1
 
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 1998.
                                                     REGISTRATION NO. 333-
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
 
                           UNION PACIFIC CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

                    UTAH
       (State or Other Jurisdiction of
       Incorporation or Organization)

                                            
                    UTAH                                        13-2626465
       (State or Other Jurisdiction of                       (I.R.S. Employer
       Incorporation or Organization)                       Identification No.)

                                1717 MAIN STREET
                                   SUITE 5900
                             DALLAS, TX 75201-4605
                                 (214) 743-5600
  (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                   Registrant's Principal Executive Offices)
                          UNION PACIFIC CAPITAL TRUST
             (Exact Name of Registrant as Specified in its Charter)

                  DELAWARE
       (State or Other Jurisdiction of
       Incorporation or Organization)

                                            
                  DELAWARE                                      75-6521817
       (State or Other Jurisdiction of                       (I.R.S. Employer
       Incorporation or Organization)                       Identification No.)

                                1717 MAIN STREET
                                   SUITE 5900
                             DALLAS, TX 75201-4605
                                 (214) 743-5600
         (Address, Including Zip Code, and Telephone Number, Including
            Area Code, of Registrant's Principal Executive Offices)
 
                            RICHARD J. RESSLER, ESQ.
                           ASSISTANT GENERAL COUNSEL
                                1717 MAIN STREET
                                   SUITE 5900
                             DALLAS, TX 75201-4605
                                 (214) 743-5600
 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
                             of Agent for Service)
 
                                    COPY TO:
 
                             PHYLLIS G. KORFF, ESQ.
                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                                919 THIRD AVENUE
                               NEW YORK, NY 10022
                                 (212) 735-3000
 
   APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
   If the securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. [ ]
   If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
   If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
   If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
 
                        CALCULATION OF REGISTRATION FEE

============================================================================================================================
           TITLE OF EACH CLASS OF                  AMOUNT TO BE             PROPOSED MAXIMUM            PROPOSED MAXIMUM
        SECURITIES TO BE REGISTERED                 REGISTERED         OFFERING PRICE PER SECURITY  AGGREGATE OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                           
6 1/4% Convertible Preferred Securities.....        30,000,000               $52.625(1)(2)           $1,578,750,000(1)(2)
Convertible Junior Subordinated Debentures
  due 2028 of Union Pacific Corporation.....            (3)                       --                          --
Common Stock, par value $2.50 per share, of
  Union Pacific Corporation.................       21,771,000(4)                  --                          --
Preferred Securities Guarantee(5)...........            --                        --                          --
        Total...............................        30,000,000                   100%                   $1,578,750,000
============================================================================================================================

============================================  =======================
           TITLE OF EACH CLASS OF                    AMOUNT OF
        SECURITIES TO BE REGISTERED             REGISTRATION FEE(1)
- --------------------------------------------  -----------------------
                                           
6 1/4% Convertible Preferred Securities.....        $465,731.25
Convertible Junior Subordinated Debentures
  due 2028 of Union Pacific Corporation.....            --
Common Stock, par value $2.50 per share, of
  Union Pacific Corporation.................            --
Preferred Securities Guarantee(5)...........            --
        Total...............................        $465,731.25
============================================================================================================================

(1) Estimated solely for the purpose of computing the registration fee in
    accordance with Rule 457(c) of the Securities Act, as amended, based upon
    the average of the high and low prices on April 28, 1998.
(2) Exclusive of accrued interest and distributions, if any.
(3) $1,546,391,750 in aggregate principal amount of Convertible Junior
    Subordinated Debentures due 2028 (the "Convertible Junior Subordinated
    Debentures") of Union Pacific Corporation (the "Company") were issued and
    sold to Union Pacific Capital Trust (the "Trust") in connection with the
    issuance by the Trust of 30,000,000 of its 6 1/4% Convertible Preferred
    Securities (the "Convertible Preferred Securities"). The Convertible Junior
    Subordinated Debentures may be distributed, under certain circumstances, to
    the holders of the Convertible Preferred Securities for no additional
    consideration.
(4) Such number of shares of Common Stock, par value $2.50 per share, of the
    Company (the "Company Common Stock") as are initially issuable upon
    conversion of the Convertible Preferred Securities or the Convertible Junior
    Subordinated Debentures registered hereunder. This Registration Statement
    also covers such shares of Company Common Stock as may be issuable pursuant
    to anti-dilution adjustments.
(5) Includes the rights of holders of the Convertible Preferred Securities under
    the Preferred Securities Guarantee. No separate consideration will be
    received for the Preferred Securities Guarantee.
 
   THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
 
PROSPECTUS
 
                    SUBJECT TO COMPLETION, DATED MAY 1, 1998
 
                  30,000,000 CONVERTIBLE PREFERRED SECURITIES
                          UNION PACIFIC CAPITAL TRUST
 
                    6 1/4% Convertible Preferred Securities
          (Liquidation Amount $50 per Convertible Preferred Security)
                 Guaranteed to the extent set forth herein by,
                     and convertible into common stock of,
 
                         Union Pacific Corporation Logo
 
     This Prospectus relates to the 6 1/4% Convertible Preferred Securities (the
"Convertible Preferred Securities"), which represent undivided preferred
beneficial ownership interests in the assets of Union Pacific Capital Trust, a
statutory business trust formed under the laws of the State of Delaware (the
"Trust" or the "Issuer"), and the shares of common stock, par value $2.50 per
share (the "Company Common Stock"), of Union Pacific Corporation, a Utah
corporation (the "Company"), issuable upon conversion of the Convertible
Preferred Securities. The Convertible Preferred Securities were issued and sold
(the "Original Offering") on April 1, 1998 (the "Original Offering Date") to the
Initial Purchasers (as defined herein) and were simultaneously sold by the
Initial Purchasers in transactions exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), in the United
States to persons reasonably believed by the Initial Purchasers to be qualified
institutional buyers as defined in Rule 144A under the Securities Act, to a
limited number of institutional "accredited investors" (as defined in Rule
501(a) (1), (2), (3) or (7) under the Securities Act) and outside the United
States to non-U.S. persons in offshore transactions in reliance on Regulation S
under the Securities Act. The Company owns all the common securities issued by
the Trust (the "Common Securities" and, together with the Convertible Preferred
Securities, the "Trust Securities"). The Trust was formed for the sole purpose
of issuing the Trust Securities and using the proceeds thereof to purchase from
the Company the Convertible Junior Subordinated Debentures Due 2028 (the
"Convertible Junior Subordinated Debentures") having the terms described herein.
The holders of the Convertible Preferred Securities will have a preference with
respect to payments in respect of distributions and payments upon liquidation,
redemption or otherwise over holders of the Common Securities of the Trust.
 
     The Convertible Preferred Securities, the Convertible Junior Subordinated
Debentures and the Company Common Stock issuable upon conversion of the
Convertible Preferred Securities (collectively the "Offered Securities") may be
offered and sold from time to time by the holders named herein or by their
transferees, pledgees, donees or successors (collectively, the "Selling
Holders") pursuant to this Prospectus. The Offered Securities may be sold by the
Selling Holders from time to time directly to purchasers or through agents,
underwriters or dealers. See "Plan of Distribution" and "Selling Holders." If
required, the names of any other Selling Holders, agents or underwriters
involved in the sale of the Offered Securities and the applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
set forth in an accompanying supplement to this Prospectus (a "Prospectus
Supplement"). The Selling Holders will receive all of the proceeds from the sale
of the Offered Securities and will pay all underwriting discounts and selling
commissions, if any, applicable to any such sale. The Company is responsible for
payment of all other expenses incident to the offer and sale of the Offered
Securities. The Selling Holders and any broker-dealers, agents or underwriters
which participate in the distribution of the Offered Securities may be deemed to
be "underwriters" within the meaning of the Securities Act, and any commission
received by them and any profit on the resale of the Offered Securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Plan of Distribution" for a description of
indemnification arrangements.
 
     PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE
CAPTION "RISK FACTORS" BEGINNING ON PAGE 1.
 
     THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
 
              The date of this Prospectus is              , 1998.
   3
 
     As used herein, (i) the "Indenture" means the Convertible Junior
Subordinated Indenture, between the Company and The Bank of New York, as trustee
(the "Debenture Trustee") relating to the Issuer, (ii) the "Declaration" means
the Amended and Restated Declaration of Trust relating to the Issuer among the
Company, as Depositor (the "Depositor"), The Bank of New York as Property
Trustee (the "Property Trustee"), The Bank of New York (Delaware) as Delaware
Trustee (the "Delaware Trustee"), and the individuals named as Administrative
Trustees therein (the "Administrative Trustees") (collectively with the Property
Trustee and the Delaware Trustee, the "Issuer Trustees") and (iii) the
"Guarantee" means the Guarantee Agreement between the Company and The Bank of
New York (the "Guarantee Trustee").
 
                             AVAILABLE INFORMATION
 
     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "SEC" or the "Commission"). Such reports, proxy statements, and
other information filed by the Company can be inspected and copied at the public
reference facilities of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street,
NW, Washington, DC 20549, and at the following Regional Offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511;
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material may also be obtained from the Public Reference Section of the SEC
at Judiciary Plaza. 450 Fifth Street, NW, Washington, DC 20549, at prescribed
rates. Such material can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
(http://www.sec.gov).
 
     The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Offered
Securities. This Prospectus, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Trust and the
Offered Securities, reference is made to the Registration Statement. Any
statements made in this Prospectus concerning the provisions of certain
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission.
 
     No separate financial statements of the Issuer have been included herein.
The Company does not consider that such financial statements would be material
to holders of the Convertible Preferred Securities because (i) all of the voting
securities of the Issuer will be owned, directly or indirectly, by the Company,
a reporting company under the Exchange Act, (ii) the Issuer has no independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Issuer and investing the
proceeds thereof in Convertible Junior Subordinated Debentures issued by the
Company and (iii) the obligations of the Issuer under the Trust Securities are
fully and unconditionally guaranteed by the Company to the extent that the
Issuer has funds available to meet such obligations. See "Description of
Convertible Junior Subordinated Debentures" and "Description of Guarantee."
 
                             CAUTIONARY INFORMATION
 
     CERTAIN INFORMATION INCLUDED IN THIS PROSPECTUS UNDER THE CAPTIONS "RISK
FACTORS" AND "THE COMPANY" CONTAINS, AND OTHER MATERIALS FILED OR TO BE FILED BY
THE COMPANY WITH THE COMMISSION INCORPORATED BY REFERENCE HEREIN (AS WELL AS
INFORMATION INCLUDED IN ORAL STATEMENTS MADE OR TO BE MADE BY THE COMPANY)
CONTAIN OR WILL CONTAIN, FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. SUCH
FORWARD-LOOKING INFORMATION MAY INCLUDE, WITHOUT LIMITATION, STATEMENTS THAT THE
COMPANY DOES NOT EXPECT THAT CLAIMS OR OTHER MATTERS WILL HAVE A MATERIAL
ADVERSE EFFECT ON ITS CONSOLIDATED FINANCIAL CONDITION, RESULTS OF OPERATIONS OR
LIQUIDITY AND OTHER SIMILAR EXPRESSIONS CONCERNING MATTERS THAT ARE NOT
HISTORICAL FACTS, AND PROJECTIONS OR PREDICTIONS AS TO THE COMPANY'S FINANCIAL
OR OPERATIONAL RESULTS. SUCH FORWARD-LOOKING INFORMATION IS OR WILL BE BASED ON
 
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INFORMATION AVAILABLE AT THAT TIME, AND IS OR WILL BE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN THE STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, WHETHER UNION PACIFIC RAILROAD COMPANY IS FULLY
SUCCESSFUL IN OVERCOMING ITS CONGESTION-RELATED PROBLEMS AND IMPLEMENTING THE
PLAN (AS DEFINED IN HEREIN) AND OTHER OPERATIONAL AND FINANCIAL INITIATIVES,
INDUSTRY COMPETITION AND REGULATORY DEVELOPMENTS, NATURAL EVENTS SUCH AS FLOODS
AND EARTHQUAKES, THE EFFECTS OF ADVERSE GENERAL ECONOMIC CONDITIONS, FUEL
PRICES, LABOR STRIKES AND THE ULTIMATE OUTCOME OF SHIPPER CLAIMS RELATED TO
CONGESTION, ENVIRONMENTAL INVESTIGATIONS OR PROCEEDINGS AND OTHER TYPES OF
CLAIMS AND LITIGATION.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
     The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, its current reports on
Form 8-K dated January 23, 1998, February 26, 1998, March 20, 1998, March 25,
1998, March 31, 1998, April 1, 1998, April 20, 1998 and April 23, 1998, and the
description of capital stock of the Company that is contained in the
registration statement filed under the Exchange Act under File No. 1-6075,
including all amendments or reports filed for the purpose of updating such
description.
 
     All documents filed by the Company with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the filing of a post-effective amendment which indicates the
termination of the offering hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be a part of this Prospectus from the date
of filing of such documents.
 
     Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be 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 of this Prospectus.
 
     The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates) and any other information requested thereby as
described above under "Available Information." Written or oral requests should
be directed to the Company's principal executive office at: Union Pacific
Corporation, 1717 Main Street, Suite 5900, Dallas, Texas 75201-4605, Attention:
Corporate Secretary (telephone 214-743-5600).
 
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                                  RISK FACTORS
 
     Prospective purchasers of the Offered Securities should carefully review
the information contained elsewhere in this Prospectus and should particularly
consider the following matters.
 
RISK FACTORS RELATING TO THE COMPANY
 
CONGESTION AND SERVICE ISSUES; IMPACT ON RESULTS OF OPERATIONS
 
     In the third quarter of 1997, congestion began to have a serious adverse
effect on the operations and earnings of Union Pacific Railroad Company
("UPRR"), the Company's principal rail subsidiary. System congestion started in
and around Houston and the coastal areas of Texas and Louisiana (the "Gulf Coast
region") and spread throughout the system as UPRR shifted resources to help
mitigate the problem in the Gulf Coast region. The Company reported a decline in
net income from continuing operations of approximately 41%, from $733 million
for 1996 to $432 million for 1997. Moreover, the Company incurred a net loss of
$152 million ($.62 per diluted share) in the fourth quarter of 1997 (which
included a $40 million after tax loss recognized in connection with Company's
planned sale of Skyway Freight Systems, Inc. ("Skyway"). This decline in
earnings is primarily the result of UPRR's service and congestion problems. The
Company estimates that the combined effects of lost business, higher costs
associated with system congestion, and costs associated with the implementation
of the service recovery plan described below, alternate transportation and
customer claims had a negative effect on net income for 1997 of approximately
$450 million, after tax. Although progress has been made to date in improving
service, UPRR expects these problems to have an adverse impact on 1998 results.
On April 23, 1998, the Company reported a net loss of $62 million ($.25 per
diluted share) for the first quarter of 1998.
 
     The Company has adopted certain measures to alleviate the congestion
problems, including the implementation of a Service Recovery Plan (the "Plan")
on October 1, 1997. The Plan focuses on reducing the number of cars on the
system and restoring system velocity, which, in turn, results in more reliable
service to customers. While the Company believes that it will ultimately be
successful in alleviating the congestion-related problems experienced by UPRR
and returning the Company to profitability, there can be no assurance that the
recovery will not be delayed for a substantial period, which would have a
continuing adverse effect on the Company's financial results, or that additional
measures will not be necessary to resolve such problems. The timing of the
Company's return to profitability will be determined by how rapidly it is able
to eliminate congestion and return to normal operations throughout its system.
As a result of recent operating losses at UPRR and in order to fund its capital
program, the Company has incurred substantial incremental debt since December
31, 1997, and the Company expects to incur significant additional debt during
the remainder of 1998.
 
RAIL SERVICE PROCEEDINGS AND RELATED MATTERS
 
     UPRR is currently subject to an emergency service order issued by the
Surface Transportation Board of the U.S. Department of Transportation (the
"STB") on October 31, 1997, as an outgrowth of a proceeding initiated by the STB
on October 2, 1997 to investigate rail service problems in the western United
States. The original service order, which, among other things, imposed several
temporary measures designed to reduce congestion on UPRR's lines in the Houston
area, was modified and extended by a supplemental order dated December 4, 1997.
On February 25, 1998, the STB, citing the gravity of UPRR's congestion problems
and characterizing them as "not yet close to being resolved," further modified
the emergency service order and extended it until August 2, 1998, the maximum
period allowable under law for the original order.
 
     On March 31, 1998, the STB initiated a proceeding under its continuing
oversight jurisdiction with respect to the merger of Southern Pacific
Transportation Company and its affiliated railroads ("Southern Pacific") and
UPRR, to consider proposals for new remedial conditions to the merger as they
pertain to service in the Houston, Texas/Gulf Coast area. The proceeding was
initiated in response to submissions by Texas Mexican Railway Company ("Tex
Mex"), Kansas City Southern Railway Company ("KCS") and the Greater Houston
Partnership ("GHP"), proposing that UPRR be directed to transfer certain lines
in the Gulf Coast region to other rail carriers and proposing the establishment
of a "neutral" switching operation in the
 
                                        1
   6
 
greater Houston area. The STB's decision announcing the proceeding established a
procedural schedule for the submission of evidence, replies and rebuttal. There
can be no assurance that the proposals advanced by Tex Mex, KCS, GHP or other
parties in the remedial conditions proceeding will not be approved in some form.
In addition, if the congestion problems persist, the STB may institute a new
proceeding at the end of the current one in light of developments concerning
UPRR's operations in 1998.
 
SHIPPER CLAIMS
 
     Certain customers have submitted claims or stated their intention to submit
claims to UPRR for damages related to the delay of shipments as a result of
congestion problems, and certain customers have filed lawsuits seeking relief
related to such delays. The nature of the damages sought by claimants includes,
but is not limited to, contractual liquidated damages, freight loss or damage,
alternative transportation charges, additional production costs, lost business
and lost profits. In addition, some customers have asserted that they have the
right to cancel contracts as a result of alleged material breaches of such
contracts by UPRR. While the Company does not believe that such claims will have
a material adverse effect on its consolidated financial condition, it is not
possible to determine fully the effects of all asserted and unasserted claims.
As the congestion problems continue, the Company expects additional claims by
shippers. The Company will continue to evaluate the adequacy of its reserves for
claims and expects to add to such reserves as appropriate.
 
SHAREHOLDER LITIGATION
 
     The Company and certain of its officers and directors are currently
defendants in two purported class action securities lawsuits, and certain
current and former directors of the Company are currently defendants in a
purported derivative action filed on behalf of the Company. The class action
suits allege, among other things, that management failed to disclose properly
UPRR's service and safety problems and thereby issued materially false and
misleading statements concerning the Company's acquisition of Southern Pacific's
parent corporation and the safe, efficient operation of UPRR's rail network. The
derivative action alleges, among other things, that the named current and former
directors breached their fiduciary duties to the Company by approving the
acquisitions of the parent corporations of Southern Pacific and CNW (as defined
herein) without ensuring that the Company or UPRR had adequate systems in place
to integrate effectively those companies into the operations of the Company and
UPRR. These lawsuits were filed in late 1997 in the Federal District Court for
the Northern District of Texas and seek to recover unspecified amounts of
damages. The Company believes that these claims are without merit and intends to
defend them vigorously.
 
RAIL ACCESS AND COMPETITION
 
     Acting pursuant to requests from two members of Congress and responding to
shippers' concerns about railroad service quality, railroad rates and allegedly
inadequate regulatory remedies, the STB on April 17, 1998, following two days of
hearings, issued a decision opening inquiries into certain elements of rail
regulation. The STB noted that no parties to the hearings had shown how
aggressive remedies designed to produce lower rates and enhance competition
would permit the industry to cover system costs and support reinvestment.
Nevertheless, it (a) directed a panel of disinterested economic experts to
recommend appropriate standards to measure railroad revenue adequacy, which is
used to determine whether rates are lawful; (b) initiated a rulemaking
proceeding to consider revisions to "competitive access" regulations in order to
address quality of service issues; (c) ordered interested parties to identify
modifications to regulations governing access on non-service-related grounds;
(d) began a proceeding to consider eliminating product and geographic
competition as factors to be considered in deciding whether a railroad has
market dominance over rail traffic; (e) ordered large and small railroads to
negotiate arrangements that would increase the role of short-line rail carriers;
and (f) directed the railroads to establish "formalized dialogue" immediately
with large and small shippers and rail labor. Should the STB or Congress take
aggressive action (e.g., by making purportedly competition-enhancing changes in
rate and route regulation and "access" provisions), the adverse effect on UPRR
and other railroads could be material.
 
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   7
 
RISK FACTORS RELATING TO THE CONVERTIBLE PREFERRED SECURITIES
 
RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES
 
     The obligations of the Company arising and accruing under the Guarantee
issued by the Company for the benefit of the holders of Convertible Preferred
Securities and under the Convertible Junior Subordinated Debentures are general
unsecured obligations of the Company which are subordinate and junior in right
of payment, to the extent and in the manner set forth in the Guarantee and the
Indenture, to all Senior Debt of the Company. At February 28, 1998, the
aggregate outstanding Senior Debt (as defined under "Description of Convertible
Junior Subordinated Debentures -- Subordination") of the Company was $7.0
billion.
 
     Since the Company is principally a holding company, the right of the
Company to participate in any distribution of assets of any subsidiary upon such
subsidiary's dissolution, winding-up, liquidation or reorganization or otherwise
(and thus the ability of holders of the Convertible Preferred Securities to
benefit indirectly from such distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Company may itself
be a creditor of that subsidiary and its claims are recognized. There are
various legal limitations on the extent to which certain of the Company's
subsidiaries may extend credit, pay dividends or otherwise supply funds to, or
engage in transactions with, the Company or certain of its other subsidiaries.
Accordingly, the Convertible Junior Subordinated Debentures and the Guarantee
will at all times be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, and holders of Convertible Junior
Subordinated Debentures and the Guarantee should look only to the assets of the
Company for payments on the Convertible Junior Subordinated Debentures and the
Guarantee. None of the Indenture, the Guarantee and the Declaration places any
limitation on the amount of secured or unsecured debt, including Senior Debt,
that may be incurred by the Company or the amount of debt that may be incurred
by the Company's subsidiaries. At February 28, 1998, the Company's subsidiaries
had Debt and other liabilities of approximately $7.7 billion. See "Description
of Guarantee -- Status of the Guarantee" and "Description of Convertible Junior
Subordinated Debentures -- Subordination." The ability of the Issuer to pay
amounts due on the Convertible Preferred Securities is solely dependent upon the
Company making payments on the Convertible Junior Subordinated Debentures as and
when required.
 
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
 
     Provided that no Event of Default (as defined in the Indenture) has
occurred and is continuing with respect to the Convertible Junior Subordinated
Debentures (a "Debenture Event of Default"), the Company has the right under the
Indenture to defer the payment of interest on the Convertible Junior
Subordinated Debentures accruing at any time or from time to time for successive
periods (each, a "Deferral Period") not exceeding 20 consecutive quarters with
respect to each Deferral Period; provided that no Deferral Period may extend
beyond the Stated Maturity (as defined herein) of the Convertible Junior
Subordinated Debentures. See "Description of Convertible Junior Subordinated
Debentures -- Option to Extend Interest Payment Date." As a consequence of any
such deferral, quarterly Distributions on the Convertible Preferred Securities
 
                                        3
   8
 
by the Issuer will be deferred (and the amount of Distributions to which holders
of the Convertible Preferred Securities are entitled will accumulate additional
Distributions thereon, compounded quarterly from the relevant payment date for
such Distributions) during any such Deferral Period. During any such Deferral
Period, the Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock (which includes common stock and preferred
stock) other than stock dividends paid by the Company which consist of stock of
the same class as that on which the dividend is being paid or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company that then rank pari passu in all
respects with or junior in interest to the Convertible Junior Subordinated
Debentures (other than (a) dividends or distributions in Company Common Stock,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) purchases or acquisitions of shares of Company
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior to the Convertible Junior Subordinated Debentures), (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock or (f) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
A Deferral Period will terminate upon the payment by the Company of all amounts
then accrued and unpaid on the Convertible Junior Subordinated Debentures
(together with interest thereon compounded quarterly, to the extent permitted by
applicable law). Prior to the termination of any such Deferral Period, the
Company may further defer the payment of interest; provided that no Deferral
Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity
of the Convertible Junior Subordinated Debentures. Upon the termination of any
Deferral Period, and subject to the foregoing limitations, the Company may elect
to begin a new Deferral Period subject to the above conditions. There is no
limitation on the number of times that the Company may elect to begin a Deferral
Period. See "Description of Convertible Preferred Securities -- Distributions"
and "Description of Convertible Junior Subordinated Debentures -- Option to
Extend Interest Payment Date."
 
     Because the Company believes that the likelihood of its exercising its
option to defer payments of interest is remote, it will treat the Convertible
Junior Subordinated Debentures as issued without "original issue discount"
("OID") for United States Federal income tax purposes in accordance with
applicable Treasury regulations. As a result, holders of Convertible Preferred
Securities generally will include their allocable share of the interest on the
Convertible Junior Subordinated Debentures in taxable income under their own
methods of tax accounting (i.e., cash or accrual). Under applicable Treasury
regulations, however, if the Company were to exercise its right to defer
payments of interest, those Convertible Junior Subordinated Debentures would be
treated as reissued for OID purposes with OID in an amount equal to the
remaining interest payments thereon and would remain OID instruments for as long
as the Convertible Junior Subordinated Debentures remained outstanding.
Consequently, for United States Federal income tax purposes, holders of the
related Convertible Preferred Securities would be required to include their pro
rata share of OID in gross income as it accrues in advance of the receipt of
cash attributable to such interest income. Such holders would not receive the
cash related to such income if they dispose of the Convertible Preferred
Securities prior to the record date for payment of distributions thereafter. See
"United States Federal Income Tax Consequences -- Interest Income and Original
Issue Discount" and "-- Sales of Convertible Preferred Securities."
 
     The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Convertible
Junior Subordinated Debentures. However, should the Company elect to exercise
such right in the future, the market price of the Convertible Preferred
Securities is likely to be adversely affected. A holder that disposes of its
Convertible Preferred Securities during a Deferral Period, therefore, might not
receive the same return on its investment as a holder that continues to hold its
Convertible Preferred Securities. In addition, as a result of the existence of
the Company's right to defer interest payments on the Convertible Junior
Subordinated Debentures the market price of the Convertible
 
                                        4
   9
 
Preferred Securities may be more volatile than the market prices of other
securities on which original issue discount accrue, that are not subject to such
deferrals.
 
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
 
     Upon the occurrence of a Tax Event (except in certain limited
circumstances) or Investment Company Event (each as defined under "Description
of Convertible Preferred Securities -- Tax Event or Investment Company Event
Redemption"), the Company will cause the Issuer Trustees to liquidate the Issuer
and cause Convertible Junior Subordinated Debentures to be distributed pro rata
to the holders of the Convertible Preferred Securities. In certain limited
circumstances upon the occurrence of a Tax Event, the Company will have the
right to redeem the Convertible Junior Subordinated Debentures, in whole, but
not in part, for the principal amount thereof plus accrued and unpaid interest
thereon, in lieu of a distribution of the Convertible Junior Subordinated
Debentures, in which event the Convertible Preferred Securities will be redeemed
in whole at the liquidation amount of $50 per each of the Convertible Preferred
Securities plus accrued and unpaid Distributions. In the case of a Tax Event,
the Company may also elect to cause the Convertible Preferred Securities to
remain outstanding and pay Additional Sums on the Convertible Junior
Subordinated Debentures. See "Description of Convertible Preferred
Securities -- Tax Event or Investment Company Event Redemption or Distribution"
and "Description of Convertible Junior Subordinated Debentures -- Additional
Sums."
 
     There can be no assurance as to the market prices for Convertible Preferred
Securities or for Convertible Junior Subordinated Debentures that may be
distributed in respect of Convertible Preferred Securities if a liquidation of
the Issuer occurs. Accordingly, the Convertible Preferred Securities, or the
Convertible Junior Subordinated Debentures that a holder of Convertible
Preferred Securities may receive upon liquidation of the Issuer, may trade at a
discount to the price that the investor paid to purchase the Convertible
Preferred Securities offered hereby. Because holders of Convertible Preferred
Securities may receive Convertible Junior Subordinated Debentures upon
termination of the Issuer, prospective purchasers of Convertible Preferred
Securities are also making an investment decision with regard to the Convertible
Junior Subordinated Debentures and should carefully review all the information
regarding the Convertible Junior Subordinated Debentures contained herein. See
"Description of Convertible Junior Subordinated Debentures."
 
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES
 
     The Company, as holder of all of the outstanding Common Securities, has the
right at any time to terminate the Issuer and, after satisfaction of liabilities
to creditors of the Issuer in accordance with applicable law, to cause the
Convertible Junior Subordinated Debentures to be distributed to the holders of
the Convertible Preferred Securities and Common Securities in liquidation of the
Issuer, provided that the Issuer Trustees shall have received an opinion of tax
counsel to the effect that holders of Convertible Preferred Securities will not
recognize any income, gain or loss on such distribution for United States
Federal income tax purposes.
 
RIGHTS UNDER THE GUARANTEE
 
     The Bank of New York will act as the Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Convertible Preferred
Securities. The Bank of New York will also act as Debenture Trustee for the
Convertible Junior Subordinated Debentures and as Property Trustee under the
Declaration. The Guarantee guarantees to the holders of the Convertible
Preferred Securities the following payments, to the extent not paid by the
Issuer: (i) any accumulated and unpaid Distributions required to be paid on the
Convertible Preferred Securities, to the extent that the Issuer has funds on
hand available therefor at such time; (ii) the Redemption Price (as defined
herein) with respect to any Convertible Preferred Securities called for
redemption, to the extent that the Issuer has funds on hand available therefor
at such time; and (iii) upon a voluntary or involuntary termination, dissolution
or liquidation of the Issuer (unless the Convertible Junior Subordinated
Debentures are distributed to holders of the Trust Securities), the lesser of
(a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions to the date of payment, to the extent that the Issuer has funds on
hand available therefor at such time, and (b) the amount
                                        5
   10
 
of assets of the Issuer remaining available for distribution to holders of the
Convertible Preferred Securities on liquidation of the Issuer. The Company's
obligations arising or accruing under the Guarantee will be general unsecured
obligations and will be subordinated as described under "-- Ranking of
Obligations Under the Guarantee and the Convertible Junior Subordinated
Debentures." The holders of at least a majority in aggregate liquidation amount
of the outstanding Convertible Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust power conferred upon the Guarantee Trustee under the Guarantee.
 
     Any holder of the Convertible Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other person or entity. If the Company were to default
on its obligation to pay amounts payable under the Convertible Junior
Subordinated Debentures, the Issuer will lack funds for the payment of
Distributions or amounts payable on redemption of the Convertible Preferred
Securities or otherwise, and, in such event, holders of the Convertible
Preferred Securities would not be able to rely upon the Guarantee for payment of
such amounts. Instead, if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
any amounts payable in respect of the Convertible Junior Subordinated Debentures
on the payment date on which such payment is due, then a holder of Convertible
Preferred Securities may institute a legal proceeding directly against the
Company for enforcement of payment to such holder of any amounts payable in
respect of such Convertible Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Convertible Preferred
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will have a right of set-off under the Indenture to the
extent of any payment made by the Company to such holder of Convertible
Preferred Securities in the Direct Action. Except as described herein, holders
of Convertible Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the Convertible Junior Subordinated
Debentures or assert directly any other rights in respect of the Convertible
Junior Subordinated Debentures. See "Description of Convertible Junior
Subordinated Debentures -- Debenture Events of Default" and "-- Enforcement of
Certain Rights by Holders of Convertible Preferred Securities" and "Description
of Guarantee." The Declaration provides that each holder of Convertible
Preferred Securities by acceptance thereof agrees to the provisions of the
Guarantee and the Indenture.
 
LIMITED VOTING RIGHTS
 
     Holders of Convertible Preferred Securities will have limited voting rights
relating generally to the modification of the Convertible Preferred Securities
and the Guarantee and the exercise of the Issuer's rights as holder of
Convertible Junior Subordinated Debentures. Holders of Convertible Preferred
Securities will not be entitled to appoint, remove or replace the Property
Trustee or the Delaware Trustee except upon the occurrence of certain events
described herein. The Property Trustee and the holders of all of the Common
Securities may, subject to certain conditions, amend the Declaration without the
consent of any holders of Convertible Preferred Securities to cure any ambiguity
or to make other provisions not inconsistent with existing provisions of the
Declaration or to ensure that the Issuer will not be classified for United
States Federal income tax purposes as an association subject to taxation as a
corporation or will be classified as a grantor trust. See "Description of
Convertible Preferred Securities -- Voting Rights; Amendment of the Declaration"
and "-- Removal of Issuer Trustees."
 
TRADING CHARACTERISTICS OF THE CONVERTIBLE PREFERRED SECURITIES
 
     If the Convertible Preferred Securities are subject to the OID rules, a
holder who disposes of its Convertible Preferred Securities between record dates
for payments of Distributions thereon will be required to include OID on the
Convertible Junior Subordinated Debentures through the date of disposition in
income as ordinary income, and to add such amount to its adjusted tax basis. To
the extent the selling price is less than the holder's adjusted tax basis (which
basis will include all accrued but unpaid OID), a holder will recognize a
 
                                        6
   11
 
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States Federal income tax purposes.
See "United States Federal Income Tax Consequences."
 
ABSENCE OF PUBLIC MARKET
 
     There is no existing market for the Convertible Preferred Securities (or
the Convertible Junior Subordinated Debentures) and there can be no assurance as
to the liquidity of any markets that may develop for the Convertible Preferred
Securities (or the Convertible Junior Subordinated Debentures), the ability of
the holders to sell their Convertible Preferred Securities (or Convertible
Junior Subordinated Debentures) or at what price holders of the Convertible
Preferred Securities (or the Convertible Junior Subordinated Debentures) will be
able to sell such securities. Future trading prices of the Convertible Preferred
Securities (and the Convertible Junior Subordinated Debentures) will depend on
many factors including, among other things, prevailing interest rates, the
Company's operating results and the market for similar securities. The Initial
Purchasers currently make a market for the Convertible Preferred Securities
offered hereby; however, the Initial Purchasers are not obligated to do so and
such market making activity is subject to the limits imposed by applicable law
and may be discontinued at any time without notice.
 
ANTI-TAKEOVER PROVISIONS
 
     The Company has adopted a number of anti-takeover measures. The Company's
Revised Articles of Incorporation provide that certain transactions between the
Company and a beneficial owner of more than 10% of the Company's voting stock,
or an affiliate of such beneficial holder, require either (i) approval of a
majority of the Company's voting stock other than that held by such beneficial
holders or their affiliates, (ii) the satisfaction of certain minimum price
requirements and other procedural requirements or (iii) the approval of a
majority of the Company's directors who are not related to such beneficial
owner. The Company's Revised Articles of Incorporation and By-laws contain other
such anti-takeover measures. See "Description of Company Common Stock."
 
                                        7
   12
 
                                  THE COMPANY
 
     The Company, incorporated in Utah in 1969, operates through subsidiaries
primarily in the areas of rail transportation and trucking. The Company's rail
transportation operations principally consist of UPRR, which includes two major
acquisitions since 1995, Southern Pacific and Chicago and North Western Railway
Company and its affiliated railroads ("CNW"). The Company's trucking operations
principally consist of Overnite Transportation Company ("Overnite").
 
     Rail Transportation.  UPRR is the largest railroad in the United States
(measured in both track miles and freight revenue), operating nearly 35,000
route miles linking Pacific Coast and Gulf Coast ports to the Midwest and
eastern U.S. gateways and providing several north/south corridors to key Mexican
gateways. UPRR serves the western two-thirds of the country and cooperates with
other carriers in the handling of freight to and from the Atlantic seaboard, the
Pacific Coast, the Southeast, the Southwest, Canada and Mexico. Export and
import traffic is moved through Gulf Coast and Pacific Coast ports and across
the Mexican and Canadian borders (primarily through interline connections).
Major categories of freight hauled by UPRR are agricultural products,
automotive, chemicals, energy (primarily coal), industrial products and
intermodal.
 
     Beginning in 1995, the Company made significant railroad acquisitions.
 
     - In April 1995, the Company acquired the remaining 71.6% of the
       outstanding common stock of CNW's parent corporation not previously owned
       by the Company for $1.2 billion.
 
     - In September 1995, the Company acquired 25% of Southern Pacific's parent
       corporation, and, in September 1996, it acquired the remaining 75% after
       receipt of a decision from the STB approving the Company's acquisition of
       Southern Pacific. The aggregate purchase price was $4.1 billion,
       comprised of $2.5 billion in the Company's common stock and $1.6 billion
       in cash.
 
     - During 1997, UPRR and a consortium of partners were granted a 50-year
       concession for the Pacific-North and Chihuahua Pacific rail lines in
       Mexico and a 25% stake in the Mexico City Terminal Company at an
       aggregate price of $525 million. UPRR holds a 13% ownership share in the
       consortium. The consortium assumed operational control of both lines in
       February 1998.
 
     Trucking.  The Company's other major line of business is truck
transportation. Overnite, a major interstate trucking company specializing in
less-than-truckload shipments, serves all 50 states and portions of Canada and
Mexico through 164 service centers located throughout the United States.
Overnite transports a variety of products, including machinery, tobacco,
textiles, plastics, electronics and paper products. During 1997 and 1996,
Overnite continued to benefit from several initiatives implemented in 1996 which
were aimed at better matching its operations to the current trucking industry
environment. These actions included workforce reductions, service center
consolidations, centralization of the linehaul management process and pricing
initiatives to eliminate less profitable freight from its mix. Overnite recorded
net income before amortization of goodwill of $24 million in 1997 compared to a
loss (before such amortization) of $23 million in 1996.
 
     Natural Resources Divestiture.  In July 1995, the Company's Board of
Directors approved a formal plan to dispose of its oil, gas and mining business
through an initial public offering (the "IPO") of 17% of the common stock of
Union Pacific Resources Group, Inc. ("Resources"), followed by a distribution of
the Company's remaining interest in Resources to the Company's stockholders on a
tax-free, pro-rata basis (the "Spin-Off"). In October 1995, Resources completed
the IPO, and, after the Company's receipt of a favorable Internal Revenue
Service ruling as to the tax-free nature of the Spin-Off, the Company completed
its divestiture of Resources in October 1996.
 
     Skyway Divestiture.  In January 1998, the Company announced its intention
to sell Skyway, a wholly-owned subsidiary engaged in contract logistics and
supply chain management, by the end of the year. In connection with the planned
sale, the Company recognized a $40 million after tax loss in the fourth quarter
of 1997. In 1997, Skyway had revenues of $152 million and an operating net loss
of $5.5 million.
 
     The Company's executive offices are located at 1717 Main Street, Suite
5900, Dallas, Texas 75201-4605, and its telephone number is (214) 743-5600.
 
                                        8
   13
 
                       RATIO OF EARNINGS TO FIXED CHARGES
 
     The following table sets forth the Company's ratio of earnings to fixed
charges on a historical basis for each of the five years ended December 31,
1997.

                                                         YEAR ENDED DECEMBER 31
                                        ---------------------------------------------------------
                                          1993        1994        1995        1996        1997
                                          ----        ----        ----        ----        ----
                                                                         
Ratio of earnings to fixed charges....      1.8         2.7         2.8         2.7         1.8

     The ratio of earnings to fixed charges has been computed on a total
enterprise basis. Earnings represent income from continuing operations before
the cumulative effect of accounting changes less equity in undistributed
earnings of unconsolidated affiliates, plus income taxes and fixed charges.
Fixed charges represent interest, amortization of debt discount and expense and
the estimated interest portion of rental charges.
 
                                        9
   14
 
                              ACCOUNTING TREATMENT
 
     For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Convertible Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company entitled "Company-obligated mandatorily redeemable
Convertible Preferred Securities of Union Pacific Capital Trust," and
appropriate disclosures about the Convertible Preferred Securities, the
Guarantee and the Convertible Junior Subordinated Debentures will be included in
the notes to the Company's consolidated financial statements. For financial
reporting purposes, the Company will record distributions payable on the
Convertible Preferred Securities as a financing charge to earnings in the
Company's statement of consolidated income.
 
                                       10
   15
 
                                USE OF PROCEEDS
 
     The Selling Holders will receive all of the proceeds from the sale of the
Offered Securities. Neither the Company nor the Issuer will receive any of the
proceeds from the sale of the Offered Securities.
 
                          UNION PACIFIC CAPITAL TRUST
 
     Union Pacific Capital Trust is a statutory business trust that was formed
under Delaware law on March 17, 1998. The Trust's original declaration of trust
was amended and restated in its entirety by the Company, as sponsor of the
Trust, and the trustees of the Issuer (the "Issuer Trustees") (as so amended and
restated, the "Declaration"), on the Original Offering Date. The Company
directly or indirectly owns Common Securities in an aggregate liquidation amount
equal to 3% of the total capital of the Issuer. Payment on the Common Securities
will be made pro rata with the Convertible Preferred Securities except that upon
the occurrence and during the continuance of an event of default under the
Declaration, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Convertible Preferred
Securities. The assets of the trust consist principally of the Convertible
Junior Subordinated Debentures, and payments under the Convertible Junior
Subordinated Debentures are the sole revenue of the Issuer. The Issuer exists
for the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust, (ii) investing the
gross proceeds of the Trust Securities in the Convertible Junior Subordinated
Debentures and (iii) engaging in only those other activities necessary or
incidental thereto.
 
     Pursuant to the Declaration, there are initially five Issuer Trustees.
Three of the Issuer Trustees (the "Administrative Trustees") are individuals who
are employees or officers of or who are affiliated with the Company. The fourth
trustee is a financial institution that is unaffiliated with the Company (the
"Property Trustee"). The fifth trustee is an entity which maintains its
principal place of business in the State of Delaware (the "Delaware Trustee").
Initially, The Bank of New York, a New York banking corporation, acts as
Property Trustee and its affiliate, The Bank of New York (Delaware), a Delaware
banking corporation, acts as Delaware Trustee until, in each case, removed or
replaced by the holder of the Common Securities. The Bank of New York also acts
as indenture trustee under the Guarantee (the "Guarantee Trustee") and under the
Indenture (the "Debenture Trustee"). See "Description of Guarantee" and
"Description of Convertible Junior Subordinated Debentures." In certain
circumstances, the holders of a majority of the Convertible Preferred Securities
will be entitled to appoint one additional trustee (a "Special Trustee"), who
need not be an officer or employee of or otherwise affiliated with the Company,
who will have the same rights, powers and privileges as the Administrative
Trustees. See "Description of Convertible Preferred Securities -- Voting Rights;
Amendment of the Declaration."
 
     The Property Trustee holds title to the Convertible Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and the
Property Trustee has the power to exercise all rights, powers and privileges
under the Indenture as the holder of the Convertible Junior Subordinated
Debentures. In addition, the Property Trustee maintains exclusive control of a
segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities. The Guarantee Trustee
holds the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, the Company, as the direct or indirect
holder of all the Common Securities, has the right to appoint, remove or replace
any of the Issuer Trustees and to increase or decrease the number of trustees,
provided that the number of trustees shall be at least three, a majority of
which shall be Administrative Trustees. The Company pays all fees and expenses
related to the Trust and the offering of the Convertible Preferred Securities
(other than any discounts, commissions, concessions or other compensation paid
to any underwriter, broker/dealer or agent in any offering of the Convertible
Preferred Securities subsequent to the Original Offering). See "Description of
Convertible Junior Subordinated Debentures."
 
     The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration and the Delaware Business Trust Act, as
                                       11
   16
 
amended (the "Trust Act"). See "Description of Convertible Preferred
Securities." The Declaration, the Indenture and the Guarantee also incorporate
by reference the terms of the Trust Indenture Act. It is expected that, at the
time the Shelf Registration Statement (as defined herein) becomes effective, the
Declaration, the Indenture and the Guarantee will be qualified under the Trust
Indenture Act.
 
     The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of the Company. See "The
Company."
 
                DESCRIPTION OF CONVERTIBLE PREFERRED SECURITIES
 
     The Convertible Preferred Securities and the Common Securities were issued
in fully registered form without interest coupons. The Convertible Preferred
Securities represent preferred undivided beneficial ownership interests in the
Trust and the holders thereof are entitled to a preference in certain
circumstances with respect to Distributions and amounts payable on redemption of
the Trust Securities or liquidation of the Trust over the Common Securities, as
well as other benefits as described in the Declaration. See "-- Subordination of
Common Securities." The Declaration will be qualified under the Trust Indenture
Act and incorporates certain provisions of the Trust Indenture Act. This summary
of certain provisions of the Convertible Preferred Securities, the Common
Securities and the Declaration does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
Declaration, including the definitions therein of certain terms. The form of the
Declaration is available upon request from the Issuer Trustees.
 
GENERAL
 
     Payments on the Convertible Preferred Securities will be made pro rata with
payments on the Common Securities, except as described under "-- Subordination
of Common Securities." Legal title to the Convertible Junior Subordinated
Debentures is held by the Property Trustee on behalf of the Trust in trust for
the benefit of the holders of the Convertible Preferred Securities and Common
Securities. The Guarantee Agreement executed by the Company for the benefit of
the holders of the Convertible Preferred Securities provides for the Guarantee
on a subordinated basis with respect to the Convertible Preferred Securities but
does not guarantee payment of Distributions or amounts payable on redemption of
the Convertible Preferred Securities or on liquidation of the Trust when the
Trust does not have funds on hand available to make such payments. See
"Description of Guarantee."
 
DISTRIBUTIONS
 
     Distributions accrue on the Convertible Preferred Securities from the date
of their original issuance at the annual rate of 6 1/4% of the stated
liquidation amount of $50 per each of the Convertible Preferred Securities, and
are payable quarterly in arrears on each January 1, April 1, July 1 and October
1 (each, a "Distribution Date"), commencing July 1, 1998, to the person in whose
name each of the Convertible Preferred Securities is registered, subject to
certain exceptions, at the close of business on the fifteenth of the month next
preceding the applicable Distribution Date. The amount of Distributions payable
for any period will be computed on the number of days elapsed in a 360-day year
consisting of twelve 30-day months. In the event that any Distribution Date is
not a Business Day, payment of the Distributions payable on such date will be
made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payments in respect to any such delay) with
the same force and effect as if made on the date such payment was originally
payable. Accrued Distributions that are not paid on the applicable Distribution
Date will accrue additional Distributions on the amount thereof (to the extent
permitted by law), compounded quarterly from the relevant Distribution Date.
"Distribution" as used herein shall include quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date, Special Distributions and Additional Sums (as defined herein), as
applicable. See "Description of Convertible Junior Subordinated Debentures
- -- Additional Sums" and "Registration Rights." A "Business Day" shall mean any
day other than a Saturday or a Sunday, or a day on which banking institutions in
The City of New York or London are
 
                                       12
   17
 
authorized or required by law or executive order to remain closed, or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
 
     So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Convertible Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Deferral Period, provided that no Deferral Period may extend beyond the Stated
Maturity of the Convertible Junior Subordinated Debentures. See "Description of
Convertible Junior Subordinated Debentures -- Option to Extend Interest Payment
Date." As a consequence of any such election, quarterly Distributions on the
Convertible Preferred Securities by the Trust will be deferred during any such
Deferral Period. Deferred Distributions to which holders of the Convertible
Preferred Securities are entitled will accumulate additional Distributions
thereon, compounded quarterly from the relevant payment date for such
Distributions during any such Deferral Period, to the extent permitted by
applicable law. During any such Deferral Period, the Company may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends paid by the
Company which consist of stock of the same class as that on which the dividend
is being paid, (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Convertible Junior Subordinated
Debentures, or (iii) make any guarantee payments with respect to any guarantee
by the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Convertible Junior
Subordinated Debentures (other than (a) dividends or distributions in Company
Common Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Company Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or any other contractual obligation of the Company (other than a contractual
obligation ranking pari passu with or junior to the Convertible Junior
Subordinated Debentures), (e) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). A Deferral Period will
terminate upon the payment by the Company of all amounts then accrued and unpaid
on the Convertible Junior Subordinated Debentures (together with interest
thereon compounded quarterly, to the extent permitted by applicable law). Prior
to the termination of any such Deferral Period, the Company may further extend
such Deferral Period, provided that such deferral does not cause such Deferral
Period to exceed 20 consecutive quarters or to extend beyond the Stated Maturity
of the Convertible Junior Subordinated Debentures. Upon the termination of any
Deferral Period, and subject to the foregoing limitations, the Company may elect
to begin a new Deferral Period. No interest or other amounts shall be due and
payable during a Deferral Period, except at the end thereof. The Company must
give the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any such Deferral Period and shall cause the Issuer to
give such notice (which shall include notice of the deferral of Distributions on
Convertible Preferred Securities) to holders of Convertible Preferred Securities
not later than ten days prior to the related record date for Distributions on
Convertible Preferred Securities. There is no limitation on the number of times
that the Company may elect to begin a Deferral Period. See "Description of
Convertible Junior Subordinated Debentures -- Option to Extend Interest Payment
Date" and "United States Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
 
     The Company has no current intention of exercising its right to defer
payments of interest on the Convertible Junior Subordinated Debentures.
 
     The revenue of the Trust available for distribution to holders of the
Convertible Preferred Securities is limited to payments under the Convertible
Junior Subordinated Debentures. See "Description of Convertible Junior
Subordinated Debentures -- General." If the Company does not make interest
payments on the Convertible Junior Subordinated Debentures, the Property Trustee
will not have funds available to pay
 
                                       13
   18
 
Distributions on the Convertible Preferred Securities. The payment of
Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantee."
 
CONVERSION RIGHTS
 
     General.  Convertible Preferred Securities are convertible at any time
prior to 5:00 p.m., New York City time on the Stated Maturity date (except that
Convertible Preferred Securities called for redemption by the Company will be
convertible at any time prior to 5:00 p.m., New York City time, on the Business
Day preceding any Optional Redemption Date), at the option of the holder thereof
and in the manner described below, into shares of Company Common Stock. Each of
the Convertible Preferred Securities is convertible, at the option of the
holder, into 0.7257 shares of Company Common Stock for each of the Convertible
Preferred Securities (equivalent to a conversion price (the "Initial Conversion
Price") of $68.90 per share of Company Common Stock). The conversion ratio and
the equivalent conversion price are subject to adjustment as described under
"-- Conversion Price Adjustments" below, and the conversion price and equivalent
conversion ratio in effect at any time after giving effect to all such
adjustments are hereinafter referred to as the Applicable Conversion Price and
the Applicable Conversion Ratio, respectively. The Issuer has covenanted in the
Declaration not to convert Convertible Junior Subordinated Debentures held by it
except pursuant to a notice of conversion delivered to the Property Trustee, as
Conversion Agent, by a holder of Convertible Preferred Securities. A holder of
Convertible Preferred Securities wishing to exercise its conversion right shall
deliver an irrevocable conversion notice, together, if such Convertible
Preferred Securities are in certificated form with such certificated securities,
to the Conversion Agent which shall, on behalf of such holder, exchange such
Convertible Preferred Securities for a Like Amount (as defined under
"-- Liquidation of the Trust and Distribution of Convertible Junior Subordinated
Debt") of Convertible Junior Subordinated Debentures and immediately convert
such Convertible Junior Subordinated Debentures into Company Common Stock.
Holders may obtain copies of the required form of the conversion notice from the
Conversion Agent.
 
     Holders of Convertible Preferred Securities at the close of business on a
Distribution record date will be entitled to receive the Distribution payable on
such Convertible Preferred Securities on the corresponding Distribution Date
notwithstanding the conversion of such Convertible Preferred Securities
following such Distribution record date but prior to such Distribution Date.
Except as provided in the immediately preceding sentence, neither the Issuer nor
the Company will make, or be required to make, any payment, allowance or
adjustment for accrued and unpaid Distributions, whether or not in arrears, on
converted Convertible Preferred Securities. The Company will make no payment or
allowance for distributions on the shares of Company Common Stock issued upon
such conversion, except to the extent that such shares of Company Common Stock
are held of record on the record date for any such distributions. Each
conversion will be deemed to have been effected immediately prior to the close
of business on the day on which the related conversion notice was received by
the Issuer.
 
     No fractional shares of Company Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the then current market value of the Company Common
Stock.
 
     Conversion Price Adjustments -- General.  The Applicable Conversion Price
will be subject to adjustment in certain events including, without duplication:
(i) the payment of dividends (and other distributions) payable in Company Common
Stock on the Company Common Stock; (ii) the issuance to all holders of Company
Common Stock of rights or warrants; (iii) subdivisions and combinations of
Company Common Stock; (iv) the payment of dividends (and other distributions) to
all holders of Company Common Stock consisting of evidences of indebtedness of
the Company, securities or capital stock, cash or assets (including securities,
but excluding those rights, warrants, dividends and distributions referred to in
clauses (i) and (ii) and dividends and distributions paid exclusively in cash);
(v) the payment of dividends (and other distributions) on Company Common Stock
paid exclusively in cash, excluding (a) cash dividends that do not exceed the
per share amount of the smallest of the four immediately preceding quarterly
cash dividends (as adjusted to reflect any of the events referred to in clauses
(i) through (vi) of this sentence) and (b) cash
                                       14
   19
 
dividends if the annualized per share amount thereof does not exceed 12 1/2% of
the current market price of Company Common Stock as of the trading day
immediately preceding the date of declaration of such dividend; and (vi) payment
to holders of Company Common Stock in respect of a tender or exchange offer
(other than an odd-lot offer) by the Company or any subsidiary of the Company
for Company Common Stock at a price in excess of 110% of the current market
price of Company Common Stock as of the trading day next succeeding the last
date tenders or exchanges may be made pursuant to such tender or exchange offer.
 
     The Company may, at its option, make such reductions in the Applicable
Conversion Price as the Company's Board of Directors deems advisable to avoid or
diminish any income tax to holders of Company Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "United States Federal Income Tax
Consequences -- Adjustment of Conversion Price."
 
     No adjustment of the Applicable Conversion Price will be made upon the
issuance of any shares of Company Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
shares of Company Common Stock under any such plan or the issuance of any shares
of Company Common Stock or options or rights to purchase such shares pursuant to
any present or future employee, director or consultant benefit plan or program
of the Company or pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security outstanding as of the date the Convertible
Preferred Securities were first issued. There shall also be no adjustment of the
Applicable Conversion Price in case of the issuance of any Company Common Stock
(or securities convertible into or exchangeable for Company Common Stock),
except as specifically described above. If any action would require adjustment
of the Applicable Conversion Price pursuant to more than one of the
anti-dilution provisions, only one adjustment shall be made and such adjustment
shall be the amount of adjustment that has the highest absolute value to holders
of the Convertible Preferred Securities. No adjustment in the Applicable
Conversion Price will be required unless such adjustment would require an
increase or decrease of at least 1% of the Applicable Conversion Price, but any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment.
 
     Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
the Company.  In the event that the Company is a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the assets of the Company, recapitalization or
reclassification of Company Common Stock or any compulsory share exchange (each
of the foregoing being referred to as a "Company Transaction")), in each case,
as a result of which shares of Company Common Stock shall be converted into the
right to receive other securities, cash or other property, then lawful provision
shall be made as part of the terms of such Company Transaction whereby the
holder of each of the Convertible Preferred Securities then outstanding shall
have the right thereafter to convert each of the Convertible Preferred
Securities only into (i) in the case of any Company Transaction other than a
Company Transaction involving a Common Stock Fundamental Change (as defined
herein), the kind and amount of securities, cash and other property receivable
upon the consummation of such Company Transaction by a holder of that number of
shares of Company Common Stock into which each of the Convertible Preferred
Securities was convertible immediately prior to such Company Transaction, or
(ii) in the case of a Company Transaction involving a Common Stock Fundamental
Change, common stock of the kind received by holders of Company Common Stock
(but in each case after giving effect to any adjustment discussed below relating
to a Fundamental Change (as defined herein) if such Company Transaction
constitutes a Fundamental Change). The holders of Convertible Preferred
Securities will have no voting rights with respect to any Company Transaction
described in this section.
 
     In the case of any Company Transaction involving a Fundamental Change, the
Applicable Conversion Price will be adjusted immediately after such Fundamental
Change as follows:
 
          (i) in the case of a Non-Stock Fundamental Change, the Applicable
     Conversion Price of the Convertible Preferred Securities will thereupon
     become the lower of (a) the Applicable Conversion Price immediately prior
     to such Non-Stock Fundamental Change, but after giving effect to any other
     prior adjustments, and (b) the result obtained by multiplying the greater
     of the Relevant Price or the then
 
                                       15
   20
 
     applicable Reference Market Price by the Optional Redemption Ratio (such
     product shall hereinafter be referred to as the "Adjusted Relevant Price"
     or the "Adjusted Reference Market Price," as the case may be); and
 
          (ii) in the case of a Common Stock Fundamental Change, the Applicable
     Conversion Price of the Convertible Preferred Securities immediately prior
     to such Common Stock Fundamental Change, but after giving effect to any
     other prior adjustments, will thereupon be adjusted by multiplying such
     Applicable Conversion Price by a fraction of which the numerator will be
     the Purchaser Stock Price and the denominator will be the Relevant Price;
     provided, however, that in the event of a Common Stock Fundamental Change
     in which (a) 100% of the value of the consideration received by a holder of
     Company Common Stock is common stock of the successor, acquiror or other
     third party (and cash, if any, is paid only with respect to any fractional
     interests in such common stock resulting from such Common Stock Fundamental
     Change) and (b) all of Company Common Stock will have been exchanged for,
     converted into, or acquired for common stock (and cash with respect to
     fractional interests) of the successor, acquiror or other third party, the
     Applicable Conversion Price of the Convertible Preferred Securities
     immediately prior to such Common Stock Fundamental Change will thereupon be
     adjusted by multiplying such conversion price by a fraction of which the
     numerator will be one and the denominator will be the number of shares of
     common stock of the successor, acquiror, or other third party received by a
     holder of one share of Company Common Stock as a result of such Common
     Stock Fundamental Change.
 
     In the absence of the adjustments to the Applicable Conversion Price after
a Fundamental Change, in the case of a Company Transaction each of the
Convertible Preferred Securities would become convertible into the securities,
cash, or other property receivable by a holder of the number of shares of
Company Common Stock into which each of the Convertible Preferred Securities was
convertible immediately prior to such Company Transaction. Thus, in the absence
of the Fundamental Change provisions, a Company Transaction could substantially
lessen or eliminate the value of the conversion privilege associated with the
Convertible Preferred Securities. For example, if the Company were acquired in a
cash merger, each of the Convertible Preferred Securities would become
convertible solely into cash and would no longer be convertible into securities
whose value would vary depending on the future prospects of the Company and
other factors.
 
     In Non-Stock Fundamental Change transactions, the foregoing conversion
price adjustments are designed to increase the securities, cash or other
property into which each of the Convertible Preferred Securities is convertible.
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of Company Common Stock (measured as described in the
definition of Adjusted Relevant Price) is lower than the then Applicable
Conversion Price of each of the Convertible Preferred Securities but greater
than or equal to the Adjusted Reference Market Price, the Applicable Conversion
Price will be adjusted as described above with the effect that each of the
Convertible Preferred Securities will be convertible into securities, cash or
other property of the same type received by the holders of Company Common Stock
in such transaction with the Applicable Conversion Price adjusted as though such
initial value had been the Adjusted Relevant Price. In a Non-Stock Fundamental
Change transaction in which the initial value received per share of Company
Common Stock (measured as described in the definition of Adjusted Relevant
Price) is lower than both the Applicable Conversion Price of each of the
Convertible Preferred Securities and the Adjusted Reference Market Price, the
Applicable Conversion Price will be adjusted as described above but calculated
as though such initial value had been the Adjusted Reference Market Price.
 
     In Common Stock Fundamental Change transactions, the foregoing adjustments
are designed to provide in effect that (i) where Company Common Stock is
converted partly into such common stock and partly into other securities, cash
or property, each of the Convertible Preferred Securities will be convertible
solely into a number of shares of such common stock determined so that the
initial value of such shares (measured as described in the definition of
Purchaser Stock Price) equals the value of the shares of Company Common Stock
into which each of the Convertible Preferred Securities was convertible
immediately before the transaction (measured as aforesaid) and (ii) where
Company Common Stock is converted solely into such common stock, each of the
Convertible Preferred Securities will be convertible into the same number of
shares of such common stock receivable by a holder of the number of shares of
Company Common Stock into which each of the Convertible Preferred Securities was
convertible immediately before such transaction.
                                       16
   21
 
     "Closing Price" of any security on any day means the last reported sale
price of such security on such day, or in case no sale takes place on such day,
the average of the closing bid and asked prices in each case on the principal
national securities exchange on which such securities are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Market System of the Nasdaq Stock Market or any
successor national automated interdealer quotation system (the "NNM") or, if
such securities are not listed or admitted to trading on any national securities
exchange or quoted on the NNM, the average of the closing bid and asked prices
of such security in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected by the Company for such purpose.
 
     "Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Company
Common Stock consists of common stock that for each of the ten consecutive
trading days immediately prior to and including the Entitlement Date has been
admitted for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the NNM.
 
     "Entitlement Date" means the record date for determination of the holders
of Company Common Stock entitled to receive securities, cash or other property
in connection with a Non-Stock Fundamental Change or a Common Stock Fundamental
Change or, if there is no such record date, the date upon which holders of
Company Common Stock shall have the right to receive such securities, cash or
other property.
 
     "Fundamental Change" means the occurrence of any transaction or event in
connection with a plan pursuant to which all or substantially all of Company
Common Stock shall be exchanged for, converted into, acquired for or constitute
solely the right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise); provided that, in
the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Applicable Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Company
Common Stock shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash, or other property, but
the adjustment shall be based upon the highest weighted average per share
consideration that a holder of Company Common Stock could have received in such
transactions or events as a result of which more than 50% of Company Common
Stock shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash or other property.
 
     "Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
 
     "Optional Redemption Ratio" means a fraction of which the numerator will be
$50 and the denominator will be the then current Optional Redemption Price (as
defined herein) or, prior to April 10, 2001, an amount per each of the
Convertible Preferred Securities determined by the Company in its sole
discretion, after consultation with an investment banking firm, to be the
equivalent of the hypothetical redemption price that would have been applicable
if the Convertible Preferred Securities had been redeemable during such period.
 
     "Purchaser Stock Price" means, with respect to any Common Stock Fundamental
Change, the average of the Closing Prices for the common stock received in such
Common Stock Fundamental Change for the ten consecutive trading days prior to
and including the Entitlement Date, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in clauses (i) through (vi)
of the first paragraph under "-- Conversion Price Adjustments -- General."
 
