to designate a Beneficiary to receive a benefit that becomes payable pursuant to
Section 8.01 or Section 8.04(c), or in the event that the Participant
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<PAGE>
is predeceased by all designated primary and secondary Beneficiaries, the death
benefit shall be payable to the Participant's spouse or, if there is no spouse,
to the Participant's estate.
(c) Form and Content of Spouse's Consent. A spouse may consent to the
designation of one or more Beneficiaries other than such spouse provided that
such consent shall be in writing, must consent to the specific alternate
beneficiary or beneficiaries designated (or permit beneficiary designations by
the Participant without the spouse's further consent), must acknowledge the
effect of such consent, and must be witnessed by a notary public. Such spouse's
consent shall be irrevocable, unless expressly made revocable. The consent of a
spouse in accordance with this subsection (c) shall not be effective with
respect to any subsequent spouse of the Participant.
(d) Definition of "Spouse". For purposes of this Section 8.05:
(1) with respect to a death benefit payable pursuant to Section
8.01, the term "spouse" shall mean the Participant's spouse as of the date of
the Participant's death; and
(2) with respect to a death benefit payable pursuant to Section
8.04(c), the term "spouse" shall mean the Participant's spouse as of the
Participant's Benefit Payment Date.
Sec. 8.06 Required Distribution Dates. Anything contained in the Plan to
the contrary notwithstanding:
(a) the Benefit Payment Date for a Beneficiary described in Section 8.01
receiving payment in a single sum shall in no event be later than December 31 of
the calendar year containing the fifth anniversary of the Participant's death;
(b) the Benefit Payment Date for a Beneficiary described in Section 8.01
receiving payment in installments shall in no event be later than December 31 of
the calendar year following the calendar year of the Participant's death unless
(1) the Beneficiary is the Participant's spouse, in which case the Benefit
Payment Date shall in no event be later than December 31 of the later of (A) the
calendar year following the calendar year of the Participant's death or (B) the
calendar year in which the Participant would have attained age 70-1/2 or (2)
full payment of the benefit due to such Beneficiary is made by December 31 of
the calendar year containing the fifth anniversary of the Participant's death;
(c) unless a Participant elects otherwise by failing to elect to receive
his benefit pursuant to Section 8.02, his Benefit Payment Date shall be no later
than the 60th day following the close of the Plan Year in which the Participant
attains his Normal Retirement Age or has a Separation from Service, whichever
occurs last; provided, however, that a Participant's Benefit Payment Date shall
in no event be later than his Required Beginning Date;
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(d) distributions under the Plan shall comply with the requirements of
section 401(a)(9) of the Code and the Treasury regulations thereunder, including
the incidental death benefit requirements of proposed Treas. Reg.
ss.1.401(a)(9)-2; and
(e) no distribution shall be made from a Participant's Account to the
extent that such distribution would fail to satisfy the requirements of section
401(k)(2)(B) of the Code. In addition, no distribution shall be made from a
Participant's PAYSOP Contribution Account to the extent that such distribution
would fail to satisfy the requirements of section 409(d) of the Code.
Sec. 8.07 Rights of Alternate Payees.
(a) General. Except as otherwise provided in this Section 8.07, an
Alternate Payee shall have no rights to a Participant's benefit and shall have
no rights under this Plan other than those rights specifically granted to the
Alternate Payee pursuant to a QDRO. Notwithstanding the foregoing, an Alternate
Payee shall have the right to make a claim for any benefits awarded to the
Alternate Payee pursuant to a QDRO, as provided in Article XIII. Any interest of
an Alternate Payee in the Accounts of a Participant, other than an interest
payable (1) solely upon the Participant's death pursuant to a QDRO which
provides that the Alternate Payee shall be treated as the Participant's
surviving spouse or (2) from, and for only so long as, installment payments are
made to a Participant, shall be separately accounted for by the Trustee in the
name and for the benefit of the Alternate Payee.
(b) Distribution.
(1) Notwithstanding anything in this Plan to the contrary, a QDRO
may provide that any benefits of a Participant payable to an Alternate Payee
that are separately accounted for shall be distributed immediately or at any
other time specified in the order but not later than the latest date benefits
would be payable to the Participant pursuant to this Article. If the order does
not specify the time at which benefits shall be payable to the Alternate Payee,
the Alternate Payee may elect, in writing on a form prescribed by the Named
Fiduciary-Plan Administration, to have benefits commence (A) in accordance with
Section 8.02 as of the earlier of (i) the Participant's 50th birthday or (ii)
the Participant's Separation from Service or as of any date thereafter that is
not later than the latest date on which benefits would be payable to the
Participant pursuant to that Section or (B) in accordance with Section 8.01, but
as of the Alternate Payee's death; provided, however, that in the event the
amount payable to the Alternate Payee under the QDRO does not exceed $3,500,
such amount shall be paid to the Alternate Payee in a single sum as soon as
practicable following the Named Fiduciary-Plan Administration's receipt of the
order and verification of its status as a QDRO.
(2) Except as provided in paragraph (1), if a QDRO does not provide
the form of distribution of benefits payable to an Alternate Payee, the
Alternate Payee shall have the right to elect distribution in any form provided
under Section 8.04, except that benefits to be paid in
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installments may not be paid over a period exceeding the life expectancy of the
Alternate Payee, determined as of the date of the first distribution.
(3) If the QDRO does not specify the Participant's Accounts, or
Investment Funds in which such Accounts are invested, from which amounts that
are separately accounted for shall be paid to an Alternate Payee, such amounts
shall be distributed, or segregated, from the Participant's Accounts, and the
Investment Funds in which such Accounts are invested (excluding any Loan Fund),
on a pro rata basis, subject to section 72(m)(10) of the Code. A QDRO may not
provide for the assignment to an Alternate Payee of an amount that exceeds the
balance of the Participant's vested accounts after deduction of any Loan Fund.
(c) Withdrawals. Unless a QDRO establishing a separate account for an
Alternate Payee provides to the contrary, an Alternate Payee shall not be
permitted to make any withdrawals under Article VIII.
(d) Death Benefits. Unless a QDRO establishing a separate account for an
Alternate Payee provides to the contrary, an Alternate Payee shall have the
right to designate a Beneficiary, in the same manner as provided in Section 8.05
with respect to a Participant (except that no spousal consent shall be
required), who shall receive benefits payable to an Alternate Payee which have
not been distributed at the time of the Alternate Payee's death. If the
Alternate Payee does not designate a Beneficiary, or if the Beneficiary
predeceases the Alternate Payee, benefits payable to the Alternate Payee which
have not been distributed shall be paid to the Alternate Payee's estate. Any
death benefit payable to the Beneficiary of an Alternate Payee shall be paid in
a single sum, subject to Sections 8.04(f) and (g), as soon as administratively
practicable after the Alternate Payee's death, with or without the Beneficiary's
request for payment.
(e) Investment Direction. Unless a QDRO establishing a separate account
for an Alternate Payee provides to the contrary, an Alternate Payee shall have
the right to direct the investment of any portion of a Participant's Accounts
payable to the Alternate Payee under such order in the same manner as provided
in Article VI with respect to a Participant, which amounts shall be separately
accounted for by the Trustee in the Alternate Payee's name.
(f) Voting Rights. Unless a QDRO establishing a separate account for an
Alternate Payee provides to the contrary, an Alternate Payee shall have the
right to direct the Trustee as to the exercise of voting rights or tender offer
response with respect to the Common Stock, shares of Union Pacific Corporation
stock or shares of the Vanguard Funds, including fractional shares, allocated to
any portion of a Participant's Accounts payable to the Alternate Payee under
such order in the same manner as provided in Sections 6.11, 6.12 and 6.13 with
respect to a Participant, which amounts shall be separately accounted for by the
Trustee in the Alternate Payee's name.
(g) Loans. An Alternate Payee shall not be permitted to make a loan under
Article IX.
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Sec. 8.08 Post Distribution Credits. In the event that, after the payment
of a single-sum distribution under this Plan (other than an in-service benefit
distribution described in Section 8.03), any funds shall be subsequently
credited to the Participant's Account, such additional funds, to the extent
vested, shall be paid to the Participant as promptly as practicable thereafter;
provided that the Participant is not then an Employee or, if he is an Employee
he has reached his Required Beginning Date.
Sec. 8.09 Suspension of Payments. If a Participant who is receiving a
distribution of his Account in installments again becomes a Covered Employee,
payments under the Plan shall cease and the Participant shall have a new Benefit
Payment Date on the earlier of (a) the date the Participant again has a
Separation from Service and begins to receive payment under this Article VIII,
or (b) his Required Beginning Date.
Sec. 8.10 Direct Rollovers. In the event any payment or payments to be
made to a person pursuant to this Article VIII would constitute an "eligible
rollover distribution" within the meaning of section 401(a)(31)(C) of the Code
and regulations thereunder, such person may request that, in lieu of payment to
the person, all or part of such eligible rollover distribution be rolled over
directly to the trustee or custodian of an "eligible retirement plan" within the
meaning of section 401(a)(31)(D) of the Code and regulations thereunder. Any
such request shall be made in writing, on the form and subject to such
requirements and restrictions as may be prescribed by the Named Fiduciary-Plan
Administration for such purpose pursuant to Treasury regulations, at such time
in advance of the date payment would otherwise be made as may be required by the
Named Fiduciary-Plan Administration. For purposes of this Section, a "person"
shall include an Employee or former Employee or his surviving spouse or his
spouse or former spouse who is an Alternate Payee.
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ARTICLE IX
PARTICIPANT LOANS
Sec. 9.01 In General.
(a) (1) Permissibility. Each Participant who is an Employee and any
other Participant who is a party in interest as defined in ERISA may apply for a
loan from the Plan.
(2) Covered Employee treated as Participant. Notwithstanding any
other provision to the contrary, solely for purposes of permitting a Covered
Employee to make a loan from his Rollover Account pursuant to this Article IX,
to the extent that a Covered Employee has a balance in his Rollover Account,
such Covered Employee shall be deemed a Participant and shall be permitted to
apply for a loan from the Plan from his Rollover Account, if any, in accordance
with the provisions set forth in this Article IX.
(b) Application. Subject to such uniform and nondiscriminatory rules as
may from time to time be adopted by the Named Fiduciary-Plan Administration, the
Trustee, upon application by such Participant on forms approved by the Named
Fiduciary-Plan Administration, may make a loan or loans to such applicant;
provided, however, that the Named Fiduciary-Plan Administration shall reject a
loan application if it has actual knowledge that the intended use of the loan
proceeds is to purchase securities. No loan shall be granted if there is already
a loan outstanding, or if the Participant has previously obtained a loan within
the 12-consecutive-month period preceding the date of the current loan
application.
(c) Limitation on Amount. Loans shall be at least $1,000 in amount, and in
no event shall total loans exceed the lesser of (1) fifty percent (50%) of the
vested balance credited to such Participant's Account (exclusive of his PAYSOP
Contribution Account) as of the date of the Named Fiduciary-Plan
Administration's approval of the Participant's loan application or (2) $50,000
reduced by the excess, if any, of (A) the highest outstanding balance of all
loans during the twelve (12) months prior to the time the new loan is to be made
over (B) the outstanding balance of loans made to the Participant on the date
such new loan is made. Loans under any other qualified plan sponsored by the
Employer and all Affiliated Companies shall be aggregated with loans under the
Plan in determining whether or not the limitation stated herein has been
exceeded.
(d) Equality of Borrowing Opportunity. Loans shall be available to all
Participants who are parties in interest on a reasonably equivalent basis,
provided, however, that the Named Fiduciary-Plan Administration may make
reasonable distinctions among prospective borrowers on the basis of
creditworthiness. Subject to considerations relating to a Participant's credit
worthiness and ability or deemed ability to repay the loan, loans shall not be
made available to Participants who are or were Highly Compensated Employees in
an amount greater than the amount available to other Participants.
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(e) Loan Statement. Every Participant receiving a loan hereunder will
receive a statement from the Named Fiduciary-Plan Administration clearly
reflecting the charges involved in each transaction, including the dollar amount
and annual interest rate of the finance charges. The statement will provide all
information required to meet applicable "truth-in-lending" laws.
(f) Restriction on Loans. The Named Fiduciary-Plan Administration will not
approve any loan if it is the belief of the Named Fiduciary-Plan Administration
that such loan, if made, would constitute a prohibited transaction (within the
meaning of section 406 of ERISA or section 4975(c) of the Code), would
constitute a distribution taxable for federal income tax pur poses, or would
imperil the status of the Plan or any part thereof under section 401(k) of the
Code.
Sec. 9.02 Loans as Trust Fund Investments. All loans shall be considered
as fixed income investments of a segregated account of the Trust Fund (the "Loan
Fund") directed by the borrower. Accordingly, the following conditions shall
prevail with respect to each such loan:
(a) Security. All loans shall be secured by the portion of the
Participant's Accounts allocated to the Loan Fund pursuant to subsection (g) of
this Section and such additional security as the Named Fiduciary-Plan
Administration may deem necessary.
(b) Interest Rate. Interest shall be charged at a rate to be fixed by the
Named Fiduciary-Plan Administration and, in determining the interest rate, the
Named Fiduciary-Plan Administration shall take into consideration interest rates
currently being charged on similar commercial loans by persons in the business
of lending money.
(c) Loan Term. Loans shall be for terms of twelve (12), twenty-four (24),
thirty-six (36), forty-eight (48), or sixty (60) consecutive calendar months.
