As filed with the Securities and Exchange Commission on November 2, 1999
Registration No. 333-
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 2 ON FORM S-8
TO FORM S-4*
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EL PASO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0568816
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
(Address, including zip code, of Principal Executive Offices)
EL PASO ENERGY CORPORATION
SONAT SAVINGS PLAN
(formerly Sonat Savings Plan)
(Full title of the plan)
Britton White Jr., Esq.
Executive Vice President and General Counsel
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
===================================================================
Proposed
Maximum Proposed
Title of Securities Amount to Offering Maximum Amount
to be Registered be Price Aggregate of
Registered Per Offering Registration
(1) Share Price Fee
- --------------------------------------------------------------------
Common Stock (including 2,300,000 (2) (2) (2)
associated common stock shares
purchase rights), par
value $3.00 per share
====================================================================
(1) Includes an indeterminate amount of additional shares which
may be necessary to adjust the number of shares reserved for
issuance pursuant to the Sonat Savings Plan as a result of any
future stock split, stock dividend or similar adjustment of the
outstanding Common Stock of the Registrant. In addition, pursuant
to Rule 416(c) under the Securities Act of 1933, as amended, this
registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan described herein.
(2) Not applicable. All filing fees payable in connection with
the issuance of these securities were paid in connection with the
filing of the Registrant's Registration Statement on Form S-4
(No. 333-75781) filed April 7, 1999.
(*) Filed as a Post-Effective Amendment on Form S-8 to such
Registration Statement on Form S-4 pursuant to the procedure
described herein in the section captioned "Introductory
Statement."
<PAGE>
INTRODUCTORY STATEMENT
On October 25, 1999, El Paso Energy Corporation (the
"Company" or "Registrant") and Sonat Inc., a Delaware corporation
("Sonat"), consummated the merger (the "Merger") of Sonat with
and into the Company as provided by the Second Amended and
Restated Agreement and Plan of Merger dated March 13, 1999, by
and between the Company and Sonat (the "Merger Agreement").
Subsequent to the Merger, Sonat's common stock and associated
common stock purchase rights ("Sonat Common Stock") were
converted into shares of the Company's common stock, par value
$3.00 per share, and associated preferred stock purchase rights
("Common Stock") and such shares of Sonat Common Stock have
ceased to be outstanding. All certificates evidencing shares of
Sonat Common Stock represent only the right to receive without
interest, shares of the Common Stock in accordance with the
provisions of the Merger Agreement. In connection with the
Merger, the Company assumed each share of Sonat Common Stock
outstanding under the Sonat Savings Plan. Each share of Sonat Common
Stock was automatically converted into one share of Common Stock.
The Registrant hereby amends its Registration Statement on
Form S-4 (No. 333-75781) (the "Form S-4") by filing this Post-
Effective Amendment No. 2 on Form S-8 relating to up to
2,300,000 shares of Common Stock issuable pursuant to Sonat
Savings Plan assumed by the Company in the Merger. All such
shares of Common Stock were previously registered on the Form S-
4, and are being transferred to this Form S-8.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
of the General Instructions to the Registration Statement on Form
S-8 will be sent or given to employees of the Registrant selected
to participate in the Plan as required by Rule 428(b)(1)
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). These documents and the documents
incorporated herein by reference pursuant to Item 3 of Part II of
this Registration Statement taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the
Securities Act (the "Prospectus").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission (the "Commission") by Registrant
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are hereby incorporated by reference in
this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998, which contains audited
financial statements for the most recent year for which such
statements have been filed;
(b) All other reports filed by the Registrant pursuant
to Section 13(a) or 15(d) of the Exchange Act, since the end
of the fiscal year covered by the Annual Report referred to
in (a) above;
(c) The Joint Proxy Statement/Prospectus dated April 7, 1999,
filed with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and
included in its Registration Statement on Form S-4 (File No. 333-
75781) and as amended by Amendment No. 1 dated April 8, 1999, and
as further amended by Amendment No 2, dated April 30, 1999;
(d) The Sonat Savings Plan Annual Report on Form 11-K
for the year ended December 31, 1998, filed by Sonat, dated
June 29, 1999; and
(e) The description of the Registrant's Common Stock,
par value $3.00, per share contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission
on August 3, 1998, and a description of the Registrant's
preferred stock purchase rights associated with its Common
Stock, contained in Registrant's Registration Statement on
Form 8-A/A filed with the Commission on January 29, 1999,
pursuant to Section 12 of the Exchange Act, including any
amendments or reports filed for the purposes of updating
such descriptions.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing such documents. Any
statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of the Registration
Statement and the prospectus to the extent that a statement
contained herein or in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or
Prospectus.
Item 4. Description of Securities.
The information required by Item 4 is not applicable to this
Registration Statement.
Item 5. Interests of Named Experts and Counsel.
The information required by Item 5 is not applicable to this
Registration Statement.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware provides that a corporation may indemnify directors and
officers as well as other employees and individuals against
expenses (including attorneys' fees), judgements, fines and
amounts paid in settlement in connection with specified actions,
suits or proceedings if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceedings, had no reasonable cause to believe their
conduct was unlawful. Similar indemnity is authorized for such
persons against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement
of any such threatened, pending or completed action or suit if
such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of
competent jurisdiction otherwise provides) such person shall not
have been adjudged liable to the corporation. The statute
provides that it is not exclusive of other indemnification that
may be granted by a corporation's by-laws, disinterested director
vote, stockholder vote, agreement or otherwise.
Article X of the By-laws of the Registrant requires
indemnification to the full extent permitted under Delaware law
as from time to time in effect. Subject to any restrictions
imposed by Delaware law, the By-laws provide an unconditional
right to indemnification for all expense, liability and loss
(including attorneys' fees, judgements, fines, ERISA excise taxes
or penalties and amounts paid in settlement) actually and
reasonably incurred or suffered by any person in connection with
any actual or threatened proceeding (including, to the extent
permitted by law, any derivative action) by reason of the fact
that such person is or was serving at the request of the
Registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including an employee benefit plan. The By-laws also
provide that the Registrant may, by action of its Board of
Directors, provide indemnification to its agents with the same
scope and effect as the foregoing indemnification of directors
and officers.
Section 102(b)(7) of the General Corporation Law of the
State of Delaware permits a corporation to provide in its
certificate of incorporation that a director of the corporation
shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability for (i) any breach of the
director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) payment of unlawful dividends or unlawful stock purchases
or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
Article 10 of the Registrant's Restated Certificate of
Incorporation, as amended, provides that to the full extent that
the General Corporation Law of the State of Delaware, as it now
exists or may hereafter be amended, permits the limitation or
elimination of the liability of directors, a director of the
Registrant shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as
a director. Any amendment to or repeal of such Article 10 shall
not adversely affect any right or protection of a director of the
Registrant for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
The Registrant maintains Directors' and Officers' liability
insurance which provides for payment on behalf of the directors
and officers of all losses of such persons (other than matters
uninsurable under the law) arising from claims, including claims
arising under the Securities Act, for acts or omissions by such
persons while acting as directors or officers.
Item 7. Exemption from Registration Claimed.
The information required by Item 7 is not applicable to this
Registration Statement.
Item 8. Exhibits.
Sonat has submitted its Savings Plan and each amendment
thereto to the Internal Revenue Service ("IRS") in a timely
manner and has made all changes required by the IRS to qualify
the Savings Plan under Section 401(a) of the Internal Revenue
Code, and the Registrant hereby undertakes to continue to submit
the Savings Plan and each amendment thereto to the IRS in a
timely manner and will make all changes required so to qualify
the Savings Plan.
Exhibit
Number Description
-------- -----------
5.1 Opinion of Andrews & Kurth L.L.P. regarding the
legality of the securities being registered
hereunder.
10.1 El Paso Energy Corporation Sonat Savings Plan
as amended and restated effective as of January 1,
1998, as amended.
23.1 Consent of Counsel (included in the opinion
filed as Exhibit 5.1 to this Registration
Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on the signature
page contained in Part II of this Registration
Statement).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in this Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated
by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Houston, State of Texas, on this 25th day of
October, 1999.
EL PASO ENERGY CORPORATION
By: /s/ William A. Wise
-------------------------
William A. Wise
President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
authorizes H. Brent Austin and Britton White Jr., and each of
them, as attorneys-in-fact with full power of substitution, to
execute in the name and on behalf of such person, individually
and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all
post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates as
indicated.
Signature Title Date
--------- ----- ----
/s/ William A. Wise President, Chief October 25, 1999
-------------------- Executive
William A. Wise Officer and Director
/s/ H. Brent Austin Executive Vice October 25, 1999
-------------------- President
H. Brent Austin and Chief Financial
Officer
/s/ Jeffrey I. Beason Senior Vice President October 25, 1999
- --------------------- and
Jeffrey I. Beason Controller
(Chief Accounting
Officer)
/s/ Byron Allumbaugh Director October 25, 1999
------------------
Byron Allumbaugh
/s/ Juan Carlos Braniff Director October 25, 1999
______________________
Juan Carlos Braniff
/s/ James F. Gibbons Director October 25, 1999
--------------------
James F. Gibbons
/s/ Ben F. Love Director October 25, 1999
-------------------
Ben F. Love
/s/ Kenneth L. Smalley Director October 25, 1999
- ----------------------
Kenneth L. Smalley
/s/ Malcolm Wallop Director October 25, 1999
- ---------------------
Malcolm Wallop
The Plan. Pursuant to the requirements of the Securities Act of
1933, the trustees (or other persons who administer the employee
benefit plan) have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on this 25th
day of October, 1999.
By: /s/ H. Brent Austin
_______________________
H. Brent Austin
Executive Vice President
and Chief Financial
Officer
INDEX TO EXHIBITS
Exhibit
Number Description
-------- -----------
5.1 Opinion of Andrews & Kurth L.L.P. regarding the
legality of the securities being registered
hereunder.
10.1 El Paso Energy Corporation Sonat Savings Plan
as amended and restated effective as of January 1,
1998, as amended.
23.1 Consent of Counsel (included in the opinion
filed as Exhibit 5.1 to this Registration
Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on the signature
page contained in Part II of this Registration
Statement).
Exhibit 5
[LETTERHEAD OF ANDREWS & KURTH L.L.P.]
November 2, 1999
Board of Directors
El Paso Energy Corporation
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
Gentlemen:
We have acted as special counsel to El Paso Energy
Corporation, a Delaware corporation (the "Company"), in
connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of the post-effective
amendment to Form S-4 on Form S-8 filed by the Company with the
Commission on November 2, 1999 (the "Registration Statement"),
with respect to the offering and sale by the Company of up to
2,300,000 shares (the "Shares") of the Company's common stock,
par value $3.00 per share, in connection with the El Paso Energy
Corporation Sonat Savings Plan (the "Plan").
In arriving at the opinion expressed below, we have
examined the Company's Certificate of Incorporation and By-laws,
each as amended to date, the Registration Statement, and the
originals or copies certified or otherwise identified to our
satisfaction of such other instruments and other certificates of
public officials, officers and representatives of the Company and
such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinions
expressed below.
In rendering the opinion expressed below, we have
assumed and have not verified (i) the genuineness of the
signatures on all documents that we have examined, (ii) the
conformity to the originals of all documents supplied to us as
certified or photostatic or faxed copies, (iii) the authenticity
of the originals of such documents and (iv) as to the forms of
all documents in respect of which forms were filed with the
Commission as exhibits to the Registration Statement, the
conformity in all material respects of such documents to the
forms thereof that we have examined.
Based on the foregoing, and subject to the limitations
and exceptions set forth below, it is our opinion that the Shares
will, when issued and paid for in accordance with the terms of
the Plan, be duly authorized, validly issued, fully paid and
nonassessable.
For the purposes of the opinion expressed above, we
have assumed that the Registration Statement, and any amendments
thereto (including post-effective amendments), will have become
effective.
We express no opinion other than as to the federal laws
of the United States of America and the Delaware General
Corporation laws. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the
reference to this firm under the heading "Legal Matters" in the
prospectus forming part of the Registration Statement without
admitting that we are "experts" under the Act, or the rules and
regulations of the Commission issued thereunder, with respect to
any part of the Registration Statement, including this exhibit.