     "Reference Market Price" shall initially mean on the date of original
issuance of the Convertible Preferred Securities, $36.17 (which is an amount
equal to 66 2/3% of the last reported sale price for the Company Common Stock on
the New York Stock Exchange Composite Tape on March 26, 1998), and, in the event
of any adjustment to the Applicable Conversion Price, other than as a result of
a Non-Stock Fundamental Change, the Reference Market Price shall also be
adjusted so that the ratio of the Reference Market Price to the Applicable
Conversion Price after giving effect to any such adjustment shall always be the
same as the ratio of $36.17 to the Initial Conversion Price.
 
                                       17
   22
 
     "Relevant Price" means (i) in the case of a Non-Stock Fundamental Change in
which the holder of Company Common Stock receives only cash, the amount of cash
received by the holder of one share of Company Common Stock and (ii) in the
event of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the daily Closing Prices for Company Common Stock during
the ten consecutive trading days prior to and including the Entitlement Date, in
each case as adjusted in good faith by the Company to appropriately reflect any
of the events referred to in clauses (i) through (vi) of the first paragraph
under "-- Conversion Price Adjustments -- General."
 
MANDATORY REDEMPTION
 
     Upon the repayment in full of the Convertible Junior Subordinated
Debentures at the Stated Maturity or a redemption in whole or in part of the
Convertible Junior Subordinated Debentures (other than following any
distribution of the Convertible Junior Subordinated Debentures to the holders of
the Trust Securities), the proceeds from such repayment or redemption shall be
applied by the Property Trustee to redeem, on a pro rata basis, a Like Amount of
Trust Securities, on the Redemption Date, in an amount per Trust Security equal
to the applicable Redemption Price, which Redemption Price will be equal to (i)
the liquidation amount of each of the Convertible Preferred Securities plus any
accrued and unpaid Distributions thereon (A) in the case of the repayment of the
Convertible Junior Subordinated Debentures at Stated Maturity (the "Stated
Maturity Price"), or (B) in the case of the redemption of the Convertible Junior
Subordinated Debentures in certain limited circumstances upon the occurrence of
a Tax Event or (ii) in the case of an Optional Redemption (as defined herein) on
or after April 10, 2001, the Optional Redemption Price.
 
     If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Convertible Junior Subordinated Debentures such
amounts as shall be required so that the Distributions payable by the Trust in
respect of the Trust Securities shall not be reduced as a result of any such
additional taxes, duties or other governmental charges. See "Description of
Convertible Junior Subordinated Debentures -- Additional Sums."
 
REDEMPTION PROCEDURES
 
     Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or redemption of the
Convertible Junior Subordinated Debentures. Redemptions of the Trust Securities
shall be made and the applicable Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds on hand available
for the payment of such Redemption Price. See also "-- Subordination of Common
Securities." As used herein, "Redemption Price" shall mean the "Stated Maturity
Price," the "Optional Redemption Price" and the "Tax Event Redemption Price" (as
defined herein), as applicable.
 
     If the Trust gives a notice of redemption in respect of the Convertible
Preferred Securities, then, by 12:00 noon, New York City time, on the date fixed
for redemption (the "Redemption Date"), to the extent funds are available, with
respect to the Convertible Preferred Securities held in global form, the
Property Trustee will deposit irrevocably with The Depository Trust Company
("DTC") funds sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the applicable Redemption
Price to the holders of the Convertible Preferred Securities. See "-- Form,
Book-Entry Procedures and Transfer." With respect to the Convertible Preferred
Securities held in certificated form, the Property Trustee, to the extent funds
are available, will irrevocably deposit with the paying agent for the
Convertible Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable instructions and
authority to pay the Redemption Price to the holders thereof upon surrender of
their certificates evidencing the Convertible Preferred Securities. See
"-- Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
the Convertible Preferred Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
the holders of the Convertible Preferred Securities will cease, except the right
of the holders of the Convertible Preferred Securities to receive the applicable
Redemption Price, but without interest on such Redemption Price, and the
Convertible Preferred Securities will cease to be
                                       18
   23
 
outstanding. In the event that any Redemption Date is not a Business Day, then
payment of the applicable Redemption Price payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the applicable Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Company pursuant to the Guarantee as described under "Description of
Guarantee," Distributions on Convertible Preferred Securities will continue to
accrue from the Redemption Date originally established by the Trust to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the Redemption
Price.
 
     Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Convertible Preferred Securities by
tender, in the open market or by private agreement.
 
     If the Company desires to consummate an Optional Redemption it must send a
notice to each holder of Trust Securities at its registered address in
accordance with the notice procedures set forth under "Description of
Convertible Junior Subordinated Debentures -- Redemption -- Optional
Redemption." Notice of a Tax Event Redemption will be mailed at least 20 days
but not more than 60 days before the Redemption Date to each holder of
Convertible Preferred Securities. Notice of repayment at Stated Maturity is not
required.
 
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
 
     If a Tax Event shall occur and be continuing, the Company shall cause the
Issuer Trustees to liquidate the Issuer and cause Convertible Junior
Subordinated Debentures to be distributed to the holders of the Convertible
Preferred Securities in liquidation of the Issuer within 90 days following the
occurrence of such Tax Event; provided, however, that such liquidation and
distribution shall be conditioned on (i) the Issuer Trustees' receipt of an
opinion of nationally recognized independent tax counsel (reasonably acceptable
to the Issuer Trustees) experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the holders of the Convertible Preferred
Securities will not recognize any income, gain or loss for United States Federal
income tax purposes as a result of such liquidation and distribution of
Convertible Junior Subordinated Debentures, and (ii) the Company being unable to
avoid such Tax Event within such 90-day period by taking some ministerial action
or pursuing some other reasonable measure that, in the sole judgment of the
Company, will have no adverse effect on the Issuer, the Company or the holders
of the Convertible Preferred Securities and will involve no material cost.
Furthermore, if (i) the Company has received an opinion (a "Redemption Tax
Opinion") of nationally recognized independent tax counsel (reasonably
acceptable to the Issuer Trustees) experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that the Company would
be precluded from deducting the interest on the Convertible Junior Subordinated
Debentures for United States Federal income tax purposes, even after the
Convertible Junior Subordinated Debentures were distributed to the holders of
the Convertible Preferred Securities upon liquidation of the Issuer as described
above, or (ii) the Issuer Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion, the Company shall have the
right, upon not less than 20 nor more than 60 days' notice and within 90 days
following the occurrence and continuation of the Tax Event, to redeem the
Convertible Junior Subordinated Debentures, in whole, but not in part, for cash,
for the principal amount thereof plus accrued and unpaid interest thereon and,
following such redemption, all the Convertible Preferred Securities will be
redeemed by the Issuer at the aggregate liquidation amount thereof plus accrued
and unpaid Distributions thereon; provided, however, that, if at the time there
is available to the Company or the Issuer the opportunity to eliminate, within
such 90-day period, the Tax Event by taking some ministerial action or pursuing
some other reasonable measure that, in the sole judgment of the Company, will
have no adverse effect on the Issuer, the Company or the holders of the
Convertible Preferred Securities and will involve no material cost, the Issuer
or the Company will pursue such measure in lieu of redemption. See "-- Mandatory
Redemption." In lieu of the foregoing options, the Company will also have the
option of causing the Convertible Preferred Securities to remain outstanding and
pay Additional Sums on the Convertible Junior
 
                                       19
   24
 
Subordinated Debentures. See "Description of Convertible Junior Subordinated
Debentures -- Additional Sums."
 
     "Tax Event" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company (reasonably
acceptable to the Issuer Trustees) experienced in such matters (a "Dissolution
Tax Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Convertible Junior Subordinated Debentures or the issue date of
the Convertible Preferred Securities issued by the Trust, there is more than an
insubstantial risk that (a) if the Convertible Junior Subordinated Debentures
are held by the Property Trustee, (I) the Trust is, or will be within 90 days of
the date of such opinion, subject to United States Federal income tax with
respect to interest accrued or received on the Convertible Junior Subordinated
Debentures or subject to more than a de minimis amount of other taxes, duties or
other governmental charges as determined by such counsel, or (II) any portion of
interest payable by the Company to the Trust on the Convertible Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes or (b) with respect to Convertible Junior
Subordinated Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Company on the Convertible Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes.
 
     If an Investment Company Event shall occur and be continuing, the Company
shall cause the Issuer Trustees to liquidate the Issuer and cause the
Convertible Junior Subordinated Debentures to be distributed to the holders of
the Convertible Preferred Securities in liquidation of the Issuer within 90 days
following the occurrence of such Investment Company Event.
 
     "Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Issuer is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the date of this Prospectus.
 
     The distribution by the Company of the Convertible Junior Subordinated
Debentures will effectively result in the cancelation of the Convertible
Preferred Securities. See "-- Liquidation of the Trust and Distribution of
Convertible Junior Subordinated Debentures."
 
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES
 
     The Company, as the holder of the outstanding Common Securities, has the
right at any time (including, without limitation, upon the occurrence of a Tax
Event or Investment Company Act Event) to terminate the Trust and cause a Like
Amount of the Convertible Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities upon liquidation of the Trust, provided that
the Issuer Trustees shall have received a No Recognition Opinion prior to the
liquidation of the Trust; and, provided further that, following such
distribution of the Convertible Junior Subordinated Debentures, the Company
agrees to use its best efforts to maintain a rating of such Convertible Junior
Subordinated Debentures by any nationally recognized rating agency for so long
as any such Convertible Junior Subordinated Debentures are outstanding.
 
                                       20
   25
 
     The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Convertible Junior Subordinated
Debentures to the holders of the Trust Securities if the Company, as Depositor,
has given written direction to the Property Trustee to terminate the Trust
(which direction is optional and, except as described above, wholly within the
discretion of the Company, as Depositor); (iii) redemption of all the Trust
Securities as described under "-- Mandatory Redemption" above; (iv) expiration
of the term of the Trust; and (v) the entry of an order for the dissolution of
the Trust by a court of competent jurisdiction.
 
     If an early termination occurs as described in clause (i), (ii), (iv) or
(v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of such Trust Securities a Like Amount of the Convertible
Junior Subordinated Debentures, unless such distribution would not be practical,
in which event such holders will be entitled to receive out of the assets of the
Trust available for distribution to holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to, in
the case of holders of Convertible Preferred Securities, the aggregate
liquidation amount thereof plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Convertible
Preferred Securities shall be paid on a pro rata basis. The Company, as holder
of the Common Securities, will be entitled to receive distributions upon any
such liquidation pro rata with the holders of the Convertible Preferred
Securities, except that if a Debenture Event of Default (or an event that, with
notice or passage of time, would become such a Debenture Event of Default) or an
Event of Default under the Declaration has occurred and is continuing, the
Convertible Preferred Securities shall have a priority over the Common
Securities with respect to any such distributions. See "-- Subordination of
Common Securities."
 
     "Like Amount" means (i) with respect to a redemption of Convertible
Preferred Securities, Convertible Preferred Securities having an aggregate
liquidation amount equal to that portion of the principal amount of Convertible
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Convertible
Preferred Securities based upon the relative liquidation amounts of such classes
and the proceeds of which will be used to pay the applicable Redemption Price of
the Convertible Preferred Securities and (ii) with respect to a distribution of
Convertible Junior Subordinated Debentures to holders of Convertible Preferred
Securities in connection with a dissolution or liquidation of the Trust,
Convertible Junior Subordinated Debentures having a principal amount equal to
the aggregate liquidation amount of the Trust Securities of the holder to whom
such Convertible Junior Subordinated Debentures are distributed.
 
     If the Company does not redeem the Convertible Junior Subordinated
Debentures prior to maturity and the Trust is not liquidated and the Convertible
Junior Subordinated Debentures are not distributed to holders of the Trust
Securities, the Convertible Preferred Securities will remain outstanding until
the repayment of the Convertible Junior Subordinated Debentures at the Stated
Maturity and the distribution of the Liquidation Distribution to the holders of
the Convertible Preferred Securities.
 
     On and after the liquidation date fixed for any distribution of Convertible
Junior Subordinated Debentures to holders of the Trust Securities, (i) the
Convertible Preferred Securities will no longer be deemed to be outstanding,
(ii) DTC or its nominee, as the record holder of the Convertible Preferred
Securities, will receive a registered global certificate or certificates
representing the Convertible Junior Subordinated Debentures to be delivered upon
such distribution with respect to Convertible Preferred Securities held by DTC
or its nominee and (iii) any certificates representing Convertible Preferred
Securities not held by DTC or its nominee will be deemed to represent
Convertible Junior Subordinated Debentures having a principal amount equal to
the liquidation amount of such Convertible Preferred Securities and bearing
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Convertible Preferred Securities until such certificates
are presented to the Administrative Trustees or their agent for cancelation,
whereupon the Company will issue to such holder, and the Debenture Trustee will
authenticate, a certificate representing such Convertible Junior Subordinated
Debentures.
                                       21
   26
 
     There can be no assurance as to the market prices for the Convertible
Preferred Securities or the Convertible Junior Subordinated Debentures that may
be distributed in exchange for the Trust Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Convertible Preferred
Securities, or the Convertible Junior Subordinated Debentures that a holder may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Convertible Preferred
Securities.
 
SUBORDINATION OF COMMON SECURITIES
 
     Payment of Distributions on, and the Redemption Price of, the Convertible
Preferred Securities and Common Securities, as applicable, shall be made pro
rata to the holders of Convertible Preferred Securities and Common Securities
based on the liquidation amount of the Trust Securities, provided that, if on
any Distribution Date or Redemption Date any Debenture Event of Default (or an
event that, with notice or passage of time, would become such an Event of
Default) or an Event of Default under the Declaration shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accrued and unpaid Distributions on
all of the outstanding Convertible Preferred Securities for all Distribution
periods terminating on or prior thereto, or, in the case of payment of the
applicable Redemption Price, the full amount of such Redemption Price on all of
the outstanding Convertible Preferred Securities, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
applicable Redemption Price of, the Convertible Preferred Securities then due
and payable.
 
     In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Company as holder of the Common Securities will
be deemed to have waived any right to act with respect to any such Event of
Default under the Declaration until the effect of all such Events of Default
have been cured, waived or otherwise eliminated. Until all such Events of
Default under the Declaration have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Convertible Preferred Securities and not on behalf of the Company as holder
of the Common Securities, and only the holders of the Convertible Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
 
EVENTS OF DEFAULT; NOTICE
 
     Any one of the following events constitutes an "Event of Default" under the
Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
 
          (i) the occurrence of a Debenture Event of Default (see "Description
     of Convertible Junior Subordinated Debentures -- Debenture Events of
     Default"); or
 
          (ii) default by the Issuer in the payment of any Distribution when it
     becomes due and payable, and continuation of such default for a period of
     30 days (subject to the deferral of any due date in the case of a Deferral
     Period); or
 
          (iii) default by the Issuer in the payment of any Redemption Price of
     any Trust Security when it becomes due and payable; or
 
          (iv) default in the performance, or breach, in any material respect,
     of any covenant or warranty of the Issuer Trustees in the Declaration
     (other than a covenant or warranty, a default in the performance of which
     or the breach of which is addressed in clause (ii) or (iii) above), and
     continuation of such default or breach for a period of 60 days after there
     has been given, by registered or certified mail, to the defaulting Issuer
     Trustee or Issuer Trustees by the holders of at least 25% in aggregate
     liquidation amount of the outstanding Convertible Preferred Securities, a
     written notice specifying such default or
 
                                       22
   27
 
     breach and requiring it to be remedied and stating that such notice is a
     "Notice of Default" under the Declaration; or
 
          (v) the occurrence of certain events of bankruptcy or insolvency with
     respect to the Property Trustee and the failure by the Company to appoint a
     successor Property Trustee within 60 days thereof.
 
     Within three Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Convertible Preferred
Securities, the Administrative Trustees and the Company, as Depositor, unless
such Event of Default shall have been cured or waived. The Company, as
Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under the Declaration.
 
     If a Debenture Event of Default (or an event that with notice or the
passage of time, would become such an Event of Default) or an Event of Default
under the Declaration has occurred and is continuing, the Convertible Preferred
Securities shall have a preference over the Common Securities as described
above. See "-- Liquidation of the Trust and Distribution of Convertible Junior
Subordinated Debentures" and "-- Subordination of Common Securities."
 
REMOVAL OF ISSUER TRUSTEES
 
     Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in liquidation amount of the outstanding Convertible
Preferred Securities. In no event do the holders of the Convertible Preferred
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Company as the holder of the Common Securities. No resignation or removal of the
Delaware Trustee or the Property Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the Declaration.
 
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
 
     Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's property
may at the time be located, the Company, as the holder of the Common Securities,
and the Administrative Trustees have the power to appoint one or more persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such Trust's property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Declaration. In case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to make such
appointment.
 
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
 
     Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, provided such person shall be otherwise qualified and eligible.
 
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
 
     The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Company, as
 
                                       23
   28
 
Depositor, with the consent of the Administrative Trustees but without the
consent of the holders of the Convertible Preferred Securities, the Property
Trustee or the Delaware Trustee, merge with or into, consolidate, amalgamate or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a trust organized as such under the laws of any
State; provided, however, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Convertible
Preferred Securities or (b) substitutes for the Convertible Preferred Securities
other securities having substantially the same terms as the Convertible
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Convertible Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Convertible Junior Subordinated Debentures, (iii) the Successor
Securities are listed or traded, or any Successor Securities will be listed or
traded upon notification of issuance, on any national securities exchange,
national automated quotation system or other organization on which the
Convertible Preferred Securities are then listed or traded, if any, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Convertible Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Convertible Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical and limited to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Company has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Convertible
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act,
(viii) the Company or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee and (ix) such merger, consolidation, amalgamation, replacement
or lease is not a taxable event for holders of the Convertible Preferred
Securities. Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in aggregate liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as an association taxable as a corporation (or
to substantially increase the likelihood that the Trust or the successor entity
would be classified as other than a grantor trust) for United States Federal
income tax purposes.
 
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
 
     Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Declaration, the
holders of the Convertible Preferred Securities have no voting rights.
 
     In addition to the rights of the holders of Convertible Preferred
Securities with respect to the enforcement of payment to the Issuer of principal
of or interest on the Convertible Junior Subordinated Debentures as provided
under "Description of Convertible Junior Subordinated Debentures -- Debenture
Events of Default," if (i) a Debenture Event of Default occurs and is continuing
or (ii) the Company defaults under the Guarantee with respect to the Convertible
Preferred Securities (each an "Appointment Event"), then the holders of the
Convertible Preferred Securities, acting as a single class, will be entitled by
the majority vote of such holders to appoint a Special Trustee. Any holder of
Convertible Preferred Securities (other than the Company or any of its
affiliates) shall be entitled to nominate any person to be appointed as Special
Trustee. Not later than 30 days after such right to appoint a Special Trustee
arises, the Issuer Trustees shall convene a meeting of the holders of
Convertible Preferred Securities for the purpose of appointing a
                                       24
   29
 
Special Trustee. If the Issuer Trustee fails to convene such meeting within such
30-day period, the holders of not less than 10% of the aggregate stated
liquidation amount of the outstanding Convertible Preferred Securities will be
entitled to convene such meeting. The provisions of the Declaration relating to
the convening and conduct of the meetings of the holders will apply with respect
to any such meeting. Any Special Trustee so appointed shall cease to be a
Special Trustee if the Appointment Event pursuant to which the Special Trustee
was appointed and all other Appointment Events cease to be continuing.
Notwithstanding the appointment of any such Special Trustee, the Company shall
retain all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period as provided under "Description
of Convertible Junior Subordinated Debentures -- Option to Extend Interest
Payment Date." If such an extension occurs, there will be no Debenture Event of
Default and, consequently, no Event of Default for failure to make any scheduled
interest payment during the Deferral Period on the date originally scheduled.
 
     The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to ministerial
matters or questions arising under the Declaration, which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will not be taxable as a corporation or will
be classified for United States Federal income tax purposes as a grantor trust
at all times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company" under the 1940
Act; provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any holder of Trust
Securities, and any amendments of the Declaration shall become effective when
notice thereof is given to the holders of the Trust Securities. The Declaration
may be amended by the Issuer Trustees and the Company with (i) the consent of
holders representing not less than a majority (based upon liquidation amounts)
of the outstanding Convertible Preferred Securities, and (ii) receipt by the
Issuer Trustees of an opinion of counsel to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes or the Trust's exemption from status as an
"investment company" under the 1940 Act. In addition, without the consent of
each holder of Trust Securities, the Declaration may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
 
     So long as any Convertible Junior Subordinated Debentures are held by the
Trust, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Convertible Junior Subordinated Debentures, (ii) waive any past default that
is waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Convertible Junior Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Convertible Junior
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding Convertible Preferred Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Convertible Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each holder of the Convertible Preferred Securities. The Issuer
Trustees shall not revoke any action previously authorized or approved by a vote
of the holders of the Convertible Preferred Securities except by subsequent vote
of such holders. The Property Trustee shall notify each holder of Convertible
Preferred Securities of any notice of default with respect to the Convertible
Junior Subordinated Debentures. In addition to obtaining the foregoing approvals
of such holders of the Convertible Preferred Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that such action will not affect the
Trust's status as a grantor trust for United States Federal income tax purposes
on account of such action.
                                       25
   30
 
     Any required approval of holders of Convertible Preferred Securities may be
given at a meeting of such holders convened for such purpose or pursuant to
written consent. The Property Trustee will cause a notice of any meeting at
which holders of Convertible Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Convertible Preferred Securities in the
manner set forth in the Declaration.
 
     No vote or consent of the holders of Convertible Preferred Securities will
be required for the Trust to redeem and cancel the Convertible Preferred
Securities in accordance with the Declaration.
 
     Notwithstanding that holders of the Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned by the Company, the
Issuer Trustees or any affiliate of the Company or any Issuer Trustees, shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
 
EXPENSES AND TAXES
 
     In the Indenture, the Company, as borrower, has agreed to pay all debts and
other obligations (other than with respect to payments of Distributions, amounts
payable upon redemption and the liquidation amount of the Trust Securities) and
all costs and expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the Issuer Trustees and
the costs and expenses relating to the operation of the Trust), and to pay any
and all taxes and all costs and expenses with respect to the foregoing (other
than United States withholding taxes) to which the Trust might become subject.
The foregoing obligations of the Company under the Indenture are for the benefit
of, and shall be enforceable by, any person to whom any such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice thereof. Any such Creditor may enforce such obligations of
the Company directly against the Company, and the Company has irrevocably waived
any right or remedy to require that any such Creditor take any action against
the Trust or any other person before proceeding against the Company. The Company
has also agreed in the Indenture to execute such additional agreement(s) as may
be necessary or desirable to give full effect to the foregoing.
 
FORM, BOOK-ENTRY PROCEDURES AND TRANSFER
 
     Convertible Preferred Securities originally sold to qualified institutional
buyers (as defined in Rule 144A under the Securities Act) were issued in the
form of one or more fully registered global Convertible Preferred Securities
certificates (the "Global Convertible Preferred Securities"). The Global
Convertible Preferred Securities were deposited with the Property Trustee, as
custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.
Except as set forth below, the Global Convertible Preferred Securities may be
transferred, in whole and not in part, only to DTC or another nominee of the
DTC. Investors may hold their beneficial interests in the Global Convertible
Preferred Securities directly through DTC if they have an account with DTC or
indirectly through organizations which have accounts with DTC.
 
     DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (which may include the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to DTC's
book-entry system is also available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, whether directly or indirectly.
 
     Upon the issuance of the Global Convertible Preferred Securities, DTC
credited, on its book-entry registration and transfer system, the principal
amount of the Convertible Preferred Securities represented by such Global
Convertible Preferred Securities to the accounts of participants designated by
the Initial
                                       26
   31
 
Purchasers of such Convertible Preferred Securities. Ownership of beneficial
interests in the Global Convertible Preferred Securities is limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the Global Convertible Preferred Securities are shown
on, and the transfer of those ownership interests will be effected only through,
records maintained by DTC (with respect to participants' interests) and such
participants (with respect to the owners of beneficial interests in the Global
Convertible Preferred Securities other than participants). The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and laws may impair
the ability to transfer or pledge beneficial interests in the Global Convertible
Preferred Securities.
 
     So long as DTC or its nominee is the registered holder and owner of the
Global Convertible Preferred Securities, DTC or such nominee, as the case may
be, will be considered the sole legal owner and holder of the related
Convertible Preferred Securities for all purposes of the Declaration, the
Guarantee and the Indenture. Except as set forth below, owners of beneficial
interests in the Global Convertible Preferred Securities will not be entitled to
have the Convertible Preferred Securities represented by the Global Convertible
Preferred Securities registered in their names, will not receive or be entitled
to receive physical delivery of certificated Convertible Preferred Securities in
definitive form and will not be considered to be the owners or holders of any
Convertible Preferred Securities under the Declaration, the Guarantee or the
Indenture. The Company understands that under existing industry practice, in the
event an owner of a beneficial interest in the Global Convertible Preferred
Securities desires to take any action that DTC, as the holder of the Global
Convertible Preferred Securities, is entitled to take, DTC would authorize the
participants to take such action, and that the participants would authorize
beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
 
     Payment of amounts with respect to the Convertible Preferred Securities
represented by the Global Convertible Preferred Securities registered in the
name of and held by DTC or its nominee will be made to DTC or its nominee, as
the case may be, as the registered owner and holder of the Global Convertible
Preferred Securities.
 
     The Company expects that DTC or its nominee, upon receipt of payment of
amounts with respect to the Global Convertible Preferred Securities, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global
Convertible Preferred Securities as shown on the records of DTC or its nominee.
The Company also expects that payments by participants to owners of beneficial
interests in the Global Convertible Preferred Securities held through such
participants will be governed by standing instructions and customary practices
and will be the responsibility of such participants. None of the Company, the
Issuer or the Initial Purchasers will have any responsibility or liability for
any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in the Global Convertible Preferred Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for any other aspect of the relationship
between DTC and its participants or the relationship between such participants
and the owners of beneficial interests in the Global Convertible Preferred
Securities owning through such participants.
 
     Unless and to the extent they are exchanged in whole or in part for
certificated Convertible Preferred Securities in definitive form, the Global
Convertible Preferred Securities may not be transferred except as a whole by DTC
to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC.
 
     Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Convertible Preferred Securities among
participants of DTC, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. None of
the Company, the Issuer or the Initial Purchasers will have any responsibility
for the performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
 
     None of the Company, the Issuer or the Initial Purchasers shall be liable
for any delay by DTC or any participant or indirect participant in identifying
the beneficial owners of the Convertible Preferred Securities,
 
                                       27
   32
 
and the Company, the Issuer and the Initial Purchasers may conclusively rely on,
and shall be protected in relying on, instructions from DTC for all purposes
(including with respect to the registration and delivery, and their respective
principal amounts, of the Convertible Preferred Securities to be issued).
 
     The information in this Prospectus concerning DTC and DTC's book-entry
system has been obtained from such sources that the Company believes to be
reliable. None of the Company, the Issuer or the Initial Purchasers will have
any responsibility for the performance by DTC or its participants of their
respective obligations as described hereunder or under the rules and procedures
governing their respective operations.
 
  Certificated Convertible Preferred Securities
 
     Convertible Preferred Securities initially sold to (i) institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) or (ii) to a non-U.S. person pursuant to Regulation S were
issued in fully registered, certificated form ("Restricted Certificated
Convertible Preferred Securities"). Upon the transfer of any such Restricted
Certificated Convertible Preferred Securities, such Restricted Certificated
Convertible Preferred Securities will, unless the Global Convertible Preferred
Securities have previously been exchanged for Certificated Convertible Preferred
Securities (as defined below), be exchanged for an interest in the Global
Convertible Preferred Securities representing the number of Convertible
Preferred Securities being transferred. Any such transfers will generally
require the delivery by the transferee of a transfer certificate in the form set
forth in the Declaration.
 
     The Convertible Preferred Securities represented by the Global Convertible
Preferred Securities are exchangeable for certificated Convertible Preferred
Securities in definitive form of like tenor as such Convertible Preferred
Securities ("Certificated Convertible Preferred Securities") in denominations of
U.S. $1,000 and integral multiples thereof if (i) DTC notifies the Company or
the Issuer that it is unwilling or unable to continue as depositary for the
Global Convertible Preferred Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company or the
Issuer in its discretion at any time determines not to have all of the
Convertible Preferred Securities evidenced by the Global Convertible Preferred
Securities or (iii) a default entitling the holders of the Convertible Preferred
Securities to accelerate the maturity thereof has occurred and is continuing.
Any of the Convertible Preferred Securities that is exchangeable pursuant to the
preceding sentence is exchangeable for Certificated Convertible Preferred
Securities issuable in authorized denominations and registered in such names as
DTC shall direct. Subject to the foregoing, the Global Convertible Preferred
Securities are not exchangeable, except for Global Convertible Preferred
Securities of the same aggregate denomination to be registered in the name of
DTC or its nominee.
 
PAYMENT AND PAYING AGENCY
 
     Payments in respect of the Global Convertible Preferred Securities shall be
made to DTC, which shall credit the relevant accounts at DTC on the applicable
Distribution Dates, or, in respect of the Convertible Preferred Securities that
are not held by DTC, such payments shall be made by check mailed to the address
of the holder entitled thereto as such address shall appear on the register. The
paying agent (the "Paying Agent") shall initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Company. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
 
     The Property Trustee has informed the Trust that so long as it serves as
paying agent for the Convertible Preferred Securities, it anticipates that
information regarding Distributions on the Convertible Preferred Securities,
including payment date, record date and redemption information, will be made
available through The Bank of New York.
 
                                       28
   33
 
REGISTRAR, CONVERSION AGENT, PAYING AGENT AND TRANSFER AGENT
 
     The Property Trustee acts as registrar and conversion agent for the
Convertible Preferred Securities.
 
     The Property Trustee acts as initial paying agent and transfer agent for
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities and may designate additional or substitute
paying agents and transfer agents at any time. Registration of transfers of
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities will be effected without charge by or on behalf
of the Trust, but upon payment (with the giving of such indemnity as the
Administrative Trustees, the Property Trustee or the Company may require) in
respect of any tax or other government charges that may be imposed in relation
thereto. The Trust will not be required to register the transfer of or exchange
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities during the period beginning at the opening of
business 15 days before any selection of Restricted Certificated Convertible
Preferred Securities and Certificated Convertible Preferred Securities to be
redeemed and ending at the close of business on the day of that selection or
register the transfer of or exchange any Restricted Certificated Convertible
Preferred Securities and Certificated Convertible Preferred Securities, or
portion thereof, called for redemption.
 
INFORMATION CONCERNING THE PROPERTY TRUSTEE
 
     The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Convertible Preferred
Securities or the Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed by the Company
and, if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
 
MISCELLANEOUS
 
     The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or classified as an association taxable as a corporation for United States
Federal income tax purposes (or in a way that would substantially increase the
risk that the Trust would be classified as other than a grantor trust for United
States Federal income tax purposes), and so that the Convertible Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States Federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Declaration,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
 
     Holders of the Trust Securities have no preemptive or similar rights.
 
     The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
 
           DESCRIPTION OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
 
     The Convertible Junior Subordinated Debentures were issued under a
Convertible Junior Subordinated Indenture (the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Debenture
                                       29
   34
 
Trustee"). The Indenture will be qualified under the Trust Indenture Act and
incorporates certain provisions of the Trust Indenture Act. This summary of
certain terms and provisions of the Convertible Junior Subordinated Debentures
and the Indenture does not purport to be complete, and where reference is made
to particular provisions of the Indenture, such provisions, including the
definitions of certain terms, some of which are not otherwise defined herein,
are qualified in their entirety by reference to all of the provisions of the
Indenture and those terms made a part of the Indenture by incorporation of the
Trust Indenture Act.
 
GENERAL
 
     Concurrently with the issuance of the Trust Securities, the Trust invested
the proceeds thereof in Convertible Junior Subordinated Debentures issued by the
Company. Interest accrues on the Convertible Junior Subordinated Debentures from
the date of their original issuance at the annual rate of 6 1/4% of the
principal amount thereof and is payable quarterly in arrears on January 1, April
1, July 1 and October 1 (each, an "Interest Payment Date"), commencing July 1,
1998, to the person in whose name each Convertible Junior Subordinated Debenture
is registered, subject to certain exceptions, at the close of business on the
fifteenth of the month next preceding the applicable Interest Payment Date. It
is anticipated that, until the liquidation of the Trust, each Convertible Junior
Subordinated Debenture will be registered in the name of the Trust and held by
the Property Trustee for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period will be computed on the basis of the
number of days elapsed in a 360-day year consisting of twelve 30-day months. In
the event that any Interest Payment Date is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on the applicable
Interest Payment Date. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law), compounded quarterly from the relevant Interest
Payment Date. The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable Interest Payment Date, Special Interest and Additional Sums, as
applicable. See "-- Additional Sums" and "Registration Rights."
 
     Unless previously redeemed or repurchased in accordance with the Indenture,
the Convertible Junior Subordinated Debentures will mature on April 1, 2028 (the
"Stated Maturity"). See "-- Redemption -- Repayment at Maturity; Redemption of
Convertible Preferred Securities."
 
     The Convertible Junior Subordinated Debentures are unsecured and rank
junior and are subordinate in right of payment to all Senior Debt. Because the
Company is principally a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Convertible Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Company may itself be recognized as a creditor of
such subsidiary. Accordingly, the Convertible Junior Subordinated Debentures are
subordinated to all Senior Debt and effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, and holders of Convertible
Junior Subordinated Debentures should look only to the assets of the Company for
payments on the Convertible Junior Subordinated Debentures. The Indenture does
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Debt, whether under the Indenture or any existing or
other indenture that the Company may enter into in the future or otherwise. See
"Risk Factors -- Ranking of Obligations Under the Guarantee and the Convertible
Junior Subordinated Debentures" and "-- Subordination."
 
OPTION TO EXTEND INTEREST PAYMENT DATE
 
     As long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Convertible Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Deferral Period, provided, that no Deferral Period may extend beyond the Stated
Maturity of the Convertible Junior Subordinated Debentures. At the end of a
Deferral Period, the Company must pay all interest then accrued
                                       30
   35
 
and unpaid on the Convertible Junior Subordinated Debentures (together with
interest accrued thereon compounded quarterly from the relevant Interest Payment
Date, to the extent permitted by applicable law). During a Deferral Period and
for so long as the Convertible Junior Subordinated Debentures remain
outstanding, interest will continue to accrue and holders of Convertible Junior
Subordinated Debentures (and holders of the Convertible Preferred Securities)
will be required to accrue interest income (in the form of OID) for United
States Federal income tax purposes. See "United States Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
 
     During any Deferral Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends paid by the
Company which consist of stock of the same class as that on which the dividend
is being paid and (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in interest to the Convertible Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the Convertible
Junior Subordinated Debentures (other than (a) dividends or distributions in
Company Common Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Company Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or any other contractual obligation of the Company (other than a contractual
obligation ranking pari passu with or junior to the Convertible Junior
Subordinated Debentures), (e) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). A Deferral Period will
terminate upon the payment by the Company of all interest then accrued and
unpaid on the Convertible Junior Subordinated Debentures (together with interest
accrued thereon, compounded quarterly, to the extent permitted by applicable
law). Prior to the termination of any Deferral Period, the Company may further
extend such Deferral Period, provided, however, that such deferral does not
cause such Deferral Period to exceed 20 consecutive quarters or to extend beyond
the Stated Maturity of the Convertible Junior Subordinated Debentures. Upon the
termination of any Deferral Period, and subject to the foregoing limitations,
the Company may elect to begin a new Deferral Period. No interest shall be due
and payable during a Deferral Period, except at the end thereof. The Company
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Deferral Period at least ten days prior to
the record date for the Distributions on the Convertible Preferred Securities
that would have been payable except for the election to begin or extend such
Deferral Period. The Debenture Trustee shall give notice of the Company's
election to begin or extend a new Deferral Period to the holders of the
Convertible Preferred Securities. There is no limitation on the number of times
that the Company may elect to begin a Deferral Period.
 
REDEMPTION
 
  Repayment at Maturity; Redemption of Convertible Junior Subordinated
Debentures
 
     The Convertible Junior Subordinated Debentures must be repaid at Stated
Maturity, unless earlier redeemed. The circumstances in which the Company may
redeem the Convertible Junior Subordinated Debentures prior to Stated Maturity
are described below. Upon the repayment in full at maturity or redemption, in
whole or in part, of the Convertible Junior Subordinated Debentures (other than
following the distribution of the Convertible Junior Subordinated Debentures to
the holders of the Trust Securities), the proceeds from such repayment or
redemption shall concurrently be applied to redeem, at the applicable Redemption
Price, a Like Amount of Trust Securities, upon the terms and conditions
described herein. See "Description of Convertible Preferred
Securities -- Mandatory Redemption."
 
                                       31
   36
 
  Optional Redemption
 
     The Company has the right to redeem (an "Optional Redemption") the
Convertible Junior Subordinated Debentures, in whole or in part, at any time or
from time to time after April 10, 2001, upon not less than 30 nor more than 60
days' notice, at a redemption price (the "Optional Redemption Price") equal to
$51.56 per $50 principal amount of the Convertible Junior Subordinated
Debentures to be redeemed plus any accrued and unpaid interest, including
Additional Sums, if any, to the date of redemption, if redeemed on or before
April 1, 2002, and at the following redemption prices per $50 principal amount
of Convertible Junior Subordinated Debentures, if redeemed during the 12-month
period ending April 1:

                                                         PRICE PER
                       YEAR                         $50 PRINCIPAL AMOUNT
                       ----                         --------------------
                                                 
2003..............................................         $51.04
2004..............................................         $50.52

and thereafter at $50 per $50 principal amount of Convertible Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Sums, if any, to the redemption date.
 
     In the event of any redemption in part, the Company shall not be required
(i) to issue, register the transfer of or exchange any Convertible Junior
Subordinated Debenture during a period beginning at the opening of business 15
days before any selection for redemption of Convertible Junior Subordinated
Debentures and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all holders of
Convertible Junior Subordinated Debentures to be so redeemed and (ii) to
register the transfer of or exchange any Convertible Junior Subordinated
Debentures so selected for redemption, in whole or in part, except the
unredeemed portion of any Convertible Junior Subordinated Debenture being
redeemed in part.
 
  Tax Event Redemption
 
     The Company may also, under certain limited circumstances within 90 days of
the occurrence and continuation of a Tax Event, redeem (a "Tax Event
Redemption") the Convertible Junior Subordinated Debentures in whole, but not in
part, at the aggregate principal amount thereof plus accrued and unpaid interest
thereon to the date of redemption (the "Tax Event Redemption Price"). See
"Description of Convertible Preferred Securities -- Tax Event or Investment
Company Event Redemption or Distribution."
 
     If the Company is permitted to consummate a Tax Event Redemption and it
desires to do so, it must mail notice to holders of Convertible Preferred
Securities at least 20 days but not more than 60 days before the Redemption
Date.
 
ADDITIONAL SUMS
 
     If (i) the Property Trustee is the sole holder of all Convertible Junior
Subordinated Debentures and (ii) the Trust is required to pay any additional
taxes, duties, assessments or other governmental charges as a result of a Tax
Event or otherwise ("Additional Sums"), the Company will pay as additional
amounts on the Convertible Junior Subordinated Debentures such amounts as shall
be required so that the Distributions payable by the Trust in respect of the
Trust Securities shall not be reduced as a result of any such Additional Sums.
 
RESTRICTIONS ON CERTAIN PAYMENTS
 
     If (i) there shall have occurred a Debenture Event of Default, (ii) the
Company shall be in default with respect to its payment of any obligations under
the Guarantee or (iii) the Company shall have given notice of its election of a
Deferral Period as provided in the Indenture and shall not have rescinded such
notice, or such Deferral Period shall be continuing, the Company will not (a)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock (which includes common and preferred stock) other than stock dividends
paid by the Company which consist of stock of the same class as that on which
the dividend is being paid, (b) make any payment of
 
                                       32
   37
 
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Convertible Junior Subordinated Debentures or (c) make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Convertible Junior Subordinated Debentures (in each case
other than (A) dividends or distributions in Company Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of Company
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior in interest to the Convertible Junior Subordinated Debentures), (E) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (F) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged).
 
MODIFICATION OF INDENTURE
 
     From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Convertible Junior Subordinated Debentures, amend,
waive or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Convertible Junior Subordinated Debentures or the holders of the Convertible
Preferred Securities so long as they remain outstanding) and maintaining the
qualification of the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Company and the Debenture Trustee, with the
consent of the holders of not less than a majority in principal amount of
Convertible Junior Subordinated Debentures, to modify the Indenture in a manner
affecting the rights of the holders of Convertible Junior Subordinated
Debentures; provided, however, that no such modification may, without the
consent of the holder of each outstanding Convertible Junior Subordinated
Debenture so affected, change the Stated Maturity, or reduce the principal
amount of the Convertible Junior Subordinated Debentures, or reduce the rate or
extend the time of payment of interest thereon or reduce the percentage of
principal amount of Convertible Junior Subordinated Debentures the consent of
whose holders is required to amend, waive or supplement the Indenture, or have
certain other effects as set forth in the Indenture.
 
DEBENTURE EVENTS OF DEFAULT
 
     The Indenture provides that any one or more of the following described
events with respect to the Convertible Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default":
 
          (i) failure for 30 days to pay any interest on the Convertible Junior
     Subordinated Debentures when due (subject to the deferral of any due date
     in the case of a Deferral Period); or
 
          (ii) failure to pay any principal or premium, if any, on the
     Convertible Junior Subordinated Debentures when due, whether at maturity,
     upon redemption, by declaration of acceleration or otherwise; or
 
          (iii) failure to observe or perform certain other covenants contained
     in the Indenture for 90 days after written notice to the Company from the
     Debenture Trustee or the holders of at least 25% in aggregate outstanding
     principal amount of the Convertible Junior Subordinated Debentures; or
 
          (iv) failure by the Company to issue and deliver shares of Company
     Common Stock upon an election by a holder of Convertible Preferred
     Securities to convert such Convertible Preferred Securities; or
 
          (v) certain events in bankruptcy, insolvency or reorganization of the
     Company; or
 
                                       33
   38
 
          (vi) the voluntary or involuntary dissolution, winding-up or
     termination of the Trust, except in connection with the distribution of the
     Convertible Junior Subordinated Debentures to the holders of Trust
     Securities in liquidation of the Trust, the redemption of all of the Trust
     Securities of the Trust, or certain mergers, consolidations or
     amalgamations, each as permitted by the Declaration.
 
     The holders of a majority in aggregate outstanding principal amount of the
Convertible Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Convertible Junior Subordinated
Debentures may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture Trustee or such holders of
Convertible Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate liquidation amount of the Convertible
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of the Convertible Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of the Convertible Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee. Should the holders of Convertible Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate liquidation amount of the Convertible Preferred
Securities shall have such right.
 
     The holders of a majority in aggregate outstanding principal amount of the
Convertible Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Convertible Junior Subordinated Debentures, waive any
past default, except a default in the payment of principal of (or premium, if
any) or interest (unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Convertible
Junior Subordinated Debenture. Should the holders of such Convertible Junior
Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities shall have such right. The Company is required to file
annually with the Debenture Trustee a certificate as to whether or not the
Company is in compliance with all the conditions and covenants applicable to it
under the Indenture.
 
     In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Convertible Junior Subordinated Debentures, and any other
amounts payable under the Indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Convertible Junior
Subordinated Debentures.
 
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CONVERTIBLE PREFERRED SECURITIES
 
     If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Convertible Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, a holder of Convertible Preferred Securities may
institute a Direct Action. The Company may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Convertible Preferred Securities. If the right to
bring a Direct Action is removed following the effectiveness of the Shelf
Registration Statement in respect of the Convertible Junior Subordinated
Debentures, the Trust may become subject to the reporting obligations under the
Exchange Act. Notwithstanding any payments made to a holder of Convertible
Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Convertible Junior Subordinated Debentures, and the Company shall be subrogated
to the rights of the holders of such Convertible Preferred Securities with
respect to payments on the Convertible Preferred Securities to the extent of any
payments made by the Company to such holder in any Direct Action.
 
                                       34
   39
 
     The holders of the Convertible Preferred Securities will not be able to
exercise directly any remedies, other than those set forth in the preceding
paragraph, available to the holders of the Convertible Junior Subordinated
Debentures unless there shall have been an Event of Default under the
Declaration. See "Description of Convertible Preferred Securities -- Events of
Default; Notice."
 
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
 
     The Indenture provides that the Company shall not consolidate with or merge
with or into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and no person shall
consolidate with or merge with or into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless
(i) in case the Company consolidates with or merges with or into another person
or conveys or transfers its properties and assets substantially as an entirety
to any person, the successor person is organized under the laws of the United
States or any State of the United States or the District of Columbia, and such
successor person expressly assumes the Company's obligations on the Convertible
Junior Subordinated Debentures issued under the Indenture and shall have
provided for conversion rights in accordance with Article XIII of the Indenture;
(ii) immediately after giving effect thereto, no Debenture Event of Default, and
no event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; (iii) if at the time
any Convertible Preferred Securities are outstanding, such transaction is
permitted under the Declaration and the Guarantee and does not give rise to any
breach or violation of the Declaration or the Guarantee; and (iv) certain other
conditions as prescribed in the Indenture are met.
 
     The general provisions of the Indenture do not afford holders of the
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Convertible Junior Subordinated Debentures.
 
SUBORDINATION
 
     In the Indenture, the Company has covenanted and agreed that any
Convertible Junior Subordinated Debentures issued thereunder shall be
subordinate and junior in right of payment to all Senior Debt to the extent
provided in the Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Company, the holders of Senior Debt
will first be entitled to receive payment in full of principal of, and premium
and interest, if any, on, such Senior Debt before the holders of Convertible
Junior Subordinated Debentures, or the Property Trustee on behalf of the
holders, will be entitled to receive or retain any payment or distribution in
respect thereof.
 
     In the event of the acceleration of the maturity of the Convertible Junior
Subordinated Debentures, the holders of all Senior Debt outstanding at the time
of such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of the Convertible Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect of the principal of, and premium and
interest, if any, on, the Convertible Junior Subordinated Debentures.
 
     In the event that the Company shall default in the payment of any principal
of, or premium or interest, if any, on, any Senior Debt when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, and such default continues beyond the
period of grace, if any, specified in the instrument evidencing such Senior
Debt, then, unless and until such default shall have been cured or waived or
shall have ceased to exist or all Senior Debt shall have been paid, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall
be made or agreed to be made for principal of, and premium and interest, if any,
on, the Convertible Junior Subordinated Debentures, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Convertible Junior Subordinated Debentures.
 
     "Senior Debt" means (i) the principal of, and premium and interest, if any,
on, all indebtedness of the Company for money borrowed, whether outstanding on
the date of execution of the Indenture or thereafter
                                       35
   40
 
created, assumed or incurred, (ii) all obligations to make payment pursuant to
the terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Convertible Junior Subordinated Debentures, (iii) indebtedness or
obligations of others of the kind described in both (i) and (ii) above for the
payment of which the Company is responsible or liable as guarantor or otherwise
and (iv) any deferrals, renewals or extensions of any such Senior Debt;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, was without
recourse to the Company, (b) trade accounts payable and accrued liabilities
arising in the ordinary course of business, (c) any Debt of the Company to any
of its subsidiaries, (d) Debt to any employee of the Company and (e) Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the holders of the Convertible Junior Subordinated
Debentures as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.
 
     "Debt" means (i) the principal of, and premium and interest, if any, on,
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
 
     The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt. At February 28, 1998, the
aggregate outstanding Senior Debt of the Company was approximately $7.0 billion.
The Indenture also places no limitation on the Debt of the Company's
subsidiaries, which is effectively senior in right of payment to the Convertible
Junior Subordinated Debentures. As of February 28, 1998, the Company's
subsidiaries had Debt and other liabilities of approximately $7.7 billion.
 
REGISTRATION AND TRANSFER
 
     Unless and until distributed to holders of the Trust Securities, the
Convertible Junior Subordinated Debentures will be registered in the name of and
held by the Property Trustee. Should the Convertible Junior Subordinated
Debentures be distributed to holders of the Trust Securities, (i) beneficial
interests in the Convertible Junior Subordinated Debentures issued to holders of
beneficial interests in Global Convertible Preferred Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
participants in DTC and (ii) Convertible Junior Subordinated Debentures issued
to holders of Restricted Certificated Convertible Preferred Securities will be
in fully registered, certificated form.
 
     A global security shall be exchangeable for Convertible Junior Subordinated
Debentures in certificated form registered in the names of persons other than
Cede & Co. only if (i) DTC notifies the Company that it is unwilling or unable
to continue as a depositary for such global security and no successor depositary
shall have been appointed, or if at any time DTC ceases to be a "clearing
agency" registered under the Exchange Act, at a time when DTC is required to be
so registered to act as such depositary, (ii) the Company in its sole discretion
determines that such global security shall be so exchangeable, or (iii) there
shall have occurred and be continuing a Debenture Event of Default. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for certificates registered in such names as DTC shall direct. It
is
                                       36
   41
 
expected that such instructions will be based upon directions received by DTC
from its participants with respect to ownership of beneficial interests in such
global security.
 
     Payments on Convertible Junior Subordinated Debentures held in global form
will be made to DTC, as the depositary for the Convertible Junior Subordinated
Debentures. In the case of Convertible Junior Subordinated Debentures issued in
certificated form, principal and interest will be payable, the transfer of the
Convertible Junior Subordinated Debentures will be registrable, and Convertible
Junior Subordinated Debentures will be exchangeable for Convertible Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate office of the Debenture Trustee in New York, New York,
or at the offices of any paying agent or transfer agent appointed by the
Company, provided that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto or by
wire transfer.
 
     For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Convertible Preferred Securities -- Form,
Book-Entry Procedures and Transfer." If the Convertible Junior Subordinated
Debentures are distributed to the holders of the Trust Securities upon the
termination of the Trust, the form, book-entry and transfer procedures with
respect to the Convertible Preferred Securities as described under "Description
of Convertible Preferred Securities -- Form, Book-Entry Procedures and
Transfer," shall apply to the Convertible Junior Subordinated Debentures mutatis
mutandis.
 
PAYMENT AND PAYING AGENTS
 
     Payment of the principal of, and premium and interest, if any, on, the
Convertible Junior Subordinated Debentures will be made at the office or agency
of the Company maintained for that purpose in New York, New York, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the
option of the Company, payment of interest may be made (except in the case of
Convertible Junior Subordinated Debentures that are held in global form) by
check mailed to each registered holder or by wire transfer. Payment of any
interest on any Convertible Junior Subordinated Debenture will be made to the
person in whose name such Convertible Junior Subordinated Debenture is
registered at the close of business on the record date for such interest, except
in the case of defaulted interest.
 
GOVERNING LAW
 
     The Indenture and the Convertible Junior Subordinated Debentures are
governed by and will be construed in accordance with the laws of the State of
New York.
 
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
 
     The Debenture Trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Convertible Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
 
                            DESCRIPTION OF GUARANTEE
 
     The Guarantee was executed and delivered by the Company concurrently with
the issuance by the Trust of the Convertible Preferred Securities for the
benefit of the holders from time to time of such Convertible Preferred
Securities. The Bank of New York acts as trustee (the "Guarantee Trustee") under
the Guarantee Agreement. The Guarantee Agreement will be qualified under the
Trust Indenture Act. This summary of certain provisions of the Guarantee does
not purport to be complete and is subject to, and qualified in its
 
                                       37
   42
 
entirety by reference to, all of the provisions of the Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act. The Guarantee
Trustee holds the Guarantee for the benefit of the holders of the Convertible
Preferred Securities.
 
GENERAL
 
     Pursuant to the Guarantee, the Company irrevocably agrees to pay in full on
a subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined herein) to the holders of the Convertible Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that the
Trust may have or assert other than the defense of payment. The following
payments with respect to the Convertible Preferred Securities, to the extent not
paid by or on behalf of the Trust (the "Guarantee Payments"), are subject to the
Guarantee: (i) any accrued and unpaid Distributions required to be paid on the
Convertible Preferred Securities, to the extent that the Trust has funds on hand
available therefor at such time, (ii) the applicable Redemption Price with
respect to Convertible Preferred Securities called for redemption, to the extent
that the Trust has funds on hand available therefor at such time, and (iii) upon
a voluntary or involuntary dissolution, winding up or liquidation of the Trust
(other than in connection with the distribution of Convertible Junior
Subordinated Debentures to the holders of the Convertible Preferred Securities
or the redemption of all of the Convertible Preferred Securities) the lesser of
(a) the Liquidation Distribution, to the extent the Trust has funds available
therefor and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Convertible Preferred Securities upon liquidation
of the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the
holders of the Convertible Preferred Securities or by causing the Trust to pay
such amounts to such holders.
 
     The Guarantee is an irrevocable guarantee on a subordinated basis of the
Trust's obligations under the Convertible Preferred Securities, although it
applies only to the extent that the Trust has funds sufficient to make such
payments, and is not a guarantee of collection. If the Company does not make
interest payments on the Convertible Junior Subordinated Debentures held by the
Trust, the Trust will not be able to pay Distributions on the Convertible
Preferred Securities and will not have funds legally available therefor.
 
     The Guarantee ranks subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Company is
principally a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of the holders of Convertible
Preferred Securities to benefit indirectly from any such distribution), is
subject to the prior claims of creditors of such subsidiary, except to the
extent the Company may itself be recognized as a creditor of that subsidiary.
Accordingly, the Company's obligations under the Guarantee are effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, including Senior Debt, whether
under any indenture that the Company may enter into in the future or otherwise.
 
     Taken together, the Company's obligations under the Guarantee, the
Declaration, the Convertible Junior Subordinated Debentures and the Indenture,
including the Company's obligation to pay the costs, expenses and other
liabilities of the Trust (other than the Trust's obligations to the holders of
the Trust Securities under the Trust Securities), provide, in the aggregate, a
full, irrevocable and unconditional guarantee of all of the Trust's obligations
under the Convertible Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Convertible Preferred Securities. See
"Relationship Among the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures and the Guarantee."
 
STATUS OF THE GUARANTEE
 
     The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all Senior Debt in the same manner
as Convertible Junior Subordinated Debentures.
 
                                       38
   43
 
     The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee is held
for the benefit of the holders of the Convertible Preferred Securities. The
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Trust or upon distribution to the holders of
the Convertible Preferred Securities of the Convertible Junior Subordinated
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Debt that may be incurred by the Company. The Company expects
from time to time to incur additional indebtedness constituting Senior Debt.
 
AMENDMENTS AND ASSIGNMENT
 
     Except with respect to any changes that do not materially adversely affect
the rights of holders of the Convertible Preferred Securities (in which case no
vote will be required), the Guarantee may not be amended without the prior
approval of the holders of not less than a majority of the aggregate liquidation
amount of the outstanding Convertible Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of
Convertible Preferred Securities -- Voting Rights; Amendment of the
Declaration." All guarantees and agreements contained in the Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Convertible
Preferred Securities then outstanding.
 
EVENTS OF DEFAULT
 
     An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder; provided,
however, that except with respect to a default in payment of any Guarantee
Payment, the Company shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice. The holders of
not less than a majority in aggregate liquidation amount of the Convertible
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
 
     Any holder of the Convertible Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
 
     The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
 
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
 
     The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of the Convertible Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
 
TERMINATION OF THE GUARANTEE
 
     The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Convertible Preferred Securities,
upon full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Convertible Junior Subordinated Debentures to the holders of the
Convertible Preferred Securities. The Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of the
Convertible Preferred Securities must restore payment of any sums paid under the
Convertible Preferred Securities or the Guarantee.
                                       39
   44
 
GOVERNING LAW
 
     The Guarantee is governed by and will be construed in accordance with the
laws of the State of New York.
 
            RELATIONSHIP AMONG THE CONVERTIBLE PREFERRED SECURITIES,
        THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
 
FULL AND UNCONDITIONAL GUARANTEE
 
     Payments of Distributions and other amounts due on the Convertible
Preferred Securities (to the extent the Trust has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Guarantee." Taken together, the
Company's obligations under the Convertible Junior Subordinated Debentures, the
Indenture, the Declaration and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Convertible Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Trust's obligations under the Trust Securities. If and to the extent that
the Company does not make payments on the Convertible Junior Subordinated
Debentures, the Trust will not pay Distributions or other amounts due on the
Convertible Preferred Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to institute a Direct Action. The obligations of the Company under
the Guarantee are subordinate and junior in right of payment to all Senior Debt.
 
SUFFICIENCY OF PAYMENTS
 
     As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Convertible Preferred
Securities, primarily because (i) the aggregate principal amount or applicable
Redemption Price of the Convertible Junior Subordinated Debentures will be equal
to the sum of the aggregate liquidation amount or applicable Redemption Price,
as applicable, of the Trust Securities; (ii) the interest rate payable on the
Convertible Junior Subordinated Debentures and interest and other payment dates
on the Convertible Junior Subordinated Debentures will match the Distribution
rate and Distribution and other payment dates for the Convertible Preferred
Securities; (iii) the Company shall pay for all costs, expenses and liabilities
of the Trust except the Trust's obligations to holders of Trust Securities under
such Trust Securities; and (iv) the Declaration further provides that the Trust
will not engage in any activity that is not consistent with the limited purposes
thereof.
 
     Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, any payment under the Guarantee used to satisfy
the related payment of indebtedness under the Indenture.
 
ENFORCEMENT RIGHTS OF HOLDERS OF CONVERTIBLE PREFERRED SECURITIES
 
     A holder of any of the Convertible Preferred Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
 
     A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Convertible Junior Subordinated Debentures until such Senior Debt has been
paid in full or any payment default
 
                                       40
   45
 
thereunder has been cured or waived. Failure to make required payments on
Convertible Junior Subordinated Debentures would constitute an Event of Default
under the Declaration.
 
LIMITED PURPOSE OF THE TRUST
 
     The Convertible Preferred Securities evidence a beneficial interest in the
Trust, and the Trust exists for the sole purpose of issuing the Convertible
Preferred Securities and Common Securities and investing the proceeds of the
Trust Securities in Convertible Junior Subordinated Debentures.
 
RIGHTS UPON TERMINATION
 
     Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the Convertible Junior Subordinated
Debentures, after satisfaction of the liabilities of creditors of the Trust as
required by applicable law, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of Convertible Preferred Securities -- Liquidation of the
Trust and Distribution of Convertible Junior Subordinated Debentures." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Convertible Junior Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior Debt as set forth in the Indenture, but entitled to receive payment in
full of principal and interest, before any stockholders of the Company receive
payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Convertible Preferred Securities and a
holder of Convertible Junior Subordinated Debentures relative to other creditors
and to stockholders of the Company in the event of liquidation or bankruptcy of
the Company are expected to be substantially the same.
 
                      DESCRIPTION OF COMPANY COMMON STOCK
 
     The Company is presently authorized to issue 500,000,000 shares of Common
Stock, par value $2.50 per share ("Company Common Stock"), and 20,000,000 shares
of preferred stock, without par value. At February 28, 1998 an aggregate of
247,292,769 shares of Company Common Stock were outstanding. No shares of
preferred stock are currently outstanding, and no shares are reserved for
issuance.
 
DIVIDEND RIGHTS AND PRIORITY
 
     Subject to the rights of holders of any preferred stock which may be issued
in the future, the holders of Company Common Stock are entitled to receive, to
the extent permitted by law, dividends thereon if and when declared by the Board
of Directors. The Company may not pay dividends on Company Common Stock (other
than dividends payable in Company Common Stock) unless all dividends accrued on
outstanding preferred stock have been paid or declared and set apart for
payment.
 
VOTING RIGHTS
 
     Holders of Company Common Stock are entitled to one vote for each share
held. Holders do not have cumulative voting rights.
 
CERTAIN TRANSACTIONS
 
     The Company's Revised Articles of Incorporation provide that certain
transactions between the Company and a beneficial owner of more than 10% of the
Company's voting stock, or an affiliate of such a beneficial holder, must either
(1) be approved by a majority of the Company's voting stock other than that held
by such beneficial owner, (2) satisfy certain minimum price and procedural
criteria, or (3) be approved by a majority of the Company's directors who are
not related to such beneficial owner. The transactions covered by these
provisions include mergers, consolidations, sales or disposition of assets,
adoption of a plan or liquidation or dissolution, or other transactions
increasing the proportionate share of such 10% beneficial owner.
 
                                       41
   46
 
LIQUIDATION RIGHTS
 
     Any preferred stock would be senior to the Company Common Stock as to
distributions upon liquidation, dissolution or winding up. After distribution in
full of the preferential amounts to be distributed to holders of preferred
stock, holders of Company Common Stock will be entitled to receive all remaining
assets of the Company available for distribution to stockholders in the event of
voluntary or involuntary liquidation.
 
PREFERRED STOCK
 
     The Board of Directors of the Company is authorized to issue preferred
stock in one or more series, from time to time, with such designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions thereof, as may be provided in
resolutions adopted by the Board of Directors. Each share of preferred stock is
entitled to one vote, and except as described below, holders of preferred stock
vote together with holders of Company Common Stock as one class. In the event
that dividends on the preferred stock are in arrears in an amount equal to six
quarterly dividends, the holders of the preferred stock, voting separately as a
class are entitled to elect two directors of the Company. Holders of preferred
stock are entitled to vote separately as a class on certain transactions
affecting the rights and preferences of the preferred stock.
 
OTHER MATTERS
 
     The Company Common Stock is not redeemable, has no preemptive or conversion
rights and is not liable for further assessments or calls. All shares of Company
Common Stock issuable upon conversion of the Convertible Preferred Securities
will be fully paid and nonassessable.
 
     Harris Trust and Savings Bank is the Transfer Agent and Registrar for the
Company Common Stock.
 
                 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
 
GENERAL
 
     In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel to the Company and the Issuer ("Special Tax Counsel"), the following is
a summary of certain material United States Federal income tax consequences of
the purchase, ownership, conversion and disposition of Convertible Preferred
Securities. Unless otherwise stated, this summary assumes that the Convertible
Preferred Securities are held as capital assets by holders who purchase the
Convertible Preferred Securities upon original issuance. It does not describe
the special tax considerations applicable to special classes of holders such as
banks, thrifts, real estate investment trusts, regulated investment companies,
insurance companies, dealers in securities or currencies, tax-exempt investors,
or persons who will hold the Convertible Preferred Securities as a position in a
"straddle", as part of a "synthetic security" or "hedge", as part of a
"conversion transaction" or other integrated investment or as other than a
capital asset. This summary also does not address the tax consequences to
persons who have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of
Convertible Preferred Securities. Further, it does not include any description
of any alternative minimum tax consequences or the tax laws of any state or
local government or of any foreign government that may be applicable to the
Convertible Preferred Securities. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations thereunder (the
"Treasury Regulations") and administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis.
 