However, if the loan will be used to acquire the Participant's principal
residence, the term of the loan may be any multiple of twelve (12) consecutive
months, but not less than twelve (12) months, nor more than one hundred eighty
(180) consecutive calendar months. Loans shall be non-renewable and non-
extendable.
(d) Promissory Note. Any loan made to a Participant under this Article IX
shall be evidenced by a promissory note executed by the Participant and his
spouse; provided, however, that execution by the Participant's spouse shall only
be with respect to those provisions, if any, for which the Named Fiduciary-Plan
Administration shall determine spousal consent is necessary, in accordance with
uniform and nondiscriminatory standards. Such promissory note shall contain the
irrevocable consent of the Participant to the payroll withholding described in
subsection (e), if applicable. The Named Fiduciary-Plan Administration shall
have the right to require the Participant to execute a revised promissory note
if the Named Fiduciary-Plan Administration determines it is necessary to comply
with ERISA or the Code. In the event the Participant, and his spouse if
applicable, do not execute such revised promissory note by the date prescribed
by the Named Fiduciary-Plan Administration, the loan shall become due and
payable as of such date.
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(e) Repayment. Loans shall be repaid in equal monthly installments through
payroll withholding; provided, however, that:
(1) a Participant who is not an Employee but who is a party in
interest;
(2) a Participant who is an Employee but for whom payroll
withholding is not possible;
(3) a Participant who is receiving benefits under a short- or
long-term disability plan of the Employer or an Affiliated Company for whom
withholding from disability benefits is not possible;
(4) a Participant who is receiving Compensation, or a disability
benefit described in clause (3), which has become insufficient to make the
required monthly loan payment; and
(5) a Participant who is on an approved leave of absence,
shall repay by certified check or in such other manner directed by the Named
Fiduciary-Plan Administration. Loans may be prepaid in full as of the end of any
month without penalty, upon reasonable prior written notice to the Named
Fiduciary-Plan Administration. Partial prepayment may be made upon reasonable
prior written notice to the Named Fiduciary-Plan Administration. Such partial
prepayments shall be applied entirely to the principal amount of the loan
outstanding and may be made only once every twelve (12) months. Each partial
prepayment shall not be less than the original amount of the loan principal
divided by the original term (in years) of the loan and shall not have the
effect of reducing the monthly loan repayment amount but will reduce the
duration of the loan term. A partial prepayment will be taken into account for a
month only if received by the cutoff date prescribed by the Named Fiduciary-Plan
Administration. If permitted by the Named Fiduciary-Plan Administration, loan
repayments may be suspended during periods of qualified military service in
accordance with section 414(u) of the Code.
(f) Loan Fees. Fees properly chargeable in connection with a loan may be
charged, in accordance with a uniform and nondiscriminatory policy established
by the Named Fiduciary-Plan Administration, against the Account of the
Participant to whom the loan is granted.
(g) Loan Fund.
(1) A portion of the vested balance of the Participant's Accounts in
the Investment Funds (exclusive of his PAYSOP Contribution Account) that is
equal to the initial principal amount of any loan made pursuant to this Article
IX shall be transferred, upon the approval of the loan application and
disbursement of the initial principal amount to the Participant, to
corresponding Accounts in a Loan Fund established for the Participant. If a
Participant's vested Accounts are invested in more than one Investment Fund, the
Participant shall be permitted to elect in his loan application the basis on
which the transfer described in the
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preceding sentence shall be made from such Investment Funds; provided, however,
that, the vested balance in the Matching Contribution Account attributable to
post-February 29, 1996 Matching Contributions and the balance in the ESOP
Matching Contribution Account can be elected by the Participant only after
amounts are borrowed from other Participant Accounts. In the absence of the
Participant's election, the transfer shall be made pro-rata from the Investment
Funds in which the vested balance of the Participant's Accounts (exclusive of
his PAYSOP Contribution Account, the vested balance in the Matching Contribution
Account attributable to post-February 29, 1996 Matching Contributions and the
balance in the ESOP Matching Contribution Account) is then invested. The vested
balance in the Participant's Matching Contribution Account attributable to
post-February 29, 1996 Matching Contributions can be transferred only after
transfers from the Participant's other Accounts (exclusive of his PAYSOP
Contribution Account and his ESOP Matching Contribution Account) are exhausted
and the balance in the Participant's ESOP Matching Contribution Account can be
transferred only after transfers from the Participant's other Accounts
(exclusive of his PAYSOP Contribution Account) are exhausted. For purposes of
this paragraph and paragraph (2) below, amounts transferred to a Participant's
Loan Fund shall be taken solely from the vested portion of the Participant's
Accounts (exclusive of his PAYSOP Contribution Account), and no portion of the
nonvested portion of the Participant's Accounts shall be deemed allocated to the
Loan Fund. A Participant shall be fully vested in the portion of his Accounts
allocated to the Loan Fund.
(2) Loan payments to the Plan by the Participant pursuant to
subsection (e) or made during a grace period described in subsection (h) shall
be allocated, for loans taken before March 1, 1996, among such Participant's
Accounts in the Investment Funds in the proportion that such Accounts are
represented in the Loan Fund and shall be invested in the Investment Funds on
the basis of the Participant's current investment election under Section 6.03
(or the Participant's most recent investment election, if no investment election
is currently in effect, unless the Participant elects otherwise in accordance
with rules prescribed by the Named Fiduciary-Plan Administration). However,
notwithstanding the foregoing, for loans taken on or after March 1, 1996, loan
payments to the Plan by the Participant pursuant to subsection (e) or made
during a grace period described in subsection (h), shall be allocated first to
the Participant's ESOP Matching Contribution Account to the extent represented
in the Loan Fund, then to the Participant's Matching Contribution Account
attributable to post-February 29, 1996 contributions to the extent represented
in the Loan Fund, then proportionally among the other Accounts and shall be
invested in the Investment Funds on the basis of the Participant's current
investment election under Section 6.03 (or the Participant's most recent
investment election, if no investment election is currently in effect, unless
the Participant elects otherwise in accordance with the rules prescribed by the
Named Fiduciary-Plan Administration). At the same time, the portion of the
Participant's Accounts allocated to the Loan Fund shall be reduced, in a like
manner, by the portion of each loan payment attributable to principal.
(h) Default and Remedies. In the event that:
(1) a Participant (other than a Participant who (A) continues to be
a party in interest or (B) is receiving benefits under a short- or long-term
disability plan of the Employer or
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an Affiliated Company) has a Separation from Service and fails (or, in the case
of a deceased Participant, the Beneficiary fails) to repay the full unpaid
balance of the loan by the close of the grace period;
(2) the loan is not repaid by the time the promissory note matures;
(3) a Participant revokes any payroll withholding authorization
(whether withholding is made from Compensation or short- or long-term disability
benefits) for repayment of the loan;
(4) (A) a Participant's monthly Compensation (or monthly disability
benefit) from which a Participant's loan payments are withheld becomes
insufficient to pay the monthly loan installment, (B) such Participant has not
previously failed to make a payment by the due date or otherwise been subject to
a grace period described in this paragraph or in paragraph (5) and (C) such
Participant fails to pay, by the close of the grace period, the total of the
loan installments then due and payable;
(5) (A) a Participant who is an Employee or who is receiving
disability benefits and is repaying a loan by other than payroll withholding (or
withholding from disability benefits) fails to pay a loan installment when due,
(B) the Participant has not previously failed to make a payment by the due date
or otherwise been subject to a grace period described in this paragraph or in
paragraph (4) and (C) such Participant fails to pay, by the close of the grace
period, the total of the loan installments then due and payable;
(6) (A) a Participant's monthly Compensation (or monthly disability
benefit) from which loan payments are withheld becomes insufficient to pay the
monthly loan installment (other than an installment which becomes due during the
grace period described in paragraph (4) for the Participant, if applicable) or
(B) a Participant who is making installment payments in a manner other than
payroll withholding (or withholding from disability benefits) fails to pay any
installment when due (other than an installment which becomes due during the
grace period described in paragraph (5) for the Participant, if applicable);
(7) a Participant fails to execute a revised promissory note
pursuant to subsection (d);
(8) a Participant who is receiving benefits under a short- or
long-term disability plan of an Employer or an Affiliated Company or who is
absent due to an approved leave of absence dies or requests distribution of all
or a portion of his Account pursuant to Section 8.02 or 8.03 such Participant
shall be treated as having a Separation from Service and if such Participant
fails (or, in the case of a deceased Participant, the Beneficiary fails) to
repay the full unpaid balance of the loan by the close of the grace period; or
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(9) distributions under Article VIII to a Participant who has
reached his Required Beginning Date would require distribution of amounts
allocated to the Participant's Loan Fund,
before a loan is repaid in full, the unpaid balance of the loan shall become
immediately due and payable. The phrase "close of the grace period" shall mean
(A) for purposes of paragraphs (1) and (8), the next to the last day of the
second month following the Participant's Separation from Service (or the
Participant's Benefit Payment Date, if earlier), (B) for purposes of paragraph
(4), the next to last day of the second month following the first month in which
the Participant's monthly Compensation (or disability benefit) became
insufficient to pay loan installments, and (C) for purposes of paragraph (5),
the next to the last day of the second month following the due date of the first
loan installment that the Participant fails to pay by the due date.
Notwithstanding anything in paragraphs (1), (4), (5) or (8) to the contrary, a
Participant's loan shall become due and payable immediately upon the event
described in any such paragraph without regard to the grace period if the term
of the loan would otherwise expire prior to the end of the otherwise applicable
grace period.
In the event that a loan becomes immediately due and payable (in
"default") pursuant to this subsection (h), the Participant (or his Beneficiary
in the event of his death) may satisfy the loan by paying the outstanding
balance in full. Otherwise, any such outstanding loan shall be deducted from the
portion of the Participant's vested Accounts allocated to his Loan Fund before
any benefit which is or becomes payable to the Participant or his Beneficiary is
distributed. In the case of a benefit which becomes payable to the Participant
or his Beneficiary pursuant to Section 8.01 or 8.02, the deduction described in
the preceding sentence shall occur on the earliest date following such default
on which the Participant or Beneficiary could receive payment of such benefit,
had the proper application been filed or election been made, regardless of
whether or not payment is actually made to the Participant or Beneficiary on
such date. In the case of a benefit which becomes payable under any other
provision, the deduction shall occur on the date such benefit is paid to the
Participant. The Named Fiduciary-Plan Administration shall also be entitled to
take any and all other actions necessary and appropriate to foreclose upon any
property other than the Participant's vested Accounts pledged as security for
the loan or to otherwise enforce collection of the outstanding balance of the
loan.
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ARTICLE X
PROVISIONS RELATING TO TOP-HEAVY PLANS
Sec. 10.01 Definitions. For purposes of this Article X, the following
terms shall have the following meanings:
(a) "Aggregation Group" shall mean the group of qualified plans sponsored
by the Employer or by an Affiliated Company formed by including in such group
(1) all such plans in which a Key Employee participates in the Plan Year
containing the Determination Date, or any of the four (4) preceding Plan Years,
including any frozen or terminated plan that was maintained within the five-year
period ending on the Determination Date, (2) all such plans which enable any
plan described in clause (1) to meet the requirements of either section
401(a)(4) of the Code or section 410 of the Code, and (3) such other qualified
plans sponsored by the Employer or an Affiliated Company as the Employer elects
to include in such group, as long as the group, including those plans electively
included, continues to meet the requirements of sections 401(a)(4) and 410 of
the Code.
(b) "Determination Date" shall mean the last day of the preceding Plan
Year or, in the case of the first Plan Year, the last day of such Plan Year.
(c) "Key Employee" shall mean a person employed or formerly employed by
the Employer or an Affiliated Company who, during the Plan Year or during any of
the preceding four (4) Plan Years, was any of the following:
(1) An officer of the Employer having an annual Compensation of more
than fifty percent (50%) of the amount in effect under section 415(b)(1)(A) of
the Code for the Plan Year. The number of persons to be considered officers in
any Plan Year and the identity of the persons to be so considered shall be
determined pursuant to the provisions of section 416(i) of the Code and Treasury
regulations published thereunder.
(2) One (1) of the ten (10) Employees who owns (or is considered as
owning under the attribution rules set forth at section 318 of the Code and
Treasury regulations thereunder) the largest interest in the Employer or an
Affiliated Company, provided that no person shall be considered a Key Employee
under this paragraph (2) if his annual Compensation is not greater than the
limitation in effect for such Plan Year under section 415(c)(1)(A) of the Code,
nor shall any person be considered a Key Employee under this paragraph (2) if
his ownership interest in the Plan Year being tested and the preceding four (4)
Plan Years was at all times less than one-half of one percent (1/2%) in value of
any of the entities forming the Employer and the Affiliated Companies.
(3) A five-percent (5%) owner of the Employer.
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(4) A person who is both an Employee whose annual Compensation
exceeds $150,000 and who is a one-percent (1%) owner of the Employer.
The beneficiary of any deceased Participant who was a Key Employee shall
be considered a Key Employee for the same period as the deceased Participant
would have been so considered.
(d) "Key Employee Ratio" shall mean the ratio (expressed as a percentage)
for any Plan Year, calculated as of the Determination Date with respect to such
Plan Year, determined by dividing the amount described in paragraph (1) hereof
by the amount described in paragraph (2) hereof, after deduction from both such
amounts of the amount described in paragraph (3) hereof.
(1) The amount described in this paragraph (1) is the sum of (A) the
aggregate of the present value of all accrued benefits of Key Employees under
all qualified defined benefit plans included in the Aggregation Group, (B) the
aggregate of the balances in all of the accounts standing to the credit of Key
Employees under all qualified defined contribution plans included in the
Aggregation Group, and (C) the aggregate amount distributed from all plans in
such Aggregation Group to or on behalf of any Key Employee during the period of
five (5) Plan Years ending on the Determination Date.
