Page 1 of 8 Foreign Corrupt Practices Act Policy Union Pacific's Values Statement emphasizes high ethical standards to ensure that the Company maintains and enhances its solid reputation as one of America's leading and most recognizable companies. As part of this commitment to values, Union Pacific, its employees and its business partners are bound to comply with the federal government's Foreign Corrupt Practices Act (FCPA). This Act prohibits many kinds of payments and gifts to foreign officials, including foreign political candidates and employees of foreign government owned businesses. The Act fosters honesty, fairness and open competition. The law allows for narrow exceptions for limited gifts and entertainment and for payments authorized by written law or certain contract provisions. Union Pacific expects its suppliers, Appendix A: Pre-Approval for Expense Involving a Foreign Official consultants and other parties it does Appendix B: Due Diligence Questionnaire for New Foreign Representatives business with to comply with the FCPA and any other applicable antibribery and corruption laws applicable to them. This policy provides guidance to help employees, customers and suppliers understand the scope of the law and the Company's procedures for complying with the law. For guidance contact FCPA@up.com or contact Reha Kamas in the Law Department. Union Pacific asks that its business partners review and understand Union Pacific's FCPA policies and procedures. Section I. The Foreign Corrupt Practices Act The FCPA makes it unlawful to bribe foreign officials (see the definition of foreign official below). As an employee of Union Pacific Corporation, or a Union Pacific subsidiary, or as an agent, consultant or representative of Union Pacific, you cannot offer, pay or promise to pay money or provide anything of value to a foreign official for the following purposes: To obtain or retain business; To influence any decision of a foreign official; or To secure any other improper advantage. Similarly, you cannot do indirectly what is prohibited directly. In other words, you cannot pass something of value to a person, knowing that the person will offer it to a foreign official. 1.1 Scope - Who Is Covered by the FCPA?
Page 2 of 8 The FCPA applies to Union Pacific Corporation, its subsidiaries, agents, consultants and other representatives (hereinafter collectively referred to as Union Pacific or the Company). The FCPA applies to every employee of Union Pacific and every third party representing Union Pacific. 1.2 Key FCPA Definitions. Anything of Value includes cash and non-cash payments. These payments can include, but are not limited to, any of the following: gifts, gift or sale of stock or other investments in other than an arm's length transaction for demonstrated fair market value, contracts or other business opportunities awarded to a company in which a foreign official holds a beneficial interest, medical expenses, living expenses, educational expenses, contributions to any foreign charity, travel, meals, lodging, shopping or entertainment expenses. Foreign Official means any officer or employee of a foreign government (at any level of government), a public international organization, or a foreign political party, including political candidates. It also includes any person acting in an official capacity for such government or organization. The FCPA categorizes all officers, directors and employees of a state owned or controlled business as foreign officials. Foreign Government means any government outside the United States. Public International Organization means an organization that is so designated by the President of the United States; it generally includes organizations such as the International Monetary Fund, the European Union, the World Bank and similar organizations. 1.3 Enforcement, Penalties and Sanctions. The FCPA can subject Union Pacific and its employees to civil and criminal penalties for violations. 1. Criminal Penalties for Violations of Anti Bribery Provisions (US = United States): U.S. Individuals U.S. Corporations Fine of up to US $100,000 per violation Alternative fines amounting to two times the amount gained from the violation Up to 5 years in prison per violation Debarment from federal contracts Defense costs Fine of up to US $2 million per violation Alternative fines amounting to two times the amount gained from the violation Felony conviction Debarment from federal contracts Oversight by compliance monitor 2. In addition, there may be civil penalties for corporations of up to US $10,000, plus additional fines up to US $500,000. There may also be civil penalties for individuals of up to US $10,000, plus additional fines up to US $100,000. The FCPA prohibits employers from paying fines assessed against individuals. 3. Criminal Penalties for Violations of Books and Records Provisions: Individuals Corporations Fine up to US $5 million per violation Fine of up to US $25 million per violation
Page 3 of 8 Up to 20 years in prison per violation Alternative fines amounting to two times the amount gained from the violation Alternative fines amounting to two times the amount gained from the violation Section II. Union Pacific Policy and Procedures Union Pacific employees, subsidiaries, agents, consultants and other representatives will not pay, offer to pay, or authorize the payment of bribes to foreign officials. Union Pacific employees, subsidiaries, agents, consultants and other representatives must comply with the following procedures concerning payments, gifts or entertainment involving foreign officials. In general, payments or offers to provide anything of value to foreign officials require pre-approval and, in some cases, they are completely prohibited. If you have any questions, you can contact the FCPA Coordinator, Reha Kamas, at (801) 212-3980 or by email at FCPA@up.com. Employees, subsidiaries, agents, consultants and other representatives must report violations or suspected violations of this policy by calling either the Union Pacific Values Line (1-800-998-2000) or the Company's General Auditor. The Company encourages employees to provide their names to facilitate the investigation of complaints. However, Union Pacific will accept anonymous complaints. Please Note: Certain sections are marked as "ACTION REQUIRED." This designation is used to highlight the areas where employee action is required for compliance. 