SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 7, 2000
Union Pacific Corporation
(Exact Name of Registrant as Specified in its Charter)
Utah 1-6075 13-2626465
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1416 Dodge Street, Omaha, Nebraska 68179
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (402) 271-5777
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Counsel for Union Pacific Corporation ("UPC"), Union Pacific Railroad
Company (the "Railroad") and certain officers and directors of UPC and the
Railroad entered into a Memorandum of Understanding, dated as of June 28, 2000,
with counsel for the plaintiffs in Robert Bassman, et al. v. Union Pacific Corp,
et al. (the "Class Action") and counsel for the plaintiffs in Bryna Stepak v.
Drew Lewis, et al. v. Union Pacific Corp., et al. (the "Derivative Action" and,
together with the Class Action, the "Actions"), providing for the settlement of
both Actions, subject to certain conditions.
As previously disclosed, UPC and certain of its directors and officers
(who are also directors of the Railroad) are defendants in the Class Action. The
complaint in the Class Action alleges, among other things, that UPC violated the
federal securities laws by failing to disclose material facts and making
materially false and misleading statements concerning the service, congestion
and safety problems encountered following UPC's acquisition of Southern Pacific
Rail Corporation ("Southern Pacific") in 1996. The Class Action was filed in
late 1997 in the United States District Court for the Northern District of Texas
and seeks to recover unspecified amounts of damages. The Derivative Action was
filed on behalf of UPC and the Railroad in September 1998 in the District Court
for Tarrant County, Texas, naming as defendants the then-current and certain
former directors of UPC and the Railroad and, as nominal defendants, UPC and the
Railroad. The Derivative Action alleges, among other things, that the named
directors breached their fiduciary duties to UPC and the Railroad by approving
and implementing the Southern Pacific merger without informing themselves of its
impact or ensuring that adequate controls were put in place and by causing UPC
and the Railroad to make misrepresentations about the Railroad's service
problems to the financial markets and regulatory authorities.
The Memorandum of Understanding provides, among other things, that the
Class Action will be settled for $34,025,000 in cash (the "Settlement Payment").
The total amount of the Settlement Payment is expected to be fully covered by
UPC's insurance carriers. The fees and expenses of counsel for the plaintiffs in
the Class Action will be paid out of the Settlement Payment.
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The Memorandum of Understanding also provides that, in settlement of
the Derivative Action, UPC will adopt certain additional procedures which will
reinforce its continuing effort to ensure both the effective implementation of
its merger with Southern Pacific and its ongoing commitment to rail safety. In
addition, in the event of any proposed merger or other transaction involving
consolidation of UPC and a rail system of greater than 1,000 miles in length of
road, UPC will commission a study, to be completed in advance of any formal
application to a U.S., Canadian or Mexican federal regulatory board, to analyze
prospective safety and congestion-related issues. As part of the terms of the
Derivative Action settlement, counsel for the plaintiffs will receive such fees
and expenses as may be awarded by the Court, up to an aggregate amount of
$975,000. Such amount is also expected to be fully covered by UPC's insurance
carriers.
The settlement of each of the Actions is subject to, among other
conditions, the negotiation and execution of definitive Stipulations of
Settlement and such other documentation as may be required in connection with
such settlement and the approval of each settlement by the respective courts in
which each Action is pending.
Notwithstanding the existence of the Memorandum of Understanding, there
can be no assurances that a definitive settlement will be consummated with
respect to either Action.
UPC, the Railroad and the individual defendants named in the Actions
entered into the Memorandum of Understanding solely for the purpose of avoiding
the further expense, inconvenience, burden and uncertainty of the Actions, and
their decision to do so should not be construed as an admission or concession or
evidence of any liability or wrongdoing on the part of any party to either
Action, which liability and wrongdoing have consistently been, and continue to
be, denied.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 7, 2000
UNION PACIFIC CORPORATION
By: /s/ Carl W. von Bernuth
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Carl W. von Bernuth
Senior Vice President,
General Counsel and
Corporate Secretary