(2) The amount described in this paragraph (2) is the sum of (A) the
aggregate of the present value of all accrued benefits of all Participants under
all qualified defined benefit plans included in the Aggregation Group, (B) the
aggregate of the balances in all of the accounts standing to the credit of all
Participants under all qualified defined contribution plans included in the
Aggregation Group, and (C) the aggregate amount distributed from all plans in
such Aggregation Group to or on behalf of any Participant during the period of
five (5) Plan Years ending on the Determination Date.
(3) The amount described in this paragraph (3) is the sum of (A) all
rollover contributions (or similar transfers) to plans included in the
Aggregation Group initiated by an Employee from a plan sponsored by an employer
which is not the Employer or an Affiliated Company, (B) any amount that would
have been included under paragraph (1) or (2) hereof with respect to any person
who has not rendered service to any Employer at any time during the five-year
period ending on the Determination Date, and (C) any amount that is included in
paragraph (2) hereof for, on behalf of, or on account of, a person who is a
Non-Key Employee as to the Plan Year of reference but who was a Key Employee as
to any earlier Plan Year.
The present value of accrued benefits under any defined benefit plan
shall be determined under the method used for accrual purposes for all plans
maintained by the Employer and all Affiliated Companies if a single method is
used by all such plans, or otherwise, the slowest accrual method permitted under
section 411(b)(1)(C) of the Code.
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(e) "Non-Key Employee" shall mean any Employee or former Employee who is
not a Key Employee as to that Plan Year, or a beneficiary of a deceased
Participant who was a Non-Key Employee.
Sec. 10.02 Determination of Top-Heavy Status. The Plan shall be deemed
"top-heavy" as to any Plan Year if, as of the Determination Date with respect to
such Plan Year, either of the following conditions is met:
(a) The Plan is not part of an Aggregation Group and the Key Employee
Ratio, determined by substituting the "Plan" for the "Aggregation Group" each
place it appears in Section 10.01(d), exceeds sixty percent (60%), or
(b) The Plan is part of an Aggregation Group, and the Key Employee Ratio
of such Aggregation Group exceeds sixty percent (60%).
The Plan shall be deemed "super top-heavy" as to any Plan Year if, as of the
Determination Date with respect to such Plan Year, the conditions of subsections
(a) or (b) hereof are met with "ninety percent (90%)" substituted for "sixty
percent (60%)" therein.
Sec. 10.03 Top-Heavy Plan Minimum Allocation.
(a) General Rule. The aggregate allocation made under the Plan to the
Account of each Eligible Employee who is a Non-Key Employee for any Plan Year in
which the Plan is a Top-Heavy Plan and who remained in the employ of the
Employer or an Affiliated Company through the end of such Plan Year (whether or
not in the status of Eligible Employee) shall be not less than the lesser of:
(1) Three percent (3%) of the Compensation of each such Participant
for such Plan Year; or
(2) The percentage of such Compensation so allocated under the Plan
to the Account of the Key Employee for whom such percentage is the highest for
such Plan Year.
If any person who is an Eligible Employee in the Plan is a Participant under any
defined benefit pension plan qualified under section 401(a) of the Code
sponsored by the Employer or an Affiliated Company, there shall be substituted
"Four percent (4%)" for "Three percent (3%)" in paragraph (1) above. For the
purposes of determining whether or not the provisions of this Section have been
satisfied, (i) contributions or benefits under chapter 2 of the Code (relating
to tax on self-employment income), chapter 21 of the Code (relating to Federal
Insurance Contributions Act), title II of the Social Security Act, or any other
Federal or state law are disregarded; (ii) all defined contribution plans in the
Aggregation Group shall be treated as a single plan; and (iii) employer matching
contributions and elective deferrals under all plans in the Aggregation Group
shall be disregarded. For the purposes of determining whether or not the
requirements of this Section have been satisfied, contributions allocable to the
account of the
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Participant under any other qualified defined contribution plan that is part of
the Aggregation Group shall be deemed to be contributions made under the Plan,
and, to the extent thereof, no duplication of such contributions shall be
required hereunder solely by reason of this Section. Paragraph (2) above shall
not apply in any Plan Year in which the Plan is part of an Aggregation Group
containing a defined benefit pension plan (or a combination of such defined
benefit pension plans) if the Plan enables a defined benefit pension plan
required to be included in such Aggregation Group to satisfy the requirements of
either section 401(a)(4) or section 410 of the Code.
(b) Exceptions to the General Rule. The provisions of subsection (a) above
shall not apply to any Participant for a Plan Year if, with respect to that Plan
Year:
(1) such Participant was an active participant in a qualified
defined benefit pension plan sponsored by the Employer or by an Affiliated
Company under which plan the Participant's accrued benefit is not less than the
minimum accrued pension benefit that would be required under section 416(c)(1)
of the Code, treating such defined benefit pension plan as a Top-Heavy Plan and
treating all such defined benefit pension plans as constitute an Aggregation
Group as a single plan; or
(2) such Participant was an active participant in a qualified
defined contribution plan sponsored by the Employer or by an Affiliated Company
under which plan the amount of the employer contribution allocable to the
account of the Participant for the accrual computation period of such plan
ending with or within the Plan Year, exclusive of elective deferrals and
employer matching contributions, is not less than the contribution allocation
that would be required under section 416(c)(2) of the Code under this Plan.
Sec. 10.04 Top-Heavy Plan Maximum Allocations. If the Plan is a Super
Top-Heavy Plan, or if the Plan is a Top-Heavy Plan which fails to satisfy the
additional minimum allocation requirements under Section 10.03 hereof, the
definitions of "defined contribution fraction" and "defined benefit fraction" as
incorporated by reference in Section 5.04 shall be modified as required under
section 416 of the Code.
Sec. 10.05 Top-Heavy Vesting Schedule. In the event that the Plan is or
becomes a Top-Heavy Plan, the Participant's vested interest in his Company
Contribution Account and Matching Contribution Account shall be determined under
the vested schedule set forth in Section 7.02 or under the following vesting
schedule, whichever results in the Participant having a larger vested interest.
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Participant's Years of Service Vested Percentage
------------------------------ -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
If the Plan ceases to be a Top-Heavy Plan, the vesting schedule set forth in
Section 7.02 shall again apply to all Years of Service, provided that:
(a) each Participant described above shall maintain the same vested
interest in his Company Contribution Account and Matching Contribution Account
determined under the schedule above as of the date on which the Plan ceases to
be a Top-Heavy Plan until the Participant's vested percentage under the schedule
in Section 7.02 exceeds the percentage maintained under the schedule above; and
(b) any such Participant with at least three (3) Years of Service at the
time that the Plan ceases to be a Top-Heavy Plan shall continue to have his
vested percentage computed under the Plan in accordance with the vesting
schedule set forth above.
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ARTICLE XI
NAMED FIDUCIARY-PLAN ADMINISTRATION
Sec. 11.01 Appointment and Tenure. The Named Fiduciary-Plan Administration
shall be the Vice President-People. If there is no such Vice President-People,
the Named Fiduciary-Plan Administration shall consist of such person or persons
appointed by the Board of Directors.
Sec. 11.02 Authority and Responsibility of the Named Fiduciary-Plan
Administration. The Named Fiduciary-Plan Administration shall be the Plan
"administrator" as such term is defined in section 3(16) of ERISA, and as such
shall have the following duties and responsibilities:
(a) to adopt and enforce such rules and regulations and prescribe the use
of such forms as may be deemed necessary to carry out the provisions of the
Plan;
(b) to maintain and preserve records relating to Participants, former
Participants, and their Beneficiaries and Alternate Payees;
(c) to prepare and furnish to Participants, Beneficiaries and Alternate
Payees all information and notices required under federal law or the provisions
of this Plan;
(d) to prepare and file or publish with the Secretary of Labor, the
Secretary of the Treasury, their delegates and all other appropriate government
officials all reports and other information required under law to be so filed or
published;
(e) to provide directions to the Trustee with respect to the purchase of
life insurance, methods of benefit payment, valuations at dates other than
regular Valuation Dates and on all other matters where called for in the Plan or
requested by the Trustee;
(f) to determine all questions of the eligibility of Employees and of the
status of rights of Participants, Beneficiaries and Alternate Payees, to make
factual determinations, to construe the provisions of the Plan, to correct
defects therein and to supply omissions thereto;
(g) to engage assistants and professional advisers;
(h) to arrange for bonding, if required by law;
(i) to provide procedures for determination of claims for benefits and to
establish rules, not inconsistent with the provisions or purposes of the Plan,
as it may deem necessary or desirable for the proper administration of the Plan
or transaction of its business;
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(j) to determine whether any domestic relations order constitutes a QDRO
and to take such action as the Named Fiduciary-Plan Administration deems
appropriate in light of such domestic relations order;
(k) to make such determinations as are required pursuant to the provisions
of Section 8.03 hereof;
(l) to retain records on elections and waivers by Participants, their
spouses and their Beneficiaries and Alternate Payees;
(m) to supply such information to the Named Fiduciary-Plan Investments as
the latter may require in carrying out its responsibilities hereunder;
(n) to comply with investment instructions of Participants, Beneficiaries
and Alternate Payees;
(o) to provide Participants, Beneficiaries and Alternate Payees with
sufficient information to make informed investment decisions in accordance with
section 404(c) of ERISA;
(p) to establish procedures designed to maintain the confidentiality of
information relating to the purchase, holding and sale of Common Stock, and the
exercise of voting, tender and similar rights with regard to such Common Stock
held by Participants, Beneficiaries or Alternate Payees;
(q) to monitor compliance with the procedures established under subsection
(p);
(r) to appoint an independent fiduciary to carry out activities relating
to any situations which the Named Fiduciary-Plan Administration determines
involve a potential for undue influence by the Company or an Affiliated Company
regarding the exercise of rights by Participants, Beneficiaries or Alternate
Payees respecting the Company's Common Stock; and
(s) to perform such other functions and duties as are set forth in the
Plan that are not specifically given to the Board of Directors, the Finance
Committee, or the Named Fiduciary-Plan Investments.
Sec. 11.03 Reporting and Disclosure. The Named Fiduciary-Plan
Administration shall keep all individual and group records relating to
Participants, Beneficiaries and Alternate Payees, and all other records
necessary for the proper operation of the Plan. Such records shall be made
available to the Employer and to each Participant, Beneficiary and Alternate
Payee for examination during normal business hours except that a Participant,
Beneficiary or Alternate Payee shall examine only such records as pertain
exclusively to the examining Participant, Beneficiary or Alternate Payee and
those records and documents relating to all Participants generally. The Named
Fiduciary-Plan Administration shall prepare and shall file as required by law or
regulation all reports, forms, documents and other items required by ERISA, the
Code,
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and every other relevant statute, each as amended, and all regulations
thereunder. This provision shall not be construed as imposing upon the Named
Fiduciary-Plan Administration the responsibility or authority for the
preparation, preservation, publication or filing of any document required to be
prepared, preserved or filed by the Trustee or by any other Named Fiduciary to
whom such responsibilities are delegated by law or by this Plan.
Sec. 11.04 Construction of the Plan. The Named Fiduciary-Plan
Administration shall take such steps as are considered necessary and appropriate
to remedy any inequity that results from incorrect information received or
communicated in good faith or as the consequence of an administrative error. The
Named Fiduciary-Plan Administration shall have full discretionary power and
authority to make factual determinations, to interpret the Plan, to make benefit
eligibility determinations, and to determine all questions arising in the
administration, interpretation and application of the Plan. The Named
Fiduciary-Plan Administration shall correct any defect, reconcile any
inconsistency, or supply any omission with respect to the Plan. All such
corrections, reconciliations, interpretations and completions of Plan provisions
shall be final, binding and conclusive upon the parties, including the Employer,
the Employees, their families, dependents and any Alternate Payees.
Sec. 11.05 Compensation of the Named Fiduciary-Plan Administration. The
Named Fiduciary-Plan Administration shall serve without compensation for its
services as such, but all expenses of the Named Fiduciary-Plan Administration
shall be paid or reimbursed by the Employer, and if not so paid or reimbursed,
shall be proper charges to the Trust Fund and shall be paid therefrom.
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ARTICLE XII
ALLOCATION AND DELEGATION OF AUTHORITY
Sec. 12.01 Authority and Responsibilities of the Board of Directors. The
Board of Directors shall serve as a "Named Fiduciary" and shall have the
authority and responsibility to appoint the Named Fiduciary-Plan Administration.
Sec. 12.02 Authority and Responsibilities of the Finance Committee. The
Finance Committee shall serve as a "Named Fiduciary" having the following (and
only the following) authority and responsibility:
(a) to, at least once during each Plan Year or at such other times as the
Named Fiduciary-Plan Investments may specifically request, review, with the
assistance of the Named Fiduciary-Plan Investments, the Trustee's performance;
and
(b) to, at least once during each Plan Year or at such other time as the
Named Fiduciary-Plan Investments may specifically request, review (with the
assistance of the Named Fiduciary-Plan Investments) the performance of the
Investment Manager(s).
Sec. 12.03 Authority and Responsibilities of the Named Fiduciary-Plan
Administration. The Named Fiduciary-Plan Administration shall have the authority
and responsibilities imposed by Article XI hereof. With respect to the said
authority and responsibility, the Named Fiduciary-Plan Administration shall be a
"Named Fiduciary," and, as such, shall have no authority and responsibility
other than as granted in the Plan, or as imposed by law.
