0. /I \\ ^2_^^ f^.^%..Jl^^s^^ Cl^^ f c:tK ^{^U^ \^ \ lY^^ , •Vj^VvkJh . J v\S..^ y I I I To the Security Holders of the Union Pacific Main Lines Proper^ inclusive of the Kansas Pacific Line : The system of the Union Pacific Eailway Co. having become dismembered, and the holders of the securities of the branch lines having already taken steps for their own protection, it has become evident that the holders of the various kinds of bonds secured upon the main stem of the Union Pacific Railway Co., including the Kansas Pacific line, must combine in order to protect themselves. The main difficulty in effecting a prompt reorganization of the Union Pacific Railway Co. proper, is in the impracticability thus far experienced of reaching a settlement with the United States Government, which holds a second lien upon the Union Division from Omaha to a point 5 miles west of Ogden, 1,038 miles, and on the Kansas Division from Kansas City (exclusive of the Kansas City, Missouri, terminals) west to the 394:th Mile Post in Kansas ; but which has no lien upon that part of the Kansas Pacific line between the 394:th Mile Post and Denver, 245 miles, nor on the Leavenworth Branch, Leavenworth'to Lawrence Junction, 32 miles, nor on the Cheyenne Division, Denver to Cheyenne, 104 miles. Congress having thus far been unwilling to pass any legislation authorizing a settlement, it becomes imperatively necessary on the part of the holders of the First Mortgage Bonds, of which part have already matured, and all of which will mature within the next few years, to combine for an enforcement of their prior lien. Eminent counsel have advised that the lien of the First Mortgage Bonds may be effectively foreclosed ; and while it is very desirable to make a settlement with the United States Government, and to continue efforts in this direction, further delay on the part of the First Mortgage Bondholders in protecting themselves by securing their M115232 ;lpgp.l ti^atA wooilii be likely to become dangerous and to result in loss. ' ;.' Vixhfe uader3igned have been asked by large interests to formulate and proceed with a reorganization, which shall at once secure to the holders of the First Mortgage and other bonds requiring considera- tion in reorganization a full return in new securities of the successor Company with fixed charges based upon the lowest results from the operation of the main line, and the Kansas Pacific and Denver Pa- cific lines which have been obtained during the times of the great- est depression. A Plan is submitted herewith to the consideration of the security holders, which, it is believed, fully carries this pur- pose into efiect, and at the same time secures to First Mortgage Bondholders the payment of the matured and maturing interest until it shall become practicable to carry out the reorganization. Should this end, contrary to expectation, not be attained, the bonds which holders are requested to deposit without delay will be returned without expense. Prompt action on the part of bondholders in uniting being im- perative, the time during which deposits can be made has been lim- ited to December 31st, 1895, after which date no bonds will be admitted, unless otherwise determined, except upon the payment of a penalty of five per cent. Stockholders must likewise deposit their share-certificates, prop- erly endorsed, prior to December 31st, 1895, but will not be required to pay any part of the assessment of $15 a share until the same is called for hereafter by the Committee after the Plan shall have been declared operative. Upon stock deposited after December 31st, 1896, the assessment will be at the rate of $20 a share, unless otherwise determined, $5 of which shall be payable at the time of deposit, as a penalty. In case the reorganization is abandoned, without having been de- clared operative, holders of receipts will receive back the shares to which they are entitled, without expense to them, on surrender of their receipts, properly endorsed, at the Depositaries which issued them. Deposits may be made at any of the Depositaries on and after November 1, 1895, from which date matured coupons on First Mortgage Bonds will be cashed as provided in the Plan. The Committee may at any time after December 31, 1895, alter the penalties above specii&ed or decline to receive further deposits of bonds or stock. The Mercantile Trust Company of New York has been designated as the Central Depositary both for the bonds and the stock (with auxiliary Depositaries as set forth in the Plan), and will issue en- graved Certificates of Deposit, for the listing of which application will be made to the New York Stock Exchange at the proper time. Temporary receipts will be issued in exchange for securities depos- ited until the engraved Certificates shall be ready. Protective Committees already organized in the interests of the holders of either of the classes of bonds embraced in the Plan are invited to confer and co-operate with this Committee in respect to such interests. New York, October 15, 1895. Louis Fitzgerald, Jacob H. Schiff, T. Jefferson Coolidge, Jr., Chauncey M. Depew, Marvin Hughitt, Oliver Ames, 2nd, Committee. RKORGANI^ATTION OP THE UNION PACIFIC RAILWAY COMPANY. STATEMENT. Mileage : The main lines of the Union Pacific Eailway Company are as follows : Union Division — Council Bluffs to a point 5 miles west of Ogden 1,048.01 miles Kansas Division — Kansas City to Denver _ 643.55 " Leavenworth Branch — Lawrence to Leavenworth-. 31.93 " Cheyenne Division — Denver to Cheyenne 104.10 " Total main line mileage 1,827.59 " Lands : The outstanding land and town lot contracts on December 31st 1894, were as follows : Union Division $2,727,480 27 Kansas Pacific and Denver Pacific Divisions 3,435,271 28 Total ....- $6,162,751 55 It is believed that a considerable amount of these contracts, will as a result of the recent industrial depression, be cancelled, in which event the figures in the following table should be correspondingly increased. The acreage and estimated value of unsold Land Grant lands, excluding those under contract, on December 31st, 1894, were as follows : Division. Acres. Estimated Value. Union -_ _ _ _ 3,345,000 3,179,000 $3,157,000 Kansas Pacific and Denver Pacific. 