CLASSIFICATION OF THE TRUST AS A GRANTOR TRUST
 
     In connection with the Original Offering of the Convertible Preferred
Securities, Special Tax Counsel rendered its opinion, under then current law and
assuming full compliance with the terms of the Declaration and the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, that the Trust will be classified for United States
Federal income tax purposes as a grantor trust and not as a partnership, an
association taxable as a corporation, or a publicly traded partnership taxable
as a
 
                                       42
   47
 
corporation. Accordingly, for United States Federal income tax purposes, each
holder of Convertible Preferred Securities generally will be considered the
owner of an undivided interest in the Convertible Junior Subordinated
Debentures, and each holder will be required to include in its gross income all
income, gain or loss with respect to its allocable share of those Convertible
Junior Subordinated Debentures.
 
CLASSIFICATION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AS INDEBTEDNESS
 
     In connection with the Original Offering of the Convertible Junior
Subordinated Debentures, Special Tax Counsel rendered its opinion, generally to
the effect that under then current law and assuming full compliance with the
terms of the Indenture (and certain other documents), and based on certain facts
and assumptions contained in such opinion, that the Convertible Junior
Subordinated Debentures to be held by the Trust will be classified for United
States Federal income tax purposes as indebtedness of the Company. By acceptance
of Convertible Preferred Securities, each holder covenants to treat the
Convertible Junior Subordinated Debentures as indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership interest in
the Convertible Junior Subordinated Debentures. No assurance can be given,
however, that such position will not be challenged by the Internal Revenue
Service ("IRS") or, if challenged, that such a challenge will not be successful.
The remainder of this discussion assumes, unless specifically indicated
otherwise, that the Convertible Junior Subordinated Debentures will be
classified as indebtedness of the Company for United States Federal income tax
purposes.
 
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
 
     Unless the OID rules apply to the Convertible Junior Subordinated
Debentures, as discussed below, stated interest on the Convertible Preferred
Securities will generally be taxable to a holder as ordinary income when paid or
accrued in accordance with that holder's method of accounting for United States
Federal income tax purposes. While the existence of an issuer's option to defer
the payment of interest on debt instruments generally results in the application
of the OID rules, debt instruments like the Convertible Junior Subordinated
Debentures are not considered issued with OID if there is only a "remote"
likelihood of the Company exercising its option of deferral.
 
     The Company believes, and this discussion assumes, that, as of the date of
this Prospectus, the likelihood of deferring payments of interest under the
terms of the Convertible Junior Subordinated Debentures is "remote" within the
meaning of the applicable Treasury Regulations. This belief is based in part on
the fact that exercising that option would prevent the Company from declaring
dividends on its stock and would prevent the Company from making any payments
with respect to debt securities that rank pari passu with or junior to the
Convertible Junior Subordinated Debentures. Therefore, although the matter is
not free from doubt, the Company believes that the Convertible Junior
Subordinated Debentures should not be treated as subject to the OID rules at the
time of their original issuance by reason of the Company's deferral option.
 
     No rulings or other interpretations have been issued by the IRS which have
addressed the meaning of the term "remote" as used in the applicable Treasury
regulations, and it is possible that the IRS could take a position contrary to
the interpretations herein.
 
     If the likelihood of the Company exercising the option to defer any payment
of interest were determined not to be "remote" or if the Company were to
exercise its option to defer payments of interest, the Convertible Junior
Subordinated Debentures would be treated as subject to the OID rules at the time
of their original issuance or at the time of such exercise, as the case may be,
for the entire remaining term of the Convertible Junior Subordinated Debentures.
Under these rules, OID would accrue on an economic accrual basis and would be
includible in income on the accrual method, including during any interest
deferral period, regardless of the holder's method of accounting for United
States Federal income tax purposes. Consequently, holders of the Convertible
Preferred Securities would be required to include OID in gross income even
though the Company would not make any actual distributions during the extension
period. Actual distributions of interest on the Convertible Junior Subordinated
Debentures generally would not be separately taxable. A holder that disposes of
its Convertible Preferred Securities prior to the record date for payment of
distributions on the Convertible Junior Subordinated Debentures will be subject
to tax on OID accrued through the date of
 
                                       43
   48
 
disposition (and not previously included in income), but will not receive cash
from the Trust with respect to such OID.
 
     Because the income underlying the Convertible Preferred Securities would
not be characterized as dividends for United States Federal income tax purposes,
corporate holders of the Convertible Preferred Securities will not be entitled
to a dividends-received deduction for any income recognized with respect to the
Convertible Preferred Securities.
 
RECEIPT OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION
OF THE TRUST
 
     Under certain circumstances, as described under the caption "Description of
Convertible Preferred Securities -- Tax Event or Investment Company Event
Redemption or Distribution," Convertible Junior Subordinated Debentures may be
distributed to holders in exchange for the Convertible Preferred Securities and
in liquidation of the Trust. Under current law, such a distribution to holders,
for United States Federal income tax purposes, would be a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the
Convertible Junior Subordinated Debentures equal to such holder's aggregate tax
basis in its Convertible Preferred Securities. A holder's holding period in the
Convertible Junior Subordinated Debentures so received in liquidation of the
Trust would include the period during which the Convertible Preferred Securities
were held by such holder.
 
     Under certain circumstances described herein (see "Description of
Convertible Preferred Securities"), the Convertible Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Convertible Preferred Securities.
Under current law, such a redemption would, for United States Federal income tax
purposes, constitute a taxable disposition of the redeemed Convertible Preferred
Securities, and a holder would recognize gain or loss as if it sold such
redeemed Convertible Preferred Securities for cash. See "-- Sale of Convertible
Preferred Securities."
 
SALE OF CONVERTIBLE PREFERRED SECURITIES
 
     A holder who sells Convertible Preferred Securities will be considered to
have disposed of all or part of its pro rata share of the Convertible Junior
Subordinated Debentures and will recognize gain or loss equal to the difference
between the amount realized on the sale of the Convertible Preferred Securities
and the holder's adjusted tax basis in such Convertible Preferred Securities. A
holder's adjusted tax basis in the Convertible Preferred Securities generally
will be its initial purchase price decreased by principal payments received on
the Convertible Preferred Securities. If the OID rules apply to the Convertible
Junior Subordinated Debentures, a holder's adjusted tax basis is increased by
OID previously includible in income and decreased by distributions or other
payments received on the Convertible Junior Subordinated Debentures since and
including the day that the Convertible Junior Subordinated Debentures became
subject to the OID rules. Any such gain or loss generally will be a capital gain
or loss (except to the extent of any accrued interest with respect to such
holder's pro rata share of the Convertible Junior Subordinated Debentures
required to be included in income as ordinary income). In the case of a
noncorporate holder, the maximum marginal United States Federal income tax rate
applicable to such gain will be lower than the maximum marginal United States
Federal income tax rate applicable to ordinary income if such holder's holding
period for such Convertible Preferred Securities exceeds one year and will be
further reduced if such Convertible Preferred Securities are held for more than
18 months.
 
     If the Convertible Junior Subordinated Debentures are subject to the OID
rules, a holder who disposes of its Convertible Preferred Securities between
record dates for payments of distributions thereon will be required to include
OID on the Convertible Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to its adjusted
tax basis. To the extent the amount recognized on the sale is less than the
holder's adjusted tax basis (which basis will include all accrued but unpaid
OID), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States Federal income tax purposes.
 
                                       44
   49
 
CONVERSION OF CONVERTIBLE PREFERRED SECURITIES INTO COMPANY COMMON STOCK
 
     A holder of Convertible Preferred Securities will not recognize income,
gain or loss upon the conversion, through the Property Trustee, as Conversion
Agent, of Convertible Junior Subordinated Debentures into Company Common Stock
(although the holder will be required to continue to accrue any OID through the
date of conversion). The holder will recognize gain upon the receipt of cash in
lieu of a fractional share of Company Common Stock. Such gain will be equal to
the amount of cash received less the holder's tax basis in such fractional
share.
 
     A holder's tax basis in the Company Common Stock received upon conversion
will generally be equal to the holder's tax basis in the Convertible Preferred
Securities delivered to the Property Trustee, as Conversion Agent, for exchange
less the basis allocated to any fractional share for which cash is received, and
a holder's holding period in the Company Common Stock received upon conversion
will generally begin on the date following the date on which the holder acquired
the Convertible Preferred Securities delivered to the Property Trustee, as
Conversion Agent, for exchange.
 
ADJUSTMENT OF CONVERSION PRICE
 
     Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Convertible Preferred Securities as having received a constructive
distribution from the Company if the Applicable Conversion Ratio of the
Convertible Junior Subordinated Debentures were adjusted and both (i) as a
result of such adjustment, the proportionate interest (measured by the amount of
Company Common Stock into which the Convertible Junior Subordinated Debentures
are convertible) of the holders of the Convertible Preferred Securities in the
assets or earnings and profits of Company were increased, and (ii) the
adjustment was not made pursuant to a bona fide, reasonable antidilution
formula. An adjustment in the conversion ratio would not be considered made
pursuant to such a formula if the adjustment was made to compensate for certain
taxable distributions with respect to the Company Common Stock. Thus, under
certain circumstances, a reduction in the conversion price for the holders may
result in deemed dividend income to holders to the extent of the current or
accumulated earnings and profits of the Company. Holders of the Convertible
Preferred Securities would be required to include their allocable share of such
deemed dividend income in gross income but would not receive any cash related
thereto.
 
UNITED STATES ALIEN HOLDERS
 
     For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a "United
States person" as defined in section 7701(a)(30) of the Code (generally, as to
the United States, a foreign corporation, a non-resident alien individual, a
foreign partnership, or a foreign estate or trust).
 
Interest
 
     Under current United States Federal income tax law, distributions on the
Convertible Preferred Securities to a United States Alien Holder will not be
subject to withholding of United States Federal income tax if (a) the beneficial
owner of the Convertible Preferred Securities does not actually or
constructively (including by virtue of its interest in the underlying
Convertible Junior Subordinated Debentures) own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(b) the beneficial owner of Convertible Preferred Securities is not a controlled
foreign corporation that is related to the Company through stock ownership, and
(c) either (A) the beneficial owner of Convertible Preferred Securities
certifies to the Trust or its agent, under penalties of perjury, that it is not
a United States person and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds Convertible Preferred Securities in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such
statement has been received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and furnishes the Trust or its
agent with a copy thereof. Recently finalized Treasury Regulations would modify
the certification requirements set forth in (A) and (B) with respect to payments
of interest made after December 31, 1998.
 
                                       45
   50
 
Dividends
 
     If it is determined that the Convertible Junior Subordinated Debentures are
not classified as an indebtedness of the Company for United States Federal
income tax purposes, or if the Convertible Preferred Securities are converted
into Company Common Stock, any dividend paid by the Company with respect to the
Convertible Preferred Securities, or the Company Common Stock into which they
were converted, as the case may be, will generally be subject to withholding of
United States Federal income tax at the rate of 30% (unless reduced by an
applicable income tax treaty), unless the dividend is effectively connected with
the conduct of a trade or business in the United States by the United States
Alien Holder, in which case the dividend will be subject to the United States
Federal income tax on net income that applies to United States persons generally
(and with respect to corporate shareholders and under certain circumstances, the
branch profit tax). If a United States Alien Holder is treated as receiving a
deemed dividend as a result of the adjustment of the conversion price of the
Convertible Preferred Securities as described above, such deemed dividend will
generally be subject to the same rules. Under current regulations, dividends
paid to an address in a foreign country are presumed to be paid to a resident of
that country for the purpose of determining the applicable income tax treaty
rate, but regulations issued pursuant to certain income tax treaties may require
certain certification and proof of residence to be furnished. Recently finalized
Treasury regulations contain certain certification requirements with respect to
payments of dividends made after December 31, 1998.
 
Conversion
 
     A United States Alien Holder will be subject to the same rules described
above under "-- Conversion of Convertible Preferred Securities Into Company
Common Stock" on the conversion of the Convertible Preferred Securities into
Company Common Stock.
 
Sale of Convertible Preferred Securities or Company Common Stock
 
     A United States Alien Holder will not be subject to tax on any gain (except
for gain attributable to accrued and unpaid interest, which would be treated as
interest subject to the rules described above) recognized upon the sale or other
disposition of the Convertible Preferred Securities (or the Company Common Stock
to which it was converted, or upon receipt of cash in lieu of fractional shares
upon conversion of the Convertible Preferred Securities into Company Common
Stock) unless (i) the United States Alien Holder is an individual who is present
in the United States for 183 days or more in the taxable year of disposition,
and certain other conditions apply, (ii) the gain is effectively connected with
the conduct by the United States Alien Holder of a trade or business in the
United States, or (iii) the Company is, or during the preceding five years has
been, a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code and either (a) if the Convertible Preferred
Securities are considered to be "regularly traded interests", the United States
Alien Holder beneficially owns (actually or constructively), or during the
preceding five years has beneficially owned (actually or constructively), more
than five percent of the Convertible Preferred Securities, or (b) if the
Convertible Preferred Securities are not considered to be regularly traded
interests, the United States Alien Holder beneficially owned (actually or
constructively), on the date it acquired any Convertible Preferred Securities,
Convertible Preferred Securities having a fair market value greater than the
fair market value of five percent of the Company Common Stock. A United States
Alien Holder will not be subject to tax on any gain recognized upon the sale or
other disposition of the Company Common Stock unless such United States Alien
Holder is described in sub-sections (i) or (ii) above, or if the Company is, or
during the preceding five years has been, a "United States real property holding
corporation" within the meaning of section 897(c)(2) of the Code and the United
States Alien Holder beneficially owns (actually or constructively), or during
the preceding five years has beneficially owned (actually or constructively),
more than five percent of the Company Common Stock.
 
     It is not clear whether the Company is, or has been during the preceding
five years a "United States real property holding corporation" and accordingly,
United States Alien Holders should consult their own tax advisors regarding the
investment in the Convertible Preferred Securities.
 
                                       46
   51
 
INFORMATION REPORTING AND BACKUP WITHHOLDING
 
     Annual tax information reporting requirements generally will apply to
interest paid or accrued, distributions made with respect to the Company Stock
and sale or redemption proceeds received on the Convertible Preferred Securities
or the Company Common Stock to which it converts, and such amounts may be
subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements. Any withheld amounts will be allowed as a
credit against the holder's United States Federal income tax, provided the
holder provides the required information to the Internal Revenue Service.
 
     On October 7, 1997, the United States Treasury Department issued final
Treasury regulations governing information reporting and the certification
procedures regarding withholding and backup withholding on certain amounts paid
to United States Alien Holders after December 31, 1998. Such regulations, among
other things, may change the certification procedures relating to the receipt by
intermediaries of payments on behalf of a beneficial owner of Convertible
Preferred Securities. However, compliance with the certification procedures
described in the preceding Section would generally continue the exemption (from
information reporting requirements and the backup withholding tax) for United
States Alien Holders who are exempt recipients.
 
     THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
THE CONVERTIBLE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
 
                          CERTAIN ERISA CONSIDERATIONS
 
     The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on employee benefit plans and certain
other retirement plans and arrangements, including individual retirement
accounts and annuities, that are subject to ERISA and the Code (all of which are
hereinafter referred to as "ERISA Plans") and on persons who are fiduciaries
with respect to such ERISA Plans. In accordance with ERISA's general fiduciary
standards, before investing in Convertible Preferred Securities, an ERISA Plan
fiduciary should determine whether such an investment is permitted under the
governing ERISA Plan instruments and is appropriate for the ERISA Plan in view
of its overall investment policy and the composition and diversification of its
portfolio. Other provisions of ERISA and the Code prohibit certain transactions
involving the assets of an ERISA Plan and persons who have certain specified
relationships to the ERISA Plan ("parties in interest" within the meaning of
ERISA or "disqualified persons" within the meaning of the Code). Accordingly,
any ERISA Plan with respect to which the Company or any of its affiliates would
be considered a party in interest or a disqualified person should not purchase
Convertible Preferred Securities.
 
     In addition, under United States Department of Labor Regulation Section
2510.3-101 (the "Regulation"), if immediately after any acquisition of
Convertible Preferred Securities, 25 percent or more of the value of the
Convertible Preferred Securities is held by ERISA Plans, employee benefit plans
not subject to ERISA (for example, governmental plans) and entities whose
underlying assets include plan assets by reason of a plan's investment in the
entity, then the assets of the Issuer (including the Convertible Junior
Subordinated Debentures) would be treated as assets of ERISA Plans holding
Convertible Preferred Securities, unless another exemption or exception applied.
In such event, the persons providing services with respect to the assets of the
Trust may be subject to the fiduciary responsibility provisions of Title I of
ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the
Code with respect to transactions involving such assets. In order to avoid
certain prohibited transactions that might otherwise arise in connection with
the Trust assets, each investing ERISA Plan, by its purchase of Convertible
Preferred Securities, will be deemed to have directed the Trustee to purchase
the Convertible Junior Subordinated Debentures and to have
                                       47
   52
 
approved all of the documents relating to the Trust assets. Moreover, the
holders of Convertible Preferred Securities will have the right to direct the
Property Trustee as to the exercise of remedies in connection with any Event of
Default.
 
     ANY ERISA PLAN PROPOSING TO PURCHASE CONVERTIBLE PREFERRED SECURITIES
SHOULD CONSULT WITH ITS COUNSEL REGARDING THE APPLICATION OF ERISA, THE CODE AND
THE REGULATION WITH RESPECT TO INVESTMENT IN CONVERTIBLE PREFERRED SECURITIES.
 
                              REGISTRATION RIGHTS
 
     In connection with the Original Offering, the Company and the Trust entered
into a registration agreement with the Initial Purchasers (the "Registration
Agreement") for the benefit of the holders of the Convertible Preferred
Securities wherein the Company and the Trust agreed, at the Company's sole
expense, to (i) file as soon as practicable, but in no event more than 30 days
after the Original Offering Date a shelf registration (the "Shelf Registration
Statement") covering resales of the Convertible Preferred Securities, the
Guarantee, the Convertible Junior Subordinated Debentures and the related
Company Common Stock issuable upon conversion thereof (the "Registerable
Securities"), (ii) use their best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act within 120 days
after the Original Offering Date and (iii) use their best efforts to keep
effective the Shelf Registration Statement for two years or such other period as
required under Rule 144(k) of the Securities Act or any successor rule thereto
or, if earlier, such time as all of the applicable Registerable Securities have
been sold thereunder. The Company will provide to each holder for whom such
Shelf Registration Statement was filed copies of this Prospectus, notify each
such holder when the Shelf Registration Statement for the Registerable
Securities has become effective and take certain other actions as are required
to permit unrestricted resales of the Registerable Securities. A holder that
sells Registerable Securities pursuant to the Shelf Registration Statement
generally will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the Registration
Agreement that are applicable to such a holder (including certain
indemnification rights and obligations).
 
     If (i) within 120 days of the Original Offering Date the Shelf Registration
Statement has not been declared effective by the Commission, or (ii) in the
event that a Shelf Registration Statement is declared effective by the
Commission, the Company or the Trust fails to keep such Shelf Registration
Statement continuously effective and usable (subject to certain exceptions) for
the period required by the Registration Agreement (each such event referred to
in clauses (i) and (ii) a "Registration Default"), then additional interest
("Special Interest") will accrue on the Convertible Junior Subordinated
Debentures (including in respect of amounts accruing during any Deferral
Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the Trust Securities, in each case from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured or has been deemed to have
been cured. Special Interest and Special Distributions will be paid in cash
quarterly in arrears on each Interest Payment Date commencing with the first
Interest Payment Date following the applicable Registration Default and will
accrue at a rate such that the interest rate or distribution rate, as the case
may, will be increased 0.50% per annum of the principal amount or liquidation
amount, as applicable. Following the cure of a Registration Default, Special
Interest and Special Distributions will cease to accrue with respect to such
Registration Default.
 
     Each Registerable Security contains a legend to the effect that the holder
thereof, by its acceptance thereof, will be deemed to have agreed to be bound by
the provisions of the Registration Agreement.
 
     The Registration Agreement is governed by, and will be construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Registration Agreement, a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
 
                                       48
   53
 
                                SELLING HOLDERS
 
     The Convertible Preferred Securities were originally issued by the Trust
and sold by Credit Suisse First Boston Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Smith Barney Inc. and Schroder & Co. Inc. (the
"Initial Purchasers") in a transaction exempt from the registration requirements
of the Securities Act, to persons reasonably believed by such Initial Purchasers
to be "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act), to a limited number of institutional "accredited investors" (as
defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act) and
outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act. The Selling Holders may from
time to time offer and sell pursuant to this Prospectus any or all of the
Convertible Preferred Securities, any Convertible Junior Subordinated Debentures
and Company Common Stock issued upon conversion of the Convertible Preferred
Securities.
 
     Prior to any use of this Prospectus in connection with an offering of the
Offered Securities, this Prospectus will be supplemented to set forth the names
of the Selling Holders intending to sell such Offered Securities and the number
of Offered Securities that may be offered pursuant to this Prospectus. The
Prospectus Supplement will also disclose whether any Selling Holder has held any
position or office, or otherwise has had a material relationship with, the
Company or any of its predecessors or affiliates, during the three years prior
to the date of the Prospectus Supplement.
 
                              PLAN OF DISTRIBUTION
 
     The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered Securities to or through underwriters, broker/dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Holders or the purchasers of such
Offered Securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit on the sale of such securities by them and any
discounts, commissions, concessions or other compensation received by any such
underwriter, broker/dealer or agent may be deemed to be underwriting discounts
and commissions under the Securities Act.
 
     The Offered Securities may be sold by the Selling Holders from time to
time, in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the Selling Holders. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) otherwise than on
such exchanges or in the over-the-counter market or (iv) through the writing of
options. At the time a particular offering of the Offered Securities is made, if
required, a Prospectus Supplement will be distributed which will set forth the
names of the Selling Holders, the aggregate amount and type of Offered
Securities being offered, and, to the extent required, the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker/dealers.
 
     To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
 
     Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Offered Securities may be limited in its
ability to engage in market activities with respect to such securities. In
addition and without limiting the foregoing, each Selling Holder will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, which provisions may limit the
 
                                       49
   54
 
timing of purchases and sales of any of the Offered Securities by the Selling
Holders. All of the foregoing may affect the marketability of the Offered
Securities.
 
     Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Offered Securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders will
pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally,
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
 
     Pursuant to the Registration Rights Agreement, the Company is required to
use its best efforts to keep the Registration Statement continuously effective
for a period of two years from its effective date or such shorter period that
will terminate upon the earlier of the date on which the Offered Securities
shall have been sold pursuant to the Registration Statement or the date on which
the Offered Securities are permitted to be freely sold or distributed to the
public pursuant to any exemption from the registration requirements of the
Securities Act (including in reliance on Rule 144(k) but excluding in reliance
on Rule 144A under the Securities Act). Notwithstanding the foregoing
obligations, the Company may, under certain circumstances, postpone or suspend
the filing or the effectiveness of the Registration Statement (or any amendments
or supplements thereto) or the sale of Offered Securities pursuant thereto.
 
                                 LEGAL MATTERS
 
     The validity of the Convertible Preferred Securities, the Convertible
Junior Subordinated Debentures and the Guarantee will be passed upon for the
Company and the Issuer by Skadden, Arps, Slate, Meagher & Flom LLP. The validity
of the Company Common Stock issuable upon conversion of the Convertible
Preferred Securities will be passed upon by Parsons Behle & Latimer, special
Utah counsel to the Company.
 
     In connection with the offering, certain matters relating to United States
Federal income tax considerations will be passed upon for the Company by
Skadden, Arps, Slate, Meagher & Flom LLP, as special tax counsel to the Company
and the Issuer.
 
                                    EXPERTS
 
     The consolidated financial statements of the Company and its subsidiaries
as of December 31, 1997 and 1996 and for each of the years in the three-year
period ended December 31, 1997, incorporated in this Prospectus by reference
from Company's Annual Report on Form 10-K for the year ended December 31, 1997,
have been audited by Deloitte & Touche LLP, independent auditors.
 
                                       50
   55
 
             ------------------------------------------------------
 
  NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE ISSUER OR ANY INITIAL PURCHASER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THE ISSUER SINCE SUCH DATE.
 
                               ------------------
 
                               TABLE OF CONTENTS

                                         PAGE
                                         ----
                                      
Available Information.................     i
Incorporation of Certain Documents by
  Reference...........................    ii
Risk Factors..........................     1
The Company...........................     8
Ratio of Earnings to Fixed Charges....     9
Accounting Treatment..................    10
Use of Proceeds.......................    11
Union Pacific Capital Trust...........    11
Description of Convertible Preferred
  Securities..........................    12
Description of Convertible Junior
  Subordinated Debentures.............    29
Description of Guarantee..............    37
Relationship Among the Convertible
  Preferred Securities, the
  Convertible Junior Subordinated
  Debentures and the Guarantee........    40
Description of Company Common Stock...    41
United States Federal Income Tax
  Consequences........................    42
Certain ERISA Considerations..........    47
Registration Rights...................    48
Selling Holders.......................    49
Plan of Distribution..................    49
Legal Matters.........................    50
Experts...............................    50

             ======================================================
 
                                 UNION PACIFIC
                                 CAPITAL TRUST
                    6 1/4% Convertible Preferred Securities
 
                                   30,000,000
                             Convertible Preferred
                                   Securities
                          guaranteed to the extent set
                              forth herein by, and
                       convertible into Common Stock of,
 
                         Union Pacific Corporation logo
                                   PROSPECTUS
             ------------------------------------------------------
   56
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The following are the estimated expenses to be paid by the Company in
connection with the distribution of the securities being registered hereunder,
other than underwriting discounts and commissions.

                                                           
SEC Registration fee........................................  $465,731.25
Printing, shipping and engraving expenses...................       *
Legal fees and expenses.....................................       *
Accounting fees and expenses................................       *
Transfer Agent, Registrar and trustee fees and expenses.....       *
Miscellaneous expenses......................................       *
                                                              -----------
          Total.............................................       *
                                                              ===========

- ---------------
* To be filed by amendment.
 
ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
  THE COMPANY
 
     The Company is a Utah corporation. Section 16-10a-901 et. seq. of the
Revised Business Corporation Act of Utah grants to a corporation the power to
indemnify a person made a party to a lawsuit or other proceeding because such
person is or was a director or officer. A corporation is further empowered 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 a director or officer. The
Company's By-Laws provide for mandatory indemnification of its directors,
officers and employees in certain circumstances. The Company maintains insurance
on behalf of directors and officers against liability asserted against them
arising out of their status as such.
 
     The Company's Revised Articles of Incorporation eliminate in certain
circumstances the personal liability of directors of the Company for monetary
damages for a breach of their fiduciary duty as directors. This provision does
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 Revised Business Corporation Act of Utah (relating to
the liability of directors for unlawful distributions) or (iv) an intentional
violation of criminal law.
 
THE TRUST
 
     The Declaration of Trust (the "Declaration") provides that no Trustee,
affiliate of any Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, or any employee
or agent of the Trust or its affiliates (each an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any officer,
director, shareholder, partner, member, representative or agent of the Trust,
any affiliate of the Trust or any holder of Trust Securities for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by the Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such act or omissions. The Declaration also provides that to the fullest
extent permitted by applicable law, the Company shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably
 
                                      II-1
   57
 
believed to be within the scope of authority conferred on such Indemnified
Person by the Declaration, except that no Indemnified Person shall be entitled
to be indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The directors and officers of the Company and the Regular Trustees
are covered by insurance policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), which might be incurred by them in such
capacities and against which they cannot be indemnified by the Company or the
Trust. The Selling Holders will be indemnified by the Company and the Trust,
jointly and severally, against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith. The Company and the Trust will be indemnified by the
Selling Holders severally against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith.
 
ITEM 16.  EXHIBITS
 
     A list of exhibits included as part of the Registration Statement is set
forth below:

EXHIBIT NO.                            DESCRIPTION
- -----------                            -----------
            
    4.1        Revised Articles of Incorporation of Union Pacific
               Corporation, as amended through April 25, 1996 (incorporated
               by reference to Exhibit 3 to Union Pacific Corporation's
               Quarterly Report on Form 10-Q for the quarter ended March
               31, 1996).
    4.2        By-Laws of Union Pacific Corporation.*
    4.3        Certificate of Trust of Union Pacific Capital Trust.
    4.4        Amended and Restated Declaration of Trust of Union Pacific
               Capital Trust, dated as of April 1, 1998, among Union
               Pacific Corporation, as Sponsor, The Bank of New York, as
               Property Trustee, The Bank of New York (Delaware), as
               Delaware Trustee, and Gary M. Stuart, L. White Matthews, III
               and Joseph E. O'Connor, Jr., as Regular Trustees.
    4.5        Indenture for the Convertible Junior Subordinated Debentures
               due 2028, dated as of April 1, 1998, among Union Pacific
               Corporation, as Issuer, and The Bank of New York, as
               Indenture Trustee.
    4.6        Form of Union Pacific Corporation Stock Certificate.*
    4.7        Form of Union Pacific Capital Trust 6 1/4% Convertible
               Preferred Securities (included in Exhibit 4.4).
    4.8        Form of Union Pacific Corporation Convertible Junior
               Subordinated Debentures due 2028 (included in Exhibit 4.5).
    4.9        Preferred Securities Guarantee, dated as of April 1, 1998,
               between Union Pacific Corporation, as Guarantor, and The
               Bank of New York, as Guarantee Trustee.
   4.10        Common Securities Guarantee, dated as of April 1, 1998, by
               Union Pacific Corporation, as Guarantor.
    5.1        Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
               the legality of the Convertible Preferred Securities, the
               Convertible Junior Subordinated Debentures and Preferred
               Securities Guarantee being registered hereby.*
    5.2        Opinion of Parsons Behle & Latimer as to the legality of the
               Common Stock of Union Pacific Corporation being registered
               hereby.*
    8.1        Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
               certain tax matters.*
   10.1        Registration Rights Agreement, dated April 1, 1998, by and
               among Union Pacific Capital Trust, Union Pacific
               Corporation, Credit Suisse First Boston Corporation, Merrill
               Lynch, Pierce, Fenner & Smith Incorporated, Smith Barney
               Inc. and Schroder & Co. Inc.
   12.1        Statement of Ratio of Earnings to Fixed Charges of Union
               Pacific Corporation (incorporated by reference to Exhibit 12
               to Union Pacific Corporation's Annual Report on Form 10-K
               for the fiscal year ended December 31, 1997).
   23.1        Consent of Deloitte & Touche LLP, independent auditors.
   23.2        Consent of Skadden, Arps, Slate, Meagher & Flom LLP
               (included in the opinions filed as Exhibits 5.1 and 8.1).*
   23.3        Consent of Parsons Behle & Latimer (included in the opinion
               filed as Exhibit 5.2).*

                                      II-2
   58

EXHIBIT NO.                            DESCRIPTION
- -----------                            -----------
            
   24.1        Powers of Attorney.
   25.1        Form T-1 Statement of Eligibility under the Trust Indenture
               Act of 1939, as amended, of The Bank of New York, as
               Indenture Trustee under the Convertible Junior Subordinated
               Debentures Indenture due 2028.
   25.2        Form T-1 Statement of Eligibility under the Trust Indenture
               Act of 1939, as amended, of The Bank of New York, as
               Property Trustee under the Amended and Restated Declaration
               of Trust.
   25.3        Form T-1 Statement of Eligibility under the Trust Indenture
               Act of 1939, as amended, of The Bank of New York, as
               Preferred Guarantee Trustee under the Preferred Securities
               Guarantee.

- ---------------
* To be filed by amendment.
 
ITEM 17.  UNDERTAKINGS
 
     The undersigned Registrants hereby undertake:
 
          (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)(3) of the Securities Act
     of 1933, as amended (the "Securities Act"), (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, and
     (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.
 
          (2) That, for the purpose of determining any liability under the
     Securities Act, 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.
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have 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 Registrants of expenses incurred
or paid by a director, officer or controlling person of the Registrants 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 Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
 
     The undersigned Registrants hereby undertake that for the purposes of
determining any liability under the Securities Act, each filing of the
Registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, 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.
 
                                      II-3
   59
 
                                   SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
UNION PACIFIC CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF DALLAS, STATE OF TEXAS, ON MAY 1,
1998.
 
                                          UNION PACIFIC CORPORATION,
 
                                          By: /s/ JOSEPH E. O'CONNOR, JR.
                                            ------------------------------------
                                            Joseph E. O'Connor, Jr.
                                            Vice President and Controller
                                            (Principal Accounting Officer)
 
     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

                    SIGNATURES                                    CAPACITY                     DATE
                    ----------                                    --------                     ----
                                                                                    
              /s/ RICHARD K. DAVIDSON                    Chairman, President, Chief          May 1, 1998
- ---------------------------------------------------    Executive Officer and Director
                Richard K. Davidson                     (Principal Executive Officer)
 
            /s/ L. WHITE MATTHEWS, III               Executive Vice President -- Finance     May 1, 1998
- ---------------------------------------------------             and Director
              L. White Matthews, III                    (Principal Financial Officer)
 
            /s/ JOSEPH E. O'CONNOR, JR.                 Vice President and Controller        May 1, 1998
- ---------------------------------------------------    (Principal Accounting Officer)
              Joseph E. O'Connor, Jr.
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                Philip F. Anschutz
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                 Robert P. Bauman
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                 Richard B. Cheney
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                 E. Virgil Conway
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                 Spencer F. Eccles
 
                         *                                        Director                 May 1, 1998 \
- ---------------------------------------------------
              Elbridge T. Gerry, Jr.
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
               William H. Gray, III

                                      II-4
   60

                    SIGNATURES                                    CAPACITY                     DATE
                    ----------                                    --------                     ----
                                                                                    
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
               Judith Richards Hope
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                Richard J. Mahoney
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                   John R. Meyer
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
              Thomas A. Reynolds, Jr.
 
                         *                                        Director                   May 1, 1998
- ---------------------------------------------------
                Richard D. Simmons
 
            *By: /s/ THOMAS E. WHITAKER
   ---------------------------------------------
                Thomas E. Whitaker
                As Attorney-in-Fact

                                      II-5
   61
 
                                   SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
UNION PACIFIC CAPITAL TRUST CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF DALLAS, STATE OF TEXAS, ON MAY 1,
1998.
 
                                          UNION PACIFIC CAPITAL TRUST,
 
                                          By:      /s/ GARY M. STUART
                                            ------------------------------------
                                                  Gary M. Stuart, Trustee
 
     Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

                    SIGNATURES                                    CAPACITY                     DATE
                    ----------                                    --------                     ----

                /s/ GARY M. STUART                                 Trustee                   May 1, 1998
- ---------------------------------------------------
                  Gary M. Stuart
 
            /s/ L. WHITE MATTHEWS, III                             Trustee                   May 1, 1998
- ---------------------------------------------------
              L. White Matthews, III
 
            /s/ JOSEPH E. O'CONNOR, JR.                            Trustee                   May 1, 1998
- ---------------------------------------------------
              Joseph E. O'Connor, Jr.

                                      II-6
   62
 
                                 EXHIBIT INDEX

EXHIBIT                                                                  PAGE
NUMBER                            DESCRIPTION                           NUMBER
- -------                           -----------                           ------
                                                                  
 4.1      Revised Articles of Incorporation of Union Pacific
          Corporation, as amended through April 25, 1996 (incorporated
          by reference to Exhibit 3 to the Union Pacific Corporation's
          Quarterly Report on Form 10-Q for the quarter ended March
          31, 1996). .................................................
 4.2      By-Laws of Union Pacific Corporation.* .....................
 4.3      Certificate of Trust of Union Pacific Capital Trust. .......
 4.4      Amended and Restated Declaration of Trust of Union Pacific
          Capital Trust, dated as of April 1, 1998, among Union
          Pacific Corporation, as Sponsor, The Bank of New York, as
          Property Trustee, The Bank of New York (Delaware), as
          Delaware Trustee, and Gary M. Stuart, L. White Matthews, III
          and Joseph E. O'Connor, Jr., as Regular Trustees. ..........
 4.5      Indenture for the Convertible Junior Subordinated Debentures
          due 2028, dated as of April 1, 1998, among Union Pacific
          Corporation, as Issuer, and The Bank of New York, as
          Indenture Trustee. .........................................
 4.6      Form of Union Pacific Corporation Stock Certificate.* ......
 4.7      Form of Union Pacific Capital Trust 6 1/4% Convertible
          Preferred Securities (included in Exhibit 4.4). ............
 4.8      Form of Union Pacific Corporation Convertible Junior
          Subordinated Debentures due 2028 (included in Exhibit
          4.5). ......................................................
 4.9      Preferred Securities Guarantee, dated as of April 1, 1998,
          between Union Pacific Corporation, as Guarantor, and The
          Bank of New York, as Guarantee Trustee. ....................
 4.10     Common Securities Guarantee, dated as of April 1, 1998, by
          Union Pacific Corporation, as Guarantor. ...................
 5.1      Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
          the legality of the Convertible Preferred Securities, the
          Convertible Junior Subordinated Debentures and Preferred
          Securities Guarantee being registered hereby.* .............
 5.2      Opinion of Parsons Behle & Latimer as to the legality of the
          Common Stock of Union Pacific Corporation being registered
          hereby.* ...................................................
 8.1      Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
          certain tax matters.* ......................................
10.1      Registration Rights Agreement, dated April 1, 1998, by and
          among Union Pacific Capital Trust, Union Pacific
          Corporation, Credit Suisse First Boston Corporation, Merrill
          Lynch, Pierce, Fenner & Smith Incorporated, Smith Barney,
          Inc. and Schroder & Co. Inc. ...............................
12.1      Statement of Ratio of Earnings to Fixed Charges of Union
          Pacific Corporation (incorporated by reference to Exhibit 12
          to Union Pacific Corporation's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1997). ..............
23.1      Consent of Deloitte & Touche LLP, independent auditors. ....
23.2      Consent of Skadden, Arps, Slate, Meagher & Flom LLP
          (included in the opinions filed as Exhibits 5.1 and
          8.1).* .....................................................
23.3      Consent of Parsons Behle & Latimer (included in the opinion
          filed as Exhibit 5.2).* ....................................
24.1      Powers of Attorney. ........................................
25.1      Form T-1 Statement of Eligibility under the Trust Indenture
          Act of 1939, as amended, of The Bank of New York, as
          Indenture Trustee under the Convertible Junior Subordinated
          Debentures Indenture due 2028. .............................
25.2      Form T-1 Statement of Eligibility under the Trust Indenture
          Act of 1939, as amended, of The Bank of New York, as
          Property Trustee under the Amended and Restated Declaration
          of Trust. ..................................................
25.3      Form T-1 Statement of Eligibility under the Trust Indenture
          Act of 1939, as amended, of The Bank of New York, as
          Preferred Guarantee Trustee under the Preferred Securities
          Guarantee. .................................................

- ---------------
* To be filed by amendment.
 
                                      II-7
   1
                                                                     EXHIBIT 4.3

                              CERTIFICATE OF TRUST

                  The undersigned, the trustees of Union Pacific Capital
Trust, desiring to form a business trust pursuant to Delaware
Business Trust Act, 12 Del. C. Section 3810, hereby certify as follows:

                  1.       The name of the business trust being formed hereby
                           (the "Trust") is "Union Pacific Capital Trust."

                  2.       The name and business address of the trustee of the
                           Trust which has its principal place of business in
                           the State of Delaware is as follows:

                           The Bank of New York (Delaware)
                           White Clay Center
                           Route 273
                           Newark, DE 19711

                  3.       This Certificate of Trust shall be effective as of
                           the date of filing.

Dated:  March 17, 1998

                                         s/ L. White Matthews, III
                                         --------------------------------------
                                         Name:  L. White Matthews, III
                                         Title: Trustee

                                         s/ Gary M. Stuart
                                         --------------------------------------
                                         Name:  Gary M. Stuart
                                         Title: Trustee

                                         s/ Joseph E. O'Connor, Jr.
                                         --------------------------------------
                                         Name:  Joseph E. O'Connor, Jr.
                                         Title: Trustee

                                         The Bank of New York (Delaware),
                                         as Trustee

                                         By: s/ Walter Gitlin
                                         --------------------------------------
                                         Name:  Walter Gitlin
                                         Title: Authorized Signatory
   1
                                                                     EXHIBIT 4.4

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

                                       Of

                           UNION PACIFIC CAPITAL TRUST

                            Dated as of April 1, 1998
   2
                                TABLE OF CONTENTS

                                                                            Page

                                              ARTICLE I

                                   Interpretation and Definitions

SECTION 1.01.              Definitions......................................  2

                                             ARTICLE II

                                         Trust Indenture Act

SECTION 2.01.              Trust Indenture Act; Application................. 11
SECTION 2.02.              Lists of Holders of Securities................... 12
SECTION 2.03.              Reports by the Property Trustee.................. 12
SECTION 2.04.              Periodic Reports to Property Trustee............. 13
SECTION 2.05.              Evidence of Compliance with Conditions
                                    Precedent............................... 13
SECTION 2.06.              Events of Default; Waiver........................ 13
SECTION 2.07.              Event of Default; Notice......................... 15

                                             ARTICLE III

                                            Organization

SECTION 3.01.              Name............................................. 16
SECTION 3.02.              Office........................................... 16
SECTION 3.03.              Purpose.......................................... 16
SECTION 3.04.              Authority........................................ 17
SECTION 3.05.              Title to Property of the Trust................... 17
SECTION 3.06.              Powers and Duties of the Administrative
                                    Trustees................................ 17
SECTION 3.07.              Prohibition of Actions by the Trust and
                                    the Trustees............................ 21
   3
                                                                            Page

SECTION 3.08.              Powers and Duties of the Property
                                    Trustee..................................22
SECTION 3.09.              Certain Duties and Responsibilities of
                                    the Property Trustee.....................25
SECTION 3.10.              Certain Rights of Property Trustee................27
SECTION 3.11.              Delaware Trustee..................................29
SECTION 3.12.              Execution of Documents............................30
SECTION 3.13.              Not Responsible for Recitals or
                                    Issuance of Securities...................30
SECTION 3.14.              Duration of Trust.................................30
SECTION 3.15.              Mergers...........................................30

                                   ARTICLE IV

                                     Sponsor

SECTION 4.01.              Sponsor's Purchase of Common
                                    Securities...............................32
SECTION 4.02.              Responsibilities of the Sponsor...................32
SECTION 4.03.              Guarantee of Payment of Trust
                                    Obligations..............................33

                                    ARTICLE V

                                    Trustees

SECTION 5.01.              Number of Trustees................................34
SECTION 5.02.              Delaware Trustee..................................34
SECTION 5.03.              Property Trustee; Eligibility.....................34
SECTION 5.04.              Qualifications of Administrative
                                    Trustees and Delaware Trustee
                                    Generally................................35
SECTION 5.05.              Initial Trustees..................................35
SECTION 5.06.              Appointment, Removal and Resignation of
                                    Trustees.................................36

                                        2
   4
                                                                            Page

SECTION 5.07.              Vacancies among Trustees..........................39
SECTION 5.08.              Effect of Vacancies...............................39
SECTION 5.09.              Meetings..........................................40
SECTION 5.10.              Delegation of Power...............................40
SECTION 5.11.              Merger, Conversion, Consolidation or
                                    Succession to Business...................41

                                   ARTICLE VI

                                  Distributions

SECTION 6.01.              Distributions.....................................41

                                   ARTICLE VII

                             Issuance of Securities

SECTION 7.01.              General Provisions Regarding
                                    Securities...............................42
SECTION 7.02.              Execution and Authentication......................42
SECTION 7.03.              Form and Dating...................................43
SECTION 7.04.              Registrar, Paying Agent and Conversion
                                    Agent....................................47
SECTION 7.05.              Paying Agent to Hold Money in Trust...............47
SECTION 7.06.              Replacement Securities............................48
SECTION 7.07.              Outstanding Preferred Securities..................48
SECTION 7.08.              Preferred Securities in Treasury..................49
SECTION 7.09.              Temporary Securities..............................49
SECTION 7.10.              Cancellation......................................49

                                        3
   5
                                                                            Page

                                  ARTICLE VIII

                              Termination of Trust

SECTION 8.01.              Termination of Trust..............................50

                                   ARTICLE IX

                              Transfer and Exchange

SECTION 9.01.              General...........................................51
SECTION 9.02.              Transfer Procedures and Restrictions..............52
SECTION 9.03.              Deemed Security Holders...........................59
SECTION 9.04.              [Reserved]........................................59
SECTION 9.05.              Notices to Clearing Agency........................59
SECTION 9.06.              Appointment of Successor Clearing
                                    Agency...................................59

                                    ARTICLE X

                           Limitation of Liability of
                    Holders of Securities, Trustees or others

SECTION 10.01.             Liability.........................................60
SECTION 10.02.             Exculpation.......................................60
SECTION 10.03.             Fiduciary Duty....................................61
SECTION 10.04.             Indemnification...................................62
SECTION 10.05.             Outside Businesses................................63

                                   ARTICLE XI

                                   Accounting

SECTION 11.01.             Fiscal Year.......................................63

                                        4
   6
                                                                            Page

SECTION 11.02.             Certain Accounting Matters........................63
SECTION 11.03.             Banking...........................................64
SECTION 11.04.             Withholding.......................................64

                                   ARTICLE XII

                             Amendments and Meetings

SECTION 12.01.             Amendments........................................65
SECTION 12.02.             Meetings of the Holders of Securities;
                                    Action by Written Consent................66

                                  ARTICLE XIII

                       Representations of Property Trustee
                              and Delaware Trustee

SECTION 13.01.             Representations and Warranties of
                                    Property Trustee.........................68
SECTION 13.02.             Representations and Warranties of
                                    Delaware Trustee.........................69

                                   ARTICLE XIV

                               Registration Rights

SECTION 14.01.             Registration Rights...............................70

                                   ARTICLE XV

                                  Miscellaneous

SECTION 15.01.             Notices...........................................70

                                        5
   7
                                                                            Page

SECTION 15.02.             Governing Law.....................................72
SECTION 15.03.             Intention of the Parties..........................72
SECTION 15.04.             Headings..........................................72
SECTION 15.05.             Successors and Assigns............................72
SECTION 15.06.             Partial Enforceability............................73
SECTION 15.07.             Counterparts......................................73

ANNEX I           Terms of 6 1/4% Convertible Preferred
                  Securities and 6 1/4% Convertible Common
                  Securities

Exhibit A-1       Form of Preferred Security
Exhibit A-2       Form of Common Security

                                        6
   8
                             CROSS-REFERENCE TABLE*

         Section of
     Trust Indenture Act                                            Section of
     of 1939, as amended                                            Declaration

     310 (a)...........................................           5.03(a)
     310 (c)...........................................           Inapplicable
     311 (c)...........................................           Inapplicable
     312 (a)...........................................           2.02(a)
     312 (b)...........................................           2.02(b)
     313      .........................................           2.03
     314 (a)...........................................           2.04
     314 (b)...........................................           Inapplicable
     314 (c)...........................................           2.05
     314 (d)...........................................           Inapplicable
     314 (f)  .........................................           Inapplicable
     315 (a)...........................................           3.09(a)
                                                                  3.09(b)
     315 (c)...........................................           3.09(a)
     315 (d)...........................................           3.09(b)
     316 (a)...........................................           Annex I
     316 (c)...........................................           3.06(e)

     *        This Cross-Reference Table does not constitute part of the
              Declaration and shall not affect the interpretation of any of
              its terms or provisions.

                                        7
   9
                              AMENDED AND RESTATED
                              DECLARATION OF TRUST
                                       OF
                           UNION PACIFIC CAPITAL TRUST

                                  APRIL 1, 1998

         AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of April 1, 1998, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Union
Pacific Corporation, a Utah corporation, as trust sponsor (the "Sponsor"), and
by the holders, from time to time, of undivided beneficial interests in the
Trust (as defined below) issued pursuant to this Declaration;

         WHEREAS, the Trustees and the Sponsor established Union Pacific Capital
Trust (the "Trust") under the Business Trust Act (as hereinafter defined)
pursuant to a Declaration of Trust dated as of March 17, 1998 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on March 17, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (as herein after defined); and

         WHEREAS, as of the date hereof, no interests in the Trust have been
issued;

         WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and

         NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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                                    ARTICLE I

                         Interpretation and Definitions

         SECTION 1.01. Definitions. Unless the context otherwise requires:

         (a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;

         (b) a term defined anywhere in this Declaration or the Indenture has
the same meaning throughout;

         (c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;

         (d) all references in this Declaration to Articles, Sections, Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;

         (e) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;

         (f) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless other wise defined in this Declaration or unless
the context otherwise requires; and

         (g) a reference to the singular includes the plural and vice versa.

         "Administrative Action" has the meaning set forth in the definition of
"Tax Event".

         "Administrative Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or con trolled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person
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means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; the terms "controlling" and "controlled" have meanings correlative
to the foregoing.

         "Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.

         "Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.

         "Authorized Officer" of a Person means any Person that is authorized to
bind such Person.

         "Beneficiaries" has the meaning set forth in Section 4.03(a).

         "Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 9.04.

         "Business Day" means any day other than a Saturday or a Sunday, a day
on which banking institutions in New York, New York and in London, England are
authorized or required by law to close.

         "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.

         "Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.

         "Closing Date" means April 1, 1998.

         "Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.

         "Commission" means the Securities and Exchange Commission.
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         "Common Securities" has the meaning specified in Section 7.01(a).

         "Common Securities Guarantee" means the guarantee agreement to be dated
as of April 1, 1998, of the Sponsor in respect of the Common Securities.

         "Conversion Agent" has the meaning set forth in Section 7.04.

         "Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.

         "Debenture Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.

         "Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.

         "Debenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

         "Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, in the
form attached to the Indenture as Exhibit A.

         "Delaware Trustee" has the meaning set forth in Section 5.02.

         "Deferral Period" has the meaning set forth in the Indenture.

         "Definitive Preferred Securities" means the Regulation S Definitive
Preferred Security, the IAI Definitive Preferred Security and any other
Preferred Securities in definitive form issued by the Trust.

         "Depositary" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.06, and
thereafter means such successor Depositary.
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         "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.

         "Event of Default" means:

         (i) a Debenture Event of Default; or

         (ii) default by the Trust in the payment of any Distribution when it
    becomes due and payable, and continuation of such default for a period of
    30 days (subject to the deferral of any due date in the case of a Deferral
    Period); or

         (iii) default by the Trust in the payment of any Redemption Price of
    any Security when it becomes due and payable; or

         (iv) default in the performance, or breach, in any material respect, of
    any covenant or warranty of the Trustees in the Declaration (other than a
    covenant or warranty, a default in the performance of which or the breach of
    which is addressed in clause (ii) or (iii) above), and continuation of such
    default or breach for a period of 60 days after there has been given, by
    registered or certified mail, to the defaulting Issuer Trustee or Issuer
    Trustees by the holders of at least 25% in aggregate liquidation amount of
    the outstanding Preferred Securities, a written notice specifying such
    default or breach and requiring it to be remedied and stating that such
    notice is a "Notice of Default" under the Declaration; or

         (v) the failure of the Sponsor to appoint a successor Property Trustee
    in the manner required by Section 5.06(c).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.

         "Global Preferred Securities" means Rule 144A Global Preferred
Securities and/or Unrestricted Global Preferred Securities, as the context
requires.

         "Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
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         "IAI Definitive Preferred Security" has the meaning set forth in
Section 7.03(c).

         "Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.

         "Indenture" means the Indenture dated as of April 1, 1998, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.

         "Investment Company" means an investment company as defined in the
Investment Company Act.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

         "Legal Action" has the meaning set forth in Section 3.06(g).

         "Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.

         "List of Holders" has the meaning set forth in Section 2.02(a).

         "Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of out standing Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities
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voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.

         "Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.

         "Obligations" means any costs, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.

         "Offering Circular" means the confidential offering circular, dated as
of March 27, 1998, relating to the issuance by the Trust of Preferred
Securities.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:

                  (a)      a statement that each officer signing the Certificate
                           has read the covenant or condition and the definition
                           relating thereto;

                  (b)      a brief statement of the nature and scope of the
                           examination or investigation undertaken by each
                           officer in rendering the Certificate;

                  (c)      a statement that each such officer has made such
                           examination or investigation as, in such officer's
                           opinion, is necessary to enable such officer to
                           express an informed opinion as to whether or not such
                           covenant or condition has been complied with; and

                  (d)      a statement as to whether, in the opinion of each
                           such officer, such condition or covenant has been
                           complied with.
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         "Optional Closing Date" has the meaning assigned to such term in the
Purchase Agreement.

         "Participants" has the meaning set forth in Section 7.03(b).

         "Paying Agent" has the meaning specified in Section 7.04.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "Preferred Securities" has the meaning specified in Section 7.01(a).

         "Preferred Securities Guarantee" means the guarantee agreement to be
dated as of April 1, 1998, of the Sponsor in respect of the Preferred
Securities.

         "Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).

         "Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.

         "Property Trustee Account" has the meaning set forth in Section
3.08(c).

         "Purchase Agreement" has the meaning set forth in Section 7.03.

         "Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.

         "Redemption Price" has the meaning set forth in Annex I.
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         "Registrable Securities" has the meaning set forth in Section 14.01.

         "Registrar" has the meaning set forth in Section 7.04.

         "Registration Default" has the meaning set forth in Section 14.01.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated April 1, 1998, among the Sponsor, the Trust, and the Initial
Purchasers named in the Purchase Agreement.

         "Regulation S" means Regulation S under the Securities Act.

         "Regulation S Definitive Preferred Security" has the meaning set forth
in Section 7.03(c).

         "Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

         "Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.

         "Restricted Preferred Securities" shall include the Regulation S
Definitive Preferred Securities, the IAI Definitive Preferred Securities and the
Rule 144A Global Preferred Securities.

         "Restricted Securities Legend" has the meaning specified in Section
9.02(j).

         "Rule 144A Global Preferred Security" has the meaning specified in
Section 7.03(a).
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         "Securities" means the Common Securities and the Preferred Securities.

         "Securities Act" means the Securities Act of 1933, as amended, or any
successor legislation.

         "Securities Custodian" means the custodian with respect to the Rule
144A Global Preferred Security and any other Preferred Security in global form.

         "Securities Guarantees" means the Preferred Securities Guarantee and
the Common Securities Guarantee.

         "Shelf Registration Statement" has the meaning specified in Section
14.01.

         "Special Trustee" means a trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B).

         "Sponsor" means Union Pacific Corporation, a Utah corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.

         "Successor Delaware Trustee" has the meaning set forth in Section 5.06.

         "Successor Property Trustee" has the meaning set forth in Section 5.06.

         "Super Majority" has the meaning set forth in Section 2.06(a)(ii).

         "Tax Event" means the Property Trustee shall have received an opinion
of nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement
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of intent to adopt such procedures or regulations (an "Administrative Action")
or (iii) any amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental agency or regulatory body, irrespective of
the manner in which such amendment or change is made known, which amendment or
change is effective or such Administrative Action or decision is announced, in
each case, on or after the date of original issuance of the Debentures or the
issue date of the Preferred Securities issued by the Trust, there is more than
an insubstantial risk that (a) if the Debentures are held by the Property
Trustee, (I) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with respect to interest
accrued or received on the Debentures or subject to more than a de minimis
amount of other taxes, duties or other governmental charges as determined by
such counsel, or (II) any portion of interest payable by the Sponsor to the
Trust on the Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Sponsor in whole or in part for United States
Federal income tax purposes or (b) with respect to Debentures which are no
longer held by the Property Trustee, any portion of interest payable by the
Sponsor on the Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Sponsor in whole or in part for United States
Federal income tax purposes.

         "10% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities or by the Trust Indenture Act, Holders
of out standing Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.

         "Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
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         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

         "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

         "Unrestricted Global Security" has the meaning set forth in Section
9.02(b).

                                   ARTICLE II

                               Trust Indenture Act

         SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration, which are incorporated by reference in and made part
of this Declaration and shall, to the extent applicable, be governed by such
provisions.

         (b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.

         (c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

         (d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

         SECTION 2.02. Lists of Holders of Securities. (a) Each of the Sponsor
and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the
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Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Administrative Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Administrative Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
its capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

         (b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

         SECTION 2.03. Reports by the Property Trustee. Within 60 days after May
15 of each year, commencing May 15, 1998, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.

         SECTION 2.04. Periodic Reports to Property Trustee. Each of the Sponsor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.

         SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each of
the Sponsor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to
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Section 314(c)(1) may be given in the form of an Officers' Certificate.

         SECTION 2.06. Events of Default; Waiver. (a) The Holders of a Majority
in liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the
Event of Default:

         (i) is caused by a Debenture Event of Default that is not waivable
    under the Indenture, the Event of Default under the Declaration shall also
    not be waivable;

         (ii) is caused by a Debenture Event of Default that requires the
    consent or vote of greater than a majority in principal amount of the
    holders of the Debentures (a "Super Majority") to be waived under the
    Indenture, the Event of Default under the Declaration may only be waived by
    the vote of the Holders of at least the proportion in liquidation amount of
    the Preferred Securities that the relevant Super Majority represents of the
    aggregate principal amount of the Debentures outstanding;

         (iii) is the result of a default by the Trust in the payment of any
    Distribution when it becomes due and payable, which default has continued
    for 30 days (subject to the deferral of any due date in the case of a
    Default Period), the Event of Default shall not be waivable; or

         (iv) is the result of a default by the Trust in the payment of any
    Redemption Price of any preferred Security when it becomes due and payable,
    the Event of Default shall not be waivable.

         The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

         Upon such waiver, any such default shall cease to exist, and any Event
of Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but
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no such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.

         (b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:

         (i) is not waivable under the Indenture, except where the Holders of
    the Common Securities are deemed to have waived such Event of Default under
    the Declaration as provided below in this Section 2.06(b), the Event of
    Default under the Declaration shall also not be waivable; or

         (ii) requires the consent or vote of a Super Majority to be waived,
    except where the Holders of the Common Securities are deemed to have waived
    such Event of Default under the Declaration as provided below in this
    Section 2.06(b), the Event of Default under the Declaration may only be
    waived by the vote of the Holders of at least the proportion in liquidation
    amount of the Preferred Securities that the relevant Super Majority
    represents of the aggregate principal amount of the Debentures outstanding;

provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
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Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B)
of the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.

         (c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities, constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.

         SECTION 2.07. Event of Default; Notice. (a) The Property Trustee shall,
within thirty days after the occurrence of an Event of Default actually known to
the Trustee, (i) transmit by mail, first-class postage prepaid, to the Holders
of the Securities, and (ii) transmit by any means provided for in this
Declaration to the Administrative Trustees and the Sponsor, notices of all
defaults actually known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.07(a) being hereby defined to be an Event of Default, not
including any periods of grace and irrespective of the giving of any notice);
provided that, except for a default in the payment of principal of (or premium,
if any) or interest on any of the Debentures or in the payment of any sinking
fund installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
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         (b) The Property Trustee shall not be deemed to have knowledge of any
default except:

         (i) a default under Sections 5.01(1) and 5.01(2) of the Indenture; or

         (ii) any default as to which the Property Trustee shall have received
    written notice.

                                   ARTICLE III

                                  Organization

         SECTION 3.01. Name. The Trust is named "Union Pacific Capital Trust,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.

         SECTION 3.02. Office. The address of the principal office of the Trust
is c/o Union Pacific Corporation, 1717 Main Street, Suite 5900, Dallas, Texas
75201-4605, Attention: Chief Financial Officer. On ten Business Days written
notice to the Holders of Securities, the Administrative Trustees may designate
another principal office.

         SECTION 3.03. Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such sale
to acquire the Debentures, and (b) except as otherwise limited herein, to engage
in only those other activities necessary or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.

         SECTION 3.04. Authority. (a) Subject to the limitations provided in
this Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers
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shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.

         (b) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.

         (c) An Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.06.

         SECTION 3.05. Title to Property of the Trust. Except as provided in
Section 3.08 with respect to the Debentures and the Property Trustee Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.

         SECTION 3.06. Powers and Duties of the Administrative Trustees. The
Administrative Trustees shall have, together (except in the case of paragraphs
(a), (b) and (c) of this Section 3.06) with any Special Trustee holding office
pursuant to Section 5.06, if any, the exclusive power, duty and authority to
cause the Trust to engage in the following activities:

         (a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited
   27
                                                                              20

to simultaneous issuances of both Preferred Securities and Common Securities on
the Closing Date and any Optional Closing Date;

         (b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:

         (i) assist in the preparation of the Offering Circular and a
    preliminary offering circular, in each case prepared by the Sponsor, in
    relation to the offering and sale of Preferred Securities to qualified
    institutional buyers in reliance on Rule 144A under the Securities Act, a
    limited number of institutional "accredited investors", as such term is
    defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act and
    outside the United States to non-U.S. persons in offshore transactions in
    reliance on Regulation S under the Securities Act and to execute and file
    with the Commission, at such time as determined by the Sponsor, a
    registration statement filed on Form S-3 prepared by the Sponsor, including
    any amendments thereto, in relation to the Preferred Securities;

         (ii) execute and file any documents prepared by the Sponsor, or take
    any acts as determined by the Sponsor to be necessary in order to qualify or
    register all or part of the Preferred Securities in any State or foreign
    jurisdiction in which the Sponsor has determined to qualify or register such
    Preferred Securities for sale;

         (iii) execute and file an application, prepared by the Sponsor, to the
    Private Offerings, Resale and Trading through Automated Linkages ("PORTAL")
    Market and, at such time as determined by the Sponsor, to the New York Stock
    Exchange or any other national stock exchange or the Nasdaq National Market
    for listing or quotation of the Preferred Securities;

         (iv) to execute and deliver letters, documents, or instruments with The
    Depository Trust Company relating the Preferred Securities;

         (v) execute and file with the Commission, at such time as determined by
    the Sponsor, a registration statement on Form 8-A, including any amendments
    thereto, prepared by the Sponsor relating to the
   28
                                                                              21

    registration of the Preferred Securities under Section 12 of the
    Exchange Act; and

         (vi) execute and enter into the Purchase Agreement, Registration Rights
    Agreement and other related agreements providing for the sale of the
    Preferred Securities and to provide any certificates or other documents in
    connection with such agreements;

         (c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders or Common Securities;

         (d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Tax Event; provided that the Administrative Trustees (and
Special Trustee, if any) shall consult with the Sponsor and the Property Trustee
before taking or refraining from taking any Ministerial Action in relation to a
Tax Event;

         (e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;

         (f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;

         (g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee has
the exclusive power to bring such Legal Action;

         (h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
   29
                                                                              22

         (i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

         (j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;

         (k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;

         (l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;

         (m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;

         (n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;

         (o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;

         (p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.06, including, but not limited to:

         (i) causing the Trust not to be deemed to be an Investment Company
    required to be registered under the Investment Company Act;

         (ii) causing the Trust to be classified for United States federal
    income tax purposes as a grantor trust; and
   30
                                                                              23

         (iii) cooperating with the Debenture Issuer to ensure that the
    Debentures will be treated as indebtedness of the Debenture Issuer for
    United States federal income tax purposes,

provided that such action does not adversely affect the interests of Holders;
and

         (q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust.