Sec. 12.04 Authority and Responsibilities of the Trustee. The Trustee
shall be the "Named Fiduciary" with respect to investment of Trust Fund assets
and shall have the powers and duties set forth in the Trust Agreement. The
Trustee shall keep complete and accurate accounts of all of the assets of, and
the transactions involving, the Trust Fund. All such accounts shall be open to
inspection by the Named Fiduciary-Plan Investments during normal business hours.
Sec. 12.05 Authority and Responsibilities of the Named Fiduciary-Plan
Investments. The Named Fiduciary-Plan Investments shall have the following
authority and responsibility:
(a) to establish, revise from time to time, and communicate to the Trustee
and/or Investment Manager(s), a funding policy and method for the Plan;
(b) to appoint Investment Manager(s) to manage (including the power to
direct the Trustee to acquire and dispose of) all or part of the assets of the
Trust Fund (or refrain from such appointment) and to terminate such appointment
and, upon termination or resignation of the
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Investment Manager(s), to appoint a successor, to amend the separate
agreements(s) which shall be entered into with the Investment Manager(s) and
either increase or decrease the portion of the Trust Fund which shall be managed
by the Investment Manager(s);
(c) to approve the Trust Agreement, which shall contain such provisions as
may be appropriate and to terminate the Trust Agreement and settle the Account
of the Trustee and to remove the Trustee and upon such removal or upon the
resignation of the Trustee, to appoint a successor;
(d) to select an independent qualified public accountant to examine, at
the expense of the Company, the Trustee's accounts and records as of the close
of each Plan Year and render an opinion;
(e) to assist the Finance Committee by reviewing the performance of the
Trustee and the Investment Manager(s) in light of the funding policy and method
then in effect and to report to the Finance Committee thereon at such times as
the Finance Committee requires and at such times as the Named Fiduciary-Plan
Investments deems necessary or proper;
(f) to determine the extent to which the costs and expenses of the Plan
shall be paid from the Trust Fund; and
(g) to supply such information to the Named Fiduciary-Plan Administration
as the latter may require in carrying out its responsibilities hereunder.
With respect to the said authority and responsibility, the Named Fiduciary-Plan
Investments shall be a "Named Fiduciary" and, as such, shall have no authority
and responsibility other than as granted in the Plan, or as imposed by law.
Sec. 12.06 Limitations on Obligations of Named Fiduciaries. No Named
Fiduciary shall have authority or responsibility to deal with matters other than
as delegated to it under this Plan, under the Trust Agreement, or by operation
of law. A Named Fiduciary shall not in any event be liable for breach of
fiduciary responsibility or obligation by another fiduciary (including Named
Fiduciaries) if the responsibility or authority of the act or omission deemed to
be a breach was not within the scope of the said Named Fiduciary's authority or
delegated responsibility. The determination of any Named Fiduciary as to any
matter involving its responsibilities hereunder shall be conclusive and binding
on all persons.
Sec. 12.07 Reports to Board of Directors. As deemed necessary or proper,
but in any event at least once during each Plan Year, each Named Fiduciary shall
report to the Board of Directors on the operation and administration of the
Plan.
Sec. 12.08 Designation and Delegation. Each Named Fiduciary may designate
other persons to carry out such of its responsibilities hereunder for the
operation and administration of the Plan as it deems advisable and delegate to
the persons so designated such of its powers as it
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deems necessary to carry out such responsibilities. Such designation and
delegation shall be subject to such terms and conditions as the Named Fiduciary
deems necessary or proper. Any action or determination made or taken in carrying
out responsibilities hereunder by the persons so designated by the Named
Fiduciary shall have the same force and effect for all purposes as if such
action or determination had been made or taken by such Named Fiduciary.
Sec. 12.09 Engagement of Assistants and Advisers. Any Named Fiduciary
shall have the right to hire such professional assistants and consultants as it,
in its sole discretion, deems necessary or advisable, including, but not limited
to:
(a) investment managers and/or advisers;
(b) accountants;
(c) actuaries;
(d) attorneys;
(e) consultants;
(f) clerical and office personnel; and
(g) medical practitioners.
The Named Fiduciaries 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 other specialist engaged for that purpose or upon any valuation
certificate or report furnished by the Trustee. The expenses incurred by the
Named Fiduciaries in connection with the operation of the Plan, including, but
not limited to, the expenses incurred by reason of the engagement of
professional assistants and consultants, shall be expenses of the Plan and shall
be payable from the Trust Fund at the direction of the Named Fiduciary-Plan
Investments. The Employer shall have the option, but not the obligation, to pay
any such expenses, in whole or in part, and by so doing, relieve the Trust Fund
from the obligation of bearing such expenses. Payment of any such expenses by
the Employer on any occasion shall not bind the Employer to thereafter pay any
similar expenses. No person who is an Employee shall receive any compensation
solely for services in carrying out any responsibility under the Plan.
Sec. 12.10 Bonding. The Named Fiduciary-Plan Administration shall arrange
for such bonding as is required by law for persons who are Employees and/or
members of the Board of Directors, but no bonding in excess of the amount
required by law shall be considered required by the Plan. The Company shall
obtain, and pay the expense of, any bond required by law.
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Sec. 12.11 Indemnification. Each person (other than the Trustee) who is a
Named Fiduciary or is a member of any committee or board comprising a Named
Fiduciary shall be indemnified by the Company against costs, expenses and
liabilities (other than amounts paid in settlement to which the Company does not
consent) reasonably incurred by him in connection with any action to which he
may be a party by reason of his service as a Named Fiduciary except in relation
to matters as to which he shall be adjudged in such action to be personally
guilty of gross negligence or willful misconduct in the performance of his
duties. The foregoing right to indemnification shall be in addition to such
other rights as the person may enjoy as a matter of law or by reason of
insurance coverage of any kind, but shall not extend to costs, expenses and/or
liabilities otherwise covered by insurance or that would be so covered by any
insurance then in force if such insurance contained a waiver of subrogation.
Rights granted hereunder shall be in addition to and not in lieu of any rights
to indemnification to which the person may be entitled pursuant to the bylaws or
contract of the Company. Service as a Named Fiduciary shall be deemed in partial
fulfillment of the person's function as an employee, officer and/or director of
the Company, if he serves in that capacity as well as in the role of Named
Fiduciary.
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ARTICLE XIII
CLAIMS PROCEDURES
Sec. 13.01 Application for Benefits. Each Participant, Beneficiary or
Alternate Payee believing himself or herself eligible for benefits under the
Plan shall apply for such benefits by completing and filing with the Named
Fiduciary-Plan Administration an application for benefits on a form supplied by
the Named Fiduciary-Plan Administration. Before the date on which benefit
payments commence, each such application must be supported by such information
and data as the Named Fiduciary-Plan Administration deems relevant and
appropriate. Evidence of age, marital status (and, in the appropriate instances,
health, death or disability), and location of residence shall be required of all
applicants for benefits. In the event a Participant, Beneficiary or Alternate
Payee fails to apply to the Named Fiduciary-Plan Administration at least sixty
(60) days prior to (a) in the case of an Alternate Payee, the latest
distribution date described in Section 8.07(b)(1), (b) in the case of a
Beneficiary, the latest distribution date described in Section 8.06(a) or (b) or
Section 8.04(c), whichever applies, (c) in the case of a Participant who is not
an Employee, the latest distribution date applicable to the Participant under
Section 8.02, or (d) in the case of a Participant who is an Employee, his
Required Beginning Date, the Named Fiduciary-Plan Administration shall make
diligent efforts to locate such Participant, Beneficiary or Alternate Payee and
obtain such application. In the event the Participant, Beneficiary or Alternate
Payee fails to make application by the date described in (a) through (d),
whichever applies, the Named Fiduciary-Plan Administration shall make
distribution in the form of a single sum as of such date without such
application; provided, however, that in the event the Named Fiduciary-Plan
Administration fails to locate the Participant, Beneficiary or Alternate Payee
so that distribution as of such date is not possible, payment shall commence no
later than sixty (60) days after the date on which the Participant, Beneficiary
or Alternate Payee is located.
Sec. 13.02 Appeals of Denied Claims for Benefits. In the event that any
claim for benefits is denied in whole or in part, the Participant, Beneficiary
or Alternate Payee whose claim has been so denied shall be notified of such
denial in writing by the Named Fiduciary-Plan Administration. The notice
advising of the denial shall specify the reason or reasons for denial, make
specific reference to pertinent Plan provisions, describe any additional
material or information necessary for the claimant to perfect the claim
(explaining why such material or information is needed), and shall advise the
Participant, Beneficiary or Alternate Payee, as the case may be, of the
procedure for the appeal of such denial. All appeals shall be made by the
following procedure:
(a) The Participant, Beneficiary or Alternate Payee whose claim has been
denied shall file with the Named Fiduciary-Plan Administration a notice of
desire to appeal the denial. Such notice shall be filed within sixty (60) days
of notification by the Named Fiduciary-Plan Administration of claim denial,
shall be made in writing, and shall set forth all of the facts upon which the
appeal is based. Appeals not timely filed shall be barred.
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(b) The Named Fiduciary-Plan Administration shall consider the merits of
the claimant's written presentations, the merits of any facts or evidence in
support of the denial of benefits, and such other facts and circumstances as the
Named Fiduciary-Plan Administration shall deem relevant.
(c) The Named Fiduciary-Plan Administration shall ordinarily render a
determination upon the appealed claim within sixty (60) days after its receipt
which determination shall be accompanied by a written statement as to the
reasons therefor. However, in special circumstances the Named Fiduciary-Plan
Administration may extend the response period for up to an additional sixty (60)
days, in which event it shall notify the claimant in writing prior to
commencement of the extension. The determination so rendered shall be binding
upon all parties.
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ARTICLE XIV
AMENDMENT AND TERMINATION
Sec. 14.01 Amendment. The provisions of the Plan may be amended at any
time and from time to time by the Company, provided, however, that:
(a) No amendment shall increase the duties or liabilities of the Named
Fiduciary-Plan Administration or of the Trustee without the consent of that
party;
(b) No amendment shall deprive any Participant, Beneficiary or Alternate
Payee of any of the benefits to which he is entitled under the Plan with respect
to contributions previously made, nor shall any amendment decrease the vested
percentage of any Participant's Account nor result in the elimination or
reduction of a benefit "protected" under section 411(d)(6) of the Code, unless
otherwise permitted or required by law;
(c) No amendment shall provide for the use of funds or assets held to
provide benefits under the Plan other than for the benefit of Participants and
their Beneficiaries or Alternate Payees or to meet the administrative expenses
of the Plan, except as may be specifically authorized by statute or regulation.
Each amendment shall be approved by the Board of Directors by resolution;
provided, however, that the Vice President-People may make all technical,
administrative, regulatory and compliance amendments to the Plan, and any other
amendment that will not significantly increase the cost of the Plan to the
Employer, as it shall deem necessary or appropriate without such approval.
Sec. 14.02 Amendments to the Vesting Schedule.
(a) If the vesting schedule under this Plan is amended, each Eligible
Employee who has completed at least three (3) Years of Service prior to the end
of the election period specified in this Section 14.02 may elect, during such
election period, to have the vested percentage of his Account determined without
regard to such amendment.
(b) For the purposes of this Section 14.02, the election period shall
begin as of the date on which the amendment changing the vesting schedule is
adopted, and shall end on the latest of the following dates:
(1) the date occurring sixty (60) days after the Plan amendment is
adopted; or
(2) the date which is sixty (60) days after the day on which the
Plan amendment becomes effective; or
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(3) the date which is sixty (60) days after the day the Participant
is issued written notice of the Plan amendment by the Named Fiduciary-Plan
Administration or by the Employer; or
(4) such later date as may be specified by the Named Fiduciary-Plan
Administration.
The election provided for in this Section 14.02 shall be made in writing
and shall be irrevocable when made.
Sec. 14.03 Plan Termination.
(a) It is the intention of the Company that this Plan will be permanent.
However, each entity constituting the Employer reserves the right to terminate
its participation in this Plan by action of its board of directors or other
governing body. Furthermore, the Company reserves the power to terminate the
Plan at any time for any reason by action of the Board of Directors.
(b) Any termination of the Plan shall become effective as of the date
designated by the Board of Directors. Except as expressly provided elsewhere in
the Plan, prior to the satisfaction of all liabilities with respect to the
benefits provided under this Plan, no termination shall cause any part of the
funds or assets held to provide benefits under the Plan to be used other than
for the benefit of Participants and their Beneficiaries or Alternate Payees or
to meet the administrative expenses of the Plan. Upon termination or partial
termination of the Plan, or upon complete discontinuance of contributions, the
rights of all affected persons to benefits accrued to the date of such
termination shall be nonforfeitable. Upon termination of the Plan, Accounts
shall be distributed in accordance with applicable law.
Sec. 14.04 Mergers and Consolidations of Plans. In the event of any merger
or consolidation with, or transfer of assets or liabilities to, any other plan,
each Participant shall have a benefit in the surviving or transferee plan if
such plan were then terminated immediately after such merger, consolidation or
transfer that is equal to or greater than the benefit he would have had
immediately before such merger, consolidation or transfer in the plan in which
he was then a participant had such plan been terminated at that time. For the
purposes hereof, former Participants, Beneficiaries and Alternate Payees shall
be considered Participants.
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ARTICLE XV
MISCELLANEOUS PROVISIONS
Sec. 15.01 Nonalienation of Benefits.