2.1 Payments Permitted Without Pre-Approval. The following acceptable payments do not require pre-approval: 1. Payments authorized by law Payments that are lawful under the written laws and regulations of the relevant country are acceptable. For example, if the law of the foreign country authorizes the local government authority to charge a tax for entry into the country, payment of that tax is permissible. Payments authorized by law must not be made in cash, and they must be paid to the government or government agency or entity requiring such payment and not to any individual representing the government. 2. Meals less than US $100 per person [ACTION REQUIRED] Meals involving foreign officials do not require prior written approval if the meal costs less than US $100 per person. However, you must do the following: Include the meal as part of a meeting for a valid, reasonable business purpose, such as promotion, demonstration or explanation of Union Pacific's products or services; Provide the meal for a purpose other than to induce a foreign official to misuse their official position; Avoid the appearance or perception of an improper payment or a conflict of interest; Comply with any applicable laws of the foreign country; and
Page 4 of 8 Properly record the expense in Union Pacific's books and records, including an entry showing the itemized value of the meal, the name and title/position of each of the attendees, and an attached copy of the original receipt. Meals for greater amounts may be allowed but will require pre-approval outlined in Section 2.2 (C) below. 3. Gifts - Promotional Items less than US $200 per person [ACTION REQUIRED] Gifts of Union Pacific promotional items (items bearing the Union Pacific logo) worth less than US $200 per person do not require pre-approval, but must be reported in accordance with policies governing use of your Business and Travel Expense Report.. Any other gift will require pre-approval as outlined in Section 2.2(B) below. 2.2 Payments Requiring Pre-Approval. The payments below require written pre-approval: 1. Hosting Foreign Official Travel [ACTION REQUIRED] Union Pacific may pay travel expenses related to hosting foreign officials only if such travel directly relates to the promotion, demonstration or explanation of Union Pacific's products or services or if legitimate contractual commitments require the travel. The following procedures must be followed: 1. Written Pre-Approval- Employees must obtain written approval in advance of any travel. The person requesting authority for a travel expense must submit the "FCPA Pre-Approval Form" online at FCPA Online Forms (click on Appendix A). The employee will not make the expense until they receive written approval. Before commencement of the travel, the sponsoring employee will send a letter memorialzing all of the detailed terms of the hosting, including what expenses will and will not be covered. The FCPA Coordinator will work with the sponsoring employee to prepare this letter. 2. Compliance with Existing Policies - The expense must comply with the Company's Business and Travel Expense Policy. This policy permits expenses for transportation, lodging, meals, visa fees and other normal business travel expenses. 3. Form of Payment - Employees will not make cash payments to officials to cover travel and travel-related expenses. Employees will pay vendors (i.e. airlines, hotels, car rental companies) directly and will not make payments directly to the traveling official. Wherever possible, Travel Services should make the travel arrangements. Where direct payment to the vendor is not possible, the government official must provide receipts for the expenses for which they request reimbursement. Union Pacific will then make the reimbursement to the government rather than to the individual official. 4. Limitations - Lodging will be limited to business class hotels for stays during only the period of the particular meeting, visit, seminar or event. Union Pacific will not reimburse any side trips, separate expenses of accompanying persons, or non-business or personal charges (such as movies and personal phone calls). 2. Gifts that Exceed US $200 per person [ACTION REQUIRED] Gifts of Union Pacific promotional items (items bearing the Union Pacific logo) with a value over US $200 per person require pre-approval. The employee requesting authority for such an expense must complete and submit the "FCPA Pre-
Page 5 of 8 Approval Form" online at FCPA Online Forms (click on Appendix A). The employee will not give the gift until they receive written approval. The employee must do the following: Ensure that the gift is reasonable in light of gifts customary to the particular country; Give the gift for a purpose other than to induce a foreign official to misuse their official position; Avoid the appearance or perception of an improper payment or a conflict of interest; Comply with any applicable laws of the foreign country; and Properly record the expense in Union Pacific's books and records, including an entry into the employee's expense report showing the itemized value of the gift, the original receipt and the names and titles/positions of the attendees. THIS POLICY PROHIBITS ALL OTHER GIFTS 3. Meals and Entertainment that Exceed US $100 per person [ACTION REQUIRED] Meals and Entertainment expenses over US $100 per person require pre-approval. For purposes of this Policy, premium seating at sporting events, concerts and other entertainment events, including seating in suites and club level seating, is considered an entertainment expense that exceeds US$100 per person and requires pre-approval. The person requesting authority for such an expense must complete and submit the "FCPA Pre-Approval Form" online at FCPA Online Forms (click on Appendix A). The employee will not make the expense until they receive written approval. The employee must do the following: Ensure that the meal or entertainment is reasonable in light of business customs in the particular country; Give the meal or entertainment for a purpose other than to induce a foreign official to misuse their official position; Avoid the appearance or perception of an improper payment or a conflict of interest; Comply with any applicable laws of the foreign country; and Properly record the expense in Union Pacific's books and records, including an entry in the employee's expense report showing the name and title/position of each participant with an attached copy of the original receipt. 