10,201,500 Total _ 6,524,000 $13,358,500 Funded Debt (Oct. 1, 1895) : Union Division : Union Pacific First Mortgage 6s. $27,229,000, due Jan. 1, 1896-1899 Land Grant 7s 7,000, " AprH 1, 1889 Sinking Fund 8s. 3,730,000, " Sept. 1, 1899 " Omaha Bridge 8s__ 608,000, " April 1, 1896 " Omaha Bridge Re- newal 5s 1,056,000, " Oct. 1, 1915 Collateral Trust 6s 3,626,000, " July 1, 1908 Collateral Trust 5s 4,677,000, " Dec. 1, 1907 Collateral Trust 4^s 2,030,000, " Nov. 1, 1918 Equipment Trust 5s 1,149,000, " 1896 to 1900 Collateral Trust Notes 6s 8,610,000, " Aug. 1, 1894 n3 o « QD Us '^ 9 ^ $52,622,000 Kansas Pacific and Cheyenne Divisions and Leavenworth Branch. Eastern Division 6s $2,240,000, due Aug. 1 Middle Division 6s _ 4,063,000, " June 1 Denver Extension 6s 6,887,000, " May 1 Kansas Pacific Consolidated 6s 11,724,000, " May 1 Kansas Pacific Income 7s 263,700," July 1 " subordinated 7s 4,011,650, " July 1 Kansas Division and Collateral 5s 5,000,000, " May 1 Denver Pacific First Mortgage 7s 975,000, " May 1 Leavenworth Branch First Mtge. 7s -- 600,000, " Jan. 1 1895 1896 1899 1919 1916 1916 1921 1899 1896 $34,764,350 ♦Indebtedness to the Government: For principal _ _$33,539,512, due Nov. 1, 1895 to Jan. 1, 1899 For interest (approximately, after deducting estimated value of the Sinking Fund) 19,500,000 $53,039,512 Total Funded Debt $140,425,862 Capital Stock : The capital stock of The Union Pacific Kailway Com- pany outstanding is -_$60,868,500 * Note. The lien of the Government for the security of this debt is a second lien subordinate to the lien of the First Mortgage bonds on the Union Division, and of the Eastern and Middle Division bonds on 394 miles of the Kansas Division. The proportions of the Principal of the debt ($33,539,512) applicable to the Union and Kansas Divisions, respectively, are as follows : Union Division debt to the Government $37,236,513 Kansas Division " '♦ " 6,303,000 8 Fixed Charges. The interest on the debt to the United States (Principal $33,- 539,512) has been an accumulating obligation, diminished only by application of withheld compensation for Government service and by Sinking Fund receipts. The accumulated interest, now aggregat- ing, after all deductions, more than $19,000,000, will mature, it is claimed, with the maturity of the principal of the debt which now impends. In the following table, which states the fixed charges of the Union Pacific Railway Company (proper) for each of the five years from 1890 to 1894, inclusive, the following liabilities are not in- cluded : 1. The excess of interest on the debt to the Government over the percentage of net earnings applicable to it under the Thur- man and other Acts.* 2. Interest on bonds held in main line mortgage Trusts under conversion provisions. 3. The obligations under guaranties, determined by the deficit in the operations of auxiliary lines to meet interest or provide the traffic receipts guaranteed by the Union Pacific Railway Company. Fixed charges or deductions from net earnings : Interest on bonds. Sinking Funds. Government requirements. Total charges. 1890 1891 1892 1893 1894 $4,613,097 85 4,782,230 29 6.371,587 40 4,902,594 03 4,767,613 8L $705,458 75 708,332 50 705,172 50 666,182 50 677,685 00 $1,041,153 43 1,278,488 82 1,338,044 37 1,203,303 73 1,249,061 46 $6,359,710 03 6,769,051 61 7,414,804 27 6,772,080 26 6,694,360 27 Average charges as above for five years $6,802,001.28 * Note. The annual interest charge accumulating on this debt is $2,013,370.73 less the deductions above explained. Earnings ; The following table shows the gross and net earnings resulting from the operation of the Union Pacific Main Lines (exclusive of the Company's income from other sources) for each of the 10 years from 1885 to 1894, inclusive. Year. Gross Earnings. Net Earnings, Taxes Deducted. 1885 $17,455,031 51 $8,404,676 31 1886 17,806,132 59 7,522,707 02 1887 19,546,088 62 9,111,886 85 1888 19,898,816 93 8,119,468 16 1889 19,775,555 84 8,286,679 63 1890 20,438,208 36 7,274,759 06 1891 19,687,738 48 7,846,451 70 1892 20,361,401 66 8,550,268 22 1893 17,376,792 11 6,204,716 81 1894 14,739,436 76 4,315,077 25 Average net earnings for ten years $7,563,669 10 General Considerations : 1. The mortgage debt for which provision is made in the follow- ing Plan for Eeorganization is exclusive of main-line bonds held in Trusts or Sinking Funds under Mortgages included in the proposed reorganization — the issues being reduced, to that extent, for reorgan- ization purposes. The bonds thus available under new plan without the necessity for provision in new securities, are as follows : Omaha Bridge Eenewal 5% Bonds (held by the Keceivers) $322,000 Eastern Division bonds (held in Denver Extension Sink- ing Fund) $304,000 Middle Division bonds (held in Denver Extension Sinking Fund) _ _ ..._ 385,000 10 Denver Extension bonds (held in Denver Extension Sink- ing Fund) - 1,781,000 Kansas Pacific Consols, (held in Kansas Pacific Further Security Trust and by the Keceivers) 120,000 Kansas Pacific Income 7s, unsubordinated (held in Kansas Pacific Consolidated Mortgage Trust) 252,300 Kansas Pacific Income 7s, subordinated (held in Kansas Pacific Consolidated Mortgage Trust) 3,988,550 Denver Pacific First Mortgage 7s (held in Kansas Pacific Consolidated Mortgage Trust) 971,000 Leavenworth Branch First Mortgage 7s (held in Kansas Pacific Consolidated Mortgage Trust) 585,000 2. Nor does the reorganization include provision for the Col- lateral Trust obligations of The Union Pacific Eailway Company. The securities embraced in these Trusts are largely those of companies which have already, by orders of court made in the original general receivership cause or in independent foreclosure proceedings, lost in part or in whole their character as portions of what has been dis- tinctively known as the Union Pacific System. Independent reor- ganizations of many of these properties are pending. The purposes which brought into existence guaranties of the obligations of many of these auxiliary companies have been accomplished by construction and otherwise, and considerations will not exist under reorganization for continued relations with these properties upon the basis of an assumption of any of their fixed charges. Geographical conditions and considerations of mutual advantage point to a continued operation of such of these auxiliary properties as have had a demonstrated value, in harmony with that of the reorganized Company, and relief from the burden of these guaranties will, it is believed, be an ad- vantage obtained without detriment to the earning capacity of the property. 3. The total charges for the prosperous year of 1892 (including interest on fixed bonds, mortgage sinking funds, Government deduc- 11 tions and requirements, and other charges made up in large part of guaranty obligations), aggregated the sum of $7,881,475.44 ; or a sum greater by $881,475.44 than an amount necessary to pay the annual interest on the maximum Mortgage Debt and full dividend on the maximum issue of Preferred Stock contemplated in the fol- lowing plan of reorganization : The maximum interest and dividend requirements under the Plan applied to the average annual net earnings of the past 10 years shows these results : NET EARNINGS. Average Net Earnings of Union Pacific Kailway (proper) for 10 years, 1885 to 1894, inclusive $7,563,669 INTEREST AND DIVIDENDS. Annual Interest on the maximum issue of $100,000,000 Four Per Cent. Bonds under following plan _ _ _ $4,000,000 Annual Four Per Cent. Dividend on the maximum issue of $75,000,000 Preferred Stock 3.000,000 Interest and Dividends on Preferred Stock. _ $7,000,000 Average Surplus over Interest and Full Dividends on Preferred Stock _ 563,669 NOTE : 2 he lowest net earnings realized by the Union Pacific Raihoay were those of the year 189 J/,, when they were %Ji,,315ft77£5, or %3 15,077.^5 in excess of interest on the ma/ximum amount of bonds as jproposed in the following Plan. 12 ^ PLAN It is proposed, through such foreclosure proceedings as the Committee shall cause to be instituted or shall adopt, or through such other means as the Committee shall determine, that a new company shall succeed to (or that the present company reorganized upon the basis of indebtedness fixed in this plan shall retain) the main lines and lands covered by the mortgages included in the plan. The New Company shall issue the following New Securities : First Mortgage Railway and Laud Grant Fifty Year Four Percent. Gold Bonds $100,000,000 Four per cent, preferred stock 75,000,000 Common Stock .