(a) Except as provided in Section 15.01(b), none of the payments, benefits
or rights of any Participant, Beneficiary or Alternate Payee shall be subject to
any claim of any creditor, and, in particular, to the fullest extent permitted
by law, all such payments, benefits and rights shall be free from attachment,
garnishment, trustee's process, or any other legal or equitable process
available to any creditor of such Participant, Beneficiary or Alternate Payee.
Except as provided in Section 15.01(b), no Participant, Beneficiary or Alternate
Payee shall have the right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments which he may expect to receive,
contingently or otherwise, under the Plan, except the right to designate a
Beneficiary or Beneficiaries as hereinabove provided.
(b) Compliance with the provisions and conditions of any QDRO, any federal
tax levy made pursuant to section 6331 of the Code, or any loan made pursuant to
Article IX shall not be considered a violation of this provision.
Sec. 15.02 No Contract of Employment. Neither the establishment of the
Plan, nor any modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefits shall be construed as giving any
Participant or Employee, or any person whomsoever, the right to be retained in
the service of the Employer, and all Participants and other Employees shall
remain subject to discharge to the same extent as if the Plan had never been
adopted.
Sec. 15.03 Severability of Provisions. If any provision of the Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.
Sec. 15.04 Heirs, Assigns and Personal Representatives. This Plan shall be
binding upon the heirs, executors, administrators, successors and assigns of the
parties, including each Participant, Beneficiary and Alternate Payee, present
and future, (except that no successor to the Employer shall be considered a Plan
sponsor unless that successor adopts the Plan).
Sec. 15.05 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the Plan.
Sec. 15.06 Gender and Number. Except where otherwise clearly indicated by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice-versa.
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Sec. 15.07 Controlling Law. This Plan shall be construed and enforced
according to the laws of Texas to the extent not preempted by federal law, which
shall otherwise control.
Sec. 15.08 Funding Policy. The Named Fiduciary-Plan Investments shall
establish, and communicate to the Trustee and/or Investment Manager(s), a
funding policy consistent with the objectives of the Plan and of the Trust Fund.
Sec. 15.09 Title to Assets; Source of Benefits. No person shall have any
right to, or interest in, any assets of the Trust Fund, except as provided from
time to time under the Plan, and then only to the extent of the benefits payable
under the Plan to such person or out of the assets of the Trust Fund. All
payments of benefits as provided for in the Plan shall be made solely from the
assets of the Trust Fund, and neither the Employer nor any other person shall be
liable therefor in any manner.
Sec. 15.10 Payments to Minors, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person's guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Trustee, the Named
Fiduciary-Plan Administration, the Employer and all other parties with respect
thereto.
Sec. 15.11 Reliance on Data and Consents. The Employer, the Trustee, the
Named Fiduciary-Plan Administration, the Named Fiduciary-Plan Investments, all
fiduciaries with respect to the Plan, and all other persons or entities
associated with the operation of the Plan, the management of its assets, and the
provision of benefits thereunder, may reasonably rely on the truth, accuracy and
completeness of all data provided by the Participant and his or her
Beneficiaries, including, without limitation, representations as to age, health
and marital status. Furthermore, the Employer, the Trustee, the Named
Fiduciary-Plan Administration, the Named Fiduciary-Plan Investments and all
fiduciaries with respect to the Plan may reasonably rely on all consents,
elections and designations filed with the Plan or those associated with the
operation of the Plan and its corresponding trust by any Participant, the spouse
of any Participant, any Beneficiary of any Participant, the Alternate Payee of
any Participant or the representatives of such persons without duty to inquire
into the genuineness of any such consent, election or designation. None of the
aforementioned persons or entities associated with the operation of the Plan,
its assets and the benefits provided under the Plan shall have any duty to
inquire into any such data, and all may rely on such data being current to the
date of reference, it being the duty of the Participants, spouses of
Participants, Beneficiaries and Alternate Payees to advise the appropriate
parties of any change in such data.
Sec. 15.12 Lost Payees. A benefit shall be deemed forfeited, and used to
reduce future Matching Contributions made pursuant to Section 4.02, if the Named
Fiduciary-Plan Administration is unable to locate a Participant, Beneficiary or
Alternate Payee to whom payment is due; provided, however, that such benefit
shall be reinstated if a claim is made by the party to whom properly payable.
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Sec. 15.13 No Warranties. Neither the Board of Directors nor the Finance
Committee nor members of either, nor the Named Fiduciary-Plan Investments, nor
the Named Fiduciary-Plan Administration, nor the Company, nor any Affiliated
Company, nor the Trustee warrants or represents in any way that the value of
each Participant's Accounts will increase or will not decrease. The Participant
assumes all risk in connection with any change in values.
Sec. 15.14 Notices. Each Participant, Beneficiary and Alternate Payee
shall be responsible for furnishing the Named Fiduciary-Plan Administration with
the current and proper address for the mailing of notices, reports and benefit
payments. Any notice required or permitted to be given shall be deemed given if
directed to the person to whom addressed at such address and mailed by regular
United States mail, first-class and prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the Participant, Beneficiary or Alternate Payee furnishes the
proper address. This provision shall not be construed as requiring the mailing
of any notice or notification if the regulations issued under ERISA deem
sufficient notice to be given by the posting of notice in appropriate places, or
by any other publication device.
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ARTICLE XVI
TRANSFERS BETWEEN THE PLAN AND THE UNION
PACIFIC CORPORATION THRIFT PLAN
Sec. 16.01 Transfer to the Plan.
(a) In the event that a Covered Employee has an account balance under the
Union Pacific Corporation Thrift Plan (the "UPC Thrift Plan") at the time he
becomes such (a "Transferred UPC Employee"), his account balance under the UPC
Thrift Plan shall be transferred to the Plan as soon as administratively
practicable, but not earlier than thirty (30) days after the filing with the
Internal Revenue Service of all forms required pursuant to section 6058(b) of
the Code; provided, however, that such transfer shall not occur:
(1) in the event the Employee has a loan outstanding under the UPC
Thrift Plan unless the Employee executes such forms as may be necessary for
treatment of such loan as a loan from the Plan or the loan has been canceled;
(2) if, prior to the transfer, the Employee has a Separation from
Service or reaches his Required Beginning Date; or
(3) if the Employee's employment with the Employer occurred after
the date on which his prior employer was no longer an Affiliated Company with
the Employer.
Amounts transferred from such Employee's before-tax contribution account,
after-tax employee contribution account, matching contribution account, company
contribution account, employee contribution account, PAYSOP contribution
account, and rollover account under the UPC Thrift Plan shall be credited to the
Employee's like accounts under the Plan.
(b) Each portion of the Transferred UPC Employee's transferred account
balance that was invested in an investment fund under the UPC Thrift Plan shall
be invested in the like Investment Fund under the Plan.
(c) To the extent that the Transferred UPC Employee is not one hundred
percent (100%) vested in amounts in his Company Contribution or Matching
Contribution Accounts transferred from the UPC Thrift Plan, such transfer shall
not change such vesting percentage and such Employee shall continue to become
vested in such amounts (which shall be accounted for separately) in accordance
with the vesting provisions of the UPC Thrift Plan.
(d) For purposes of any elections otherwise available under the Plan with
respect to such Transferred UPC Employee, any elections made by such Employee
under the UPC Thrift Plan shall be taken into account, except an election to
change the manner in which future
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contributions are invested that is made at the time the Transferred UPC
Employee's account balance is transferred to the Plan.
(e) In determining how soon after the asset transfer such Transferred UPC
Employee may make a loan from the Plan, all prior loans from the UPC Thrift Plan
shall be treated as loans from the Plan.
(f) In determining how soon after the asset transfer such Transferred UPC
Employee may make a withdrawal from the Plan (whether hardship or non-hardship),
all prior withdrawals from the UPC Thrift Plan shall be treated as withdrawals
from the Plan.
(g) For purposes of Section 6.05 and 8.03(e)(2), a Transferred UPC
Employee's years of participation shall include years of participation under the
UPC Thrift Plan.
Sec. 16.02 Transfer to UPC Thrift Plan. In the event that a person who
becomes a covered employee under the UPC Thrift Plan has an account balance
under the Plan at the time he becomes such (a "Transferred UPR Employee"), his
account balance under the Plan shall be transferred to the UPC Thrift Plan as
soon as administratively practicable, but not earlier than thirty (30) days
after the filing with the Internal Revenue Service of all forms required
pursuant to section 6058(b) of the Code; provided, however, that such transfer
shall not occur:
(a) in the event the Employee has a loan outstanding under the Plan unless
the Employee executes such forms as may be necessary for treatment of such loan
as a loan from the UPC Thrift Plan or the loan has been canceled;
(b) if, prior to the transfer, the Employee has a Separation from Service
or reaches his Required Beginning Date; or
(c) if the Employee's employment with Union Pacific Corporation or one of
its affiliates occurred after the date on which such subsequent employer was no
longer an Affiliated Company with the Employer.
Amounts transferred from such Employee's Before-Tax Contribution Account,
After-Tax Employee Contribution Account, Matching Contribution Account, Company
Contribution Account, Employee Contribution Account, PAYSOP Contribution
Account, and Rollover Account under the Plan shall be credited to the Employee's
like accounts under the UPC Thrift Plan.
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ARTICLE XVII
TRANSFERS OF CERTAIN EMPLOYEES TO CCPC CHEMICAL INC.
Sec. 17.01 Scope. The provisions of this Article XVII shall,
notwithstanding any other provisions of the Plan to the contrary, apply with
respect to each Participant who becomes a "Purchaser's Employee" as such term is
defined in the Asset Purchase Agreement, as amended, among Cain Chemical Inc.,
CCPC Chemical Inc., Corpus Christi Petrochemical Company, Union Pacific
Resources Company, Union Pacific Petrochemicals, Inc., Champlin Pipeline, Inc.,
ICI Americas Inc., ICI Petrochemicals Inc., Imperial Pipeline Inc., Solvay
America, Inc., Soltex Petrochemicals, Inc. and Soltex Pipeline, Inc. (the
"Purchase Agreement").
Sec. 17.02 Vesting. Each Participant who becomes a "Purchaser's Employee"
shall, to the extent not otherwise one hundred percent (100%) vested in (a) the
value of his Company Contribution Account and (b) the value of his Matching
Contribution Account, be one hundred percent (100%) vested in the value of such
Accounts at the time he becomes a "Purchaser's Employee."
Sec. 17.03 Transfer Election. Each Participant who becomes a "Purchaser's
Employee" shall be allowed to elect to have assets representing the value of all
of his Accounts, other than his PAYSOP Contribution Account, transferred, in
accordance with the terms and requirements of Section 17.06, to a defined
contribution plan to be established by CCPC Chemical Inc. (a "Transfer
Election"), provided that the Named Fiduciary-Plan Administration (a) has
received written notice of such election, on a form adopted by the Named
Fiduciary-Plan Administration for such purpose, not later than the last day of
the month following the month in which such Participant becomes a "Purchaser's
Employee" and (b) has not previously received written notice of the making by
such Participant of an election to receive payment of his Plan benefit. A
Transfer Election, made in accordance with the requirements of the immediately
preceding sentence, shall be irrevocable.
Sec. 17.04 Effect of Transfer Election on Final Distribution. If a
Participant made a Transfer Election in accordance with the requirements of
Section 17.03, (a) each of CCPC Chemical Inc., Cain Chemical Inc. and each other
entity which would be an Affiliated Company under Section 2.04 were "CCPC
Chemical Inc." to be substituted for "Employer" each place such word appears in
Section 2.04 shall, for purposes of applying Section 8.02 with respect to such
Participant's Accounts, be treated as an Affiliated Company and (b) the value of
his PAYSOP Contribution Account shall be distributed in a lump sum, in any form
allowed under Section 8.04(g), immediately following a Valuation Date as soon as
practicable following the making of such Transfer Election, provided that a
distribution shall occur pursuant to such clause (b) only if such Participant is
alive on the Valuation Date which such distribution would, but for this proviso,
immediately follow.
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Sec. 17.05 Effect of Transfer Election on Loans. If a Participant (a)
makes a Transfer Election in accordance with the requirements of Section 17.03
and (b) has received a loan under Article IX and not paid such loan in full
prior to the date such Participant becomes a "Purchaser's Employee," each of
CCPC Chemical Inc., Cain Chemical Inc. and such other entity which would be an
Affiliated Company under Section 2.04 were "CCPC Chemical Inc." to be
substituted for "Employer" each place such word appears in Section 2.04 shall,
for purposes of applying Article IX with respect to such loan, be treated as an
Employer.
Sec. 17.06 Transfer of Accounts. As of that Valuation Date which shall be
mutually agreed upon by (a) the Named Fiduciary-Plan Administration and (b) the
appropriate "named fiduciary", as such term is defined in section 402(a)(1) of
ERISA, of such defined contribution plan to be established by CCPC Chemical Inc.
and selected by CCPC Chemical Inc. for such purpose (the "CCPC Plan"), assets
representing the value, as of such Valuation Date, of all of the Accounts other
than the PAYSOP Contribution Accounts, of all Participants who have made
Transfer Elections in accordance with the requirements of Section 18.03 shall be
transferred to such CCPC Plan, provided, however, that such transfer shall occur
only if the requirements of the fifth sentence of section 5.2(c) of the Purchase
Agreement are met with respect to the CCPC Plan as of such Valuation Date. For
each Participant with respect to whom the transfer described in the immediately
preceding sentence shall occur (a) the assets representing the value of such
Participant's Accounts in Investment Funds other than the Union Pacific Common
Stock Fund and such Participant's Loan Fund shall be as prescribed in the second
sentence of section 5.2(c) of the Purchase Agreement and (b) the assets
representing the value of such Participant's Accounts in the Union Pacific
Common Stock Fund shall be either (i) cash or (ii) shares of Union Pacific
Corporation stock and cash in lieu of fractional shares, with the form of the
transfer with respect to the Union Pacific Common Stock Fund to be elected in
writing in such fashion as shall be prescribed by the Named Fiduciary-Plan
Administration.