         The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.

         Subject to this Section 3.06, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.08.

         Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.

         SECTION 3.07. Prohibition of Actions by the Trust and the Trustees. (a)
The Trust shall not, and the Trustees (including the Property Trustee) on behalf
of the Trust shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:

         (i) invest any proceeds received by the Trust from holding the
    Debentures, but shall distribute all such proceeds to Holders of Securities
    pursuant to the terms of this Declaration and of the Securities;

         (ii) acquire any assets other than as expressly provided herein;

         (iii) possess Trust property for other than a Trust purpose;
   31
                                                                              24

         (iv) make any loans or incur any indebtedness other than loans
    represented by the Debentures;

         (v) possess any power or otherwise act in such a way as to vary the
    Trust assets or the terms of the Securities in any way whatsoever;

         (vi) issue any securities or other evidences of beneficial ownership
    of, or beneficial interest in, the Trust other than the Securities; or

         (vii) other than as provided in the Declaration or Annex I hereto, (A)
    direct the time, method and place of exercising any trust or power conferred
    upon the Debenture Trustee with respect to the Debentures, (B) waive any
    past default that is waivable under Section 5.13 of the Indenture, (C)
    exercise any right to rescind or annul any declaration that the principal of
    all the Debentures shall be due and payable, or (D) consent to any
    amendment, modification or termination of the Indenture or the Debentures
    where such consent shall be required unless, in the case of each action
    described in clause (A), (B), (C) or (D), the Trust shall have received an
    opinion of counsel to the effect that such modification will not cause more
    than an insubstantial risk that for United States federal income tax
    purposes the Trust will not be classified as a grantor trust.

         SECTION 3.08. Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders of the Securities. The
right, title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.06. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures
have been executed and delivered.

         (b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).

         (c) The Property Trustee shall:
   32
                                                                              25

         (i) establish and maintain a segregated non-interest bearing trust
    account (the "Property Trustee Account") in the name of and under the
    exclusive control of the Property Trustee on behalf of the Holders of the
    Securities and, upon the receipt of payments of funds made in respect of the
    Debentures held by the Property Trustee, deposit such funds into the
    Property Trustee Account and make payments to the Holders of the Preferred
    Securities and Holders of the Common Securities from the Property Trustee
    Account in accordance with Section 6.01. Funds in the Property Trustee
    Account shall be held uninvested until disbursed in accordance with this
    Declaration.

         (ii) engage in such ministerial activities as so directed and as shall
    be necessary or appropriate to effect the redemption of the Preferred
    Securities and the Common Securities to the extent the Debentures are
    redeemed or mature; and

         (iii) upon written notice of distribution issued by the Administrative
    Trustees in accordance with the terms of the Securities, engage in such
    ministerial activities as so directed as shall be necessary or appropriate
    to effect the distribution of the Debentures to Holders of Securities upon
    the occurrence of certain special events (as may be defined in the terms of
    the Securities) arising from a change in law or a change in legal
    interpretation or other specified circumstances pursuant to the terms of the
    Securities.

         (d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.

         (e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act; provided,
however, that if a Debenture Event of Default has occurred and is continuing and
such event is attributable to the failure of the Sponsor to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a holder of
Preferred Securities may institute a legal proceeding directly for enforcement
of payment to such Holder of the principal of or interest on
   33
                                                                              26

the Debentures having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Securities. In connection with
such Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holder of Preferred Securities in such
Direct Action. In addition, if the Property Trustee fails to enforce its rights
under the Debentures (other than rights arising from an Event of Default
described in the immediately preceding sentence) after any Holder of Preferred
Securities shall have made a written request to the Property Trustee to enforce
such rights, such Holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce the Property Trustee or
any other Person. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.

         (f) The Property Trustee shall not resign as a Trustee unless either:

         (i) the Trust has been completely liquidated and the proceeds of the
    liquidation distributed to the Holders of Securities pursuant to the terms
    of the Securities; or

         (ii) a Successor Property Trustee has been appointed and has accepted
    that appointment in accordance with Section 5.06.

         (g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.

         (h) The Property Trustee will act as Paying Agent and Registrar in both
London and New York to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the
   34
                                                                              27

Property Trustee at any time and a successor Paying Agent or additional Paying
Agents may be appointed at any time by the Property Trustee.

         (i) Subject to this Section 3.08, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.

         The Property Trustee must exercise the powers set forth in this Section
3.08 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.03, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.03.

         SECTION 3.09. Certain Duties and Responsibilities of the Property
Trustee. (a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

         (b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

         (i) prior to the occurrence of an Event of Default and after the curing
    or waiving of all such Events of Default that may have occurred:

                  (A) the duties and obligations of the Property Trustee shall
         be determined solely by the express provisions of this Declaration and
         the Property Trustee shall not be liable except for the performance of
         such duties and obligations as are specifically set forth in this
         Declaration, and no implied covenants or obligations shall
   35
                                                                              28

         be read into this Declaration against the Property Trustee; and

                  (B) in the absence of bad faith on the part of the Property
         Trustee, the Property Trustee may conclusively rely, as to the truth of
         the statements and the correctness of the opinions expressed therein,
         upon any certificates or opinions furnished to the Property Trustee and
         conforming to the requirements of this Declaration; but in the case of
         any such certificates or opinions that by any provision hereof are
         specifically required to be furnished to the Property Trustee, the
         Property Trustee shall be under a duty to examine the same to determine
         whether or not they conform to the requirements of this Declaration;

         (ii) the Property Trustee shall not be liable for any error of judgment
    made in good faith by a Responsible Officer of the Property Trustee, unless
    it shall be proved that the Property Trustee was negligent in ascertaining
    the pertinent facts;

         (iii) the Property Trustee shall not be liable with respect to any
    action taken or omitted to be taken by it in good faith in accordance with
    the direction of the Holders of not less than a Majority in liquidation
    amount of the Securities relating to the time, method and place of
    conducting any proceeding for any remedy available to the Property Trustee,
    or exercising any trust or power conferred upon the Property Trustee under
    this Declaration;

         (iv) no provision of this Declaration shall require the Property
    Trustee to expend or risk its own funds or otherwise incur personal
    financial liability in the performance of any of its duties or in the
    exercise of any of its rights or powers;

         (v) the Property Trustee's sole duty with respect to the custody, safe
    keeping and physical preservation of the Debentures and the Property Trustee
    Account shall be to deal with such property in a similar manner as the
    Property Trustee deals with similar property for its own account, subject to
    the protections and limitations on liability afforded to the Property
   36
                                                                              29

    Trustee under this Declaration and the Trust Indenture Act;

         (vi) the Property Trustee shall have no duty or liability for or with
    respect to the value, genuine ness, existence or sufficiency of the
    Debentures or the payment of any taxes or assessments levied thereon or in
    connection therewith;

         (vii) the Property Trustee shall not be liable for any interest on any
    money received by it except as it may otherwise agree with the Sponsor.
    Money held by the Property Trustee need not be segregated from other funds
    held by it except in relation to the Property Trustee Account maintained by
    the Property Trustee pursuant to Section 3.08(c)(i) and except to the extent
    otherwise required by law; and

         (viii) the Property Trustee shall not be responsible for monitoring the
    compliance by the Administrative Trustees or the Sponsor with their
    respective duties under this Declaration, nor shall the Property Trustee be
    liable for the default or misconduct of the Administrative Trustees or the
    Sponsor.

         SECTION 3.10. Certain Rights of Property Trustee. (a) Subject to the
provisions of Section 3.09:

         (i) the Property Trustee may rely conclusively and shall be fully
    protected in acting or refraining from acting upon any resolution,
    certificate, statement, instrument, opinion, report, notice, request,
    direction, consent, order, bond, debenture, note, other evidence of
    indebtedness or other paper or document believed by it to be genuine and to
    have been signed, sent or presented by the proper party or parties;

         (ii) any direction or act of the Sponsor or the Administrative Trustees
    contemplated by this Declaration shall be sufficiently evidenced by an
    Officers' Certificate;

         (iii) whenever in the administration of this Declaration, the Property
    Trustee shall deem it desirable that a matter be proved or established
    before taking, suffering or omitting any action hereunder, the Property
    Trustee (unless other evidence is herein specifically prescribed) may, in
    the absence of bad
   37
                                                                              30

    faith on its part, request and rely upon an Officers' Certificate
    which, upon receipt of such request, shall be promptly delivered by the
    Sponsor or the Administrative Trustees;

         (iv) the Property Trustee shall have no duty to see to any recording,
    filing or registration of any instrument (including any financing or
    continuation statement or any filing under tax or securities laws) or any
    rerecording, refiling or registration thereof;

         (v) the Property Trustee may consult with counsel of its choice or
    other experts and the advice or opinion of such counsel and experts with
    respect to legal matters or advice within the scope of such experts' area of
    expertise shall be full and complete authorization and protection in respect
    of any action taken, suffered or omitted by it hereunder in good faith and
    in accordance with such advice or opinion, such counsel may be counsel to
    the Sponsor or any of its Affiliates, and may include any of its employees.
    The Property Trustee shall have the right at any time to seek instructions
    concerning the administration of this Declaration from any court of
    competent jurisdiction;

         (vi) the Property Trustee shall be under no obligation to exercise any
    of the rights or powers vested in it by this Declaration at the request or
    direction of any Holder, unless such Holder shall have provided to the
    Property Trustee security satisfactory to the Property Trustee, against the
    costs, expenses (including its attorneys' fees and expenses) and liabilities
    that might be incurred by it in complying with such request or direction,
    including such reasonable advances as may be requested in writing by the
    Property Trustee, provided, that, nothing contained in this Section
    3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
    occurrence of an Event of Default, of its obligation to exercise the rights
    and powers vested in it by this Declaration;

         (vii) the Property Trustee shall not be bound to make any investigation
    into the facts or matters stated in any resolution, certificate, statement,
    instrument, opinion, report, notice, request, direction, consent, order,
    security, bond, debenture, note, other evidence of indebtedness or other
    paper or document, but the
   38
                                                                              31

    Property Trustee, in its discretion, may make such further inquiry or
    investigation into such facts or matters as it may see fit;

         (viii) the Property Trustee may execute any of the trusts or powers
    hereunder or perform any duties hereunder either directly or by or through
    agents or attorneys and the Property Trustee shall not be responsible for
    any misconduct or negligence on the part of any agent or attorney appointed
    with due care by it hereunder;

         (ix) any action taken by the Property Trustee or its agents hereunder
    shall bind the Trust and the Holders of the Securities, and the signature of
    the Property Trustee or its agents alone shall be sufficient and effective
    to perform any such action and no third party shall be required to inquire
    as to the authority of the Property Trustee to so act or as to its
    compliance with any of the terms and provisions of this Declaration, both of
    which shall be conclusively evidenced by the Property Trustee's or its
    agent's taking such action;

         (x) whenever in the administration of this Declaration the Property
    Trustee shall deem it desirable to receive instructions with respect to
    enforcing any remedy or right or taking any other action hereunder the
    Property Trustee (i) may request instructions from the Holders of the
    Securities which instructions may only be given by the Holders of the same
    proportion in liquidation amount of the Securities as would be entitled to
    direct the Property Trustee under the terms of the Securities in respect of
    such remedy, right or action, (ii) may refrain from enforcing such remedy or
    right or taking such other action until such instructions are received, and
    (iii) shall be protected in acting in accordance with such instructions;

         (xi) except as otherwise expressly provided by this Declaration, the
    Property Trustee shall not be under any obligation to take any action that
    is discretionary under the provisions of this Declaration; and

         (xii) the Property Trustee shall not be liable for any action taken,
    suffered, or omitted to be taken by it in good faith and reasonably believed
    by it to be
   39
                                                                              32

    authorized or within the discretion or rights or powers conferred upon
    it by this Declaration.

         (b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.

         SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.02, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Administrative Trustees or the Property
Trustee described in this Declaration. Except as set forth in Section 5.02, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.

         SECTION 3.12. Execution of Documents. Unless otherwise determined by
the Administrative Trustees, and except as otherwise required by the Business
Trust Act, any Administrative Trustee is authorized to execute on behalf of the
Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.06; provided that, the registration
statement referred to in Section 3.06(b)(i), including any amendments thereto,
shall be signed by a majority of the Administrative Trustees.

         SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
   40
                                                                              33

         Section 3.14. Duration of Trust. The Trust, unless terminated pursuant
to the provisions of Article VIII hereof, shall exist until March 17, 2034.

         SECTION 3.15. Mergers. (a) The Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corporation or other
entity or person, except as described in Section 3.15(b) and (c).

         (b) The Trust may, with the consent of a majority of the Administrative
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State or the
District of Columbia; provided that:

         (i) if the Trust is not the surviving entity, the successor entity (the
    "Successor Entity") either:

                  (A) expressly assumes all of the obligations of the Trust
         under the Securities; or

                  (B) substitutes for the Securities other securities having
         substantially the same terms as the Preferred Securities (the
         "Successor Securities") as long as the Successor Securities rank, with
         respect to participation in the profits and distributions or in the
         assets of the Successor Entity at least as high as the Preferred
         Securities rank with respect to participation in the profits and
         dividends or in the assets of the Trust;

         (ii) the Debenture Issuer expressly acknowledges such Successor Entity
    as the Holder of the Debentures;

         (iii) the Preferred Securities or any Successor Securities are listed,
    or any Successor Securities will be listed upon notification of issuance, on
    any national securities exchange or with any other organization on which the
    Preferred Securities are then listed or quoted;

         (iv) such merger, consolidation, amalgamation or replacement does not
    cause the Preferred Securities
   41
                                                                              34

    (including any Successor Securities) to be downgraded by any nationally
    recognized statistical rating organization;

         (v) such merger, consolidation, amalgamation or replacement does not
    adversely affect the powers, preferences and other special rights of the
    Holders of the Preferred Securities (including any Successor Securities) in
    any material respect;

         (vi) such Successor Entity has a purpose substantially identical to
    that of the Trust;

         (vii) prior to such merger, consolidation, amalgamation or replacement,
    the Sponsor has received an opinion of a nationally recognized independent
    counsel (reasonably acceptable to the Property Trustee) to the Trust
    experienced in such matters to the effect that:

                  (A) the Successor Entity will be treated as a grantor trust
         for United States federal income tax purposes;

                  (B) following such merger, consolidation, amalgamation or
         replacement, neither the Sponsor nor the Successor Entity will be
         required to register as an Investment Company; and

                  (C) such merger, consolidation, amalgamation or replacement
         will not adversely affect the limited liability of the Holders of the
         Securities (including any Successor Securities); and

         (viii) the Sponsor provides a guarantee to the Holders of the Successor
    Securities with respect to the Successor Entity having substantially the
    same terms as the Preferred Securities Guarantee.

         (c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Common Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as
   42
                                                                              35

other than a grantor trust for United States federal income tax purposes.

                                   ARTICLE IV

                                     Sponsor

         SECTION 4.01. Sponsor's Purchase of Common Securities. On the Closing
Date and any Optional Closing Date the Sponsor will purchase an amount of Common
Securities issued by the Trust such that the aggregate liquidation amount of
such Common Securities purchased by the Sponsor shall at such date equal 3% of
the total capital of the Trust.

         SECTION 4.02. Responsibilities of the Sponsor. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:

         (a) to prepare the Offering Circular and to prepare for filing by the
Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;

         (b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the applicable
laws of any such States and foreign jurisdictions;

         (c) to prepare for filing by the Trust an application to PORTAL and to
the New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Preferred Securities;

         (d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act, including any amendments
thereto; and
   43
                                                                              36

         (e) to negotiate the terms of the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities.

         SECTION 4.03. Guarantee of Payment of Trust Obligations. (a) Subject to
the terms and conditions of this Section 4.03, the Sponsor hereby irrevocably
and unconditionally guarantees to each Person to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations to such Beneficiaries.

         (b) The agreement of the Sponsor in Section 4.03(a) is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.

         (c) The agreement of the Sponsor set forth in Section 4.03(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all Holders of all
the Preferred Securities (whether upon redemption, liquidation, exchange or
otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.

                                    ARTICLE V

                                    Trustees

         SECTION 5.01. Number of Trustees. The number of Trustees shall
initially be five (5), and:

         (a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and

         (b) after the issuance of any Securities:
   44
                                                                              37

         (i) the number of Trustees may be increased or decreased, except as
    provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with respect to the
    Special Trustee, by vote of the Holders of a Majority in liquidation amount
    of the Common Securities voting as a class at a meeting of the Holders of
    the Common Securities; and

         (ii) the number of Trustees shall be increased automatically by one (1)
    if an Appointment Event has occurred and is continuing and the Holders of a
    Majority in liquidation amount of the Preferred Securities appoint a Special
    Trustee in accordance with Section 5.06(a)(ii).

         SECTION 5.02. Delaware Trustee. If required by the Business Trust Act,
one Trustee (the "Delaware Trustee") shall be an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.

         SECTION 5.03. Property Trustee; Eligibility. (a) There shall at all
times be one Trustee which shall act as Property Trustee which shall:

         (i) not be an Affiliate of the Sponsor; and

         (ii) be a corporation organized and doing business under the laws of
    the United States of America or any State or Territory thereof or of the
    District of Columbia, or a corporation or Person permitted by the Commission
    to act as an institutional trustee under the Trust Indenture Act, authorized
    under such laws to exercise corporate trust powers, having a combined
    capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
    subject to supervision or examination by Federal, State, Territorial or
    District of Columbia authority. If such corporation publishes reports of
    condition at least annually, pursuant to law or to the requirements of the
    supervising or examining authority referred to above, then for the purposes
    of this Section 5.03(a)(ii), the combined capital and surplus of such
    corporation shall be deemed to be its combined capital and surplus as set
    forth in its most recent report of condition so published.
   45
                                                                              38

         (b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.03(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.06(e).

         (c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

         (d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.

         SECTION 5.04. Qualifications of Administrative Trustees and Delaware
Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.

         SECTION 5.05. Initial Trustees. The initial Administrative Trustees
shall be:

         L. White Matthews, III
         c/o Union Pacific Corporation
         1717 Main Street
         Suite 5900
         Dallas, Texas 75201-4605

         Gary M. Stuart
         c/o Union Pacific Corporation
         1717 Main Street
         Suite 5900
         Dallas, Texas 75201-4605

         Joseph E. O'Connor, Jr.
         c/o Union Pacific Corporation
         1717 Main Street
         Suite 5900
         Dallas, Texas 75201-4605
   46
                                                                              39

    The initial Delaware Trustee shall be:

                  The Bank of New York (Delaware)
                  White Clay Center, Route 273
                  Newark, Delaware 19711
                  Attention:  Corporate Trust Trustee Administration

    The initial Property Trustee shall be:

                  The Bank of New York
                  101 Barclay Street
                  Floor 21 West
                  New York, New York 10286
                  Attention:  Corporate Trust Trustee Administration

         SECTION 5.06. Appointment, Removal and Resignation of Trustees. (a)
Except as provided otherwise in this Section 5.06(b), Trustees may be appointed
or removed with out cause at any time:

         (i) until the issuance of any Securities, by written instrument
    executed by the Sponsor; and

         (ii) after the issuance of any Securities:

                  (A) other than in respect to a Special Trustee, by vote of the
         Holders of a Majority in liquidation amount of the Common Securities
         voting as a class at a meeting of the Holders of the Common Securities,
         unless a Debenture Event of Default shall have occurred and be
         continuing, in which event the Property Trustee and the Delaware
         Trustee may only be removed by the Holders of a Majority in liquidation
         amount of the Preferred Securities, voting as a class at a meeting of
         the Holders of the Preferred Securities; and

                  (B) if an Appointment Event has occurred and is continuing,
         one (1) additional trustee (the "Special Trustee"), who shall have the
         same rights, powers and privileges as an Administrative Trustee, may be
         appointed by vote of the Holders of a Majority in liquidation amount of
         the Preferred Securities, voting as a class at a meeting of the Holders
         of the Preferred Securities, and such Special Trustee may only be
         removed (otherwise than by the operation of Section 5.06(e)), by vote
         of the Holders of a
   47
                                                                              40

         Majority in liquidation amount of the Preferred Securities voting as a
         class at a meeting of the Holders of the Preferred Securities.

         (b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.06(a) until a successor Property Trustee meeting the
requirements of Section 5.03 (a "Successor Property Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees and the
Sponsor.

         (c) The Sponsor shall remove the Property Trustee by written instrument
upon:

         (i) the entry or a decree or order by a court having jurisdiction in
    the premises adjudging the Property Trustee as bankrupt or insolvent, or
    approving as properly filed a petition seeking reorganization, arrangement,
    adjustment or composition of or in respect of the Property Trustee under any
    applicable federal or state bankruptcy, insolvency, reorganization or other
    similar law, or appointing a receiver, liquidator, assignee, trustee,
    sequestrator (or other similar official) of the Property Trustee or of any
    substantial part of its property or ordering the winding up or liquidation
    of its affairs, and the continuance of any such decree or order unstayed and
    in effect for a period of 60 consecutive days; or

         (ii) the institution by the Property Trustee of proceedings to be
    adjudicated a bankrupt or insolvent, or the consent by it to the institution
    of bankruptcy or insolvency proceedings against it, or the filing by it of a
    petition or answer or consent seeking reorganization or relief under any
    applicable federal or state bankruptcy, insolvency, reorganization or other
    similar law, or the consent by it to the filing of any such petition or to
    the appointment of a receiver, liquidator, assignee, trustee, sequestrator
    (or other similar official) of the Property Trustee or of any substantial
    part of its property, or the making by it of an assignment for the benefit
    of creditors, or the admission by it in writing of its inability to pay its
    debts generally as they become due and its willingness to be adjudicated a
    bankrupt, or the taking of corporate action by the Property Trustee in
    furtherance of any such action; or
   48
                                                                              41

The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.

         (d) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.06(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Trustees and the Sponsor.

         (e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:

         (i) No such resignation of the Trustee that acts as the Property
    Trustee shall be effective:

                  (A) until a Successor Property Trustee has been appointed and
         has accepted such appointment by instrument executed by such Successor
         Property Trustee and delivered to the Trust, the Sponsor and the
         resigning Property Trustee; or

                  (B) until the assets of the Trust have been completely
         liquidated and the proceeds thereof distributed to the holders of the
         Securities;

         (ii) no such resignation of the Trustee that acts as the Delaware
    Trustee shall be effective until a Successor Delaware Trustee has been
    appointed and has accepted such appointment by instrument executed by such
    Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
    resigning Delaware Trustee; and
   49

                                                                              42

                  (iii) no such resignation of a Special Trustee shall be
         effective until the 60th day following delivery of the instrument of
         resignation of the Special Trustee to the Sponsor and the Trust or such
         later date specified in such instrument during which period the Holders
         of the Preferred Securities shall have the right to appoint a successor
         Special Trustee as provided in this Section 5.06.

                  (f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.

                  (g) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the resigning Property Trustee or Delaware
Trustee, resigning or being removed as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.

                  (h) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.

                  SECTION 5.07. Vacancies among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.06.

                  SECTION 5.08. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust.
   50
                                                                              43

Whenever a vacancy in the number of Administrative Trustees shall occur, until
such vacancy is filled by the appointment of a Administrative Trustee in
accordance with Section 5.06, the Administrative Trustees in office, regardless
of their number, shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Declaration.

                  SECTION 5.09. Meetings. Meetings of the Administrative
Trustees shall be held from time to time upon the call of any Administrative
Trustee. Regular meetings of the Administrative Trustees may be held at a time
and place fixed by resolution of the Administrative Trustees. Notice of any
meetings of the Administrative Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile or overnight courier) not less than
24 hours before such meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Administrative Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Administrative
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Administrative Trustees may be taken at a meeting by vote of a majority of
the Administrative Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that a Quorum is present,
or without a meeting by the unanimous written consent of the Administrative
Trustees.

                  In the event there is only one Administrative Trustee, any and
all action of such Administrative Trustee shall be evidenced by a written
consent of such Administrative Trustee. In the event a Special Trustee is
holding office pursuant to Section 5.06, such Special Trustee shall have the
same rights as an Administrative Trustee with respect to participation in a
meeting of the Administrative Trustees.

                  SECTION 5.10. Delegation of Power. (a) Any Administrative
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 3.06, including any registration
statement or amendment thereto
   51
                                                                              44

filed with the Commission, or making any other governmental filing; and

                  (b) the Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.

                  SECTION 5.11. Merger, Conversion, Consolidation or Succession
to Business. Any Person into which the Property Trustee or the Delaware Trustee,
as the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.

                                   ARTICLE VI

                                  Distributions

                  SECTION 6.01. Distributions. Holders shall receive
Distributions (as defined herein) in accordance with the applicable terms of the
relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture) and Additional Sums (as defined in the Indenture)) premium and
principal on the Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
   52
                                                                              45

                                   ARTICLE VII

                             Issuance of Securities

                  SECTION 7.01. General Provisions Regarding Securities. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, designated as 6 1/4% Convertible Preferred
Securities, Term Income Deferrable Equity Securities (TIDES)(sm), representing
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"), having such terms as are set forth in Annex I and one class of
convertible common securities, liquidation amount $50, representing undivided
beneficial interests in the assets of the Trust (the "Common Securities"),
having such terms as are set forth in Annex I. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities. The Trust shall issue no
Securities in bearer form.

                  (b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.

                  (c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.01 with respect to the
Common Securities.

                  (d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.

                  SECTION 7.02. Execution and Authentication. (a) The Securities
shall be signed on behalf of the Trust by one Administrative Trustee. In case
any Administrative Trustee of the Trust who shall have signed any of the
Securities shall cease to be such Administrative Trustee before the Securities
so signed shall be delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not ceased to be
such Administrative Trustee; and any Securities may be 
   53
                                                                              46

signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Administrative Trustee.

                  (b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.

                  A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.

                  Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Section 7.06.

                  The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Company or an Affiliate.

                  SECTION 7.03. Form and Dating. The Preferred Securities and
the Property Trustee's certificate of authentication shall be substantially in
the form of Exhibit A-1 and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation
   54
                                                                              47

and such legends or endorsements required by law, stock exchange rule,
agreements to which the Trust is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Trust). The
Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.

                  The Preferred Securities are being offered and sold by the
Trust pursuant to a Purchase Agreement relating to the Preferred Securities,
dated March 27, 1998, among the Trust, the Sponsor and the Purchasers named
therein (the "Purchase Agreement").

                  (a) Global Securities. Preferred Securities offered and sold
to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons with the appropriate global
legends and Restricted Securities Legend set forth in Exhibit A-1 hereto (each,
a "Rule 144A Global Preferred Security"), which shall be deposited on behalf of
the purchasers of the Preferred Securities represented thereby with the Property
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Trust and authenticated by the Property Trustee as provided herein. The
number of Preferred Securities represented by the Rule 144A Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Depositary or its nominee as
hereinafter provided.

                  (b) Book-Entry Provisions. This Section 7.03(b) shall apply
only to the Rule 144A Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be deposited with
or on behalf of the Depositary.
   55
                                                                              48

                  The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.03, authenticate and deliver initially one or
more Rule 144A Global Preferred Securities that (a) shall be registered in the
name of Cede & Co. or other nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
written instructions or held by the Trustee as custodian for the Depositary.

                  Members of, or participants in, the Depositary
("Participants") shall have no rights under this Declaration with respect to any
Rule 144A Global Preferred Security held on their behalf by the Depositary or by
the Property Trustee as the custodian of the Depositary or under such Rule 144A
Global Preferred Security, and the Depositary may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Rule 144A Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing
the exercise of the rights of a holder of a beneficial interest in any Rule 144A
Global Preferred Security.

                  (c) Certificated Securities. Except as provided in Section
7.03(d), owners of beneficial interests in the Rule 144A Global Preferred
Security will not be entitled to receive physical delivery of certificated
Preferred Securities. Preferred Securities offered and sold in reliance on
Regulation S, as provided in the Purchase Agreement, shall be issued initially
in the form of individual certificates in definitive, fully registered form
without distribution coupons and shall bear the Restricted Securities Legend
set forth in Exhibit A-1 hereto (the "Regulation S Definitive Preferred
Securities"). Purchasers of Preferred Securities who are institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and did not purchase Preferred Securities in reliance on Rule
144A under the Securities Act will receive Preferred Securities in the form of
individual certificates in definitive, fully registered form without
distribution coupons and with the Restricted Securities Legend set forth in
Exhibit A-1 hereto ("IAI Definitive Preferred Securities"); provided, however,
that upon transfer of such IAI
   56
                                                                              49

Definitive Preferred Securities to a QIB, such IAI Definitive Preferred
Securities will, unless the Rule 144A Global Preferred Security has previously
been exchanged for a certificated Preferred Security pursuant to Section
7.03(d), be exchanged for an interest in a Rule 144A Global Security pursuant to
the provisions of Section 9.02. IAI Definitive Preferred Securities will bear
the Restricted Securities Legend set forth on Exhibit A-1 unless removed in
accordance with Section 9.02. Regulation S Definitive Preferred Securities shall
be in denominations of U.S. $1,000 and integral multiples thereof. IAI
Definitive Preferred Securities shall be in minimum denominations of $100,000
and increments of $1,000 in excess thereof.

                  (d) A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to this
Section 7.03 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Trust in its sole discretion determines that such
Global Preferred Security shall be so exchangeable, or (iii) an Event of Default
has occurred and is continuing.

                  (e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Preferred Securities of authorized denominations in the form of certificated
Preferred Securities. Any portion of a Global Preferred Security transferred
pursuant to this Section shall be registered in such names as the Depositary
shall direct. Any Preferred Security in the form of certificated Preferred
Securities delivered in exchange for an interest in the Rule 144A Global
Preferred Security shall, except as otherwise
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provided by Section 9.01, bear the Restricted Securities Legend set forth in
Exhibit A hereto.

                  (f) Subject to the provisions of Section 7.03(e), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any person, including Participants and persons that may hold interests
through Participants, to take any action which a holder is entitled to take
under this Declaration or the Securities.

                  (g) In the event of the occurrence of any of the events
specified in Section 7.03(d), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without distribution coupons.

                  SECTION 7.04. Registrar, Paying Agent and Conversion Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York, State of
New York and in the city of London, England (i) an office or agency where
Preferred Securities may be presented for registration of transfer or for
exchange ("Registrar"), (ii) an office or agency where Preferred Securities may
be presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Trust may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Conversion Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.
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                  The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Conversion Agent for the Preferred Securities.

                  SECTION 7.05. Paying Agent to Hold Money in Trust. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
principal or distribution on the Securities, and will notify the Property
Trustee if there are insufficient funds. While any such insufficiency continues,
the Property Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Sponsor or an Affiliate of the
Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.

                  SECTION 7.06. Replacement Securities. If the holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken
or if such Security is mutilated and is surrendered to the Trust or in the case
of the Preferred Securities to the Property Trustee, the Trust shall issue and
the Property Trustee shall authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. If required
by the Property Trustee or the Trust, an indemnity bond must be sufficient in
the judgment of both to protect the Trustees, the Property Trustee, the Sponsor
or any authenticating agent from any loss which any of them may suffer if a
Security is replaced. The Company may charge for its expenses in replacing a
Security.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

                  Every replacement Security is an additional obligation of the
Trust.
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                  SECTION 7.07. Outstanding Preferred Securities. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.

                  If a Preferred Security is replaced, paid or purchased
pursuant to Section 7.06 hereof, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.

                  If Preferred Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.

                  A Preferred Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.

                  SECTION 7.08. Preferred Securities in Treasury. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded
and deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be fully protected in relying on any such
direction, waiver or consent, only Securities which the Property Trustee knows
are so owned shall be so disregarded.

                  SECTION 7.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Trust may prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Trust considers
appropriate for temporary Securities. Without unreasonable delay, the Trust
shall prepare and deliver to the Property Trustee Preferred Securities in
certificated form (other than in the case of Preferred Securities in global
form) and thereupon any or all temporary Preferred Securities (other than any
such Preferred Securities in global form) may be surrendered in exchange
therefor, at the office of the Registrar, and the Property Trustee shall
authenticate and deliver an equal aggregate liquidation amount of definitive
Preferred Securities in certificated
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form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).

                  SECTION 7.10. Cancellation. The Trust at any time may deliver
Preferred Securities to the Property Trustee for cancellation. The Registrar,
Paying Agent and Conversion Agent shall forward to the Property Trustee any
Preferred Securities surrendered to them for registration of transfer,
redemption, conversion, exchange or payment. The Property Trustee shall promptly
cancel all Preferred Securities, surrendered for registration of transfer,
redemption, conversion, exchange, payment, replacement or cancellation and shall
return such canceled Preferred Securities to the Administrative Trustees. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or that have been delivered to the Property Trustee for
cancellation or that any holder has converted.

                                  ARTICLE VIII

                              Termination of Trust

                  SECTION 8.01. Termination of Trust. (a) The Trust shall
terminate upon the earliest to occur of the following:

                  (i) the bankruptcy of the Holder of the Common
         Securities or the Sponsor;

                  (ii) the filing of a certificate of dissolution or its
         equivalent with respect to the Holder of the Common Securities or the
         Sponsor; the filing of a certificate of cancellation with respect to
         the Trust or the revocation of the charter of the Holder of the Common
         Securities or the Sponsor and the expiration of 90 days after the date
         of revocation without a reinstatement thereof;

                  (iii) the distribution of a Like Amount of Debentures to
         Holders of the Securities in accordance with the terms of the
         Securities;

                  (iv) all of the Securities shall have been called for
         redemption and the amounts necessary for redemption
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         thereof shall have been paid to the Holders in accordance with the
         terms of the Securities;

                  (v) the expiration of the term of the Trust on
         March 17, 2034;

                  (vi) the entry of a decree of judicial dissolution of the
         Holder of the Common Securities, the Sponsor or the Trust;

                  (vii) when all of the Securities shall have been called for
         redemption and the amounts necessary for redemption thereof shall have
         been paid to the Holders in accordance with the terms of the
         Securities;

                  (viii) upon the distribution of the Common Stock (as defined
         in the Indenture) of the Sponsor to Holders of all outstanding
         Securities upon conversion of all such Securities; or

                  (ix) before the issuance of any Securities, with the consent
         of all the Administrative Trustees and the Sponsor.

                  (b) As soon as is practicable after the occurrence of an
event referred to in Section 8.01(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.

                  (c) The provisions of Section 3.09 and Article X shall survive
the termination of the Trust.

                                   ARTICLE IX

                              Transfer and Exchange

                  SECTION 9.01. General. (a) Where Preferred Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal number of Preferred Securities
represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To
permit registrations of transfers and exchanges, the Trust shall issue and the
Property Trustee shall authenticate Preferred Securities at the Registrar's
request.
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                  (b) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.

                  Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:

                  (i) the Trust would not be classified for United States
         federal income tax purposes as a grantor trust; and

                  (ii) the Trust would be an Investment Company or the
         transferee would become an Investment Company.

                  (c) The Administrative Trustees shall provide for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be cancelled in accordance with Section 7.10. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
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                  (d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.

                  (e) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Preferred Securities surrendered upon such transfer or exchange.

                  SECTION 9.02. Transfer Procedures and Restrictions. (a)
General. Subject to Sections 9.02(b) and 9.02(j)(iii), if Preferred Securities
are issued upon the transfer, exchange or replacement of Preferred Securities
bearing the Restricted Securities Legend set forth in Exhibit A-1 hereto, or if
a request is made to remove such Restricted Securities Legend on Preferred
Securities, the Preferred Securities so issued shall bear the Restricted
Securities Legend, or the Restricted Securities Legend shall not be removed, as
the case may be, unless there is delivered to the Trust and the Property Trustee
such satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company, that (i) neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Rule 144 or Regulation S under the Securities Act or (ii) that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of the Trust, shall authenticate and deliver
Preferred Securities that do not bear the Restricted Securities Legend.

                  (b) Transfers After Effectiveness of Shelf Registration
Statement. After the effectiveness of a Shelf Registration Statement for any
Preferred Securities, all requirements pertaining to Restricted Securities
Legends on any Preferred Security included within such Shelf
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Registration Statement will cease to apply, and beneficial interests in a
Preferred Security in global form without Restricted Securities Legends will be
available to transferees of such Preferred Securities, upon exchange of the
transferring holder's Regulation S Definitive Preferred Security or IAI
Definitive Preferred Security or directions to transfer such Holder's beneficial
interest in the Rule 144A Global Preferred Security, as the case may be. After
the effectiveness of the Shelf Registration Statement, the Trust shall issue and
the Property Trustee shall authenticate a Preferred Security in global form
without the Restricted Securities Legend (the "Unrestricted Global Preferred
Security") to deposit with the Depositary to evidence transfers of (i)
beneficial interests from the Rule 144A Global Preferred Security, (ii) IAI
Definitive Preferred Securities and (iii) Regulation S Definitive Preferred
Securities.

                  (c)  [Reserved]

                  (d)  Transfer and Exchange of Definitive Preferred
Securities.  When Definitive Preferred Securities are presented to the
Registrar or co-Registrar

                  (x) to register the transfer of such Definitive
         Preferred Securities; or

                  (y) to exchange such Definitive Preferred Securities for an
         equal number of Definitive Preferred Securities of another
         denomination.

the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:

                  (i) shall be duly endorsed or accompanied by a written
         instrument of transfer in form reasonably satisfactory to the Trust and
         the Registrar or co-registrar, duly executed by the Holder thereof or
         his attorney duly authorized in writing; and

                  (ii) in the case of Definitive Preferred Securities that are
         Restricted Preferred Securities, are being transferred or exchanged (x)
         pursuant to an effective registration statement under the Securities
         Act or
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                  (y) pursuant to, and in compliance with, clause (A) or (B)
                  below:

                           (A) if such Restricted Preferred Securities are being
                  delivered to the Registrar by a Holder for registration in the
                  name of such Holder, without transfer, such Holder shall
                  deliver a certification to that effect (in the form set forth
                  on the reverse of the Preferred Security); or

                           (B) if such Restricted Preferred Securities are being
                  transferred pursuant to an exemption from registration in
                  accordance with Rule 144A, Regulation S or Rule 144 under the
                  Securities Act such Holder shall deliver: (i) a certification
                  to that effect (in the form set forth on the reverse of the
                  Preferred Security) and (ii) if the Trust or Registrar so
                  requests, evidence reasonably satisfactory to them as to the
                  compliance with the restrictions set forth in the Restricted
                  Securities Legend.

                  Definitive Preferred Securities that are transferred to QIBs
in accordance with Rule 144A under the Securities Act must take delivery of
their interests in the Preferred Securities in the form of a beneficial interest
in the Rule 144A Global Preferred Security in accordance with Section 9.02(e).

                  (e) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:

                  (i) if such Definitive Preferred Security is an IAI Definitive
         Preferred Security or a Regulation S Definitive Preferred Security,
         certification, in the form set forth on the reverse of the Preferred
         Security, that such Definitive Preferred Security is being transferred
         to a QIB in accordance with Rule 144A under the Securities Act; and
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                  (ii) whether or not such Definitive Preferred Security is an
         IAI Definitive Preferred Security or a Regulation S Definitive
         Preferred Security, written instructions directing the Property Trustee
         to make, or to direct the Depositary to make, an adjustment on its
         books and records with respect to such Global Preferred Security to
         reflect an increase in the number of the Preferred Securities
         represented by the Global Preferred Security,

then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Administrative Trustee, an appropriate number of Preferred Securities in
global form.

                  (f) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.

                  (g)  Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security.

                  (i) Upon the transfer of a beneficial interest in a Rule 144A
         Global Preferred Security pursuant to Regulation S, subject to Section
         9.02(b) the interest being transferred in the Global Preferred Security
         may not continue to be held in book-entry form through the Depositary,
         will be exchanged for a Definitive Preferred Security only and will
         require the delivery by the transferee of a transfer certificate in the
         form set forth in Exhibit A-1.

                  (ii) Definitive Preferred Securities issued in exchange for a
         beneficial interest in a Global Preferred Security pursuant to this
         Section 9.02(g) shall be registered in such names and in such
         authorized denominations as the Depositary, pursuant to instructions
         from its Participants or indirect participants or otherwise, shall
         instruct the Property
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         Trustee. The Property Trustee shall deliver such Preferred Securities
         to the persons in whose names such Preferred Securities are so
         registered in accordance with the instructions of the Depositary.

                  (h) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.

                  (i)  [Reserved].

                  (j)  Legend.

                  (i) Except as permitted by the following paragraph (iii), each
         Preferred Security certificate evidencing the Global Preferred
         Securities and the Definitive Preferred Securities (and all Preferred
         Securities issued in exchange therefor or substitution thereof) shall
         bear a legend (together, in the case of Regulation S Definitive
         Preferred Securities and IAI Definitive Preferred Securities, the
         legend set forth in the following paragraph (ii), the "Restricted
         Securities Legend") in substantially the following form:

                  "EACH OF THE TIDES (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
         IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
         SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF THE TIDES
         AND ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE
         FOR THE TIDES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON
         CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
         THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
         EACH PURCHASER OF EACH OF THE TIDES IS HEREBY NOTIFIED THAT THE SELLER
         OF EACH OF THE TIDES MAY BE RELYING ON THE EXEMPTION FROM THE
         PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
         THEREUNDER.

                  THE HOLDER OF EACH OF THE TIDES AGREES FOR THE BENEFIT OF THE
         ISSUER AND THE COMPANY THAT (A) EACH OF
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         THE TIDES AND ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR COMMON
         STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED
         OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER
         REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
         RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A
         TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
         PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
         PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
         CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
         LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
         JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
         REQUIRED TO, NOTIFY ANY PURCHASER OF EACH OF THE TIDES FROM IT OF THE
         RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."

                  (ii) In addition to the legend set forth in paragraph (i)
         above, Preferred Securities initially sold (a) to non-U.S. persons
         pursuant to Regulation S or (b) to institutional "accredited investors"
         (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
         Act), shall bear a legend in substantially the following form:

                  "IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
                  THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
                  INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY
                  REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIED WITH
                  THE FOREGOING RESTRICTIONS."

                  (iii) Upon any sale or transfer of a Restricted Preferred
         Security (including any Restricted Preferred Security represented by a
         Global Preferred Security) pursuant to Rule 144 under the Securities
         Act or an effective registration statement under the Securities Act the
         Registrar shall permit the holder thereof to exchange such Restricted
         Preferred Security for an interest in the Unrestricted Global Security.

                  (k) Cancellation or Adjustment of Global Preferred Security.
At such time as all beneficial interests in a Global Preferred Security have
either been
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exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or cancelled in accordance with the terms
of this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and cancelled by the Property Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.

                  (l)  [Reserved]

                  (m)  No Obligation of the Property Trustee.

                  (i) The Property Trustee shall have no responsibility or
         obligation to any beneficial owner of a Global Preferred Security, a
         Participant in the Depositary or other Person with respect to the
         accuracy of the records of the Depositary or its nominee or of any
         Participant thereof, with respect to any ownership interest in the
         Preferred Securities or with respect to the delivery to any
         Participant, beneficial owner or other Person (other than the
         Depositary) of any notice (including any notice of redemption) or the
         payment of any amount, under or with respect to such Preferred
         Securities. All notices and communications to be given to the Holders
         and all payments to be made to Holders under the Preferred Securities
         shall be given or made only to or upon the order of the registered
         Holders (which shall be the Depositary or its nominee in the case of a
         Global Preferred Security). The rights of beneficial owners in any
         Global Preferred Security shall be exercised only through the
         Depositary subject to the applicable rules and procedures of the
         Depositary. The Property Trustee may conclusively rely and shall be
         fully protected in relying upon information furnished by the Depositary
         or agent thereof with respect to its Participants and any beneficial
         owners.

                  (ii) The Property Trustee and Registrar shall have no
         obligation or duty to monitor, determine or inquire
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         as to compliance with any restrictions on transfer imposed under this
         Declaration or under applicable law with respect to any transfer of any
         interest in any Preferred Security (including any transfers between or
         among Depositary Participants or beneficial owners in any Global
         Preferred Security) other than to require delivery of such certificates
         and other documentation or evidence as are expressly required by, and
         to do so if and when expressly required by, the terms of this
         Declaration, and to examine the same to determine substantial
         compliance as to form with the express requirements hereof.

                  SECTION 9.03. Deemed Security Holders. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Property Trustee, the Registrar or a
co-registrar shall have actual or other notice thereof.

                  SECTION 9.04. [Reserved]

                  SECTION 9.05. Notices to Clearing Agency. Whenever a notice or
other communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary, and shall have no
notice obligations to the Preferred Security Beneficial Owners.

                  SECTION 9.06.  Appointment of Successor Clearing Agency.  If
the Depository elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Preferred Securities.
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                                    ARTICLE X

                           Limitation of Liability of
                    Holders of Securities, Trustees or Others

                  SECTION 10.01. Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantees and the terms of the Securities the
Sponsor shall not be:

                  (i) personally liable for the return of any portion of the
         capital contributions (or any return thereon) of the Holders of the
         Securities which shall be made solely from assets of the Trust; or

                  (ii) required to pay to the Trust or to any Holder of
         Securities any deficit upon dissolution of the Trust or otherwise.

                  (b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.

                  (c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.

                  SECTION 10.02. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.

                  (b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the
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Trust and upon such information, opinions, reports or statements presented to
the Trust by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of Securities
might properly be paid.

                  SECTION 10.03. Fiduciary Duty. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.

                  (b)  Unless otherwise expressly provided herein:

                  (i) whenever a conflict of interest exists or arises between
         an Indemnified Person and any Covered Person; or

                  (ii) whenever this Declaration or any other agreement
         contemplated herein or therein provides that an Indemnified Person
         shall act in a manner that is, or provides terms that are, fair and
         reasonable to the Trust or any Holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or
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                                                                              66

term so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.

                  (c)  Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision

                  (i) in its "discretion" or under a grant of similar authority,
         the Indemnified Person shall be entitled to consider such interests and
         factors as it desires, including its own interests, and shall have no
         duty or obligation to give any consideration to any interest of or
         factors affecting the Trust or any other Person; or

                  (ii) in its "good faith" or under another express standard,
         the Indemnified Person shall act under such express standard and shall
         not be subject to any other or different standard imposed by this
         Declaration or by applicable law.

                  SECTION 10.04. Indemnification. (a) To the fullest extent
permitted by applicable law, the Debenture Issuer shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage, liability,
tax, penalty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination of the
Trust or any act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.

                  (b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
of an
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                                                                              67

undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification shall survive
the termination of this Declaration.

                  SECTION 10.05. Outside Businesses. Any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of the Sponsor, any Covered Person, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.

                                   ARTICLE XI

                                   Accounting

                  SECTION 11.01.  Fiscal Year.  The fiscal year ("Fiscal Year")
of the Trust shall be the calendar year, or such other year as is required by
the Code.

                  SECTION 11.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Administrative Trustees shall keep, or
cause to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail, each transaction
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                                                                              68

of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
Administrative Trustees.

                  (b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss;

                  (c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.

                  (d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.

                  SECTION 11.03. Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee Account and no
other funds of the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
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                                                                              69

                  SECTION 11.04. Withholding. The Trust and the Administrative
Trustees shall comply with all withholding requirements under United States
federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.

                                   ARTICLE XII

                             Amendments and Meetings

                  SECTION 12.01. Amendments. (a) This Declaration may be amended
from time to time by the Sponsor, the Property Trustee and the Administrative
Trustees, without the consent of the Holders of the Securities, (i) to cure any
ambiguity, correct or supplement any provision in the Declaration that may be
inconsistent with any other provision, or to make any other provisions with
respect to ministerial matters or questions arising under the Declaration, which
shall not be inconsistent with the other provisions of the Declaration, or (ii)
to modify, eliminate or add to any provisions of the Declaration to such extent
as shall be necessary to ensure that the Trust will not be taxable as a
corporation or will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "investment company" under
the Investment Company Act; provided, however, that in the case of clause (i),
such action shall
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                                                                              70

not adversely affect in any material respect the interests of any Holder of
Securities, and any amendments of the Declaration shall become effective when
notice thereof is given to the Holders of the Securities.

                  (b) Except as provided in (c) below, this Declaration may be
amended by the Trustees and the Company with (i) the consent of Holders
representing not less than a Majority in liquidation amount of the outstanding
Preferred Securities, and (ii) receipt by the Trustees of an opinion of counsel
to the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act.

                  (c) Without the consent of each holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.

                  SECTION 12.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of any class of Securities may
be called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 25% in liquidation amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more requests in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities represented by the Certificates so specified shall be counted for
purposes of determining whether the required
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                                                                              71

percentage set forth in the second sentence of this paragraph has been met.

                  (b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:

                  (i) notice of any such meeting shall be given to all the
         Holders of Securities having a right to vote thereat at least 7 days
         and not more than 60 days before the date of such meeting. Whenever a
         vote, consent or approval of the Holders of Securities is permitted or
         required under this Declaration or the rules of any stock exchange on
         which the Preferred Securities are listed or admitted for trading, such
         vote, consent or approval may be given at a meeting of the Holders of
         Securities. Any action that may be taken at a meeting of the Holders of
         Securities may be taken without a meeting if a consent in writing
         setting forth the action so taken is signed by the Holders of
         Securities owning not less than the minimum aggregate liquidation
         amount of Securities that would be necessary to authorize or take such
         action at a meeting at which all Holders of Securities having a right
         to vote thereon were present and voting. Prompt notice of the taking of
         action without a meeting shall be given to the Holders of Securities
         entitled to vote who have not consented in writing. The Administrative
         Trustees may specify that any written ballot submitted to the Holders
         for the purpose of taking any action without a meeting shall be
         returned to the Trust within the time specified by the Administrative
         Trustees;

                  (ii) each Holder of a Security may authorize any Person to act
         for it by proxy on all matters in which a Holder of Securities is
         entitled to participate, including waiving notice of any meeting, or
         voting or participating at a meeting. No proxy shall be valid after the
         expiration of 11 months from the date thereof unless otherwise provided
         in the proxy. Every proxy shall be revocable at the pleasure of the
         Holder of Securities executing it. Except as otherwise provided herein,
         all matters relating to the giving, voting or validity of proxies shall
         be governed by the General Corporation Law of the State of Delaware
         relating to proxies, and judicial interpretations thereunder, as if the
         Trust were a Delaware corporation and the Holders
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                                                                              72

         of the Securities were stockholders of a Delaware corporation;

                  (iii) each meeting of the Holders of the Securities shall be
         conducted by the Administrative Trustees or by such other Person that
         the Administrative Trustees may designate; and

                  (iv) unless the Business Trust Act, this Declaration, the
         terms of the Securities, the Trust Indenture Act or the listing rules
         of any stock exchange on which the Preferred Securities are then listed
         or trading, provide otherwise, the Administrative Trustees, in their
         sole discretion, shall establish all other provisions relating to
         meetings of Holders of Securities, including notice of the time, place
         or purpose of any meeting at which any matter is to be voted on by any
         Holders of Securities, waiver of any such notice, action by consent
         without a meeting, the establishment of a record date, quorum
         requirements, voting in person or by proxy or any other matter with
         respect to the exercise of any such right to vote.

                                  ARTICLE XIII

            Representations of Property Trustee and Delaware Trustee

                  SECTION 13.01. Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:

                  (a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.

                  (b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly
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                                                                              73

authorized by all necessary corporate action on the part of the Property
Trustee. The Declaration has been duly executed and delivered by the Property
Trustee, and constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).

                  (c) The execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.

                  (d) No consent, approval or authorization of, or registration
with or notice to, any New York or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.

                  SECTION 13.02. Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:

                  (a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.

                  (b) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting
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                                                                              74

creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).

                  (c) The execution, delivery and performance of the Declaration
by the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.

                  (d) No consent, approval or authorization of, or registration
with or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.

                  (e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.

                  (f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.

                                   ARTICLE XIV

                               Registration Rights

                  SECTION 14.01. Registration Rights. The Holders of the
Preferred Securities, the Debentures, the Preferred Securities Guarantee and the
shares of Common Stock of the Sponsor issuable upon conversion of the Securities
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement. Pursuant to the Registration Rights Agreement the
Sponsor and the Trust have agreed for the benefit of the Holders of the
Registrable Securities that (i) they will, at the Sponsor's sole expense, prior
to May 1, 1998, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to resales of the Registrable
Securities, (ii) they will use their best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act prior
to July 30, 1998, and (iii) they will use their best efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
(subject to certain exceptions under the Registration Rights Agreement) until
the second anniversary of the effectiveness of the Shelf Registration Statement
or such other period as shall be required under Rule 144(k) of the Securities
Act or any
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                                                                              75

successor rule or regulation thereto or such earlier date as is provided in the
Registration Rights Agreement. If the Sponsor fails to comply with either of
clauses (ii) or (iii) above, subject to certain exceptions provided in the
Registration Rights Agreement, (a "Registration Default") then, at such time,
the rate of Distributions on the Securities will increase by 50 basis points
(.50%) per annum. Such increase will remain in effect from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured on which date the rate
of Distributions on the Securities will revert to the rate of Distributions
originally borne by the Securities.

                                   ARTICLE XV

                                  Miscellaneous

                  SECTION 15.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail, as
follows:

                  (a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set
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                                                                              76

forth below (or such other address as the Trust may give notice of to the
Holders of the Securities):

                           c/o Union Pacific Corporation
                           1717 Main Street
                           Suite 5900
                           Dallas, Texas 75201-4605
                           Attention:  Chief Financial Officer

                  (b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):

                           The Bank of New York
                           Corporate Trust Trustee Administration
                           101 Barclay Street
                           Floor 21 West
                           New York, New York  10286
                           Attention:  Corporate Trust Department

                  (c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):

                           The Bank of New York (Delaware)
                           23 White Clay Center
                           Route 273
                           Newark, Delaware  19711
                           Attention:  Corporate Trust Department

                  (d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):

                           c/o Union Pacific Corporation
                           1717 Main Street
                           Suite 5900
                           Dallas, Texas 75201-4605
                           Attention:  Chief Financial Officer

                  (e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
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                                                                              77

                  All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

                  SECTION 15.02. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust.

                  SECTION 15.03. Intention of the Parties. It is the intention
of the parties hereto that the Trust be classified for United States federal
income tax purposes as a grantor trust. The provisions of this Declaration shall
be interpreted to further this intention of the parties.

                  SECTION 15.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.

                  SECTION 15.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
   85
                  SECTION 15.06. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.

                  SECTION 15.07. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.

                  IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.

                                                as Trustee

                                                ________________________________

                                                as Trustee

                                                ________________________________

                                                as Trustee

                                                ________________________________
   86
                                                THE BANK OF NEW YORK
                                                (DELAWARE), as Delaware Trustee

                                                By:_____________________________

                                                Name:

                                                Title:

                                                THE BANK OF NEW YORK, as
                                                Property Trustee

                                                By:_____________________________

                                                Name:

                                                Title:
   87
                                                UNION PACIFIC CORPORATION,
                                                as Sponsor

                                                By:_____________________________

                                                Name:

                                                Title:
   88
                                                                               1

                                    TERMS OF
                     6 1/4% CONVERTIBLE PREFERRED SECURITIES
               Term Income Deferable Equity Securities (TIDES(sm))
                      6 1/4% CONVERTIBLE COMMON SECURITIES

            Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust, dated as of April 1, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or the Indenture (as defined in the
Declaration) or, if not defined in the Declaration or Indenture, as defined in
the Offering Circular (as defined in the Declaration):

1.    Designation and Number.

      (a)   "Preferred Securities." 30,000,000 Preferred Securities of the Trust
            with an aggregate liquidation preference with respect to the assets
            of the Trust of One billion five hundred million Dollars
            ($1,500,000,000), and a liquidation amount with respect to the
            assets of the Trust of $50 per Preferred Security, are hereby
            designated for the purposes of identification only as "6 1/4%
            Convertible Preferred Securities, Term Income Deferrable Equity
            Securities (TIDES(sm))" (the "Preferred Securities"). The Preferred
            Security Certificates evidencing the Preferred Securities shall be
            substantially in the form attached hereto as Exhibit A-1, with such
            changes and additions thereto or deletions therefrom as may be
            required by ordinary usage, custom or practice or to conform to the
            rules of any stock exchange or other organization on which the
            Preferred Securities are listed.

      (b)   "Common Securities." 927,835 Common Securities of the Trust with an
            aggregate liquidation amount with respect to the assets of the Trust
            of Forty-six million, three hundred and ninety-one thousand and
            seven hundred and fifty Dollars ($46,391,750) and a liquidation
            amount with respect to the assets of the Trust of $50 per Common
            Security,
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                                                                               2

            are hereby designated for the purposes of identification only as "6
            1/4% Convertible Common Securities" (the "Common Securities"). The
            Common Security Certificates evidencing the Common Securities shall
            be substantially in the form attached hereto as Exhibit A-2, with
            such changes and additions thereto or deletions therefrom as may be
            required by ordinary usage, custom or practice.

2.    Distributions.

      (a)   Distributions payable on each Security will be fixed at a rate per
            annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount
            of $50 per Security, such rate being the rate of interest payable on
            the Debentures to be held by the Property Trustee. Distributions in
            arrears for more than one quarter will bear interest thereon
            compounded quarterly at the Coupon Rate (to the extent permitted by
            applicable law), subject to adjustment in the event of a
            Registration Default, as described in the Declaration. The term
            "Distributions" as used herein includes such quarterly
            distributions, additional distributions on quarterly distributions
            not paid on the applicable Distribution Date, Special Distributions
            and Additional Sums, as applicable. A Distribution is payable only
            to the extent that payments are made in respect of the Debentures
            held by the Property Trustee and to the extent the Property Trustee
            has funds available therefor. The amount of Distributions payable
            for any period will be computed for any full quarterly Distribution
            period on the basis of a 360-day year of twelve 30-day months, and
            for any period shorter than a full quarterly Distribution period for
            which Distributions are computed, Distributions will be computed on
            the basis of the actual number of days elapsed per 30-day month.

      (b)   Distributions on the Securities will be cumulative, will accrue from
            the date of their original issuance and will be payable quarterly in
            arrears, on the following dates, which dates correspond to the
            interest payment dates on the Debentures: January 1, April 1, July 1
            and October 1 of each year, commencing on July 1, 1998, except as
            other-
   90
                                                                               3

            wise described below. The Sponsor has the right under the Indenture
            to defer payments of interest by extending the interest payment
            period from time to time on the Debentures for a period not
            exceeding 20 consecutive quarters (each a "Deferral Period") and, as
            a consequence of such deferral, Distributions will also be deferred.
            Despite such deferral, quarterly Distributions will continue to
            accrue with interest thereon (to the extent permitted by applicable
            law) at the Coupon Rate compounded quarterly during any such
            Deferral Period. Prior to three Business Days before a Regular
            Record Date fixed for a Payment Resumption Date (as defined in the
            Indenture), the Sponsor may further extend such Deferral Period;
            provided that such Deferral Period together with all such previous
            and further extensions thereof may not exceed 20 consecutive
            quarters or extend beyond the maturity (whether at the stated
            maturity or by declaration of acceleration, call for redemption or
            otherwise) of the Debentures under the Indenture. Payments of
            accrued Distributions will be payable to Holders as they appear on
            the books and records of the Trust on the Regular Record Date for
            the relevant Payment Resumption Date. Upon the termination of any
            Deferral Period and the payment of all amounts then due, the Sponsor
            may commence a new Deferral Period, subject to the above
            requirements.

      (c)   Distributions on the Securities will be payable to the Holders
            thereof as they appear on the books and records of the Trust at the
            close of business on the relevant record dates. The relevant record
            dates shall be on the 15th of the month next preceding the relevant
            payment dates, except as otherwise described in this Annex I to the
            Declaration. Subject to any applicable laws and regulations and the
            provisions of the Declaration, each such payment in respect of
            Preferred Securities being held in book-entry form through The
            Depository Trust Company (the "Depositary") will be made as
            described under the heading "Description of TIDES -- Form,
            Book-Entry Procedures and Transfer" in the Offering Circular. The
            relevant record dates for the Common Securities shall be the same
            record dates as for the Preferred Securities. Distributions payable
            on any Securities 
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            that are not punctually paid on any Distribution payment date, as a
            result of the Sponsor having failed to make a payment under the
            Debentures, will cease to be payable to the Person in whose name
            such Securities are registered on the relevant record date, and such
            defaulted Distribution will instead be payable to the Person in
            whose name such Securities are registered on the special record date
            or other specified date determined in accordance with the Indenture.
            If any date on which Distributions are payable on the Securities is
            not a Business Day, then payment of the Distribution payable on such
            date will be made on the next succeeding day that is a Business Day
            (and without any interest or other payment in respect of any such
            delay) except that, with respect to any Redemption Date, if such
            Business Day is in the next succeeding calendar year, such
            Redemption Date shall be the immediately preceding Business Day, in
            each case with the same force and effect as if made on such date.

      (d)   In the event of an election by the Holder to convert its Securities
            through the Conversion Agent into Common Stock pursuant to the terms
            of the Securities as forth in this Annex I to the Declaration, no
            payment, allowance or adjustment shall be made with respect to
            accumulated and unpaid Distributions on such Securities, or be
            required to be made; provided that Holders of Securities at the
            close of business on any record date for the payment of
            Distributions will be entitled to receive the Distributions payable
            on such Securities on the corresponding payment date notwithstanding
            the conversion of such Securities into Common Stock following such
            record date.

      (e)   In the event that there is any money or other property held by or
            for the Trust that is not accounted for hereunder, such property
            shall be distributed Pro Rata (as defined herein) among the Holders
            of the Securities.

3.    Liquidation Distribution Upon Dissolution.

            In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Trust shall be liquidated by the Trustees as
expeditiously 
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as the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
Holders of the Securities a Like Amount of Debentures, unless such distribution
would not be practical, in which event such Holders will be entitled to receive
out of the assets of the Trust available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to, in the case of holders of Preferred Securities, the
aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Preferred Securities shall be paid on a Pro Rata (as defined below) basis in
accordance with paragraph 9. The Holder of the Common Securities will be
entitled to receive distributions upon any such liquidation Pro Rata with the
holders of the Preferred Securities, except as provided in paragraph 10.

