As filed with the Securities and Exchange Commission on June 19, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
DUKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NC 28242-0001
(704) 594-0887
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
EMPLOYEES' SAVINGS PLAN OF PANENERGY CORP
AND PARTICIPATING AFFILIATES
(Full title of the plan)
RICHARD J. OSBORNE JOHN SPUCHES
Executive Vice President and Chief Financial Dewey Ballantine
Officer 1301 Avenue of the Americas
422 South Church Street New York, New York 10019-6092
Charlotte, North Carolina 28242-0001 Telephone No. 212-259-7700
Telephone No. 704-382-5159
(Names, addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Title of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering registration fee
registered(1) share(2) price(2)
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Common Stock, 1,500,000 shares $45.50 $68,250,000 $20,682
without par value
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold in connection with the
Plan described herein pursuant to Rule 416(c) under the Securities Act of 1933,
as amended.
(2) Pursuant to Rule 457(h), these prices are estimated solely for the
purpose of calculating the registration fee and are based upon the average of
the high and low sales prices of the Registrant's Common Stock on the New York
Stock Exchange on June 12, 1997.
There also are registered hereunder such additional indeterminate
number of shares as may be issued as a result of the adjustment provisions of
the Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This Registration Statement on Form S-8 (the "Registration
Statement") is being filed by Duke Energy Corporation (the "Company" or
"Registrant") with respect to the Employees' Savings Plan of PanEnergy Corp
and Participating Affiliates (the "Plan"), referred to on the cover of this
Registration Statement. The document(s) containing the information required
in Part I of this Registration Statement will be sent or given to each of the
participants in the Plan, as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "1933 Act"). Such document(s) are not being filed
with the Commission but constitute (together with the documents incorporated by
reference into this Registration Statement pursuant to Item 3 of Part II hereof)
a prospectus that meets the requirements of Section 10(a) of the 1933 Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission are
incorporated herein by reference:
o Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1996.
o Quarterly Report on Form 10-Q of the Company for the
quarter ended March 31, 1997.
o Current reports on Form 8-K of the Company dated
April 25, 1997, May 30, 1997 and June 18, 1997.
o Definitive Joint Proxy Statement-Prospectus of the
Company and PanEnergy Corp dated March 13, 1997.
o Annual Report on Form 10-K of PanEnergy Corp for the
fiscal year ended December 31, 1996.
o Quarterly Report on Form 10-Q of PanEnergy Corp
for the quarter ended March 31, 1997.
o Annual Report on Form 11-K of the Plan for the fiscal
year ended December 31, 1995.
o The description of the Common Stock, without par
value (the "Common Stock"), of the Company, which is
contained in the Company's Registration Statement on
Form S-4, Registration No. 333-23227, filed with the
Commission on March 13, 1997, including any
amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 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 securities then remaining unsold, shall be
deemed to be incorporated by reference and to be a part hereof from the date of
the filing of such documents.
Item 4. Description of Securities.
Not applicable.
2
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act and the By-Laws of the Registrant permit
indemnification of the Registrant's directors and officers in a variety of
circumstances, which may include liabilities under the 1933 Act. In addition,
the Registrant has purchased insurance permitted by the law of North Carolina on
behalf of directors, officers, employees or agents which may cover liabilities
under the 1933 Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
------- -----------
4(A) Employees' Savings Plan of PanEnergy Corp and
Participating Affiliates (as amended and
restated September 1, 1994), with Amendments
1 through 5 thereto, dated September 1,
1994, November 9, 1995, December 20, 1995,
August 16, 1996 and December 18, 1996,
respectively.
4(B) Restated Articles of Incorporation of
Registrant, dated June 18, 1997 (incorporated
by reference to Exhibit 4(G) of Form S-8
(Registration No. 333-29563) filed by the
Registrant on June 19, 1997).
4(C) By-Laws of Registrant, as amended
(incorporated by reference to Exhibit 3-C of
the Registrant's Form 10-K for the year ended
December 31, 1995, File No. 1-4928).
5 Opinion of Peter C. Buck, Esq.
23(A) Independent Auditors' Consent of Deloitte &
Touche LLP.
23(B) Independent Auditors' Consent of KPMG Peat
Marwick LLP.
23(C) Consent of Peter C. Buck, Esq. (included in
Exhibit 5).
24(A) Copy of power of attorney authorizing W.
Edward Poe, Jr., and others to sign the
Registration Statement on behalf of the
Registrant and certain of its directors and
officers.
24(B) Certified copy of resolution of the Board of
Directors of the Registrant authorizing power
of attorney.