__ 61,000,000 New Bonds: The new bonds shall be dated January 1, 1897, and shall bear interest from that date payable on the first days of each January and July thereafter until maturity. They shall be secured by a First Mortgage lien upon all the main line mileage of The Union Pacific Railway Company, upon the equipment acquired by the new com- pany and upon the unsold lands and the land contracts embraced in the trusts of the Union Pacific Land Grant and Sinking Fund Mortgages, the Denver Extension First Mortgage, the Kansas Pacific Consolidated First Mortgage and the Denver Pacific First Mortgage, and upon such branch lines of railway as the Committee shall avail of through the ownership of branch line bonds in the trust of the Kansas Pacific Consolidated First Mortgage. New Pbeferred Stock: The new preferred stock shall be entitled to Four per cent, non- cumulative dividends, payable out of the net or surplus earnings of the Reorganized Company before the payment of any dividend on the Common Stock. The following will be the 13 BISTRIBUTION OF "STEW COMPANY'S SECURITIES. For Union Division Debt : 1. Union Pacific First Mortgage 6'8 *2. Land Grant 7'8 3. Sinking FundS's 4. Omaha Bridge 8's 5. " " Renewals, 5'3... For Kansas Division Debt : 1. Eastern Division 6's 2. Middle '• 6's 3. Denver Extension First 6's. ... 4. Consolid. First Mge. 6's t " '* Defaulted In- terest 5. Income 7's (unsubordinated)... 6. " " (subordinated) 7. Leavenworth Branch 7's 8. Denver Pacific First 7's 9. Kansas Division and Collateral Mortgage 5'8 Assessment on Common Stock In Fxchange for Common Stock of Union Pacific Railway Company on Wliich Assessment is Paid Under the Plan For Compensation to Reor- granization Syndicate and Bankers For Total Defined Issues for Re- org^anization Purposes Reserved to Dispose of Equipment Obligations and for Reorganization and Corporate Uses Balance Reserved for Settle- ment of the Debt to the United States and for Ex- traordinary Requirements New 4% 50- Year Gold Bonds. 0/ 100 100 100 100 100 100 100 80 Amount. $27,229,000 3,780,000 508,000 734,000 1,936,000 3,678,000 4,106,000 9,283,200 8,880 16,440 12,000 3,200 $51,244,720 $13,000,000 35,755,280 New Preferred Stock. At 50 50 50 50 50 25 50 50 50 50 60 100 Amount. $13,614,500 1,865,000 254,000 183,500 968,000 1,839,000 2,053,000 5,803,000 2,901,000 5,550 10,275 7,500 2,000 2,500,000 9,130,275 6,000,000 $47,135,600 $7,000,000 20,864,400 New Common Stock. V xb Amount. $60,868,500 $60,868,500 $131,500 * The Union Trust Company of New York. Trustee under the Land Grant Mortgage, has funds in hand with which to pay the $7,000 outstanding bonds. t Should a greater or less amount of interest than that here estimated be in default on these bonds at the date from which the new bonds bear interest, the provision in Preferred Stock will be varied accordingly so as to equal in amount such defaulted interest. Interest received by the Committee on deposited bonds of this class will be accounted for to the holders of corresponding Certificates of Deposit. 14 Cash Provisions for First Mortgage Bonds. Through arrangements made with the Syndicate hereafter men- tioned, the following cash provisions are made in respect to de- faulted and future interest on present outstanding First Mortgage bonds of the Union Pacific and Kansas Pacific Kailway Companies, as shown in detail below. First. The coupons now in default upon present First Mortgage bonds are to be purchased in cash for account of the Syndicate at the time of the deposit with the Committee of the bonds to which they pertain. Second. Coupons maturing on deposited First Mortgage bonds in the interval between the deposit thereof under the plan and the date from which bonds of the new company are to bear interest (January 1st, 1897), are to be purchased by the Syndicate from the Committee, which in turn shall apply the amounts so received, at the respective due dates of the coupons, to the payment of corre- sponding installments on its outstanding certificates applicable to such deposited bonds. Third. At the time of the issue of the new Four Per Cent, bonds the difference between the interest at their rate and at the rate of the present First Mortgage bonds {i. e., the rate difference of 2%) shall be adjusted in cash covering the periods between January 1st, 1897, and the respective dates of the maturity of the present bonds. The proportion of the current semi-annual interest installments which shall have accrued on January ] st, 1897, on such of said bonds as do not bear January coupons shall be likewise provided for in cash at the time of the delivery of the new bonds. The BONDS to which the foregoing cash provisions apply and the extent of the CASH REQUIREMENTS to meet these provisions, are thus shown : 15 Union Pacific First 6s: (Due in installments January 1, 1896, to January 1, 1899, inclusive.) Defaulted coupons of January 1 and July 1, 1895_._$1,633,74:0 Interest maturing, during pendency of plan, to and including January 1, 1897 2,450,610 Adjustment of interest as between rates of old and new bonds — 2 per cent, per annum, from Jan. 1, 1897, to maturity of old bonds : On $1,920,000 bonds, due July 1, 1897 $19,200 On $5,999,000 bonds, due January 1, 1898 119,980 On $8,837,000 bonds, due July 1, 1898 265,110 On $2,400,000 bonds, due January 1, 1899.. _ 96,000 500,290 Kansas Pacific, Eastern Division, First 6*s : (Matured August 1st, 1895.) Defaulted coupons of August, 1894, and February and August, 1895 201,600 Interest maturing during pendency of plan to Jan- uary 1st, 1897 , _ 190,400 Kansas Pacific, Middle Division, First 6^s: (Due June 1st, 1896.) Defaulted coupons of June Ist and December 1st, 1894, and June 1st, 1895 365,670 Interest maturing during pendency of plan to Janu- ary Ist, 1897 _ 385,985 Kansas Pacific, Denver Extension, First 6's : (Due May 1st, 1899.) Defaulted coupons of May 1st and November 1st, 1894, and May 1st and November 1st, 1895 _ _ 706,440 Interest maturing during pendency of plan to Janu- ary 1st, 1897 412,090 16 Adjustment of interest as between rates of old and new bonds — two per cent, from January 1st, 1897, to maturity of old bonds _ 274,727 $7,121,552 In all cases where the foregoing provisions apply to semi-annual interest installments not represented by coupons because of the prior maturity of the principal of the bonds, the Syndicate will take as- signments of such interest installments from holders presenting their bonds for deposit, or from the Committee"as to such bonds as shall have been deposited, and will hold and treat such assignments in the manner hereinafter provided with respect to coupons taken up by the Syndicate. Assessment. The common stock of the present Company will be assessed at the rate of $15 per share. Shareholders paying the assessment of $15 per share will receive the amount of the assessment (viz., $15 per share) in new preferred stock at par, and will also receive par of their present common stock in common stock of the new company. Shareholders who do not pay their assessments as called will forfeit their rights. The stock assessment will be underwritten be- fore the plan is declared operative. The proceeds of the assessment shall be applicable to the cash requirements of this plan as herein provided, and to such require- ments as shall be fixed and determined by the Committee, including such expenses and charges as it shall make or incur in the premises, and suitable compensation to the members of the Committee. The amount of this assessment shall be payable at such times and in such installments as the Committee shall determine after the plan has been declared operative, but not more than $5 per share shall be called in any consecutive thirty days. 17 Reorganization Syndicate. A Reorganization syndicate has been organized under the man- agement of Messrs., Kuhn, Loeb & Company, Bankers, to furnish the sum of Ten million dollars for the following purposes : 1. To purchase all the interest coupons on First Mort- gage bonds now in default. 