Union Pacific 2002 Annual Report Download - page 88

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Number of securities
Number of securities Weighted-average remaining available for
to be issued upon exercise price of future issuance under equity
exercise of outstanding compensation plans
outstanding options, options, warrants (excluding securities
warrants and rights and rights reflected in column (a))
Plan Category (a) (b) (c)
Equity compensation plans
approved by security holders ................. 13,309,985 $51.80 9,544,569
Equity compensation plans not
approved by security holders [1] [2]..... 8,042,120 $55.00 1,419,697 [3]
Total .............................................................. 21,352,105 $53.00 10,964,266
[1] The UP Shares Stock Option Plan of UPC (UP Shares Plan), the Overnite Transportation Company Employee Stock Purchase Plan
(OTC ESPP) and the Motor Cargo Industries, Inc. Employee Stock Purchase Plan (Motor Cargo ESPP) are the only equity compensation
plans of UPC not approved by shareholders. The UP Shares Plan was approved by UPC’s Board of Directors on April 30, 1998. The UP
Shares Plan reserved 12,000,000 shares of UPC’s common stock for issuance. The UP Shares Plan was a broad-based option program
that granted each eligible, active employee on April 30, 1998 an option to purchase 200 shares of UPC common stock at $55.00 per share.
All options granted were non-qualified options that became exercisable on May 1, 2001 and remain exercisable until April 30, 2008.If
an optionee’s employment terminates for any reason, the option remains exercisable for a period of one year after the date of termination,
but no option is exercisable after April 30, 2008. Pursuant to the terms of the UP Shares Plan, no options may be granted after April 30,
1998.
[2] The OTC ESPP was approved by UPC’s Board of Directors on November 19, 1987 and the Motor Cargo ESPP was approved by UPC’s
Board on November 21, 2002. Both ESPPs are intended to qualify as an employee stock purchase plan under Section 423 of the Internal
Revenue Code of 1986, as amended. The OTC ESPP initially reserved 1,000,000 shares for issuance and on November 21, 1991 UPC’s
Board increased the number of shares available for issuance to 2,000,000. There are 300,000 shares of UPC’s common stock reserved for
future issuance under the Motor Cargo ESPP. All employees of OTC and Motor Cargo are eligible to participate in their respective ESPP.
Under the ESPPs, eligible employees are permitted to purchase shares of UPC common stock through payroll deductions. Each employee
may subscribe annually to purchase up to 200 shares of UPC common stock, subject to maximum purchase limitations. The purchase
price for the common stock purchased under the ESPPs is the lesser of 95% of the closing price of the common stock on the date that is
seven business days prior to the first day of the applicable offering period (but not less than 85% of the fair market value of the common
stock on the last day of the applicable offering period) or 95% of the closing price of the common stock on the last day of the applicable
purchase period (but not less than 85% of the fair market value of the common stock on such date).
[3] Of these shares, there are currently 1,119,697 shares of UPC’s common stock remaining for future issuance under the OTC ESPP and
there are 300,000 shares of UPC’s common stock reserved for future issuance under the Motor Cargo ESPP.
Item 13. Certain Relationships and Related Transactions
Information on related transactions is set forth in the Certain Relationships and Related Transactions and Compensation
Committee Interlocks and Insider Participation segments of the Proxy Statement and is incorporated herein by reference.
The Corporation does not have any relationship with any outside third party which would enable such a party to negotiate
terms of a material transaction that may not be available to, or available from, other parties on an arm’s-length basis.
Item 14. Controls and Procedures
Within 90 days prior to the date of this report, the Corporation carried out an evaluation, under the supervision and with
the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer (CEO) and
Executive Vice President – Finance (EVP – Finance), of the effectiveness of the design and operation of the Corporation’s
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the CEO and the
EVP - Finance concluded that the Corporation’s disclosure controls and procedures are effective in alerting them, in a timely
manner, to material information relating to the Corporation (including its consolidated subsidiaries) required to be included
in the Corporation’s periodic SEC filings.
Additionally, the CEO and EVP – Finance determined that there were no significant changes in the Corporation’s internal
controls or in other factors that could significantly affect the Corporation’s internal controls subsequent to the date of their
most recent evaluation.