<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-K/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996 Commission file number 1-13916
UNION PACIFIC RESOURCES GROUP INC.
(Exact name of registrant as specified in its charter)
UTAH 13-2647483
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 CHERRY STREET
FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (817) 877-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -----------------------------
Common Stock New York Stock Exchange, Inc.
-------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ].
As of February 25, 1997, the aggregate market value of the registrant's
Common Stock held by non-affiliates (using the New York Stock Exchange closing
price) was approximately $6,192,422,750.
The number of shares outstanding of the registrant's Common Stock as of
February 25, 1997 was 253,776,970.
Certain portions of the registrant's definitive Proxy Statement for the
annual meeting of shareholders to be held on May 7, 1997 (the "Proxy
Statement") are incorporated in Part III by reference.
<PAGE> 2
The undersigned Registrant hereby amends its Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 to include the following exhibits:
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
Exhibit Number Exhibit
(23) Independent Auditors' Consent
(99) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Resources Group Inc. Thrift Plan.
<PAGE> 3
UNION PACIFIC RESOURCES GROUP INC. SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 27, 1997
UNION PACIFIC RESOURCES GROUP INC.
(Registrant)
/s/ Morris B. Smith
------------------------------------------
Morris B. Smith,
Vice President and Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer)
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
(23) Independent Auditors' Consent
(99) Financial Statements for the Fiscal Year ended
December 31, 1996 required by Form 11-K for the Union
Pacific Resources Group Inc. Thrift Plan.
</TABLE>
<PAGE> 1
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-22655 of Union Pacific Resources Group Inc. on Form S-3 and No. 333-22613
of Union Pacific Resources Group Inc. on Form S-8 of our report dated June 24,
1997, appearing in Exhibit 99 of Amendment No. 1 to the Annual Report on Form
10-K of the Union Pacific Resources Group Inc. for the year ended December 31,
1996.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Fort Worth, Texas
June 27, 1997
<PAGE> 1
Exhibit 99
UNION PACIFIC RESOURCES GROUP INC. THRIFT PLAN
Financial Statements for the Years Ended December 31, 1996 and 1995,
Supplemental Schedules for the Year Ended December 31, 1996,
and Independent Auditors' Report
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
As of December 31, 1996 and 1995 2
Statements of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1996 3
Statements of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1995 4
Notes to Financial Statements 5-11
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1996
Item 27a - Schedule of Assets Held for Investment Purposes 12
Item 27d - Schedule of Reportable Transactions 13
</TABLE>
<PAGE> 2
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of the
Union Pacific Resources Group Inc. Employees' Thrift Plan:
We have audited the accompanying statements of net assets available for
benefits of Union Pacific Resources Group Inc. Employees' Thrift Plan ("Plan")
as of December 31, 1996 and 1995 and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1996 and 1995 and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets
available for benefits and changes in net assets available for benefits of the
individual funds. The supplemental schedules listed in the table of contents
are presented for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental information by fund and supplemental schedules are the
responsibility of the Plan's management. Such supplemental information by fund
and supplemental schedules have been subjected to the auditing procedures
applied in our audit of the basic 1996 financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Fort Worth, Texas
