Exhibit 10(r)
General Electric Leadership Life Insurance
(Effective January 1, 1994)
GE Leadership Life Insurance provides selected employees in leadership
positions with individually owned life insurance that can be continued into
retirement on a tax-effective basis.
THE INFORMATION YOU NEED... BEGINS ON PAGE...
WHAT THE PLAN PROVIDES 2
Your Coverage Amount 2
GE's Special Payments 2
Cash Value 4
COVERAGE AT AGE 65 5
Reductions in Coverage 5
Other Coverage Options 5
ABOUT JOINING THE PLAN 6
Eligibility 6
Enrollment 7
Completing the Enrollment Form 7
Assigning Policy Ownership 8
IN SPECIAL CASES 8
At Retirement 8
If You Are Disabled or Laid Off 9
If You Take a Leave of Absence 9
If You Are Terminally Ill 9
If You Die 10
If You Leave the Company 10
When Your GE Participation Ends 11
ADMINISTRATIVE INFORMATION 11
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WHAT THE PLAN PROVIDES
GE Leadership Life Insurance is provided through an individual universal
life insurance policy subject to the terms and conditions set for the plan
by GE.
The policy is issued directly to eligible GE employees by the insurance
company.
To understand your coverage, be sure to learn about these key features:
* Your coverage amount -- The benefit your beneficiary receives if you
die.
* The special payments -- The method that GE uses to fund coverage for
you.
* The cash value -- The mechanism designed to provide your post-
retirement coverage.
YOUR COVERAGE AMOUNT
You are covered for two times your annual pay until age 65, when reductions
in coverage begin as described on page 5. Pay, for purposes of this plan,
is defined as your annual salary rate, plus 100% of your incentive
compensation earned in the preceding calendar year. Benefits are paid
to your beneficiary if you die. Payment options are described on page 10.
(If you become terminally ill, you may receive a partial advance payment
before your death; see "In Special Cases" for details.)
Your pre-age 65 coverage amount will change if your salary or incentive
compensation changes. These changes become effective on April 1 each year
based on your pay as of the last day of the preceding February.
GE'S SPECIAL PAYMENTS
GE funds your coverage under the plan in the following way:
1. Each year, GE advances the premium to the insurance company.
2. The insurance company adds the premium to your policy's accumulation
fund from which the costs of the insurance coverage are deducted; the
balance earns tax-deferred interest at a rate set by the insurance
company and accumulates over time to build your policy's cash value.
3. To establish individual ownership, GE adds special payments to your
paycheck (or to your monthly pension payments, if you're retired) in
equal amounts that add up to the total premium; these special
payments are immediately deducted from your paycheck and used to
reimburse GE for the advanced premium amount. You pay taxes on the
special payments added to your paycheck.
Premiums and GE's special payments increase over time to pay for the higher
costs of coverage as you age and as your earnings increase; increases are
effective on April 1 each year. The final premium payment will be made in
the plan year beginning on the April 1 after your 64th
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birthday. If you became eligible for coverage at age 55 or older, GE
continues premium payments for 10 calendar years, as long as you remain
eligible.
GE's special payments to you continue until March 31 following the final
premium payment, as long as you remain eligible. These special payments
are designed to build cash value to fund a reduced level of coverage after
you reach age 65.
TRUST OWNERSHIP
If you assign ownership of your insurance policy to a trust, as described
on page 8, GE adds one special payment to your paycheck in an amount equal
to the total annual premium. You will need to reimburse GE for the
advanced premium payment within 30 days by either of the following methods:
* Lump sum payment from your personal funds
* Lump sum payment from a checking account established for the trust.
You should consult your legal or financial advisor before choosing a
reimbursement method.
TAX CONSEQUENCES
When the special payments are added to your paycheck, they become part of
your taxable income. Although GE fully funds the coverage, you pay income
tax on these special payments when they are added to your paycheck. If you
are a non-smoker, this additional income tax is the only cost to you during
the period in which GE makes special payments. (If GE paid for the
coverage directly, you would have taxable imputed income for the value of
coverage over $50,000.)
COVERAGE FOR CIGARETTE SMOKERS
Coverage for cigarette smokers costs substantially more than coverage for
non-smokers. GE will pay the extra cost to provide coverage at the two
times pay level during the first two years of a smoker's coverage.
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After 24 months, the additional payments necessary to fund the full
coverage will end. At that time, smokers will choose either:
* To reduce coverage to a level supported by the Company's special
payments for non-smokers, or
* To make the additional payments necessary to maintain coverage at the
two times pay level.