2. To purchase as they shall mature hereafter the interest coupons on First Mortgage bonds and, also the semi-annual assignments of interest accruing on bonds already matured during the pendency of the Plan and until it shall become operative. 3. To purchase, if it shall be found advisable for the pro- motion of the reorganization, any outstanding First Mort- gage bonds and Omaha Bridge bonds, and to deposit the same under this plan ; and, if it shall be found advisable, to purchase all or any defaulted or future maturing coupons or interest assignments on Omaha Bridge bonds. Coupons and interest assignments purchased for account of the Syndicate shall be deposited in The Mercantile Trust Company of New York, which shall issue its certificates for the same to the Syn- dicate, or such other course shall be taken in respect thereto as shall be determined by the Committee and the Bankers to effect- ively and conveniently carry out this feature of the plan, and as will secure to the Syndicate all rights of the bondholders in and to the coupons and interest claims so purchased and in and to the lien and right of enforcement of the lien thereof. Such steps shall be taken in respect to all purchased coupons and interest assignments as will secure a valid claim for cumulative interest in favor of the Reorganization Syndicate. The right is reserved on behalf of the Committee, with the as- sent of the Bankers, to call for an increase of the amount required to be advanced by the Syndicate to Fifteen million dollars. 18 The Syndicate is to advance a sum not exceeding $100,000 for expenses repayable with six per cent, interest after the plan shall have been declared operative. All advances made by the Syndicate shall be re -payable to it in gold. Six Million Dollars of preferred stock are to be turned over as compensation to the Syndicate, of which the Bankers are to retain One Million as their own compensation. Limitations of Time. FoK Declaeing Plan Operative : The time for declaring this plan operative is to be limited to De- cember 31st, 1896, with the right on the part of the Committee to extend the time for six months — namely, to June 30th, 1897. Notice that the plan is operative shall be given by publication through each of the Depositaries hereinafter mentioned. For Deposit of Securities : The time for the deposit of bonds receivable under this plan and of the shares of stock of the present company is limited to December 31st, 1895, after which date no bonds will be admitted except upon the payment of a penalty of five per cent. Upon shares of stock de- posited after the time above limited (December 31st, 1895), the as- sessment will be at the rate of $20 a share. After the expiration of the Kmit of time the penalty of $5 a share will be payable at the time of deposit, and will not be refunded. Deposits may be made on and after November 1st, 1895. The Committee reserves the right at any time to alter the penalties above -specified or decHne to receive further deposits of bonds or stock. Should it in the opinion of the Committee appear desirable to make any substantial alterations in the foregoing plan, it shall make publication of such proposed alterations for at least twenty days, during which time the security holders, not approving of the pro- posed alterations, shall be permitted to surrender their certificates of deposit and withdraw their securities, upon refunding with six 19 per cent, interest the amounts advanced in purchase of the coupons and interest assignments on their respective bonds. Seourities receivable on deposit under this Plan. The following secubities will be received under this plan at either of the Depositaries hereinafter mentioned : BONDS. 1. Union Pacific Railuoad Company's First Mortgage Bonds. 2. Union Pacific Railroad Company's" Sinking Fund Mortgage Bonds. 3. Union Pacific Railroad Company's Omaha Bridge 8% Mortgage Bonds. 4. Union Pacific Railway Company's Omaha Bridge Renewal Bonds. 6. The Union Pacific Railway Company Kansas Division and Collateral Mortgage bonds. 6. (Kansas Pacific) Union Pacific, Eastern Division, First Mortgage bonds. 7. (Kansas Pacific) Union Pacific, Middle Division, First Mortgage bonds. 8. Kansas Pacific Railway Denver Extension First Mortgage Bonds. 9. Kansas Pacific Railway Consolidated First Mortgage Bonds. 10. Kansas Pacific Railway Income Bonds. 11. Leavenworth Branch Bonds. 12. Denver Pacific Railway and Telegraph First Mortgage Bonds. Also : STOCK. 13. The Certificates of Stock of the present Company. 20 Depositaries. THE MERCANTILE TRUST CO. OF NEW YORK. OLD COLONY TRUST CO., of Boston. BANK OF MONTREAL, of London. AMSTERDAMSCHE BANK, of Amsterdam. DEUTSCHE VEREINSBANK, of Frankfort-on-Main. Bonds and shares may be deposited by the holders thereof in either of the above-named Depositaries who shall issue their own negotiable certificates. After the plan has become operative, the Committee may order the transmission of securities deposited in any one of the Depositaries into the keeping of The Mercantile Trust Co. of New York, who shall constitute the central Deposi- tary, and who shall, thereupon, issue its own engraved certificates for the previously issued certificates of the branch or auxiliary De- positaries. Until the plan shall have been declared operative, depositors of bonds in either of the Depositaries may apply to have their bonds transferred to any other Depositary, upon payment of the expense thereof, and shall be entitled to the certificates of the last Deposi- tary upon the surrender of the certificates previously issued to such depositors. Holders of securities who shall have deposited the same in any one of the foreign auxiliary Depositaries shall, where such securities have had the foreign Government stamp attached, be entitled to receive the new securites likewise with the foreign Government stamp. For further particulars and powers of the Committee Depositors are referred to the agreement of which this plan is a part. 21 AGREEMKNTT. AN AGKEEMENT made this 15th day of October, 1895, be- tween Louis Fitzgerald, Jacob H. Schiff, T. Jeflferson Coolidge, Jr., Chauncey M. Depew, Marvin Hughitt, and Oliver Ames, 2d, parties of the first part, and herein called the " Committee," and holders