This opinion is rendered solely for your benefit in connection
with the above matter and may not be relied upon in any manner by
any other person or entity without our express written consent.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
EXHIBIT 10.1
SONAT SAVINGS PLAN
(As amended and in effect as of January 1, 1998)
SECTION I - DEFINITIONS
The following terms as used in the Plan have the meanings set out
below:
Account - Any account or accounts of a Participant under the
Plan.
After-Tax Account - The Account established for a
Participant's After-Tax Contributions and the income,
expenses, gains and losses with respect thereto.
After-Tax Contributions - Contributions to the Plan made by
the Participant by means of payroll deductions.
Alternate Payee - The spouse, former spouse, child or other
dependent of a Participant.
Base Group - The group of Employees eligible to participate
in the Plan who are not Highly Compensated Employees.
Base Pay - The regular, non-overtime rate of base pay of an
Employee as stated on the Employer's payroll records. Base
Pay shall include After-Tax and Before-Tax Contributions and
contributions to a plan established under Code Section 125,
and exclude any pay for overtime and any other premium or
special pay. For Plan Years beginning after December 31,
1993, Base Pay exceeding $150,000 (adjusted as provided in
Code Sections 401(a)(17) and 415(d)) shall be disregarded.
Before-Tax Account - The Account established for a
Participant's Before-Tax Contributions and the income,
expenses, gains and losses with respect thereto.
Before-Tax Contribution Rate - For a group, the average of
the ratios, calculated separately for each Participant in
the group, of (i) his Before-Tax Contributions (and, to the
extent determined by the Committee pursuant to Code Section
401(k)(3)(D)(ii), his Company Matching Contributions) for
the Plan Year to (ii) his Base Pay.
Before-Tax Contributions - Contributions to the Plan made in
lieu of compensation, in a manner intended to satisfy the
requirements of Code Section 401(k).
Beneficiary - The person, persons or entity designated by a
Participant in accordance with procedures established by the
Committee to receive any benefits payable in the event of
such Participant's death.
Board - The Board of Directors of the Company or any duly
authorized committee thereof.
Code - The Internal Revenue Code of 1986, as amended from
time to time, and any successor statute. Reference to a
specific provision of the Code shall include such provision
and the Treasury Regulations promulgated thereunder.
Committee - The Company's Benefit Plan Administrative
Committee, which has the exclusive responsibility and
discretion to administer, interpret and carry out the
provisions of the Plan, and to carry out the powers,
responsibilities and duties provided for in Section VIII.
Common Stock - The Common Stock of the Company without any
Rights that may have been issued with respect thereto.
Company - Sonat Inc. or any successor corporation by merger,
purchase or otherwise.
Company Matching Contributions - Contributions to the Plan
made by the Employer other than Before-Tax Contributions.
Diversifiable Company Matching Account - The Account
established for a Participant's Diversifiable Company
Matching Contributions and the income, expenses, gains and
losses with respect thereto.
Diversifiable Company Matching Contributions - The Company
Matching Contributions allocated to the Participant's
Diversifiable Company Matching Account, as provided in
Paragraph III.5.
Eligible Borrower - Any Participant who is a "party in
interest" to the Plan (as defined in ERISA Section 3(14)).
Employee - Any person in the employ of the Company or a
Subsidiary.
Employer or Employers - The Company and any Subsidiary of
the Company which has adopted the Plan and to whose
Employees the Board has extended the benefits of the Plan.
The Employers are listed on Schedule A hereto.
Employment Commencement Date - The date on which an Employee
first earns an Hour of Service for the Company or a
Subsidiary.
ERISA - The Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
Reference to a specific provision of ERISA shall include
such provision and any regulations promulgated thereunder.
Hardship - Hardship as determined by the Committee in a
uniform and non-discriminatory manner consistent with Code
Section 401(k). A Participant shall be entitled to a
withdrawal on account of Hardship only if the withdrawal is
necessary to satisfy one or more of the following types of
immediate and heavy financial need:
(a) expenses for medical care described
in Code Section 213(d) previously incurred by
the Participant, his spouse, or his
dependents (as defined in Code Section 152)
or necessary for such persons to obtain such
medical care;
(b) costs directly related to the
purchase of a principal residence for the
Participant (excluding mortgage payments);
(c) payment of tuition, related
educational fees, and room and board
expenses, for the next 12 months of post-
secondary education for the Participant, his
spouse, his children or his dependents (as
defined above);
(d) payments necessary to prevent the
eviction of the Participant from his
principal residence or foreclosure on the
mortgage on such residence;
(e) funeral expenses of a family
member;
(f) payments necessary to repair damage
to the Participant's principal residence
which resulted from storm, fire, flooding or
other natural disaster; or
(g) such other deemed immediate and
heavy financial needs as are set forth by the
Internal Revenue Service through the
publication of revenue rulings, notices and
other documents of general applicability.
Highly Compensated Employee - Effective as of January 1,
1997, an Employee who performs service during the current
Plan Year and who either:
(1) was a Five-Percent Owner (as defined
below) at any time during the current Plan Year or
the preceding Plan Year; or
(2) received HCE Compensation (as defined
below) during the preceding Plan Year in excess of
$80,000 (adjusted as provided in Code
Sections 414(q) and 415(d)) and, if the Committee
so elects for such preceding Plan Year, was a
member of the Top-Paid Group (as defined below)
for such preceding Plan Year.
For purposes of this definition of Highly Compensation
Employee, (1) the term Five-Percent Owner shall have the
meaning set forth in Code Section 416(i)(1); (2) the term
HCE Compensation shall mean compensation from the Employers
within the meaning of Code Section 415(c)(3) (adjusted as
provided in Code Section 414(q)(4)); and (3) the term Top-
Paid Group shall mean the top 20% of Employees (including
Employees described in Code Section 414(q)(5) and
Q&A9(b)(1)(i) of Treasury Regulation Section 1.414(q)-1T,
but excluding non-resident aliens described in Code Section
414(q)(8) and Q&A9(b)(1)(ii) of such Treasury Regulation)
ranked on the basis of HCE Compensation received during the
applicable Plan Year.
Hour of Service - (i) Each hour for which an Employee is
paid, or entitled to payment, for the performance of duties
for the Company or a Subsidiary, which hours shall be
credited to the Employee for the computation period in which
the duties are performed; (ii) each hour for which an
Employee is paid, or entitled to payment, by the Company or
a Subsidiary on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship is terminated) due to vacation, holiday,
illness, incapacity, disability, layoff, jury duty, military
duty or leave of absence, which hours shall be calculated
and credited in accordance with Section 2530.200b-2 of the
Department of Labor Regulations; and (iii) each hour (other
than an hour also credited under (i) or (ii) above) for
which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Company or a Subsidiary,
which hours shall be credited to the Employee for the
computation period or periods to which the award or
agreement pertains rather than the computation period in
which the award, agreement or payment is made.
Investment Fund - An investment fund established by the
Committee pursuant to Paragraph IV.1.
Loan - A loan from the Plan to an Eligible Borrower, as
provided for in the Plan and the Loan Procedures.
Loan Account - The Account established to hold a Note
executed by the Eligible Borrower and to receive all
payments of principal and interest with respect thereto.
Loan Procedures - The terms, conditions and procedures
established for Loans by the Committee. The Loan Procedures
shall be non-discriminatory and shall conform to the
provisions of the Code and ERISA.
Non-Diversifiable Company Matching Account - The Account
established for a Participant's Non-Diversifiable Company
Matching Contributions and the income, expenses, gains and
losses with respect thereto.
Non-Diversifiable Company Matching Contributions - The
Company Matching Contributions allocated to the
Participant's Non-Diversifiable Company Matching Account, as
provided in Paragraph III.5.
Normal Retirement Age - Age 65.
Note - The promissory note evidencing the Eligible
Borrower's obligation to repay a Loan, in such form and with
such provisions as are determined in a non-discriminatory
manner by the Committee.
Order - Any judgment, decree, or order (including approval
of a property settlement agreement) which (i) relates to the
provision of child support, alimony payments or marital
property rights to an Alternate Payee, and (ii) is made
pursuant to a state domestic relations law (including a
community property law).
Participant - An Employee who is eligible to participate in
the Plan as provided in Section II. To the extent required
by law, the term "Participant" shall also include former
Participants, Alternate Payees and Beneficiaries.
Plan - The Sonat Savings Plan (formerly the Sonat Inc. Stock
Purchase Plan), as amended from time to time, which is a
profit-sharing plan under the Code. Contributions of the
Employers shall not be contingent upon the profits of the
Employers.
Plan Year - The calendar year.
Qualified Domestic Relations Order - Subject to the
provisions of Code Section 414(p), an Order which (a)
creates or recognizes the existence of an Alternate Payee's
right to, or assigns to an Alternate Payee the right to,
receive all or a portion of the benefits payable to a
Participant under this Plan; (b) specifies (i) the name and
last known mailing address (if any) of the Participant and
each Alternate Payee covered by the Order, (ii) the amount
or percentage of the Participant's benefits under the Plan
to be paid to each such Alternate Payee, or the manner in
which such amount or percentage is to be determined, and
(iii) the number of payments or the period to which the
Order applies and each plan to which the Order relates; and
(c) does not require the Plan to (i) provide any type or
form of benefit or any option not otherwise provided under
the Plan, (ii) provide increased benefits (determined on the
basis of actuarial value), or (iii) pay benefits to an
Alternate Payee that are required to be paid to another
Alternate Payee under a prior Qualified Domestic Relations
Order.
Rights - The Rights to purchase Series A Participating Stock
upon the terms and subject to the conditions of the Rights
Agreement, dated as of February 8, 1996, as amended, between
the Company and Chemical Mellon Shareholder Services, L.L.C.
(now ChaseMellon Shareholder Services, L.L.C.), as Rights
Agent, whether such Rights are separately transferable or
are represented by certificates for (and transferable only
with) the Common Stock.
Rollover Account - The Account established for a
Participant's Rollover Contributions and the income,
expenses, gains and losses with respect thereto.
Rollover Contribution - Either (1) an "eligible rollover
distribution" (as defined in Code Section 402(c)(4)) that is
contributed to a Participant's Rollover Account pursuant to
Code Section 401(a)(31) or 402(c), or (2) a "rollover
contribution" (as defined in Code Section 408(d)(3)) that is
contributed to a Participant's Rollover Account pursuant to
Code Section 408(d)(3)(A)(ii).
Stock - Either Common Stock or Rights or a combination of
Common Stock and Rights, as the case may be.
Stock Fund - An Investment Fund established by the
Committee, pursuant to Section IV, that invests solely in
Stock and in short-term money-market investments.
Subsidiary - Any member of the controlled group of
corporations (within the meaning of Code Section 414(b), as
modified by Code Section 415(h) for purposes of determining
the limitations on contributions set forth in Code
Section 415) of which the Company is a member and any entity
whose trade or business is under common control with the
Company (within the meaning of Code Section 414(c), as
modified by Code Section 415(h) for purposes of determining
the limitations on contributions set forth in Code
Section 415).
Termination Date - The earlier of (i) the date of a
Participant's Termination of Employment or (ii) the first
anniversary of the first date that a Participant was
continuously absent (with or without pay) for any reason
(other than authorized leave of absence) which does not
constitute a Termination of Employment, such as vacation,
holiday, sickness, disability or layoff.
Termination of Employment - The voluntary or involuntary
severance of employment with the Company or a Subsidiary
(including severance of employment by reason of quit,
discharge, early or normal retirement, or death), except in
the event of transfer from the Company to a Subsidiary or
from a Subsidiary to the Company or another Subsidiary.
A leave of absence, which is defined as any period of
absence authorized and approved by the Company or Subsidiary
which employs the Employee pursuant to its uniform and non-
discriminatory personnel practices, shall not be deemed a
Termination of Employment; provided, however, that if an
Employee fails to return to work within the time prescribed
in a leave of absence, he shall be deemed to have incurred a
Termination of Employment as of the last day of such leave
of absence.
Total Contribution Rate - For a group, the average of the
ratios, calculated separately for each Participant in the
group, of (i) the total of the After-Tax Contributions and
(except as may be prohibited by Code Section 401(m)(3))
Company Matching Contributions made to his Account for the
Plan Year to (ii) his Base Pay.
Trust - The fund established by contributions of
Participants and of the Employers as outlined herein.
Trust Agreement - The agreement entered into between the
Company and the Trustee, as amended from time to time,
covering the Trustee's functions, duties and
responsibilities.