June 24, 1997
1
<PAGE> 3
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996 AND 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Investments, at fair value (Notes 2 & 3)
UPC Common Stock $ 21,843,840
UPR Fixed Income Fund 43,159,608
Index Trust - 500 Portfolio 48,065,595
Company Stock (PAYSOP) 2,917,842 $ 2,321,303
Loan Fund 5,053,489 5,072,706
Wellington 10,878,587 9,062,293
U.S. Growth 11,134,463 6,036,875
International Growth 8,293,049 5,794,616
Bond Index 1,573,957 1,690,271
UPR Group Stock Fund 17,426,039 2,858,003
VMMR Prime Portfolio 1,055,230 262,590
Union Pacific Company Stock 26,774,213
Union Pacific Equity Index 38,628,796
Union Pacific Fixed Income 45,358,720
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $171,401,699 $143,860,386
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE> 4
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<Caption
SUPPLEMENTAL FUND INFORMATION
========================================================================================
UNION PACIFIC UNION PACIFIC UNION PACIFIC COMPANY
TOTAL COMPANY EQUITY FIXED STOCK LOAN
PLAN STOCK INDEX INCOME (PAYSOP) FUND WELLINGTON
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
DIVIDEND & INTEREST $7,084,740 $485,024 $543,571 $2,139,276 $49,532 $392,140 $871,247
NET APPRECIATION/
(DEPRECIATION) IN FAIR
VALUE OF INVESTMENTS
(Note 3) 19,208,459 2,830,061 4,993,517 (22,520) 689,251 669,056
CONTRIBUTIONS BY:
PARTICIPANTS 6,457,352 99,752 1,386,001 1,390,915 5,187 16,524 909,185
UNION PACIFIC RESOURCES 4,473,259 114,746 204,545 59,511
DISTRIBUTION OF UPR STOCK
NET TRANSFERS BETWEEN
FUNDS (29,522,545) (44,085,597) (46,599,421) (222,028) (41,114)
---------------------------------------------------------------------------------------------------------
TOTAL ADDITIONS 37,223,810 (26,107,708) (37,047,762) (42,887,205) 743,970 186,636 2,467,885
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
WITHDRAWALS BY
PARTICIPANTS 8,394,690 662,236 1,519,205 2,419,118 132,050 205,853 651,591
NET TRANSFERS TO/(FROM)
OTHER PLANS &
PARTICIPANTS 1,287,807 4,269 61,829 52,397 15,381
---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 9,682,497 666,505 1,581,034 2,471,515 147,431 205,853 651,591
---------------------------------------------------------------------------------------------------------
NET INCREASE(DECREASE) 27,541,313 (26,774,213) (38,628,796) (45,358,720) 596,539 (19,217) 1,815,294
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 143,860,386 26,774,213 38,628,796 45,358,720 2,321,303 5,072,706 9,082,293
---------------------------------------------------------------------------------------------------------
END OF YEAR $171,401,699 $0 $0 $0 $2,917,842 $5,053,489 $10,678,587
=========================================================================================================
<Caption
SUPPLEMENTAL FUND INFORMATION
===========================================================================================================
U.S. INTERNATIONAL BOND UPR GROUP VMMR PRIME UPC COMMON UPR FIXED INDEX TRUST
GROWTH GROWTH INDEX STOCK FUND PORTFOLIO STOCK INCOME 500 PORTFOLIO
===========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
DIVIDEND & INTEREST $817,410 $360,642 $108,604 $60,871 $24,943 $659,577 $571,903
NET APPRECIATION/
(DEPRECIATION) IN FAIR
VALUE OF INVESTMENTS
(Note 3) 1,187,719 648,927 (49,775) 594,335 4,638,966 9,346 3,019,576
CONTRIBUTIONS BY:
PARTICIPANTS 996,543 683,038 135,983 2,446 40,834 4,909 394,080 391,955
UNION PACIFIC RESOURCES 65,092 43,770 9,635 3,982,679 1,085 (7,804)
DISTRIBUTION OF UPR STOCK 9,581,641 (9,581,641)
NET TRANSFERS BETWEEN
FUNDS 2,271,284 1,319,455 (220,006) 490,507 960,145 26,858,864 43,740,916 45,049,540
--------------------------------------------------------------------------------------------------------
TOTAL ADDITIONS 5,338,048 3,055,832 (15,559) 14,712,479 1,027,007 21,921,098 44,796,115 49,032,974
--------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
WITHDRAWALS BY