of such bonds and stock of The Union Pacific Railway Com- pany as shall, conformably with the provisions of the annexed Plan and of this Agreement, be deposited as in said Plan and herein pro- vided, parties of the second part, and herein called " Depositors." Whereas, the parties of the first part have been and hereby are constituted a Committee for the reorganization of the affairs of The Union Pacific Railway Company proper, inclusive of its Kansas Pacific lines, and have formulated the annexed Plan for such reorganization : NOW THIS AGREEMENT WITNESSETH : That each and every person or party who shall have deposited with either of the Depositaries hereunder as hereinafter provided any bonds of the Union Pacific Railway Company receivable under 22 tbis Agreement, or any stock of said Company, hereby promises and agrees to and with the Committee and every other party hereto, and they and the Committee respectively promise and agree as follows : First. Printed copies of this Agreement, certified by a majority of the Committee and lodged respectively with the Depositaries,^ shall be held and taken as the original Agreement. The said Plan is, and shall be, taken to be a part of this Agreement, with the same effect as though each and every provisien thereof had been embodied herein, and said Plan and this Agreement shall be read as parts of one and the same instrument, but it is understood, however, that no estimate, statement, explanation or suggestion in said Plan, or in the statement which precedes the same, or in this Agreement, or in any circular issued or to be issued by the Committee, is intended to or shall operate as a representation or warranty or as a condition of the deposit of securities hereunder, and no error or defect therein shall operate to release any depositing security holder, except with the consent of the Committee. Depositors of securities shall receive receipts or certificates of deposit in form to be approved by the Committee, specifying the eecurities deposited and assessments, if any, paid thereon, and all rights of the depositors in respect of such deposits shall be such only as are evidenced by such receipts or certificates ; and there- after the holder of any such receipt or certificate, or of any receipt or certificate issued in lieu thereof or in exchange therefor, shall be subject to this agreement and entitled to have and exercise the rights of the original depositor under the receipt or certificate issued to him in respect of the securities therein mentioned. The respective receipts or certificates of deposit, and the interest represented thereby, and all rights of the holders in respect of the de- posited securities and assessments paid thereon, shall be transferable only subject to the terms and conditions of this agreement and in such manner as the Committee shall approve, and upon such transfer the transferees and holders of such receipts or certificates of deposit 23 shall for all purposes be substituted in place of the prior holders, subject to this agreement. All such transferees, as well as the original holders of receipts or certificates of deposit, shall be embraced under the term " Depositors," whenever used herein. Each receipt or certificate of deposit may be treated by the Com- mittee and by the Depositaries as a negotiable instrument, and the holder for the time being may be deemed to be the absolute owner thereof and of all rights of the original depositor of the bond or stock and assessments in respect of which the same was issued, and neither the Depositaries nor the Committee shall be affected by any notice to the contrary. By accepting any such receipt or certificate, every recipient or holder thereof shall thereby become party to this agreement with the same force and effect as though an actual sub- scriber hereto under seal. Depositors must in all cases deposit with the certificates for their stock, or with their bonds or other securities, such transfers, assignments and powers of attorney as may be required by the Committee, in order to vest in said Committee or to enable it to transfer the complete and absolute title to such stock, bonds or other securities, and to coupons or interest installments on deposited bonds ; and the depositors respectively agree at any time on demand of the Committee to execute any and all transfers, assignments or writings necessary for vesting complete ownership of the bonds, stocks or other securities deposited hereunder in said Committee or in its nominees, or for the purpose of enabling said Committee to carry out said plan of reorganization. The Committee shall have power to fix or limit the time within which all or any class of security holders may deposit their securities and become parties to this agreement as herein provided, and may, in its discretion, and on such terms and conditions as it may see fit, either generally or in special instances extend or renew the time so fixed or limited. Holders of securities not deposited in the manner herein pro- vided within the times so fixed, limited, extended or renewed wiU not be entitled to deposit the same or become parties to this agree- 24 ment or share in the benefits thereof and shall acquire no rights thereunder, except by express consent of the Committee and on such terms and conditions as the Committee may prescribe. Depositors of stock who shall fail to pay their assessments, or any installments thereof, within such time as shall be fixed or limited shall cease to be entitled to any benefit hereunder, or in the securities deposited or assessments paid, and shall absolutely forfeit, without right of re- demption, their stock, together with any part of the assessments paid thereon, and the Committee may sell the same, or the new securities which may be issued in respect thereof, to any purchaser paying such amount as the Committee may determine, and the pro- ceeds thereof may be used for any of the requirements of carrying out said plan, and as a reserve for the uses of the new company. The Committee may, however, in its discretion, on such terms as it shall see fit, waive by resolution any such forfeiture or failure to pay the assessment within the times allowed. Second. The Depositors hereunder hereby request the Committee to endeavor to carry into practical operation this agreement, includ- ing the foregoing plan of reorganization, in its entirely or in part, to such extent and in such manner and with such additions, excep- tions and modifications as the Committee shall deem to be for the best interests of the depositors. Each and every Depositor, for himself and not for any other Depositor, does hereby sell, assign, transfer and set over to the said parties of the first part as joint tenants, and not as tenants in common, and to the survivor and sur- vivors of them and to their successors, as a Committee, each and every bond, share of stock, security or obligation or evidence thereof deposited hereunder, and every Depositor hereby agrees that the Committee shall be, and hereby is, vested with all the power and authority of owners of the stock, bonds, securities and obKgations deposited hereunder, with full right to transfer the same into its own name, as a Committee, or into the name of any other person or persons whom