4.    Redemption and Distribution.

      (a)   Upon the repayment or payment of the Debentures in whole or in part,
            whether at maturity or upon redemption or otherwise (other than
            following any distribution of the Debentures to the Holders), the
            proceeds from such repayment or redemption shall be simultaneously
            applied to redeem, on a Pro Rata basis, a Like Amount of Securities,
            on the redemption date, in an amount per Security equal to the
            applicable redemption price, which redemption price will be equal to
            (i) the liquidation amount of each of the Securities plus any
            accrued and unpaid Distributions thereon (A) in the case of the
            repayment of the Debentures at stated maturity, or (B) in the case
            of a redemption of the Debentures in certain limited circumstances
            set forth in the Indenture upon the occurrence of a Tax Event or
            (ii) in the case of an Optional Redemption on or after April 10,
            2001, the Optional Redemption Price (as defined in the Indenture),
            payable in cash (as applicable, the "Redemption Price"). Holders
            will be given not less than 30 (or, in the case of a redemption
            pursuant to subparagraph (d) below, 20) nor more 
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            than 60 days' notice of such redemption. Upon the repayment of the
            Debentures at maturity or upon any acceleration, earlier redemption
            or otherwise, the proceeds from such repayment will be applied to
            redeem the Securities, in whole, upon not less than 30 nor more than
            60 days' notice.

      (b)   If fewer than all the outstanding Securities are to be so redeemed,
            the Common Securities and the Preferred Securities will be redeemed
            Pro Rata and the Preferred Securities to be redeemed will be as
            described in Paragraph 4(f)(ii) below.

      (c)   The Sponsor, as the Holder of the outstanding Common Securities,
            shall have the right at any time (including, without limitation,
            upon the occurrence of a Tax Event or Investment Company Act Event)
            to terminate the Trust and, after satisfaction of the creditors of
            the Trust, cause a Like Amount of the Debentures to be distributed
            to the holders of the Securities upon liquidation of the Trust,
            provided that the Administrative Trustees shall have received a No
            Recognition Opinion (as defined below) prior to the liquidation of
            the Trust; and provided further that, following such distribution of
            the Debentures, the Company shall use its best efforts to maintain a
            rating of such Debentures by any nationally recognized rating agency
            for so long as any such Debentures are outstanding.

      (d)   If, at any time, a Tax Event shall occur and be continuing the
            Sponsor shall cause the Administrative Trustees to liquidate the
            Trust and, after satisfaction of creditors of the Trust, cause
            Debentures to be distributed to the Holders of the Securities in
            liquidation of the Trust within 90 days following the occurrence of
            such Tax Event (the "90 Day Period"); provided, however, that such
            liquidation and distribution shall be conditioned on (i) the
            Trustees' receipt of an opinion of a nationally recognized
            independent tax counsel (reasonably acceptable to the Trustees)
            experienced in such matters (a "No Recognition Opinion"), which
            opinion may rely on published revenue rulings of the Internal
            Revenue Service, to the effect that the Holders of the Securities
            will not recognize any income, gain or loss for 
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                                                                               7

            United States federal income tax purposes as a result of such
            liquidation and distribution of Debentures, and (ii) the Sponsor
            being unable to avoid such Tax Event within the 90 Day Period by
            taking some ministerial action or pursuing some other reasonable
            measure that, in the sole judgment of the Sponsor, will have no
            adverse effect on the Trust, the Sponsor or the Holders of the
            Securities and will involve no material cost ("Ministerial Action").

                        If (i) the Sponsor has received an opinion (a
            "Redemption Tax Opinion") of a nationally recognized independent tax
            counsel (reasonably acceptable to the Trustees) experienced in such
            matters that, as a result of a Tax Event, there is more than an
            insubstantial risk that the Sponsor would be precluded from
            deducting the interest on the Debentures for United States federal
            income tax purposes, even after the Debentures were distributed to
            the Holders of Securities upon liquidation of the Trust as described
            in this paragraph 4(d), or (ii) the Trustees shall have been
            informed by such tax counsel that it cannot deliver a No Recognition
            Opinion, the Sponsor shall have the right, upon not less than 20 nor
            more than 60 days' notice, and within 90 days following the
            occurrence of such Tax Event, to redeem the Debentures in whole (but
            not in part) for cash, for the principal amount plus accrued and
            unpaid interest thereon and, following such redemption, all the
            Securities will be redeemed by the Trust at the liquidation amount
            of $50 per Security plus accrued and unpaid Distributions thereon;
            provided, however, that, if at the time there is available to the
            Sponsor or the Trust the opportunity to eliminate, within the 90 Day
            Period, the Tax Event by taking some Ministerial Action, the Trust
            or the Sponsor will pursue such Ministerial Action in lieu of
            redemption.

                        In lieu of the foregoing options, the Company shall also
            have the option of causing the Securities to remain outstanding and
            pay Additional Sums on the Debentures.

                        "Tax Event" means that the Property Trustee shall have
            received an opinion of a 
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                                                                               8

            nationally recognized independent tax counsel to the Sponsor
            (reasonably acceptable to the Trustees) experienced in such matters
            (a "Dissolution Tax Opinion") to the effect that, as a result of
            (a) any amendment to, or change (including any announced prospective
            change (which shall not include a proposed change), provided that a
            Tax Event shall not occur more than 90 days before the effective
            date of any such prospective change) in the laws (or any regulations
            thereunder) of the United States or any political subdivision or
            taxing authority therefor or therein, (ii) any judicial decision or
            official administrative pronouncement, ruling, regulatory procedure,
            notice or announcement, including any notice or announcement of
            intent to adopt such procedures or regulations (an "Administrative
            Action") or (iii) any amendment to or change in the administrative
            position or interpretation of any Administrative Action or judicial
            decision that differs from the theretofore generally accepted
            position, in each case, by any legislative body, court, governmental
            agency or regulatory body, irrespective of the manner in which such
            amendment or change is made known, which amendment or change is
            effective or such Administrative Action or decision is announced, in
            each case, on or after the date of original issuance of the
            Debentures or the issue date of the Preferred Securities issued by
            the Trust, there is more than an insubstantial risk that (a) if the
            Debentures are held by the Property Trustee, (I) the Trust is, or
            will be within 90 days of the date of such opinion, subject to
            United States federal income tax with respect to interest accrued or
            received on the Debentures or subject to more than a de minimis
            amount of other taxes, duties or other governmental charges as
            determined by such counsel, or (II) any portion of interest payable
            by the Sponsor to the Trust on the Debentures is not, or within 90
            days of the date of such opinion will not be, deductible by the
            Sponsor in whole or in part for United States federal income tax
            purposes or (b) with respect to Debentures which are no longer held
            by the Property Trustee, any portion of interest payable by the
            Sponsor on the Debentures is not, or within 90 days of the date of
            such opinion will not be, deductible by the 
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                                                                               9

            Sponsor in whole or in part for United States federal income tax
            purposes.

                        If an Investment Company Event (as hereinafter defined)
            shall occur and be continuing, the Sponsor shall cause the Trustees
            to liquidate the Trust and cause the Debentures to be distributed to
            the Holders of the Securities in liquidation of the Trust within 90
            days following the occurrence of such Investment Company Event.

                        "Investment Company Event" means the occurrence of a
            change in law or regulation or a written change in interpretation or
            application of law or regulation by any legislative body, court,
            governmental agency or regulatory authority (a "Change in 1940 Act
            Law"), to the effect that the Trust is or will be considered an
            Investment Company which is required to be registered under the
            Investment Company Act, which Change in 1940 Act Law becomes
            effective on or after the date of the Offering Circular.

                        After the date fixed for any distribution of
            Debentures: (i) the Securities will no longer be deemed to be
            outstanding, (ii) the Depositary or its nominee (or any successor
            Depositary or its nominee), as record Holder of Preferred Securities
            represented by global certificates, will receive a registered global
            certificate or certificates representing the Debentures to be
            delivered upon such distribution and (iii) any certificates
            representing Securities, except for certificates representing 
            Preferred Securities held by the Depositary or its nominee (or any
            successor Depositary or its nominee), will be deemed to represent
            Debentures having an aggregate principal amount equal to the
            aggregate stated liquidation amount of such Securities, with accrued
            and unpaid interest equal to accrued and unpaid Distributions on
            such Securities until such certificates are presented to the
            Sponsor or its agent for transfer or reissuance.

      (e)   The Securities will not be redeemed unless all accrued and unpaid
            Distributions have been paid on all Securities for all quarterly
            Distribution 
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                                                                              10

            periods terminating on or before the date of redemption.

      (f)   Redemption or Distribution Procedures.

            (i)   Notice of any redemption of, or notice of distribution of
                  Debentures in exchange for the Securities (a
                  "Redemption/Distribution Notice") will be given by the Trust
                  by mail to each Holder of Securities to be redeemed or
                  exchanged not fewer than 30 (or 20, in the case of redemption
                  or distribution upon the occurrence of a Tax Event) nor more
                  than 60 days before the date fixed for redemption or exchange
                  thereof which, in the case of a redemption, will be the date
                  fixed for redemption of the Debentures. For purposes of the
                  calculation of the date of redemption or exchange and the
                  dates on which notices are given pursuant to this paragraph
                  4(f)(i), a Redemption/Distribution Notice shall be deemed to
                  be given on the day such notice is first mailed by first-class
                  mail, postage prepaid, to Holders of Securities. Each
                  Redemption/Distribution Notice shall be addressed to the
                  Holders of Securities at the address of each such Holder
                  appearing in the books and records of the Trust. No defect in
                  the Redemption/Distribution Notice or in the mailing of either
                  thereof with respect to any Holder shall affect the validity
                  of the redemption or exchange proceedings with respect to any
                  other Holder.

            (ii)  In the event that fewer than all the outstanding Securities
                  are to be redeemed, the Securities to be redeemed shall be
                  redeemed Pro Rata from each Holder of Preferred Securities, it
                  being understood that, in respect of Preferred Securities
                  registered in the name of and held of record by the Depositary
                  (or any successor Depositary) or any nominee, the distribution
                  of the proceeds of such redemption will be made to each
                  Participant (or Person on whose behalf such nominee holds such
                  securities) in accordance with the procedures applied by such
                  agency or nominee.
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                                                                              11

            (iii) If Securities are to be redeemed and the Trust gives a
                  Redemption/Distribution Notice, which notice may only be
                  issued if the Debentures are redeemed as set out in this
                  paragraph 4 (which notice will be irrevocable), then (A) with
                  respect to Preferred Securities held in book-entry form, by
                  12:00 noon, New York City time, on the redemption date, to the
                  extent funds are available, with respect to Preferred
                  Securities held in global form, the Property Trustee will
                  deposit irrevocably with the Depositary (or successor
                  Depositary) funds sufficient to pay the amount payable on
                  redemption with respect to such Preferred Securities and will
                  give the Depositary irrevocable instructions and authority to
                  pay the amount payable on redemption to the Holders of such
                  Preferred Securities, and (B) with respect to Preferred
                  Securities issued in certificated form and Common Securities,
                  to the extent funds are available, the Property Trustee will
                  irrevocably deposit with the Paying Agent funds sufficient to
                  pay the amount payable on redemption to the Holders of such
                  Securities and will give the Paying Agent irrevocable
                  instructions and authority to pay the amount payable on
                  redemption to the Holders thereof upon surrender of their
                  certificates. If a Redemption/Distribution Notice shall have
                  been given and funds deposited as required, then on the date
                  of such deposit, all rights of Holders of such Securities so
                  called for redemption will cease, except the right of the
                  Holders of such Securities to receive the redemption price,
                  but without interest on such redemption price, and such
                  Securities will cease to be outstanding. Neither the
                  Administrative Trustees nor the Trust shall be required to
                  register or cause to be registered the transfer of any
                  Securities that have been so called for redemption. If any
                  date fixed for redemption of Securities is not a Business Day,
                  then payment of the amount payable on such date will be made
                  on the next succeeding day that is a Business Day (without any
                  interest or other payment in respect of any such delay) except
                  that, if 
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                                                                              12

                  such Business Day falls in the next calendar year, such
                  payment will be made on the immediately preceding Business
                  Day, in each case with the same force and effect as if made on
                  such date fixed for redemption. If payment of the redemption
                  price in respect of any Securities is improperly withheld or
                  refused and not paid either by the Trust or by the Sponsor as
                  guarantor pursuant to the relevant Securities Guarantee,
                  Distributions on such Securities will continue to accrue at
                  the then applicable rate, from the original redemption date to
                  the date of payment, in which case the actual payment date
                  will be considered the date fixed for redemption for purposes
                  of calculating the amount payable upon redemption (other than
                  for purposes of calculating any premium).

            (iv)  Redemption/Distribution Notices shall be sent by the
                  Administrative Trustees on behalf of the Trust to (A) in the
                  case of Preferred Securities held in book-entry form, the
                  Depositary and, in the case of Securities held in certificated
                  form, the Holders of such certificates and (B) in respect of
                  the Common Securities, the Holder thereof.

            (v)   Subject to the foregoing and applicable law (including,
                  without limitation, United States federal securities laws),
                  the Sponsor or any of its subsidiaries may at any time and
                  from time to time purchase outstanding Preferred Securities by
                  tender, in the open market or by private agreement.

5.    Conversion Rights.

      The Holders of Securities shall have the right at any time, at their
      option, to cause the Conversion Agent to convert Securities, on behalf of
      the converting Holders, into shares of Common Stock, par value $2.50 per
      share, of the Sponsor (the "Common Stock") in the manner described herein
      on and subject to the following terms and conditions:

      (a)   The Securities will be convertible at the office of the Conversion
            Agent into fully paid and 
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                                                                              13

            nonassessable shares of Common Stock pursuant to the Holder's
            direction to the Conversion Agent to exchange such Securities for a
            portion of the Debentures theretofore held by the Trust on the basis
            of one Security per $50 principal amount of Debentures, and
            immediately convert such amount of Debentures into fully paid and
            nonassessable shares of Common Stock at an initial rate of 0.7257
            shares of Common Stock per $50 principal amount of Debentures (which
            is equivalent to a conversion price of $68.90 per share of Common
            Stock, subject to certain adjustments set forth in the Indenture (as
            so adjusted, "Conversion Price")).

      (b)   In order to convert Securities into Common Stock the Holder shall
            submit to the Conversion Agent at the office referred to above an
            irrevocable request to convert Securities on behalf of such Holder
            (the "Conversion Request"), together, if the Securities are in
            certificated form, with such certificates. The Conversion Request
            shall (i) set forth the number of Securities to be converted and the
            name or names, if other than the Holder, in which the shares of
            Common Stock should be issued and (ii) direct the Conversion Agent
            (a) to exchange such Securities for a portion of the Debentures held
            by the Trust (at the rate of exchange specified in the preceding
            paragraph) and (b) to immediately convert such Debentures on behalf
            of such Holder, into Common Stock (at the conversion rate specified
            in the preceding paragraph). The Conversion Agent shall notify the
            Trust of the Holder's election to exchange Securities for a portion
            of the Debentures held by the Trust and the Trust shall, upon
            receipt of such notice, deliver to the Conversion Agent the
            appropriate principal amount of Debentures for exchange in
            accordance with this Section. The Conversion Agent shall thereupon
            notify the Sponsor of the Holder's election to convert such
            Debentures into shares of Common Stock. Holders of Securities at the
            close of business on a Distribution record date will be entitled to
            receive the Distribution payable on such Securities on the
            corresponding Distribution payment date notwithstanding the
            conversion of such Securities following such record date but prior
            to 
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                                                                              14

            such distribution payment date. Except as provided above, neither
            the Trust nor the Sponsor will make, or be required to make, any
            payment, allowance or adjustment upon any conversion on account of
            any accumulated and unpaid Distributions accrued on the Securities,
            whether or not in arrears, (including any Additional Amounts accrued
            thereon) surrendered for conversion, or on account of any
            accumulated and unpaid dividends on the shares of Common Stock
            issued upon such conversion, except to the extent that such shares
            are held of record on the record date for any such distributions.
            Securities shall be deemed to have been converted immediately prior
            to the close of business on the day on which a Notice of Conversion
            relating to such Securities is received by the Trust in accordance
            with the foregoing provision (the "Conversion Date"). The Person or
            Persons entitled to receive the Common Stock issuable upon
            conversion of the Debentures shall be treated for all purposes as
            the record holder or holders of such Common Stock at such time. As
            promptly as practicable on or after the Conversion Date, the Sponsor
            shall issue and deliver at the office of the Conversion Agent a
            certificate or certificates for the number of full shares of Common
            Stock issuable upon such conversion, together with the cash payment,
            if any, in lieu of any fraction of any share to the Person or
            Persons entitled to receive the same, unless otherwise directed by
            the Holder in the notice of conversion and the Conversion Agent
            shall distribute such certificate or certificates to such Person or
            Persons.

      (c)   Each Holder of a Security by his acceptance thereof appoints The
            Bank of New York "Conversion Agent" for the purpose of effecting the
            conversion of Securities in accordance with this Section. In
            effecting the conversion and transactions described in this
            Section, the Conversion Agent shall be acting as agent of the
            Holders of Securities directing it to effect such conversion
            transactions. The Conversion Agent is hereby authorized (i) to
            exchange Securities from time to time for Debentures held by the
            Trust in connection with the conversion of such Securities in
            accordance with this Section and (ii) to convert 
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                                                                              15

            all or a portion of the Debentures into Common Stock and thereupon
            to deliver such shares of Common Stock in accordance with the
            provisions of this Section and to deliver to the Trust a new
            Debenture or Debentures for any resulting unconverted principal
            amount.

      (d)   No fractional shares of Common Stock will be issued as a result of
            conversion, but in lieu thereof, such fractional interest will be
            paid in cash by the Sponsor to the Trust, which in turn will make
            such payment to the Holder or Holders of Securities so converted.

      (e)   The Sponsor shall at all times reserve and keep available out of its
            authorized and unissued Common Stock, solely for issuance upon the
            conversion of the Debentures, free from any preemptive or other
            similar rights, such number of shares of Common Stock as shall from
            time to time be issuable upon the conversion of all the Debentures
            then outstanding. Notwithstanding the foregoing, the Sponsor shall
            be entitled to deliver upon conversion of Debentures, shares of
            Common Stock reacquired and held in the treasury of the Sponsor (in
            lieu of the issuance of authorized and unissued shares of Common
            Stock), so long as any such treasury shares are free and clear of
            all liens, charges, security interests or encumbrances. Any shares
            of Common Stock issued upon conversion of the Debentures shall be
            duly authorized, validly issued and fully paid and nonassessable.
            The Trust shall deliver the shares of Common Stock received upon
            conversion of the Debentures to the converting Holder free and clear
            of all liens, charges, security interests and encumbrances, except
            for United States withholding taxes. Each of the Sponsor and the
            Trust shall prepare and shall use its best efforts to obtain and
            keep in force such governmental or regulatory permits or other
            authorizations as may be required by law, and shall comply with all
            applicable requirements as to registration or qualification of the
            Common Stock (and all requirements to list the Common Stock issuable
            upon conversion of Debentures that are at the time applicable), in
            order to enable the Sponsor to lawfully issue Common Stock to the
            Trust upon conversion of the 
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                                                                              16

            Debentures and the Trust to lawfully deliver the Common Stock to
            each Holder upon conversion of the Securities.

      (f)   The Sponsor will pay any and all taxes that may be payable in
            respect of the issue or delivery of shares of Common Stock on
            conversion of Debentures and the delivery of the shares of Common
            Stock by the Trust upon conversion of the Securities. The Sponsor
            shall not, however, be required to pay any tax which may be payable
            in respect of any transfer involved in the issue and delivery of
            shares of Common Stock in a name other than that in which the
            Securities so converted were registered, and no such issue or
            delivery shall be made unless and until the person requesting such
            issue has paid to the Trust the amount of any such tax, or has
            established to the satisfaction of the Trust that such tax has been
            paid.

      (g)   Nothing in the preceding Paragraph (f) shall limit the requirement
            of the Trust to withhold taxes pursuant to the terms of the
            Securities set forth in this Annex I to the Declaration or in the
            Declaration itself or otherwise require the Property Trustee or the
            Trust to pay any amounts on account of such withholdings.

6.    Voting Rights - Preferred Securities.

      (a)   Except as provided under paragraphs 6(b) and 8, in the Business
            Trust Act and as otherwise required by law, the Declaration and the
            Indenture, the Holders of the Preferred Securities will have no
            voting rights.

      (b)   In addition to the rights of the Holders of the Preferred Securities
            with respect to the enforcement of payment of principal and interest
            on the Debentures set forth herein, in the Declaration or in the
            Indenture, if (i) a Debenture Event of Default occurs and is
            continuing or (ii) the Company defaults under the Guarantee (each of
            (i) and (ii) being an "Appointment Event"), then the Holders of the
            Preferred Securities, acting as a single class, will be entitled by
            the vote of a Majority in liquidation amount of the Preferred
            Securities to appoint a 
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                                                                              17

            Special Trustee in accordance with Section 5.06(a)(ii)(B) of the
            Declaration. Any Holder of Preferred Securities (other than the
            Sponsor, or any entity directly or indirectly controlling or
            controlled by or under direct or indirect common control with the
            Sponsor) will be entitled to nominate any person to be appointed as
            Special Trustee. Not later than 30 days after such right to appoint
            a Special Trustee arises, the Trustees will convene a meeting for
            the purpose of appointing a Special Trustee. If the Trustees fail
            to convene such meeting within such 30-day period, the Holders of
            not less than 10% in aggregate liquidation amount of the Preferred
            Securities will be entitled to convene such meeting in accordance
            with Section 12.02 of the Declaration. The record date for such
            meeting will be the close of business on the Business Day that is
            one Business Day before the day on which notice of the meeting is
            sent to the Holders. The provisions of the Declaration relating to
            the convening and conduct of the meetings of the Holders will apply
            with respect to any such meeting.

            Any Special Trustee so appointed shall cease to be a Special Trustee
            if the Appointment Event pursuant to which the Special Trustee was
            appointed and all other Appointment Events cease to be continuing. A
            Special Trustee may be removed without cause at any time by vote of
            the Holders of a Majority in liquidation amount of the Preferred
            Securities at a meeting of the Holders of the Preferred Securities
            in accordance with Section 5.06(a)(ii)(B) of the Declaration. The
            Holders of 10% in liquidation amount of the Preferred Securities
            will be entitled to convene such a meeting in accordance with
            Section 12.02 of the Declaration. The record date for such meeting
            will be the close of business on the Business Day which is one
            Business Day before the day on which the notice of meeting is sent
            to Holders. Notwithstanding the appointment of a Special Trustee,
            the Sponsor shall retain all rights under the Indenture, including
            the right to defer payments of interest by extending the interest
            payment period on the Debentures.
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                                                                              18

            Subject to the requirements set forth in this paragraph, the Holders
            of a majority in liquidation amount of the Preferred Securities,
            voting separately as a class may, and the Trustees shall not,
            without obtaining the prior approval of the Holders of a Majority in
            aggregate liquidation amount of all outstanding Preferred Securities
            (i) direct the time, method, and place of conducting any proceeding
            for any remedy available to the Trustee under the Indenture, or
            executing any trust or power conferred upon the Property Trustee
            with respect to the Debentures, (ii) waive any past default and its
            consequences that is waiveable under Section 5.13 of the Indenture
            or otherwise, (iii) exercise any right to rescind or annul a
            declaration that the principal of all the Debentures shall be due
            and payable or (iv) consent to any amendment, modification or
            termination of the Indenture or the Debentures, where such consent
            shall be required, provided, however, that, where a consent under
            the Indenture would require the consent or act of the Holders of
            greater than a majority of the Holders in principal amount of
            Debentures affected thereby (a "Super Majority"), the Property
            Trustee may only give such consent or take such action at the
            direction of the Holders of at least the proportion in liquidation
            preference of the Preferred Securities which the relevant Super
            Majority represents of the aggregate principal amount of the
            Debentures outstanding. The Property Trustee shall not, and none of
            the other Trustees shall in any event, revoke any action previously
            authorized or approved by a vote of the Holders of the Preferred
            Securities, except by a subsequent vote of the Holders of the
            Preferred Securities. Other than with respect to directing the time,
            method and place of conducting any remedy available to the Property
            Trustee or the Debenture Trustee as set forth above, the Property
            Trustee shall not take any action in accordance with the directions
            of the Holders of the Preferred Securities under this paragraph
            unless the Property Trustee has obtained an opinion of tax counsel
            to the effect that, as a result of such action, the Trust will not
            fail to be classified as a grantor trust for United States federal
            income tax purposes.
   106
                                                                              19

            If a Declaration Event of Default has occurred and is continuing and
            such event is attributable to the failure of the Debenture Issuer to
            pay interest or principal on the Debentures on the date such
            interest or principal is otherwise payable (or in the case of
            redemption on the redemption date), then a Holder of Preferred
            Securities may directly institute a proceeding for enforcement of
            payment to such Holder (a "Direct Action") of the principal of or
            interest on the Debentures having a principal amount equal to the
            aggregate liquidation amount of the Preferred Securities of such
            Holder on or after the respective due date specified in the
            Debentures. Except as provided in the preceding sentence, the
            Holders of Preferred Securities will not be able to exercise
            directly any other remedy available to the Holders of the
            Debentures. In connection with any Direct Action, the Debenture
            Issuer will be subrogated to the rights of such Holder of Preferred
            Securities under the Declaration to the extent of any payment made
            by the Debenture Issuer to such Holder of Preferred Securities in
            such Direct Action. In addition, the Holders of at least 25% in
            aggregate liquidation preference of Preferred Securities outstanding
            shall have the right to institute suit on behalf of the Trust for
            the enforcement of the right to receive payment of the principal of
            and interest on the Debentures on or after the Stated Maturity (as
            defined in the Indenture) of such Debentures or, in the case of
            redemption, on the Redemption Date (as defined in the Indenture), in
            the event the Debenture Trustee or the Property Trustee fails to do
            so in accordance with the terms of the Indenture.

            Any approval or direction of Holders of Preferred Securities may be
            given at a separate meeting of Holders of Preferred Securities
            convened for such purpose, at a meeting of all of the Holders of
            Securities in the Trust or pursuant to written consent. The
            Administrative Trustees will cause a notice of any meeting at which
            Holders of Preferred Securities are entitled to vote, or of any
            matter upon which action by written consent of such Holders is to be
            taken, to be mailed to each Holder of record of Preferred
            Securities. Each such notice will include a statement setting forth
   107
                                                                              20

            the following information (i) the date of such meeting or the date
            by which such action is to be taken, (ii) a description of any
            resolution proposed for adoption at such meeting on which such
            Holders are entitled to vote or of such matter upon which written
            consent is sought and (iii) instructions for the delivery of proxies
            or consents.

            No vote or consent of the Holders of the Preferred Securities will
            be required for the Trust to redeem and cancel Preferred Securities
            or to distribute the Debentures in accordance with the Declaration
            and the terms of the Securities.

            Notwithstanding that Holders of Preferred Securities are entitled
            to vote or consent under any of the circumstances described above,
            any of the Preferred Securities that are owned by the Sponsor or any
            Affiliate of the Sponsor shall not be entitled to vote or consent
            and shall, for purposes of such vote or consent, be treated as if
            they were not outstanding.

7.    Voting Rights - Common Securities.

      (a)   Except as provided under paragraphs 7(b), (c) and 8, in the Business
            Trust Act and as otherwise required by law and the Declaration, the
            Holders of the Common Securities will have no voting rights.

      (b)   The Holders of the Common Securities are entitled, in accordance
            with Article V of the Declaration, to vote to appoint, remove or
            replace any Trustee, subject to the exclusive right of the Holders
            of the Preferred Securities to appoint, remove or replace a Special
            Trustee.

      (c)   Subject to Section 2.06 of the Declaration and only after the Event
            of Default with respect to the Preferred Securities has been cured,
            waived, or otherwise eliminated and subject to the requirements of
            the second to last sentence of this paragraph, the Holders of a
            Majority in liquidation amount of the Common Securities, voting
            separately as a class, may direct the time, method, and place of
            conducting any proceeding for 
   108
                                                                              21

            any remedy available to the Property Trustee, or exercising any
            trust or power conferred upon the Property Trustee under the
            Declaration, including (i) directing the time, method, place of
            conducting any proceeding for any remedy available to the Debenture
            Trustee, or exercising any trust or power conferred on the Debenture
            Trustee with respect to the Debentures, (ii) waive any past default
            and its consequences that is waiveable under Section 5.13 of the
            Indenture, or (iii) exercise any right to rescind or annul a
            declaration that the principal of all the Debentures shall be due
            and payable, provided that, where a consent or action under the
            Indenture would require the consent or act of the Holders of greater
            than a majority in principal amount of Debentures affected thereby
            (a "Super Majority"), the Property Trustee may only give such
            consent or take such action at the direction of the Holders of at
            least the proportion in liquidation amount of the Common Securities
            which the relevant Super Majority represents of the aggregate
            principal amount of the Debentures outstanding. Pursuant to this
            paragraph 7(c), the Property Trustee shall not revoke any action
            previously authorized or approved by a vote of the Holders of the
            Preferred Securities, except by a subsequent vote of the Holders of
            the Preferred Securities. Other than with respect to directing the
            time, method and place of conducting any remedy available to the
            Property Trustee or the Debenture Trustee as set forth above, the
            Property Trustee shall not take any action in accordance with the
            directions of the Holders of the Common Securities under this
            paragraph unless the Property Trustee has obtained an opinion of tax
            counsel to the effect that, as a result of such action the Trust
            will not fail to be classified as a grantor trust for United States
            federal income tax purposes. If the Property Trustee fails to
            enforce its rights, as holder of the Debentures, under the
            Indenture, any Holder of Common Securities may, after a period of 30
            days has elapsed from such Holder's written request to the Property
            Trustee to enforce such rights, institute a legal proceeding
            directly against the Sponsor, to enforce the Property Trustee's
            rights, as holder of the Debentures, under the Indenture, 
   109
                                                                              22

            without first instituting any legal proceeding against the Property
            Trustee or any other Person.

            Any approval or direction of Holders of Common Securities may be
            given at a separate meeting of Holders of Common Securities convened
            for such purpose, at a meeting of all of the Holders of Securities
            in the Trust or pursuant to written consent. The Administrative
            Trustees will cause a notice of any meeting at which Holders of
            Common Securities are entitled to vote, or of any matter upon which
            action by written consent of such Holders is to be taken, to be
            mailed to each Holder of record of Common Securities. Each such
            notice will include a statement setting forth (i) the date of such
            meeting or the date by which such action is to be taken, (ii) a
            description of any resolution proposed for adoption at such meeting
            on which such Holders are entitled to vote or of such matter upon
            which written consent is sought and (iii) instructions for the
            delivery of proxies or consents.

            No vote or consent of the Holders of the Common Securities will be
            required for the Trust to redeem and cancel Common Securities or to
            distribute the Debentures in accordance with the Declaration and
            the terms of the Securities.

8.    Amendments to Declaration and Indenture.

      (a)   In addition to any requirements under Section 12.01 of the
            Declaration, if any proposed amendment to the Declaration provides
            for, or the Administrative Trustees otherwise propose to effect, (i)
            any action that would adversely affect the powers, preferences or
            rights of the Securities, whether by way of amendment to the
            Declaration or otherwise, or (ii) the dissolution, winding-up or
            termination of the Trust, other than as described in Section 8.01 of
            the Declaration, then the Holders of outstanding Securities will be
            entitled to vote on such amendment or proposal (but not on any other
            amendment or proposal) and such amendment or proposal shall not be
            effective except with the approval of the Holders of at least a
            Majority in liquidation amount of the Securities, voting together as
            a single class, 
   110
                                                                              23

            provided, however, that, the rights of Holders of Preferred
            Securities under Article V of the Declaration to appoint, remove or
            replace a Special Trustee shall not be amended without the consent
            of each Holder of Preferred Securities; and provided further that if
            any amendment or proposal referred to in clause (i) above would
            adversely affect only the Preferred Securities or only the Common
            Securities, then only the affected class will be entitled to vote on
            such amendment or proposal and such amendment or proposal shall not
            be effective except with the approval of at least a Majority in
            liquidation amount of such class of Securities.

      (b)   In the event the consent of the Property Trustee as the holder of
            the Debentures is required under the Indenture with respect to any
            amendment, modification or termination of the Indenture or the
            Debentures, the Property Trustee shall request the direction of the
            Holders of the Securities with respect to such amendment,
            modification or termination and shall vote with respect to such
            amendment, modification or termination as directed by at least the
            same proportion in aggregate stated liquidation preference of the
            Securities; provided, however, that the Property Trustee shall not
            take any action in accordance with the directions of the Holders of
            the Securities under this paragraph 8(b) unless the Property Trustee
            has obtained an opinion of tax counsel to the effect that for the
            purposes of United States federal income tax the Trust will not be
            classified as other than a grantor trust on account of such action.

9.    Pro Rata.

            A reference in these terms of the Securities to any payment,
Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, on any Distribution Date or redemption date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any Distribution on, or amount payable upon redemption
of, any Common Security, and no 
   111
                                                                              24

other payment on account of the redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all outstanding Preferred Securities for
all Distribution periods terminating on or prior thereto, or in the case of
payment of the amount payable upon redemption of the Preferred Securities, the
full amount of such amount in respect of all outstanding Preferred Securities
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the amount payable upon redemption of Preferred Securities
then due and payable.

10.   Ranking.

            The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.

11.   Acceptance of Securities Guarantees and Indenture.

            Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.

12.   No Preemptive Rights.

            The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.

13.   Miscellaneous.

            These terms constitute a part of the Declaration.
   112
                                                                              25

            The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
   113
                                   EXHIBIT A-1
                                     FORM OF
                               PREFERRED SECURITY

                           [FORM OF FACE OF SECURITY]

            [Include the following Restricted Securities Legend on all
Restricted Preferred Securities, including Rule 144A Global Preferred
Securities, Regulation S Definitive Preferred Securities and IAI Definitive
Preferred Securities unless otherwise determined by the Sponsor in accordance
with applicable law -- EACH OF THE TIDES (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF THE TIDES AND ANY
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE FOR THE TIDES
REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF EACH OF THE TIDES IS HEREBY
NOTIFIED THAT THE SELLER OF THE TIDES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

            THE HOLDER OF EACH OF THE TIDES AGREES FOR THE BENEFIT OF THE ISSUER
AND THE COMPANY THAT (A) EACH OF THE TIDES AND ANY CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES OR COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]

            [Include if Preferred Security is Regulation S Restricted Definitive
Preferred Security or an IAI Definitive Preferred Security -- IN CONNECTION WITH
ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]

            [Include if Preferred Security is in global form and the Depository
Trust Company is the Depository -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INAS-
   114
                                                                               2

MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

            [Include if Preferred Security is in global form -- TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]

Certificate Number                                Number of Preferred Securities

                                                  [CUSIP NO. [        ]]
                                                  [ISIN NO.  [        ]]

                              Preferred Securities

                                       of

                           Union Pacific Capital Trust

                     6 1/4% Convertible Preferred Securities
              Term Income Deferrable Equity Securities (TIDES)(SM)*
           (liquidation amount $50 per Convertible Preferred Security)

            Union Pacific Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that

________________________________________________________________________________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6 1/4% Convertible Preferred Securities, Term Income Deferrable
Equity Securities (TIDES)(sm)*(liquidation amount $50 per Convertible Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of April 1, 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The 

- --------
*The terms Term Income Deferrable Equity Securities (TIDES)(sm) and TIDES(sm)
are registered servicemarks of Credit Suisse First Boston Corporation.
   115
                                                                               3

Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.

            Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.

            Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.

            By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.

            Unless the Property Trustee's Certificate of Authentication hereon
has been properly executed, these Preferred Securities shall not be entitled to
any benefit under the Declaration or be valid or obligatory for any purpose.

            IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of April, 1998.

                        Union Pacific Capital Trust

                        By:________________________
                        Name:
                        Title:

            PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Preferred Securities referred to in the
within-mentioned Declaration.

Dated:___________,____

                                    THE BANK OF NEW YORK,
                                      as Property Trustee

                                    By: ______________________
                                         Authorized Signatory
   116
                          [FORM OF REVERSE OF SECURITY]

            Distributions payable on each Preferred Security will be fixed at a
rate per annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount of
$50 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date, Special Distributions and Additional Sums, as applicable. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.

            Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1998, to Holders of record at
the close of business on the 15th of the month next preceding the applicable
payment date, which payment dates shall correspond to the interest payment dates
(each an "Interest Payment Date") on the Debentures. The Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each a "Deferral Period") and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Deferral Period. Prior to the termination of any such
Deferral Period, the Debenture Issuer may further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
deferrals thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable on an Interest Payment Date elected by the
Company to Holders as they appear on the books and records of the Trust on the
record date fixed for such Interest Payment Date. Upon the termination of any
Deferral Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Deferral Period, subject to the above requirements.

            The Preferred Securities shall be redeemable as provided in the
Declaration.

            The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
   117
                               CONVERSION REQUEST

To:   The Bank of New York,
        as Property Trustee of
        Union Pacific Capital Trust

            The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Common Stock of UNION PACIFIC CORPORATION (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of April 1, 1998, by L. White
Matthews, III, Gary M. Stuart and Joseph E. O'Connor, Jr. as Administrative
Trustees, The Bank of New York (Delaware), as Delaware Trustee, The Bank of New
York, as Property Trustee, Union Pacific Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Preferred Securities, the undersigned hereby
directs the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms
of the Preferred Securities set forth as Annex I to the Declaration).

            The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
   118
                                                                               2

            Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Common
Stock issuable upon conversion of the Preferred Securities.

Date: ____________, ____

      in whole __                   in part __
                                    Number of Preferred Securities to be
                                    converted: ___________________

                                    If a name or names other than the
                                    undersigned, please indicate in the spaces
                                    below the name or names in which the shares
                                    of Common Stock are to be issued, along with
                                    the address or addresses of such person or
                                    persons

                              __________________________________________________
                              __________________________________________________
                              __________________________________________________
                              __________________________________________________
                              __________________________________________________
                              __________________________________________________

                              __________________________________________________
                              Signature (for conversion only)

                                    Please Print or Typewrite Name and
                                    Address, Including Zip Code, and
                                    Social Security or Other Identifying
                                    Number

                              __________________________________________________
                              __________________________________________________
                              __________________________________________________

                              Signature Guarantee:**____________________________

___________

** (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
   119
                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
        (Insert assignee's social security or tax identification number)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
                    (Insert address and zip code of assignee)

and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security on the books of the Trust.  The
agent may substitute another to act for him or her.

Date:_______________________

Signature:__________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

Signature Guarantee:***

___________

***   (Signature must be guaranteed by an "eligible guarantor institution"
      that is, a bank, stockbroker, savings and loan association or credit
      union meeting the requirements of the Registrar, which requirements
      include membership or participation in the Securities Transfer
      Agents Medallion Program ("STAMP") or such other "signature
      guarantee program" as may be determined by the Registrar in addition
      to, or in substitution for, STAMP, all in accordance with the
      Securities Exchange Act of 1934, as amended.)
   120
                                                                               2

                          ---------------------

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES

This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.

(A) The undersigned (check one box below):

[ ]   has requested the Property Trustee by written order to deliver in
      exchange for its beneficial interest in the Rule 144A Global Preferred
      Security held by the Depositary a Preferred Security or Preferred
      Securities in definitive, registered form in such number equal to its
      beneficial interest in such Rule 144A Global Preferred Security (or the
      number thereof indicated above); or

[ ]   has requested the Property Trustee by written order to exchange its
      Preferred Security in definitive registered form for an interest in the
      Rule 144A Global Preferred Security held by the Depositary in such number
      equal to number of Preferred Securities in definitive registered form so
      held; or

[ ]   has requested the Property Trustee by written order to exchange or
      register the transfer of a Preferred Security or Preferred Securities.

(B)   The undersigned confirms that such Securities are being (check one box
      below):

      (1)   [ ]   acquired for the undersigned's own account, without transfer 
                  (in satisfaction of Section 9.02(d)(ii)(A) of the 
                  Declaration); or

      (2)   [ ]   transferred pursuant to and in compliance with Rule 144A
                  under the Securities Act of 1933; or

      (3)   [ ]   transferred pursuant to and in compliance with Regulation S 
                  under the Securities Act of 1933; or

      (4)   [ ]   transferred pursuant to Rule 144 of the Securities Act of 
                  1933; or

      (5)   [ ]   transferred pursuant to an effective registration statement 
                  under the Securities Act.

Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that 
   121
                                                                               3

such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of 1933,
such as the exemption provided by Rule 144 under such Act.

                                    ____________________________
                                             Signature

Signature Guarantee:****

____________________________         ____________________________
Signature must be guaranteed                 Signature

________________________________________________________________________________

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

            The undersigned represents and warrants that it is purchasing these
Preferred Securities for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Trust as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Dated:____________________          ____________________________________________
                                    NOTICE: To be executed by an executive 
                                            officer

_______________

**** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
   122
                                   EXHIBIT A-2
                                     FORM OF
                                 COMMON SECURITY

                           [FORM OF FACE OF SECURITY]

      [THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]

      [OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF UNION PACIFIC CORPORATION.]

Certificate Number                                   Number of Common Securities

                                Common Securities

                                       of

                           Union Pacific Capital Trust

                      6 1/4% Convertible Common Securities
            (liquidation amount $50 per Convertible Common Security)

            Union Pacific Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that

________________________________________________________________________________
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6 1/4% Convertible Common Securities (liquidation amount $50 per
Convertible Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of April 1,
1998, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
   123
            Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.

            Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.

            By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.

            IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of April, 1998.

                                    Union Pacific Capital Trust

                                    By:____________________________
                                    Name:
                                    Title:
   124
                          [FORM OF REVERSE OF SECURITY]

            Distributions payable on each Common Security will be fixed at a
rate per annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount of
$50 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date, Special Distributions and Additional Sums, as applicable. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.

            Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1998, to Holders of record one
(1) day prior to such payment dates, which payment dates shall correspond to the
interest payment dates (each, an "Interest Payment Date") on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures
for a period not exceeding 20 consecutive quarters (each a "Deferral Period")
and, as a consequence of such deferral, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture. Payments of accrued Distributions will be payable on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.

            The Common Securities shall be redeemable as provided in the
Declaration.

            The Common Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
   125
                               CONVERSION REQUEST

To:  The Bank of New York,
        as Property Trustee of
        Union Pacific Capital Trust

            The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of UNION PACIFIC CORPORATION (the "Common Stock")
in accordance with the terms of the Amended and Restated Declaration of Trust
(the "Declaration"), dated as of April 1, 1998, by L. White Mathews, III, Gary
M. Stuart and Joseph E. O'Connor, Jr., as Administrative Trustees, The Bank of
New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, Union Pacific Corporation, as Sponsor, and by the Holders, from time to
time, of individual beneficial interests in the Trust to be issued pursuant to
the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Common Securities, the undersigned hereby directs the Conversion
Agent (as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Annex I to the Declaration).

            The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
   126
                                                                               2

            Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Common Securities, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Common Securities.

Date: ____________, ____

      in whole __                   in part __
                                    Number of Common Securities to be
                                    converted:  _____________________

                                    If a name or names other than the
                                    undersigned, please indicate in the spaces
                                    below the name or names in which the shares
                                    of Common Stock are to be issued, along with
                                    the address or addresses of such person or
                                    persons

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________
                                    Signature (for conversion only)

                                          Please Print or Typewrite Name
                                          and Address, Including Zip
                                          Code, and Social Security or
                                          Other Identifying Number
                                    ____________________________________________
                                    ____________________________________________
                                    ____________________________________________

                                    Signature Guarantee:*_______________________

________________

* (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
   127
                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)

and irrevocably appoints 
________________________________________________________________________________
________________________________________________________________________________
____________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.

Date: _______________________

Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)

Signature Guarantee**: _____________________________________________________

_______________

** (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)

   1

                                                                     EXHIBIT 4.5

                            UNION PACIFIC CORPORATION

                                       TO

                              THE BANK OF NEW YORK
                                     Trustee

                                    Indenture

                            Dated as of April 1, 1998

                                 $1,391,752,600

                 (subject to increase to up to $1,546,391,750 in
                  the event and to the extent an over-allotment
                              option is exercised)

                         Convertible Junior Subordinated
                               Debentures Due 2028
   2
                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

                       Definitions and Other Provisions of
                               General Application

SECTION 1.01.              Definitions.........................................3
SECTION 1.02.              Compliance Certificates and
                                    Opinions..................................14
SECTION 1.03.              Form of Documents Delivered to
                                    Trustee...................................15
SECTION 1.04.              Acts of Holders; Record Dates......................15
SECTION 1.05.              Notices, Etc., to Trustee and the
                                    Company...................................17
SECTION 1.06.              Notice to Holders; Waiver..........................18
SECTION 1.07.              Conflict with Trust Indenture Act..................19
SECTION 1.08.              Effect of Headings and Table of
                                    Contents..................................19
SECTION 1.09.              Successors and Assigns.............................19
SECTION 1.10.              Separability Clause................................19
SECTION 1.11.              Benefits of Indenture..............................19
SECTION 1.12.              Governing Law......................................19
SECTION 1.13.              Legal Holidays.....................................19

                                   ARTICLE II

                                 Security Forms

SECTION 2.01.              Forms Generally....................................20
SECTION 2.02.              Initial Issuance to Property
                                    Trustee...................................20
SECTION 2.03.              Additional Provisions Required in
                                    Global Security...........................21
   3
                                                                            Page

SECTION 2.04.              Issuance of Global Securities to
                                    Holders...................................22

                                   ARTICLE III

                                 The Securities

SECTION 3.01.              Title and Terms....................................22
SECTION 3.02.              Denominations......................................24
SECTION 3.03.              Execution, Authentication, Delivery and
                                    Dating....................................24
SECTION 3.04.              Temporary Securities...............................25
SECTION 3.05.              Global Securities..................................25
SECTION 3.06.              Registration, Transfer and Exchange
                                    Generally; Certain Transfers and
                                    Exchanges.................................27
SECTION 3.07.              Mutilated, Destroyed, Lost and Stolen
                                    Securities................................30
SECTION 3.08.              Payment of Interest; Interest Rights
                                    Preserved.................................31
SECTION 3.09.              Persons Deemed Owners..............................33
SECTION 3.10.              Cancellation.......................................34
SECTION 3.11.              Right of Set Off...................................34
SECTION 3.12.              CUSIP Numbers......................................34
SECTION 3.13.              Extension of Interest Payment Period;
                                    Notice of Extension.......................34
SECTION 3.14.              Paying Agent, Security Registrar and
                                    Conversion Agent..........................36

                                   ARTICLE IV

                           Satisfaction and Discharge

SECTION 4.01.              Satisfaction and Discharge of
                                    Indenture.................................36

                                        2
   4
                                                                            Page

SECTION 4.02.              Application of Trust Money.........................37

                                    ARTICLE V

                                    Remedies

SECTION 5.01.              Events of Default..................................38
SECTION 5.02.              Acceleration of Maturity; Rescission
                                    and Annulment.............................39
SECTION 5.03.              Collection of Indebtedness and Suits
                                    for Enforcement by Trustee................41
SECTION 5.04.              Trustee May File Proofs
                                    of Claim..................................41
SECTION 5.05.              Trustee May Enforce Claims Without
                                    Possession of Securities..................42
SECTION 5.06.              Application of Money Collected.....................42
SECTION 5.07.              Limitation on Suits................................42
SECTION 5.08.              Unconditional Right of Holders to
                                    Receive Principal and Interest and 
                                    to Convert................................43
SECTION 5.09.              Restoration of Rights and Remedies.................44
SECTION 5.10.              Rights and Remedies Cumulative.....................44
SECTION 5.11.              Delay or Omission Not Waiver.......................44
SECTION 5.12.              Control by Holders.................................44
SECTION 5.13.              Waiver of Past Defaults............................45
SECTION 5.14.              Undertaking for Costs..............................45
SECTION 5.15.              Waiver of Stay or Extension Laws...................45
SECTION 5.16.              Enforcement by Holders of Preferred
                                    Securities................................46

                                   ARTICLE VI

                                   The Trustee

SECTION 6.01.              Certain Duties and Responsibilities................46

                                        3
   5
                                                                            Page

SECTION 6.02.              Notice of Defaults.................................47
SECTION 6.03.              Certain Rights of Trustee..........................47
SECTION 6.04.              Not Responsible for Recitals or
                                    Issuance of Securities....................48
SECTION 6.05.              May Hold Securities................................49
SECTION 6.06.              Money Held in Trust................................49
SECTION 6.07.              Compensation and Reimbursement.....................49
SECTION 6.08.              Disqualification; Conflicting
                                    Interests.................................50
SECTION 6.09.              Corporate Trustee Required;
                                    Eligibility...............................50
SECTION 6.10.              Resignation and Removal; Appointment of
                                    Successor.................................50
SECTION 6.11.              Acceptance of Appointment by
                                    Successor.................................51
SECTION 6.12.              Merger, Conversion, Consolidation or
                                    Succession to Business....................52
SECTION 6.13.              Preferential Collection of Claims
                                    Against Company...........................52

                                   ARTICLE VII

                Holders' Lists and Reports by Trustee and Company

SECTION 7.01.              Company to Furnish Trustee Names and
                                    Addresses of Holders......................53
SECTION 7.02.              Preservation of Information;
                                    Communications to Holders.................53
SECTION 7.03.              Reports by Trustee.................................53
SECTION 7.04.              Reports by Company.................................54
SECTION 7.05.              Tax Reporting......................................54

                                        4
   6
                                                                            Page

                                  ARTICLE VIII

                        Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 8.01.              Company May Consolidate, Etc., Only on
                                    Certain Terms.............................54
SECTION 8.02.              Successor Substituted..............................55

                                   ARTICLE IX

                             Supplemental Indentures

SECTION 9.01.              Supplemental Indentures Without Consent
                                    of Holders................................56
SECTION 9.02.              Supplemental Indentures with Consent of
                                    Holders...................................57
SECTION 9.03.              Execution of Supplemental
                                    Indentures................................58
SECTION 9.04.              Effect of Supplemental
                                    Indentures................................59
SECTION 9.05.              Conformity with Trust Indenture
                                    Act.......................................59
SECTION 9.06.              Reference in Securities to Supplemental
                                    Indentures................................59

                                    ARTICLE X

                    Covenants; Representations and Warranties

SECTION 10.01.             Payment of Principal and Interest..................59
SECTION 10.02.             Maintenance of Office or Agency....................59
SECTION 10.03.             Money for Security Payments to Be Held
                                    in Trust..................................60
SECTION 10.04.             Statement by Officers as to
                                    Default...................................61

                                        5
   7
                                                                            Page

SECTION 10.05.             Limitation on Dividends; Transactions
                                    with Affiliates; Covenants as to the
                                    Trust.....................................61
SECTION 10.06.             Payment of Expenses of the Trust...................62
SECTION 10.07.             Registration Rights................................63

                                   ARTICLE XI

                            Redemption of Securities

SECTION 11.01.             Optional Redemption................................64
SECTION 11.02.             Tax Even Redemption................................64
SECTION 11.03.             [Reserved].........................................65
SECTION 11.04.             Selection by Trustee of Securities to
                                    Be Redeemed...............................65
SECTION 11.05.             Notice of Redemption...............................66
SECTION 11.06.             Deposit of Redemption Price........................67
SECTION 11.07.             Securities Payable on
                                    Redemption Date...........................67
SECTION 11.08.             Securities Redeemed in Part........................67

                                   ARTICLE XII

                           Subordination of Securities

SECTION 12.01.             Agreement to Subordinate...........................68
SECTION 12.02.             Default on Senior Debt.............................68
SECTION 12.03.             Liquidation; Dissolution;
                                    Bankruptcy................................69
SECTION 12.04.             Subrogation........................................71
SECTION 12.05.             Trustee to Effectuate
                                    Subordination.............................72
SECTION 12.06.             Notice by the Company..............................72
SECTION 12.07.             Rights of the Trustee; Holders of
                                    Senior Debt...............................73

                                        6
   8
                                                                            Page

SECTION 12.08.             Subordination May Not Be Impaired..................73

                                  ARTICLE XIII

                            Conversion of Securities

SECTION 13.01.             Conversion Rights..................................74
SECTION 13.02.             Conversion Procedures..............................75
SECTION 13.03.             Conversion Price Adjustments.......................77
SECTION 13.04.             Reclassification, Consolidation, Merger
                                    or Sale of Assets.........................83
SECTION 13.05.             Notice of Adjustments of Conversion
                                    Price.....................................84
SECTION 13.06.             Prior Notice of Certain Events.....................84
SECTION 13.07.             Adjustments in Case of Fundamental
                                    Changes...................................85
SECTION 13.08.             Dividend or Interest Reinvestment
                                    Plans.....................................89
SECTION 13.09.             Certain Additional Rights..........................89
SECTION 13.10.             Restrictions on Common Stock Issuable
                                    Upon Conversion...........................90
SECTION 13.11.             Trustee Not Responsible for Determining
                                    Conversion Price or Adjustments...........90

                                   ARTICLE XIV

                    Immunity of Incorporators, Stockholders,
                             Officers and Directors

SECTION 14.01.             No Recourse........................................91

EXHIBIT A         Form of Security

                                        7
   9
                 Certain Sections of this Indenture relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

       Trust Indenture                                           Indenture
         Act Section                                              Section

     Section 310 (a) (1).....................................     6.09
                 (a) (2).....................................     6.09
                 (a) (3).....................................     Not Applicable
                 (a) (4).....................................     Not Applicable
                 (b).........................................     6.08, 6.10
     Section 311 (a).........................................     6.13
                 (b).........................................     6.13
     Section 312 (a).........................................     7.01
                                                                  7.02(a)
                 (b).........................................     7.02(b)
                 (c).........................................     7.02(c)
     Section 313 (a).........................................     7.03(a)
                 (a) (4).....................................     7.03(a)
                 (b).........................................     7.03(a)
                 (c).........................................     7.03(a)
                 (d).........................................     7.03(b)
     Section 314 (a).........................................     7.04
                 (b).........................................     Not Applicable
                 (c) (1).....................................     1.02
                 (c) (2).....................................     1.02
                 (c) (3).....................................     Not Applicable
                 (d).........................................     Not Applicable
                 (e).........................................     1.02
     Section 315 (a).........................................     6.01
                                                                  6.03
                 (b).........................................     6.02
                 (c).........................................     6.01
                 (d).........................................     6.01
                 (e).........................................     5.14
     Section 316 (a) (1) (A).................................     5.02
                                                                  5.12
                 (a) (1) (B).................................     5.13

                                        8
   10
                 (a) (2).....................................     Not Applicable
                 (b).........................................     5.08
                 (c).........................................     1.04(c)
     Section 317 (a) (1).....................................     5.03
                 (a) (2).....................................     5.04
                 (b).........................................     1.003
     Section 318 (a).........................................     1.07

Note:    This reconciliation and tie shall not, for any purpose, be deemed to be
         a part of the Indenture.

                                       9

   11
                                    INDENTURE, dated as of April 1, 1998,
                           between Union Pacific Corporation, a corporation duly
                           organized and existing under the laws of the State of
                           Utah (herein called the "Company"), and The Bank of
                           New York, a New York banking corporation, as Trustee
                           (herein called the "Trustee").

                             RECITALS OF THE COMPANY

                  WHEREAS Union Pacific Capital Trust, a Delaware business trust
(the "Trust"), formed under the Amended and Restated Declaration of Trust among
the Company, as Sponsor, The Bank of New York, as property trustee (the
"Property Trustee"), and The Bank of New York (Delaware), as Delaware trustee
(the "Delaware Trustee"), and L. White Mathews, III, Gary M. Stuart, and Joseph
E. O'Connor, Jr., as trustees (together with the Property Trustee and the
Delaware Trustee, the "Issuer Trustees"), dated as of April 1, 1998, (the
"Declaration"), pursuant to the Purchase Agreement (the "Purchase Agreement")
dated March 27, 1998, among the Company, the Trust and the Initial Purchasers
named therein, will issue and sell up to 27,000,000 of its 6 1/4% Convertible
Preferred Securities, Term Income Deferrable Equity Securities (TIDES)
("Preferred Securities") (or up to 30,000,000 of its Preferred Securities to the
extent the over-allotment option is exercised in full) with a liquidation amount
of $50 per Preferred Security, having an aggregate liquidation amount with
respect to the assets of the Trust of up to $1,350,000,000 (or up to
$1,500,000,000 to the extent the over-allotment option is exercised in full);

                  WHEREAS the trustees of the Trust, on behalf of the Trust,
will execute and deliver to the Company Common Securities evidencing an
ownership interest in the Trust, registered in the name of the Company, in an
aggregate amount equal to three percent of the capitalization of the Trust,
equivalent to up to 835,052 6 1/4% Common Securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities") (or up to
927,835 Common Securities to the extent the over-allotment option is exercised
in full), with a liquidation amount of $50 per Common Security, having an
aggregate liquidation amount with respect to the assets of the Trust of up to
$41,752,600 (or
   12
                                                                               2

up to $46,391,750 to the extent the over-allotment option is exercised in full);

                  WHEREAS the Trust will use the proceeds from the sale of the
Preferred Securities and the Common Securities to purchase from the Company the
Convertible Junior Subordinated Debentures Due 2028 (the "Securities") in an
aggregate principal amount of up to $1,391,752,600 (or up to $1,546,391,750 to
the extent the over-allotment option is exercised in full);

                  WHEREAS the Company is guaranteeing the payment of
distributions on the Trust Securities and payment of the Redemption Price (as
defined herein) and payments on liquidation with respect to the Trust
Securities, to the extent provided in the Common Securities Guarantee Agreement,
dated April 1, 1998, between the Company and the Trust, and the Guarantee
Agreement, dated April 1, 1998, between the Company and The Bank of New York, as
Guarantee Trustee, for the benefit of the holders of the Trust Securities from
time to time (together, the "Guarantee");

                  WHEREAS the Company has duly authorized the creation of an
issue of the Securities of substantially the tenor and amount hereinafter set
forth and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture;

                  WHEREAS, so long as the Trust is a Holder of Securities and
any Preferred Securities are outstanding, the Declaration provides that the
holders of Preferred Securities may cause the Conversion Agent (as defined
herein) to (i) exchange such Preferred Securities for Securities held by the
Trust and (ii) immediately convert such Securities into Common Stock (as defined
herein); and

                  WHEREAS all things necessary to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Securities by the Holders (as defined
   13
                                                                               3

herein) thereof, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Securities, as follows:

                                    ARTICLE I

                              Definitions and Other
                        Provisions of General Application

                  SECTION 1.01. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein;

                  (3) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles; and

                  (4) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.

                  "Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.

                  "Additional Payments" means Compounded Interest and Additional
Sums, if any.

                  "Additional Sums" has the meaning specified in Section 3.01.

                  "Adjusted Reference Market Price" has the meaning specified in
Section 13.07(a)(i).

                  "Adjusted Relevant Price" has the meaning specified in Section
13.07(a)(i).
   14
                                                                               4

                  "Administrative Action" has the meaning specified in the
definition of Tax Event in this Section 1.01.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                  "Agent" means any Registrar, Paying Agent, Conversion Agent
or co-registrar.

                  "Agent Member" means any member of, or participant in, the
Depositary.

                  "Applicable Conversion Price" has the meaning specified in
Section 13.01.

                  "Applicable Conversion Ratio" has the meaning specified in
Section 13.01.

                  "Applicable Rate" means the rate at which the Securities
accrue interest and the corresponding Trust Securities accrue distributions,
which in the absence of a Registration Default shall mean 6 1/4%. In the event
of a Registration Default, the Applicable Rate shall be increased in accordance
with the provisions of Section 10.07 hereof.

                  "Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.

                  "Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

                  "Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed, or a day on
which the
   15
                                                                               5

corporate trust office of the Property Trustee or the Trustee is closed for
business.

                  "Closing Price" has the meaning specified in Section 13.07(b).

                  "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

                  "Common Securities" has the meaning specified in the Second
Recital to this instrument.

                  "Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Article XIII, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

                  "Common Stock Fundamental Change" has the meaning specified in
Section 13.07(b).

                  "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
   16
                                                                               6

                  "Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

                  "Company Transaction" has the meaning specified in Section
13.04.

                  "Compounded Interest" has the meaning specified in Section
3.13.

                  "Conversion Agent" means the Person appointed to act on behalf
of the holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.

                  "Conversion Date" has the meaning specified in Section 13.02.

                  "Corporate Trust Office" means the principal office of the
Trustee in New York, New York, at which at any particular time its corporate
trust business shall be administered and which at the date of this Indenture is
101 Barclay Street, Floor 21 West, New York, New York 10286.

                  "Declaration" has the meaning specified in the Recitals to
this instrument.

                  "Debt" means (i) the principal of and premium and interest, if
any, on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Company is responsible for the payment of, such indebtedness
of others, (v) renewals, extensions and refunding of any such indebtedness, (vi)
interest or obligations in respect of any such indebtedness accruing after the
commencement of any insolvency or bankruptcy proceedings and (vii) obligations
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts and similar
arrangements.

                  "Defaulted Interest" has the meaning specified in Section
3.08.
   17
                                                                               7

                  "Deferral Period" has the meaning specified in Section 3.13.

                  "Deferral Notice" has the meaning specified in Section 3.13.

                  "Delaware Trustee" has the meaning given it in the first
recital of this instrument.

                  "Depositary" means The Depository Trust Company, or any
successor thereto.

                  "Dissolution Tax Opinion" has the meaning specified in the
definition of Tax Event in this Section 1.01.

                  "Entitlement Date" has the meaning specified in Section
13.07(b).

                  "Event of Default" has the meaning specified in Section 5.01.

                  "Exchange Act" means the Securities Exchange Act of 1934.

                  "Expiration Date" has the meaning specified in Section
1.04(d).

                  "Expiration Time" has the meaning specified in Section
13.03(vi).

                  "Fundamental Change" has the meaning specified in Section
13.07(b).

                  "Global Security" means a Security issued in the form
prescribed in Section 2.03, issued to the Depositary or its nominee, and
registered in the name of the Depositary or its nominee.

                  "Guarantee" has the meaning specified in the Fourth Recital to
this instrument.

                  "Holder" means a Person in whose name a Security is registered
in the Security Register.

                  "Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
   18
                                                                               8

including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.

                  "Initial Conversion Price" has the meaning specified in
Section 13.01.

                  "Initial Purchasers", with respect to the Preferred
Securities, means Credit Suisse First Boston Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Smith Barney Inc. and Schroder & Co. Inc.

                  "Initial Reference Market Rate" has the meaning specified in
Section 13.07(b).

                  "Interest Payment Date" has the meaning specified in Section
3.01. 

                  "Issuer Trustees" has the meaning specified in the First 
Recital of this Indenture.

                  "Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

                  "90 Day Period" has the meaning specified in Section 11.02.

                  "NNM" means the National Market System of the National
Association of Securities Dealers, Inc., or any successor national automated
interdealer quotation system.

                  "Non-Stock Fundamental Change" has the meaning specified in
Section 13.07(b).