3
<PAGE>
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(a)(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 of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
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 the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if
the total dollar value of securities offered
would not exceed that which was registered)
and any deviation from the low or high end of
the estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20% change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective 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 the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and 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 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the 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 of 1933 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
4
<PAGE>
indemnification is against public policy as expressed in the Securities Act of
1933 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 of 1933 and will be governed by the final adjudication of such issue.
5
<PAGE>
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 Charlotte, State of North Carolina, on the 19th
day of June, 1997.
DUKE ENERGY CORPORATION
Registrant
By R. B. Priory
--------------------------------
R. B. Priory
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
R.B. Priory Chairman of the Board and June 19, 1997
Chief Executive Officer
(Principal Executive Officer)
Richard J. Osborne Executive Vice President and June 19, 1997
Chief Financial Officer
(Principal Financial Officer)
Jeffrey L. Boyer Vice President and June 19, 1997
Corporate Controller
(Principal Accounting Officer)
Paul M. Anderson
G. Alex Bernhardt
Robert J. Brown
William A. Coley
William T. Esrey
Ann Maynard Gray
Dennis R. Hendrix
Harold S. Hook All of the Directors June 19, 1997
George Dean Johnson, Jr.
W.W. Johnson
Max Lennon
Leo E. Linbeck, Jr.
James G. Martin
Buck Mickel
R.B. Priory
Russell M. Robinson, II
W. Edward Poe, Jr., by signing his name hereto, does hereby
sign this document on behalf of the Registrant and on behalf of each of the
above-named persons pursuant to a power of attorney duly executed by the
Registrant and such persons, filed with the Securities and Exchange Commission
as an exhibit hereto.
W. Edward Poe, Jr.
-----------------------------------
W. Edward Poe, Jr.
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrative Committee 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 the 19th day of June,
1997.
EMPLOYEES' SAVINGS PLAN OF
PANENERGY CORP
AND PARTICIPATING AFFILIATES
By /s/ Sandra P. Meyer
----------------------------------
Sandra P. Meyer
Plan Administrative Committee Chairman
6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4(A) Employees' Savings Plan of PanEnergy Corp and Participating
Affiliates (as amended and restated September 1, 1994) with
Amendments 1 through 5 thereto, dated September 1, 1994,
November 9, 1995, December 20, 1995, August 16, 1996 and
December 18, 1996, respectively.
4(B) Restated Articles of Incorporation of Registrant, dated June
18, 1997 (incorporated by reference to Exhibit 4(G) of Form S-8
(Registration No. 333-29563) filed by the Registrant on June
19, 1997).
4(C) By-Laws of Registrant, as amended (incorporated by reference to
Exhibit 3-C of Form 10-K for the year ended December 31, 1995,
File No. 1-4928).
5 Opinion of Peter C. Buck, Esq.
23(A) Independent Auditors' Consent of Deloitte & Touche LLP.
23(B) Independent Auditors' Consent of KPMG Peat Marwick LLP.
23(C) Consent of Peter C. Buck, Esq. (included in Exhibit 5).
24(A) Copy of power of attorney authorizing W. Edward Poe, Jr., and
others to sign the Registration Statement on behalf of the
Registrant and certain of its directors and officers.
24(B) Certified copy of resolution of the Board of Directors of the
Registrant authorizing power of attorney.