the Committee may select ; to vote thereon 26 at any meeting of stockholders or bondholders or creditors ; to use every such stock, bond, security or obligation as fully and to the same extent as the owner or holder thereof, including power to declare due the principal of any bond or other obligation deposited hereunder, and to revoke any such declaration whenever made; to call or attend, and either in person or by proxy to vote at, any and all meetings of stockholders or bondholders or creditors of any corporation, however convened ; to terminate or to seek to dissolve or modify any trust or lease, in whole or in part ; to apply for the determination of the validity thereof, or for the re- moval of any trustees or the substitution of other trustees, or to take any other steps in respect of any trust or lease or under any pro- vision thereof ; to purchase at such prices as it shall see fit, or to pay, compromise or settle with the holders of any coupons, notes or other obligations of the Union Pacific Railway Company, or of any or either of the original Companies consolidated therein, or of aux- iliary Companies heretofore related thereto, or any Receivers' cer- tificates or obligations issued or which may be issued or incurred by the Receivers thereof, and to apply for that purpose any moneys received from the assessments on the stock, or which may otherwise be received or raised by the Committee ; to sell and transfer and to effectively assign any and all coupons on deposited bonds, and any rights, claims or demands for accrued or future interest on such bonds ; to give all bonds of indemnity or other bonds, and to charge therewith the securities deposited hereunder or any part thereof, if the Committee shall so deem necessary or expedient in carrying out the purposes hereof; to institute or cause to be instituted or to become parties to any legal proceed- ings which could be instituted by any Depositor or any corporation, or any officer of any corporation whose stock or bonds or other obligations (or any part thereof) are deposited hereunder, and to participate in, adopt or extend its aid and co-operation in and to any and all legal proceedings now existing ; to apply for receivers, or the removal of receivers and the substitution of other receivers, or for the termination of any receivership and the delivery of any 26 property to its owners; to enter into settlement of any litigation now or at any time existing or threatened, in whole or in part, with plenary power to enter into arrangements for decrees, or for facili- tating or hastening the course of litigation, or in any way to pro- mote the objects of the Plan and the purposes of the Committee ; to do whatever, in the judgment of the Committee, may be necessary to promote or to procure such joint or separate sales of any prop- erty or franchises herein concerned, as the Committee may deem desirable, wherever the same may be situated ; to adjourn the sale of any property or franchises, or of any portion or lot thereof at discretion ; to bid, or to refrain from bidding, at any sale, either public or private, either in separate lots or as a whole, for any property or franchise or any part thereof, whether or not owned, controlled or covered by any deposited security, including or excluding any particular rolling stock, or other property, real or personal, and at, before, or after, any such sale, to arrange and agree for the resale of any portion of the property which the Committee may decide to sell rather than to retain ; to hold any property or franchises purchased by the Committee either in its name or in the name of persons or corporations by it chosen for the purposes of this agreement, and to apply any security deposited hereunder in satisfaction of any bid or towards obtaining funds for the satisfac- tion thereof ; it being understood that the term property and fran- chises includes any and all railroads, railroad and other transporta- tion lines, leaseholds, stock or other interests in corporations, in which the Union Pacific Railway Company has any interest of any kind whatever, direct or indirect. The amount to be bid or paid by the Committee for any property or franchises shall be absolutely discretionary with it ; and, in case of the sale to others of any prop- erty or franchise, the Committee may receive out of the proceeds of such sale or otherwise any dividend in any form accruing on any securities held by it. The enumeration of specific powers hereby conferred shall not be construed to limit or to restrict general powers herein conferred or intended so to be ; and it is hereby distinctly declared that it is 27 intended to confer on the Committee, and each depositor hereunder hereby confers on the Committee, in respect of all securities de- posited or to be deposited, and in all other respects, any and all powers necessary or expedient, or which the Committee may deem necessary or expedient in or towards carrying out or promoting the purposes of this agreement in any respect, even though any such power be apparently of a character not now contemplated ; and the Committee may exercise any and every such power as fully and effectively as if the same were herein distinctly specified, and as often as, for any cause or reason, it may deem expedient. And it is further understood and agreed that the methods to be adopted for or towards carrying out this agreement shall be entirely discretion- ary with the Committee. Third. Any moneys paid under or with reference to said plan or this agreement shall be paid over by the Depositaries to the Com- mittee, and shall be applicable for any of the purposes of the plan and agreement as may be most convenient, and as may from time to time be determined by the Committee, whose determination as to the propriety and purposes of any such application shall be final, and nothing in said plan shall be understood as limiting or requiring the application of specific moneys to specific purposes. No liability in respect or in favor of any bonds, stocks, obligations, securities or debts not called for and accepted on deposit hereunder, nor in favor of any lease or contract, is assumed hereunder, or by or for any new company (notwithstanding any mention thereof, or estimate in respect thereto, or reservation of securities to provide therefore, in said plan), nor is any trust in their favor created or impressed upon any deposit or payment hereunder, or upon any securities to be issued under the plan. Any obligation in the nature of floating debt or otherwise against the Union Pacific Railway Com- pany or any property embraced in the plan, either as proposed or as carried out, or any securities held as collateral for any such obli- gation, may be acquired or extinguished or held by the Committee 28 at sucn times, in such maimer and upon such terms as it may deem proper for the purposes of reorganization, but nothing contained in the plan or in this agreement is intended to constitute, nor shall it constitute, any liability or trust in favor or in respect of any such obligation. The Committ ee shall have absolute and complete discretion and latitude in the use, disposition or distribution of all securities of the new Company which are specified in the plan as reserved for purposes