Trustee - The trustee appointed to administer the Trust
pursuant to the Trust Agreement.
Valuation Date - Such dates as the Committee may establish
on a non-discriminatory basis for the valuation of Accounts
under the Plan.
Withdrawable Company Matching Account - The Account
established for all Company Matching Contributions made by
the Employer on behalf of the Participant on or before
December 31, 1993, and the income, expenses, gains and
losses with respect thereto.
Where a masculine pronoun is used, it includes both males and
females.
SECTION II - ELIGIBILITY AND PARTICIPATION
1. Eligibility - General
Except as provided in this Section II, all Employees are
eligible to participate in the Plan.
2. Exclusions From Eligibility
Employees in the following categories shall not be eligible
to participate in the Plan:
a. Employees who are included in a unit of Employees
covered by a collective bargaining agreement where
retirement, savings or profit-sharing benefits were the
subject of good faith bargaining between Employee
representatives and the Employer, unless the benefits
provided by this Plan are specifically included under
said collective bargaining agreement;
b. Employees who are not listed in and paid through
the Company's payroll system as employees of an
Employer;
c. "Leased employees" as defined in Code Section
414(n); and
d. Auxiliary Employees (including Auxiliary Chart
Changers and Auxiliary Clerks), Field Trainees, Student
Trainees, Temporary Employees and Tower Light Watchers.
3. Application to Participate
An Employee who becomes eligible to participate in the Plan
will automatically become a Participant at such time.
However, no After-Tax or Before-Tax Contributions will be
made on behalf of an Employee unless he has filed an applica
tion to participate with the Committee. An application to
participate shall be effective as soon as administratively
practicable under such procedures as may be established by
the Committee, but in no event earlier than the first day of
the pay period coinciding with or immediately following the
date such application is filed.
4. Leave or Layoff
A Participant who takes an authorized leave of absence or
who is placed on layoff status remains a Participant, but is
suspended from making contributions, during any period when
he is not being paid because of such authorized leave of
absence or layoff.
5. Transfer or Job Reassignment
A Participant who remains an Employee but is no longer
eligible to participate in the Plan because he is excluded
from eligibility pursuant to Paragraph II.2 shall cease to
be eligible to make contributions to the Plan as of the date
on which he falls within an exclusion set forth in such
Paragraph.
SECTION III - CONTRIBUTIONS
1. Amount of After-Tax and Before-Tax Contributions
Each Participant may elect the percentage of his Base Pay
(stated in full percentages) which shall be contributed to
the Plan for his account as After-Tax and Before-Tax
Contributions. The aggregate of a Participant's After-Tax
and Before-Tax Contributions shall not be less than 1.0% nor
more than 12.0% of Base Pay. The percentages so elected
shall be applied to the Base Pay of the Participant (taking
into account any partial pay periods that may occur), on a
paycheck by paycheck basis, as increased or decreased from
time to time. The percentages so elected shall be subject
to automatic adjustment and the limitations on contributions
as set forth in Section XII.
2. Changes by Participant
A Participant may increase (subject to the permitted
maximum), decrease (subject to the permitted minimum) or
cease his After-Tax Contributions and Before-Tax Contribu
tions from time to time pursuant to such procedures as may
be established by the Committee. A change so made will be
effective no earlier than the first day of the pay period
coinciding with, or immediately following, the date the
Participant elects to make such change.
3. Return from Leave or Lay-off
The After-Tax Contributions and Before-Tax Contributions of
a Participant who returns to work as an Employee after a lay-
off or an authorized leave of absence or who again becomes
eligible to participate in the Plan upon a transfer or job
reassignment shall automatically recommence effective as of
the date he returns to work or again becomes eligible, based
upon the Participant's most recent election with respect
thereto.
4. Payment and Allocation of After-Tax and Before-Tax
Contributions
After-Tax and Before-Tax Contributions shall be paid to the
Trustee as soon as such Contributions can reasonably be
segregated from the Company's general assets (and in no
event later than the fifteenth business day of the month
after the month in which the contribution would otherwise
have been payable to the Participant). After-Tax
Contributions and Before-Tax Contributions shall be
allocated to the respective After-Tax Account and Before-Tax
Account of the Participant by whom or with respect to whom
such contribution was made.
5. Company Matching Contributions
Company Matching Contributions shall be paid to the Trustee
after the end of each pay period (and in no event later than
the fifteenth business day of the month after the month in
which such pay period ends). The maximum Company Matching
Contribution payable with respect to a Participant for any
pay period shall not exceed the lesser of (1) 6% of his Base
Pay for such pay period (taking into account only Base Pay
earned while the Participant was eligible to participate in
the Plan), and (2) his Before-Tax Contributions for such pay
period.
In addition to the Company Matching Contributions paid as
set forth above, there shall be paid to the Trustee a
Company Matching Contribution for each Plan Year with
respect to each Participant equal to the difference between
(1) the lesser of (a) the Participant's Before-Tax
Contributions with respect to his Base Pay during such Plan
Year, and (b) 6% of the Participant's Base Pay during such
Plan Year (taking into account only Base Pay earned while
the Participant was eligible to participate in the Plan),
minus (2) the aggregate Company Matching Contributions paid
with respect to such Participant for such Plan Year under
the preceding paragraph of this Paragraph III.5. The
Company Matching Contribution made pursuant to this
paragraph for a Plan Year shall be paid to the Trustee (1)
if the Participant has a Termination of Employment during
the Plan Year, as soon as reasonably practicable (and no
more than 60 days) after the Participant's Termination of
Employment, and (2) if the Participant does not have a
Termination of Employment during the Plan Year, as soon as
reasonably practicable (and no more than 60 days) after the
end of the Plan Year.
One-half of the Company Matching Contributions paid to the
Trustee on or after January 1, 1994 on behalf of a
Participant shall be Diversifiable Company Matching
Contributions and shall be allocated to his Diversifiable
Company Matching Account, and the remaining one-half of the
Company Matching Contributions paid to the Trustee on or
after January 1, 1994 on behalf of a Participant shall be
Non-Diversifiable Company Matching Contributions and shall
be allocated to his Non-Diversifiable Company Matching
Account.
6. Rollover Account
Any Employee who is eligible to participate in the Plan may
make Rollover Contributions to his Rollover Account in the
Plan. In order to make a Rollover Contribution, the
Employee must comply with such procedures, and furnish the
Committee with such information, as the Committee may deem
necessary or appropriate. If a contribution is accepted
into an Employee's Rollover Account, and it is later
determined that the contribution was not a valid Rollover
Contribution, such contribution (plus earnings thereon) will
be distributed to the Employee within a reasonable time
after such determination.
SECTION IV - INVESTMENT OF CONTRIBUTIONS
1. Establishment of Investment Funds
The Committee shall establish the Stock Fund and such other
Investment Funds as it may from time to time determine for
the investment of a Participant's Accounts.
2. Election of Investment Funds
In order to participate in the Plan, a Participant shall be
required to elect the Investment Funds in which his After-
Tax, Before-Tax and Diversifiable Company Matching
Contributions shall be invested. A Participant who makes a
Rollover Contribution shall be required to elect the
Investment Funds in which such Contribution shall be
invested. Elections under this Paragraph IV.2 shall be made
in the manner prescribed from time to time by the Committee,
and shall specify the application of such contributions to
the Investment Funds within a Participant's Accounts in
integral multiples of 1% or in such other percentages as the
Committee may determine.
3. Allocation of Earnings
Earnings of any Investment Fund shall be credited to the
Participants' Accounts in proportion to their Account
balances in such Investment Fund as of the applicable
Valuation Date.
4. Changes in Investment Direction
Pursuant to such non-discriminatory rules and procedures as
the Committee shall determine, a Participant may change his
election of Investment Funds with respect to future After-
Tax, Before-Tax and Diversifiable Company Matching
Contributions.
5. Transfers Among Investment Funds
A Participant may elect to have all or part of his balance
in any Investment Fund in any Account transferred to one or
more other Investment Funds established for such Account
under the Plan. Such elections shall be made pursuant to
such non-discriminatory rules and procedures as the
Committee shall determine.
6. Investment of Withdrawable Company Matching and Non-
Diversifiable Company Matching Accounts
All amounts in a Participant's Withdrawable Company Matching
and Non-Diversifiable Company Matching Accounts shall be
invested in the Stock Fund.
SECTION V - DISTRIBUTIONS FROM THE PLAN UPON TERMINATION OF
EMPLOYMENT; ATTAINMENT OF AGE 70 1/2
1. Distributions on Termination of Employment
A. Upon a Participant's Termination of Employment,
the balance in the Participant's Accounts shall be
distributed as provided in this Section V (unless the
Participant has been rehired prior to such
distribution, in which case no distribution shall be
made). The Valuation Date for such distribution shall
be determined pursuant to such uniform rules as the
Committee shall prescribe. All distributions made
pursuant to this Paragraph V.1 shall be made (1) in the
form of a single payment and (2) not later than 60 days
after the end of the Plan Year containing the
Participant's Termination Date or Normal Retirement Age
(whichever is later).
B. If the Participant has a Termination of Employment
as a result of death or on or after attaining Normal
Retirement Age, or if the value of the balance of the
Participant's Accounts is less than or equal to $5,000
as of the Valuation Date coincident with or immediately
following both his Termination Date and allocation of
all After-Tax, Before-Tax and Company Matching
Contributions to his Accounts, the entire balance shall
be distributed as soon as practicable after such
Valuation Date.
C. If the Participant has a Termination of Employment
(other than death) prior to attaining Normal Retirement
Age, and if the value of the balance of the
Participant's Accounts is greater than $5,000 as of the
Valuation Date coincident with or immediately following
both his Termination Date and allocation of all After-
Tax, Before-Tax and Company Matching Contributions to
his Accounts, the entire balance shall be distributed
(1) as soon as practicable after the Participant has
submitted his written request for and consent to the
distribution as provided in Code Section 411(a)(11),
and (2) if the balance has not been distributed prior
to Normal Retirement Age, as soon as practicable after
Normal Retirement Age.
D. For purposes of this Section V, "Termination of
Employment" shall not include any event which is not a
"separation from service" within the meaning of Code
Section 401(k).
E. Except as provided in Sections VIIA and IX, in the
event of a Participant's death prior to distribution of
his entire balance, distribution thereof as provided in
this Paragraph V.1 will be made (1) to the
Participant's spouse; or (2) to the Participant's
Beneficiary (or his estate in the event he has not
designated a Beneficiary), provided either (a) the
Participant does not have a spouse, or (b) the
Participant's spouse has waived the right to receive
such distribution as provided in Paragraph V.1.F below.
F. The designation by a Participant of a Beneficiary
other than his spouse shall be effective only if it is
made in writing by the Participant on a form provided
by (or acceptable to) the Committee, and filed with the
Committee together with the written consent of the
Participant's spouse acknowledging the effect of such
designation (witnessed by a Plan representative
appointed by the Committee or notary public), unless
(1) it is established to the satisfaction of the
Committee that such spouse's consent may not be
obtained because the Participant has no spouse or the
spouse cannot be located, or (2) such other
circumstances exist as the Committee may, in accordance
with applicable regulations, deem appropriate to waive
the foregoing consent requirement. Upon the death of a
Participant who has not received distribution of his
entire balance, if the Participant had a spouse who is
entitled to receive such balance under Paragraph V.1.E
above, such spouse may waive such right by executing
and filing with the Committee a form acknowledging the
effect of the waiver of such right (witnessed by a Plan
representative appointed by the Committee or notary
public).
A Participant may revoke a designation under this
Paragraph V.1.F, and make a new designation (subject to
the requirements of this Paragraph), at any time prior
to the Participant's death.
2. Distributions Upon Attaining Age 70 1/2
Notwithstanding any other provision of the Plan, if a
Participant either (1) has attained age 70 1/2 before
January 1, 1999 and has not had a Termination of Employment,
or (2) is a Five-Percent Owner (as defined below) with
respect to the calendar year in which he attains age 70-1/2,
there shall be distributed to such Participant:
(a) No later than April 1 of the Plan Year following
the Plan Year in which he attained age 70 1/2, the balance
in his Accounts as of the Valuation Date immediately
preceding the date of such distribution; and
(b) No later than each December 31 thereafter, the
balance in his Accounts as of the Valuation Date immediately
preceding the date of such distribution.