                  "No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters, which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
of the Securities will not recognize any income, gain or loss for United States
Federal income tax purposes as a result of the liquidation of the Trust and the
   19
                                                                               9

distribution of the Securities to the holders of the Preferred Securities.

                  "Notice of Conversion" means the notice to be given by a
Holder of Preferred Securities to the Conversion Agent directing the Conversion
Agent to exchange such Preferred Securities for Securities and to convert such
Securities into Common Stock on behalf of such holder.

                  "Notice of Default" has the meaning specified in Section 5.01.

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.04 shall
be the principal executive, financial or accounting officer of the Company.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be reasonably acceptable to the
Trustee.

                  "Optional Redemption" has the meaning specified in Section
11.01.

                  "Optional Redemption Ratio" has the meaning specified in
Section 13.07(b).

                  "Outstanding", when used with respect to Securities, means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except: (i) Securities theretofore canceled by
the Trustee or delivered to the Trustee for cancellation; (ii) Securities for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities which have been paid pursuant to Section 3.08,
converted into Common Stock pursuant to
   20
                                                                              10

Section 13.01, or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company.

                  "Paying Agent" means any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company.

                  "Payment Resumption Date" has the meaning set forth in Section
3.13.

                  "Person" means any individual, corporation, company, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                  "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.07 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

                  "Preferred Securities" has the meaning specified in the first
recital to this instrument.

                  "Property Trustee" has the meaning specified in the Recitals
to this instrument.

                  "Purchase Agreement" has the meaning specified in the Recitals
to this instrument.

                  "Purchased Shares" has the meaning specified in
Section 13.03(vi).

                  "Purchaser Stock Price" has the meaning specified in Section
13.07(b).

                  "Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
   21
                                                                              11

                  "Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

                  "Redemption Tax Opinion" means an opinion of a nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Company would be precluded from
deducting the interest on the Securities for United States Federal income tax
purposes, even after the Trust was liquidated and the Securities were
distributed to the holders of the Preferred Securities.

                  "Reference Date" has the meaning specified in Section
13.03(iv).

                  "Reference Market Price" has the meaning specified in Section
13.07(b).

                  "Registration Default" has the meaning specified in Section
10.07.

                  "Registration Rights Agreement" has the meaning specified in
Section 10.07.

                  "Regular Record Date" has the meaning specified in Section
3.01.

                  "Relevant Price" has the meaning specified in Section
13.07(b).

                  "Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer, the controller or any assistant controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.

   22
                                                                              12

                  "Restricted Preferred Securities" means each Preferred
Security required to bear the restricted securities legend required by Section
9.02(j) of the Declaration.

                  "Restricted Securities" means each Security required to bear a
Restricted Securities Legend pursuant to Section 2.02 hereof.

                  "Restricted Securities Legend" has the meaning specified in
Section 2.02.

                  "Securities" has the meaning specified in the Fifth Recital to
this instrument.

                  "Securities Act" means the Securities Act of 1933.

                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.06.

                  "Senior Debt" means (i) the principal of, and premium and
interest, if any, on all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, (ii) all obligations to make payment pursuant to the terms
of financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals
or extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to
   23
                                                                              13

any of its subsidiaries, (d) Debt to any employee of the Company and (e) Debt
which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the Holders of the Securities as a
result of the subordination provisions of the Indenture would be greater than
such payments otherwise would have been as a result of any obligation of such
holders of such Debt to pay amounts over to the obligees on such trade accounts
payable or accrued liabilities arising in the ordinary course of business as a
result of subordination provisions to which such Debt is subject.

                  "Shelf Registration Statement" has the meaning specified in
Section 10.07.

                  "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.08.

                  "Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal, together
with any accrued and unpaid interest (including Compounded Interest), of such
Security or such installment of interest is due and payable.

                  "Subsidiary" of any Person means (i) a corporation more than
50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other than
a corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.

                  "Tax Event" means the receipt by the Property Trustee of an
opinion of a nationally recognized independent tax counsel to the Company
experienced in such matters (a "Dissolution Tax Opinion") to the effect that, as
a result of (a) any amendment to or change (including any announced prospective
change (which shall not include a proposed change), provided that a Tax Event
shall not occur more than 90 days before the effective date of any such
prospective change) in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing author-
   24
                                                                              14

ity thereof or therein, (b) any judicial decision or official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations
(an "Administrative Action") or (c) any amendment to or change in the
administrative position or interpretation of any Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective or such Administrative Action or
decision is announced, in each case, on or after the date of original issuance
of the Securities or the issue date of the Preferred Securities issued by the
Trust, there is more than an insubstantial risk that (x) if the Securities are
held by the Property Trustee, (i) the Trust is, or will be within 90 days of the
date of such opinion, subject to United States Federal income tax with respect
to interest accrued or received on the Securities or subject to more than a de
minimis amount of other taxes, duties or other governmental charges as
determined by such counsel, or (ii) any portion of interest payable by the
Company to the Trust on the Securities is not, or within 90 days of the date of
such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes or (y) with respect to Securities
which are no longer held by the Property Trustee, any portion of interest
payable by the Company on the Securities is not, or within 90 days of the date
of such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes.

                  "Trading Day" has the meaning specified in Section 13.07(b).

                  "Trust" has the meaning specified in the first recital to this
instrument.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the
   25
                                                                              15

Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.

                  "Trust Securities" means Common Securities and Preferred
Securities.

                  "Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

                  "Voting Stock" of any Person means capital stock of such
Person which ordinarily has voting power for the election of directors (or
Persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.

                  SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act or
reasonably requested by the Trustee in connection with such application or
request. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (1) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;

                  (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;
   26
                                                                              16

                  (3)  a statement that, in the opinion of each such
         individual, he has made or caused to be made such
         examination or investigation as is necessary to enable him to express
         an informed opinion as to whether or not such covenant or condition has
         been complied with; and

                  (4) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

                  SECTION 1.03. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

                  SECTION 1.04. Acts of Holders; Record Dates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given to or taken by Holders may be embodied in
and
   27
                                                                              17

evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee or the Company, as the case may be, deems
sufficient.

                  (c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 7.01) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.
   28
                                                                              18

                  (d) The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to join in
the giving or making of (i) any notice of default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the date set by
the Trustee by which any such determination shall be made (the "Expiration
Date") by Holders of the requisite principal amount of Outstanding Securities on
such record date. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities in the manner set forth in Section 1.06.

                  (e) The ownership of Securities shall be proved by the
Security Register.

                  (f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

                  (g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular Security
may do so with regard to
   29
                                                                              19

all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which who may do so pursuant to such appointment with
regard to all or any different part of such principal amount.

                  SECTION 1.05.  Notices, Etc., to Trustee and the Company.  Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company shall be
         sufficient for every purpose hereunder if made, given, furnished or
         filed in writing to:

                           The Bank of New York
                           101 Barclay Street
                           Floor 21 West
                           New York, New York 10286

                           Attention of:    Corporate Trust Trustee
                                            Administration

                  (2) the Company by the Trustee or by any Holder shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Company addressed to:

                           Union Pacific Corporation
                           1717 Main Street
                           Suite 5900
                           Dallas, Texas 75201-4605

                           Attention of:  Chief Financial Officer

                  SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such
Holder's address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
   30
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notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

                  In case, by reason of the suspension of regular mail service
or by reason of any other cause, it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.

                  SECTION 1.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.

                  SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

                  SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

                  SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

                  SECTION 1.11. Benefits of Indenture. Nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto and

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their successors hereunder, the holders of Senior Debt, the holders of Preferred
Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.

                  SECTION 1.12. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  SECTION 1.13. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security or the last
date on which a Holder has the right to convert his Securities shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal or conversion of the Securities
need not be made on such date, but may be made on the next succeeding Business
Day (except that, with respect to any Redemption Date, if such Business Day is
in the next succeeding calendar year, such Redemption Date shall be the
immediately preceding Business Day) with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity or on
such last day for conversion, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.

                                   ARTICLE II

                                 Security Forms

                  SECTION 2.01. Forms Generally. The Securities and the
Trustee's certificates of authentication shall be substantially in the form of
Exhibit A which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each Security shall be dated
the date of its authentication. The terms and provisions of the Securities set
forth in Exhibit A are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their
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                                                                              22

execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.

                  The definitive Securities shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

                  SECTION 2.02. Initial Issuance to Property Trustee. The
Securities initially issued to the Property Trustee of the Trust shall be in the
form of one or more individual certificates in definitive, fully registered form
without distribution coupons and shall bear the following legend (the
"Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:

         THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
         TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
         ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON
         STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
         OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
         APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
         HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
         EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
         PROVIDED BY RULE 144A THEREUNDER.

         THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
         THE COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
         CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
         TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
         IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
         SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
         (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE
         904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
         (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
         ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
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                                                                              23

         OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION,
         AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
         NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
         RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  SECTION 2.03.  Additional Provisions Required in Global
Security.  Any Global Security issued hereunder shall, in addition to the
provisions contained in Section 2.02, bear a legend in substantially the
following form:

         "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
         HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
         TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
         SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
         PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
         CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS
         SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
         DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
         DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
         BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

         UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
         UNION PACIFIC CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER,
         EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
         OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON
         IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
         VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
         OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

                  SECTION 2.04. Issuance of Global Securities to Holders. The
Securities may be represented by one or more Global Securities registered in the
name of the Depositary or its nominee if, and only if, the Securities are
distributed to the Holders of the Trust Securities. Until such time, the
Securities shall be registered in the name of and held by the Property Trustee.
Securities distributed to Holders of book-entry Trust Securities shall be
distributed in the form of one or more Global Securities registered in
   34
                                                                              24

the name of the Depositary or its nominee, and deposited with the Security
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Securities distributed to Holders of Trust Securities other than book-entry
Trust Securities shall not be issued in the form of a Global Security or any
other form intended to facilitate book-entry trading in beneficial interests in
such Securities.

                                   ARTICLE III

                                 The Securities

                  SECTION 3.01. Title and Terms. The aggregate principal amount
of Securities that may be authenticated and delivered under this Indenture is
limited to the sum of $1,546,391,750 except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 3.04, 3.05, 3.06, 3.07, 9.06, 11.08 or
13.02.

                  The Securities shall be known and designated as the "6 1/4%
Convertible Junior Subordinated Debentures Due 2028" of the Company. Their
Stated Maturity shall be April 1, 2028, and they shall bear interest at the
Applicable Rate, from April 1, 1998, or from the most recent Interest Payment
Date (as defined below) to which interest has been paid or duly provided for, as
the case may be, payable quarterly (subject to deferral as set forth herein), in
arrears, on January 1, April 1, July 1 and October 1 (each an "Interest Payment
Date") of each year, commencing July 1, 1998, until the principal thereof is
paid or made available for payment, and they shall be paid to the Person in
whose name the Security is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the fifteenth day of the month next preceding the applicable Interest Payment
Date (the "Regular Record Date"). Interest will compound quarterly and will
accrue at the Applicable Rate on any interest installment in arrears for more
than one quarter or during an extension of an interest payment period as set
forth in Section 3.13 hereof.

                  The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day
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                                                                              25

months. Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
in such a 30-day month. In the event that any date on which interest is payable
on the Securities is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on such date.

                  If at any time (including upon the occurrence of a Tax Event)
while the Property Trustee is the Holder of all the Securities, the Trust or the
Property Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any case, the
Company will pay as additional amounts ("Additional Sums") on the Securities
held by the Property Trustee, such additional amounts as shall be required so
that the net amounts received and retained by the Trust and the Property Trustee
after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Property Trustee would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.

                  The principal of and interest on the Securities shall be
payable at the office or agency of the Company in New York, New York maintained
for such purpose and at any other office or agency maintained by the Company for
such purpose in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at any time that the Property Trustee is not the sole
holder of the Securities, payment of interest may, at the option of the Company,
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer.

                  The Securities shall be redeemable as provided in Article XI
hereof.

                  The Securities shall be subordinated in right of payment to
Senior Debt as provided in Article XII hereof.
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                  The Securities shall be convertible as provided in Article
XIII hereof.

                  SECTION 3.02. Denominations. The Securities shall be issuable
only in registered form without coupons and only in denominations of $1,000 and
integral multiples thereof.

                  SECTION 3.03. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

                  Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall manually authenticate and make available for
delivery such Securities as in this Indenture provided and not otherwise.

                  No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.

                  SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and make available for delivery, temporary
Securities which are printed, lithographed, typewritten, mimeographed
   37
                                                                              27

or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

                  If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
10.02, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.

                  SECTION 3.05. Global Securities. (a) Each Global Security
issued under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes of
this Indenture.

                  (b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary advises the Trustee in writing that
such Depositary is no longer willing or able to continue as a Depositary with
respect to such Global Security, and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a "clearing agency"
registered under the Exchange Act, at a time when the Depositary is required to
be so registered to act as such depositary, (ii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default.
   38
                                                                              28

                  (c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Security Registrar for exchange or cancellation
as provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, then
either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article III or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or canceled, or equal to the principal amount of such other
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions and, to the extent required by Section 3.06, a
Restricted Securities Certificate, the Trustee shall, subject to Section 3.05(b)
and as otherwise provided in this Article III, authenticate and make available
for delivery any Securities issuable in exchange for such Global Security (or
any portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.

                  (d) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Security Registrar shall have any
liability in respect of any transfers effected by the Depositary.

                  (e) The rights of the beneficial interests in a Global
Security shall be exercised only through the Depositary and shall be limited to
those established by law
   39
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and agreements between such owners and the Depositary and/or its Agent Members.

                  SECTION 3.06. Registration, Transfer and Exchange Generally;
Certain Transfers and Exchanges. (a) The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section
10.02 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.

                  Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to Section 10.02 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.

                  At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be required by this
Indenture, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.

                  All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.

                  Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfac-
   40
                                                                              30

tory to the Company and the Security Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.

                  No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 3.05, 9.06, 11.09 or 13.01 not
involving any transfer.

                  Neither the Company nor the Trustee shall be required (i) in
the case of a partial redemption of the Securities, to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.

                  (b) Transfer and Exchange Procedures and Restrictions. The
Securities may not be transferred except in compliance with the Restricted
Securities Legend unless otherwise determined by the Company in accordance with
applicable law. Upon any distribution of the Securities to the holders of the
Trust Securities in accordance with the Declaration, the Company and the Trustee
shall enter into a supplemental indenture pursuant to Section 9.01(6) to provide
for transfer procedures and restrictions with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at the time of such distribution.
Notwithstanding any other provision of the Indenture, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.06(b) shall be made only in accordance with this Section
3.06(b).

                  (1) Non-Global Security to Global Security. If the Holder of a
         Security (other than a Global Security) wishes at any time to transfer
         all or any portion of such Security to a Person who wishes to take
         delivery thereof in the form of a beneficial interest in a Global
         Security, such transfer may be effected only in
   41
                                                                              31

         accordance with the provisions of this clause (b)(1) and subject to the
         rules and procedures of the Depositary. Upon receipt by the Security
         Registrar of (A) such Security as provided in Section 3.06(a) and
         instructions satisfactory to the Security Registrar directing that a
         beneficial interest in the Global Security in a specified principal
         amount not greater than the principal amount of such Security be
         credited to a specified Agent Member's account and (B) a Securities
         Certificate duly executed by such Holder or such Holder's attorney duly
         authorized in writing, then the Security Registrar shall cancel such
         Security (and issue a new Security in respect of the untransferred
         portion thereof) as provided in Section 3.06(a) and increase the
         aggregate principal amount of the Global Security by the specified
         principal amount as provided in Section 3.05(c).

                  (2) Non-Global Security to Non-Global Security. A Security
         that is not a Global Security may be transferred, in whole or in part,
         to a Person who takes delivery in the form of another Security that is
         not a Global Security as provided in Section 3.06(a); provided, that if
         such Security to be transferred in whole or in part is a Restricted
         Security, the Security Registrar shall have received the assignment
         form attached to the Security duly executed by the transferor Holder or
         such Holder's attorney duly authorized in writing.

                  (3)  Exchanges between Global Security and Non-Global
         Security.  A beneficial interest in a Global Security may be exchanged
         for a Security that is not a Global Security as provided in Section
         3.05.

                  (c)  Restricted Securities Legend.  (1)  Except as set forth
below, all Securities shall bear the Restricted Securities Legend set forth in
Section 2.02.

                  (2) Subject to Section 3.06(d) and to the following clauses of
         this Section 3.06(c), a Security (other than a Global Security) that
         does not bear a Restricted Securities Legend may be issued in exchange
         for or in lieu of a Restricted Security or any portion thereof that
         bears such legend if, in the Company's judgment, placing such a legend
         upon such new Security is not necessary to ensure compliance with the
         registration requirements of the Securities Act, and
   42
                                                                              32

         the Trustee, at the written direction of the Company in the form of an
         Officers' Certificate, shall countersign and deliver such a new
         Security.

                  (3) Notwithstanding the foregoing provisions of this Section
         3.06(c), a successor Security of a Security that does not bear a
         Restricted Securities Legend shall not bear such form of legend unless
         the Company has reasonable cause to believe that such successor
         Security is a "restricted security" within the meaning of Rule 144
         under the Securities Act, in which case the Trustee, at the written
         direction of the Company in the form of an Officers' Certificate, shall
         countersign and deliver a new Security bearing a Restricted Securities
         Legend in exchange for such successor Security.

                  (4) Upon any sale or transfer of a Restricted Security
         (including any Restricted Security represented by a Global Security)
         pursuant to an effective registration statement under the Securities
         Act or pursuant to Rule 144 under the Securities Act after such
         registration ceases to be effective: (A) in the case of any Restricted
         Security that is a definitive Security, the Security Registrar shall
         permit the Holder thereof to exchange such Restricted Security for a
         definitive Security that does not bear the Restricted Securities Legend
         and shall rescind any restriction on the transfer of such Restricted
         Security; and (B) in the case of any Restricted Security that is
         represented by a Global Security, the Security Registrar shall permit
         the Holder of such Global Security to exchange such Global Security for
         another Global Security that does not bear the Restricted Securities
         Legend.

                  (5) If Restricted Securities are being presented or
         surrendered for transfer or exchange then there shall be (if so
         required by the Trustee), (A) if such Restricted Securities are being
         delivered to the Security Registrar by a Holder for registration in the
         name of such Holder, without transfer, a certification from such Holder
         to that effect; or (B) if such Restricted Securities are being
         transferred, a certification from the transferor as to the compliance
         with the restrictions set forth in the Restricted Securities Legend.
   43
                                                                              33

                  SECTION 3.07. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

                  If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

                  Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

                  The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

                  SECTION 3.08. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is pay-
   44
                                                                              34

able, and is punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date.

                  Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities (or their
         respective Predecessor Securities) are registered at the close of
         business on a Special Record Date (as defined below) for the payment of
         such Defaulted Interest, which shall be fixed in the following manner.
         The Company shall notify the Trustee in writing of the amount of
         Defaulted Interest proposed to be paid on each Security and the date of
         the proposed payment, and at the same time the Company shall deposit
         with the Trustee an amount of money equal to the aggregate amount
         proposed to be paid in respect of such Defaulted Interest or shall make
         arrangements satisfactory to the Trustee for such deposit prior to the
         date of the proposed payment, such money when deposited to be held in
         trust for the benefit of the Persons entitled to such Defaulted
         Interest as in this clause provided. Thereupon the Trustee shall fix a
         special record date (the "Special Record Date") for the payment of such
         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Company of such
         Special Record Date and, in the name and at the expense of the Company,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor to be mailed, first-class postage
         prepaid, to each Holder at his address as it appears in the Security
         Register, not less than 10 days prior to such Special Record Date.
         Notice of the proposed payment of such Defaulted Interest and the
         Special Record Date therefor having
   45
                                                                              35

         been so mailed, such Defaulted Interest shall be paid to the Persons in
         whose names the Securities (or their respective Predecessor Securities)
         are registered at the close of business on such Special Record Date and
         shall no longer be payable pursuant to the following clause (2).

                  (2) The Company may make payment of any Defaulted Interest in
         any other lawful manner not inconsistent with the requirements of any
         securities exchange on which the Securities may be listed, and, if so
         listed, upon such notice as may be required by such exchange (or by the
         Trustee if the Securities are not listed), if, after notice given by
         the Company to the Trustee of the proposed payment pursuant to this
         clause, such manner of payment shall be deemed practicable by the
         Trustee provided that any such payment will be made in coin or currency
         of the United States of America which at the time of payment is a legal
         tender for payment of public and private debt.

                  Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue (including in each such case Compounded
Interest), which were carried by such other Security.

                  In the case of any Security which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted prior to any Regular Record Date, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments)
   46
                                                                              36

on the Securities being converted, which shall be deemed to be paid in full.

                  SECTION 3.09. Persons Deemed Owners. The Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
any Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.08) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. No holder of any
beneficial interest in any Global Security held on its behalf by a Depositary
shall have any rights under this Indenture with respect to such Global Security,
and such Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company or the Trustee from giving effect to any written certification, proxy,
or other authorization furnished by a Depositary or impair, as between the
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of any Security.

                  SECTION 3.10. Cancellation. All Securities surrendered for
payment, redemption, registration of transfer or exchange or conversion shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancelation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order; provided, however, that the Trustee shall not be required to
destroy the certificates representing such canceled Securities.

                  SECTION 3.11. Right of Set Off. Notwithstanding anything to
the contrary in this Indenture, the Company shall have the right to set off any
payment it is otherwise
   47
                                                                              37

required to make hereunder to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.

                  SECTION 3.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.

                  SECTION 3.13. Extension of Interest Payment Period; Notice of
Extension. (a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this Security,
from time to time to defer payments of interest by extending for successive
periods not exceeding 20 consecutive quarters for each such period (a "Deferral
Period"); provided that no Deferral Period may extend beyond April 1, 2028. To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 3.13, will bear interest thereon at the Applicable Rate compounded
quarterly for each quarter of the Deferral Period ("Compounded Interest"). On
the applicable Payment Resumption Date, the Company shall pay all interest then
accrued and unpaid on the Securities, including any Compounded Interest that
shall be payable to the Holders of the Securities in whose names the Securities
are registered in the Security Register on the Regular Record Date fixed for
such Payment Resumption Date. A Deferral Period shall terminate upon the payment
by the Company of all interest then accrued and unpaid on the Securities
(together with interest thereon accrued at an annual rate equal to the
Applicable Rate, compounded quarterly, to the extent permitted by applicable
law). Before the termination of any Deferral Period, the Company may further
extend such period as provided in paragraph (b) of this Section 3.13, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Securities. Upon the termination of any Deferral Period, and subject to the
foregoing requirements, the Company may elect to begin a new
   48
                                                                              38

Deferral Period. No interest shall be due and payable during a Deferral Period
except on the Payment Resumption Date as determined pursuant to paragraph (b) of
this Section 3.13. There is no limitation on the number of times that the
Company may elect to begin a Deferral Period.

                  (b) The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend a Deferral Period. On or prior to the Regular Record Date immediately
preceding the Interest Payment Date on which the Company elects to pay all
interest then accrued and unpaid on the Securities, including Compound Interest,
(the "Payment Resumption Date") the Company shall give the Holder of the
Security and the Trustee written notice that the Deferral Period will end on
such Payment Resumption Date. Notwithstanding the provision of such notice, the
Company may elect to further extend the Deferral Period, subject to the
limitations set forth in Section 3.13(a), by providing the Holder of the
Security and the Trustee with a new Deferral Notice not less than three Business
Days prior to the Regular Record Date immediately preceding the previously
scheduled Payment Resumption Date. The Company may elect to pay all interest
then accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established Payment Resumption
Date provided that the Company gives the Holder of the Security and the Trustee
a new Deferral Notice setting forth the revised Payment Resumption Date at least
three Business Days prior to the Regular Record Date for such revised Payment
Resumption Date.

                  (c) The quarter in which any Deferral Notice is given pursuant
to paragraph (b) hereof shall be counted as one of the 20 quarters permitted in
the maximum Deferral Period permitted under paragraph (a) hereof.

                  SECTION 3.14. Paying Agent, Security Registrar and Conversion
Agent. The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of its
Affiliates may act in any such capacity.
   49
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                                   ARTICLE IV

                           Satisfaction and Discharge

                  SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to any surviving rights
of conversion, registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

                  (1) either

                           (A) all Securities theretofore authenticated and
                  delivered (other than (i) Securities which have been
                  destroyed, lost or stolen and which have been replaced or paid
                  as provided in Section 3.06 and (ii) Securities for whose
                  payment money has theretofore been deposited in trust or
                  segregated and held in trust by the Company and thereafter
                  repaid to the Company or discharged from such trust, as
                  provided in Section 10.03) have been delivered to the Trustee
                  for cancellation; or

                           (B) all such Securities not theretofore
                  delivered to the Trustee for cancellation

                                    (i) have become due and payable, or

                                    (ii) will become due and payable at their
                           Stated Maturity within one year, or

                                    (iii) are to be called for redemption within
                           one year under arrangements satisfactory to the
                           Trustee for the giving of notice of redemption by the
                           Trustee in the name, and at the expense, of the
                           Company

                  and the Company, in the case of (i), (ii) or (iii) above, has
                  deposited or caused to be deposited with the Trustee as trust
                  funds in trust for the purpose an amount sufficient to pay and
                  discharge the entire indebtedness on such Securities not
                  theretofore delivered to the Trustee for cancellation, for
                  principal and interest (including Compounded Interest) to the
                  date of such deposit
   50
                                                                              40

         (in the case of Securities which have become due and payable) or to the
         Stated Maturity or Redemption Date, as the case may be;

                  (2) the Company has paid or caused to be paid all
         other sums payable hereunder by the Company; and

                  (3) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent herein provided for relating to the satisfaction and
         discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.

                  SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Trustee. All moneys deposited with the Trustee pursuant
to Section 4.01 (and held by it or any Paying Agent) for the payment of
Securities subsequently converted shall be returned to the Company upon Company
Request.

                                    ARTICLE V

                                    Remedies

                  SECTION 5.01. Events of Default. "Event of Default," wherever
used herein, means any one of the following events that has occurred and is
continuing (whatever the reason for such Event of Default and whether it shall
be occasioned by the provisions of Article XI or be voluntary or involuntary or
be effected by operation of law

   51

                                                                              41

or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

                  (1) default in the payment of any interest upon any Security,
         including any Additional Payments, when it becomes due and payable, and
         continuance of such default for a period of 30 days (subject to the
         deferral of any due date in the case of a Deferral Period); or

                  (2) default in the payment of the principal of any Security
         when due, whether at its Maturity, upon redemption, by declaration of
         acceleration or otherwise; or

                  (3) default in the observation or performance, in any material
         respect, of any covenant of the Company in this Indenture (other than a
         covenant a default in the performance of which or the breach of which
         is elsewhere in this Section specifically dealt with), and continuance
         of such default for a period of 90 days after there has been given, by
         registered or certified mail, to the Company by the Trustee or to the
         Company and the Trustee by the Holders of at least 25% in aggregate
         outstanding principal amount of the Securities a written notice
         specifying such default and requiring it to be remedied; or

                  (4) failure by the Company to issue and deliver Common Stock
         upon an election to convert the Securities into Common Stock; or

                  (5) the entry or a decree or order by a court having
         jurisdiction in the premises adjudging the Company as bankrupt or
         insolvent, or approving as properly filed a petition seeking
         reorganization, arrangement, adjustment or composition of or in respect
         of the Company under any applicable federal or state bankruptcy,
         insolvency, reorganization or other similar law, or appointing a
         receiver, liquidator, assignee, trustee, sequestrator (or other similar
         official) of the Company or of any substantial part of its property or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order unstayed and in effect for a
         period of 60 consecutive days; or
   52
                                                                              42

                  (6) the institution by the Company of proceedings to be
         adjudicated a bankrupt or insolvent, or the consent by it to the
         institution of bankruptcy or insolvency proceedings against it, or the
         filing by it of a petition or answer or consent seeking reorganization
         or relief under any applicable federal or state bankruptcy, insolvency,
         reorganization or other similar law, or the consent by it to the filing
         of any such petition or to the appointment of a receiver, liquidator,
         assignee, trustee, sequestrator (or other similar official) of the
         Company or of any substantial part of its property, or the making by it
         of an assignment for the benefit of creditors, or the admission by it
         in writing of its inability to pay its debts generally as they become
         due and its willingness to be adjudicated a bankrupt, or the taking of
         corporate action by the Company in furtherance of any such action; or

                  (7) the voluntary or involuntary dissolution, winding up or
         termination of the Trust, except in connection with (i) the
         distribution of Securities to holders of Preferred Securities in
         liquidation or redemption of their interests in the Trust, (ii) the
         redemption of all of the outstanding Preferred Securities of the Trust
         or (iii) certain mergers, consolidations or amalgamations, each as
         permitted by the Declaration.

                  SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); provided that, if the Property
Trustee is the sole Holder of the Securities and if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities fail to declare the principal of all the Securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon
any such declaration such principal and all accrued interest shall become
immediately due and payable. Upon any such
   53
                                                                              43

declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Payments) on all the Securities of such
series shall then become immediately due and payable; provided that the payment
of principal and interest on such Securities (including Additional Payments)
shall remain subordinated to the extent provided in Article XII.

                  At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as provided in this Article hereinafter, the Holders of
a majority in aggregate principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if

                  (1) the Company has paid or deposited with the Trustee a sum
         sufficient to pay

                           (A) all overdue interest (including any
                  Compounded Interest) on all Securities,

                           (B) the principal of any Securities which have become
                  due otherwise than by such declaration of acceleration and
                  interest thereon at the rate borne by the Securities, and

                           (C) all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel;

         and

                  (2) all Events of Default, other than the non-payment of the
         principal of Securities which have become due solely by such
         declaration of acceleration, have been cured or waived as provided in
         Section 5.13.

                  The Company is required to file annually with the Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under this Indenture.

                  No such rescission shall affect any subsequent default or
impair any right consequent thereon.
   54
                                                                              44

                  SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if

                  (1) default is made in the payment of any interest (including
         any Compounded Interest) on any Security when such interest becomes due
         and payable and such default continues for a period of 30 days, or

                  (2) default is made in the payment of the
         principal of any Security at the Stated Maturity
         thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional Sums),
at the rate borne by the Securities, and, in addition thereto, all amounts owing
to the Trustee under Section 6.07.

                  If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.

                  SECTION 5.04. Trustee May File Proofs of Claim. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any
   55
                                                                              45

amount due it and any predecessor Trustee under Section 6.07.

                  No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

                  SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing to the Trustee and any
predecessor Trustee under Section 6.07, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.

                  SECTION 5.06. Application of Money Collected. Subject to
Article XII, any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest (including any Additional Payments), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

                  FIRST:  To the payment of all amounts due the
         Trustee and any predecessor Trustee under Section 6.07;

                  SECOND: To the payment of the amounts then due and unpaid for
         principal of and interest (including any Additional Payments) on the
         Securities in respect of which or for the benefit of which such money
         has been collected, ratably, without preference or priority of any
         kind, according to the amounts due and payable on such Securities for
         principal and interest (including any Compounded Interest),
         respectively; and

                  THIRD:  The balance, if any, to the Company.
   56
                                                                              46

                  SECTION 5.07. Limitation on Suits. Subject to Section 5.08, no
Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless

                  (1) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default;

                  (2) the Holders of not less than 25% in aggregate principal
         amount of the Outstanding Securities shall have made written request to
         the Trustee to institute proceedings in respect of such Event of
         Default, in its own name as Trustee hereunder;

                  (3) such Holder or Holders have offered to the Trustee
         reasonable indemnity against the costs, expenses and liabilities to be
         incurred in compliance with such request;

                  (4) the Trustee for 60 days after its receipt of such notice,
         request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5) no direction inconsistent with such written request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.

                  SECTION 5.08. Unconditional Right of Holders to Receive
Principal and Interest and to Convert. Notwithstanding any other provision in
this Indenture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of and (subject
to Section 3.08) interest (including any Additional Payments) on such Security
on the respective Stated Maturities expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to
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                                                                              47

convert such Security in accordance with Article XIII and to institute suit for
the enforcement of any such payment and right to convert, and such rights shall
not be impaired without the consent of such Holder. If the Property Trustee is
the sole Holder of the Securities, any holder of the Preferred Securities shall
have the right to institute suit on behalf of the Trust for the enforcement of
any such payment and right to convert.

                  SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

                  SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.07, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

                  SECTION 5.11. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

                  SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities
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                                                                              48

shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, that

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture; and

                  (2) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction.

                  SECTION 5.13. Waiver of Past Defaults. Subject to Section 9.02
hereof, the Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default

                  (1) in the payment of the principal of, premium, if any, or
         interest (including any Additional Payments) on any Security (unless
         such default has been cured and a sum sufficient to pay all matured
         installments of interest and principal due otherwise than by
         acceleration has been deposited with the Trustee); or

                  (2) in respect of a covenant or provision hereof which under
         Article IX cannot be modified or amended without the consent of the
         Holder of each Outstanding Security affected.

                  Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

                  SECTION 5.14. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided, that
neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by the
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Company or the Trustee or in any suit for the enforcement of the right to
receive the principal of and interest (including any Additional Payments) on any
Security or to convert any Security in accordance with Article XIII.

                  SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

                  SECTION 5.16. Enforcement by Holders of Preferred Securities.
Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Securities on the
date such interest or principal is otherwise payable, the Company acknowledges
that, in such event, a holder of Preferred Securities may institute a legal
proceeding directly for enforcement of payment to such Holder of the principal
of or interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Securities. The Company may not amend this Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of all the
holders of Preferred Securities. Notwithstanding any payment made to such holder
of Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Securities (including Additional Payments, if any) held by the Trust or the
Property Trustee and the Company shall be subrogated to the rights of the holder
of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Securities.
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                                   ARTICLE VI

                                   The Trustee

                  SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default, the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.

                  (b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.

                  (c) Notwithstanding the foregoing, (i) the duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
and (ii) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

                  SECTION 6.02. Notice of Defaults. The Trustee shall give the
Holders notice of any default hereunder as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any default of the
character specified in Section 5.01(3), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.

                  SECTION 6.03. Certain Rights of Trustee. Subject to the
provisions of Section 6.01:

                  (a) the Trustee may conclusively rely and shall be protected
         in acting or refraining from acting upon any
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         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document believed by
         it to be genuine and to have been signed or presented by the proper
         party or parties;

                  (b) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by a Company Request or Company Order
         and any resolution of the Board of Directors may be sufficiently
         evidenced by a Board Resolution;

                  (c) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

                  (d) the Trustee may consult with counsel of its choice and the
         advice of such counsel or any Opinion of Counsel shall be full and
         complete authorization and protection in respect of any action taken,
         suffered or omitted by it hereunder in good faith and in reliance
         thereon;

                  (e) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders pursuant to this Indenture, unless
         such Holders shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which might be
         incurred by it in compliance with such request or direction;

                  (f) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit, and, if the Trustee shall determine to make such
         further inquiry or investigation, it shall be entitled to reasonable
         examination of the books,
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         records and premises of the Company, personally or by agent or
         attorney;

                  (g) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder; and

                  (h) the Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith, without
         negligence or willful misconduct, and reasonably believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Indenture.

                  SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of the Securities or the proceeds thereof.

                  SECTION 6.05. May Hold Securities. The Trustee, any Paying
Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying Agent, Security
Registrar, or such other agent.

                  SECTION 6.06. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

                  SECTION 6.07. Compensation and Reimbursement. The Company
agrees:

                  (1) to pay to the Trustee from time to time such reasonable
         compensation as the Company and the Trustee
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         shall from time to time agree in writing for all services rendered by
         it hereunder (which compensation shall not be limited by any provision
         of law in regard to the compensation of a trustee of an express trust);

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         fees, disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence or bad faith; and

                  (3) to indemnify the Trustee and any predecessor Trustee for,
         and to hold it harmless against, any loss, liability or expense
         incurred without negligence or bad faith on its part, arising out of or
         in connection with the acceptance or administration of this trust,
         including the costs and expenses of defending itself against any claim
         or liability in connection with the exercise or performance of any of
         its powers or duties hereunder.

                  SECTION 6.08. Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.

                  SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
in New York, New York. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section,
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it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

                  SECTION 6.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.

                  (b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

                  (c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.

                  (d)  If at any time:

                  (1) the Trustee shall fail to comply with Section 6.08 after
         written request therefor by the Company or by any Holder who has been a
         bona fide Holder of a Security for at least six months; or

                  (2) the Trustee shall cease to be eligible under Section 6.09
         and shall fail to resign after written request therefor by the Company
         or by any such Holder; or

                  (3) the Trustee shall become incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation;

then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for
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the removal of the Trustee and the appointment of a successor Trustee.

                  (e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

                  (f) The Company shall give written notice of each resignation
and each removal of the Trustee and each appointment of a successor Trustee to
all Holders in the manner provided in Section 1.06. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust Office.

                  SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to
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more fully and certainly vest in and confirm to such successor Trustee all such
rights, powers and trusts.

                  No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

                  SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any Person into which the Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

                  SECTION 6.13. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

                                   ARTICLE VII

                Holders' Lists and Reports by Trustee and Company

                  SECTION 7.01. Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee

                  (a) semiannually, not later than January 15 and July 15 in
         each year, a list, in such form as the Trustee may reasonably require,
         of the names and addresses of the Holders as of a date not more than 15
         days prior to the delivery thereof; and
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                  (b) at such other times as the Trustee may request in writing,
         within 30 days after the receipt by the Company of any such request, a
         list of similar form and content as of a date not more than 15 days
         prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

                  SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.

                  (b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

                  (c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

                  SECTION 7.03. Reports by Trustee. (a) Within 60 days after May
15 of each year, commencing May 15, 1998, the Trustee shall transmit by
first-class mail to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act in
the manner provided pursuant thereto.

                  (b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.

                  SECTION 7.04. Reports by Company. The Company shall file with
the Trustee and the Commission, and transmit
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to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

                  Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                  SECTION 7.05. Tax Reporting. The Company shall provide to the
Trustee on a timely basis such information as the Trustee requires to enable the
Trustee to prepare and file any form required to be submitted by the Company
with the Internal Revenue Service and the Holders relating to original issue
discount, including, without limitation, Form 1099-0ID or any successor form.

                                  ARTICLE VIII

              Consolidation, Merger, Conveyance, Transfer or Lease

                  SECTION 8.01. Company May Consolidate, Etc., Only on Certain
Terms. The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge with or
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

                  (1) in case the Company shall consolidate with or merge with
         or into another Person or convey, transfer or lease all or
         substantially all of its properties and assets on a consolidated basis
         to any Person, the Person formed by such consolidation or into which
         the Company is merged or the Person which acquires by conveyance,
         transfer or lease, all or substantially all
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         of the properties and assets of the Company on a consolidated basis
         shall be a corporation, limited liability company, partnership or
         trust, shall be organized and validly existing under the laws of the
         United States of America, any State thereof or the District of Columbia
         and shall expressly assume, by an indenture supplemental hereto,
         executed and delivered to the Trustee, in form reasonably satisfactory
         to the Trustee, the due and punctual payment of the principal of and
         interest (including any Additional Payments) on all the Securities and
         the performance or observance of every covenant of this Indenture on
         the part of the Company to be performed or observed and shall have
         provided for conversion rights in accordance with Article XIII;

                  (2) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of the Company or
         a Subsidiary as a result of such transaction as having been incurred by
         the Company or such Subsidiary at the time of such transaction, no
         Event of Default, and no event which, after notice or lapse of time or
         both, would become an Event of Default, shall have happened and be
         continuing;

                  (3) if at the time any Preferred Securities are outstanding,
         such consolidation or merger or conveyance, transfer or lease of
         assets of the Company is permitted under, and does not give rise to any
         breach or violation of, the Declaration or the Guarantee; and

                  (4) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and, if a
         supplemental indenture is required in connection with such transaction,
         such supplemental indenture, comply with this Article and that all
         conditions precedent herein provided for relating to such transaction
         have been complied with.

                  SECTION 8.02. Successor Substituted. Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of all or substantially all the properties and
assets of the Company on a consolidated basis in accordance with Section 8.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and
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be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

                                   ARTICLE IX

                             Supplemental Indentures

                  SECTION 9.01. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

                  (1) to evidence the succession of another Person to the
         Company and the assumption by any such successor of the covenants of
         the Company herein and in the Securities; or

                  (2) to add to the covenants of the Company for the benefit of
         the Holders, or to surrender any right or power herein conferred upon
         the Company; or

                  (3) to make provision with respect to the conversion rights
         of Holders pursuant to the requirements of Article XIII; or

                  (4) to cure any ambiguity, to correct or supplement any
         provision herein which may be inconsistent with any other provision
         herein, or to make any other provisions with respect to matters or
         questions arising under this Indenture which shall not be inconsistent
         with the provisions of this Indenture; provided, that such action
         pursuant to this clause (4) shall not adversely affect the interests of
         the Holders of the Securities or, so long as any of the Preferred
         Securities shall remain outstanding, the holders of the Preferred
         Securities;

                  (5) to comply with the requirements of the Commission in order
         to effect or maintain the qualification of this Indenture under the
         Trust Indenture Act; or
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                  (6) to make provision for transfer procedures, certification,
         book-entry provisions, the form of restricted securities legends, if
         any, to be placed on Securities, and all other matters required
         pursuant to Section 3.06(b) or otherwise necessary, desirable or
         appropriate in connection with the issuance of Securities to holders
         of Preferred Securities in the event of a distribution of Securities by
         the Trust if a Tax Event or Investment Company Event occurs and is
         continuing.

                  SECTION 9.02. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,

                  (1) extend the Stated Maturity of the principal of, or any
         installment of interest (including any Additional Payments) on, any
         Security, or reduce the principal amount thereof, or reduce the rate or
         extend the time for payment of interest thereon, or reduce any premium
         payable upon the redemption thereof, or change the place of payment
         where, or the coin or currency in which, any Security or interest
         thereon is payable, or impair the right to institute suit for the
         enforcement of any such payment on or after the Stated Maturity thereof
         (or, in the case of redemption, on or after the Redemption Date), or
         adversely affect the right to convert any Security as provided in
         Article XIII (except as permitted by Section 9.01(3)), or modify the
         provisions of this Indenture with respect to the subordination of the
         Securities in a manner adverse to the Holders,

                  (2) reduce the percentage in principal amount of the
         Outstanding Securities, the consent of whose Holders is required for
         any such supplemental indenture, or the consent of whose Holders is
         required for any waiver of compliance with certain provisions of
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         this Indenture or certain defaults hereunder and their consequences
         provided for in this Indenture, or

                  (3) modify any of the provisions of this Section or Section
         5.13, except to increase any such percentage or to provide that certain
         other provisions of this Indenture cannot be modified or waived without
         the consent of the Holder of each Outstanding Security affected
         thereby.

                  Notwithstanding anything to the contrary in this Indenture or
the Declaration, if the Property Trustee is the sole holder of the Securities,
so long as any of the Preferred Securities remains outstanding, no amendment
shall be made that adversely affects the holders of such Preferred Securities,
and no termination of this Indenture shall occur, and no waiver of any Event of
Default or compliance with any covenant under this Indenture shall be effective,
without the prior consent of the holders of the percentage of the aggregate
liquidation amount of such Preferred Securities then outstanding which is at
least equal to the percentage of aggregate stated liquidation amount of the
Outstanding Securities as shall be required under this Indenture to effect any
such amendment, termination or waiver.

                  It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

                  The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder
be canceled and of no further effect.

                  SECTION 9.03. Execution of Supplemental Indentures. In
executing or accepting the additional trusts created by any supplemental
indenture permitted by this
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Article or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

                  SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby. No such supplemental indenture shall directly or indirectly modify the
provisions of Article XII in any manner which might terminate or impair the
rights of the Senior Debt pursuant to such subordination provisions.

                  SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.

                  SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture, may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

                                    ARTICLE X

                    Covenants; Representations and Warranties

                  SECTION 10.01. Payment of Principal and Interest. The Company
will duly and punctually pay the principal of
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and interest on the Securities in accordance with the terms of the Securities
and this Indenture.

                  SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain in the United States an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange or conversion, and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

                  The Company may also from time to time designate one or more
other offices or agencies (in the United States) where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the United States for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.

                  SECTION 10.03. Money for Security Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

                  Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held as provided by the Trust Indenture
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Act, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.

                  The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.

                  The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

                  Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or
interest on any Security and remaining unclaimed for two years after such
principal or interest has become due and payable, shall be paid to the Company
on Company Request, or (if then held by the Company) shall be discharged from
such trust; and the Holder of any such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.

                  SECTION 10.04. Statement by Officers as to Default. The
Company will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period
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of grace or requirement of notice provided hereunder) and, if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                  SECTION 10.05. Limitation on Dividends; Transactions with
Affiliates; Covenants as to the Trust. (a) If at such time (x) there shall have
occurred an Event of Default, (y) the Company shall be in default with respect
to its payment of any obligations under the Guarantee or (z) the Company shall
have given notice of its election to begin a Deferral Period as provided herein
and shall not have rescinded such notice, or such Deferral Period shall be
continuing, the Company covenants that the Company shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends which consist of
stock of the same class as that on which the dividends are being paid, (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Company that rank pari passu with or junior
in interest to the Securities or (iii) make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Securities (in each case, other than (A) dividends or distributions in Common
Stock, (B) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(C) payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock or (F) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
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                  (b) The Company also covenants and agrees (i) that it shall
directly or indirectly maintain 100% ownership of the Common Securities of the
Trust; provided, however, that any permitted successor of the Company hereunder
may succeed to the Company's ownership of such Common Securities and (ii) that
it shall use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of the Securities to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, and (y) to otherwise continue to be
classified as a grantor trust for United States Federal income tax purposes.

                  SECTION 10.06. Payment of Expenses of the Trust. In connection
with the offering, sale and issuance of the Securities to the Property Trustee
in connection with the sale of the Trust Securities by the Trust, the Company
shall:

                  (a) pay for all costs, fees and expenses relating to the
         offering, sale and issuance of the Securities, including commissions to
         the Initial Purchasers payable pursuant to the Purchase Agreement and
         compensation of the Trustee under the Indenture in accordance with the
         provisions of Section 6.07 of the Indenture;

                  (b) be responsible for and pay for all debts and obligations
         (other than with respect to the Trust Securities) of the Trust, pay for
         all costs and expenses of the Trust (including, but not limited to,
         costs and expenses relating to the organization of the Trust, the
         offering, sale and issuance of the Trust Securities (including
         commissions to the underwriters in connection therewith), the fees and
         expenses of the Property Trustee and the Delaware Trustee, the costs
         and expenses relating to the operation of the Trust, including without
         limitation, costs and expenses of accountants, attorneys, statistical
         or bookkeeping services, expenses for printing and engraving and
         computing or accounting equipment, paying agent(s), registrar(s),
         transfer agent(s), duplicating, travel and telephone and other
         telecommunications expenses and costs and expenses incurred in
         connection with the acquisition, financing, and disposition of Trust
         assets); and
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                  (c) pay any and all taxes (other than United States
         withholding taxes attributable to the Trust or its assets) and all
         liabilities, costs and expenses with respect to such taxes of the
         Trust.

                  SECTION 10.07. Registration Rights. The holders of the
Preferred Securities, the Securities, the Guarantee Agreement and the shares of
Common Stock of the Company issuable upon conversion of the Securities
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement, dated as of April 1, 1998, among the Company, the
Trust and the Initial Purchasers (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement the Company and the Trust have
agreed for the benefit of the holders of the Registrable Securities that (i)
they will, at the Company's sole expense, prior to May 1, 1998, file a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Registrable Securities, (ii) they will use their
best efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act prior to July 30, 1998 and (iii) they will use their
best efforts to maintain such Shelf Registration Statement continuously
effective under the Securities Act (subject to certain exceptions under the
Registration Rights Agreement) until the second anniversary of the effectiveness
of the Shelf Registration Statement or such other period as shall be required
under Rule 144(k) thereunder or any successor rule or regulation thereto or such
earlier date as is provided in the Registration Rights Agreement. If the Company
fails to comply with either of clauses (ii) or (iii) above, subject to certain
exceptions provided in the Registration Rights Agreement, (a "Registration
Default") then, at such time, the Applicable Rate will increase by 50 basis
points (.50%). Such increase will remain in effect from and including the date
on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured, on which date the interest rate
on the Securities will revert to the interest rate originally borne by the
Securities.

                                   ARTICLE XI

                            Redemption of Securities

                  SECTION 11.01. Optional Redemption. The Company shall have the
right to redeem the Securities (an "Optional
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Redemption") in whole or in part, at any time or from time to time on or after
April 10, 2001, at a Redemption Price equal to $51.56 per $50 principal amount
of the Securities to be redeemed plus any accrued and unpaid interest, including
Additional Payments, if any, to the Redemption Date, if redeemed on or before
April 1, 2002, and at the prices per $50 principal amount of Securities set
forth in the following table, plus accrued and unpaid interest, including
Additional Payments, if any, to the Redemption Date, if redeemed during the
12-month period ending on April 1:

                              Price Per $50
                                Principal
       Year                      Amount
       ----                      ------
                           
       2003                      $51.04
       2004                      $50.52

and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.

                  SECTION 11.02. Tax Event Redemption. (a) If a Tax Event has
occurred and is continuing and:

                  (1) the Company has received a Redemption Tax Opinion; or

                  (2) the Issuer Trustees shall have been informed by nationally
         recognized independent tax counsel (reasonably acceptable to the Issuer
         Trustees) experienced in such matters that a No Recognition Opinion
         cannot be delivered,

then the Company shall have the right upon not less than 20 days, nor more than
60 days, notice to the Holders of the Securities to redeem the Securities in
whole, but not in part, for cash at $50 per $50 principal amount of the
Securities plus accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); provided, however, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, including, but
not
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limited to, filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, will have
no adverse effect on the Company, the Trust or the Holders of the Preferred
Securities and will involve no material cost, then the Company or the Trust
shall pursue such ministerial action or other measure in lieu of redemption; and
provided further that the Company shall have no right to redeem the Securities
while the Trust is pursuing any ministerial action or other similar measure
pursuant to its obligations under the Declaration.

                  (b) If the Company opts not to redeem the Securities pursuant
to this Section 11.02, the Company shall be required to pay Additional Sums in
respect of the Securities pursuant to Section 3.01 for so long as (i) a Tax
Event has occurred and is continuing and (ii) the Property Trustee is the sole
Holder of the Securities.

                  SECTION 11.03.  [Reserved]

                  SECTION 11.04. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee by such method as the Trustee shall deem fair and appropriate, from
the Outstanding Securities not previously called for redemption. Such selection
method may provide for the selection for redemption of portions (equal to $50 or
any integral multiple thereof) of the principal amount of the Securities.

                  The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.

                  The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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                  For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

                  SECTION 11.05. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 30
(or, in the case of a redemption pursuant to Section 11.02 hereof, 20) nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at such Holder's address appearing in the Security Register.

                  All notices of redemption given pursuant to this Article XI
shall identify the Securities to be redeemed (including, if relevant, CUSIP or
ISIN number) and shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and that
         interest thereon will cease to accrue on and after said date,

                  (4) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price, and

                  (5) the date on which the right to convert the Securities to
         be redeemed will terminate and the places where such Securities may be
         surrendered for conversion.

                  Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

                  SECTION 11.06. Deposit of Redemption Price. Prior to 12:00
noon on any Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 10.03) an amount of
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money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

                  If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.08) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.

                  SECTION 11.07. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to the terms and the provisions of Section 3.08.

                  If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.

                  SECTION 11.08. Securities Redeemed in Part. (a) In the event
of any redemption in part, the Company shall not be required (i) to issue,
register the transfer of or exchange any Security during a period beginning at
the opening of business 15 days before the date of the mailing of a notice of
redemption of Securities selected for redemption and ending at the close of
business on the day of such mailing and (ii) to register the transfer of or
exchange any Securities so selected for redemption, in whole or in part, except
for the unredeemed portion of any Securities being redeemed in part.
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                  (b) If a partial redemption of the Securities would result in
the delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
listed, the Company shall not be permitted to effect such partial redemption and
may only redeem the Securities in whole.

                  (c) Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is surrendered, such new
Security will (subject to Section 3.06) also be a new Global Security.

                                   ARTICLE XII

                           Subordination of Securities

                  SECTION 12.01. Agreement to Subordinate. The Company covenants
and agrees, and each Holder of Securities by such Holder's acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article XII; and each Holder of a Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions. The payment by the Company of the principal of,
premium, if any, and interest (including Additional Payments) on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and junior in right of payment to the prior payment in full of
all Senior Debt, whether outstanding at the date of this Indenture or thereafter
incurred; provided, however, that no provision of this Article XII shall prevent
the occurrence of any default or Event of Default hereunder.

                  SECTION 12.02. Default on Senior Debt. In the event and during
the continuation of any default by the
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Company in the payment of principal, premium, interest or any other payment due
on any Senior Debt continuing beyond the period of grace, if any, specified in
the instrument evidencing such Senior Debt, unless and until such default shall
have been cured or waived or shall have ceased to exist, and in the event that
the maturity of any Senior Debt has been accelerated because of a default, then
no payment shall be made by the Company with respect to the principal of
(including redemption payments), premium, if any, or interest on the Securities.

                  In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 12.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Senior Debt (or their representative or representatives or a
trustee) notify the Trustee in writing within 90 days of such payment of the
amounts then due and owing on the Senior Debt and only the amounts specified in
such notice to the Trustee shall be paid to the holders of Senior Debt.

                  SECTION 12.03. Liquidation; Dissolution; Bankruptcy. Upon any
payment by the Company or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts (including principal, premium, if any, and
interest) due or to become due upon all Senior Debt shall first be paid in full,
or payment thereof provided for in money in accordance with its terms, before
any payment is made on account of the principal (and premium, if any) or
interest on the Securities; and upon any such dissolution or winding up or
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provisions of this Article XII, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities
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or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay such Senior Debt in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Debt, before any payment or distribution is made to the
Holders of Securities or to the Trustee.

                  In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing shall be received by
the Trustee or the Holders of the Securities before all Senior Debt is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Debt or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Debt may have
been issued, and their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior Debt remaining unpaid to
the extent necessary to pay such Senior Debt in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Debt.

                  For purposes of this Article XII, the words, "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in this Article XII with
respect to the Securities to the payment of all Senior Debt which may at the
time be outstanding; provided that (i) such Senior Debt is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Debt are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the
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liquidation or dissolution of the Company following the conveyance, transfer or
lease of all or substantially all its properties and assets on a consolidated
basis to another Person upon the terms and conditions provided for in Article
VIII hereof shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 12.03 if such other Person
shall, as a part of such consolidation, merger, conveyance, transfer or lease,
comply with the conditions stated in Article VIII hereof. Nothing in Section
12.02 or in this Section 12.03 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07 hereof.

                  SECTION 12.04. Subrogation. Subject to the payment in full of
all Senior Debt, the rights of the Holders of the Securities shall be subrogated
to the rights of the holders of such Senior Debt to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Debt until the principal of (and premium, if any)
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article XII,
and no payment pursuant to the provisions of this Article XII, to or for the
benefit of the holders of such Senior Debt by Holders of the Securities or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Debt. It is understood that the
provisions of this Article XII are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of such Senior Debt on the other hand.

                  Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt, and the Holders of
the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company, as the case may be, other than
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the holders of Senior Debt, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XII of the holders of such Senior Debt in
respect of cash, property or securities of the Company, as the case may be,
received upon the exercise of any such remedy.

                  Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of
Section 6.03, and the Holders of the Securities shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XII.

                  SECTION 12.05. Trustee to Effectuate Subordination. Each
Holder of Securities by such Holder's acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XII and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.

                  SECTION 12.06. Notice by the Company. The Company shall give
prompt written notice to a Responsible Officer of the Trustee of any fact known
to the Company which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article XII. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XII unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust Office
of the Trustee from the Company or a
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holder or holders of Senior Debt or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.03 hereof, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 12.06 at least two Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (and
premium, if any) or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which it was
received, and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.

                  The Trustee, subject to the provisions of Section 6.03, shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee on behalf of
such holder) to establish that such notice has been given by a holder of such
Senior Debt or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the right of such Person under this Article XII, and,
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.

                  SECTION 12.07. Rights of the Trustee; Holders of Senior Debt.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XII in respect of any Senior Debt at any time held by it,
to the same extent as any other holder of Senior Debt, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.

                  With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform or to observe
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only such of its covenants and obligations as are set forth in this Article XII,
and no implied covenants or obligations with respect to the holders of such
Senior Debt shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of such Senior Debt
and, subject to the provisions of Section 6.03, the Trustee shall not be liable
to any holder of such Senior Debt if it shall pay over or deliver to Holders of
Securities, the Company or any other Person money or assets to which any holder
of such Senior Debt shall be entitled by virtue of this Article XII or
otherwise.

                  SECTION 12.08. Subordination May Not Be Impaired. No right of
any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.

                  Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the holders
of Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Debt, or otherwise amend or supplement in any manner such Senior
Debt or any instrument evidencing the same or any agreement under which such
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Debt; (iii)
release any Person liable in any manner for the collection of such Senior Debt;
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person.
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                                  ARTICLE XIII

                            Conversion of Securities

                  SECTION 13.01. Conversion Rights. Subject to and upon
compliance with the provisions of this Article, the Securities are convertible,
at the option of the Holder, at any time prior to 5:00 p.m. New York City time
on April 1, 2028 into fully paid and nonassessable shares of Common Stock of the
Company at an initial conversion rate of 0.7257 shares of Common Stock for each
$50 in aggregate principal amount of Securities (the "Initial Conversion Ratio")
(equal to a conversion price of $68.90 principal amount of Securities per share
of Common Stock (the "Initial Conversion Price")). The conversion ratio and the
equivalent conversion price in effect at any given time are known as the
"Applicable Conversion Ratio" and the "Applicable Conversion Price",
respectively, and are subject to adjustment as described in this Article XIII. A
Holder of Securities may convert any portion of the principal amount of the
Securities into that number of fully paid and nonassessable shares of Common
Stock (calculated as to each conversion to the nearest 1/100th of a share)
obtained by dividing the principal amount of the Securities to be converted by
the Applicable Conversion Ratio. In case a Security or portion thereof is called
for redemption, such conversion right in respect of the Security or portion so
called shall expire at the close of the Business Day immediately preceding the
corresponding Redemption Date, unless the Company defaults in making the payment
due upon redemption.

                  SECTION 13.02. Conversion Procedures. (a) In order to convert
all or a portion of the Securities, the Holder thereof shall deliver to the
Conversion Agent an irrevocable Notice of Conversion setting forth the principal
amount of Securities to be converted, together with the name or names, if other
than the Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Securities are definitive Securities, surrender to the
Conversion Agent the Securities to be converted, duly endorsed or assigned to
the Company or in blank. In addition, a holder of Preferred Securities may
exercise its right under the Declaration to convert such Preferred Securities
into Common Stock by delivering to the Conversion Agent an irrevocable Notice of
Conversion setting forth the information called for by the preceding sentence
and directing the Conversion Agent (i) to exchange such Preferred 
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Security for a portion of the Securities held by the Trust (at an exchange rate
of $50 principal amount of Securities for each Preferred Security) and (ii) to
immediately convert such Securities, on behalf of such holder, into Common Stock
of the Company pursuant to this Article XIII and, if such Preferred Securities
are in definitive form, surrendering such Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Preferred Securities are
outstanding, the Trust shall not convert any Securities except pursuant to a
Notice of Conversion duly executed and delivered to the Conversion Agent by a
holder of Preferred Securities.

                  If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder will
be entitled to receive the interest payable on the subsequent Interest Payment
Date on the portion of Securities to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest on the Securities being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "Conversion Date") by the Conversion Agent from the Holder or from a holder
of the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
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                  (b) Subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 3.08 and the second paragraph of clause (a) of Section 13.02, the
Company's delivery upon conversion of the whole number of shares of Common Stock
into which the Securities are convertible (together with the cash payment, if
any, in lieu of fractional shares) shall be deemed to satisfy the Company's
obligation to pay the principal amount at Maturity of the portion of Securities
so converted and any unpaid interest (including Compounded Interest and
Additional Sums) accrued on such Securities at the time of such conversion.

                  (c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly surrendered to
the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn will make such payment,
if any, to the Holder of the Securities or the holder of the Preferred
Securities so converted.

                  (d) In the event of the conversion of any Security in part
only, a new Security or Securities for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancelation thereof in
accordance with Section 3.06.

                  (e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Securities) and as
agent of the Holders of Securities (in the conversion of Securities into Common
Stock), as the case may be, directing it to effect such conversion transactions.
The Conversion Agent is hereby authorized (x) if the Trust exists, (i) to
exchange Securities held by or on behalf of the Trust from time to time for
Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article XIII and (ii) to convert all or a
portion of the Securities into Common Stock and thereupon to deliver such shares
of Common Stock in accordance with the provisions of this Article XIII and to
deliver to the Trust a new Security or Securities for any resulting unconverted
principal amount and (y) if the Trust no longer exists (i)
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to exchange Securities held by the Holders in connection with the conversion of
such Securities in accordance with this Article XIII and (ii) to convert all or
a portion of the Securities into Common Stock and thereupon to deliver such
shares of Common Stock in accordance with the provisions of this Article XIII
and to deliver to such Holders a new Security or Securities for any resulting
unconverted principal amount.

                  (f) All shares of Common Stock delivered upon any conversion
of Restricted Securities shall bear a restrictive legend substantially in the
form of the legend required to be set forth on such Securities and shall be
subject to the restrictions on transfer provided in such legend and in Section
3.06(b) hereof. Neither the Trustee nor the Conversion Agent shall have any
responsibility for the inclusion or content of any such restrictive legend on
such Common Stock; provided, however, that the Trustee or the Conversion Agent
shall have provided to the Company or to the Company's transfer agent for such
Common Stock, prior to or concurrently with a request to the Company to deliver
to such Conversion Agent certificates for such Common Stock, written notice that
the Securities delivered for conversion are Restricted Securities.

                  SECTION 13.03.  Conversion Price Adjustments.  The Applicable
Conversion Price shall be subject to adjustment (without duplication) from time
to time as follows:

                  (i) In case the Company shall pay a dividend or make a
         distribution on the Common Stock exclusively in Common Stock, the
         Applicable Conversion Price in effect at the opening of business on the
         day following the date fixed for the determination of stockholders
         entitled to receive such dividend or other distribution shall be
         reduced by multiplying such Applicable Conversion Price by a fraction
         of which the numerator shall be the number of shares of Common Stock
         outstanding at the close of business on the date fixed for such
         determination and the denominator shall be the sum of such number of
         shares and the total number of shares constituting such dividend or
         other distribution, such reduction to become effective immediately
         after the opening of business on the day following the date fixed for
         such determination. For the purposes of this subparagraph (i), the
         number of shares of Common Stock at any time outstanding shall not
         include shares held in the treasury of the Company.
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         In the event that such dividend or distribution is not so paid or made,
         the Applicable Conversion Price shall again be adjusted to be the
         Applicable Conversion Price which would then be in effect if such
         dividend or distribution had not occurred.