PARTICIPANTS 240,460 306,737 100,755 141,123 234,367 77,258 1,327,938 375,999
NET TRANSFERS TO/(FROM)
OTHER PLANS &
PARTICIPANTS 250,662 3,320 308,569 591,380
--------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 240,460 557,399 100,755 144,443 234,367 77,258 1,636,507 967,379
--------------------------------------------------------------------------------------------------------
NET INCREASE(DECREASE) 5,097,588 2,498,433 (116,314) 14,568,036 792,640 21,843,840 43,159,608 48,065,595
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 6,036,875 5,794,616 1,690,271 2,858,003 262,590
---------------------------------------------------------------------------------------------------------
END OF YEAR $11,134,463 $8,293,049 $1,573,957 $17,426,039 $1,055,230 $21,843,840 $43,159,608 $48,065,595
=========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE> 5
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
===============================================================================
UNION PACIFIC UNION PACIFIC UNION PACIFIC COMPANY
TOTAL COMPANY EQUITY FIXED STOCK LOAN
PLAN STOCK INDEX INCOME (PAYSOP) FUND
================================================================================================
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
DIVIDEND & INTEREST $ 6,131,870 $ 709,072 $ 934,724 $ 3,215,923 $ 61,134 $ 329,984
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Note 3) 21,821,982 8,290,148 9,266,714 321,703 712,717
CONTRIBUTIONS BY:
PARTICIPANTS 6,022,641 170,755 1,453,672 2,359,711 1,332 33,934
UNION PACIFIC RESOURCES 4,263,172 1,194,809 793,851 1,115,793
NET TRANSFERS BETWEEN
FUNDS (982,156) 729,209 (6,681,773) 446,056
------------------------------------------------------------------------------------------------
TOTAL ADDITIONS 38,239,665 9,382,628 13,178,170 331,357 775,183 809,974
------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
WITHDRAWALS BY
PARTICIPANTS 5,227,595 842,076 872,709 2,777,654 75,518 87,288
NET TRANSFERS TO/(FROM)
OTHER PLANS &
PARTICIPANTS 490,372 21,879 61,732 242,891 7,769
------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 5,717,967 863,955 934,441 3,020,545 83,287 87,288
------------------------------------------------------------------------------------------------
NET INCREASE(DECREASE) 32,521,698 8,518,673 12,243,729 (2,689,188) 691,896 722,686
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 111,338,688 18,255,540 26,385,067 48,047,908 1,629,407 4,350,020
------------------------------------------------------------------------------------------------
END OF YEAR $ 143,860,386 $ 26,774,213 $ 38,628,796 $ 45,358,720 $ 2,321,303 $ 5,072,706
================================================================================================
<CAPTION>
SUPPLEMENTAL FUND INFORMATION
============================================================================================
INTERNATIONAL BOND UPR GROUP VMMR PRIME
WELLINGTON U.S. GROWTH GROWTH INDEX STOCK FUND PORTFOLIO
============================================================================================
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
DIVIDEND & INTEREST $ 389,687 $ 235,167 $ 153,000 $ 94,719 $ 6,962 $ 1,498
NET APPRECIATION IN FAIR
VALUE OF INVESTMENTS
(Note 3) 1,356,992 855,336 586,833 138,063 293,476
CONTRIBUTIONS BY:
PARTICIPANTS 632,145 563,920 652,412 153,447 1,313
UNION PACIFIC RESOURCES 284,093 253,458 299,565 66,726 254,096 781
NET TRANSFERS BETWEEN
FUNDS 2,202,093 2,668,788 (1,036,707) 91,183 2,304,309 258,998
--------------------------------------------------------------------------------------------
TOTAL ADDITIONS 4,865,010 4,576,669 655,103 544,138 2,858,843 262,590
--------------------------------------------------------------------------------------------
DISTRIBUTIONS:
WITHDRAWALS BY
PARTICIPANTS 141,284 124,754 283,636 21,836 840
NET TRANSFERS TO/(FROM)
OTHER PLANS &
PARTICIPANTS 120,116 1,633 34,352
--------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 261,400 126,387 317,988 21,836 840 0