For purposes of this Paragraph V.2, the term "Five Percent
Owner" shall have the meaning set forth in Code Section
416(i)(1).
SECTION VI - VESTING REQUIREMENTS; FORFEITURES
1. Vesting - General
Subject to the provisions of Paragraph VI.2, effective
January 1, 1993, a Participant shall at all times be fully
vested in his Accounts under the Plan.
2. Vesting Upon Reemployment
The vesting of the Withdrawable Company Matching Account of
a Participant who had a Termination of Employment before
January 1, 1993, shall be subject to the provisions of the
Plan on the date of such Termination of Employment. If such
an Employee is reemployed by the Company or a Subsidiary on
or after January 1, 1993, all amounts which were forfeited
pursuant to such Plan provisions as a result of such
Termination of Employment shall be reinstated in the Trust,
without interest and without earnings on Stock during the
break in employment, in his Withdrawable Company Matching
Account, and shall be immediately vested.
3. Vesting of Rights
Notwithstanding any other provision of his Section VI, any
Rights issued with respect to Common Stock shall vest at the
same time as the Common Stock with respect to which they
were issued.
SECTION VII - RIGHTS OF WITHDRAWAL FROM THE PLAN PRIOR TO
TERMINATION OF EMPLOYMENT; PLAN LOANS
1. In-Service Withdrawals - General
A Participant may make withdrawals from his Accounts prior
to his Termination of Employment only as provided in this
Section VII and pursuant to such non-discriminatory rules as
the Committee shall prescribe. The balance in each Account
that may be withdrawn shall be subject to the provisions of
this Section VII and shall be determined from time to time
as of Valuation Dates pursuant to such non-discriminatory
rules as the Committee shall prescribe.
2. After-Tax Account
A Participant may withdraw all or any part of the balance in
his After-Tax Account prior to his Termination of Employment
after 12 calendar months of participation in the Plan. A
subsequent withdrawal under this Paragraph VII.2 may not be
made until 12 months after the date of the previous
withdrawal under this Paragraph. A Participant may also
make withdrawals from his After-Tax Account in the event of
Hardship as provided in Paragraph VII.5 below.
3. Before-Tax Account, Diversifiable Company Matching Account,
Non-Diversifiable Company Matching Account and Rollover
Account
Except as provided in Paragraph VII.5 below, a Participant
may withdraw all or any part of the balance in his Before-
Tax Account, Diversifiable Company Matching Account, Non-
Diversifiable Company Matching Account and Rollover Account
prior to his Termination of Employment only after the
Participant has attained age 59-1/2. A subsequent
withdrawal from the Before-Tax Account, Diversifiable
Company Matching Account, Non-Diversifiable Company Matching
Account or Rollover Account under this Paragraph VII.3 may
not be made until 12 months after the date of the previous
withdrawal from such Account under this Paragraph.
4. Withdrawable Company Matching Account
A Participant may withdraw all or any part of the balance in
his Withdrawable Company Matching Account prior to his
Termination of Employment. A subsequent withdrawal under
this Paragraph VII.4 may not be made until 12 months after
the date of the previous withdrawal under this Paragraph. A
Participant may also make withdrawals from his Withdrawable
Company Matching Account in the event of Hardship as
provided in Paragraph VII.5 below.
5. Hardship Withdrawals
Notwithstanding any withdrawals made pursuant to
Paragraphs VII.2, VII.3 and VII.4, a Participant may make
withdrawals from his After-Tax, Before-Tax, Withdrawable
Company Matching, and Rollover Accounts on account of
Hardship. Any application for a withdrawal on account of
Hardship shall be made in writing to the Committee, setting
forth facts demonstrating that a Hardship exists and
containing such financial statements, documents and other
additional information as the Committee shall require. Such
application shall also contain the written agreement of the
Participant to (1) suspend his right to make After-Tax and
Before-Tax Contributions (and to receive Company Matching
Contributions with respect thereto) for 12 months,
commencing as of the first day of the pay period coincident
with or immediately following distribution from his Accounts
on account of Hardship, and (2) suspend his right to
contribute to all other qualified and nonqualified plans of
deferred compensation maintained by the Company for at least
12 months after distribution from his Accounts on account of
Hardship. The Participant's After-Tax and Before-Tax
Contributions (and Company Matching Contributions with
respect thereto) shall automatically recommence at the end
of such 12-month period, based upon the Participant's most
recent election with respect thereto. A withdrawal on
account of Hardship may be made only if the Participant has
obtained all withdrawals (other than hardship withdrawals)
and all nontaxable loans available under the Plan and all
other plans maintained by the Company.
The amount that a Participant may withdraw on account of
Hardship may not exceed the amount of the immediate and
heavy financial need of the Participant (including any
amounts necessary to pay any federal or state income taxes
or penalties reasonably anticipated to result from the
withdrawal, as determined by the Committee), and shall be
paid from his Accounts in the following order: (1) the
balance of the Participant's After-Tax Account, (2) the
balance of the Participant's Withdrawable Company Matching
Account, (3) the balance of the Participant's Before-Tax
Account as of December 31, 1988 plus the amount of the
Participant's Before-Tax Contributions after such date minus
any amount of Before-Tax Contributions previously withdrawn
by the Participant from such Account, and (4) the balance of
the Participant's Rollover Account.
6. Mandatory Withdrawals
In the event a portion of a Participant's Account is
liquidated pursuant to Paragraph VII.8 or Section XII, such
liquidation will be disregarded for purposes of determining
the timing of withdrawals under this Section VII.
7. Loan Account
A Participant may not withdraw any part of the balance from
his Loan Account prior to his Termination of Employment.
8. Plan Loans
a. General. An Eligible Borrower may take out a Loan
from the Plan as provided in this Paragraph VII.8 and
the Loan Procedures.
b. Availability of Loans. An Eligible Borrower may
have only one Loan outstanding at any time, and can
take out a Loan only once in any Plan Year. An
Eligible Borrower may not extend or shorten the term of
a Loan, use proceeds from a new Loan to pay off a
currently outstanding Loan, or otherwise refinance a
Loan. The Loan Procedures may impose a Loan
application or processing fee, and may require that
such fee be paid by the liquidation of a portion of the
Eligible Borrower's Accounts.
c. Loan Terms. The minimum Loan shall be $1,000.
The maximum Loan shall be the lesser of (1) 50% of the
vested balance in the Eligible Borrower's Accounts; and
(2) $50,000, reduced by the highest outstanding balance
of any Plan Loan (or any loan from other tax-qualified
plans of the Company and its Subsidiaries) to such
Eligible Borrower during the 12-month period ending on
the day before the Loan is made. Each Loan shall bear
a reasonable rate of interest. Each Loan shall be
required to be repaid in full within 5 years; provided,
however, that if the Loan is used to acquire a dwelling
which is to be used within a reasonable time after the
Loan is made as the Eligible Borrower's principal
residence, the Loan shall be required to be repaid in
full within 10 years. Except as otherwise permitted
under the Code and ERISA, each Loan shall be repaid
with substantially level payments, no less frequently
than quarterly, over the term of the Loan.
Notwithstanding the foregoing, an Eligible Borrower may
prepay a Loan in whole (but not in part), without
penalty, through payment of the outstanding principal
of the Loan (plus accrued interest thereon).
d. Loan Proceeds. Upon the approval of an Eligible
Borrower's application for a Loan, the Loan proceeds
shall be derived from the proceeds of the sale or
redemption of Investment Funds in the Eligible
Borrower's Accounts, in the manner specified in the
Loan Procedures. The proceeds of such sales or
redemptions shall be transferred (1) from the Eligible
Borrower's other Accounts to his Loan Account, and
(2) from his Loan Account to the Eligible Borrower.
e. Security. Each Loan shall be secured by a lien on
the Eligible Borrower's vested balance in the Plan, to
the maximum extent permitted by the Code and ERISA.
f. Loan Repayments. All Loan repayments shall be
made to the Eligible Borrower's Loan Account. Such
repayments shall immediately be transferred from the
Loan Account to the Eligible Borrower's other Accounts,
and invested in the manner specified in the Loan
Procedures.
g. Loan Defaults. Upon the occurrence of any event
of default as specified in the Note evidencing any Loan
(an "Event of Default"), the Committee shall take such
action as it determines to be necessary or appropriate
in order to preclude the loss of principal and interest
by the Plan. Such action may include a foreclosure of
the Loan by distribution of the Note to the Eligible
Borrower, or by other reduction of the Eligible
Borrower's Plan balance by the value of the Loan;
provided that no such foreclosure or reduction shall be
made until the earliest time that Before-Tax
Contributions may be distributed to the Eligible
Borrower, as provided in Code Section 401(k).
9. Alternate Payees
Any Plan provision to the contrary notwithstanding, if
Accounts have been established in the name of an Alternate
Payee pursuant to the terms of a Qualified Domestic
Relations Order relating to a Participant, then the
Alternate Payee may withdraw the entire balance in all of
such Accounts in a single distribution at any time. If such
balance has not been distributed prior to the Participant's
Normal Retirement Age, it shall be distributed as soon as
practicable after such Normal Retirement Age. The
withdrawal and distribution provisions in this Paragraph
VII.9 are in lieu of all other withdrawal and distribution
provisions set forth elsewhere in the Plan with respect to
Accounts held in the name of an Alternate Payee.
SECTION VIIA - DISTRIBUTION OPTIONS
1. Form of Distributions
Distributions from the Stock Fund shall be made in the form
of shares of Stock or cash, at the election of the
Participant (provided that fractional shares and fractional
Rights shall be distributed in cash). If the Participant
fails to make such an election, such distributions shall be
made in the form of shares of Stock. Distributions from all
other Investment Funds shall be in the form of cash.
2. Direct Rollovers
Any Plan provision to the contrary notwithstanding, a
distributee may elect, in the manner and on such forms as
may be prescribed or permitted by the Committee, to have all
or any portion of an eligible rollover distribution paid
directly to the eligible retirement plan specified by the
distributee in the form of a direct rollover, all as
provided for in Code Sections 401(a)(31) and 402.
Subject to the provisions of Code Sections 401(a)(31) and
402, for purposes of this Paragraph VIIA.2:
"distributee" shall mean (1) the Participant,
(2) upon the death of the Participant, the
Participant's surviving spouse (to the extent of such
person's interest in the Participant's Accounts), and
(3) the Participant's spouse or former spouse (to the
extent of such person's interest in the Participant's
Accounts as an Alternate Payee under a Qualified
Domestic Relations Order).
"eligible rollover distribution" shall mean any
distribution of all or any portion of the balance of
the Participant's Accounts, other than (1) any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of
ten years or more; (2) any distribution to the extent
such distribution is required under Code Section
401(a)(9); (3) the portion of any distribution that is
not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation
with respect to employer securities); and (4) any
hardship distribution described in Code Section
401(k)(2)(B)(i)(IV) that is paid on or after January 1,
1999.
"eligible retirement plan" shall mean (1) an
individual retirement account described in Code Section
408(a); (2) an individual retirement annuity described
in Code Section 408(b); (3) an annuity plan described
in Code Section 403(a); or (4) a qualified trust
described in Code Section 401(a); provided, however,
that (3) and (4) above shall not apply if the
distributee is the surviving spouse of the Participant.
"direct rollover" shall mean a payment by the Plan
to the eligible retirement plan specified by the
distributee.
In order for a distributee to have all or any portion an
eligible rollover distribution paid to an eligible
retirement plan as a direct rollover, such distributee must
furnish the Committee with such information as it may deem
necessary or appropriate.
3. Withholding
Notwithstanding any other provision of the Plan, withholding
taxes, if any (including the withholding taxes imposed by
Code Section 3405), incurred on account of distributions to
or withdrawals by a Participant or to his estate, spouse,
Beneficiary or Alternate Payee, shall be borne by such
Participant, estate, spouse, Beneficiary or Alternate Payee,
by way of withholding from distributions or withdrawals, or
otherwise as the Committee shall determine.