therein stated and which are in excess of the securities there embraced in the defined issues for reorganization purposes ; and it may use, dispose of, distribute or apportion any of such reserved securities of the new Company in any manner and upon any terms which it may deem expedient or advisable to promote or accomplish the substantial objects and purposes of the plan and of this agreement. In case of any claim, lien or obligation not herein fully provided for, and afi'ecting the Union Pacific Eailway Company, or any prop- erty or franchises thereof, the Committee may from time to time make such compromise in respect thereto or provision therefor as it may deem suitable, using therefor any securities not expressly re- quired for settlement with Depositors ; but the total amount of new securities to be created, as set forth in the plan, shall not be in- creased. Fourth. The Committee may from time to time make contracts or arrangements with any other Committee, person, syndicate, or corporation, for the purpose of carrying this agreement, or any of the provisions or purposes thereof, into effect. The Committee may employ counsel, agents and all necessary assistance, and may incur and discharge any and all expenses by the Committee deemed reasonable for the purposes of this agreement. Its selection of the Depositaries named in the plan, and any selections which may be here- after made by it of further or substituted Depositaries, are hereby authorized, ratified and confirmed. The Committee may prescribe the form of all securities and of all instruments at any time to be issued 29 or entered into under this agreement. It may create and provide for all necessary trusts, and may nominate and appoint trustees thereunder. It may, at public or private sale, or otherwise, dispose of any securites of the new company left in its hands because of any failure to make deposits hereunder. In so disposing of any such new securities thus left in its hands the Committee may use the same or the proceeds thereof for the purpose of carrying out the reorganization in such manner as it may deem expedient and advisable. Fifth. The Committee may procure the organization of one or more new companies, or may adopt or use any existing or future companies, and may cause to be made such consolidations, leases, sales or other arrangements, and may make, or cause to be made, such conveyances or transfers of any properties or securities ac- quired by the Committee and take such other steps as the Committee may deem proper for the purpose of creating the new securities pro- vided for in the plan and carrying out all or any of the provisions thereof. The Committee may negotiate and agree with any and all com- panies or persons for obtaining or granting running powers, terminal facilities, exchanges of property, or any other conveniences which it may deem necessary or desirable to obtain or to grant, and may make contracts therefor binding upon such new company ; and generally may authorize, ratify and make such purchases, contracts, stipulations or arrangements as will in its opinion operate directly or indirectly to aid in the preservation, improvement, development or protection of any property of the Union Pacific Kailway Com- pany, or to prevent or avoid opposition to, or interference with, the successful execution hereof. The Committee may proceed under this agreement, or any part thereof, with or without foreclosure, and may exercise any power after foreclosure sale. Any action contemplated in the plan or agreement to be per- 30 formed on or after completion of reorganization may be taken by the Committee at any time when it shall deem the reorganization advanced suflSciently to justify such course, and the Committee may defer, as it may deem necessary, the performance of any pro- vision of the plan or agreement, or may refer such performance to the new Company. SrxTH. The bonds deposited under this agreement, and all Re- ceivers' certificates, coupons and claims purchased or otherwise acquired under this agreement, shall remain in full force and effect for all purposes, and shall not be deemed satisfied, released or dis- charged by the delivery to the depositors of new securities in respect of their deposits, and no legal right or lien shall be deemed released or waived, but said bonds and other claims, and any deficiency judg- ment obtained in respect of any of said deposited bonds, and any judgment upon any of such claims, and all liens and equities, shall remain unimpaired, and may be enforced by the Committee or by the new Company or other assigns of the Committee until paid or satisfied in full or expressly released. Neither the Committee nor any bondholders or creditors of the Union Pacific Eailway Com- pany, by executing this agreement or by becoming parties thereto, release, surrender or waive any lien, right or claim in favor of any stockholders or other parties interested in such Company, and all such liens, rights or claims shall vest unimpaired in the Committee, and in the new Company, as its assigns ; and any purchase or purchases by or on behalf of the Committee, or the new Company, under any de- cree for the enforcement of any such lien, right or claim shall vest the property purchased in the Committee or the new Company, free from all interest or claim on the part of such stockholders or other parties. Seventh. The Committee may construe this agreement (including the plan of reorganization), and its construction thereof or action thereunder in good faith shall be final and conclusive. 81 The Committee may supply any omission or correct any error in the plan or in this agreement, and may modify or depart from any provisions thereof which it shall unanimously deem not to be sub- stantial. In case, however, in the opinion of the Committee, any substantial change or alteration of the plan or of this agreement shall be necessary, such amendment shall be made only in the fol- lowing manner : A copy of the proposed change or alteration shall be lodged with each of the Depositaries under this agreement, and a notice thereof shall be advertised in the manner specified in Article Tenth hereof. Thereupon any holders of receipts or certificates of deposit who do not assent to such alteration may, at any time before a date specified in such advertisement, which date shall be at least twenty days after the first publication of such advertisement, withdraw the securities represented by their receipts or certificates of deposit upon sur- rendering their said receipts or certificates of deposit to the proper Depositaries. Any interest paid or advanced in purchase of coupons or other- wise to holders of receipts or certificates in respect of deposited bonds represented thereby, or in respect of the new bonds to be issued in ex- change therefor under the plan, must, in such case, also be repaid with interest by the holders of such certificates of deposit before the deposited bonds represented by such certificates shall be surren- dered in exchange therefor. Any assessments paid on deposited stock so withdrawn or the proceeds of the use thereof, shall be re- turned to the holders of certificates of deposit representing such deposited stock, less a pro rata share of the expenses and other