--------------------------------------------------------------------------------------------
NET INCREASE(DECREASE) 4,603,610 4,450,282 337,115 522,302 2,858,003 262,590
NET ASSETS AVAILABLE FOR
BENEFITS:
BEGINNING OF YEAR 4,458,683 1,586,593 5,457,501 1,167,969
--------------------------------------------------------------------------------------------
END OF YEAR $ 9,062,293 $ 6,036,875 $ 5,794,616 $ 1,690,271 $ 2,858,003 $ 262,590
============================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE> 6
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF PLAN
The following description of the Union Pacific Resources Group Inc. and its
subsidiaries (the "Company") Employees' Thrift Plan (the "Plan") provides only
general information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
a. GENERAL - The Plan is a defined contribution pension plan
covering all full-time, non-agreement employees and agreement
employees in accordance with union contracts of Union Pacific
Resources Group Inc. who have completed twelve months of continuous
service or are regular part-time employees who have completed twelve
months of service and worked at least 1,000 hours. The Board of
Directors of Union Pacific Resources Group Inc. and the Plan
Administrator control and manage the operation and administration of
the Plan. In October 1995, the Company sold approximately 17% of its
common stock in an initial public offering (the "Offering"). Prior to
consummation of the Offering, the Company was wholly owned by Union
Pacific Corporation ("UPC"). Following the Offering and until October
15, 1996, UPC owned approximately 83% of the Company's outstanding
common stock. Concurrent with the Offering, UPC announced its
intention to distribute its remaining ownership interest in the
Company to its shareholders as a dividend by means of a tax-free
distribution (the "Distribution"). On October 15, 1996, the
Distribution was consummated. At this time, the participants in the
Plan received .846946 of a share of the Company's Common Stock for
each share of UPC common stock held in the participants' accounts.
This distribution was 343,736 shares at $27.875.
b. CONTRIBUTIONS - The Company contributes to the Plan on behalf
of each participant an amount equal to 200% of the participant's basic
contribution, limited to 3% of the participant's base salary. The
Plan meets the requirements of section 401(k) of the Internal Revenue
Code, which (i) permits certain employee contributions to be withheld
on a "salary deferral" basis, so that amounts deducted will not be
included in the employee's income for Federal income tax purposes,
(ii) allows employees to contribute up to 13% of their salary to the
Plan, and (iii) makes various other changes intended to give
participants greater control and flexibility with respect to Plan
investments. In prior years the Plan provided for payroll based
employee stock ownership plan contributions ("PAYSOP").
c. LOANS TO PARTICIPANTS - In June 1985, the loan provisions of
the Plan were approved by the Internal Revenue Service and became
effective. The amount of a loan is limited to one-half of the vested
value of a participant's accounts, excluding PAYSOP and
5
<PAGE> 7
subject to a minimum and maximum loan amount. As the loan is repaid,
all principal and interest payments will be credited to the
participant's accounts, excluding PAYSOP, in the same proportions as
the contributions then being made on behalf of the participant. If no
contributions are then being made, the loan repayments will be
invested in accordance with the participant's most recent investment
election, unless he or she directs otherwise to the extent permitted
by the Plan. Participants' loans, which are secured by the
participants' individual account balances, bear a fixed rate of
interest set by the Plan Administrator based on interest rates then
being charged on similar loans, and are repayable over periods not
exceeding five years, except loans relating to a principal residence,
in which case the term of the loan shall not exceed fifteen years.