SECTION VIII - ADMINISTRATION
1. The Committee
Administration of the Plan, the exclusive power and
discretion to interpret it and to make factual
determinations with respect to its provisions, and the
responsibility for carrying out its provisions are vested in
the Committee. The members of the Committee shall be
appointed and subject to removal by the Board, and may be
employees of the Company or its Subsidiaries. The Board
shall designate a Chairman and a Secretary of the Committee
and any other officers deemed necessary. The Committee
shall establish rules for transaction of its business. The
Committee shall have the following powers, responsibilities
and duties:
a. To establish and enforce such rules, regulations
and procedures as it shall deem necessary or proper for
the efficient administration of the Plan. Such rules,
regulations and procedures may include special
limitations on elections by Participants who are
subject to Section 16 of the Securities Exchange Act of
1934.
b. To interpret the Plan and to decide all questions
(of fact or otherwise) concerning the Plan, with such
interpretations and decisions to be determined by the
Committee in its sole discretion and to be final and
conclusive and binding on all persons.
c. To make provision for payment of contributions to
the Trustee and to direct and coordinate the Trustee's
activities in administering the Trust in accordance
with the Trust Agreement.
d. To determine from the Employers' records and from
other information made available to it any facts
concerning Participants which are pertinent to the
operation of the Plan, such as Base Pay, Hardship,
Termination of Employment and other factual determina
tions which are necessary.
e. To approve forms used in connection with the Plan.
f. To provide for the maintenance of adequate
records, including those with respect to contributions
made, Stock purchased, elections and transfers among
the Investment Funds, distributions to Participants and
earnings paid to the Trustee, and to credit to the
Account of each Participant the contributions allocable
thereto.
g. To file with the appropriate government agencies
any and all reports and notifications required of the
Plan and to provide all Participants and Beneficiaries
with any and all reports and notifications to which
they are by law entitled.
h. In connection with the exercise by Participants
and Beneficiaries of voting and other rights granted
hereunder with respect to Stock held in the Trust, to
cause to be distributed to each Participant or Benefi
ciary in a timely manner such information as is
distributed to stockholders of the Company.
i. To determine at least annually the fair market
value of the assets held by the Trust as of the end of
each Plan Year, and to make such adjustments to the
value of the Participants' Accounts as are necessary to
reflect such valuation in a uniform and non-discrimi
natory manner.
j. In the case of any Order received by the Plan, (1)
to promptly notify the Participant and any Alternate
Payee of the receipt of the Order and the procedures
for determining whether the Order is a Qualified
Domestic Relations Order, (2) within a reasonable time
after receipt of the Order to determine whether the
Order is a Qualified Domestic Relations Order and to
notify the Participant and each Alternate Payee of such
determination, and (3) to segregate and pay benefits to
the Participant and each Alternate Payee, all as
provided in Code Section 414(p).
k. To establish Loan Procedures and to make all
determinations with respect to Loans.
l. To make all determinations with respect to
Rollover Contributions, including determinations of
whether a contribution, if made to the Plan, would
affect the Plan's tax-qualified treatment under the
Code.
m. To engage a qualified public accountant to perform
an annual audit of the Plan.
n. To the extent provided by the Board, to designate
or recommend from time to time the Investment Funds
available to the Participants, to monitor the
performance of the Investment Funds, and to terminate
the availability of any Investment Fund (or make
recommendations with respect thereto).
o. To take any and all action as the Committee
determines, in its discretion, as necessary or
appropriate for the administration of the Plan in
accordance with its terms.
2. Committee Expenses
Any expenses incurred by the Committee or its members in the
performance of its duties shall be paid by the Company.
3. Delegation of Responsibilities
The Committee may appoint subcommittees consisting of
Committee members and delegate to such subcommittees any or
all of the responsibilities of the Committee, employ counsel
and agents, and authorize one or more Committee members or
any agent to execute or to deliver any written instructions,
requisitions, orders, notices or other instruments or to
make any payments on its behalf. The Committee, or an
appointed subcommittee, may also obtain clerical, accounting
and actuarial assistance to carry out its responsibilities
and the provisions of the Plan.
The Committee may appoint a person, insurance company, bank
or other institution or organization (a "Delegate") to
assume any one or more of the responsibilities and duties of
the Committee. Such appointment must be in writing, specify
the responsibilities and duties being delegated, detail any
interpretation of the Plan made by the Committee with
respect to such responsibilities and duties, and be accepted
in writing by the Delegate.
4. Denial of Claims and Appeals Procedure
a. Notification of Claims Procedures: The Committee
shall adopt a procedure by which a Participant shall
claim benefits and such procedure shall be communicated
to each Participant in the Plan.
b. Denial of Claims: If a claim is wholly or
partially denied, the Committee or the appropriate
Delegate shall give written notice of denial of the
claim to the Participant within 90 days of receipt of
the claim; provided, however, that if special
circumstances require an extension of time for
processing the claim, (1) written notice of denial of
the claim shall be given to the Participant within 180
days of receipt of the claim, and (2) written notice of
the extension of time for processing the claim shall be
furnished to the Participant prior to the end of the
initial 90 day period, such notice of extension to
indicate the special circumstances requiring such
extension of time and the date by which a final
determination can be expected. A written notice of
denial of a claim shall set forth, in a manner
calculated to be understood by the Participant, (1) the
specific reason or reasons for the denial, (2) specific
reference to the relevant Plan provisions on which the
denial is based, (3) a description of any additional
material or information necessary for the Participant
to perfect the claim and an explanation of why such
information is necessary, and (4) the procedure for
submitting the claim for review. If such Participant
has not received notification within the 90 day or (if
applicable) 180 day period set forth above that his
claim has been allowed, he shall be entitled to assume
denial and utilize the appeals procedure described in
Paragraph VIII.4.c below.
c. Appeals Procedure: Any Participant whose claim is
denied may request a review of the denied claim. Such
request for review must be in writing, directed to the
Committee or the appropriate Delegate, and received
within 60 days after (1) receipt by the Participant of
written notice of the denial of the claim or (2) the
date on which he may assume denial of the claim as
provided in the last sentence of Paragraph VIII.4.b
above. The Participant or his duly authorized
representative shall have the right to review all
documents pertinent to the denial and to submit issues
and comments in writing.
The Committee or Delegate shall respond to the
written request for review of a denied claim no later
than 60 days after receipt of such request; provided,
however, that if special circumstances require an
extension of time for processing the claim, (1) the
Committee or Delegate shall respond to such request as
soon as possible (but not later than 120 days after
receipt of such request), and (2) written notice of the
extension of time for processing the claim shall be
furnished to the Participant prior to the commencement
of such extension of time. The decision on review of a
denied claim shall set forth, in a manner calculated to
be understood by the Participant, (1) the specific
reason or reasons for the decision, and (2) specific
reference to the relevant Plan provisions on which the
decision is based.
d. Exhaustion of Remedies: Exhaustion of the
administrative remedies set forth in this Paragraph
VIII.4 (including the timely appeal of any denial of
claim, as provided in Paragraph VIII.4.c) is an
absolute precondition to any action at law or equity by
any Participant or Beneficiary against the Plan, the
Committee, any Delegate, the Company, any Employer, or
any other person or party concerning the entitlement to
or claims for benefits under the Plan.
5. Indemnification
To the extent permitted under ERISA, the Company and its
Subsidiaries shall indemnify each member of the Board, the
board of directors of an Employer, each Committee member and
other employees of the Company or any Subsidiary of the
Company involved in the administration of the Plan against
all costs, expenses and liabilities, including attorney's
fees, incurred in connection with any action, suit or pro
ceeding instituted against him alleging any act of omission
or commission performed by him in discharging his duties
with respect to the Plan. Indemnification pursuant to this
Paragraph VIII.5 shall be available only to the extent the
Company determines that such director, Committee member or
employee acted in good faith. Indemnification shall not be
provided to the extent such costs, expenses and liabilities
are covered under insurance as may be now or hereafter
provided by the Company or its Subsidiaries.
6. The Trustee
The Trustee has custody of the funds in the Trust and
performs other duties as outlined below. The Trustee
receives such compensation for its services as may be agreed
upon from time to time between it and the Committee. The
Trustee shall have the following powers, responsibilities
and duties:
a. To maintain custody of all funds in the
Trust.
b. To apply contributions to the Investment
Funds in accordance with the terms of the Plan.
c. To purchase Stock to be registered in
its name as Trustee or in the name of its nominee.
Such purchases may be made from any source and
through any broker unless otherwise directed by
the Committee.
d. To make distributions in accordance with
the terms of the Plan.
e. To exercise voting rights with respect
to Stock held in the Trust in accordance with
instructions of the Participants in whose Accounts
such Stock is held and, with respect to Stock for
which Participant instructions are not received
and securities other than Stock held in the Trust,
to exercise voting rights in accordance with
instructions of the Committee.
f. To maintain the amounts held in the
Trust separate and apart from all other property
owned by it or in its custody, for the sole
benefit of Participants. The Trustee is not
obligated to pay or credit interest on any
contributions pending allocation of such
contributions to the Participant's Accounts or
distribution to Participants.
g. To exercise, in accordance with Section
XIII, any then exercisable Rights allocated to a
Participant's Account in accordance with the
Participant's written instructions, to sell Stock
or other Investment Funds to obtain such cash as
is necessary for exercising Rights pursuant to
Section XIII, and to sell or deliver for redemp
tion Rights that have been called for redemption.
h. In the absence of specific instructions
from the Participants or the Committee, to
exercise its discretion with respect to any other
matters affecting its functions as Trustee.
7. Costs and Expenses
All costs of administration and related expenses shall be
paid by the Employers, including fees of the Trustee, legal
and accounting fees, brokerage fees, and transfer taxes or
other taxes related to Stock purchased, held or distributed
under the Plan. Notwithstanding the previous sentence, all
investment and service fees with respect to any Investment
Fund (other than the Stock Fund) shall be paid by such
Investment Fund.
SECTION IX - NON-ASSIGNABILITY OF PARTICIPANT'S RIGHTS
1. Assignments - General
Except as provided in Code Section 401(a)(13) and in
Paragraph IX.2 below, (a) no right or interest of any
Participant in the Plan or in his Account is assignable or
transferable in its entirety or in any part, directly or
indirectly, except by death or by appropriate operation of
law in the event the Participant becomes mentally
incompetent, and (b) no such right or interest of any
Participant shall be liable for or subject to the claims of
any creditor including, but not limited to, execution, levy,
garnishment, attachment, pledge, bankruptcy, or any other
means.
2. Qualified Domestic Relations Orders
Paragraph IX.1 above shall not apply to the creation,
assignment or recognition of a right to any benefit payable
under the Plan with respect to a Participant pursuant to a
Qualified Domestic Relations Order.
3. Plan Distributions
Subject to the provisions of Paragraph VIIA.2, distributions
from the Plan (including certificates for Stock) will be
issued only to or in the name of the Participant, except in
the event of the death or incompetency of the Participant,
or as otherwise required pursuant to a Qualified Domestic
Relations Order. Transfers of Stock after distribution from
the Plan will not violate this Section IX.
SECTION X - TERMINATION, AMENDMENT OR MODIFICATION
1. Termination
The Company intends to continue the Plan indefinitely.
However, the Company may, by resolution of the Board,
terminate the Plan completely at any time. The Plan may
also be terminated by the board of directors of any Employer
insofar as it applies to the Employees of the respective
Employer.
2. Effect of Plan Termination
Termination of the Plan in its entirety will not decrease
amounts credited to a Participant's Accounts prior to the
effective date of the termination. In the event of
termination, all vesting requirements and forfeiture
provisions will become inapplicable, and the full amount
credited to each Participant's Accounts will be payable as
soon as practicable following such termination (provided
that the full amount credited to each Participant's Before-
Tax Account will be payable at the earliest time permitted
under Code Section 401(k)).
3. Amendment
The Company reserves the right, by resolution of the Board
or the Committee, to amend the Plan at any time, or from
time to time.
4. Additional Subsidiaries
This Plan may be modified at any time by the Board by
resolution to extend its benefits to the employees of any
present or future Subsidiary of the Company, for such
periods, on such terms, and subject to such limitations and
conditions, as the Board may determine.
5. Mergers and Transfers of Assets
a. Subject to Paragraph X.5.b below, the Board may by
resolution direct that the Plan be merged or
consolidated with, or transfer all or a portion of its
assets and liabilities to, another plan or receive
assets and liabilities from another plan.
b. In the case of any merger or consolidation with,
or transfer of assets or liabilities to, any other
plan, each Participant in this Plan on the date of such
merger, consolidation or transfer shall, if the Plan
then terminates, receive a benefit immediately after
said merger, consolidation or transfer which is no less
than the benefit he would have been entitled to receive
immediately before said merger, consolidation or
transfer if the Plan had then terminated.