                  (ii) In case the Company shall pay or make a dividend or other
         distribution on its Common Stock consisting exclusively of, or shall
         otherwise issue to all holders of its Common Stock, rights or warrants,
         in each case entitling the holders thereof to subscribe for or purchase
         shares of Common Stock at a price per share less than the current
         market price per share (determined as provided in subparagraph (vii))
         of the Common Stock on the date fixed for the determination of
         stockholders entitled to receive such rights or warrants, the
         Applicable Conversion Price in effect at the opening of business on the
         day following the date fixed for such determination shall be reduced by
         multiplying such Applicable Conversion Price by a fraction of which the
         numerator shall be the number of shares of Common Stock outstanding at
         the close of business on the date fixed for such determination plus the
         number of shares of Common Stock which the aggregate of the offering
         price of the total number of shares of Common Stock so offered for
         subscription or purchase would purchase at such current market price
         and the denominator shall be the number of shares of Common Stock
         outstanding at the close of business on the date fixed for such
         determination plus the number of shares of Common Stock so offered for
         subscription or purchase, such reduction to become effective
         immediately after the opening of business on the day following the date
         fixed for such determination. To the extent that rights are not so
         issued or shares of Common Stock are not so delivered after the
         expiration of such rights or warrants, the Applicable Conversion Price
         shall be readjusted to the Applicable Conversion Price which would then
         be in effect if such date fixed for the determination of stockholders
         entitled to receive such rights or warrants had not been fixed. For the
         purposes of this subparagraph (ii), the number of shares of Common
         Stock at any time outstanding shall not include shares held in the
         treasury of the Company.

                  (iii) In case outstanding shares of Common Stock shall be
         subdivided into a greater number of shares of Common Stock, the
         Applicable Conversion Price in effect
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         at the opening of business on the day following the day upon which such
         subdivision becomes effective shall be proportionately reduced and,
         conversely, in case outstanding shares of Common Stock shall each be
         combined into a smaller number of shares of Common Stock, the
         Applicable Conversion Price in effect at the opening of business on the
         day following the day upon which such combination becomes effective
         shall be proportionately increased, such reduction or increase, as the
         case may be, to become effective immediately after the opening of
         business on the day following the day upon which such subdivision or
         combination becomes effective.

                  (iv) Subject to the last sentence of this subparagraph (iv),
         in case the Company shall, by dividend or otherwise, distribute to all
         holders of its Common Stock evidences of its indebtedness, shares of
         any class or series of capital stock, cash or assets (including
         securities, but excluding any rights or warrants referred to in
         subparagraph (ii) of this Section 13.03, any dividend or distribution
         paid exclusively in cash and any dividend or distribution referred to
         in subparagraph (i) of this Section 13.03), the Applicable Conversion
         Price shall be reduced so that the same shall equal the price
         determined by multiplying the Applicable Conversion Price in effect
         immediately prior to the effectiveness of the Applicable Conversion
         Price reduction contemplated by this subparagraph (iv) by a fraction of
         which the numerator shall be the current market price per share
         (determined as provided in subparagraph (vii) of this Section 13.03) of
         the Common Stock on the date fixed for the determination of
         stockholders entitled to receive such distribution (the "Reference
         Date") less the fair market value (as determined in good faith by the
         Board of Directors, whose determination shall be conclusive and
         described in a resolution of the Board of Directors), on the Reference
         Date, of the portion of the evidences of indebtedness, shares of
         capital stock, cash and assets so distributed applicable to one share
         of Common Stock and the denominator shall be such current market price
         per share of the Common Stock, such reduction to become effective
         immediately prior to the opening of business on the day following the
         Reference Date. In the event that such dividend or distribution is not
         so paid or made, the Applicable Conversion Price shall again be
         adjusted to be the Applicable Conversion Price which would then be in
   96
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         effect if such dividend or distribution had not occurred. For purposes
         of this subparagraph (iv), any dividend or distribution that includes
         shares of Common Stock or rights or warrants to subscribe for or
         purchase shares of Common Stock shall be deemed instead to be (1) a
         dividend or distribution of the evidences of indebtedness, shares of
         capital stock, cash or assets other than such shares of Common Stock or
         such rights or warrants (making any Applicable Conversion Price
         reduction required by this subparagraph (iv)) immediately followed by
         (2) a dividend or distribution of such shares of Common Stock or such
         rights or warrants (making any further Applicable Conversion Price
         reduction required by subparagraph (i) or (ii) of this Section 13.03),
         except any shares of Common Stock included in such dividend or
         distribution shall not be deemed "outstanding at the close of business
         on the date fixed for such determination" within the meaning of
         subparagraph (i) of this Section 13.03.

                  (v) In case the Company shall pay or make a dividend or other
         distribution on its Common Stock exclusively in cash (excluding (x)
         cash dividends to the extent that they do not exceed the per share
         amount of the smallest of the immediately four preceding quarterly cash
         dividends (as adjusted to appropriately reflect any of the events
         referred to in subparagraphs (i), (ii), (iii), (iv), (v) and (vi)), and
         (y) cash dividends to the extent that the annualized per share amount
         thereof does not exceed 12 1/2% of the current market price per share
         of the Common Stock on the Trading Day next preceding the date of
         declaration of such dividend, the Applicable Conversion Price shall be
         reduced so that the same shall equal the price determined by
         multiplying the Applicable Conversion Price in effect immediately prior
         to the effectiveness of the Applicable Conversion Price reduction
         contemplated by this subparagraph (v) by a fraction of which the
         numerator shall be the current market price per share (determined as
         provided in subparagraph (vii) of this Section 13.03) of the Common
         Stock on the date fixed
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         for the payment of such distribution less the amount of cash so
         distributed and not excluded as provided applicable to one share of
         Common Stock and the denominator shall be such current market price per
         share of the Common Stock, such reduction to become effective
         immediately prior to the opening of business on the day following the
         date fixed for the payment of such distribution; provided, however,
         that in the event the portion of the cash so distributed applicable to
         one share of Common Stock is equal to or greater than the current
         market price per share (as defined in subparagraph (vii) of this
         Section 13.03) of the Common Stock on the record date mentioned above,
         in lieu of the foregoing adjustment, adequate provision shall be made
         so that each Holder of Securities shall have the right to receive upon
         conversion the amount of cash such Holder would have received had such
         Holder converted each Security immediately prior to the record date for
         the distribution of the cash. In the event that such dividend or
         distribution is not so paid or made, the Applicable Conversion Price
         shall again be adjusted to be the Applicable Conversion Price which
         would then be in effect if such record date had not been fixed.

                  (vi) In case a tender or exchange offer (other than an odd-lot
         offer) made by the Company or any Subsidiary of the Company for all or
         any portion of the Company's Common Stock shall expire and such tender
         or exchange offer shall involve the payment by the Company or such
         Subsidiary of consideration per share of Common Stock having a fair
         market value (as determined in good faith by the Board of Directors,
         whose determination shall be conclusive and described in a resolution
         of the Board of Directors) at the last time (the "Expiration Time")
         tenders or exchanges may be made pursuant to such tender or exchange
         offer (as it shall have been amended) that exceeds 110% of the current
         market price per share (determined as provided in subparagraph (vii) of
         this Section 13.03) of the Common Stock on the Trading Day next
         succeeding the Expiration Time, the Applicable Conversion Price shall
         be reduced so that the same shall equal the price determined by
         multiplying the Applicable Conversion Price in effect immediately prior
         to the effectiveness of the Applicable Conversion Price reduction
         contemplated by this subparagraph (vi) by a fraction of which the
         numerator shall be the number of shares of Common Stock outstanding
         (including any tendered or exchanged shares) at the Expiration Time
         multiplied by the current market price per share (determined as
         provided in subparagraph (vii) of this Section 13.03) of the Common
         Stock on the Trading Day next succeeding the Expiration Time and the
         denominator shall be the sum of (x) the fair market value (determined
         as aforesaid) of the
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         aggregate consideration payable to stockholders based on the acceptance
         (up to any maximum specified in the terms of the tender or exchange
         offer) of all shares validly tendered or exchanged and not withdrawn as
         of the Expiration Time (the shares deemed so accepted, up to any such
         maximum, being referred to as the "Purchased Shares") and (y) the
         product of the number of shares of Common Stock outstanding (less any
         Purchased Shares) at the Expiration Time and the current market price
         per share (determined as provided in subparagraph (vii) of this Section
         13.03) of the Common Stock on the Trading Day next succeeding the
         Expiration Time, such reduction to become effective immediately prior
         to the opening of business on the day following the Expiration Time.

                  (vii) For the purpose of any computation under subparagraphs
         (ii), (iv), (v) and (vi) of this Section 13.03, the current market
         price per share of Common Stock on any date in question shall be deemed
         to be the average of the daily Closing Prices for the ten consecutive
         Trading Days prior to the earlier of the day in question and, if
         applicable, the day before the "ex" date with respect to the issuance
         or distribution requiring such computation; provided, however, that if
         another event occurs that would require an adjustment pursuant to
         subparagraphs (i) through (vi) of this Section 13.03, inclusive, the
         Board of Directors may make such adjustments to the Closing Prices
         during such five Trading Day period as it deems appropriate to
         effectuate the intent of the adjustments in this Section 13.03, in
         which case any such determination by the Board of Directors shall be
         set forth in a Board Resolution and shall be conclusive. For purposes
         of this paragraph, the term "ex" date, (1) when used with respect to
         any issuance or distribution, means the first date on which the Common
         Stock is quoted regular way on the New York Stock Exchange Composite
         Tape or on such successor securities exchange on which the Common Stock
         may be quoted or listed or in the relevant market from which the
         Closing Prices were obtained without the right to receive such issuance
         or distribution, and (2) when used with respect to any tender or
         exchange offer means the first date on which the Common Stock is quoted
         regular way on such securities exchange or in such market after the
         Expiration Time of such offer.
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                  (viii) The Company may make such reductions in the Applicable
         Conversion Price, in addition to those required by subparagraphs (i),
         (ii), (iii), (iv), (v) and (vi) of this Section 13.03, as it considers
         to be advisable to avoid or diminish any income tax to holders of
         Common Stock or rights to purchase Common Stock resulting from any
         dividend or distribution of stock (or rights to acquire stock) or from
         any event treated as such for income tax purposes.

                  (ix) There shall also be no adjustment of the Applicable
         Conversion Price in case of the issuance of any Common Stock (or
         securities convertible into or exchangeable for Common Stock), except
         as specifically described above. If any action would require adjustment
         of the Applicable Conversion Price, pursuant to more than one of the
         anti-dilution provisions set forth in this Article XIII, only one
         adjustment shall be made and such adjustment shall be the amount of
         adjustment that has the highest absolute value to Holders. Furthermore,
         no adjustment in the Applicable Conversion Price shall be required
         unless such adjustment would require an increase or decrease of at
         least 1% in the Applicable Conversion Price; provided, however, that
         any adjustments which by reason of this sentence are not required to be
         made shall be carried forward and taken into account in determining
         whether any subsequent adjustment shall be required.

                  SECTION 13.04. Reclassification, Consolidation, Merger or Sale
of Assets. In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (b) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancelation of outstanding shares of Common Stock of the
Company), (c) any sale or transfer of all or substantially all of the assets of
the Company or (d) any compulsory share exchange) (each of the events in the
preceding clauses (a) through (d) being referred to as a "Company Transaction"),
in each case, as a result of which shares of Common Stock shall be converted
into the right to receive other securities, cash or other property, then lawful
provision
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                                                                              90

shall be made as part of the terms of such Company Transaction whereby the
Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into (i) in the case of any Company Transaction other
than a Common Stock Fundamental Change, the kind and amount of securities, cash
and other property receivable upon the consummation of the Company Transaction
by a holder of that number of shares of Common Stock into which such Security
was convertible immediately prior to such transaction, after giving effect to
any adjustment in the Applicable Conversion Price required by the provision of
Section 13.07(a)(i), and (ii) in the case of a Company Transaction involving a
Common Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section 13.07(a)(ii). Holders of the
Securities shall have no voting rights with respect to any Company Transaction
described in this Section 13.04.

                  The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XIII. The above provisions shall similarly apply to
successive transactions of the foregoing type.

                  SECTION 13.05. Notice of Adjustments of Conversion Price.
Whenever the Applicable Conversion Price is adjusted as herein provided:

                           (a) the Company shall compute the adjusted Applicable
         Conversion Price and shall prepare a certificate signed by the Chief
         Financial Officer or the Treasurer of the Company setting forth the
         adjusted Applicable Conversion Price and showing in reasonable detail
         the facts upon which such adjustment is based, and such certificate
         shall forthwith be filed with the Trustee, the Conversion Agent and the
         transfer agent for the Preferred Securities and the Securities; and
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                           (b) a notice stating the Applicable Conversion Price
         has been adjusted and setting forth the adjusted Applicable Conversion
         Price shall as soon as practicable be mailed by the Company to all
         record holders of Preferred Securities and the Securities at their last
         addresses as they appear upon the stock transfer books of the Company
         and the books and records of the Trust, respectively.

                  SECTION 13.06.  Prior Notice of Certain Events.
In case:

                  (i) the Company shall (1) declare any dividend (or any other
         distribution) on its Common Stock, other than (A) a dividend payable in
         shares of Common Stock or (B) a dividend payable in cash that would not
         require an adjustment pursuant to Section 13.03(iv) or (v) or (2)
         authorize a tender or exchange offer that would require an adjustment
         pursuant to Section 13.03(vi);

                  (ii) the Company shall authorize the granting to all holders
         of Common Stock of rights or warrants to subscribe for or purchase any
         shares of stock of any class or series or of any other rights or
         warrants;

                  (iii) of any reclassification of Common Stock (other than a
         subdivision or combination of the outstanding Common Stock, or a change
         in par value, or from par value to no par value, or from no par value
         to par value), or of any consolidation or merger to which the Company
         is a party and for which approval of any stockholders of the Company
         shall be required, or of the sale or transfer of all or substantially
         all of the assets of the Company or of any compulsory share ex change
         whereby the Common Stock is converted into other securities, cash or
         other property; or

                  (iv) of the voluntary or involuntary dissolution,
         liquidation or winding up of the Company;

then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust, or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the appli-
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cable record or effective date hereinafter specified, a notice stating (x) the
date on which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).

                  SECTION 13.07. Adjustments in Case of Fundamental Changes. (a)
Notwithstanding any other provision in this Article XIII to the contrary, in the
case of any Company Transaction involving a Fundamental Change, the Applicable
Conversion Price will be adjusted immediately after such Fundamental Change as
follows:

                  (i) in the case of a Non-Stock Fundamental Change, the
         Applicable Conversion Price of the Securities shall thereupon become
         the lower of (A) the Applicable Conversion Price in effect immediately
         prior to such Non-Stock Fundamental Change, but after giving effect to
         any other prior adjustments effected pursuant to this Article XIII, and
         (B) the result obtained by multiplying the greater of the Relevant
         Price or the then applicable Reference Market Price by the Optional
         Redemption Ratio (such product shall hereinafter be referred to as the
         "Adjusted Relevant Price" or the "Adjusted Reference Market Price", as
         the case may be); and

                  (ii) in the case of a Common Stock Fundamental Change, the
         Applicable Conversion Price of the Securities in effect immediately
         prior to such Common Stock Fundamental Change, but after giving effect
         to any other prior adjustments effected pursuant to this Article XIII,
         shall thereupon be adjusted by multiplying such Applicable Conversion
         Price by a
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                                                                              93

         fraction of which the numerator shall be the Purchaser Stock Price and
         the denominator shall be the Relevant Price; provided, however, that in
         the event of a Common Stock Fundamental Change in which (A) 100% of the
         value of the consideration received by a holder of Common Stock is
         common stock of the successor, acquiror or other third party (and cash,
         if any, is paid only with respect to any fractional interests in such
         common stock resulting from such Common Stock Fundamental Change) and
         (B) all of the Common Stock shall have been exchanged for, converted
         into or acquired for common stock (and cash with respect to fractional
         interests) of the successor, acquiror or other third party, the
         Applicable Conversion Price of the Securities in effect immediately
         prior to such Common Stock Fundamental Change shall thereupon be
         adjusted by multiplying such Applicable Conversion Price by a fraction
         of which the numerator shall be one and the denominator shall be the
         number of shares of common stock of the successor, acquiror, or other
         third party received by a stockholder for one share of Common Stock as
         a result of such Common Stock Fundamental Change.

                  (b) Definitions. The following definitions shall apply to
terms used in this Article XIII:

                  (1) "Closing Price" of any security on any day shall mean on
         any day the last reported sale price of such security on such day, or
         in case no sale takes place on such day, the average of the closing bid
         and asked prices in each case on the principal national securities
         exchange on which such securities are listed or admitted to trading or,
         if not listed or admitted to trading on any national securities
         exchange, on the NNM or, if such securities are not listed or admitted
         to trading on any national securities exchange or quoted on the NNM,
         the average of the closing bid and asked prices in the over-the-counter
         market as furnished by any New York Stock Exchange member firm selected
         by the Company for such purpose.

                  (2) "Common Stock Fundamental Change" shall mean any
         Fundamental Change in which more than 50% of the value (as determined
         in good faith by the Board of Directors) of the consideration received
         by holders of Common Stock consists of common stock that for each of
         the ten consecutive Trading Days immediately prior to the Entitlement
         Date has been admitted for listing or
   104
                                                                              94

         admitted for listing subject to notice of issuance on a national
         securities exchange or quoted on the NNM.

                  (3) "Entitlement Date" shall mean the record date for
         determination of the holders of Common Stock entitled to receive
         securities, cash or other property in connection with a Non-Stock
         Fundamental Change or a Common Stock Fundamental Change or, if there is
         no such record date, the date upon which holders of Common Stock shall
         have the right to receive such securities, cash or other property.

                  (4) "Fundamental Change" shall mean the occurrence of any
         transaction or event in connection with a plan pursuant to which all or
         substantially all of the Common Stock shall be exchanged for, converted
         into, acquired for or constitute solely the right to receive
         securities, cash or other property (whether by means of an exchange
         offer, liquidation, tender offer, consolidation, merger, combination,
         reclassification, recapitalization or otherwise); provided, however, in
         the case of a plan involving more than one such transaction or event,
         for purposes of adjustment of the Applicable Conversion Price, such
         Fundamental Change shall be deemed to have occurred when substantially
         all of the Common Stock of the Company shall be exchanged for,
         converted into, or acquired for or constitute solely the right to
         receive securities, cash or other property, but the adjustment shall be
         based upon the highest weighted average per share consideration that a
         holder of Common Stock could have received in such transactions or
         events as a result of which more than 50% of the Common Stock of the
         Company shall have been exchanged for, converted into, or acquired for
         or constitute solely the right to receive securities, cash or other
         property.

                  (5)  "Non-Stock Fundamental Change" shall mean any
         Fundamental Change other than a Common Stock Fundamental Change.

                  (6) "Optional Redemption Ratio" means a fraction of which the
         numerator shall be $50 and the denominator will be the then current
         Optional Redemption Price or, prior to April 10, 2001, an amount per
         Security determined by the Company in its sole discretion, after
         consultation with an investment banking firm, to be the equivalent of
         the hypothetical redemption price that
   105
                                                                              95

         would have been applicable if the Securities had been redeemable during
         such period.

                  (7) "Purchaser Stock Price" shall mean, with respect to any
         Common Stock Fundamental Change, the average of the daily Closing
         Prices of the common stock received in such Common Stock Fundamental
         Change for the ten (10) consecutive Trading Days prior to and including
         the Entitlement Date, as adjusted in good faith by the Board of
         Directors to appropriately reflect any of the events referred to in
         subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section 13.03.

                  (8) "Reference Market Price" shall initially mean on the date
         of original issuance of the Securities, $36.17 (which is an amount
         equal to 66-2/3% of the last reported sale price for the Common Stock
         on the New York Stock Exchange Composite Tape on March 26, 1998 and, in
         the event of any adjustment to the Applicable Conversion Price, other
         than as a result of a Non-Stock Fundamental Change, the Reference
         Market Price shall also be adjusted so that the ratio of the Reference
         Market Price to the Applicable Conversion Price after giving effect to
         any such adjustment shall always be the same as the ratio of $36.17 to
         the Initial Conversion Price.

                  (9) "Relevant Price" shall mean (i) in the event of a
         Non-Stock Fundamental Change in which the holders of the Common Stock
         receive only cash, the amount of cash received by a stockholder for one
         share of Common Stock and (ii) in the event of any other Non-Stock
         Fundamental Change or any Common Stock Fundamental Change, the average
         of the daily Closing Prices of the Common Stock for the ten (10)
         consecutive Trading Days prior to and including the Entitlement Date,
         in each case, as adjusted in good faith by the Company to appropriately
         reflect any of the events referred to in subparagraphs (i), (ii),
         (iii), (iv), (v) and (vi) of Section 13.03.

                  (10) "Trading Day" shall mean a day on which securities are
         traded on the national securities exchange or quotation system used to
         determine the Closing Price.

                  SECTION 13.08. Dividend or Interest Reinvestment Plans. (a)
Notwithstanding the foregoing provisions, the
   106
                                                                              96

issuance of any shares of Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
the Company and the investment of additional optional amounts in shares of
Common Stock under any such plan, and the issuance of any shares of Common Stock
or options or rights to purchase such shares pursuant to any employee benefit
plan or program of the Company or pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security outstanding as of the date the
Securities were first issued, shall not be deemed to constitute an issuance of
Common Stock or exercisable, exchangeable or convertible securities by the
Company to which any of the adjustment provisions described above applies.

                  (b) There shall also be no adjustment of the Applicable
Conversion Price in case of the issuance of any stock (or securities convertible
into or exchangeable for stock) of the Company except as specifically described
in this Article XIII.

                  SECTION 13.09. Certain Additional Rights. Notwithstanding any
other provision of this Article XIII to the contrary, rights, warrants,
evidences of indebtedness, other securities, cash or other assets (including,
without limitation, any rights distributed pursuant to any stockholder rights
plan) shall be deemed not to have been distributed for purposes of this Article
XIII if the Company makes proper provision so that each Holder who converts a
Security (or any portion thereof) after the date fixed for determination of
stockholders entitled to receive such distribution shall be entitled to receive
upon such conversion, in addition to the shares of Common Stock issuable upon
such conversion, the amount and kind of such distributions that such Holder
would have been entitled to receive if such Holder had, immediately prior to
such determination date, converted such Security into Common Stock.

                  SECTION 13.10. Restrictions on Common Stock Issuable Upon
Conversion. (a) Shares of Common Stock to be issued upon conversion of a
Security in respect of Restricted Preferred Securities (as defined in the
Declaration) shall bear such restrictive legends as the Company may provide in
accordance with applicable law.

                  (b) If shares of Common Stock to be issued upon conversion of
a Security in respect of Restricted Preferred
   107
                                                                              97

Securities are to be registered in a name other than that of the Holder of such
Preferred Security, then the Person in whose name such shares of Common Stock
are to be registered must deliver to the Conversion Agent a certificate
satisfactory to the Company and signed by such Person, as to compliance with
the restrictions on transfer applicable to such Preferred Security. Neither the
Trustee nor any Conversion Agent or Registrar shall be required to register in a
name other than that of the Holder shares of Common Stock or such Preferred
Securities issued upon conversion of any such Security in respect of such
Preferred Securities not so accompanied by a properly completed certificate.

                  SECTION 13.11. Trustee Not Responsible for Determining
Conversion Price or Adjustments. Neither the Trustee nor any Conversion Agent
shall at any time be under any duty or responsibility to any Holder of any
Security to determine whether any facts exist which may require any adjustment
of the Applicable Conversion Price, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and neither the Trustee nor any Conversion
Agent makes any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property upon the surrender of any
Security for the purpose of conversion, or, except as expressly herein provided,
to comply with any of the covenants of the Company contained in Article X or
this Article XIII.

                                   ARTICLE XIV

                           Immunity of Incorporators,
                      Stockholders, Officers and Directors

                  SECTION 14.01. No Recourse. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Security, or for
any claim based thereon or otherwise in respect thereof, shall be had
   108
                                                                              98

against any incorporator, stockholder, officer or director, past, present or
future as such, of the Company or of any predecessor or successor corporation,
either directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
   109
                                                                              99

                  This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.

                                             UNION PACIFIC CORPORATION,

                                               by______________________

                                                  Name:
                                                  Title:

                                             THE BANK OF NEW YORK,

                                               by______________________

                                                  Name:
                                                  Title:
   110
                                    EXHIBIT A

                                FORM OF SECURITY

                           [FORM OF FACE OF SECURITY]

[Include if a Global Security: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO UNION PACIFIC
CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[Include Restricted Securities Legend if required under Section 2.02:

         THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
         TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
         ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON
         STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
         OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
         APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
         HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
         EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
         PROVIDED BY RULE 144A THEREUNDER.

         THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
         THE COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
         CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
         TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
         IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
         SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
         (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE
         904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
         (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
         ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
         UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
         WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
         OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
         ABOVE.]
   111
                                                                               2

                            UNION PACIFIC CORPORATION

                         Convertible Junior Subordinated
                               Debenture Due 2028

No.                                                           $
                                                                    [CUSIP No. ]

                  UNION PACIFIC CORPORATION, a corporation duly organized and
existing under the laws of the State of Utah (herein called "the Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to        , or registered
assigns, the principal sum [indicated on Schedule A hereof](1) [of Dollars](2)
($ ) on April 1, 2028.

Interest Payment Dates:             January 1, April 1, July 1 and October 1,
                                    commencing July 1, 1998

Regular Record Dates:               the close of business on the fifteenth day
                                    immediately preceding each Interest Payment
                                    Date, commencing June 15, 1998

                  Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

- --------
   (1)              Applicable to Global Securities only.
   (2)              Applicable to certificated Securities only.
   112
                  IN WITNESS WHEREOF, the Company has caused this instrument to
be signed manually or by facsimile by its duly authorized officers and a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.

Dated:         ,

                                                     UNION PACIFIC CORPORATION

                                                     By:________________________
                                                        Name:
                                                        Title:

[Seal]

Attest:

_____________________

                              TRUSTEE'S CERTIFICATE
                                OF AUTHENTICATION

                  This is one of the Securities referred to in the
within-mentioned Indenture.

Dated:           ,                          THE BANK OF NEW YORK
                                                  as Trustee

                                            By: _______________________
                                                  Authorized Signatory
   113
                                                                               2

                          [FORM OF REVERSE OF SECURITY]

                            UNION PACIFIC CORPORATION

                         Convertible Junior Subordinated
                              Debenture Due 2028(3)

                  1. Interest. Union Pacific Corporation, a Utah corporation
(the "Company"), is the issuer of this Convertible Junior Subordinated Debenture
Due 2028 (the "Security") limited in aggregate principal amount to
$1,546,391,750, issued under the Indenture hereinafter referred to. The Company
promises to pay interest on the Securities in cash from April 1, 1998 or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral for up to 20 consecutive quarters
as described in Section 3 hereof) in arrears on January 1, April 1, July 1, and
October 1 of each year (each such date, an "Interest Payment Date"), commencing
July 1, 1998, at the Applicable Rate, plus Additional Sums, if any, until the
principal hereof shall have become due and payable.

                  The amount of interest payable for any period will be computed
on the basis of twelve 30-day months and a 360-day year. To the extent lawful,
the Company shall pay interest on overdue installments of interest (without
regard to any applicable grace period) at the rate borne by the Securities,
compounded quarterly. Any interest paid on this Security shall be increased to
the extent necessary to pay Additional Sums as set forth in this Security.

                  2. Additional Sums. The Company shall pay to Union Pacific
Capital Trust (and its permitted successors or assigns under the Declaration)
(the "Trust") such additional amounts as may be necessary in order that the
amount of dividends or other distributions then due and payable by the Trust on
the Preferred Securities that at any time remain outstanding in accordance with
the terms thereof shall not be reduced as a result of any additional taxes,
duties and other governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other taxing authority.

                  3. Extension of Interest Payment Period. So long as no Event
of Default has occurred and is continuing, the Company shall have the right, at
any time during the term of this Security, from time to time to defer payments
of interest by extending the interest payment period of such Security for up to
20 consecutive quarters (a "Deferral Period"); provided that no Deferral Period
may extend beyond April 1, 2028. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to Section 3.13 of the Indenture, will bear
interest thereon at the Applicable Rate compounded quarterly for each quarter of
the Deferral Period ("Compounded Interest"). On the applicable Payment
Resumption Date, the Company shall pay all interest then accrued and unpaid on
the Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose

- --------

   (3) All terms used in this Security which are defined in the Indenture or in
the Declaration referred to herein shall have the meanings assigned to them in
the Indenture or the Declaration, as the case may be.
   114
                                                                               3

names the Securities are registered in the Security Register on the record date
fixed for such Payment Resumption Date. Before the termination of any Deferral
Period, the Company may further extend such period as provided in the
Indenture, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Security. Upon the termination of any Deferral Period and upon
the payment of all Compounded Interest and Additional Sums (together,
"Additional Payments"), if any, then due, the Company may commence a new
Deferral Period, subject to the foregoing requirements. No interest shall be due
and payable during a Deferral Period except on the applicable Payment Resumption
Date.

                  The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend such Deferral Period. The Company may elect to pay all interest then
accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established Payment Resumption
Date, provided that the Company gives the Holder of the Security and the Trustee
a new Deferral Notice setting forth the revised Payment Resumption Date at least
three Business Days prior to the Regular Record Date for such revised Payment
Resumption Date.

                  The quarter in which any Deferral Notice is given pursuant to
the second paragraph of this Section 3 shall be counted as one of the 20
quarters permitted in the maximum Deferral Period permitted under the first
paragraph of this Section 3.

                  4. Method of Payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the fifteenth day immediately preceding each Interest Payment Date (the
"Regular Record Date"), commencing June 15, 1998. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than ten days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture, provided that any such payment will be made in such coin or currency
of the United States of America which at the time of payment is a legal tender
for payment of public and private debts.

                  Payment of the principal of and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
New York, New York, in coin or currency of the United States of America which at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at any time that the Property Trustee is not the sole
holder of the Securities, payment of
   115
                                                                               4

interest may, at the option of the Company, be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by wire transfer.

                  5.  Paying Agent and Security Registrar.  The Trustee will act
as Paying Agent, Security Registrar and Conversion Agent.  The Company may
change any Paying Agent, Security Registrar, co-registrar or Conversion
Agent without prior notice.  The Company or any of its Affiliates may act
in any such capacity.

                  6. Indenture. The Company issued the Securities under an
indenture, dated as of April 1, 1998 (the "Indenture"), between the Company and
The Bank of New York, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) ("Trust Indenture Act") as in effect on the date of
the Indenture. The Securities are subject to, and qualified by, all such terms,
certain of which are summarized herein, and holders are referred to the
Indenture and the Trust Indenture Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to up to
$1,546,391,750 and subordinated in right of payment to all existing and future
Senior Debt of the Company. No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed or to convert this Security as provided
in the Indenture.

                  7. Optional Redemption. The Securities are redeemable at the
Company's option (an "Optional Redemption") in whole or in part, at any time or
from time to time, on or after April 10, 2001, at a Redemption Price equal to
$51.56 per $50 principal amount of the Securities to be redeemed plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before April 1, 2002, and at the prices per
$50 principal amount of Securities set forth in the table below, plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed during the 12-month period ending on April 1:

                                                          Price Per $50
                                                            Principal
                         Year                                 Amount
                                                      
                         2003.........................        $51.04
                         2004.........................        $50.52

   116
                                                                               5

and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.

                  8. Optional Redemption Upon Tax Event. Subject to the
conditions set forth in the Indenture, the Securities are subject to redemption
in whole, but not in part, if a Tax Event shall occur and be continuing, at any
time within 90 days following the occurrence of such Tax Event, at a Redemption
Price equal to $50 per $50 principal amount thereof, plus accrued but unpaid
interest, including Additional Payments, if any, to the Redemption Date.

                  In lieu of the foregoing, the Company also shall have the
option of causing the Securities to remain outstanding and pay Additional Sums
on the Securities.

                  9. Notice of Redemption. Notice of redemption will be mailed
by first-class mail, postage prepaid, at least 30 days (or 20 days, in the case
of a redemption upon the occurrence of a Tax Event), but not more than 60 days
before the Redemption Date to each Holder of the Securities to be redeemed at
such Holder's address appearing in the Security Register.

                  10.  No Sinking Fund.  There are no sinking fund payments with
respect to the Securities.

                  11. Payment to Registered Holders; Cessation of Interest
Accrual Upon Redemption. If this Security is redeemed subsequent to a Regular
Record Date with respect to any Interest Payment Date specified above and on or
prior to such Interest Payment Date, then any accrued interest will be paid to
the person in whose name this Security is registered at the close of business
on such record date. On or after the Redemption Date, interest will cease to
accrue on the Securities, or portion thereof, called for redemption.

                  12. Subordination. The payment of the principal of, interest
on or any other amounts due on the Securities is subordinated in right of
payment to all existing and future Senior Debt (as defined below) of the
Company, as described in the Indenture. Each Holder, by accepting a Security,
agrees to such subordination and authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee as its attorney-in-fact for
such purpose.

                  "Senior Debt" means (i) the principal of, and premium and
interest, if any, on all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, (ii) all obligations to make payment pursuant to the terms
of financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebted ness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above
   117
                                                                               6

for the payment of which the Company is responsible or liable as guarantor or
otherwise, and (iv) deferrals, renewals or extensions of any such Senior Debt;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, was without
recourse to the Company, (b) trade accounts payable and accrued liabilities
arising in the ordinary course of business, (c) any Debt of the Company to any
of its subsidiaries, (d) Debt to any employee of the Company, and (e) Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the Holders of the Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.

                  13. Conversion. The Holder of any Security has the right,
exercisable at any time prior to 5:00 p.m., New York City time, on April 1,
2028, to convert the principal amount thereof (or any portion thereof that is an
integral multiple of $50) into shares of Common Stock at the initial
conversation rate of 0.7257 shares of Common Stock for each $50 in aggregate
principal amount of Securities (equivalent to a conversion price of $68.90 per
share of Common Stock of the Company). The conversion ratio and equivalent
conversion price in effect at any time are known as the "Applicable Conversion
Price" and the "Applicable Conversion Ratio," respectively, and are subject to
adjustment under certain circumstances. If a Security is called for redemption,
the conversion right will terminate at the close of business on the Business Day
immediately preceding the corresponding Redemption Date, unless the Company
defaults in making the payment due upon redemption.

                  To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Security Registrar or Conversion Agent and (4) pay
any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Security for conversion after the close of business on the Regular Record Date
for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Security on such Regular Record Date. In such
event, such Security, when surrendered for conversion, need not be accompanied
by payment of an amount equal to the interest payable on such Interest Payment
Date on the portion so converted. The number of shares issuable upon conversion
of a Security is determined by dividing the principal amount of the Security
converted by the Applicable Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.

                  14. Registration Rights. The holders of the Preferred
Securities, the Securities, the Guarantee Agreement and the shares of
   118
                                                                               7

Common Stock of the Company issuable upon conversion of the Securities
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement, dated as of April 1, 1998, among the Company, the
Trust and the Initial Purchasers (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement the Company and the Trust have agreed for
the benefit of the holders of the Registrable Securities that (i) they will, at
the Company's sole expense, prior to May 1, 1998, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Shelf Registration Statement to be declared effective under the
Securities Act prior to July 30, 1998, and (iii) they will use their best
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act (subject to certain exceptions under the Registration
Rights Agreement) until the second anniversary of the effectiveness of the Shelf
Registration Statement or such other period as shall be required under Rule
144(k) thereunder or any successor rule or regulation thereto or such earlier
date as is provided in the Registration Rights Agreement. If the Company fails
to comply with either of clauses (ii) or (iii) above, subject to certain
exceptions provided in the Registration Rights Agreement, (a "Registration
Default") then, at such time, the Applicable Rate will increase by 50 basis
points (.50%). Such increase will remain in effect from and including the date
on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured, on which date the interest rate
on the Securities will revert to the interest rate originally borne by the
Securities.

                  15. Registration, Transfer, Exchange and Denominations. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in New York, New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

                  The Securities are issuable only in registered form without
coupons in denominations of $50 and integral multiples thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Prior to due presentment of
this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary. In the event of redemption or
conversion of this Security in part only, a new Security or Securities for the
unredeemed or unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancelation hereof.

                  16.  Persons Deemed Owners.  Except as provided in Section 3
hereof, the registered Holder of a Security may be treated as its owner for
all purposes.
   119
                                                                               8

                  17. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

                  18. Events of Default and Remedies. The Securities shall have
the Events of Default as set forth in Section 5.01 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the holders of at least 25%
in aggregate principal amount of the Outstanding Securities by notice to the
Company and the Trustee may declare all amounts payable on the Securities
(including any Additional Payments) to be due and payable immediately; provided
that, if the Property Trustee is the sole Holder of the Security and if upon an
Event of Default, the Trustee or the holder of not less than 25% in aggregate
principal amount of the then outstanding Securities fail to declare the
principal of all the Securities to be immediately due and payable, the holders
of at least 25% in aggregate liquidation amount of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee; and upon any such declaration such principal and all accrued interest
shall become immediately due and payable; and provided further that the payment
of principal and interest on such Securities shall remain subordinated to the
extent provided in the Indenture.

                  In the case of an Event of Default, the holders of a majority
in principal amount of the Outstanding Securities by written notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.

                  Holders may not enforce the Indenture or the Securities except
as provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.

                  19. Amendments, Supplements and Waivers. The Indenture
permits, subject to the rights of the holders of Preferred Securities set forth
therein and in the Declaration and with certain other exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company, and the rights of the Holders of the Securities
under the Indenture, at any time, by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, subject to the rights of the holders of the Preferred Securities set
forth therein and in the Declaration, to waive compliance by the Company
   120
                                                                               9

with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security. The above
description of amendments, supplements and waivers is qualified by reference to,
and subject in its entirety, by the more complete description thereof contained
in the Indenture.

                  20. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not a Trustee, subject to certain
limitations provided for in the Indenture and in the Trust Indenture Act.
Any Agent may do the same with like rights.

                  21. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.

                  22.  Governing Law.  THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.

                  23.  Authentication.  The Securities shall not be valid until
authenticated by the manual signature of an authorized officer of the
Trustee or an authenticating agent.

                  24. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

                  The Company will furnish to any Holder of the Securities upon
written request and without charge a copy of the Indenture. Request may be made
to:

                           Union Pacific Corporation
                           1717 Main Street
                           Suite 5900
                           Dallas, Texas 75201-4605

                           Attention of:  Chief Financial Officer
   121
                                 ASSIGNMENT FORM

                To assign this Security, fill in the form below:

                (I) or (we) assign and transfer this Security to

             (Insert assignee's social security or tax I.D. number)

              (Print or type assignee's name, address and zip code)

and irrevocably appoint
agent to transfer this Security on the books of the Company.  The agent may
substitute another to act for him.

         Your Signature:
                                       (Sign exactly as your name appears on the
                                       other side of this Security)

         Date:

         Signature Guarantee:(4)

[Include the following if the Security bears a Restricted Securities Legend
- --

In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:

CHECK ONE BOX BELOW

         (1)      / /      exchanged for the undersigned's own account without
                           transfer; or

         (2)      / /      transferred pursuant to and in compliance with Rule
                           144A under the Securities Act of 1933; or

         (3)      / /      transferred pursuant to and in compliance with
                           Regulation S under the Securities Act of 1933; or

- --------

   (4)(Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
   122
                                                                               2

         (4)      / /      transferred pursuant to another available exemption
                           from the registration requirements of the Securities
                           Act of 1933.

         (5)      / /      transferred pursuant to an effective registration
                           statement under the Securities Act.

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.

                                                       _________________________
                                                                Signature

Signature Guarantee:(5)

                                                       _________________________
Signature must be guaranteed                                    Signature

- --------

   (5) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
   123
                                                                               3

             [TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.]

                  The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Dated:_________________________            _____________________________________
                                           NOTICE:      [To be executed by
                                                        an executive officer]
   124
                      (TO BE ATTACHED TO GLOBAL SECURITIES)

                                   SCHEDULE A

                  The initial principal amount of this Global Security shall be
$_______. The following increases or decreases in the principal amount of this
Global Security have been made:

                       Amount of in
                       crease in Princi-
                       pal Amount of
                       this Global Secu-      Amount of de-          Principal Amount       Signature of
                       rity including         crease in Princi-      of this Global         authorized offi-
                       increase  upon         pal Amount of          Security follow-       cer of Trustee
                       exercise of over-      this Global Secu-      ing such decrease      or Securities
Date Made              allotment option       rity                   or increase            Custodian

   125
                               ELECTION TO CONVERT

To:  Union Pacific Corporation

                  The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion below designated,
into Common Stock of UNION PACIFIC CORPORATION in accordance with the terms of
the Indenture referred to in this Security, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.

                  Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Security, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Securities.

Date:      ,

         in whole __
                                          Portions of Security to be
                                          converted ($50 or integral
                                          multiples thereof):
                                          $______________________

                                 ____________________________________
                                 Signature (for conversion only)

                                          Please Print or Typewrite Name and
                                          Address, Including Zip Code, and
                                          Social Security or Other Identifying
                                          Number
                                 ____________________________________
                                 ____________________________________
                                 ____________________________________

                                 Signature Guarantee:(6)

                                 ____________________________________

   (6) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)

   1
                                                                     Exhibit 4.9
                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                                     Between

                            UNION PACIFIC CORPORATION

                                       and

                              THE BANK OF NEW YORK

                            Dated as of April 1, 1998
   2
                            CROSS-REFERENCE TABLE */

Section of
Trust Indenture Act                                        Section of
of 1939, as amended                                        Guarantee Agreement

310(a)...................................................  4.01(a)
310(b)...................................................  4.01(c), 2.08
310(c)...................................................  Inapplicable
311(a)...................................................  2.02(b)
311(b)...................................................  2.02(b)
311(c)...................................................  Inapplicable
312(a)...................................................  2.02(a)
312(b)...................................................  2.02(b)
313   ...................................................  2.03
314(a)...................................................  2.04
314(b)...................................................  Inapplicable
314(c)...................................................  2.05
314(d)...................................................  Inapplicable
314(e)...................................................  1.01, 2.05, 3.02
314(f)...................................................  2.01, 3.02
315(a)...................................................  3.01(d)
315(b)...................................................  2.07
315(c)...................................................  3.01
315(d)...................................................  3.01(d)
316(a)...................................................  1.01, 2.06, 5.04
316(b)...................................................  5.03
316(c)...................................................  8.02
317(a)...................................................  Inapplicable
317(b)...................................................  Inapplicable
318(a)...................................................  2.01(b)
318(b)...................................................  2.01
318(c)...................................................  2.01(a)

- --------

     */ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
   3
                                TABLE OF CONTENTS

                                                                                                Page
                                                                                                ----

                                    ARTICLE I

                         Definitions and Interpretation
SECTION 1.01.          Definitions and Interpretation....................................         2

                                   ARTICLE II

                       Trust Indenture Act
SECTION 2.01.          Trust Indenture Act; Application..................................         5
SECTION 2.02.          Lists of Holders of Securities....................................         6
SECTION 2.03.          Reports by the Guarantee
                         Trustee.........................................................         6
SECTION 2.04.          Periodic Reports to Guarantee
                         Trustee.........................................................         6
SECTION 2.05.          Evidence of Compliance with
                         Conditions Precedent............................................         6
SECTION 2.06.          Events of Default; Waiver.........................................         7
SECTION 2.07.          Event of Default; Notice..........................................         7
SECTION 2.08.          Conflicting Interests.............................................         7

                                   ARTICLE III

                          Powers, Duties and Rights of
                                Guarantee Trustee
SECTION 3.01.          Powers and Duties of the Guarantee
                       Trustee...........................................................         8
SECTION 3.02.          Certain Rights of Guarantee Trustee...............................         9
SECTION 3.03.          Not Responsible for Recitals or
                         Issuance of Guarantee...........................................        12

   4
                                                                               2

                                   ARTICLE IV

                      Guarantee Trustee
                                                                                         Page
                                                                                         ----
                                                                                       
SECTION 4.01.          Guarantee Trustee;
                         Eligibility..................................................... 12
SECTION 4.02.          Appointment, Removal and
                       Resignation of Guarantee
                         Trustee......................................................... 13

                                    ARTICLE V

                      Guarantee
SECTION 5.01.          Guarantee......................................................... 14
SECTION 5.02.          Subordination..................................................... 14
SECTION 5.03.          Waiver of Notice and Demand....................................... 14
SECTION 5.04.          Obligations Not Affected.......................................... 14
SECTION 5.05.          Rights of Holders................................................. 16
SECTION 5.06.          Guarantee of Payment.............................................. 16
SECTION 5.07.          Subrogation....................................................... 16
SECTION 5.08.          Independent Obligations........................................... 17
SECTION 5.09.          Conversion........................................................ 17

                                   ARTICLE VI

                    Limitation of Transactions; Subordination
SECTION 6.01.          Limitation of Transactions........................................ 17
SECTION 6.02.          Ranking........................................................... 17

                                   ARTICLE VII

                                   Termination
SECTION 7.01.          Termination....................................................... 18

   5
                                                                               3

                                  ARTICLE VIII
                                                                                          Page
                                                                                          ----
                                                                                       
                       Indemnification
SECTION 8.01.          Exculpation....................................................... 18
SECTION 8.02.          Indemnification................................................... 19

                                   ARTICLE IX

                                  Miscellaneous
SECTION 9.01.          Successors and Assigns............................................ 19
SECTION 9.02.          Amendments........................................................ 19
SECTION 9.03.          Notices........................................................... 20
SECTION 9.04.          Benefit........................................................... 20
SECTION 9.05.          Governing Law..................................................... 21

   6
                                    THIS PREFERRED SECURITIES GUARANTEE
                           AGREEMENT ("Guarantee"), dated as of April 1, 1998,
                           is executed and delivered by UNION PACIFIC
                           CORPORATION, a Utah corporation (the "Guarantor"),
                           and THE BANK OF NEW YORK, a New York banking
                           corporation, as trustee (the "Guarantee Trustee"),
                           for the benefit of the HOLDERS (as defined herein)
                           from time to time of the Preferred Securities (as
                           defined herein) of UNION PACIFIC CAPITAL TRUST, a
                           Delaware statutory business trust (the "Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of April 1, 1998, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 30,000,000 TIDES, having an aggregate stated
liquidation amount of $1,500,000,000, designated the 6 1/4% Convertible
Preferred Securities Term Income Deferrable Equity Securities (TIDES)(sm)
(liquidation amount $50 per Preferred Security) (the "Preferred Securities");

                  WHEREAS as incentive for the Holders to purchase the TIDES,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay on a subordinated basis to the Holders the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein; and

                  WHEREAS the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Guarantee for the benefit of the holders of the Common
Securities (as defined herein) except that if a Debenture Event of Default or a
Declaration Event of Default (each as defined herein) (or an event that, with
passage of time, would become such a Debenture Event of Default) shall have
occurred and be continuing, the rights of holders of the Common Securities to
receive Guarantee Payments under the Common Securities Guarantee are
subordinated to the rights of Holders to receive Guarantee Payments under this
Guarantee.
   7
                                                                               2

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee for
the benefit of the Holders.

                                    ARTICLE I

                         Definitions and Interpretation

                  SECTION 1.01.  Definitions and Interpretation.  In this 
Guarantee, unless the context otherwise requires:

                  (a) capitalized terms used in this Guarantee but not defined
         in the preamble above have the respective meanings assigned to them in
         this Section 1.01; terms defined in the Declaration as at the date of
         execution of this Guarantee have the same meaning when used in this
         Guarantee unless otherwise defined in this Guarantee;

                  (b) a term defined anywhere in this Guarantee has the same
         meaning throughout;

                  (c) all references to "the Guarantee" or "this Guarantee" are
         to this Guarantee as modified, supplemented or amended from time to
         time;

                  (d) all references in this Guarantee to Articles and Sections
         are to Articles and Sections of this Guarantee unless otherwise
         specified;

                  (e) a term defined in the Trust Indenture Act has the same
         meaning when used in this Guarantee unless otherwise defined in this
         Guarantee or unless the context otherwise requires; and

                  (f) a reference to the singular includes the plural and vice
         versa.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether
   8
                                                                               3

through the ownership of voting securities, by contract or otherwise; the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

                  "Common Securities" means the convertible common securities
(liquidation amount $50 per common security) representing common undivided
beneficial interests in the assets of the Issuer.

                  "Covered Person" means any Holder or beneficial owner of
Preferred Securities.

                  "Debenture Event of Default" means an Event of Default as
defined in the Indenture.

                  "Debentures" means the series of convertible junior
subordinated debt securities of the Guarantor designated the Convertible Junior
Subordinated Debentures Due 2028 held by the Property Trustee (as defined in the
Indenture) of the Issuer.

                  "Declaration Event of Default" means an Event of Default as
defined in the Declaration.

                  "Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee; provided, however, that
except with respect to a default in payment of any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.

                  "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions (as defined in the Declaration) that are required to be
paid on the Preferred Securities, to the extent that the Issuer shall have funds
on hand available therefor at such time, (ii) the applicable Redemption Price
(as defined in the Indenture) with respect to Preferred Securities called for
redemption by the Issuer, to the extent that the Issuer has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders or the redemption of all the
Preferred Securities), the lesser of (a) the aggregate liquidation
   9
                                                                               4

amount thereof plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution") to the extent the
Issuer has funds available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to Holders upon liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law. 

                  "Guarantee Trustee" means The Bank of New York until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

                  "Holder" means any holder, as registered on the books and
records of the Issuer of any outstanding Preferred Securities; provided,
however, that, in determining whether the holders of the requisite percentage in
liquidation amount of the Preferred Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.

                  "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.

                  "Indenture" means the Indenture dated as of April 1, 1998,
among the Guarantor and The Bank of New York, as trustee, and any indenture
supplemental thereto, pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.

                  "Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, Holder(s), voting
separately as a class, representing more than 50% of the stated aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities then outstanding.

                  "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or
an Assistant Secretary of such Person, and delivered to the
   10
                                                                               5

Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee shall
include:

                  (a) a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b) a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officers' Certificate;

                  (c) a statement that each such officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (d) a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

                  "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

                  "Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

                  "Senior Debt" shall have the meaning set forth in the
Indenture.

                  "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.01.
   11
                                                                               6

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.

                                   ARTICLE II

                               Trust Indenture Act

                  SECTION 2.01.  Trust Indenture Act; Application. (a)  This
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee, which are incorporated by reference
hereto, and shall, to the extent applicable, be governed by such provisions; and

                  (b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

                  SECTION 2.02. Lists of Holders of Securities. (a) The
Guarantor shall provide the Guarantee Trustee (i) within 14 days after January 1
and June 30 of each year, commencing June 30, 1998, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date; provided that the Guarantor shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor, and (ii) at any other time, within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Guarantee Trustee. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

                  (b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

                  SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days
after May 15 of each year, commencing May 15, 1998, the Guarantee Trustee shall
provide to the Holders of the Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act.
   12
                                                                               7

The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.

                  SECTION 2.04. Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information as required
by Section 314 (if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.

                  SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
which relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.

                  SECTION 2.06. Events of Default; Waiver. The Holders of a
Majority in liquidation amount of the Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent therefrom.

                  SECTION 2.07. Event of Default; Notice. (a) The Guarantee
Trustee shall, within 30 days after the occurrence of an Event of Default
actually known to the Guarantee Trustee, transmit by mail, first-class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such notice;
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
   13
                                                                               8

                  (b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Guarantee Trustee shall have received written notice or a Responsible Officer
charged with the administration of the Declaration shall have obtained written
notice.

                  SECTION 2.08. Conflicting Interests. The Declaration shall be
deemed to be specifically described in this Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

                  Powers, Duties and Rights of Guarantee Trustee

                  SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee shall be held by the Guarantee Trustee for the benefit of the
Holders, and the Guarantee Trustee shall not transfer this Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.05(d)
or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The right,
title and interest of the Guarantee Trustee shall automatically vest in any
Successor Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.

                  (b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders.

                  (c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee, and no implied covenants shall be read into this Guarantee
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or
   14
                                                                               9

use under the circumstances in the conduct of his or her own affairs.

                  (d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee, and the Guarantee Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee,
                  and no implied covenants or obligations shall be read into
                  this Guarantee against the Guarantee Trustee; and

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee; but in the case of any
                  such certificates or opinions that by any provision hereof are
                  specifically required to be furnished to the Guarantee
                  Trustee, the Guarantee Trustee shall be under a duty to
                  examine the same to determine whether or not they conform to
                  the requirements of this Guarantee;

                  (ii) the Guarantee Trustee shall not be liable for any error
         of judgment made in good faith by a Responsible Officer of the
         Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
         was negligent in ascertaining the pertinent facts upon which such
         judgment was made;

                  (iii) the Guarantee Trustee shall not be liable with respect
         to any action taken or omitted to be taken by it in good faith in
         accordance with the direction of the Holders of not less than a
         Majority in liquidation
   15
                                       10

         amount of the Preferred Securities, relating to the time, method and
         place of conducting any proceeding for any remedy available to the
         Guarantee Trustee, or exercising any trust or power conferred upon the
         Guarantee Trustee under this Guarantee; and

                  (iv) no provision of this Guarantee shall require the
         Guarantee Trustee to expend or risk its own funds or otherwise incur
         personal financial liability in the performance of any of its duties or
         in the exercise of any of its rights or powers.

                  SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.01:

                  (i) the Guarantee Trustee may conclusively rely and shall be
         fully protected in acting or refraining from acting upon any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document believed by
         it to be genuine and to have been signed, sent or presented by the
         proper party or parties;

                  (ii) any direction or act of the Guarantor contemplated by
         this Guarantee shall be sufficiently evidenced by an Officers'
         Certificate;

                  (iii) whenever, in the administration of this Guarantee, the
         Guarantee Trustee shall deem it desirable that a matter be proved or
         established before taking, suffering or omitting any action hereunder,
         the Guarantee Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         rely upon an Officers' Certificate which, upon receipt of such request,
         shall be promptly delivered by the Guarantor;

                  (iv) the Guarantee Trustee shall have no duty to see to any
         recording, filing or registration of any instrument (or any
         rerecording, refiling or reregistration thereof);

                  (v) the Guarantee Trustee may consult with legal counsel of
         its selection, and the written advice or opinion of such legal counsel
         with respect to legal matters shall be full and complete authorization
         and protection in respect of any action taken, suffered or
   16
                                                                              11

         omitted to be taken by it hereunder in good faith and in accordance
         with such advice or opinion. Such legal counsel may be legal counsel to
         the Guarantor or any of its Affiliates and may include any of the
         Guarantor's employees. The Guarantee Trustee shall have the right at
         any time to seek instructions concerning the administration of this
         Guarantee from any court of competent jurisdiction.

                  (vi) the Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee at
         the request or direction of any Holder, unless such Holder shall have
         provided to the Guarantee Trustee security and indemnity satisfactory
         to the Guarantee Trustee against the costs, expenses (including
         attorneys' fees and expenses) and liabilities that might be incurred by
         it in complying with such request or direction, including such
         reasonable advances as may be requested by the Guarantee Trustee;
         provided that nothing contained in this Section 3.02(a)(vi) shall be
         taken to relieve the Guarantee Trustee, upon the occurrence of an Event
         of Default, of its obligation to exercise the rights and powers vested
         in it by this Guarantee;

                  (vii) the Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit;

                  (viii) the Guarantee Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through agents or attorneys, and the Guarantee Trustee shall not be
         responsible for any misconduct or negligence on the part of any agent
         or attorney appointed with due care by it hereunder;

                  (ix) any action taken by the Guarantee Trustee or its agents
         hereunder shall bind the Holders, and the signature of the Guarantee
         Trustee or its agents alone shall be sufficient and effective to
         perform any such action; it being understood that no third party shall
   17
                                                                              12

         be required to inquire as to the authority of the Guarantee Trustee to
         so act or as to its compliance with any of the terms and provisions of
         this Guarantee, both of which shall be conclusively evidenced by the
         Guarantee Trustee's or its agent's taking such action; and

                  (x) whenever in the administration of this Guarantee the
         Guarantee Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right or taking any other action
         hereunder, the Guarantee Trustee (i) may request written instructions
         from the Holders or, other than with respect to enforcing any remedy or
         right or taking any action related thereto, the Guarantor, (ii) may
         refrain from enforcing such remedy or right or taking such other
         action until such written instructions are received, and (iii) shall be
         protected in acting in accordance with such written instructions.

                  (b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.

                  SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee.

                                   ARTICLE IV

                                Guarantee Trustee

                  SECTION 4.01.     Guarantee Trustee; Eligibility. (a)  There
shall at all times be a Guarantee Trustee which shall:
   18
                                                                              13

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a corporation organized and doing business under the
         laws of the United States of America or any State or Territory thereof
         or of the District of Columbia, or a corporation or Person permitted
         by the Securities and Exchange Commission to act as an institutional
         trustee under the Trust Indenture Act, authorized under such laws to
         exercise corporate trust powers, having a combined capital and surplus
         of at least 50 million U.S. dollars ($50,000,000), and subject to
         supervision or examination by Federal, State, Territorial or District
         of Columbia authority. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         the supervising or examining authority referred to above, then, for the
         purposes of this Section 4.01(a)(ii), the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

                  (b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).

                  (c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 3.10(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 3.10(b) of the Trust Indenture Act.

                  SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

                  (b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

                  (c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need
   19
                                                                              14

for prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

                  (d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of an instrument of removal or resignation,
the Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                  (e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.

                  (f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.02, the
Guarantor shall pay to the Guarantee Trustee all amounts accrued to the date of
such termination, removal or resignation.

                                    ARTICLE V

                                    Guarantee

                  SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full on a subordinated basis to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer), as and when due, in coin or currency of the United States
of America which at the time of payment is legal tender for payment of public
and private debt regardless of any defense, right of setoff or counterclaim that
the Issuer may have or assert other than the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.

                  SECTION 5.02. Subordination. If a Debenture Event of Default
or a Declaration Event of Default (or an event that, with passage of time, would
become a Debenture
   20
                                                                              15

Event of Default) shall have occurred and be continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders to receive
Guarantee Payments under this Guarantee.

                  SECTION 5.03. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

                  SECTION 5.04. Obligations Not Affected.  The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:

                  (a) the release or waiver, by operation of law or otherwise,
         of the performance or observance by the Issuer of any express or
         implied agreement, covenant, term or condition relating to the
         Preferred Securities to be performed or observed by the Issuer;

                  (b) the extension of time for the payment by the Issuer of all
         or any portion of the Distributions, the amount payable upon redemption
         or the amount payable upon liquidation or any other sums payable under
         the terms of the Preferred Securities or the extension of time for the
         performance of any other obligation under, arising out of, or in
         connection with, the Preferred Securities (other than an extension of
         time for payment of Distributions that results from the extension of
         any interest payment period on the Debentures permitted by the
         Indenture);

                  (c) any failure, omission, delay or lack of diligence on the
         part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the TIDES, or any action on the part of the Issuer granting
         indulgence or extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership,
   21
                                                                              16

         insolvency, bankruptcy, assignment for the benefit of creditors,
         reorganization, arrangement, composition or readjustment of debt of, or
         other similar proceedings affecting, the Issuer or any of the assets of
         the Issuer;

                  (e) any invalidity of, or defect or deficiency in
         the Preferred Securities;

                  (f) the settlement or compromise of any obligation
         guaranteed hereby or hereby incurred; or

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor, it
         being the intent of this Section 5.04 that the obligations of the
         Guarantor hereunder shall be absolute and unconditional under any and
         all circumstances.

                  There shall be no obligation of the Holders or any other
Person to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.

                  SECTION 5.05. Rights of Holders. The Guarantor expressly
acknowledges that:

                  (a) This Guarantee will be deposited with the Guarantee
         Trustee to be held for the benefit of the Holders.

                  (b)  The Guarantee Trustee has the right to enforce this
         Guarantee on behalf of the Holders.

                  (c) The Holders of a Majority in liquidation amount of the
         Preferred Securities have the right to direct the time, method and
         place of conducting any proceeding for any remedy available to the
         Guarantee Trustee in respect of this Guarantee or exercising any trust
         or power conferred upon the Guarantee Trustee under this Guarantee.

                  (d) Any Holder may institute a legal proceeding directly
         against the Guarantor to enforce its rights under this Guarantee,
         without first instituting a legal proceeding against the Issuer, the
         Guarantee Trustee or any other Person.
   22
                                                                              17

                  SECTION 5.06. Guarantee of Payment. This Guarantee creates a
guarantee of payment and not of collection. This Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Declaration.

                  SECTION 5.07. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Guarantee and shall
have the right to waive payment by the Issuer pursuant to Section 5.01;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee, if,
at the time of any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.

                  SECTION 5.08. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities, and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.04
hereof.

                  SECTION 5.09. Conversion. The Guarantor acknowledges its
obligation to issue and deliver common stock upon the conversion of the
Preferred Securities.

                                   ARTICLE VI

                    Limitation of Transactions; Subordination

                  SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, if there shall have occurred and be
continuing a Debenture Event of Default, a Declaration Event of Default or an
event that, with the giving of notice or the lapse of time or
   23
                                                                              18

both, would constitute a Debenture Event of Default or a Declaration Event of
Default, or a selection by the Guarantor of a Deferral Period as provided in
the Indenture and such period, or any extension thereof, shall be continuing,
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than stock dividends
paid by the Guarantor which stock dividends consist of the stock of the same
class as that on which the dividend is being paid), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior in interest to the Debentures and (c) shall not make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
with or junior in interest to the Debentures (in each case, other than (A)
dividends or distributions in Common Stock, (B) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (C) payments under this
Guarantee, (D) purchases or acquisitions of shares of the Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plan or any other contractual obligation of the Guarantor
(other than a contractual obligation ranking pari passu with or junior in
interest to the Securities), (E) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock or (F) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).

                  SECTION 6.02.     Ranking.  This Guarantee will
constitute an unsecured obligation of the Guarantor and will rank subordinate
to all Senior Debt of the Guarantor to the same extent that the Debentures are
subordinated pursuant to the Indenture.
   24
                                                                              19

                                   ARTICLE VII

                                   Termination

                  SECTION 7.01. Termination. This Guarantee shall terminate upon
(i) full payment of the amount payable upon redemption of all Preferred
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Preferred Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders of all of the
Preferred Securities or (iii) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder must restore payment of any sums
paid under the Preferred Securities or under this Guarantee.