The loans bear interest ranging from 6% to 10% and have terms ranging
from 1 to 15 years. The number of loans outstanding at December 31,
1996 and 1995 was 559 and 588, respectively.
d. PARTICIPANT ACCOUNTS - Aggregate monthly employee
contributions, other than PAYSOP contributions, may be invested
entirely in the UPR Fixed Income Fund, Vanguard/Wellington Fund
(Wellington), Vanguard U.S. Growth Fund (U.S. Growth), Vanguard
International Growth Fund (International Growth), VMMR Prime
Portfolio, Vanguard Bond Index Fund (Bond Index), Vanguard Index Trust
- 500 Portfolio Fund or any combination thereof, in multiples of 5% in
accordance with separate elections by each employee. In the event a
participant has an account balance under the UPC Thrift Plan at the
time the participant becomes an employee of the Company, the
participant's account balance under the UPC Thrift Plan is transferred
to the Plan and credited to the participant's like accounts under the
Plan. Since March 1, 1996, all employer contributions have been
invested in the UPR Group Stock Fund. Employer contributions prior to
March 1, 1996 but subsequent to the Offering, were eligible to be
invested in all of the available funds including the UPR Group Stock
Fund, in multiples of 5% in accordance with separate elections by each
employee. Prior to the Offering, employer contributions were eligible
to be invested in all of the available funds including the Union
Pacific Company Stock Fund, in multiples of 5% in accordance with
separate elections by each employee.
Participants' Plan accounts are maintained on a unit basis. Under
this method, an employee's account value is expressed in units of
participation, representing an undivided interest in the underlying
assets and income of the Fund. The purchase or redemption price of
the units is determined daily by the Trustee, based on the current
market values, or contract value in the case of Guaranteed Investment
Contracts (GICs), of the underlying assets of the Fund.
6
<PAGE> 8
<TABLE>
<CAPTION>
THE NUMBER OF UNITS AND THEIR UNIT VALUES AT DECEMBER 31, 1996 AND 1995:
1996 1995
--------------------------- ------------------------
UNIT UNIT
UNITS VALUE UNITS VALUE
========================================================
<S> <C> <C> <C> <C>
UPC COMMON STOCK 1,709,221 12.78
UPR FIXED INCOME FUND 4,260,573 10.13
INDEX TRUST - 500 PORTFOLIO 695,014 69.16
PAYSOP 219,387 13.30 164,748 $14.09
WELLINGTON 416,007 26.15 370,949 24.43
U.S. GROWTH 469,017 23.74 296,652 20.35
INTERNATIONAL GROWTH 503,830 16.46 385,793 15.02
BOND INDEX 159,955 9.84 166,693 10.14
UPR GROUP STOCK FUND 1,310,228 13.30 246,592 11.50
VMMR PRIME PORTFOLIO 1,055,230 1.00 262,590 1.00
UNION PACIFIC COMPANY STOCK 1,900,228 14.09
UNION PACIFIC EQUITY INDEX 2,417,321 15.98
UNION PACIFIC FIXED INCOME 4,473,247 10.14
</TABLE>
e. VESTING - Vesting is based exclusively upon years of service.
Participants at all times have a 100% vested interest in their
voluntary contributions plus actual earnings thereon and their
PAYSOP account. A participant's vested interest in the portion of
his/her account derived from Company contributions are 100% vested
after four years and 1,000 hours of credited service. A
participant's interest in the Company's contributions will also
become 100% vested if while employed by the Company, the participant
reaches age 65, dies, or sustains a total and permanent disability.
f. PAYMENT OF BENEFITS - Except for PAYSOP accounts, a
participant may elect to receive a final distribution under the Plan
as either a cash lump sum distribution or monthly installments over
a specified period of time not to exceed the lesser of ten calendar
years, the life expectancy of the participant or the joint life
expectancy of the participant and his/her beneficiary as prescribed
in the Treasury Regulations. For benefit payments equal to or less
than $3,500, the Plan Administrator may direct the Trustee to make a
lump sum payment to the participant or beneficiary. A participant
has the option to receive the value of his/her PAYSOP account and
the portion of his/her account invested in either the Union Pacific
Company Stock Fund, the UPC Common Stock Fund or the UPR Group Stock
Fund in cash or in shares of the respective company stock; in-kind
distributions will be lump sum and any fractional shares will be
distributed in cash.