SECTION XI - LEGAL REQUIREMENTS
1. Legal Requirements - General
The Plan is subject to the continuance of registration under
the Securities Act of 1933 of Stock covered thereby, of
qualification under Code Section 401, and of compliance with
the provisions of ERISA.
2. Top-Heavy Provisions
a. The provisions of Paragraphs XI.2.c-XI.2.g shall
become effective for any Plan Year after the 1983 Plan
Year in which the Plan is determined to be a Top-Heavy
Plan, as defined in Paragraph XI.2.b.
b. The Plan will be considered a Top-Heavy Plan for
any Plan Year if, as of the last day of the preceding
Plan Year (the "determination date"), (1) the aggregate
of the Accounts of key employees (as defined in Code
Section 416(i)) ("Key Employees") exceeds 60% of the
aggregate of the Accounts of all Participants (the "60%
Test") or (2) the Plan is part of a required
aggregation group (within the meaning of Code Section
416(g)) and the required aggregation group is a top-
heavy group (as defined in such Section), all as
provided in Code Section 416. Notwithstanding the
results of the 60% Test, the Plan shall not be
considered a Top-Heavy Plan for any Plan Year in which
the Plan is a part of a required or permissive
aggregation group (within the meaning of Code Section
416(g)) which is not a top-heavy group.
For purposes of the 60% Test for any Plan Year, a
Participant's Account balance as of the determination
date shall equal the sum of his Account balance as of
the most recent Valuation Date occurring within a 12-
month period ending on the determination date and the
amount of contributions made to his Account after such
Valuation Date but on or before the determination date.
c. For any Plan Year in which the Plan is determined
to be a Top-Heavy Plan, the amount of Company Matching
Contributions with respect to a Participant who is not
a Key Employee shall be not less than the lesser of (1)
3% of such Participant's compensation (as defined in
Code Section 415), and (2) the highest percentage with
respect to any Key Employee calculated by dividing, for
each Key Employee, (a) the amount of Before-Tax and
Company Matching Contributions with respect to such Key
Employee by (b) such Key Employee's compensation, all
as provided in Code Section 416.
The foregoing paragraph shall not apply for any
Participant who is not a Key Employee for any Plan Year
in which such Participant is a participant in a defined
benefit plan maintained by an Employer and accrues a
benefit from Employer contributions to such plan which
satisfies the requirements of Code Section 416(c)(1).
d. The otherwise applicable requirements for vesting
under the Plan notwithstanding, if a Participant was an
Employee at any time during a Plan Year in which the
Plan is a Top-Heavy Plan and has completed at least
three Years of Service, such Participant's Accounts
shall be immediately vested.
e. For any Plan Year before the 1989 Plan Year in
which the Plan is a Top-Heavy Plan, the annual
compensation of each Participant taken into account
under the Plan shall not exceed $200,000 (as adjusted
pursuant to Code Section 416(d)(2)).
f. If the Plan becomes a Top-Heavy Plan and subse
quently ceases to be such, the vesting schedule in
Paragraph XI.2.d shall continue to apply to any
Participant who had at least three Years of Service as
of December 31 in the last Plan Year in which the Plan
was a Top-Heavy Plan. For other Participants, such
schedule shall apply only to their Accounts as of such
December 31.
g. For any Plan Year in which the Plan is a Top-Heavy
Plan, the defined benefit plan fraction and the defined
contribution plan fraction referred to in Paragraph
XII.7 shall be adjusted as required by Code
Section 416(h).
3. Special Rules Relating to Reemployed Veterans Under
USERRA
a. Reemployment of Veterans - General. Any Plan
provision to the contrary notwithstanding, the
provisions of this Paragraph XI.3 shall apply with
respect to any Reemployed Veteran, all as provided
in USERRA and Code Section 414(u).
b. Definitions. For purposes of this Paragraph
XI.3:
"Election Period" shall mean a period which
begins on the date a Reemployed Veteran is
reemployed by an Employer after a period of
Qualified Military Service and which has the same
length as the lesser of (a) the product of three
times such period of Qualified Military Service
and (b) five years.
"Projected Base Pay" shall mean (1) the Base
Pay the Reemployed Veteran would have received
during his Qualified Military Service if he were
not in Qualified Military Service, determined
based on the rate of Base Pay he would have had
with the Employer but for the absence during the
period of Qualified Military Service, and (2) if
the rate of Base Pay the Reemployed Veteran would
have had during such period is not reasonably
certain, the Reemployed Veteran's average rate of
Base Pay from the Employer during the 12-month
period immediately preceding the Qualified
Military Service (or, if shorter, the period of
employment immediately preceding the Qualified
Military Service).
"Qualified Military Service" shall mean a
Reemployed Veteran's "service in the uniformed
services" (as defined in USERRA Section 4303), if
the Reemployed Veteran is entitled to reemployment
rights under USERRA with respect to such service.
"Reemployed Veteran" shall mean any Employee
who is reemployed by the Company pursuant to such
Employee's reemployment rights under USERRA
Section 4312 after a period of Qualified Military
Service, and whose rights under the Plan are
subject to the provisions of USERRA Section 4318.
"USERRA" shall mean the Uniformed Services
Employment and Reemployment Rights Act of 1994, as
amended from time to time, and any successor
statute. Reference to a specific provision of
USERRA shall include such provision and any
regulations promulgated thereunder.
c. Make-Up Contributions. During the Election
Period after a Reemployed Veteran is reemployed by
an Employer, the Reemployed Veteran may elect to
make additional After-Tax and Before-Tax
Contributions to the Plan with respect to the
relevant period of Qualified Military Service.
The amount of such Contributions shall be
determined by applying the elections made by the
Reemployed Veteran during the Election Period with
respect to such period of Qualified Military
Service to his Projected Base Pay during such
period, taking into account the applicable Plan
provisions as in effect during such period. Such
Contributions shall not exceed the limits set
forth in Code Section 414(u)(1). The Company
shall make Company Matching Contributions with
respect to such additional After-Tax and Before-
Tax Contributions to the extent such Company
Matching Contributions would have been required
had such After-Tax and Before-Tax Contributions
actually been made during the period of Qualified
Military Service. No earnings shall be credited
to an Employee's Account with respect to any
Contributions made under this Paragraph XI.3.c for
any period before the date such Contributions are
actually made.
SECTION XII - LIMITATION ON CONTRIBUTIONS
1. $7,000 Limitation of Before-Tax Contributions
Notwithstanding a Participant's election, for Plan Years
beginning after December 31, 1986, a Participant's Before-
Tax Contributions for any Plan Year shall not exceed $7,000
(adjusted as provided in Code Sections 402(g)(5) and
415(d)). If the Before-Tax Contributions elected by a
Participant would exceed this limit, such excess shall be
contributed as After-Tax Contributions.
2. Limitation of Contributions After Hardship Withdrawal
A Participant who receives a distribution from his Before-
Tax Account on account of Hardship during any Plan Year may
not make Before-Tax Contributions during the following Plan
Year in excess of $7,000 (adjusted as provided in Code
Sections 402(g)(5) and 415(d)) minus the amount of his
Before-Tax Contributions during the Plan Year in which he
received such distribution.
3. Automatic Adjustments to After-Tax and Before-Tax Contri
butions of Highly Compensated Employees
Notwithstanding a Participant's election, for Plan Years
beginning after December 31, 1986, the Before-Tax
Contributions of the Highly Compensated Employees shall be
reduced prospectively (and automatically converted to After-
Tax Contributions) by reducing, in increments of 1.0% of
Base Pay, the maximum percentage of Base Pay which Highly
Compensated Employees may contribute as Before-Tax
Contributions, to the extent necessary so that for a Plan
Year either
(a) the Before-Tax Contribution Rate for the Highly
Compensated Employees is not greater than 125% of the
Before-Tax Contribution Rate for the Base Group; or
(b) the Before-Tax Contribution Rate for the Highly
Compensated Employees does not exceed the lesser of (1)
the Before-Tax Contribution Rate for the Base Group
plus 2 percentage points, or (2) two times the Before-
Tax Contribution Rate for the Base Group.
The adjustment required to be made pursuant to the preceding
sentence in the Before-Tax Contributions of Highly
Compensated Employees (or such persons as the Committee
estimates will be Highly Compensated Employees) shall be
made at such times and to the extent necessary as the
Committee may from time to time determine.
4. Limitation of After-Tax and Company Matching Contributions
of Highly Compensated Employees
Notwithstanding a Participant's election, for Plan Years
beginning after December 31, 1986, the total of the After-
Tax Contributions and Company Matching Contributions made to
the Accounts of the Highly Compensated Employees shall be
reduced prospectively to the extent necessary so that for a
Plan Year either
(a) the Total Contribution Rate for the Highly Compen
sated Employees is not greater than 125% of the Total
Contribution Rate for the Base Group; or
(b) the Total Contribution Rate for the Highly Compen
sated Employees does not exceed the lesser of (1) the
Total Contribution Rate for the Base Group plus
2 percentage points, or (2) two times the Total
Contribution Rate for the Base Group.
The reduction required to be made pursuant to the preceding
sentence in the After-Tax Contributions and Company Matching
Contributions of Highly Compensated Employees (or such
persons as the Committee estimates will be Highly
Compensated Employees) shall be made at such times, in such
manner and to the extent necessary as the Committee may from
time to time determine.
5. Combined Limitation on After-Tax, Before-Tax and Company
Matching Contributions
Notwithstanding a Participant's election, if the Before-Tax
Contribution Rate and the Total Contribution Rate of the
Highly Compensated Employees each exceeds 125% of the
corresponding Rate for the Base Group, the total of the
After-Tax Contributions, Before-Tax Contributions and
Company Matching Contributions made to the Accounts of the
Highly Compensated Employees shall be reduced to the extent
necessary so that for a Plan Year the sum of the Before-Tax
Contribution Rate and the Total Contribution Rate for the
Highly Compensated Employees does not exceed the greater of:
(A) the sum of (a) 125% of the greater of (1) the
Before-Tax Contribution Rate for the Base Group or
(2) the Total Contribution Rate for the Base Group for
such Plan Year, and (b) the lesser of (1) 2% plus the
lesser of (i) the Before-Tax Contribution Rate for the
Base Group or (ii) the Total Contribution Rate for the
Base Group for such Plan Year or (2) two times the
lesser of (i) the Before-Tax Contribution Rate for the
Base Group or (ii) the Total Contribution Rate for the
Base Group for such Plan Year; and
(B) the sum of (a) 125% of the lesser of (1) the
Before-Tax Contribution Rate for the Base Group or
(2) the Total Contribution Rate for the Base Group for
such Plan Year, and (b) the lesser of (1) 2% plus the
greater of (i) the Before-Tax Contribution Rate for the
Base Group or (ii) the Total Contribution Rate for the
Base Group for such Plan Year or (2) two times the
greater of (i) the Before-Tax Contribution Rate for the
Base Group or (ii) the Total Contribution Rate for the
Base Group for such Plan Year.
The reduction required to be made pursuant to the preceding
sentence in the After-Tax Contributions, Before-Tax
Contributions and Company Matching Contributions of Highly
Compensated Employees (or such persons as the Committee
estimates will be Highly Compensated Employees) shall be
made at such times and to the extent necessary as the
Committee may from time to time determine. The Committee
shall, to the extent necessary to comply with such
limitation, reduce one or both of the Before-Tax Contri
bution Rate and the Total Contribution Rate for the Highly
Compensated Employees in the manner provided in
Paragraphs XII.3 and XII.4.
6. Section 415 Limitation
Notwithstanding any other provisions of the Plan, for Plan
Years beginning after December 31, 1986, the addition to a
Participant's Accounts for any applicable year within the
meaning of Code Section 415 shall not exceed an amount equal
to the lesser of (i) $30,000 (adjusted as provided in Code
Section 415(d)); or (ii) 25% of the compensation paid to the
Participant by the Employer in that year, as defined in Code
Section 415. For this purpose the addition to a Partici
pant's Accounts under this Plan shall be the sum of the
After-Tax Contributions, Before-Tax Contributions and
Company Matching Contributions to his Account.
Where After-Tax and/or Before-Tax Contributions in the
percentages initially elected by a Participant would, when
combined with the related Company Matching Contributions,
cause the addition to the Participant's Accounts to exceed
the limitation set forth in the preceding paragraph, the
Committee shall notify the Employer and the Participant and
shall, to the extent necessary to comply with such
limitation, reduce Company Matching Contributions, After-Tax
Contributions and Before-Tax Contributions for such
Participant in such manner as the Committee shall determine.