4. Unplanned Meals and Entertainment that Exceed US $100 per person [ACTION REQUIRED] In the event that an employee provides meals and entertainment that exceed US $100 per person due to unforeseen circumstances, the employee must send a copy of his or her expense report to the FCPA Compliance Coordinator at FCPA@up.com and include an explanation of the circumstances surrounding the unplanned expenditure. Acceptable circumstances for providing unplanned meals and entertainment under this Policy include a planned meal or event that the employee reasonably expected to be less than US $100 per person but inadvertently exceeded this amount or a bona fide unplanned meal or event. Compliance - The Company will investigate any suspicious expenditures claimed under this Section, including regular expenditures made by the same individual or working group that appear to be intended to circumvent this Policy. All meals and entertainment expenses provided pursuant to this Section (D) must otherwise comply with this Policy, including satisfying all of the criteria listed in Section 2.2(C) above. 5. Charitable Donations - [ACTION REQUIRED] Although Union Pacific generally avoids making charitable donations to foreign governments and to specific charities at the request of a foreign official, the Company recognizes that there may be instances where such donations may serve legitimate business purposes, including enhancing the Company's reputation and acting as a positive corporate citizen.
Page 6 of 8 If an exception to this policy is requested, the person requesting the exception must complete and submit the "FCPA Pre -Approval Form"at FCPA Online Forms (click on Appendix A) just as he or she would if requesting an expense involving a foreign official. These exceptions will require the approval of the Vice President (including any Assistant Vice President, Senior Vice President or comparable officer of a Union Pacific subsidiary) responsible for managing the department requesting the exception, and the Vice President for Corporate Relations. 2.3 Prohibited Payments. Past enforcement actions demonstrate that virtually any payment made in the business context may be scrutinized for compliance with the FCPA's prohibition against improper payments. Therefore, Union Pacific employees must not pay or give things of value to a foreign official directly or indirectly FOR AN IMPROPER PURPOSE OR TO ACHIEVE OR EFFECT AN IMPROPER END. Examples of improper purposes or ends include, but are not limited to the following: Preventing governmental action such as the imposition of a tax or fine or the cancellation of an existing government contract or contractual obligation; Obtaining confidential information about business opportunities, bids or the activities of competitors; Obtaining the right to open an office or to influence the award of a government contract; Obtaining the award of a government contract or a contract with a government owned business; Influencing the rate of taxes that would be levied on Union Pacific's business; Obtaining relief from government controls; Resolving government disputes or resolving commercial litigation in foreign courts; Affecting or Influencing the nature of foreign regulations or the application of regulatory provisions; Assisting the company in obtaining or retaining business; or Obtaining any other business advantage. This Policy prohibits the following actions at all times: Making cash payments to foreign government officials; Facilitating payments; Making charitable donations to foreign governments or to specific foreign charities at the request of a foreign government or official; and Making political contributions to candidates for public office in a foreign country or to political parties in a foreign country. 2.4 Sales Representatives, Agents or Partners. [Action Required] Union Pacific may use sales representatives, agents, consultants and partners in foreign countries (hereinafter referred to collectively as a Union Pacific's Foreign Representative) only on a limited basis. Use of Foreign Representatives requires preapproval. The following procedures apply to the use of any Foreign Representative: 1. Written Request for Approval - The Vice President (including any Assistant Vice President, Senior Vice President or comparable officer of a Union Pacific subsidiary) responsible for managing the department requesting use of a Foreign Representative must submit to the FCPA Compliance Coordinator a written request for approval of the Foreign Representative. The request must explain the business purpose, the activities to be conducted by any such Foreign