A withdrawal may be made by a participant from his/her account in
accordance with the Plan's provisions.
7
<PAGE> 9
g. FORFEITURES - When certain terminations of participation in the
Plan occur, the nonvested portion of a participant's account, as
defined by the Plan, represents a potential forfeiture. Such
potential forfeitures reduce subsequent Company contributions to the
Plan. However, if upon reemployment the former participant fulfills
certain requirements as defined in the Plan, the previously
forfeited nonvested portion of the participant's account may be
restored through Company contributions.
Amounts summarized below represent Company contributions forfeited
for the years ended December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Company contributions forfeited $60,984 $12,465
======= =======
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING - The accounts of the Plan have been
maintained in accordance with generally accepted accounting
principles. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA) and the financial
statements and schedules are prepared in accordance with the
financial reporting requirements of ERISA, as permitted by the
Securities and Exchange Commission's amendments to Form 11-K adopted
during 1990.
b. VALUATION OF INVESTMENTS (STOCK AND MUTUAL FUNDS) - Investments
in stock are stated at fair value based on closing sales prices
reported on recognized securities exchanges on the last business day
of the year. The mutual fund investments are valued at quoted
market prices which represent the net asset values of shares held by
the Plan at year-end. Dividend income is recorded as of the
ex-dividend date. Security transactions are recorded as of the
trade date.
c. VALUATION OF INVESTMENTS (INSURANCE CONTRACTS) Investments in
guaranteed investment contracts are valued at contract value which
approximates fair value. Contract value represents cost plus
reinvested interest.
d. VALUATION OF INVESTMENTS (LOANS TO PARTICIPANTS) - Loans to
participants are valued at cost plus accrued interest which
approximates fair value.
e. EXPENSES - The Plan's expenses are paid by the Company as
provided by the Plan document.
f. RECLASSIFICATIONS - Certain 1995 amounts have been reclassified
to conform to the 1996 financial statement presentation.
8
<PAGE> 10
3. INVESTMENTS
At December 31, 1995, and until October 15, 1996, Plan investments were
maintained in commingled funds of the Plan Trustee along with investments of
another UPC-administered Thrift Plan, within a Master Trust. During 1995 and
until October 15, 1996, assets, liabilities, investment income, and security
gains and losses were allocated monthly to the Plan based on its equity in the
investments of the Master Trust. At December 31, 1995, the Plan held percentage
interests in a Master Trust of 17.1 in Company Stock (including PAYSOP), 33.8
in Equity Index, 34.2 in Fixed Income, 22.3 in the Loan Fund, 26.0 in
Wellington, 28.1 in U.S. Growth, 24.4 in International Growth, 66.7 in VMMR
Prime Portfolio, 100.0 in UPR Group Stock Fund, and 29.8 in Bond Index.
The Plan provides for separate funds for the investment of contributions.
Participants may designate into which fund or funds their contributions are to
be directed within specific limits. At December 31, 1996 and 1995, Union
Pacific Company Stock, UPC Common Stock and PAYSOP are invested primarily in
Union Pacific Common Stock. The UPC Common Stock Fund was established during
1996 as a result of the Distribution. Index Trust-500 Portfolio and Union
Pacific Equity Index are invested in the Vanguard Index Trust 500 Portfolio
Fund at December 31, 1996 and 1995, respectively, which are designed to closely
track the investment performance of the Standard and Poor's 500 Composite Stock
Index. At December 31, 1996 and 1995, UPR Fixed Income Fund and Union Pacific
Fixed Income Fund, respectively, are comprised of investments in GICs bearing
interest at 5.19% to 7.85% and 5.94% to 7.85%, respectively. GICs are held
with insurance companies rated at least A-1 by Standard & Poors. The
maturities of these GICs are generally not longer than five years and their
principal and interest are unconditionally guaranteed by the respective
insurance companies. At December 31, 1996 and 1995, respectively, UPR Fixed
Income Fund and Union Pacific Fixed Income fund are also comprised of the
Vanguard Investment Contract Trust, which is composed of contracts issued by
financial institutions and backed by high quality bonds and bond mutual funds.