Sec. 17.07 Successor Employer. The provisions of Sections 17.01 through
17.06 above shall, following the acquisition of Cain Chemical, Inc. by
Occidental Petroleum Corporation be applied by substituting Occidental Petroleum
Corporation for Cain Chemical, Inc. as appropriate in those Sections, and by
substituting for the CCPC Plan, as defined in Section 17.06, an appropriate
defined contribution plan selected by Occidental Petroleum Corporation and
qualified, as of the date of the transfer of accounts pursuant to Section 17.06,
under the applicable provisions of the Code.
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ARTICLE XVIII
TRANSFERS OF CERTAIN EMPLOYEES TO GATX CORPORATION
Sec. 18.01 Scope. The provisions of this Article XVIII shall,
notwithstanding any other provisions of the Plan to the contrary, apply with
respect to each Participant who becomes a "Purchaser's Employee" as such term is
defined in the Stock Purchase Agreement between GATX Pipe Line Company, Union
Pacific Pipeline Company and Union Pacific Resources Company (the "Purchase
Agreement").
Sec. 18.02 Vesting. Each Participant who becomes a "Purchaser's Employee"
shall, to the extent not otherwise one hundred percent (100%) vested in (a) the
value of his Company Contribution Account and (b) the value of his Matching
Contribution Account, be one hundred percent (100%) vested in the value of such
Accounts at the time he becomes a "Purchaser's Employee."
Sec. 18.03 Transfer Election. Each Participant who becomes a "Purchaser's
Employee" shall be allowed to elect to have assets representing the value of all
of his Accounts, other than his PAYSOP Contribution Account, transferred, in
accordance with the terms and requirements of Section 18.06, to the defined
contribution plan established by GATX Corporation and/or GATX Pipe Line Company
(a "Transfer Election"), provided that the Named Fiduciary-Plan Administration
(a) has received written notice of such election, on a form adopted by the Named
Fiduciary-Plan Administration for such purpose, not later than the last day of
the month following the month in which such Participant becomes a "Purchaser's
Employee" and (b) has not previously received written notice of the making by
such Participant of an election to receive payment of his Plan benefit. A
Transfer Election, made in accordance with the requirements of the immediately
preceding sentence, shall be irrevocable.
Sec. 18.04 Effect of Transfer Election on Final Distribution. If a
Participant makes a Transfer Election in accordance with the requirements of
Section 18.03, (a) GATX Pipe Line Company and Calnev Pipe Line Company shall,
for purposes of applying Article VIII with respect to such Participant's
Accounts, be treated as Affiliated Companies and (b) the value of his PAYSOP
Contribution Account shall be distributed in a lump sum, in any form allowed
under Section 8.04(g), immediately following a Valuation Date as soon as
practicable following the making of such Transfer Election, provided that a
distribution shall occur pursuant to such clause (b) only if such Participant is
alive on the Valuation Date which such distribution would, but for this proviso,
immediately follow.
Sec. 18.05 Effect of Transfer Election on Loans. If a Participant (a)
makes a Transfer Election in accordance with the requirements of Section 18.03
and (b) has received a loan under Article IX and not paid such loan in full
prior to the date such Participant becomes a "Purchaser's Employee", GATX Pipe
Line Company and Calnev Pipe Line Company shall, for purposes of applying
Article IX with respect to such loan, be treated as Employers.
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Sec. 18.06 Transfer of Accounts. As of that Valuation Date which shall be
mutually agreed upon by (a) the Named Fiduciary-Plan Administration and (b) the
appropriate "named fiduciary", as such term is defined in section 402(a)(1) of
ERISA, of the defined contribution plan established by GATX Corporation and/or
GATX Pipe Line Company (the "GATX Plan") assets representing the value, as of
such Valuation Date, of all the Accounts, other than the PAYSOP Contribution
Accounts, of all Participants who have made Transfer Elections in accordance
with the requirements of Section 18.03 shall be transferred to such GATX Plan;
provided, however, that such transfer shall occur only if the requirements of
the last sentence of section 4.03(b) of the Purchase Agreement are met with
respect to the GATX Plan prior to such transfer. All transfers under this
Article XIX shall, as required by section 4.03(b) of the Purchase Agreement, be
in cash, except for any notes held in Participants' Loan Funds.
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ARTICLE XIX
TRANSFERS OF CERTAIN EMPLOYEES TO AMERICAN ULTRAMAR LIMITED
Sec. 19.01 Scope. The provisions of this Article XIX shall,
notwithstanding any other provisions of the Plan to the contrary, apply with
respect to each Participant who becomes an employee of American Ultramar Limited
("Ultramar") as a result of the sale of the Wilmington, California Refinery to
American Ultramar Limited on December 21, 1988.
Sec. 19.02 Vesting. Each Participant described in Section 19.01 shall, to
the extent not otherwise one hundred percent (100%) vested in (a) the value of
his Company Contribution Account and (b) the value of his Matching Contribution
Account, be one hundred percent (100%) vested in the value of such accounts at
the time he becomes an employee of Ultramar.
Sec. 19.03 Transfer Election. Each Participant described in Section 19.01
may elect to have assets representing the value of all of his vested Accounts
(other than his PAYSOP Contribution Account) transferred to the qualified
defined contribution plan established by Ultramar (the "Ultramar Plan") provided
that the Named Fiduciary-Plan Administration has received written notice of such
election, on a form adopted by the Named Fiduciary-Plan Administration for such
purpose, not later than the last day of the month following the month in which
such Participant becomes an employee of Ultramar. Any such transfer election
shall be irrevocable. As of the Valuation Date which shall be mutually agreed
upon by (a) the Named Fiduciary-Plan Administration and (b) the plan
administrator of the Ultramar Plan, assets representing the value, as of such
Valuation Date, of all the Accounts (excluding the PAYSOP Contribution Account)
of all Participants who have made transfer elections hereunder shall be
transferred to the Ultramar Plan; provided, however, that the Named
Fiduciary-Plan Administration has previously received satisfactory evidence from
Ultramar that the Ultramar Plan is qualified under section 401(a) of the Code.
All transfers under this Section 19.02 shall be in cash, except for any notes in
Participants' Loan Funds.
Sec. 19.04 Effect on Right to Distribution. In the event a Participant
described in Section 19.01 fails to make the transfer election under Section
19.03 such that his Accounts remain in the Plan:
(a) the Participant shall not be treated as having a Separation from
Service for purposes of Section 8.02 until he terminates employment with
Ultramar; and
(b) prior to his termination of employment with Ultramar, the Participant
shall have the right to request withdrawals from his Accounts pursuant to
Section 8.03 as if he were still an Employee.
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The provisions of this Section shall also apply to a Participant who has made
the transfer election described in Section 19.03 throughout the period prior to
transfer of his Accounts to the Ultramar Plan.
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ARTICLE XX
DISTRIBUTIONS TO EMPLOYEES OF USPCI, INC.
Sec. 20.01 Eligibility. The provisions of Article XX shall apply to any
Vested Participant who continues working for Laidlaw Transportation, Inc.
("Laidlaw") or any member of its controlled group of corporation or trades and
businesses under common control, as defined in sections 414(b) and (c) of the
Code, as a consequence of Laidlaw's acquisition of USPCI, Inc., and its
subsidiaries ("Subsidiaries") pursuant to the Stock Purchase Agreement dated
December 5, 1994. Such Vested Participant is hereinafter referred to as a "USPCI
Employee."
Sec. 20.02 Separation from Service. For purposes of Section 8.02, a USPCI
Employee shall be treated as having a Separation from Service due to the
Company's sale of the Subsidiaries to Laidlaw, provided such USPCI Employee's
Benefit Payment Date occurs prior to December 31, 1996.
Sec. 20.03 Form of Benefit Payment. Notwithstanding anything in Section
8.04 to the contrary, a USPCI Employee's Account shall only be distributed under
this Article XX in the form of a single sum payment.
Sec. 20.05 Other Distributions. A USPCI Employee whose Benefit Payment
Date does not occur prior to December 31, 1996 shall only be eligible for a
distribution under Article VIII after terminating employment with Laidlaw, any
member of its controlled group of corporations (as defined in section 414(b) of
the Code and any trade or business with which Laidlaw is under common control
(as defined in section 414(c) of the Code).
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Exhibit 4.2
<PAGE>
1995
STOCK OPTION AND RETENTION STOCK PLAN
of
UNION PACIFIC RESOURCES GROUP INC.
<PAGE>
1995 STOCK OPTION AND RETENTION STOCK PLAN
OF UNION PACIFIC RESOURCES GROUP INC.
================================================================================
1. PURPOSE
This 1995 Stock Option and Retention Stock Plan of Union Pacific Resources Group
Inc. is to promote and closely align the interests of officers and employees
with those of the shareholders of Union Pacific Resources Group Inc. by
providing stock based compensation. The Plan is intended to strengthen Union
Pacific Resources Group Inc.'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.
================================================================================
2. DEFINITIONS
The following terms shall have the following meanings:
"Act" means the Securities Exchange Act of 1934, as amended.
"Approved Leave of Absence" means a leave of absence of definite length
approved by the Vice President - People 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 pursuant to the Plan.
"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.
"Code" means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any successor statute.
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"Committee" means the Committee designated by the Board to administer the
Plan pursuant to Section 3.
"Common Stock" means the Common Stock of the Company.
"Company" means Union Pacific Resources Group Inc., 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, including a Rollover Option.
"Optionee" means the Chairman of the Board or 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 the Chairman of the Board or any employee of the
Company or a Subsidiary (including directors who are also such employees) who is
granted an Award under the Plan.
"Plan" means this 1995 Stock Option and Retention Stock Plan of Union
Pacific Resources Group Inc., as amended from time to time.
"Retention Shares" means shares of Common Stock subject to an Award
granted under the Plan, including Rollover Retention Shares.
"Restriction Period" means the period defined in Section 9(a).
"Rollover Option" means an Option granted under the Plan in exchange for
UPC Stock Options.
"Rollover Retention Shares" means shares of Common Stock subject to an
Award granted under the Plan in exchange for UPC Retention Shares.
"Subsidiary" means any corporation, partnership, or limited liability
company of which the Company owns directly or indirectly at least a majority of
the outstanding shares of voting stock or other voting interest.
"UPC" means Union Pacific Corporation, a Utah corporation.
"UPC Plans" mean the 1993 Stock Option and Retention Stock Plan of Union
Pacific Corporation, the 1990 Retention Stock Plan of Union Pacific Corporation,
the 1988 Stock Option and Restricted Stock Plan of Union Pacific Corporation and
the 1982 Stock Option and Restricted Stock Plan of Union Pacific Corporation.
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"UPC Stock Option" means any option granted under any UPC Plan.
"UPC Retention Shares" means shares of common stock of UPC granted and
subject to restrictions under the UPC Plans.
"Vesting Condition" means any condition to the vesting of Retention Shares
established by the Committee pursuant to Section 9.
================================================================================
3. ADMINISTRATION
The Plan shall be administered by the Committee which shall comprise not less
than three persons, who shall be either members of the Board or, if the Board
does not include at least three members who are not employees of UPC, the
Company or any Subsidiary, members of the Board of Directors of UPC, 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 to
Participants, and (ii) determine the terms and conditions of such Options and
Awards of Retention Shares, 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. The Committee may delegate its authority under the
Plan to one or more officers or employees of the Company or a Subsidiary,
provided, however, that no delegation shall be made of authority to take an
action which is required by Rule 16b-3 promulgated under the Act to be taken by
"disinterested persons" in order that the Plan and transactions thereunder meet
the requirements of such Rule. Each Option and grant of Retention Shares shall,
if required by the Committee, be evidenced by an 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.
================================================================================
4. ELIGIBILITY
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, provided, that
the Chairman of the Board shall be eligible to receive Rollover Options.
Directors other than the Chairman of the Board who are not full-time salaried
employees shall not be eligible. In granting Options or Awards of Retention
Shares to eligible persons, the Committee shall take into account their duties,
their present and
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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 11 hereof, the maximum number and kind of
shares as to which Options or Retention Shares may at any time be granted under
the Plan are 16 million shares of Common Stock. No Participant may receive
Options or Awards aggregating more than 10% of the shares of Common Stock
available under the Plan. 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 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 under
the Plan. Upon the forfeiture (in whole or in part) of a grant of Retention
Shares, the shares of Common Stock subject to such forfeiture shall again be
available for option or grant as Retention Shares 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,
other than Rollover Options, 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. Rollover Options shall each
have an option price per share determined by the Committee, provided that,
unless the Committee determines otherwise in a specific case, the aggregate gain
or loss, as determined by the Committee, implicit in the Rollover Options
granted to each Optionee shall be equal to the aggregate gain or loss implicit
in the UPC Stock Options surrendered in exchange for such Rollover Options.
(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 shall any option be exercisable subsequent to the
tenth anniversary of the date on which the option is granted or, in the case of
Rollover Options, of the date of grant of the UPC Stock Option for which such
Rollover Option was exchanged.