Page 7 of 8 Representative, and all proposed compensation arrangements for the Foreign Representative. To obtain approval for use of a Foreign Representative, the Vice President of the requesting department must submit a request online at FCPA Online Forms, (click on Due Diligence Questionnaire - Appendix B). 2. Selection of Representative - Union Pacific will select Foreign Representatives solely on the basis of merit. The Company must carefully screen and evaluate all prospective Foreign Representatives prior to retention by Union Pacific. 3. Due Diligence - Whenever the Company intends to engage or retain a Foreign Representative in connection with any business being sought or transacted outside the United States, an investigation of the prospective Representative must be conducted by the FCPA Coordinator in order to determine the reputation, professional capability and experience, financial standing (including ownership and financial interests, as applicable) and credibility of the prospective Representative and the history of such prospective Representative's compliance with applicable provisions of the FCPA or similar applicable legislation in other countries. 4. Due Diligence - Written Approval - Once the Company completes the due diligence and background check, the Chief Compliance Officer and/or the General Counsel (or an Associate or Assistant General Counsel) will review the request prior to the employment of the Foreign Representative and the commencement of any formal or informal activities by the Foreign Representative. The Chief Compliance Officer and/or the General Counsel (or an Associate or Assistant General Counsel) will provide approval in writing. 5. Contracts - The Company will not enter into any oral agreements or arrangements with a Foreign Representative. All agreements with a foreign representative must be in writing and in a form approved by the FCPA Compliance Coordinator. Any modifications or amendments to any such agreement must be approved in advance and in writing by the FCPA Compliance Coordinator. All agreements with a Foreign Representative must contain the following covenants or provisions: The Foreign Representative will not violate any laws, including specifically the FCPA and the anti-bribery and corruption laws of the jurisdiction(s) applicable to the Foreign Representative's activities; A violation of any of the contractual covenants renders the contract void; The Foreign Representative will not use undisclosed subagents nor will it split commissions with undisclosed parties; The Foreign Representative will not have authority to take any action that would violate United States laws, including specifically the FCPA; At any time, Union Pacific has the right to inspect the books and records of the Foreign Representative; and The Foreign Representative agrees to comply with this Policy and Union Pacific's procedures for foreign payments. 6. Compensation - Commissions or other compensation paid to a Foreign Representative must be in amounts that are customary and reasonable in relation to the services provided. Commissions, expenses, and other payments must be properly reflected in Union Pacific's records, books of account and financial statements. The Company will not make any payments in cash, to any third person or to bank accounts that are not in the name of the Foreign Representative. The Company will make payments only in the country where the Foreign Representative resides or where the services are rendered. 7. Certification - All Foreign Representatives must certify prior to beginning work and each following year that during the previous twelve month period, the Foreign Representative complied with his or her obligations under the relevant contract and is in full compliance with the FCPA as of the date of such certification. The FCPA Compliance Coordinator will send requests for certification to all Foreign Representatives on a yearly basis. Each department must provide the FCPA Compliance Coordinator with the names and email addresses of all Foreign Representatives or consultants it uses.
Page 8 of 8 2.5 Due Diligence Procedures. 1. Representatives in Foreign Countries Whenever the Company intends to engage or retain a consultant, agent, sponsor or other independent third party representative (collectively, "Representative") in connection with any business being sought or transacted outside the United States, an investigation of the prospective Representative must be conducted by the FCPA Coordinator in order to determine the reputation, professional capability and experience, financial standing (including ownership and financial interests, as applicable), credibility of the prospective Representative's compliance with applicable provisions of the FCPA or similar applicable legislation in other countries. The form should be submitted online at FCPA Online Forms, (click on Appendix B). 2. Other Vendors in Foreign Countries The Company will conduct a due diligence check on vendors whose principal place of business is outside of the United States. This due diligence will involve the use of a third party vendor program designed to assess corruption and bribery risks. 3. Acquisitions Whenever Union Pacific pursues the acquisition of any business entity, the due diligence process associated with the proposed acquisition will include an investigation of the acquisition target's compliance with the FCPA. 4. Joint Ventures Whenever Union Pacific elects to pursue work outside the United States through a joint venture, a review of the prospective joint venture partner or partners must be conducted at the direction of the Chief Compliance Officer in order to determine the reputation, beneficial ownership, professional capability and experience, financial standing and responsibility of the prospective joint venture partner and the history of such prospective joint venture partner's compliance with applicable legislation of other countries. The Background Check will follow the same procedures as outlined in Section 2.4. 2.6 Training and Certification [Action Required] 1. Certification - All Union Pacific Employees will complete an annual certification regarding their business related contact with foreign officials. This certification will be part of the annual Business Conduct Policy Certification. 2. The following groups will undergo FCPA training on an annual basis: 1. All Union Pacific Employees whose job responsibilities include conducting business with or making or approving payments to foreign officials; and 2. Employees supporting or facilitating the work of employees listed above. The Chief Compliance Officer and FCPA Coordinator will work with Department Heads to identify such individuals. The Chief Compliance Officer, working with the FCPA Coordinator, will determine whether training will be computer-based or in person. Appendices Appendix A - Pre-Approval for Expense Involving a Foreign Official Appendix B - Due Diligence Questionnaire for New Foreign Representatives Last Updated: January 28, 2014