As the GICs expire, the proceeds will be reinvested in the Vanguard Investment
Contract Trust. Wellington is invested in the Vanguard/Wellington Fund at
December 31, 1996, which is composed of common stocks and fixed-income
securities. At December 31, 1996 and 1995, U.S. Growth is invested in
Vanguard U.S. Growth Fund which is comprised of established U.S. growth stocks.
International Growth is invested in the Vanguard International Growth Fund at
December 31, 1996 and 1995, which is comprised of foreign common stocks with
high growth potential. At December 31, 1996 and 1995, Bond Index is invested
in the Vanguard Bond Index Fund which is designed to closely track the
investment performance of the Salomon Brothers Broad Investment-Grade Bond
Index. VMMR Prime Portfolio is a diversified money market investment fund
invested and reinvested at December 31, 1996 and 1995, in high quality
certificates of deposit, bankers' acceptances, commercial paper, U.S.
government securities, and other short-term obligations with the objective of
preserving principal while providing income. Subsequent to the Offering, the
UPR Group Stock Fund became an investment option for participants. However,
only employer contributions are eligible for investment in the UPR Group Stock
Fund. At December 31, 1996 and 1995, UPR Group Stock Fund is invested primarily
in Union Pacific Resources Group Inc. Common Stock.
9
<PAGE> 11
4. PLAN AMENDMENTS
Effective August 1, 1996, certain provisions to the plan regarding participant
loans and distributions were amended. Effective October 11, 1995, and November
1, 1995, the UPR Group Stock Fund and the VMMR Prime Portfolio, respectively,
were added as investment alternatives under the Plan. Effective August 1,
1994, the Plan was amended to allow each participant to make daily elections to
change his investment elections, transfer all or a portion of his interest in
any Investment Fund, and/or elect to increase, reduce or totally suspend
contributions being made. For plan years beginning on or after January 1,
1994, only the first $150,000 (as adjusted) of an employee's salary would be
considered for contributions under the Plan. Effective April 1, 1993, the Plan
was amended to provide that the account of a participant who cannot be located
is forfeited and used to reduce Company match contributions to the Plan,
pending reinstatement upon location. The Plan was amended and restated to
reflect changes in the law, including those resulting from the Tax Reform Act
of 1986. These amendments were approved by the Named Fiduciary - Plan
Investments pursuant to a delegation of authority from the Company's, and
previously UPC's, Board of Directors.
5. FEDERAL INCOME TAXES
The Company has received a letter of determination from the Internal Revenue
Service dated July 27, 1995, and the Plan Administrator and the Plan's tax
counsel believe that the Plan, as subsequently amended, is currently designed
and being operated in compliance with section 401(a) of the Internal Revenue
Code of 1986, as amended. With respect to the operation of the Plan, Plan
management is aware of certain operational defects which could adversely affect
the tax- exempt status of the Plan. These operational defects will be
corrected through the use of the Voluntary Compliance Resolution (VCR) program.
Submission to the VCR program was originally made on August 5, 1996. A
restated submission was made in early 1997.
Inasmuch as it is the opinion of Management that the Plan is qualified,
employees participating in the Plan are not taxed on Company contributions made
on their behalf, on employee contributions made on a pre-tax basis, on earnings
on such Company contributions or pre-tax employee contributions, or on earnings
on after-tax employee contributions, until any such amounts are distributed.
In addition, no provision for Federal income taxes has been made in the
financial statements.
6. PLAN TERMINATION
Although the Plan is intended to be continued by the Company, the Company
reserves the right to amend or terminate the Plan. In the event of a Plan
termination or partial termination, or the Company permanently ceases to make
contributions, all invested amounts shall immediately vest and be
nonforfeitable. All funds shall continue to be held for distribution as
provided by the Plan.