                                  ARTICLE VIII

                                 Indemnification

                  SECTION 8.01. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.

                  (b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts
   25
                                                                              20

pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.

                  SECTION 8.02. Indemnification. (a) The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any and all loss, liability or expense including taxes (other
than taxes based on the income of such Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this Section 8.02 shall survive the termination of
this Guarantee.

                  (b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.02(a).

                  (c) No Indemnified Person shall claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee.

                                   ARTICLE IX

                                  Miscellaneous

                  SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders.

                  SECTION 9.02. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee may only be amended with the prior
   26
                                                                              21

approval of the Holders of a majority in liquidation amount of the Preferred
Securities then outstanding. The provisions of Section 12.02 of the Declaration
with respect to meetings of holders of the Securities (as defined in the
Declaration) apply to the giving of such approval.

                  SECTION 9.03.     Notices.  All notices provided for in this
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first-class mail, as follows:
   27
                                                                              22

                  (a) if given to the Issuer, in care of the Regular Trustees at
         the Issuer's mailing address set forth below (or such other address as
         the Issuer may give notice):

                           L. White Mathews
                           Gary M. Stuart
                           Joseph E. O'Connor, Jr.
                           Union Pacific Capital Trust
                           c/o Union Pacific Corporation
                           1717 Main Street, Suite 5900
                           Dallas, Texas 75201
                           Attention:  Treasurer

                  (b) If given to the Guarantee Trustee, at the Guarantee
         Trustee's mailing address set forth below (or such other address as the
         Guarantee Trustee may give notice of to the Holders):

                           The Bank of New York
                           101 Barclay Street, Floor 21 West
                           Attn:  Corporate Trust
                           Trustee Administration
                           New York, New York 10286

                  (c) If given to the Guarantor, at the Guarantor's mailing
         address set forth below (or such other address as the Guarantor may
         give notice of to the Holders):

                           Union Pacific Corporation
                           1717 Main Street, Suite 5900
                           Dallas, Texas 75201
                           Attention:  Treasurer

                  (c)  If given to any Holder, at the address set
         forth on the books and records of the Issuer.

                  All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

                  SECTION 9.04. Benefit. This Guarantee is solely for the
benefit of the Holders and, subject to
   28
                                                                              23

Section 3.01(a), is not separately transferable from the Preferred Securities.
   29
                  SECTION 9.05. Governing Law. THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

                  THIS GUARANTEE is executed as of the day and year first above
written.

                                                UNION PACIFIC CORPORATION, as
                                                Guarantor,

                                                  by
                                                    --------------------------
                                                    Name:
                                                    Title:

                                                THE BANK OF NEW YORK, as
                                                Guarantee Trustee,

                                                  by
                                                    --------------------------
                                                    Name:
                                                    Title:

   1
                                                                    EXHIBIT 4.10

                      COMMON SECURITIES GUARANTEE AGREEMENT

                  This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common
Securities Guarantee"), dated as of April 1, 1998, is executed and delivered by
Union Pacific Corporation, a Utah corporation (the "Guarantor"), for the benefit
of the Holders (as defined herein) from time to time of the Common Securities
(as defined in the Declaration (as defined herein)) of Union Pacific Capital
Trust, a Delaware business trust (the "Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of April 1, 1998, among the Trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 927,835 Common Securities, having an aggregate
stated liquidation amount of $46,391,750, designated the 6 1/4% Convertible
Common Securities (liquidation amount $50 per each of the Convertible Common
Securities);

                  WHEREAS as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay on a
subordinated basis to the Holders of the Common Securities the Guarantee Pay-
ments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and

                  WHEREAS the Guarantor is also executing and delivering a
guarantee agreement in substantially identical terms to this Common Securities
Guarantee for the benefit of the holders of the Preferred Securities (the
"Guarantee") except that if a Debenture Event of Default or a Declaration Event
of Default (each as defined herein) (or an event that, with passage of time,
would become a Debenture Event of Default) shall have occurred and be
continuing, the rights of Holders of the Common Securities to receive Guarantee
Payments under this Common Securities Guarantee are subordinated to the rights
of holders of Preferred Securities to receive Guarantee Payments under the
Guarantee.

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the
   2
                                                                               2

Guarantor executes and delivers this Common Securities Guarantee for the benefit
of the Holders.

                                    ARTICLE I

                  SECTION 1.01. In this Common Securities Guarantee, unless the
context otherwise requires, the terms set forth below shall have the following
meanings.

                  (a) capitalized terms used in this Common Securities Guarantee
         but not defined in the preamble above have the respective meanings
         assigned to them in this Section 1.01 or the Guarantee;

                  (b) terms defined in the Declaration as at the date of
         execution of this Common Securities Guarantee have the same meaning
         when used in this Common Securities Guarantee unless otherwise defined
         in this Common Securities Guarantee or in the Guarantee;

                  (c)  a term defined anywhere in this Common
         Securities Guarantee has the same meaning throughout;

                  (d) all references to "the Common Securities Guarantee" or
         "this Common Securities Guarantee" are to this Common Securities
         Guarantee as modified, supplemented or amended from time to time;

                  (e) all references in this Common Securities Guarantee to
         Articles and Sections are to Articles and Sections of this Common
         Securities Guarantee unless otherwise specified; and

                  (f)  a reference to the singular includes the
         plural and vice versa.

                  "Debenture Event of Default" means an Event of
Default under the Indenture.

                  "Declaration Event of Default" means an Event of
Default under the Declaration.

                  "Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions which are required to be paid on such Common Securities,
to the extent that the Issuer shall have funds on hand available therefor at
such time, (ii) the applicable
   3
                                                                               3

Redemption Price (as defined in the Indenture) with respect to any Common
Securities called for redemption by the Issuer, to the extent that the Issuer
has funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders or the redemption
of all the Common Securities), the lesser of (a) the aggregate liquidation
amount thereof plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution") to the extent the
Issuer has funds available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to Holders upon liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law.

                  "Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any outstanding Common Securities.

                  "Senior Debt" shall have the meaning set forth in
the Indenture.

                                   ARTICLE II

                  SECTION 2.01. The Guarantor irrevocably and unconditionally
agrees to pay in full on a subordinated basis to the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, in coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debt regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert other than the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.

                  SECTION 2.02. If a Debenture Event of Default or a Declaration
Event of Default (or an event that, with passage of time, would become a
Debenture Event of Default) shall have occurred and be continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Guarantee.
   4
                                                                               4

                  SECTION 2.03. The Guarantor hereby waives notice of acceptance
of this Common Securities Guarantee and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

                  SECTION 2.04. The obligations, covenants, agreements and
duties of the Guarantor under this Common Securities Guarantee shall in no way
be affected or impaired by reason of the happening from time to time of any of
the following:

                  (a) the release or waiver, by operation of law or otherwise,
         of the performance or observance by the Issuer of any express or
         implied agreement, covenant, term or condition relating to the Common
         Securities to be performed or observed by the Issuer;

                  (b) the extension of time for the payment by the Issuer of all
         or any portion of the Distributions, the amount payable upon
         redemption, Liquidation Distribution or any other sums payable under
         the terms of the Common Securities or the extension of time for the
         performance of any other obligation under, arising out of, or in
         connection with, the Common Securities (other than an extension of time
         for payment of Distributions, that results from the extension of any
         interest payment period on the Debentures permitted by the Indenture);

                  (c) any failure, omission, delay or lack of diligence on the
         part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Common Securities, or any action on the part of the Issuer
         granting indulgence or extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment of debt of, or other similar proceedings
         affecting, the Issuer or any of the assets of the Issuer;

                  (e) any invalidity of, or defect or deficiency in
         the Common Securities;
   5
                                                                               5

                  (f) the settlement or compromise of any obligation
         guaranteed hereby or hereby incurred; or

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor, it
         being the intent of this Section 2.04 that the obligations of the
         Guarantor hereunder shall be absolute and unconditional under any and
         all circumstances.

                  There shall be no obligation of the Holders or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.

                  SECTION 2.05. The Guarantor expressly acknowledges that any
Holder of Common Securities may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Common Securities Guarantee,
without first instituting a legal proceeding against the Issuer or any other
Person.

                  SECTION 2.06. This Common Securities Guarantee creates a
guarantee of payment and not of collection. This Common Securities Guarantee
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.

                  SECTION 2.07. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Common Securities Guarantee and shall
have right to waive payment by the Issuer pursuant to Section 2.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

                  SECTION 2.08. The Guarantor acknowledges that its obligations 
hereunder are independent of the obligations of the Issuer with respect to the 
Common Securities and that
   6
                                                                               6

the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.04 hereof.

                  SECTION 2.09. The Guarantor acknowledges its obligation to
issue and deliver common stock upon the conversion of the Common Securities.

                                   ARTICLE III

                  SECTION 3.01. So long as any Common Securities remain
outstanding, if (i) there shall have occurred and be continuing a Debenture
Event of Default, a Declaration Event of Default or an event that, with the
giving of notice or the lapse of time or both, would constitute a Debenture
Event of Default or a Declaration Event of Default or (ii) a selection by the
Guarantor of a Deferral Period as provided in the Indenture and such period, or
any extension thereof, shall be continuing, then (a) the Guarantor shall not de-
clare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than stock dividends paid by the Guarantor which
consist of the stock of the same class as that on which the dividend is being
paid), (b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Guarantor which rank pari passu with or junior in interest to the Debentures
and (c) shall not make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior in interest to the Debentures (in each
case, other than (A) dividends or distributions in Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Guarantor of its
obligations under any employee benefit plan or any other contractual obligation
of the Guarantor (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for
   7
                                                                               7

another class or series of the Guarantor's capital stock or (F) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged).

                  SECTION 3.02. This Common Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank subordinate to all Senior
Debt of the Guarantor to the same extent that the Debentures (as defined in the
Indenture) are subordinated pursuant to the Indenture.

                                   ARTICLE IV

                  SECTION 4.01. This Common Securities Guarantee shall terminate
upon (i) full payment of the amount payable upon redemption of the Common
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Common Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders in exchange
for all of the Common Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.

                                    ARTICLE V

                  SECTION 5.01. All guarantees and agreements contained in this
Common Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders.

                  SECTION 5.02. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Common Securities Guarantee may only be amended with the
prior approval of the Holders of a majority in liquidation amount of the
outstanding Common Securities. The provisions of Section 12.02 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
   8
                                                                               8

                  SECTION 5.03. All notices provided for in this Common
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by registered or certified
mail, as follows:

                  (a)      if given to the Issuer, in care of the Regular
                           Trustees at the Issuer's mailing address set forth
                           below (or such other address as the Issuer may give
                           notice of to the Holders of the Common Securities):

                                    L. White Mathews, III
                                    Gary M. Stuart
                                    Joseph E. O'Connor, Jr.
                                    Union Pacific Capital Trust
                                    c/o Union Pacific Corporation
                                    1717 Main Street, Suite 5900
                                    Dallas, Texas 75201
                                    Attention:  Treasurer

                  (b)      if given to the Guarantor, at the Guarantor's mailing
                           address set forth be low (or such other address as
                           the Guarantor may give notice of to the Holders of
                           the Common Securities):

                                    Union Pacific Corporation
                                    1717 Main Street, Suite 5900
                                    Dallas, Texas 75201
                                    Attention:  Treasurer

                  (c)      if given to any Holder of Common Securities, at the
                           address set forth on the books and records of the
                           Issuer.

                  All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

                  SECTION 5.04. This Common Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.
   9
                                                                               9

                  SECTION 5.05. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
   10
                                                                              10

                  THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.

                                                 UNION PACIFIC CORPORATION,
                                                       as Guarantor

                                                 By:
                                                    ---------------------------
                                                     Name:
                                                     Title:

   1
                                                                    Exhibit 10.1

                           UNION PACIFIC CAPITAL TRUST

                     6 1/4% CONVERTIBLE PREFERRED SECURITIES
              TERM INCOME DEFERRABLE EQUITY SECURITIES (TIDES)(SM)
                           (LIQUIDATION AMOUNT $50 PER
                               EACH OF THE TIDES)
                       GUARANTEED TO THE EXTENT SET FORTH
                       IN THE GUARANTEE AGREEMENT BY, AND
                        CONVERTIBLE INTO COMMON STOCK OF,
                            UNION PACIFIC CORPORATION

                          REGISTRATION RIGHTS AGREEMENT

                                                                   April 1, 1998

Credit Suisse First Boston Corporation
Merrill Lynch & Co.
   Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Smith Barney
   Smith Barney Inc.
Schroder & Co. Inc.
c/o Credit Suisse First Boston Corporation
   As Representative of the Several Purchasers
   Eleven Madison Avenue
   New York, NY 10010-3629

Dear Sirs:

                  Union Pacific Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") by Union Pacific
Corporation, a Utah corporation (the "Company"), proposes to issue and sell to
each of you, as initial purchasers (the "Purchasers"), upon the terms set forth
in a purchase agreement dated March 27, 1998 (the "Purchase Agreement"), among
the Purchasers, the Company and the Trust up to 30,000,000 6 1/4% Convertible
Preferred Securities Term Income Deferrable Equity Securities ("TIDES")
(liquidation amount $50 per each of the TIDES) (the "Initial Placement"). The
proceeds of the sale by the
   2
                                                                               2

Trust of the TIDES and the Common Securities, liquidation amount $50 per Common
Security (the "Common Securities"), are to be invested in the Convertible Junior
Subordinated Debentures Due 2028 of the Company (the "Convertible Junior
Subordinated Debentures") having an aggregate principal amount equal to the
aggregate liquidation amount of the TIDES and the Common Securities. The TIDES
are guaranteed by the Company to the extent set forth in the Guarantee Agreement
dated as of April 1, 1998 (the "Guarantee"), among the Company, the Trust and
The Bank of New York, as trustee and are convertible into Common Stock, par
value $2.50 per share (the "Common Stock") of the Company. As an inducement to
you to enter into the Purchase Agreement and in satisfaction of a condition to
your obligations thereunder, the Trust and the Company agree with you, (i) for
the benefit of the Purchasers and (ii) for the benefit of the registered holders
from time to time of the TIDES and the Convertible Junior Subordinated
Debentures and the record holders of the Common Stock of the Company issuable
upon conversion of the TIDES or the Convertible Junior Subordinated Debentures
(collectively, together with the Guarantee by the Company of the TIDES, the
"Securities"), including the Purchasers (each of the foregoing a "Holder" and
together the "Holders"), as follows:

                  1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in or pursuant to the
Purchase Agreement or, if not defined therein, in the Confidential Offering
Circular dated March 27, 1998, in respect of the TIDES or, if not defined
therein, in the Amended and Restated Declaration of Trust dated as of April 1,
1998 (the "Declaration") relating to the Trust. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:

                  "Act" or "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.

                  "Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; the terms
   3
                                                                               3

"controlling" and "controlled" have meanings correlative to the foregoing.

                  "Business Day" means any day other than (i) a Saturday or
Sunday, (ii) a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed or (iii) a day
on which the corporate trust office of the Debenture Trustee or the Property
Trustee is closed for business.

                  "Closing Date" has the meaning given such term in
the Purchase Agreement.

                  "Commission" means the Securities and Exchange
Commission.

                  "Common Stock" has the meaning set forth in the
first paragraph to this Agreement.

                  "Company" has the meaning set forth in the first
paragraph to this Agreement.

                  "Convertible Junior Subordinated Debentures" has the meaning
set forth in the first paragraph to this Agreement.

                  "Debenture Trustee", "Guarantee Trustee" and
"Property Trustee" each means The Bank of New York, a
New York banking corporation.

                  "Electing Holder" has the meaning assigned thereto
in Section 2(c)(iii) hereof.

                  "Exchange Act" means the Securities Exchange Act
of 1934, as amended.

                  "Guarantee" means the guarantee by the Company of the TIDES
pursuant to a Guarantee Agreement dated as of April 1, 1998 between the Company
and the Guarantee Trustee.

                  "Holder" and "Holders" each has the meaning set
forth in the first paragraph to this Agreement.

                  "Initial Placement" has the meaning set forth in
the first paragraph to this Agreement.
   4
                                                                               4

                  "Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 6 hereof.

                  "Prospectus" means the prospectus included in any Shelf
Registration Statement filed pursuant to Rule 415 under the Act, with respect to
the terms of the offering of all or any portion of the Securities covered by
such Shelf Registration Statement, as amended or supplemented by all amendments
(including post-effective amendments) and supplements to the Prospectus.

                  "Purchase Agreement" has the meaning set forth in the first
paragraph to this Agreement.

                  "Purchasers" has the meaning set forth in the first paragraph
to this Agreement.

                  "Registration Default" has the meaning given to such term in
Section 7(a) hereof.

                  "Securities" means the TIDES, the Convertible Junior
Subordinated Debentures, the Common Stock and the Guarantee, individually and
collectively.

                  "Shelf Registration" means a registration effected pursuant to
Section 2 hereof.

                  "Shelf Registration Period" has the meaning set forth in
Section 2(b) hereof.

                  "Shelf Registration Statement" means a "shelf" registration
statement of the Trust and the Company pursuant to the provisions of Section 2
hereof filed with the Commission which covers some or all of the Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Special Distributions" has the meaning given such
term in Section 7(a) hereof.
   5
                                                                               5

                  "Special Interest" has the meaning given such term in Section
7(a) hereof.

                  "TIDES" has the meaning set forth in the first paragraph to
this Agreement.

                  "Trust" has the meaning set forth in the first paragraph to
this Agreement.

                  "Trustee" means the Guarantee Trustee, the Indenture Trustee
or the Property Trustee, as applicable.

                  "Underwriter" means any underwriter of Securities in
connection with an offering thereof under a Shelf Registration Statement.

                  2. Shelf Registration. (a) The Trust and the Company shall (i)
file as soon as practicable, but in no event more than 30 days after the Closing
Date, a Shelf Registration covering resales of the TIDES, the Guarantee, the
Convertible Junior Subordinated Debentures and the related Company Common Stock
issuable upon conversion thereof and (ii) use their best efforts to cause the
Shelf Registration Statement to be declared effective under the Securities Act
within 120 days after the Closing Date, provided, however, that no Holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the Prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder.

                  (b) The Trust and the Company shall each use their best
efforts (i) to keep the Shelf Registration Statement continuously effective,
subject to Section 7(b) hereof, in order to permit the Prospectus forming part
thereof to be usable by Holders until resale of the Securities are permitted
pursuant to Rule 144(k) under the Securities Act or any successor rule or
regulation thereto after the date the Shelf Registration Statement is declared
effective or such shorter period that will terminate upon the earlier of the
following: (A) when all the TIDES covered by the Shelf Registration Statement
have been sold pursuant to the
   6
                                                                               6

Shelf Registration Statement, (B) when all Convertible Junior Subordinated
Debentures issued to Holders in respect of TIDES that had not been sold pursuant
to the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or (C) when all shares of Common Stock issued upon
conversion of any such TIDES or any such Convertible Junior Subordinated
Debentures that had not been sold pursuant to the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement (in any such case,
such period being called the "Shelf Registration Period") and (ii) after the
effectiveness of the Shelf Registration Statement, promptly upon the request of
any Holder that is not then an Electing Holder to take any action reasonably
necessary to register the sale of any Securities of such Holder and to identify
such Holder as a selling securityholder, provided, however, that nothing in this
subparagraph shall relieve such Holder of the obligation to provide the Company
and the Trust with the information required pursuant to Section 2(c) hereof.

                 (c) (i) No Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the date on which the
Commission declares the Shelf Registration Statement effective or on which the
Shelf Registration Statement otherwise becomes effective, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such holder has provided the Company and the
Trust with such information as they shall reasonably request in order to enable
the Company and the Trust to comply with the applicable requirements of the
Securities Act in connection with offers and sales by such Holder as a selling
securityholder in the Shelf Registration Statement within 30 calendar days from
the date on which any such request is first mailed to such Holder.

                           (ii) After the date on which the Commission declares
         the Shelf Registration Statement effective or on which the Shelf
         Registration Statement otherwise becomes effective, the Company and the
         Trust may, upon the request of any Holder of Registrable Securities
         that is not then an Electing Holder, take such action as is necessary
         to name such Holder as a selling securityholder in the Shelf
         Registration Statement or to enable such Holder to use the Prospectus
         forming a part thereof for resales of Registrable Securities if such
         Holder promptly provides the Company and the Trust with such
         information as they shall reasonably request in order to enable the
         Company and the Trust to comply with the applicable requirements of the
         Securities Act
   7
                                                                               7

         in connection with offers and sales by such Holder as so as to permit
         such Holder to be so named.

                           (iii) The term "Electing Holder" shall mean any
         holder of Registrable Securities that has complied with the requests of
         the Company and the Trust in accordance with Section 2(c)(i) or
         2(c)(ii) hereof.

                  3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:

                  (a) The Trust and the Company shall furnish to the Purchasers,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall each use its
best efforts to reflect in each such document, when so filed with the
Commission, such comments as the Purchasers reasonably may propose.

                  (b) The Trust and the Company shall take such action as may be
necessary, subject to Section 7(b) hereof, so that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all material
respects with the Securities Act and the Exchange Act and the respective rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not, during the Shelf
Registration Period, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
   8
                                                                               8

                  (c) (1) The Company shall advise the Purchasers and each
Electing Holder and, if requested by the Purchasers or any such Electing Holder,
confirm such advice in writing:

                           (i) when a Shelf Registration Statement and any
                  amendment thereto has been filed with the Commission and when
                  the Shelf Registration Statement or any post-effective
                  amendment thereto has become effective; and

                           (ii) of any request by the Commission for amendments
                  or supplements to the Shelf Registration Statement or the
                  Prospectus included therein or for additional information.

                  (2) The Trust and the Company shall advise the Purchasers and
         each Electing Holder and, if requested by the Purchasers or any such
         Electing Holder, confirm such advice in writing:

                           (i) of the issuance by the Commission of any stop
                  order suspending the effectiveness of the Shelf Registration
                  Statement or the initiation of any proceedings for that
                  purpose;

                           (ii) of the receipt by the Trust or the Company of
                  any notification with respect to the suspension of the
                  qualification of the securities included therein for sale in
                  any jurisdiction or the initiation or threatening of any
                  proceeding for such purpose; and

                           (iii) of the happening, during the Shelf Registration
                  Period, of any event (provided that such notice need not
                  specify the nature of such event) that requires the making of
                  any changes in the Shelf Registration Statement or the
                  Prospectus so that, as of such date, the Registration
                  Statement and the Prospectus do not contain an untrue
                  statement of a material fact and do not omit to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein (in the case of the Prospectus,
                  in light of the circumstances under which they were made) not
                  misleading (which advice shall be accompanied by an
                  instruction to suspend the use of the 
   9
                                                                               9

                  Prospectus until the requisite changes have been made).

                  (d) The Trust and the Company shall use their best efforts to
         prevent the issuance, and if issued to obtain the withdrawal, of any
         order suspending the effectiveness of any Shelf Registration Statement
         at the earliest possible time.

                  (e) The Trust and the Company shall furnish to each Electing
         Holder of Securities, without charge, at least one copy of such Shelf
         Registration Statement and any post-effective amendment thereto
         (including any reports or other documents incorporated therein by
         reference), including financial statements and schedules, and, if the
         Electing Holder so requests in writing, all exhibits (including those
         incorporated by reference).

                  (f) The Trust and the Company shall, during the Shelf
         Registration Period, deliver to each Electing Holder, without charge,
         as many copies of the Prospectus (including each preliminary
         Prospectus) included in such Shelf Registration Statement and any
         amendment or supplement thereto as such Electing Holder may reasonably
         request and shall deliver such materials to the New York Stock Exchange
         pursuant to Rule 153 under the Act; and each of the Trust and the
         Company consents to the use of the Prospectus or any amendment or
         supplement thereto by each of the Electing Holders in connection with
         the offering and sale of the Securities covered by the Prospectus or
         any amendment or supplement thereto during the Shelf Registration
         Period.

                  (g) Prior to any offering of Securities pursuant to any Shelf
         Registration Statement, the Trust and the Company shall register or
         qualify or cooperate with the Electing Holders and their respective
         counsel in connection with the registration or qualification of such
         Securities for offer and sale under the securities or blue sky laws of
         such jurisdictions as any such Electing Holders reasonably request in
         writing and do any and all other acts or things necessary or advisable
         to enable the offer and sale in such jurisdictions of the Securities
         covered by such Shelf Registration

   10
                                                                              10

         Statement; provided, however, that neither the Trust nor the Company
         will be required to qualify generally to do business in any
         jurisdiction where it is not then so qualified or to take any action
         which would subject it to general service of process or to taxation in
         any such jurisdiction where it is not then so subject.

                  (h) Unless the applicable Securities shall be in book-entry
         only form, the Trust and the Company shall cooperate with the Electing
         Holders to facilitate the timely preparation and delivery of
         certificates representing Securities to be sold pursuant to any Shelf
         Registration Statement free of any restrictive legends and in such
         permitted denominations and registered in such names as Electing
         Holders may request in connection with the sale of Securities pursuant
         to such Shelf Registration Statement.

                  (i) Upon the occurrence of any event contemplated by Section
         3(c)(1)(ii) or 3(c)(2)(iii) above, the Trust and the Company shall
         promptly prepare, subject to Section 7(b) hereof, as soon as possible a
         post-effective amendment to any Shelf Registration Statement or an
         amendment or supplement to the related Prospectus or file any other
         required document so that, as thereafter delivered to purchasers of the
         Securities included therein, the Prospectus will not include an untrue
         statement of a material fact or omit to state any material fact
         necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading. If the Trust
         or the Company notifies the Electing Holders of the occurrence of any
         event contemplated by Section 3(c)(2)(iii) above, the Electing Holders
         shall suspend the use of the Prospectus until the requisite changes to
         the Prospectus have been made.

                  (j) Not later than the effective date of any Shelf
         Registration Statement hereunder, the Trust and the Company shall
         provide a CUSIP number for the TIDES and, in the event of and at the
         time of any distribution thereof to Holders, the Convertible Junior
         Subordinated Debentures, registered under such Shelf Registration
         Statement, and provide the applicable Trustee with certificates for
         such Securities, in a
   11
                                                                              11

         form eligible for deposit with The Depository Trust Company.

                  (k) The Trust and the Company shall use their best efforts to
         comply with all applicable rules and regulations of the Commission and
         shall make generally available to their security holders or otherwise
         in accordance with Section 11(a) of the Securities Act as soon as
         practicable after the effective date of the applicable Shelf
         Registration Statement an earning statement satisfying the provisions
         of Section 11(a) of the Securities Act.

                  (l) The Trust and the Company shall cause the Indenture, the
         Declaration and the Guarantee to be qualified under the Trust Indenture
         Act in a timely manner.

                  (m) The Trust and the Company may require each Electing Holder
         to furnish to the Trust and the Company such information regarding the
         Electing Holder and the distribution of such Securities as the Trust
         and the Company may from time to time reasonably require for inclusion
         in such Shelf Registration Statement.

                  (n) The Trust and the Company shall, if requested, promptly
         incorporate in a Prospectus supplement or post-effective amendment to a
         Shelf Registration Statement, such information as the Managing
         Underwriters reasonably agree should be included therein and to which
         the Trust and the Company do not reasonably object and shall make all
         required filings of such Prospectus supplement or post-effective
         amendment as soon as practicable after they are notified of the matters
         to be incorporated in such Prospectus supplement or post-effective
         amendment.

                  (o) The Trust and the Company shall enter into such customary
         agreements (including underwriting agreements in customary form) to
         take all other appropriate actions in order to expedite or facilitate
         the registration or the disposition of the Securities, and in
         connection therewith, if an underwriting agreement is entered into,
         cause the same to contain indemnification provisions and procedures
         substantially identical to those set forth in Section 5 (or such
   12
                                                                              12

         other provisions and procedures acceptable to the Managing
         Underwriters, if any) with respect to all parties to be indemnified
         pursuant to Section 5.

                  (p) The Trust and the Company shall (i) make reasonably
         available for inspection by the Electing Holders, any underwriter
         participating in any disposition pursuant to such Shelf Registration
         Statement, and any attorney, accountant or other agent retained by such
         Electing Holders or any such underwriter all relevant financial and
         other records, pertinent corporate documents and properties of the
         Trust and the Company and its subsidiaries as shall be requested in
         connection with the discharge of their due diligence obligations; (ii)
         cause the Company's officers, directors and employees and any relevant
         Trustees to supply at the Company's expense all relevant information
         reasonably requested by such Electing Holders or any such underwriter,
         attorney, accountant or agent in connection with any such Shelf
         Registration Statement as is customary for similar due diligence
         examinations; provided, however, that any information that is
         designated in writing by the Trust and the Company, in good faith, as
         confidential at the time of delivery of such information shall be kept
         confidential by such Electing Holders or any such underwriter,
         attorney, accountant or agent, unless such disclosure is made in
         connection with a court proceeding or required by law, or such
         information becomes available to the public generally or through a
         third party without an accompanying obligation of confidentiality, and
         such Electing Holders shall agree that such information may only be
         used as part of their due diligence examination and for no other
         purpose; and provided further that the foregoing inspection and
         information gathering shall, to the greatest extent possible, be
         coordinated on behalf of the Electing Holders and the other parties
         entitled thereto by one counsel designated by and on behalf of such
         Electing Holders and other parties; (iii) in connection with an
         underwritten offering conducted pursuant to Section 6 hereof, make such
         representations and warranties to the Electing Holders participating in
         such underwritten offering and the underwriters in form, substance and
         scope as are customarily made by the issuers to underwriters in primary
         underwritten offerings and
   13
                                                                              13

         covering matters as are customarily covered in representations and
         warranties requested in primary underwritten offerings including, but
         not limited to, those set forth in the Purchase Agreement; (iv) in
         connection with an underwritten offering conducted pursuant to Section
         6 hereof, obtain opinions of counsel to the Trust and the Company and
         updates thereof (which counsel and opinions (in form, scope and
         substance) shall be reasonably satisfactory to the Managing
         Underwriters) addressed to each Electing Holder participating in such
         offering and the underwriters, if any, covering such matters and with
         such exceptions as are customarily covered or taken in opinions
         requested in underwritten offerings and such other matters as may be
         reasonably requested by such Electing Holders and underwriters (it
         being agreed that the matters to be covered by such opinion shall
         include, without limitation, as of the date of the opinion and as of
         the effective date of the Shelf Registration Statement or most recent
         post-effective amendment thereto, as the case may be, a statement by
         such counsel regarding the absence from such Shelf Registration
         Statement and the prospectus included therein, as then amended or
         supplemented, including the documents incorporated by reference
         therein, of an untrue statement of a material fact or the omission to
         state therein a material fact required to be stated therein or
         necessary to make the statements therein not misleading); (v) in
         connection with an underwritten offering conducted pursuant to Section
         6 hereof, obtain "cold comfort" letters and updates thereof from the
         independent certified public accountants of the Company (and, if
         necessary, any other independent certified public accountants of any
         subsidiary of the Company or of any business acquired by the Company
         for which financial statements and financial data are, or are required
         to be, included in the Shelf Registration Statement), addressed to each
         Electing Holder participating in such underwritten offering and the
         underwriters, if any, in customary form and covering matters of the
         type customarily covered in "cold comfort" letters in connection with
         primary underwritten offerings; and (vi) in connection with an
         underwritten offering conducted pursuant to Section 6 hereof, deliver
         such documents and certificates as may be reasonably requested by the
         Managing Underwriters, 
   14
         if any, including those to evidence compliance with Section 3(i) and
         with any customary conditions contained in the underwriting agreement
         or other agreement entered into by the Trust and the Company. The
         foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
         this Section 3(p) shall be performed at (A) with respect to clauses
         (ii) and (v) only, the execution of an underwriting agreement and (B)
         each closing under any underwritten offering to the extent required
         under any related underwriting or similar agreement.

                  (q) The Trust and the Company will use their best efforts to
         cause the Common Stock relating to such Shelf Registration Statement to
         be listed on each securities exchange, over-the-counter market, or
         respective counterpart if any, on which any shares of Common Stock are
         then listed.

                  (r) The Trust and the Company shall, in the event that any
         broker-dealer registered under the Exchange Act shall underwrite any
         Securities or participate as a member of an underwriting syndicate or
         selling group or "assist in the distribution" (within the meaning of
         the Rules of Fair Practice and the By-Laws of the National Association
         of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of
         such Securities or as an underwriter, a placement or sales agent or a
         broker or dealer in respect thereof, or otherwise, assist such
         broker-dealer in complying with the requirements of such Rules and
         By-Laws, including, without limitation, by (A) if such Rules or
         By-Laws, including Schedule E thereto, shall so require, engaging a
         "qualified independent underwriter" (as defined in such Schedule) to
         participate in the preparation of the Shelf Registration Statement
         relating to such Securities, to exercise usual standards of due
         diligence in respect thereto, (B) indemnifying any such qualified
         independent underwriter to the extent of the indemnification of
         underwriters provided in Section 5 hereof and (C) providing such
         information to such broker-dealer as may be required in order for such
         broker-dealer to comply with the requirements of the Rules of Fair
         Practice of the NASD.
   15
                                                                              15

                  (s) The Trust and the Company shall use their best efforts to
         take all other steps necessary to effect the registration, offering and
         sale of the Securities covered by the Shelf Registration Statement
         contemplated hereby.

                  4. Registration Expenses. Except as otherwise provided in
Section 6, the Company shall bear all fees and expenses incurred in connection
with the performance of the obligations of the Company and the Trust under
Sections 2 and 3 hereof and shall bear or reimburse the Purchasers for the
reasonable fees and disbursements of one counsel for the Purchasers in
connection with the filing of the Shelf Registration Statement.

                  5. Indemnification and Contribution. (a) In connection with
any Shelf Registration Statement, the Trust and the Company, jointly and
severally, agree to indemnify and hold harmless the Purchasers, each Electing
Holder (including the Purchasers) and each person who controls the Purchasers or
any such Electing Holder within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Trust will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
   16
                                                                              16

furnished to the Company by or on behalf of the Purchasers or any such Electing
Holder specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company or the Trust may otherwise have.

                  The Trust and the Company, jointly and severally, also agree
to indemnify or contribute to Losses (as defined below) of, as provided in
Section 5(d), any underwriters of Securities registered under the Shelf
Registration Statement, their officers, directors, employees and agents and each
person who controls such underwriters on substantially the same basis as that of
the indemnification of the Purchasers and the Electing Holders provided in this
Section 5(a) and shall, if requested by any Electing Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(o)
and Section 6 hereof.

                  (b) Each Electing Holder (including the Purchasers) severally
agrees as a consequence of the inclusion of any of such Holder's Registrable
Securities in such Shelf Registration Statement, and each underwriter executing
an underwriting agreement, if any, which facilitates the disposition of
Registrable Securities shall agree, as a consequence of facilitating such
disposition of Registrable Securities, severally and not jointly, to indemnify
and hold harmless (i) the Trust and the Company, (ii) each of the directors of
the Company, (iii) each of its officers and any Administrative Trustee who signs
such Shelf Registration Statement and (iv) each person who controls the Trust or
the Company within the meaning of either the Securities Act or the Exchange Act
to the same extent as the foregoing indemnity from the Trust and the Company,
but only with reference to written information relating to such Electing Holder
or underwriter executing an underwriting agreement furnished to the Company by
or on behalf of such Electing Holder or underwriter executing an underwriting
agreement specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Electing Holder or underwriter executing an
underwriting agreement may otherwise have.

                  (c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in
   17
                                                                              17

respect thereof is to be made against the indemnifying party under this Section
5, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve the indemnifying party from
any liability it may have to any indemnified party otherwise than under
paragraph (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of such indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 5 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.

                  (d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; provided, however,
that in no case shall the Purchasers or any subsequent Holder of any Securities
be responsible, in the aggregate, for any amount in excess of the amount by
which the net proceeds received by such Holders from the sale of the Securities
pursuant to the Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. If the allocation provided by
   18
                                                                              18

the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand. The parties
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). For purposes of this Section 5, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act shall
have the same rights to contribution as such Holder, and each person who
controls the Company or the Trust within the meaning of either the Securities
Act or the Exchange Act, each officer of the Company who shall have signed the
Shelf Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).

                  (e) The provisions of this Section 5 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Company or the Trust or any of the officers, directors, employees, agents
or controlling persons referred to in Section 5 hereof, and will survive the
sale by a Holder of Securities covered by the Shelf Registration Statement. The
obligations of the
   19
                                                                              19

Trust and the Company under this Section shall be in addition to any liability
which the Trust and the Company may otherwise have.

                  6. Underwritten Offering. The Holders of Securities covered by
the Shelf Registration Statement who desire to do so may sell such Securities in
an underwritten offering. In any such underwritten offering, the investment
banker or bankers and manager or managers that will administer the offering will
be selected by, and the underwriting arrangements with respect thereto will be
approved by, the Holders of a majority of the Securities to be included in such
offering; provided, however, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and the
Trust and (ii) the Company shall not be obligated to arrange for more than one
underwritten offering during the Shelf Registration Period. No Holder may
participate in any underwritten offering contemplated hereby unless such Holder
(a) agrees to sell such Holder's Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, (c) at least 30% of the outstanding Securities are
included in such underwritten offering, and (d) if such Holder is not then an
Electing Holder, such Holder provides the Company and the Trust with such
information as they shall reasonably request in order to enable the Company and
the Trust to comply with the applicable requirements of the Security Act in
connection with offers and sales by such Holder as a selling securityholder in
the underwritten offering within a reasonable amount of time before such
underwritten offering. The Holders participating in any underwritten offering
shall be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions and fees and
expenses of counsel to the selling securityholders. Notwithstanding the
foregoing or the provisions of Section 3(n) hereof, upon receipt of a request
from the Managing Underwriter or a representative of Holders of a majority of
the Securities outstanding to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such
   20
                                                                              20

amendment or supplement for up to 90 days if the Company in good faith has a
valid business reason for such delay.

                  7. Special Interest and Special Distributions Under Certain
Circumstances. If (i) within 120 days of the Closing Date the Shelf Registration
Statement has not been declared effective by the Commission, or (ii) in the
event that a Shelf Registration Statement is declared effective by the
Commission, the Company or the Trust fails to keep such Shelf Registration
Statement continuously effective and usable (except as permitted in paragraph
(b) of this Section 7) prior to the end of the Shelf Registration Period (each
such event referred to in clauses (i) and (ii) a "Registration Default"), then
additional interest ("Special Interest") will accrue on the Convertible Junior
Subordinated Debentures (including in respect of amounts accruing during any
Deferral Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the TIDES and the Common Securities, in each case
from and including the day following such Registration Default to but excluding
the day on which such Registration Default has been cured or has been deemed to
have been cured. Subject to the deferral of interest provisions of the
Convertible Junior Subordinated Debentures and the deferral of distributions
provisions of the TIDES, Special Interest and Special Distributions will be paid
in cash quarterly in arrears on January 1, April 1, July 1 and October 1
commencing with the first such date following the applicable Registration
Default and will accrue at a rate such that the interest rate or distribution
rate, as the case may be, will be increased 0.50% per annum of the principal
amount or liquidation amount, as applicable. Following the cure of a
Registration Default, Special Interest and Special Distributions will cease to
accrue with respect to such Registration Default.

                  (b) A Registration Default referred to in Section 7(a)(ii)
shall be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if such Registration Default
has occurred solely as a result of (x) the filing of a post-effective amendment
to such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the
   21
                                                                              21

occurrence of other material events or developments with respect to the Trust or
the Company that would need to be described in such Registration Statement or
the related Prospectus and either (i) the Company shall have determined in good
faith that such disclosure is not in the best interests of the Company and its
stockholders or (ii) the Trust and the Company are proceeding promptly and in
good faith to amend or supplement such Registration Statement and related
Prospectus to describe such events; provided, however, that in any case, if such
Registration Default occurs for a continuous period in excess of 45 days,
Special Interest and Special Distributions shall be payable in accordance with
the above paragraph from the first day of such 45-day period until the date on
which such Registration Default is cured.

                  8.  Miscellaneous.

                  (a) No Inconsistent Agreements. The Trust and the Company have
not, as of the date hereof, entered into, nor shall they on or after the date
hereof, enter into, any agreement with respect to their securities or otherwise
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.

                  (b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Purchasers.

                  (c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:

                  (1) if to a Holder, at the most current address given by such
         Holder to the Company in accordance with the provisions of this Section
         7(c), which address initially is, with respect to each Holder, the
         address of such Holder maintained by the Registrar under the Indenture,
         with a copy in a like manner to Credit Suisse First Boston Corporation;
   22
                                                                              22

                  (2) if to the Purchasers, initially at the address set forth
         in the Purchase Agreement; and

                  (3) if to the Trust or the Company, initially at its address
         set forth in the Purchase Agreement.

                  All such notices and communications shall be deemed to have
         been duly given when received.

                  The Purchaser or the Trust and the Company by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

                  (d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Trust or the Company thereto, subsequent Holders of Securities.
The Trust and the Company hereby agree to extend the benefits of this Agreement
to any Holder of Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.

                  (e) Counterparts. This agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (f)  Headings.  The headings in this agreement are
for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

                  (g)  Governing Law.  This agreement shall be
governed by and construed in accordance with the internal
laws of the State of New York applicable to agreements made
and to be performed in said State.

                  (h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being
   23
                                                                              23

intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
   24
                  Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.

                                              Very truly yours,

                                              UNION PACIFIC CAPITAL TRUST,
                                              by                         ,
                                              solely in his capacity as
                                              trustee and not in his
                                              individual capacity,

                                                by
                                                  --------------------------
                                                  Name:
                                                  Title: Administrative
                                                         Trustee

                                              UNION PACIFIC CORPORATION,

                                                by
                                                  --------------------------
                                                  Name:
                                                  Title:

The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written.

CREDIT SUISSE FIRST BOSTON
CORPORATION,
Acting on behalf of itself
and as the Representative of
the several Purchasers

     by
          --------------------
          Name:
          Title:

   1
                                                                    Exhibit 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Union Pacific Corporation on Form S-3 of our report dated January 22, 1998,
appearing in and incorporated by reference in the Annual Report on Form 10-K of
Union Pacific Corporation for the year ended December 31, 1997 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.

DELOITTE & TOUCHE

Dallas, Texas

May 1, 1998
   1
                                                                    Exhibit 24.1

                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Philip F. Anschutz, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                      /s/ Philip F. Anschutz
                                      ----------------------------------
                                             PHILIP F. ANSCHUTZ
   2
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Robert P. Bauman, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                          /s/ Robert P. Bauman
                                              -----------------------------
                                                  ROBERT P. BAUMAN
   3
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Richard B. Cheney, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Richard B. Cheney
                                              -----------------------------
                                                    RICHARD B. CHENEY
   4
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, E. Virgil Conway, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ E. Virgil Conway
                                              -----------------------------
                                                    E. VIRGIL CONWAY
   5
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Spencer F. Eccles, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Spencer F. Eccles
                                              -----------------------------
                                                    SPENCER F. ECCLES
   6
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Elbridge T. Gerry, Jr.,
a Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                           /s/ Elbridge T. Gerry, Jr.
                                               -----------------------------
                                                ELBRIDGE T. GERRY, JR.
   7
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, William H. Gray, III, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ William H. Gray, III
                                              -----------------------------
                                                    WILLIAM H. GRAY, III
   8
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Judith Richards Hope, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Judith Richards Hope
                                              -----------------------------
                                                    JUDITH RICHARDS HOPE
   9
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Richard J. Mahoney, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Richard J. Mahoney
                                              -----------------------------
                                                    RICHARD J. MAHONEY
   10
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, John R. Meyer, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ John R. Meyer
                                              -----------------------------
                                                    JOHN R. MEYER
   11
                                      UNION PACIFIC CORPORATION

                                          POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Thomas A. Reynolds,
Jr., a Director of Union Pacific Corporation, a Utah corporation (the
"Corporation"), do hereby appoint Richard K. Davidson, L. White Matthews, III,
Carl W. von Bernuth and Thomas E. Whitaker, and each of them acting
individually, as my true and lawful attorney-in-fact, each with power to act
without the other in full power of substitution, to execute, deliver and file,
for and on my behalf, and in my name and in my capacity as a Director, a
Registration Statement on Form S-3 (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 issuance of debentures, notes, and other
debt obligations, preferred stock, common stock issuable upon exchange or
conversion of debt obligations or preferred stock which, by their terms, are
exchangeable for or convertible into common stock, warrants or rights to
purchase debt obligations or preferred stock, and foreign exchange warrants, in
a principal amount up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, 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 I might or could do personally
or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Thomas A. Reynolds, Jr.
                                              -----------------------------
                                                    THOMAS A. REYNOLDS, JR.
   12
                            UNION PACIFIC CORPORATION

                                POWER OF ATTORNEY

                  KNOW ALL MEN BY THESE PRESENTS THAT I, Richard D. Simmons, a
Director of Union Pacific Corporation, a Utah corporation (the "Corporation"),
do hereby appoint Richard K. Davidson, L. White Matthews, III, Carl W. von
Bernuth and Thomas E. Whitaker, and each of them acting individually, as my true
and lawful attorney-in-fact, each with power to act without the other in full
power of substitution, to execute, deliver and file, for and on my behalf, and
in my name and in my capacity as a Director, a Registration Statement on Form
S-3 (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
issuance of debentures, notes, and other debt obligations, preferred stock,
common stock issuable upon exchange or conversion of debt obligations or
preferred stock which, by their terms, are exchangeable for or convertible into
common stock, warrants or rights to purchase debt obligations or preferred
stock, and foreign exchange warrants, in a principal amount up to $3,000,000,000
(or the equivalent in foreign denominated currency), of the Corporation, 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 I might or could do personally or in my 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, I have executed this Power of Attorney as
of February 26, 1998.

                                              /s/ Richard D. Simmons
                                              -----------------------------
                                                    RICHARD D. SIMMONS

   1
                                                                    Exhibit 25.1

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                              SECTION 305(b)(2) [ ]

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

48 Wall Street, New York, N.Y.                               10286
(Address of principal executive offices)                     (Zip code)

                            UNION PACIFIC CORPORATION
               (Exact name of obligor as specified in its charter)

Utah                                                         13-2626465
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

1717 Main Street
Suite 5900
Dallas, Texas                                                75201-4605
(Address of principal executive offices)                     (Zip code)

                   Convertible Junior Subordinated Debentures
                       (Title of the indenture securities)
   2
1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
                  WHICH IT IS SUBJECT.

                  Name                                        Address

         Superintendent of Banks of the State of   2 Rector Street, New York,
         New York                                  N.Y.  10006, and Albany, N.Y.
                                                   12203

         Federal Reserve Bank of New York          33 Liberty Plaza, New York,
                                                   N.Y.  10045

         Federal Deposit Insurance Corporation     Washington, D.C.  20429

         New York Clearing House Association       New York, New York   10005

         (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.       AFFILIATIONS WITH OBLIGOR.

         IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
         AFFILIATION.

         None.

16.      LIST OF EXHIBITS.

         EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
         ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
         RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
         C.F.R. 229.10(d).

         1.       A copy of the Organization Certificate of The Bank of New York
                  (formerly Irving Trust Company) as now in effect, which
                  contains the authority to commence business and a grant of
                  powers to exercise corporate trust powers. (Exhibit 1 to
                  Amendment No. 1 to Form T-1 filed with Registration Statement
                  No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
                  Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
                  filed with Registration Statement No. 33-29637.)

         4.       A copy of the existing By-laws of the Trustee. (Exhibit 4 to
                  Form T-1 filed with Registration Statement No. 33-31019.)

                                      -2-
   3
         6.       The consent of the Trustee required by Section 321(b) of the
                  Act. (Exhibit 6 to Form T-1 filed with Registration Statement
                  No. 33-44051.)

         7.       A copy of the latest report of condition of the Trustee
                  published pursuant to law or to the requirements of its
                  supervising or examining authority.

                                       -3-
   4
                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of April, 1998.

                               THE BANK OF NEW YORK

                               By:       /s/ Walter N. Gitlin
                                  -------------------------------
                                  Name:  Walter N. Gitlin
                                  Title: Vice President

                                      -4-
   5
                      Consolidated Report of Condition of
                              THE BANK OF NEW YORK                    Exhibit 7
                    of 48 Wall Street, New York, N.Y. 10286

         And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1997, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.

                                                                                              Dollar Amounts
ASSETS                                                                                          in Thousands
                                                                                        
Cash and balances due from depos-
  itory institutions:
  Noninterest-bearing balances and
   currency and coin .........................                                                   $ 5,742,986
  Interest-bearing balances ..................                                                     1,342,769
Securities:
  Held-to-maturity securities ................                                                     1,099,736
  Available-for-sale securities ..............                                                     3,882,686
Federal funds sold and Securities pur-
  chased under agreements to resell...........                                                     2,568,530
Loans and lease financing
  receivables:
  Loans and leases, net of unearned
    income ...................................   35,019,608
  LESS: Allowance for loan and
    lease losses .............................      627,350
  LESS: Allocated transfer risk
    reserve...................................            0
  Loans and leases, net of unearned
    income, allowance, and reserve ...........                                                    34,392,258
Assets held in trading accounts ..............                                                     2,521,451
Premises and fixed assets (including
  capitalized leases) ........................                                                       659,209
Other real estate owned ......................                                                        11,992
Investments in unconsolidated
  subsidiaries and associated
  companies ..................................                                                       226,263
Customers' liability to this bank on
  acceptances outstanding ....................                                                     1,187,449
Intangible assets ............................                                                       781,684
Other assets .................................                                                     1,736,574
                                                                                                 -----------
Total assets .................................                                                   $56,153,587
                                                                                                 ===========
LIABILITIES
Deposits:
  In domestic offices ........................                                                   $27,031,362
  Noninterest-bearing ........................   11,899,507
  Interest-bearing ...........................   15,131,855
  In foreign offices, Edge and
  Agreement subsidiaries, and IBFs ...........                                                    13,794,449
  Noninterest-bearing ........................      590,999
  Interest-bearing ...........................   13,203,450
Federal funds purchased and Securities
  sold under agreements to repurchase ........                                                     2,338,881
Demand notes issued to the U.S.
  Treasury ...................................                                                       173,851
Trading liabilities ..........................                                                     1,695,216
Other borrowed money:
  With remaining maturity of one year
    or less ..................................                                                     1,905,330
  With remaining maturity of more than
    one year through three years..............                                                             0
  With remaining maturity of more than
    three years ..............................                                                        25,664
Bank's liability on acceptances exe-
  cuted and outstanding ......................                                                     1,195,923
Subordinated notes and debentures ............                                                     1,012,940
Other liabilities ............................                                                     2,018,960
                                                                                                 -----------
Total liabilities ............................                                                    51,192,576
                                                                                                 -----------
EQUITY CAPITAL
Common stock .................................                                                     1,135,284
Surplus ......................................                                                       731,319
Undivided profits and capital
  reserves ...................................                                                     3,093,726
Net unrealized holding gains
  (losses) on available-for-sale
  securities .................................                                                        36,866
Cumulative foreign currency transla-
  tion adjustments ...........................                                                       (36,184)
                                                                                                 -----------
Total equity capital .........................                                                     4,961,011
                                                                                                 -----------
Total liabilities and equity
  capital ....................................                                                   $56,153,587
                                                                                                 ===========

      I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Robert E. Keilman

      We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

      Thomas A. Renyi     }
      Alan R. Griffith    } Directors
      J. Carter Bacot     }
                          
   1
                                                                    Exhibit 25.2

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                              SECTION 305(b)(2) [ ]

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

48 Wall Street, New York, N.Y.                               10286
(Address of principal executive offices)                     (Zip code)

                            UNION PACIFIC CORPORATION
               (Exact name of obligor as specified in its charter)

Utah                                                         13-2626465
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

1717 Main Street
Suite 5900
Dallas, Texas                                                75201-4605
(Address of principal executive offices)                     (Zip code)

                      Guarantee of Preferred Securities of
                           Union Pacific Capital Trust
                       (Title of the indenture securities)
   2
1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
                  WHICH IT IS SUBJECT.

                  Name                                        Address

         Superintendent of Banks of the State of   2 Rector Street, New York,
         New York                                  N.Y.  10006, and Albany, N.Y.
                                                   12203

         Federal Reserve Bank of New York          33 Liberty Plaza, New York,
                                                   N.Y.  10045

         Federal Deposit Insurance Corporation     Washington, D.C.  20429

         New York Clearing House Association       New York, New York   10005

         (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.       AFFILIATIONS WITH OBLIGOR.

         IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
         AFFILIATION.

         None.

16.      LIST OF EXHIBITS.

         EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
         ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
         RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
         C.F.R. 229.10(d).

         1.       A copy of the Organization Certificate of The Bank of New York
                  (formerly Irving Trust Company) as now in effect, which
                  contains the authority to commence business and a grant of
                  powers to exercise corporate trust powers. (Exhibit 1 to
                  Amendment No. 1 to Form T-1 filed with Registration Statement
                  No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
                  Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
                  filed with Registration Statement No. 33-29637.)

         4.       A copy of the existing By-laws of the Trustee. (Exhibit 4 to
                  Form T-1 filed with Registration Statement No. 33-31019.)

                                      -2-
   3
         6.       The consent of the Trustee required by Section 321(b) of the
                  Act. (Exhibit 6 to Form T-1 filed with Registration Statement
                  No. 33-44051.)

         7.       A copy of the latest report of condition of the Trustee
                  published pursuant to law or to the requirements of its
                  supervising or examining authority.

                                       -3-
   4
                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of April, 1998.

                              THE BANK OF NEW YORK

                              By:      /s/ Walter N. Gitlin
                                 -----------------------------
                                 Name:     Walter N. Gitlin
                                 Title:    Vice President

                                      -4-
   5
                      Consolidated Report of Condition of
                              THE BANK OF NEW YORK                    Exhibit 7
                    of 48 Wall Street, New York, N.Y. 10286

         And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1997, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.

                                                                                              Dollar Amounts
ASSETS                                                                                          in Thousands
                                                                                        
Cash and balances due from depos-
  itory institutions:
  Noninterest-bearing balances and
   currency and coin .........................                                                   $ 5,742,986
  Interest-bearing balances ..................                                                     1,342,769
Securities:
  Held-to-maturity securities ................                                                     1,099,736
  Available-for-sale securities ..............                                                     3,882,686
Federal funds sold and Securities pur-
  chased under agreements to resell...........                                                     2,568,530
Loans and lease financing
  receivables:
  Loans and leases, net of unearned
    income ...................................   35,019,608
  LESS: Allowance for loan and
    lease losses .............................      627,350
  LESS: Allocated transfer risk
    reserve...................................            0
  Loans and leases, net of unearned
    income, allowance, and reserve ...........                                                    34,392,258
Assets held in trading accounts ..............                                                     2,521,451
Premises and fixed assets (including
  capitalized leases) ........................                                                       659,209
Other real estate owned ......................                                                        11,992
Investments in unconsolidated
  subsidiaries and associated
  companies ..................................                                                       226,263
Customers' liability to this bank on
  acceptances outstanding ....................                                                     1,187,449
Intangible assets ............................                                                       781,684
Other assets .................................                                                     1,736,574
                                                                                                 -----------
Total assets .................................                                                   $56,153,587
                                                                                                 ===========
LIABILITIES
Deposits:
  In domestic offices ........................                                                   $27,031,362
  Noninterest-bearing ........................   11,899,507
  Interest-bearing ...........................   15,131,855
  In foreign offices, Edge and
  Agreement subsidiaries, and IBFs ...........                                                    13,794,449
  Noninterest-bearing ........................      590,999
  Interest-bearing ...........................   13,203,450
Federal funds purchased and Securities
  sold under agreements to repurchase ........                                                     2,338,881
Demand notes issued to the U.S.
  Treasury ...................................                                                       173,851
Trading liabilities ..........................                                                     1,695,216
Other borrowed money:
  With remaining maturity of one year
    or less ..................................                                                     1,905,330
  With remaining maturity of more than
    one year through three years..............                                                             0
  With remaining maturity of more than
    three years ..............................                                                        25,664
Bank's liability on acceptances exe-
  cuted and outstanding ......................                                                     1,195,923
Subordinated notes and debentures ............                                                     1,012,940
Other liabilities ............................                                                     2,018,960
                                                                                                 -----------
Total liabilities ............................                                                    51,192,576
                                                                                                 -----------
EQUITY CAPITAL
Common stock .................................                                                     1,135,284
Surplus ......................................                                                       731,319
Undivided profits and capital
  reserves ...................................                                                     3,093,726
Net unrealized holding gains
  (losses) on available-for-sale
  securities .................................                                                        36,866
Cumulative foreign currency transla-
  tion adjustments ...........................                                                       (36,184)
                                                                                                 -----------
Total equity capital .........................                                                     4,961,011
                                                                                                 -----------
Total liabilities and equity
  capital ....................................                                                   $56,153,587
                                                                                                 ===========

      I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Robert E. Keilman

      We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

      Thomas A. Renyi     }
      Alan R. Griffith    } Directors
      J. Carter Bacot     }
                          
   1
                                                                    Exhibit 25.3

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) [ ]

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

48 Wall Street, New York, N.Y.                               10286
(Address of principal executive offices)                     (Zip code)

                           UNION PACIFIC CAPITAL TRUST
               (Exact name of obligor as specified in its charter)

Delaware                                                     75-6521817
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

1717 Main Street
Suite 5900
Dallas, Texas                                                75201-4605
(Address of principal executive offices)                     (Zip code)

                     6 1/4% Convertible Preferred Securities
                       (Title of the indenture securities)
   2
1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
                  WHICH IT IS SUBJECT.

                  Name                                        Address

         Superintendent of Banks of the State of   2 Rector Street, New York,
         New York                                  N.Y.  10006, and Albany, N.Y.
                                                   12203

         Federal Reserve Bank of New York          33 Liberty Plaza, New York,
                                                   N.Y.  10045

         Federal Deposit Insurance Corporation     Washington, D.C.  20429

         New York Clearing House Association       New York, New York   10005

         (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.       AFFILIATIONS WITH OBLIGOR.

         IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
         AFFILIATION.

         None.

16.      LIST OF EXHIBITS.

         EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
         ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
         RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
         C.F.R. 229.10(d).

         1.       A copy of the Organization Certificate of The Bank of New York
                  (formerly Irving Trust Company) as now in effect, which
                  contains the authority to commence business and a grant of
                  powers to exercise corporate trust powers. (Exhibit 1 to
                  Amendment No. 1 to Form T-1 filed with Registration Statement
                  No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
                  Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
                  filed with Registration Statement No. 33-29637.)

         4.       A copy of the existing By-laws of the Trustee. (Exhibit 4 to
                  Form T-1 filed with Registration Statement No. 33-31019.)

                                      -2-
   3
         6.       The consent of the Trustee required by Section 321(b) of the
                  Act. (Exhibit 6 to Form T-1 filed with Registration Statement
                  No. 33-44051.)

         7.       A copy of the latest report of condition of the Trustee
                  published pursuant to law or to the requirements of its
                  supervising or examining authority.

                                       -3-
   4
                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of April, 1998.

                              THE BANK OF NEW YORK

                              By:      /s/ Walter N. Gitlin
                                 -----------------------------
                                 Name:     Walter N. Gitlin
                                 Title:    Vice President

                                      -4-
   5
                      Consolidated Report of Condition of
                              THE BANK OF NEW YORK                     Exhibit 7
                    of 48 Wall Street, New York, N.Y. 10286

         And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1997, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.

                                                                                              Dollar Amounts
ASSETS                                                                                          in Thousands
                                                                                        
Cash and balances due from depos-
  itory institutions:
  Noninterest-bearing balances and
   currency and coin .........................                                                   $ 5,742,986
  Interest-bearing balances ..................                                                     1,342,769
Securities:
  Held-to-maturity securities ................                                                     1,099,736
  Available-for-sale securities ..............                                                     3,882,686
Federal funds sold and Securities pur-
  chased under agreements to resell...........                                                     2,568,530
Loans and lease financing
  receivables:
  Loans and leases, net of unearned
    income ...................................   35,019,608
  LESS: Allowance for loan and
    lease losses .............................      627,350
  LESS: Allocated transfer risk
    reserve...................................            0
  Loans and leases, net of unearned
    income, allowance, and reserve ...........                                                    34,392,258
Assets held in trading accounts ..............                                                     2,521,451
Premises and fixed assets (including
  capitalized leases) ........................                                                       659,209
Other real estate owned ......................                                                        11,992
Investments in unconsolidated
  subsidiaries and associated
  companies ..................................                                                       226,263
Customers' liability to this bank on
  acceptances outstanding ....................                                                     1,187,449
Intangible assets ............................                                                       781,684
Other assets .................................                                                     1,736,574
                                                                                                 -----------
Total assets .................................                                                   $56,153,587
                                                                                                 ===========
LIABILITIES
Deposits:
  In domestic offices ........................                                                   $27,031,362
  Noninterest-bearing ........................   11,899,507
  Interest-bearing ...........................   15,131,855
  In foreign offices, Edge and
  Agreement subsidiaries, and IBFs ...........                                                    13,794,449
  Noninterest-bearing ........................      590,999
  Interest-bearing ...........................   13,203,450
Federal funds purchased and Securities
  sold under agreements to repurchase ........                                                     2,338,881
Demand notes issued to the U.S.
  Treasury ...................................                                                       173,851
Trading liabilities ..........................                                                     1,695,216
Other borrowed money:
  With remaining maturity of one year
    or less ..................................                                                     1,905,330
  With remaining maturity of more than
    one year through three years..............                                                             0
  With remaining maturity of more than
    three years ..............................                                                        25,664
Bank's liability on acceptances exe-
  cuted and outstanding ......................                                                     1,195,923
Subordinated notes and debentures ............                                                     1,012,940
Other liabilities ............................                                                     2,018,960
                                                                                                 -----------
Total liabilities ............................                                                    51,192,576
                                                                                                 -----------
EQUITY CAPITAL
Common stock .................................                                                     1,135,284
Surplus ......................................                                                       731,319
Undivided profits and capital
  reserves ...................................                                                     3,093,726
Net unrealized holding gains
  (losses) on available-for-sale
  securities .................................                                                        36,866
Cumulative foreign currency transla-
  tion adjustments ...........................                                                       (36,184)
                                                                                                 -----------
Total equity capital .........................                                                     4,961,011
                                                                                                 -----------
Total liabilities and equity
  capital ....................................                                                   $56,153,587
                                                                                                 ===========

      I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Robert E. Keilman

      We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

      Thomas A. Renyi     }
      Alan R. Griffith    } Directors
      J. Carter Bacot     }