Former cigarette smokers can qualify for two times pay coverage at the
lower non-smoker rates once they have stopped smoking for at least 12
consecutive months. To apply for the lower non-smoker rates, you'll need
to submit an application to the GE Leadership Life Insurance Service
Center. Your coverage at the lower rates goes into effect on the first day
of the month after the insurance company accepts your application.
If you elect reduced coverage, you may apply for coverage at the two times
pay level at any time. However, in addition to an application, you'll need
to provide proof of your good health satisfactory to the insurance company
and, if you continue to smoke, agree to make the additional payments,
before any increase goes into effect. Your increased coverage begins on
the first day of the month after the insurance company accepts your
application.
CASH VALUE
The cash value that accumulates in your policy is designed to provide
funding to continue a reduced level of insurance coverage after you reach
age 65. It builds most quickly in the last 10 years of your participation
in the plan as the costs of coverage increase based on your age and
earnings.
To accomplish its intended goal, the cash value needs to build without
disruption. If you borrow or withdraw from your cash value, your
participation in the plan ends and GE discontinues its special payments to
you. In addition, you will not be eligible for the GE Life Insurance
provided under the GE Life, Medical and Disability Plan.
If you die, the cash value helps provide the insurance benefit owed to your
beneficiary; it is not paid in addition to the death benefit. You are not
permitted to make direct contributions to the accumulation fund while GE is
making special payments on your behalf -- except as required to maintain
unreduced coverage at age 65 (as described on page 6) or
for cigarette smokers to maintain coverage at the two times pay level
(as described above).
Coverage after age 65 is based on interest and mortality assumptions in
effect in the year in which the last premium payment is made. Changes
in interest rates and mortality experience after the last premium payment,
as well as policy loans and withdrawals, may affect your policy's cash
value and the death benefit payable to your beneficiary.
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COVERAGE AT AGE 65
REDUCTIONS IN COVERAGE
Your insurance coverage begins to reduce after age 65 if you are still at
work or if you are an eligible retiree (see "In Special Cases"). All
reductions go into effect on the January 1* after your birthday.
ON THE JANUARY 1* YOUR PRE-AGE 65 COVERAGE IS REDUCED...**
AFTER YOU REACH...
Age 65 To 1.5 times your pay (or by 25% of your coverage
if you had coverage of less than 2 times pay)
Age 66 To 1 times your pay (or by an additional 25%
if you had coverage of less than 2 times pay)
Age 67 To 2/3 of your pay (or by an additional 16.67% if
you had coverage of less than 2 times pay) which
continues for as long as you continue your policy
Reductions are applied to the coverage in effect on the day before your
65th birthday, based on your pay as of the end of the preceding February.
Reductions begin on the January 1* after you reach age 65 regardless of
when you join the plan. Keep in mind, however, that GE's special payments
continue until you reach age 65 or complete 10 years of participation in
the plan if you became eligible after age 55.
* If your birthday is January 1, applicable reductions go into effect
on your 65th, 66th and 67th birthdays
** All amounts are rounded to the nearest $100
OTHER COVERAGE OPTIONS
Your cash value is intended to fund reduced coverage after age 65.
However, if you prefer, you may elect one of three other options when
you reach age 65:*
* UNREDUCED COVERAGE -- You may choose to continue your full, pre-age
65 coverage by paying additional premiums.
* PARTIAL WITHDRAWAL -- You may withdraw a portion of your cash value
and use the remainder to fund a lesser amount of coverage.
* FULL WITHDRAWAL/TERMINATION -- You may withdraw your entire cash
value by canceling your policy. You'll have no further insurance
coverage from the plan.
You may decide to take a cash withdrawal or increase your coverage amount
at any time after age 65. However, you'll need to provide proof
of good health satisfactory to the insurance company before any coverage
increase goes into effect.
* If you became eligible for the plan after age 55, you may elect
unreduced coverage when you reach age 65. However, you may not
borrow or withdraw from your cash value until you complete 10 years
of participation in the plan; if you do, your participation in the
plan will end and GE will discontinue its special payments.
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ABOUT JOINING THE PLAN
ELIGIBILITY
Because you are a GE employee in a selected leadership position on or after
January 1, 1994, you are eligible for GE Leadership Life Insurance --
provided you are "actively at work" on the date you complete your
enrollment application. Employees in leadership positions are those in the
Executive, Senior Executive and Officer Bands.
