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EXHIBIT 10(t)
EXECUTIVE LIFE INSURANCE PLAN OF UPC
PLAN DESCRIPTION AND CENSUS INFORMATION
Eligibility Employees who are Salary Grade 24 and above; are on
the payroll as of December 31 of the year in which
they become eligible, and are employed by one of the
following Union Pacific Operating Companies:
- Union Pacific Corporation
- Union Pacific Railroad
- Union Pacific Technologies
Effective Date January 1
Plan Year January 1 - December 31
Core Group Benefit $50,000 which remains in effect until retirement
Under Flex Plan
Optional Group Benefit Employees can also purchase up to six times base
Under Flex Plan salary under the Union Pacific Flexible Benefits
Plan.
Post-Retirement Group None
Benefit Under Flex Plan
Executive Life Insurance PRE-RETIREMENT: The death benefit is two times salary.
Plan Death Benefit The targeted death benefit may or may not be equal to
2 times salary of those executives entering the plan
over 62 years of age.
POST-RETIREMENT: The target death benefit is one half
of final salary at retirement. The actual death
benefit may vary based on:
- The performance of the contract;
- The continuous participation in the program by the
Executive;
- Any loans or withdrawals taken by the executive
against the assets of the contract;
- The contractual limits of the contract; and
- Failure to pass any evidence of insurability.
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October, 1997
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Section 1
Plan Description
COST TO EXECUTIVE Union Pacific, at its discretion, will grant a
bonus to each Executive covered under the Plan in
an amount equal to or less than the annual
premium for the Executive's benefit. To
participate in the plan, the Executive must
authorize Union Pacific to pay that amount
directly to Connecticut General in December of
each year. Since that bonus will be considered
compensation, the Executive will be notified of
the amount, and the appropriate Federal
withholding and other payroll taxes will be
deducted from the Executive's December
compensation or any cash payment made under the
Union Pacific Executive Compensation Plan for the
Executive.
INSURANCE POLICY The Executive will receive an individual universal
life policy issued by Connecticut General Life
Insurance Company. This policy is Form Number
LN502 and has been approved by the Pennsylvania
Department of Insurance.
POLICY OWNER The executive will be the sole Owner of the policy
and will be able to exercise all policy rights
including the rights to borrow or surrender the
policy.
If the Executive surrenders this policy, takes
loans, or withdrawals or discontinues
participation in this program while he is an
employee, future bonuses will be frozen at the
prior year level.
If the Executive reenters the Plan, an actuarial
adjustment will be made to future bonuses and
evidence of insurability will be required. If the
Executive wishes to transfer Ownership of the
policy to another person or entity, refer to
Section 6, Ongoing Business Forms.
BENEFICIARY The Executive (or the policy Owner if different)
has the right to name the beneficiary of the
proceeds (see Section 6, Ongoing Business Forms).
SALARY INCREASES Assuming continued participation in the Plan, each
year before an Executive retires, the death
benefit will be increased on the next plan
anniversary based on the increase in the
Executive's salary as of August 16 of the prior
year.
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Section 1
Plan Description
EVIDENCE OF INSURABILITY No evidence of insurability will be
required for an Executive meeting the
following criteria:
o Actively-at-Work (for initial coverage
and annual increases)
o Under age 61 as of the Plan anniversary
with basic initial benefit up to
$1 million.
o Future annual increases in death benefit
equal to annual salary increase up to a
maximum 10% per plan year.
o One time promotion increase up to
$100,000 (promotions must be certified by
Union Pacific)
In all other circumstances, medical
information may be required. In addition, when
all insurance coverage in force on an
Executive reaches Connecticut General's
retention limit (currently $3 million),
evidence of insurability may be required for
ANY increase in coverage even if it is within
the limits described above.
TERMINATION OF PARTICIPATION If an Executive voluntarily surrenders the
WHILE ACTIVELY EMPLOYED policy or terminates participation in the
Plan, future participation in the Plan will be
subject to evidence of insurability.
TERMINATION OF EMPLOYMENT An Executive terminating employment with
Union Pacific may keep the policy in force,
modify it, or terminate it. Future premiums
may be required to keep the policy in force
and will be the responsibility of the
Executive. Premiums must be paid directly to
Connecticut General Life Insurance Company on
an annual basis.
After termination of an Executive's employment
with Union Pacific, increases in death benefit
will no longer be available without evidence
of insurability.
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AFTER RETIREMENT The retired Executive retains the policy
after retirement. At the time of retirement
UPC will use the current interest rate to
illustrate and fund the death benefit amount
according to the post-retirement benefit
described above. In the event the retiring
participant chooses to carry insurance above
the level provided by Union Pacific and at
any time up to age 62 causes the policy to
lapse for any reason, Union Pacific shall be
notified and further contributions on behalf
of the participant shall cease. If the
retired executive surrenders this policy,
future bonus payments will cease.
ADDITIONAL INSURANCE Connecticut General's Corporate Universal
Life policy is not available to the general
public. However, Executives participating
in the Executive Life Insurance Program
may apply for additional coverage,
subject to evidence of insurability. Any
additional coverage will be provided under a
separate policy, and the premiums will be
paid by the Executive. Anyone interested in
applying for additional coverage should
contact Jonathan Kraiza at Connecticut
General.
DEFINITION OF TERMS SALARY: For purposes of determining the
death benefit under this program, base
salary will be defined as the Executive's
salary on August 16 of the prior calendar
year as defined under the Union Pacific
Flexible Benefits Plan.
ANNUAL PREMIUM: For participants entering
the Executive Life Insurance Program prior
to age 62, the annual premium will be an
amount determined by Connecticut General to
be sufficient to realize the target death
benefit. For participants entering the
Executive Life Insurance Program on or after
age 62, the annual premium will be
determined as if the participant was one day
less than age 62. This annual premium may or
may not be sufficient to realize the target
death benefit of two times salary.
AGE: Age will be determined according to the
age at the Executive's nearest birthday on
the effective date of coverage.
ACTIVELY-AT-WORK: Actively-at-Work is
defined as "performing all duties of the
position on a full-time basis for not less
than 35 hours per week and not absent from
work due to accident, illness, or other
condition for more than any three days of
the 90 days prior to first becoming eligible
to participate in the Executive Life
Insurance Program.
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