7. Section 415 Limitation - Combined Limit
For each Participant who is also covered by any defined
benefit plans to which the Employer contributes, the rate of
such Participant's benefit accrual under such defined
benefit plan or plans shall be diminished to the extent
necessary to prevent the sum of the defined benefit plan
fraction and the defined contribution plan fraction, as
defined in Code Sections 415 and 416, with respect to the
Participant from exceeding 1.0. This Paragraph XII.7 shall
not apply to any Plan Year beginning after December 31,
1999.
8. Limitation on Before-Tax Contributions and Company Matching
Contributions Under Code Section 404
In the event that with respect to any Plan Year the
Employers would be limited by Code Section 404 in the amount
of their contributions (to the Plan and any other employee
benefit plan or plans of the Employers) that are deductible
for Federal income tax purposes, the amount of Before-Tax
Contributions permitted to be made shall be reduced
prospectively in 1% increments (and automatically converted
to After-Tax Contributions) to the extent necessary to
permit full utilization of the deduction.
9. Distribution of Before-Tax Contributions Exceeding $7,000
Notwithstanding any other provision of the Plan, "excess
deferrals" (as defined in Code Section 402(g)), the Company
Matching Contributions made with respect thereto, and the
income allocable to such deferrals and Contributions shall
be distributed no later than April 15 of each year to
(1) Participants whose Before-Tax Contributions to the Plan
for the preceding Plan Year exceeded the limit set forth in
Paragraph XII.1 and (2) any Participants who claim such
excess deferrals for the preceding Plan Year. In order to
claim such excess deferrals, a Participant must provide the
Committee, on or before the March 1 following the Plan Year
in which such excess deferrals were made, with a written
statement (1) stating that the Participant has made excess
deferrals during the preceding calendar year, and
(2) specifying the amount of such excess deferrals that the
Participant desires to allocate to, and have distributed
from, the Plan.
10. Distribution of Before-Tax Contributions Exceeding the
Before-Tax Contribution Rate Test
A. Notwithstanding any other provision of the Plan,
if for a Plan Year the test set forth in Paragraph
XII.3 and Code Section 401(k)(3)(A)(ii) (the "ADP
Test") has not been satisfied, then the Committee shall
either (1) recharacterize the Excess Contributions (as
determined below) of Highly Compensated Employees as
After-Tax Contributions under the Plan (as provided in
Paragraph XII.10.C), or (2) distribute Before-Tax
Contributions (and income allocable to the distributed
amounts) of Highly Compensated Employees as provided in
Paragraph XII.10.B. For purposes of this Paragraph
XII.10, the total amount of Excess Contributions of the
Highly Compensated Employees as a group for a Plan Year
shall be determined by aggregating, for all Highly
Compensated Employees, the amounts determined by
(1) reducing the Before-Tax Contributions of the Highly
Compensated Employee with the highest Before-Tax
Contribution Rate until such Rate either (a) would
permit the ADP Test to be satisfied or (b) equals the
Before-Tax Contribution Rate of the Highly Compensated
Employee with the next highest such Rate; and
(2) repeating the process set forth in clause (1) above
until the ADP Test is satisfied.
B. Effective for Plan Years beginning after December
31, 1996, the amount of Before-Tax Contributions to be
distributed for a Plan Year to each Highly Compensated
Employee shall be determined by (1) reducing Before-Tax
Contributions of the Highly Compensated Employee with
the most Before-Tax Contributions until either (a) the
aggregate of all Before-Tax Contributions that have
been reduced pursuant to this paragraph equals the
Excess Contributions (as determined pursuant to
Paragraph XII.10.A) or (b) the Before-Tax Contributions
of such Employee equals the Before-Tax Contributions of
the Highly Compensated Employee with the next highest
amount of Before-Tax Contributions; and (2) repeating
the process set forth in clause (1) above until the
aggregate of all Before-Tax Contributions that have
been reduced pursuant to this paragraph equals the
Excess Contributions.
All Before-Tax Contributions (and the income
allocable thereto) with respect to any Plan Year to be
distributed to any Highly Compensated Employee shall be
so designated and distributed within 12 months after
the end of such Plan Year, all as provided in Code
Section 401(k)(8). The income allocable to such Before-
Tax Contributions shall be calculated for the
applicable Plan Year pursuant to a reasonable method as
provided in Treasury Regulation Section 1.401(k)-
1(f)(4)(ii)(B). If Before-Tax Contributions are
distributed as provided in this Paragraph XII.10.B, the
Company Matching Contributions made with respect to
such Before-Tax Contributions (and the income allocable
thereto) shall be forfeited.
C. All Before-Tax Contributions with respect to any
Plan Year to be recharacterized as After-Tax
Contributions under the Plan shall be so
recharacterized within 2 1/2 months after the end of such
Plan Year. All recharacterizations of Before-Tax
Contributions shall be made in compliance with Code
Section 401(k)(8) and Treasury Regulation Section
1.401(k)-1(f)(3). If Before-Tax Contributions are
recharacterized as provided in this Paragraph XII.10.C,
the Company Matching Contributions made with respect to
such Before-Tax Contributions (and the income allocable
thereto) shall be forfeited.
The amount of Before-Tax Contributions for each
Highly Compensated Employee to be recharacterized for a
Plan Year shall be determined by (1) recharacterizing
the Before-Tax Contributions of the Highly Compensated
Employee with the most Before-Tax Contributions until
either (a) the aggregate of all Before-Tax
Contributions that have been recharacterized pursuant
to this paragraph equals the Excess Contributions, or
(b) the Before-Tax Contributions of such Employee
equals the Before-Tax Contributions of the Highly
Compensated Employee with the next highest amount of
Before-Tax Contributions; and (2) repeating the process
set forth in clause (1) above until the aggregate of
all Before-Tax Contributions that have been
recharacterized pursuant to this paragraph equals the
Excess Contributions.
11. Distribution of After-Tax and Company Matching Contributions
Exceeding the Total Contribution Rate Test
A. Notwithstanding any other provision of the Plan,
if for a Plan Year the test set forth in Paragraph
XII.4 and Code Section 401(m)(2) (the "ACP Test") has
not been satisfied, then, at the direction of the
Committee, Excess Aggregate Contributions (as
determined below), and the income allocable to the
distributed amounts, shall be designated and
distributed to Highly Compensated Employees within
12 months after the end of such Plan Year, as provided
in Code Section 401(m)(6). The income allocable to
such Excess Aggregate Contributions shall be calculated
for the applicable Plan Year pursuant to a reasonable
method as provided in Treasury Regulation Section
1.401(m)-1(e)(3)(ii)(B). For purposes of this
Paragraph XII.11, the total amount of Excess Aggregate
Contributions of the Highly Compensated Employees as a
group for a Plan Year shall be determined by
aggregating, for all Highly Compensated Employees, the
amounts determined by (1) reducing the After-Tax and
Company Matching Contributions of the Highly
Compensated Employee with the highest Total
Contribution Rate until such Rate either (a) would
permit the ACP Test to be satisfied or (b) equals the
Total Contribution Rate of the Highly Compensated
Employee with the next highest such Rate; and (2)
repeating the process set forth in clause (1) above
until the ACP Test is satisfied.
B. The amount of After-Tax and Company Matching
Contributions to be distributed for a Plan Year to each
Highly Compensated Employee shall be determined by (1)
reducing After-Tax and Company Matching Contributions
to the Highly Compensated Employee with the most After-
Tax and Before-Tax Contributions until either (a) the
aggregate of all After-Tax and Company Matching
Contributions that have been reduced pursuant to this
paragraph equals the Excess Aggregate Contributions (as
determined pursuant to Paragraph XII.11.A) or (b) the
After-Tax and Company Matching Contributions of such
Employee equals the After-Tax and Company Matching
Contributions of the Highly Compensated Employee with
the next highest amount of such Contributions; and (2)
repeating the process set forth in clause (1) above
until the aggregate of all After-Tax and Company
Matching Contributions that have been reduced pursuant
to this paragraph equals the Excess Aggregate
Contributions.
12. Aggregation of Plans
To the extent required by the Code, for purposes of applying
the limitations in this Section XII all defined contribution
plans (whether or not terminated) of the Company and its
Subsidiaries are to be treated as one defined contribution
plan.
13. Withholding Taxes
In the event that additional amounts of income tax are
required to be withheld as a result of the conversion of
Before-Tax Contributions to After-Tax Contributions or the
distribution to a Participant of amounts in his Account
under this Section, such additional amounts will be withheld
from compensation, if any, remaining to be paid in the Plan
Year; provided, however, that if such compensation is insuf
ficient to satisfy the additional withholding obligation,
the Committee shall, after notice to the Participant giving
him an opportunity to pay the amount of such additional
withholding obligation, apply a portion of the excess Before-
Tax Contributions to the extent necessary to satisfy such
withholding obligation. Any Company Matching Contributions
made with respect to Before-Tax Contributions which are so
applied shall be forfeited.
SECTION XIII - TENDER OFFERS AND EXERCISE OF RIGHTS
1. Participant Information
In the event that a tender or exchange offer is made for
Stock (including an offer made for only Common Stock or only
Rights) or in the event the Rights become exercisable, the
Company will take such action as is practicable to provide
each Participant with the same information that is
distributed to stockholders of the Company.
2. Tender Offers
Notwithstanding any other provision of the Plan, in the
event that a tender or exchange offer is made for Stock,
each Participant shall have the right to direct the Trustee,
by timely notice in a manner specified by the Trustee, to
tender all or any portion of the Stock which is the subject
of such tender or exchange offer credited to his Accounts.
The right to tender shall be exercised without a withdrawal
of Stock from the Plan, and all cash received in exchange
for Stock so tendered from a Participant's Account shall be
initially retained in an Investment Fund invested primarily
in short-term government obligations or similar instruments.
The Participant may transfer the balance in such Investment
Fund to other Investment Funds in his Account as provided in
Paragraph IV.5. If the tender or exchange offer provides
for the payment of property other than (or together with)
cash in exchange for Stock tendered, the Trustee shall,
promptly upon receipt, sell for cash all property other than
cash received in exchange for the Stock tendered and invest
the proceeds in the Investment Fund described above.
3. Tender by Trustee
Except as specifically authorized by the terms of the Plan,
the Trustee shall not tender or sell any Stock, except upon
specific direction of the Participant pursuant to the
provisions of this Section XIII.
4. Withdrawal of Rights
For a period of 60 days after the Rights first become
exercisable (and for such other periods as the Committee may
determine), each Participant shall have the right, upon
written notice to the Trustee, to withdraw all or any
portion of the Rights allocated to his Account, to the
extent permitted by law. This right of withdrawal shall be
in addition to any right of withdrawal provided elsewhere in
the Plan.
5. Exercise of Rights
At any time that the Rights are exercisable, each
Participant shall have the right to direct the Trustee, by
written notice at a time and in a manner specified by the
Trustee, to exercise all or any portion of the Rights
allocated to his Account and to sell any Stock or other
Investment Fund allocated to his Account necessary (after
application of any cash allocated to his Account) to obtain
the cash needed to exercise such Rights. Securities
purchased upon the exercise of Rights shall be retained in
an Investment Fund established by the Committee for such
Account. Such Investment Fund shall be invested solely in
such securities. The Participant may transfer the balance
in such Investment Fund to other Investment Funds in his
Account as provided in Paragraph IV.5.
SECTION XIV - SPECIAL RULES FOR DETERMINING YEARS OF SERVICE
1. Howell Pipeline
Employment by an Employee with Howell Pipeline Company Inc.
from December 3, 1980 to August 31, 1984 shall be treated as
if such employment were with an Employer for purposes of
determining such Employee's Years of Service, provided such
Employee's Employment Commencement Date occurs during the
1984 Plan Year.
2. Eason Oil
Employment by an Employee with Eason Oil Company or Spartan
Gas Company or their respective affiliates immediately prior
to January 18, 1985 shall be treated as if such employment
were with an Employer for purposes of determining such
Employee's Years of Service, provided such Employee's
Employment Commencement Date occurs during the 1985 Plan
Year.