expenditures and compensation of the Committee incurred up to the date of such withdrawal, which pro rata share shall be such as the Committee shall estimate to be properly applicable to the stock so withdrawn. All holders of certificates of deposit who shall not exer- cise this right to withdraw their securities within said time shall be deemed to have assented to and adopted such change or alteration and shall be bound thereby, and the Committee shall be fully 82 authorized to carry the same into effect with all the powers provided in this agreement. Wherever the plan or this agreement is referred to in the plan or in this agreement, it shall be deemed to include any change or alteration thereof so adopted. The plan may be abandoned by the Committee at any time not- withstanding it may have previously declared the same to be opera- tive. The Committee may at any time abandon such portions and feat- ures of the Reorganization as relate to any of the lines, or parts of lines, embraced in said plan, which lines or parts of lines, by reason of failure of holders to deposit securities affecting the same, or for any reason satisfactory to the Committee, it may deem expedient to omit from the Eeorganization ; and in such event the Committee shall, upon the surrender of the corresponding certificates of deposit and reimbursement of advances in respect to the bonds represented thereby, as above provided in case of withdrawals, return to the holders the deposited bonds secured upon the lines, or portions of lines, thus omitted, and the securities apportioned in the plan to the bonds thus returned shall not be issued. In case the Committee shall finally abandon the entire plan, after having once declared it operative, the stock, bonds and securities deposited hereunder, or their proceeds, or any stock, bonds, securities, or claims representative thereof, then under the control of the Committee, shall be delivered to the several Depositors in amounts representing their respective interests upon surrender of their respective receipts or certificates. In such case the assessment moneys paid by the depositing stockholders, or any coupons, notes. Receivers' certificates, or other claims or property acquired therewith, or the proceeds thereof when received, shall be distributed or equitably adjusted among the respective holders of the receipts or certificates of deposit for stock in pro- portion to the amount of the assessment moneys paid thereon respectively. 33 Eighth. The action of a majority of the members of the Com- mittee, expressed from time to time, either at a meeting or in writing with or without meeting, shall for all purposes constitute the action of the Committee, and have the same effect as if assented to by all. It may adopt its own rules of procedure. Any vacancy in the Com- mittee may be tilled by appointment in writing by the remaining members or a majority of them, and the Committee may by action of a majority of its members add to its number. All title, rights and powers vested in the Committee hereunder shall, from time to time, vest in the members of the Committee for the time being, without any further appointment, transfer or assignment whatsoever. In case of absence, any member may vote by any other member as his proxy. Any member of the Committee may at any time resign by giving notice in writing to a majority of the remaining members, and the Committee may give full release and discharge to any such member, or to the personal representative of any deceased member. The Committee may act through sub-committees or agents, and may delegate any authority, as well as discretion, to any such sub-com- mittee or agent. The Committee, or the Depositaries, or any present or future member of either, may be member of the Committee or of the Depositaries, and all or any of them may be or become pecuni- arily interested in any contracts, property or matters which this agreement concerns, including any syndicate agreement, whether or not mentioned in the plan. Any direction given by the Committee shall be full and suflScient authority for any action of the Deposi- taries or any Trust Company or other custodian, or for any sub- committee or agent. Ninth. The Committee undertakes in good faith to endeavor to carry out said Plan and this agreement, but the members of the Committee assume no personal responsibility for the execution thereof. No member of said Committee shall be liable in any case for the acts of the other members or of any other Committees or of any Depositary, nor for the acts of their agents, sub-committees or 84 employees; nor shall they be personally liable for any error of judgment or mistake of law, but each shall be liable only for his willful misfeasance. No Depositary shall be liable for the acts of the Committee or of any other Depositary hereunder, or of any agents of the Committee or of any Depositary. The members of the Committee shall be entitled to receive reasonable compensation for their services, and such compensation, with the reasonable expenses of said Committee, shall be paid as part of the expenses of reorganization, the amounts of such com- pensation and expenses being first approved of by at least four members of the Committee. The accounts of the Committee shall be filed with the Board of Directors of the new Company, and, when audited by said Board of Directors, shall be binding and conclusive on all parties, and the Committee shall be thereby dis- charged, turning over to the new Company any balance in the hands of the Committee. The acceptance of new securities by any Depositor shall estop such Depositor from questioning the conformity of such securities, as to character or otherwise, with any provision of said plan, and the acceptance of new securities by a majority in amount of any class of depositors shall so estop all Depositors of such class. Tenth. All calls for the deposit of bonds and stocks, for the pay- ment of assessments or for the surrender of certificates, all notices fixing or limiting the time for the deposit of securities or the pay- ment of assessments, and all other calls or notices hereunder, shall, except when otherwise provided, be inserted in two or more daily papers of general circulation published in the City of New York, and in one or more daily papers of general circulation published in the cities of London, Boston, Amsterdam and Frankfort, respectively, twice in each week for two successive weeks. Any call or notice whatsoever, when so published .by the Committee, shall be taken and considered as though personally served on all parties hereto and upon all parties becoming bound hereby, as of the respective dates 35 of insertion thereof, and such publication shall be the only notice required to be given under any provision of this agreement. Eleventh. This agreement shall bind the Committee and their successors in oflfice appointed in accordance herewith and the depositors hereunder, their and each of their heirs, executors, admin- istrators, successors and assigns. Ittwttttjess wUzXJ^ortf the members of the Committee have hereunto signed their names, and all other parties hereto have de- posited securities as above set forth. [8678] PM. m. 21. 1908 IVI115292 HE;?79/ THE UNIVERSITY OF CAUFORNIA LIBRARY