If you are eligible for GE Leadership Life Insurance, you are not eligible
for the GE Life Insurance provided under the GE Life, Medical and
Disability Plan -- whether or not you enroll for GE Leadership Life
Insurance. If you were covered under GE Life Insurance, your coverage ends
when you become eligible for GE Leadership Life Insurance.
Employees hired on a temporary basis, employees on retainer and other
special classes of employees as determined by the Company are not eligible
for GE Leadership Life Insurance.
If you transfer to a non-eligible position, GE will continue your
participation in this plan without interruption.
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ENROLLMENT
To enroll, simply complete the GE Leadership Life Insurance enrollment
application form and return it to the GE Leadership Life Insurance Service
Center within 31 days of first becoming eligible. On the form, you'll be
asked to:
* Name your beneficiary (or beneficiaries)
* Designate whether you're assigning ownership of the policy to a
person other than yourself or to a trust
* Indicate whether you are "actively at work"
* Indicate whether you smoke cigarettes and, if so, list the date you
last smoked
* Sign and date the front and back.
It's important to answer the actively at work and smoking questions
accurately. If you are not actively at work or if you are a cigarette
smoker and indicate otherwise on the form, and you die within two years
after your coverage takes effect, the insurance company reserves the right
to contest the claim -- in other words, to investigate whether you
falsified information on your application. If the insurance company
successfully contests your claim, it may refuse to pay the death benefit.
IF YOU BECOME ELIGIBLE AND YOU ENROLL WITHIN 31 DAYS, THEN
BECAUSE... YOUR COVERAGE BECOMES EFFECTIVE...
You just joined the Company On your first day of work
You were promoted to an On the first day of the second month
eligible position after the month in which you are promoted.
Your policy will be delivered in April of the plan year after you enroll.
If you are not actively at work when you complete the application, the
reason for your absence will determine when your coverage begins. In the
meantime, if you're currently covered under GE Life Insurance, your
coverage will continue until your GE Leadership Life Insurance coverage
becomes effective.
NAMING A BENEFICIARY
You select your beneficiary, the person who receives the benefits from the
plan at your death, when you enroll. If you name more than one
beneficiary, you may indicate on the enrollment application what percentage
of the benefits each should receive. If percentages aren't specified, the
beneficiaries will receive equal amounts.
You may, if you wish, designate a contingent beneficiary(ies) as well.
This is the person or persons who receive benefits if none of your primary
beneficiaries are alive at the time of your death.
If you have no beneficiary at your death, benefits will be paid to your
estate or according to state law.
Changing Your Beneficiary -- You may change your beneficiary designation at
any time by notifying the GE Leadership Life Insurance Service Center.
When a change of beneficiary notice is received by the insurance company,
the change becomes effective on the date you signed the request.
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ASSIGNING POLICY OWNERSHIP
You may designate an owner other than yourself -- or assign ownership -- of
your GE Leadership Life Insurance policy. This is often done for estate
planning purposes.
Assigning ownership -- most commonly to a trust, or in some cases, to
another person -- is typically done during the enrollment process before
your policy is issued, but you may assign ownership at any time. However,
be aware that if you assign ownership after your coverage begins and you
die within three years, the proceeds from your insurance policy will still
be considered by the Internal Revenue Service to be part of your estate for
tax purposes -- which may defeat the purpose for assignment in the first
place. This "three-year contemplation of death" rule applies whenever an
insurance policy is assigned to someone other than the person to whom it
was originally issued.
To assign ownership, you'll need to complete the ownership information on
the application form.
* IF YOU ARE ASSIGNING OWNERSHIP TO ANOTHER PERSON -- Be prepared to
provide the owner's name, Social Security Number, date of birth and
relationship to you. Both of you will need to sign the application
form.
* IF YOU ARE ASSIGNING OWNERSHIP TO AN EXISTING TRUST -- Be prepared to
provide the title of the trust, its date of inception and its tax ID
number. You and the trustee(s) will need to sign both the enrollment
application and a trust certification form.
* IF YOU ARE ASSIGNING OWNERSHIP TO A NEW TRUST -- Be aware that
setting up a trust can take time. Consult with your legal or
financial advisor as soon as possible.
IN SPECIAL CASES
AT RETIREMENT
RETIRING BEFORE AGE 65
If you retire under the GE Pension Plan before age 65, your GE Leadership
Life Insurance coverage continues at the level that was in effect on the
last day you worked if you:
* Retire from Company service at age 60 or older with at least 10 years
of continuous service
* Retire on a disability pension
* Retire under the Special Early Retirement Option
* Receive pension benefits under the Plant Closing Pension Option with
at least 25 years of Pension Qualification Service, or
* Retire with a special retirement allowance.