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(c) Exercise of Option. Except as provided in Section 6(h), 6(i) or 8(c),
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 or, in the case
of Rollover Options, prior to the date of exercise of the UPC Stock Option for
which such Rollover Option was exchanged (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, provided, however, that no option (other than Rollover Options)
shall be exercisable before the earlier of (i) December 31, 1997, or (ii) one
year after UPC no longer owns at least 50% of the voting power of all shares of
the Company entitled to vote generally in the election of directors. 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 written
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 which 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.
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(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 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, 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 (I) in the case of disability as described below,
any holding period required by Section 6(c) shall automatically be deemed to be
satisfied and (II) 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. 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) 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.
(iv) 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 Committee may
determine that particular limitations and restrictions under the Plan shall not
apply, and such option shall expire, unless exercised by the Optionee's legal
representatives or heirs, five (5) years after the date of death (unless the
Committee shall provide for a shorter period at the time the option is granted).
-6-
<PAGE>
In no event, however, shall any option be exercisable pursuant to
Sections 6(h) or (i) subsequent to the tenth anniversary of the date on which it
is granted or, in the case of a Rollover Option, of the date of grant of the UPC
Stock Option(s) for which such Rollover Option was exchanged.
(j) Rollover Options. Rollover Options may be granted only in exchange for
UPC Stock Options and only during the period prior to 90 days after UPC no
longer owns at least 50% of the voting power of all of the shares of the Company
entitled to vote generally in the election of directors. The ratio for such
exchange shall be determined by the Committee, provided that the requirements of
Section 6(a) are met.
================================================================================
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
(a) General. The Committee may also grant a stock appreciation right in
connection with a non-qualified option, either at the time of grant or by
amendment. Such stock appreciation right shall cover the same shares covered by
such option (or such lesser number of shares of Common Stock as the Committee
may determine) and shall, except for the provisions of Section 6(d) hereof, be
subject to the same terms and conditions as the related non-qualified option.
(b) Exercise and Payment. Each stock appreciation right shall entitle the
Optionee to surrender to the Company unexercised the related option, or any
portion thereof, and to receive from the Company in exchange therefor an amount
equal to the excess of the fair market value of one share of Common Stock over
the option price per share times the number of shares covered by the option, or
portion thereof, which is surrendered. Payment shall be made in shares of Common
Stock valued at fair market value, or in cash, or partly in shares and partly in
cash, all as shall be determined by the Committee. The fair market value shall
be the value determined in accordance with procedures established by the
Committee. Stock appreciation rights may be exercised from time to time upon
actual receipt by the Company of written notice stating the number of shares of
Common Stock with respect to which the stock appreciation right is being
exercised, provided that if a stock appreciation right expires unexercised, it
shall be deemed exercised on the expiration date if any amount would be payable
with respect thereto. No fractional shares shall be issued but instead cash
shall be paid for a fraction or, if the Committee should so determine, the
number of shares shall be rounded downward to the next whole share. 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 stock appreciation
rights, 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.
-7-
<PAGE>
(c) Restrictions. The obligation of the Company to satisfy any stock
appreciation right exercised by an Optionee subject to Section 16 of the Act
shall be conditioned upon the prior receipt by the Company of an opinion of
counsel to the Company that any such satisfaction will not create an obligation
on the part of such Optionee pursuant to Section 16(b) of the Act to reimburse
the Company for any statutory profit which might be held to result from such
satisfaction.
-8-
<PAGE>
================================================================================
8. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
(a) General. The Committee may also grant incentive stock options as
defined under section 422 of the Code. All incentive stock options issued under
the Plan shall, except for the provisions of Sections 6(h) and (i) and Section 7
hereof, be subject to the same terms and conditions as the non-qualified options
granted under the Plan, and may be Rollover Options subject to Section 6(j)
hereof; provided, however, that no incentive stock option which is a Rollover
Option shall confer additional benefits (within the meaning of section 424(h)(3)
of the Code) upon the Optionee which the Optionee did not have under the UPC
Stock Option surrendered in exchange therefor. In addition, incentive stock
options shall be subject to the conditions of Sections 8(b), (c), (d) and (e).
(b) Limitation of Exercise. The aggregate fair market value (determined as
of the date the incentive stock option is granted) of the shares of stock with
respect to which incentive stock options are exercisable for the first time by
such Optionee during any calendar year, under this Plan or any other stock
option plans adopted by the Company, its Subsidiaries or any predecessor
companies thereof, other than Rollover Options issued in exchange for UPC
Options which were exercisable by the Optionee at the time of exchange, shall
not exceed $100,000. If any incentive stock options become exercisable in any
year in excess of the $100,000 limitation, options representing such excess
shall become non-qualified options exercisable pursuant to the terms of Section
6 hereof and shall not be exercisable as incentive stock options.
(c) Termination of Employment. Upon the termination of an Optionee's
employment, for any reason other than death, his or her incentive stock option
shall be exercisable only as to those shares of Common Stock which were then
subject to the exercise of such option provided that (I) in the case of
disability as described below, any holding period required by Section 6(c) shall
automatically be deemed to be satisfied and (II) the Committee may determine
that particular limitations and restrictions under the Plan shall not apply, and
such option shall expire as an incentive stock option (but shall become a
non-qualified option exercisable pursuant to the terms of Section 6 hereof less
the period already elapsed under such Section), according to the following
schedule (unless the Committee shall provide for shorter periods at the time the
incentive stock option is granted):
(i) Retirement. An incentive stock option shall expire, unless
exercised, three (3) months 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. In the case of an Optionee who is disabled within
the meaning of section 22(e)(3) of the Code, an incentive stock option
shall expire, unless exercised, one (1) year after the earlier of the date
the Optionee terminates employment or 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.
-9-
<PAGE>
(iii) Gross Misconduct. An incentive stock 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.
(iv) All Other Terminations. An incentive stock option shall expire,
unless exercised, three (3) months after the date of such termination.
(d) Death of Optionee. Upon the death of an Optionee during his or her
period of employment, the incentive stock option shall be exercisable as an
incentive stock option only as to those shares of Common Stock which were
subject to the exercise of such option at the time of death, provided that (I)
any holding period required by Section 6(c) shall automatically be deemed to be
satisfied, and (II) the Committee may determine that particular limitations and
restrictions under the Plan shall not apply, and such option shall expire,
unless exercised by the Optionee's legal representatives or heirs, five (5)
years after the date of death (unless the Committee shall provide for a shorter
period at the time the option is granted).
(e) Leave of Absence. A leave of absence, whether or not an Approved Leave
of Absence, shall be deemed a termination of employment for purposes of Section
8.
In no event, however, shall any incentive stock option be
exercisable pursuant to Sections 8(c) or (d) subsequent to the tenth anniversary
of the date on which it was granted or, in the case of a Rollover Option, of the
date of grant of the UPC Stock Option(s) for which such Rollover Option was
exchanged.
================================================================================
9. TERMS AND CONDITIONS OF AWARDS OF RETENTION STOCK
(a) General. Retention Shares (other than Rollover Retention Shares) may
be granted to reward the attainment of individual, Company or Subsidiary goals,
or to attract or retain officers or other employees of the Company or any
Subsidiary. With respect to each grant of Retention Shares under the Plan, the
Committee shall determine the period or periods, including any conditions for
determining such period or periods, during which the restrictions set forth in
Section 9(b) shall apply, provided that in no event, other than as provided in
Section 9(c), shall such restrictions terminate prior to 3 years after the date
of grant, except for Rollover Retention Shares, in which case such restrictions
shall not terminate prior to 3 years after the date of grant of the UPC
Retention Shares for which such Rollover Retention Shares are exchanged (the
"Restriction Period"), and may also specify any other terms or conditions to the
right of the Participant to receive such Retention Shares ("Vesting
Conditions"). Subject to Section 9(c) and any such Vesting Condition, a grant of
Retention Shares shall be effective for the Restriction Period and may not be
revoked.
-10-
<PAGE>
(b) Restrictions. At the time of grant of Retention Shares to a
Participant, a certificate representing the number of shares of Common Stock
granted shall be registered in the Participant's name but shall be held by the
Company for his or her account. The Participant shall have the entire beneficial
ownership interest in, and all rights and privileges of a stockholder as to,
such Retention Shares, including the right to vote such Retention Shares and,
unless the Committee shall determine otherwise, the right to receive dividends
thereon, subject to the following: (i) subject to Section 9(c), the Participant
shall not be entitled to delivery of the stock certificate until the expiration
of the Restriction Period and the satisfaction of any Vesting Conditions; (ii)
none of the Retention Shares may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restriction Period or prior to
the satisfaction of any Vesting Conditions; and (iii) all of the Retention
Shares shall be forfeited and all rights of the Participant to such Retention
Shares shall terminate without further obligation on the part of the Company
unless the Participant remains in the continuous employment of the Company or a
Subsidiary for the entire Restriction Period, except as provided by Sections
9(a) and 9(c), and any applicable Vesting Conditions have been satisfied. Any
shares of Common Stock or other securities or property received as a result of a
transaction listed in Section 11 shall be subject to the same restrictions as
such Retention Shares unless the Committee shall determine otherwise.
(c) Termination of Employment.
(i) Disability and Retirement. Unless the Committee shall determine
otherwise at the time of grant of Retention Shares, if (A) a Participant
ceases to be an employee of the Company or a Subsidiary prior to the end
of a Restriction Period, by reason of disability under the provisions of
the Company's or a Subsidiary's long-term disability plan or retirement
under the provisions of the Company's or a Subsidiary's pension plan
either (i) at age 65 or (ii) prior to age 65 at the request of the Company
or a Subsidiary, and (B) all Vesting Conditions have been satisfied, the
Retention Shares granted to such Participant shall immediately vest and
all restrictions applicable to such shares shall lapse. A certificate for
such shares shall be delivered to the Participant in accordance with the
provisions of Section 9(d).
(ii) Death. Unless the Committee shall determine otherwise at the
time of grant of Retention Shares, if (A) a Participant ceases to be an
employee of the Company or a Subsidiary prior to the end of a Restriction
Period by reason of death, and (B) all Vesting Conditions have been
satisfied, the Retention Shares granted to such Participant shall
immediately vest in his or her Beneficiary, and all restrictions
applicable to such shares shall lapse. A certificate for such shares shall
be delivered to the Participant's Beneficiary in accordance with the
provisions of Section 9(d).
(iii) All Other Terminations. If a Participant ceases to be an
employee of the Company or a Subsidiary prior to the end of a Restriction
Period for any reason other than death, disability or retirement as
provided in Section 9(c)(i) and (ii), the Participant shall immediately
forfeit all Retention Shares then subject to the restrictions of Section
9(b) in
-11-
<PAGE>
accordance with the provisions thereof, except that the Committee may, if
it finds that the circumstances in the particular case so warrant, allow a
Participant whose employment has so terminated to retain any or all of the
Retention Shares then subject to the restrictions of Section 9(b) and all
restrictions applicable to such retained shares shall lapse. A certificate
for such retained shares shall be delivered to the Participant in
accordance with the provisions of Section 9(d).
(iv) Vesting Conditions. Unless the Committee shall determine
otherwise at the time of grant of Retention Shares, if a Participant
ceases to be an employee of the Company or a Subsidiary for any reason
prior to the satisfaction of any Vesting Condi tions, the Participant
shall immediately forfeit all Retention Shares then subject to the
restrictions of Section 9(b) in accordance with the provisions thereof,
except that the Committee may, if it finds that the circumstances in the
particular case so warrant, allow a Participant whose employment has so
terminated to retain any or all of the Retention Shares then subject to
the restrictions of Section 9(b) and all restrictions applicable to such
retained shares shall lapse. A certificate for such retained shares shall
be delivered to the Participant in accordance with the provisions of
Section 9(d).
(d) Payment of Retention Shares. At the end of the Restriction Period and
after all Vesting Conditions have been satisfied, or at such earlier time as
provided for in Section 9(c) or as the Committee, in its sole discretion, may
otherwise determine, all restrictions applicable to the Retention Shares shall
lapse, and a stock certificate for a number of shares of Common Stock equal to
the number of Retention Shares, free of all restrictions, shall be delivered to
the Participant or his or her Beneficiary, as the case may be. If an amount is
payable by a Participant to the Company or a Subsidiary under applicable
withholding tax laws in connection with the lapse of such restrictions, the
Committee, in its sole discretion, may permit the Participant to make such
payment, in whole or in part, by authorizing the Company to transfer to the
Company Retention Shares otherwise deliverable to the Participant having a fair
market value equal to the amount to be paid under such withholding tax laws.
(e) Rollover Retention Shares. Rollover Retention Shares may be granted
only in exchange for shares of UPC Retention Stock granted and subject to
restrictions under a UPC Plan and only during the period prior to 90 days after
UPC no longer owns at least 50% of the voting power of all of the shares of the
Company entitled to vote generally in the election of directors. Unless the
Committee shall determine otherwise in a specific case, the Rollover Retention
Shares shall, on the date of exchange, have the same value, as determined by the
Committee, as the shares of UPC surrendered in exchange for such Rollover
Retention Shares.
================================================================================
10. REGULATORY APPROVALS AND LISTING
-12-
<PAGE>
The Company shall not be required to issue to an Optionee, Participant or a
Beneficiary, as the case may be, any certificate for any shares of Common Stock
upon exercise of an option or for any Retention Shares granted under the Plan
prior to (i) the obtaining of any approval from any governmental agency which
the Company, in its sole discretion, shall determine to be necessary or
advisable, (ii) the admission of such shares to listing on any stock exchange on
which the Common Stock may then be listed, and (iii) the completion of any
registration or other qualification of such shares under any state or Federal
law or rulings or regulations of any governmental body which the Company, in its
sole discretion, shall determine to be necessary or advisable.