3. Texas Oil
Employment by an Employee with Texas Oil and Gas Production
Corporation immediately prior to such Employee's Employment
Commencement Date shall be treated as if such employment
were with an Employer for purposes of determining such
Employee's Years of Service, provided such Employee's
Employment Commencement Date occurs during the 1990 Plan
Year.
4. United Gas
Employment by an Employee with United Gas Pipe Line Company
or its affiliates immediately prior to such Employee's
Employment Commencement Date shall be treated as if such
employment were with an Employer for determining such
Employee's Years of Service under Sections II and VI (and
not for determining the amount of Company Matching
Contributions under Section III), provided such Employee's
Employment Commencement Date was December 13, 1990.
5. Woods Petroleum
Employment by an Employee with Woods Resources, Inc., Woods
Petroleum, Inc. or their affiliates immediately prior to
such Employee's Employment Commencement Date shall be
treated as if such employment were with an Employer for
purposes of determining such Employee's Years of Service,
provided such Employee's Employment Commencement Date occurs
during January 1991.
6. Grace Petroleum Corporation
Employment by an Employee with Grace Petroleum Corporation
or its affiliates immediately prior to such Employee's
Employment Commencement Date shall be treated as if such
employment were with an Employer for purposes of determining
such Employee's Years of Service, provided such Employee's
Employment Commencement Date occurs during January 1993.
7. Texas Drilling Company
Employment by an Employee with Texas Drilling Company or its
affiliates immediately prior to such Employee's Employment
Commencement Date shall be treated as if such employment
were with an Employer for purposes of determining such
Employee's Years of Service, provided such Employee's
Employment Commencement Date occurs during March 1993.
8. Mobil
Employment by an Employee with Mobil Exploration & Producing
U.S. Inc. and its affiliates immediately prior to such
Employee's Employment Commencement Date shall be treated as
if such employment were with an Employer for purposes of
determining such Employee's Years of Service, provided such
Employee's Employment Commencement Date occurs during
October 1993.
SECTION XV - GENERAL PROVISIONS
1. Plan Not a Contract of Employment
The Plan shall not be deemed to constitute a contract of
employment between any Employee and any Employer, or to be a
consideration for the employment of any Employee. Nothing
in the Plan shall give any Employee the right to be retained
in the employ of an Employer, and all Employees shall remain
subject to discharge, discipline or layoff to the same
extent as if the Plan had not been put into effect. The
terms used or defined in the Plan are included solely for
the purpose of implementing the provisions hereof.
2. Payments to Minors and Incompetents
If the Committee shall receive satisfactory evidence that a
person who is entitled to receive any benefit under the Plan
is, at the time such benefits become available, physically
unable or mentally incompetent to receive such benefit and
to give a valid release therefor, and that another person or
an institution is maintaining or has custody of such person
and that no guardian, committee or other representative
shall have been duly appointed, the Committee may authorize
payment of such benefit to such other person or institution
(provided that such payment shall be made for and applied to
the benefit of the person entitled to receive such payment),
and the release of such other person or institution shall be
a valid and complete discharge for payment of such benefit.
The Committee may require that all payments of any benefits
under the Plan to a minor shall be paid only to the guardian
of such minor.
3. Return of Employer Contributions
All contributions by the Employers to the Plan are
conditioned upon the qualification of the Plan under Code
Section 401(a) and the immediate deductibility of the
contributions under Code Section 404. If a contribution by
the Employers to the Plan is made by mistake of fact, or if
one of the conditions set forth in the preceding sentence is
not satisfied, then such contribution may be returned to the
Employers as provided in ERISA Section 403(c)(2).
4. Headings
The headings in this Plan are inserted for convenience of
reference; they are not part of this Plan, and are not to be
considered in the construction hereof.
5. GOVERNING LAW
THE PLAN SHALL BE GOVERNED BY THE CODE AND ERISA AND, TO THE
EXTENT NOT INCONSISTENT THEREWITH, THE LAWS OF THE STATE OF
ALABAMA.
6. Plan Restatement
This document amends the Plan and incorporates into one
document all of the provisions of the Plan, as originally
adopted and as it has been amended from time to time, as of
January 1, 1998. Reference is hereby made to the original
Plan document and the amendments thereto for the effective
dates of the other Plan provisions set forth herein.
IN WITNESS WHEREOF, Sonat Inc. has executed this document as
of January 1, 1998.
SONAT INC.
by: /s/ Beverley T. Krannich
------------------------
Beverley T. Krannich
Vice President-Human Resources
and Secretary
SCHEDULE A
1/1/98
SONAT SAVINGS PLAN EMPLOYERS
Sonat Energy Services Company
Sonat Exploration Company
Sonat Inc.
Sonat Intrastate Alabama Inc.
Sonat Marketing Company
Sonat Power Marketing Company
Sonat Services (D.C.) Inc.
Sonat Services Inc.
Sonat Ventures Inc.
South Georgia Natural Gas Company
Southern Natural Gas Company
<PAGE>
AMENDMENT TO THE
SONAT SAVINGS PLAN
1. Sonat Inc. hereby amends Paragraph III.1 of the Sonat
Savings Plan to read in its entirety as follows, effective as of
January 1, 1999:
1. Amount of After-Tax and Before-Tax
Contributions
Each Participant may elect the percentage of
his Base Pay (stated in full percentages) which
shall be contributed to the Plan for his account
as After-Tax and Before-Tax Contributions. The
aggregate of a Participant's After-Tax and Before-
Tax Contributions shall not be less than 1.0% nor
more than 15.0% of Base Pay. The percentages so
elected shall be applied to the Base Pay of the
Participant (taking into account any partial pay
periods that may occur), on a paycheck by paycheck
basis, as increased or decreased from time to
time. The percentages so elected shall be subject
to automatic adjustment and the limitations on
contributions as set forth in Section XII.
IN WITNESS WHEREOF, Sonat Inc. has executed this document as
of December 31, 1998.
Sonat Inc.
By: /s/ Beverley T. Krannich
----------------------------
Beverley T. Krannich
Vice President-Human Resources
and Secretary
<PAGE>
AMENDMENT TO THE
SONAT SAVINGS PLAN
1. Sonat Inc. hereby amends the Sonat Savings Plan by
adding a new Section VIIB, such new Section VIIB to read in
its entirety as follows:
SECTION VIIB - PROVISIONS REGARDING ZILKHA PLAN MERGER
1. Definitions
The following terms as used in the Plan have the meanings
set out below:
Zilkha Matching Account - The Account established for
the Matching Contributions allocated to a Participant's
account in the Zilkha Plan and for all Forfeitures
allocated to the Participant's account in the Zilkha
Plan, and the income, expenses, gains and losses with
respect thereto.
Zilkha Plan - The Zilkha Energy Company Retirement
Savings Plan, as in effect immediately before the
Zilkha Plan Merger.
Zilkha Plan Merger - The merger of the Plan with the
Zilkha Plan, effective as of May 11, 1999.
Zilkha Pre-Tax Account - The Account established for
the Elective Deferral Contributions allocated to a
Participant's account in the Zilkha Plan and the
income, expenses, gains and losses with respect
thereto.
Zilkha Rollover Account - The Account established for
Rollover Contributions allocated to a Participant's
account in the Zilkha Plan and the income, expenses,
gains and losses with respect thereto.
Zilkha Accounts - A Participant's Zilkha Pre-Tax
Account, Zilkha Matching Account and Zilkha Rollover
Account.
2. General
A Participant's Zilkha Accounts shall be treated as
Accounts for all purposes of the Plan. The terms of the
Plan shall apply to a Participant's Zilkha Accounts, except
as otherwise provided in this Section VIIB.
3. Contributions
No contributions may be made to a Participant's Zilkha
Accounts.
4.
Investments
A Participant may direct the investment of his Zilkha
Accounts among the Investment Funds pursuant to such non-
discriminatory rules and procedures as the Committee shall
determine.
5. Distributions on Termination of Employment
Upon a Participant's Termination of Employment, the
balance in the Participant's Zilkha Accounts shall be
distributed as set forth in Paragraph V.1, except that the
form of payment for such Accounts shall be the "Qualified
Joint and Survivor Form" (as defined under the Zilkha Plan)
unless the Participant elects, with spousal consent which
meets the requirements of Paragraph V.1.F, to receive
payment in the form of a single sum payment or one of the
other forms of payment available under the Zilkha Plan.
Notwithstanding the preceding sentence, if the value of the
balance of all of a Participant's Accounts under the Plan is
less than or equal to $5,000 as of the Valuation Date
coincident with or immediately following both his
Termination Date and allocation of all Plan contributions to
his Accounts, the entire balance shall be distributed in a
single sum payment as soon as practicable after such
Valuation Date. The Company may eliminate an optional form
of benefit to the extent permissible under Code Section
411(d)(6) and may implement such valuation dates,
administrative procedures for distributing benefits, and
other administrative and operational procedures, to the
fullest extent permissible under the Code (including Code
Section 411(d)(6)).
6. Distributions on Death
Except as provided in Sections VIIA and IX, in the
event of a Participant's death prior to commencement of the
distribution of the balance of his Zilkha Accounts,
distribution of the Participant's Zilkha Accounts shall be
made in a single sum payment as provided in Paragraph V.1.E
to the Participant's beneficiary with respect to the
Participant's Zilkha Accounts (as determined under the
following paragraph); provided (1) if the Participant has a
spouse to whom he has been continuously married throughout
the one-year period ending on the date of his death and if
the value of the balance of all of the Participant's
Accounts under the Plan is greater than $5,000, the normal
form of payment of the Participant's Zilkha Accounts shall
be the "Qualified Preretirement Survivor Annuity" (as
defined under the Zilkha Plan), and (2) if the value of the
balance of all of the Participant's Accounts under the Plan
is greater than $5,000, the Participant's beneficiary may
elect to receive distribution of the Participant's Zilkha
Accounts in any of the forms of payment available to a
beneficiary under the Zilkha Plan.
Designation of a Participant's beneficiary to receive
any distribution from the Participant's Zilkha Accounts in
the event of the Participant's death shall be made in
accordance with Paragraph V.1.F, except that any designation
of a beneficiary other than the Participant's spouse which
is made before the first day of the Plan Year in which the
Participant reaches age 35 shall become invalid on such
date, and the Participant's spouse shall become the
Participant's beneficiary with respect to the Participant's
Zilkha Accounts on such date, unless the Participant makes
another designation of beneficiary after such date in
accordance with Paragraph V.1.F. Any such designation made
by a Participant after he ceases to be an Employee will not
become invalid on the first day of the Plan Year in which he
reaches age 35 unless he again becomes an Employee. This
paragraph shall not apply to any Accounts other than a
Participant's Zilkha Accounts.
7. Rights of Withdrawal From the Plan Prior to Termination
of Employment; Plan Loans
Except as provided in the following paragraph, a
Participant may not withdraw any part of the balance in his
Zilkha Accounts prior to his Termination of Employment.
A Participant may make withdrawals from his Zilkha Pre-
Tax Account on account of Hardship as set forth in Paragraph
VII.5; provided that the Participant has obtained spousal
consent (which meets the requirements of Paragraph V.1.F) to
such withdrawal. The amount of such withdrawal shall not
exceed the balance of such Account as of December 31, 1988,
plus the amount of the Participant's Elective Deferral
Contributions to the Zilkha Plan after such date minus any
amount of such Elective Deferral Contributions previously
withdrawn by the Participant from such Account. Payment
from the Participant's Zilkha Pre-Tax Account shall be made
after payment from his other Accounts as set forth in the
last sentence of Paragraph VII.5. Any such withdrawal shall
be made pursuant to such non-discriminatory rules as the
Committee shall prescribe.
A Participant Loan under Paragraph VII.8 may be taken
by a Participant who has a Zilkha Account only if the
Participant has obtained spousal consent (which meets the
requirements of Paragraph V.1.F) to such Loan.
IN WITNESS WHEREOF, Sonat Inc. has executed this
document as of May 11, 1999.
Sonat Inc.
by: /s/ Beverley T. Krannich
-----------------------------
Beverley T. Krannich
Vice President - Human Resources
and Secretary
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Post
Effective Amendment No. 2 on Form S-8 to Form S-4 (File No. 333-
75781) of our report dated March 9, 1999 relating to the consolidated
financial statements and financial statement schedule, which appears
in El Paso Energy Corporation's Annual Report on Form 10-K for the year
ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Houston, Texas
November 2, 1999