If you meet one of these eligibility requirements, your special payments
continue to age 65, or for 10 years if you became eligible for the plan
after age 55.
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If you do not meet these eligibility requirements, you are not eligible for
continued special payments after retirement, regardless of your age. Your
options in this case are described in "If You Leave the Company."
RETIRING AFTER AGE 65
In most cases, special payments end at age 65, whether you are retired or
still working. Your cash value is designed to supply the funds for
continuing the reduced coverage. Other coverage options are also described
on page 5.
However, if you joined the plan at age 55 or older, special payments
continue for 10 years as long as you continue working or if you retire and
meet the eligibility requirements listed above. If you do not meet the
eligibility requirements, the special payments end when you retire and your
options are described under "If You Leave the Company."
IF YOU ARE DISABLED OR LAID OFF
If you are unable to work because of a disability or because of layoff,
plant closing or other permanent job loss event, GE will continue its
special payments to you for 12 months. Then, you may:
* Continue coverage indefinitely by paying the required premiums
yourself directly to the insurance company
* Continue coverage for a limited time by using your accumulated cash
value to pay the required premiums, or
* Withdraw the cash value and cancel the policy -- you'll have no
remaining insurance coverage from the plan.
The options will be described to you in more detail at the time you stop
working.
IF YOU TAKE A LEAVE OF ABSENCE
If you take an approved leave of absence, GE will continue its special
payments to you for the duration of your leave. If you do not return to
work at the end of your leave, GE's special payments end. Your options in
this case are described in "If You Leave the Company."
IF YOU ARE TERMINALLY ILL
If you are diagnosed as terminally ill with 12 months or less to live, you
may request a payment from your insurance policy of up to 50% of your life
insurance benefit. You'll need to provide a written diagnosis from your
doctor satisfactory to the insurance company. This "living benefit" will
be deducted from the life insurance benefit before the remainder is paid to
your beneficiary after your death.
If you need to access this benefit, please contact the GE Leadership Life
Insurance Service Center.
Please note that the living benefit may vary in some areas according to
state law. It is available to both active and retired policyholders.
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IF YOU DIE
If you die while still covered by the plan, the policy pays your coverage
amount to your beneficiary. The cash value is not paid in addition to the
insurance benefits. Your beneficiary can call the GE Leadership Life
Insurance Service Center at 1-800-799-4777 or the GE Benefits Inquiry
Center at 1-800-432-3450 with any questions about benefit payments or
procedures.
Benefits are usually paid in a lump sum. However, other options are also
available, including:
* Installments on a regular basis, such as monthly, quarterly or
annually
* Single or joint and survivor annuity.
You may choose one of the options for your beneficiary at any time. If you
do not choose one in advance, your beneficiary may request one of these
options at your death.
If you or your beneficiary wishes to elect a benefit payment option other
than a lump sum, please contact the GE Leadership Life Insurance Service
Center.
IF YOU LEAVE THE COMPANY
GE's special payments end on the date your employment with GE ends for
reason other than disability, layoff, leave of absence or retirement.
Because your policy is individually owned, your coverage is portable. This
means you may:
* Continue coverage indefinitely by paying the necessary premiums
yourself directly to the insurance company
* Continue coverage for a limited time by using your accumulated cash
value, or
* Withdraw the cash value and cancel the policy; you'll have no
remaining insurance coverage from the plan.
If you leave GE, you communicate directly with the insurance company
regarding your policy.
Keep in mind that you must repay the portion of the premium that GE had
advanced to the insurance company on your behalf in the year you leave,
prorated as of your date of termination. Your coverage will continue
through March 31 following the date your employment ends -- no matter what
long-term decision you make about continuing your policy.
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WHEN YOUR GE PARTICIPATION ENDS
Your participation in the GE Leadership Life Insurance Plan ends if you do
one of the following:
* Leave the Company, as described on page 10,
* Retire with less than 10 years of service or without meeting one of
the other eligibility requirements as listed on page 8,
* Withdraw or borrow from the cash value while GE is making special
payments to you, or
* Transfer to a non-participating GE business or affiliate.
In these cases, special payments from GE end, but your coverage can
continue directly with the insurance company. If you are transferring to a
non-participating business, you may be eligible for GE-provided life
insurance offered to employees of that affiliate.
ADMINISTRATIVE INFORMATION
PLAN DOCUMENTS
Copies of the latest annual report of plan operations and the summary plan
description for GE Leadership Life Insurance are filed with the U.S.