================================================================================
11. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION
In the event of a recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, rights offering, separation,
spin-off, reorganization or liquidation, or any other change in the corporate
structure or shares of the Company, the Board, upon recommenda tion of the
Committee, may make such equitable adjustments as it may deem appropriate in the
number and kind of shares authorized by the Plan, in the option price of
outstanding Options, and in the number and kind of shares or other securities or
property subject to Options or covered by outstanding Awards.
================================================================================
12. TERM OF THE PLAN
No Options or Retention Shares shall be granted pursuant to the Plan after
September 27, 2005 but grants of Options and Retention Shares theretofore
granted may extend beyond that date and the terms and conditions of the Plan
shall continue to apply thereto.
================================================================================
13. TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan with respect to any shares of
Common Stock not at that time subject to outstanding Options or Awards, and may
from time to time alter or amend the Plan or any part thereof (including, but
without limiting the generality of the foregoing, any amendment deemed necessary
to ensure that the Company may obtain any approval referred to in Section 10 or
to ensure that the grant of Options or Awards, the exercise of Options or
payment of Retention Shares or any other provision or the Plan complies with
Section 16(b) of the Act), provided that no change with respect to any Options
or Retention Shares theretofore granted may be made which would impair the
rights of an Optionee or Participant without the consent of such Optionee or
Participant and, further, that without the approval of stockholders, no
alteration or amendment may be made which would (i) increase the maximum number
of shares of Common Stock subject to the Plan as set forth in Section 5 (except
by operation of Section 11), (ii) extend the term of the Plan, (iii) change the
class of eligible persons who may receive Options or Awards
-13-
<PAGE>
of Retention Shares under the Plan or (iv) increase the limitation set forth in
Section 5 on the maximum number of shares that any Participant may receive under
the Plan.
================================================================================
14. LEAVE OF ABSENCE
Unless the Committee shall determine otherwise, a leave of absence other than an
Approved Leave of Absence shall be deemed a termination of employment for
purposes of the Plan. An Approved Leave of Absence shall not be deemed a
termination of employment for purposes of the Plan (except for purposes of
Section 8), but the period of such Leave of Absence shall not be counted toward
satisfaction of any Restriction Period or any holding period described in
Section 6(c).
================================================================================
15. GENERAL PROVISIONS
(a) Neither the Plan nor the grant of any Option or Award nor any action
by the Company, any Subsidiary or the Committee shall be held or construed to
confer upon any person any right to be continued in the employ of the Company or
a Subsidiary. The Company and each Subsidiary expressly reserve the right to
discharge, without liability but subject to his or her rights under the Plan,
any Optionee or Participant whenever in the sole discretion of the Company or a
Subsidiary, as the case may be, its interest may so require.
(b) All questions pertaining to the construction, regulation, validity and
effect of the Plan shall be determined in accordance with the laws of the State
of Utah, without regard to conflict of laws doctrine.
================================================================================
16. EFFECTIVE DATE
The Plan shall become effective upon approval of the stockholders of the
Company.
-14-
<PAGE>
Exhibit 5
<PAGE>
February 24, 1997
Union Pacific Resources Group Inc.
801 Cherry Street
P.O. Box 7
Fort Worth, Texas 76101-0007
RE: Registration Statement on Form S-8 Relating to the Union Pacific
Resources Group Inc. Employee's Thrift Plan and 1995 Stock Option
and Retention Stock Plan
Ladies and Gentlemen:
As General Attorney of Union Pacific Resources Group Inc., a Utah
corporation (the "Company"), I have participated in the preparation of a
registration statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
11,700,000 shares of the Company's common stock (the "Registered Shares"), no
par value per share (the "Common Stock"), of which 3,700,000 Registered Shares
may be offered and sold under the Company's Employee's Thrift Plan and of which
8,000,000 Registered Shares may be offered and sold under the Company's 1995
Stock Option and Retention Stock Plan (collectively, the "Plans").
In connection with this opinion, I have examined the Registration
Statement, the Articles of Incorporation and Bylaws of the Company, certain of
the Company's corporate proceedings as reflected in its minute books, and such
other records as I have deemed relevant. I have examined and relied upon
originals or copies, certified or otherwise authenticated to my satisfaction, of
all corporate records, documents, agreements or other instruments of the Company
and have made such other examinations of law and fact as I have deemed
appropriate in order to form a basis for the opinion hereinafter expressed.
In my opinion, the Registered Shares that may be originally issued by the
Company in offers and sales in connection with the Plans will, when issued in
accordance with the terms of the Plans, be validly issued, fully paid, and
non-assessable shares of Common Stock.
The opinion set forth above is limited to the Utah Business Corporation
Act.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving such opinion and consent, I do not thereby
admit that I am acting within the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ Mark L. Jones
-------------------------------
MLJ:mel
<PAGE>
Exhibit 15
<PAGE>
February 27, 1997
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim consolidated
financial information of Union Pacific Resources Group Inc. for the periods
ended March 31, 1996 and 1995 and June 30, 1996 and 1995 and September 30, 1996
and 1995 as indicated in our reports dated April 18, 1996, July 18, 1996 and
October 14, 1996, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996 are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touch LLP
- -------------------------------
DELOITTE & TOUCHE LLP
<PAGE>
Exhibit 23.1
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Union Pacific Resources Group Inc. on Form S-8 of our report dated January 18,
1996, appearing in the Annual Report on Form 10-K of Union Pacific Resources
Group Inc. for the year ended December 31, 1995 and to the reference to us under
the heading "Experts" in this Registration Statement.
/s/ Deloitte & Touche LLP
- ------------------------------------
DELOITTE & TOUCHE LLP
Fort Worth, Texas
February 27, 1997
<PAGE>
Exhibit 24
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that H. JESSE ARNELLE, a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK L.
JONES, and each of them acting individually, his true and lawful attorney, each
with power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity as
Director, Registration Statements on Form S-8 (or other appropriate form) for
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and any other documents in support thereof or supplemental or
amendatory thereto, with respect to the 1995 Stock Option and Retention Stock
Plan and Union Pacific Resources Group Inc. Employees' Thrift Plan hereby
granting to such attorneys and each of them full power and authority to do and
perform each and every act and thing whatsoever as such attorney or attorneys
may deem necessary or advisable to carry out fully the intent of the foregoing
as the undersigned might or could do personally or in his capacity as Director,
hereby ratifying and confirming all acts and things which such attorney or
attorneys may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ H. Jesse Arnelle
----------------------------------
H. JESSE ARNELLE
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that LYNNE V. CHENEY, a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, MARK S. KNOUSE and MARK L. JONES,
and each of them acting individually, her true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on her behalf, and in her name and in her capacity as
Director, Registration Statements on Form S-8 (or other appropriate form) for
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and any other documents in support thereof or supplemental or
amendatory thereto, with respect to the 1995 Stock Option and Retention Plan and
Union Pacific Resources Group Inc. Employees' Thrift Plan hereby granting to
such attorneys and each of them full power and authority to do and perform each
and every act and thing whatsoever as such attorney or attorneys may deem
necessary or advisable to carry out fully the intent of the foregoing as the
undersigned might or could do personally or in her capacity as Director, hereby
ratifying and confirming all acts and things which such attorney or attorneys
may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Lynne V. Cheney
----------------------------------
LYNNE V. CHENEY
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that PRESTON M. GEREN III, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK
L. JONES, and each of them acting individually, his true and lawful attorney,
each with power to act without the other and full power of substitution, to
execute, deliver and file, for and on his behalf, and in his name and in his
capacity as Director, Registration Statements on Form S-8 (or other appropriate
form) for filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and any other documents in support thereof
or supplemental or amendatory thereto, with respect to the 1995 Stock Option and
Retention Stock Plan and Union Pacific Resources Group Inc. Employees' Thrift
Plan hereby granting to such attorneys and each of them full power and authority
to do and perform each and every act and thing whatsoever as such attorney or
attorneys may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in his capacity as
Director, hereby ratifying and confirming all acts and things which such
attorney or attorneys may do or cause to be done by virtue of this power of
attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Preston M. Geren III
----------------------------------
PRESTON M. GEREN III
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that LAWRENCE M. JONES, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK
L. JONES, and each of them acting individually, his true and lawful attorney,
each with power to act without the other and full power of substitution, to
execute, deliver and file, for and on his behalf, and in his name and in his
capacity as Director, Registration Statements on Form S-8 (or other appropriate
form) for filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and any other documents in support thereof
or supplemental or amendatory thereto, with respect to the 1995 Stock Option and
Retention Stock Plan and Union Pacific Resources Group Inc. Employees' Thrift
Plan hereby granting to such attorneys and each of them full power and authority
to do and perform each and every act and thing whatsoever as such attorney or
attorneys may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in his capacity as
Director, hereby ratifying and confirming all acts and things which such
attorney or attorneys may do or cause to be done by virtue of this power of
attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Lawrence M. Jones
----------------------------------
LAWRENCE M. JONES
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that DREW LEWIS, a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK L.
JONES, and each of them acting individually, his true and lawful attorney, each
with power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity as
Director, Registration Statements on Form S-8 (or other appropriate form) for
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and any other documents in support thereof or supplemental or
amendatory thereto, with respect to the 1995 Stock Option and Retention Stock
Plan and Union Pacific Resources Group Inc. Employees' Thrift Plan hereby
granting to such attorneys and each of them full power and authority to do and
perform each and every act and thing whatsoever as such attorney or attorneys
may deem necessary or advisable to carry out fully the intent of the foregoing
as the undersigned might or could do personally or in his capacity as Director,
hereby ratifying and confirming all acts and things which such attorney or
attorneys may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Drew Lewis
----------------------------------
DREW LEWIS
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that CLAUDINE B. MALONE, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, MARK S. KNOUSE and MARK L.
JONES, and each of them acting individually, her true and lawful attorney, each
with power to act without the other and full power of substitution, to execute,
deliver and file, for and on her behalf, and in her name and in her capacity as
Director, Registration Statements on Form S-8 (or other appropriate form) for
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and any other documents in support thereof or supplemental or
amendatory thereto, with respect to the 1995 Stock Option and Retention Plan and
Union Pacific Resources Group Inc. Employees' Thrift Plan hereby granting to
such attorneys and each of them full power and authority to do and perform each
and every act and thing whatsoever as such attorney or attorneys may deem
necessary or advisable to carry out fully the intent of the foregoing as the
undersigned might or could do personally or in her capacity as Director, hereby
ratifying and confirming all acts and things which such attorney or attorneys
may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Claudine B. Malone
----------------------------------
CLAUDINE B. MALONE
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that JOHN W. PODUSKA, SR., PH.D., a
Director of Union Pacific Resources Group Inc., a Utah Corporation (the
"Corporation"), hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S.
KNOUSE and MARK L. JONES, and each of them acting individually, his true and
lawful attorney, each with power to act without the other and full power of
substitution, to execute, deliver and file, for and on his behalf, and in his
name and in his capacity as Director, Registration Statements on Form S-8 (or
other appropriate form) for filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and any other documents in support
thereof or supplemental or amendatory thereto, with respect to the 1995 Stock
Option and Retention Stock Plan and Union Pacific Resources Group Inc.
Employees' Thrift Plan hereby granting to such attorneys and each of them full
power and authority to do and perform each and every act and thing whatsoever as
such attorney or attorneys may deem necessary or advisable to carry out fully
the intent of the foregoing as the undersigned might or could do personally or
in his capacity as Director, hereby ratifying and confirming all acts and things
which such attorney or attorneys may do or cause to be done by virtue of this
power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ John W. Poduska, Sr., Ph.D.
----------------------------------
JOHN W. PODUSKA, SR., PH.D.
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that SAMUEL K. SKINNER, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK
L. JONES, and each of them acting individually, his true and lawful attorney,
each with power to act without the other and full power of substitution, to
execute, deliver and file, for and on his behalf, and in his name and in his
capacity as Director, Registration Statements on Form S-8 (or other appropriate
form) for filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and any other documents in support thereof
or supplemental or amendatory thereto, with respect to the 1995 Stock Option and
Retention Stock Plan and Union Pacific Resources Group Inc. Employees' Thrift
Plan hereby granting to such attorneys and each of them full power and authority
to do and perform each and every act and thing whatsoever as such attorney or
attorneys may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in his capacity as
Director, hereby ratifying and confirming all acts and things which such
attorney or attorneys may do or cause to be done by virtue of this power of
attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ Samuel K. Skinner
----------------------------------
SAMUEL K. SKINNER
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that JAMES R. THOMPSON, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., MARK S. KNOUSE and MARK
L. JONES, and each of them acting individually, his true and lawful attorney,
each with power to act without the other and full power of substitution, to
execute, deliver and file, for and on his behalf, and in his name and in his
capacity as Director, Registration Statements on Form S-8 (or other appropriate
form) for filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and any other documents in support thereof
or supplemental or amendatory thereto, with respect to the 1995 Stock Option and
Retention Stock Plan and Union Pacific Resources Group Inc. Employees' Thrift
Plan hereby granting to such attorneys and each of them full power and authority
to do and perform each and every act and thing whatsoever as such attorney or
attorneys may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in his capacity as
Director, hereby ratifying and confirming all acts and things which such
attorney or attorneys may do or cause to be done by virtue of this power of
attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 5th day of February, 1997.
/s/ James R. Thompson
----------------------------------
JAMES R. THOMPSON