10
<PAGE> 12
7. SUBSEQUENT EVENTS
The Plan was amended and restated effective January 1, 1997. Several changes,
including the creation of a leveraged employee stock ownership provision
(LESOP) and changes to the rules regarding participant vesting and eligibility,
were made to the Plan. Details of the LESOP are described in more detail below.
Participants should refer to the plan document for a complete description of
the revised and amended Plan's provisions.
On January 2, 1997, the Trustee, on behalf of the Plan, borrowed $107,300,000
in the form of a note payable from the Company and purchased 3,700,000 shares
of Common Stock of the Company in connection with the LESOP of the Plan. The
note payable requires repayment of principal and interest thereon at a fixed
rate of 7.5% per annum over 30 years beginning in January 1997. The note
payable is collateralized by the unallocated shares held by the Trustee. The
LESOP shares are held by the Trustee until released and allocated to
participant's accounts. The LESOP shares are allocated to the participant
accounts in amounts necessary to (a) meet the Company's 200% matching
requirement and (b) replace the value of any dividends on LESOP shares
allocated to the participant's LESOP account which were used to repay the note
payable to the Company. Debt service payments are made by the Plan from
Company matching contributions and dividends on the LESOP shares (whether or
not allocated ).
11
<PAGE> 13
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FAIR
COST VALUE
------------ ------------
<S> <C> <C>
UPC Common Stock $ 9,892,346 $ 21,843,698
UPR Fixed Income Fund 43,155,831 43,143,620
Index Trust - 500 Portfolio 45,132,465 48,065,001
Company Stock (PAYSOP) 917,576 2,917,842
Loan Fund (6% to 10% for 1 to 15 years) 5,053,489 5,053,489
Wellington 9,490,488 10,878,587
U.S. Growth 9,426,447 11,134,463
International Growth 7,228,037 8,293,049
Bond Index 1,565,774 1,573,957
UPR Group Stock Fund 12,217,425 17,426,039
VMMR Prime Portfolio 1,055,230 1,055,230
Union Pacific Company Stock 137 142
Union Pacific Equity Index 344 594
Union Pacific Fixed Income 16,063 15,988
------------ ------------
$145,151,652 $171,401,699
============ ============
</TABLE>
Page 12
<PAGE> 14
UNION PACIFIC RESOURCES GROUP INC. EMPLOYEES' THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OF
ASSET ON
PURCHASE SELLING COST OF TRANSACTION NET GAIN
IDENTITY OF ISSUE PRICE PRICE ASSET DATE OR LOSS
----------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS IN EXCESS
OF 5% OF PLAN ASSETS:
Union Pacific Company Stock $ 29,809,399 $ 16,040,098 $ 29,809,399 $ 13,769,301
Union Pacific Equity Index 44,480,963 29,352,693 44,480,963 15,128,270
Union Pacific Fixed Income 43,960,107 44,193,689 43,960,107 (233,582)
Union Pacific Common Stock $ 16,040,098 16,040,098
Union Pacific Resources Fixed Income Fund 43,960,107 43,960,107
Vanguard Index Trust - 500 Portfolio 44,480,963 44,480,963
SERIES OF TRANSACTIONS IN EXCESS
OF 5% OF PLAN ASSETS:
Union Pacific Company Stock $ 30,189,132 $ 27,360,000 $ 30,189,132 $ 2,829,132
Union Pacific Equity Index 49,399,098 44,405,843 49,399,098 4,993,255
Union Pacific Fixed Income 52,768,691 52,746,210 52,768,691 22,481
Union Pacific Fixed Income $ 7,444,635 7,444,635
Union Pacific Resources Group Stock Fund 7,397,986 7,397,986
Union Pacific Common Stock 27,284,781 27,284,781
Union Pacific Resources Fixed Income Fund 46,287,242 46,287,242
Vanguard Index Trust - 500 Portfolio 46,701,985 46,701,985
</TABLE>
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