Department of Labor and are available for your review at any time during
normal working hours at your local human resources office or at GE
Corporate Human Resources, 3135 Easton Turnpike, Fairfield, Connecticut
06431.
To request a copy of the official plan document, please write to Corporate
Benefits Delivery, P.O. Box 2213, Schenectady, New York 12301-2213. It
will be sent within 30 days after your written request is received by
Corporate Benefits Delivery.
CLAIMS
To receive benefits, your beneficiary will need to file a claim, along with
the policy and a certified copy of the death certificate. Forms are
available by calling the GE Leadership Life Insurance Service Center or the
GE Benefits Inquiry Center.
If a claim for benefits is denied in whole or in part, your beneficiary
will receive written notification from the claims administrator within 90
days. The notice will include:
* The specific reason(s) for denial, with specific reference to the
pertinent plan provisions on which the denial was based.
* Description of any information or materials necessary to process the
claim properly and why the materials are needed.
* An explanation of how to submit the claim for review.
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Within 60 days after receiving the denial, your beneficiary may submit a
written request for reconsideration to the insurance company. Any such
request should be accompanied by documents or records in support of the
appeal.
The insurer will respond within 60 days -- or 120 days under special
circumstances -- after receipt of the appeal, explaining the reasons for
the decision, and referring to the specific plan provisions on which the
decision is based.
The insurer has complete discretionary authority to determine benefit
payments and interpret the provisions of your policy. The insurer's
decision with respect to policy provisions is final and binding.
The plan administrator or a designated third party, such as the plan
insurer, has the authority and responsibility to interpret the provisions
of the plan.
YOUR RIGHTS UNDER ERISA
As a participant in the GE Leadership Life Insurance plan, you are
entitled to certain rights and protection under the Employee Retirement
Income Security Act of 1974 (ERISA). Under ERISA, plan participants are
entitled to:
* Examine, without charge at the plan administrator's office and at
major locations, all plan documents, including insurance contracts
and copies of all documents filed by the plan with the U.S.
Department of Labor, such as detailed annual reports and plan
descriptions.
* Obtain copies of all plan documents and other plan information upon
written request to the plan administrator; the administrator may
charge a reasonable fee for the copies.
* Receive a summary of the plan's annual financial report.
You have the right to expect fiduciaries -- the people who are responsible
for the management of the plans -- to act prudently and in the best
interest of you and other plan participants and beneficiaries.
Another one of your ERISA-guaranteed rights means that no one may fire you
or otherwise discriminate against you in any way to prevent you from
obtaining a plan benefit or exercising your rights under ERISA. ERISA also
guarantees your rights to written notice if any part of a claim is denied,
as described in "Claims" above.
Because your rights under ERISA are protected by law, you can also file
suit if the need ever arises. For example, if you request materials from
the plan and do not receive them within 30 days, you may file suit in a
federal court. In such a case, the court may require the plan
administrator to provide the materials and pay a fine of up to $100 a day
until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the administrator.
You may also file suit in a state or federal court if you have a claim for
benefits which is denied or ignored, in whole or in part. Such a suit may
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not be filed, however, until you have exhausted the claim appeals
procedures described on page 11.
You also can seek assistance from the U.S. Department of Labor or file suit
in a federal court if you believe a fiduciary has misused plan funds or
interfered with your rights under the law. The court will decide who
should pay court costs and legal fees.
If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose -- because, for example, the court finds
your claim frivolous -- you may be ordered to pay all these costs and fees
on your own.
If you have any questions about your rights under ERISA, you should contact
the nearest Area Office of the U.S. Labor-Management Services
Administration, Department of Labor.
PLAN TERMINATION
The Company expects and intends to continue offering GE Leadership Life
Insurance indefinitely, but reserves the right to terminate or amend the
plan, in whole or in part, at any time and for any reason.
GE's decision to terminate or amend the plan may be due to changes in
federal law or state laws governing welfare benefits, the requirements of
the Internal Revenue Service or ERISA.
ADDITIONAL INFORMATION
Employer ID number: 14-0689340
Full plan name: GE Leadership Life Insurance
Plan type and number: Welfare -- Flexible-premium adjustable
life insurance policy
Plan number 542
Insurer: Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010
Source of special payments: General Electric Company
Payment of benefits: Plan insurer pays benefits
Plan administrator and General Electric Company
agent for legal service: 3135 Easton Turnpike
Fairfield, CT 06431
1-800-432-3450
Plan year: April 1 - March 31
Policy year: January 1 - December 31
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