EMPLOYEES' SAVINGS PLAN
OF
PANHANDLE EASTERN CORPORATION
AND
PARTICIPATING AFFILIATES
(AS AMENDED AND RESTATED
SEPTEMBER 1, 1994)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
I
Definitions and Construction
<S> <C> <C> <C>
1.1 Definitions...................................................................................I-1
-----------
1.2 Number and Gender.............................................................................I-9
-----------------
1.3 Headings......................................................................................I-9
--------
II
Service Crediting and
Participation Eligibility
2.1 Service Crediting............................................................................II-1
-----------------
2.2 Eligibility..................................................................................II-2
-----------
III
Contributions
3.1 Deferred Contributions......................................................................III-1
----------------------
3.2 After-Tax Contributions.....................................................................III-2
-----------------------
3.3 Company Matching Contributions..............................................................III-3
------------------------------
3.4 Company Safeharbor Contributions............................................................III-5
--------------------------------
3.5 Restrictions on Company Contributions and After-Tax Contributions...........................III-5
-----------------------------------------------------------------
3.6 Payments to Trustee.........................................................................III-5
-------------------
3.7 Return to Contributions.....................................................................III-5
-----------------------
3.8 Distribution of Excess Contributions........................................................III-6
------------------------------------
3.9 Rollover Contributions......................................................................III-7
----------------------
3.10 Forfeiture Reinstatement Contributions......................................................III-8
--------------------------------------
IV
Allocations
4.1 Suspense Account.............................................................................IV-1
----------------
4.2 Allocation of Contributions and Forfeitures..................................................IV-1
-------------------------------------------
4.3 Limitations..................................................................................IV-2
-----------
V
Investment of Funds
5.1 Prior Actions.................................................................................V-1
-------------
5.2 Company Contributions Post 1990 Matching Accounts.............................................V-1
-------------------------------------------------
5.3 Investment Funds..............................................................................V-1
----------------
5.4 Units and Net Asset Value.....................................................................V-4
-------------------------
5.5 Act Section 404(c) and Voting and Other Rights................................................V-5
----------------------------------------------
(i)
<PAGE>
VI
Benefits
6.1 Benefits.....................................................................................VI-1
--------
6.2 Designation of Beneficiaries.................................................................VI-1
----------------------------
VII
Time and Manner of Payment of Benefits
7.1 Time Of Payment.............................................................................VII-1
---------------
7.2 Cash-Out of Benefit.........................................................................VII-3
-------------------
7.3 Benefits from Account Balances..............................................................VII-3
------------------------------
7.4 Unclaimed Benefits..........................................................................VII-3
------------------
7.5 Claims Review...............................................................................VII-3
-------------
7.6 Direct Rollover Election....................................................................VII-4
------------------------
VIII
Withdrawals and Loans
8.1 Withdrawals................................................................................VIII-1
-----------
8.2 Loans......................................................................................VIII-4
-----
IX
Grandfathered Rights
9.1 Effect of Article............................................................................IX-1
-----------------
9.2 Grandfathered Distributions..................................................................IX-1
---------------------------
9.3 Intent of Article............................................................................IX-2
-----------------
X
Transfer Accounts from
Employees' Savings Plan of
Algonquin Gas Transmission Company
10.1 Effect of Article.............................................................................X-1
-----------------
10.2 Distribution Rights...........................................................................X-1
-------------------
10.3 Interpretation of Article.....................................................................X-1
-------------------------
(ii)
<PAGE>
XI
Transfer Accounts from
Employees' Tax Incentive Plan of
Algonquin Gas Transmission Company
11.1 Effect of Article............................................................................XI-1
-----------------
11.2 Distribution Rights..........................................................................XI-1
-------------------
11.3 Interpretation of Article....................................................................XI-1
-------------------------
XII
ESOP Accounts
12.1 Effect of Article...........................................................................XII-1
-----------------
12.2 ESOP Accounts...............................................................................XII-1
-------------
XIII
TRASOP Provisions
13.1 Definitions................................................................................XIII-1
-----------
13.2 Member TRASOP Contributions................................................................XIII-1
---------------------------
13.3 Company TRASOP Contributions...............................................................XIII-3
----------------------------
13.4 Form of Company TRASOP Contributions.......................................................XIII-4
------------------------------------
13.5 Time of Company TRASOP Contributions.......................................................XIII-4
------------------------------------
13.6 Redetermination and Recapture of Investment Credit.........................................XIII-5
--------------------------------------------------
13.7 Allocation of Contributions................................................................XIII-6
---------------------------
13.8 Allocation and Investment of Dividends.....................................................XIII-7
--------------------------------------
13.9 Statement of Account.......................................................................XIII-7
--------------------
13.10 Benefit Payments...........................................................................XIII-7
----------------
XIV
Administration of the Plan
14.1 Appointment of Committee....................................................................XIV-1
------------------------
14.2 Term, Vacancies, Resignation and Removal....................................................XIV-1
----------------------------------------
14.3 Officers, Records and Procedures............................................................XIV-1
--------------------------------
14.4 Meetings....................................................................................XIV-1
--------
14.5 Self-Interest of Members....................................................................XIV-1
------------------------
14.6 Compensation and Bonding....................................................................XIV-2
------------------------
14.7 Committee Powers and Duties.................................................................XIV-2
---------------------------
14.8 Company to Supply Information...............................................................XIV-3
-----------------------------
14.9 Indemnification.............................................................................XIV-3
---------------
(iii)
<PAGE>
XV
Administration of Funds
15.1 Payment of Expenses..........................................................................XV-1
-------------------
15.2 Trust Fund Property..........................................................................XV-1
-------------------
15.3 Distributions from Members' Accounts.........................................................XV-1
------------------------------------
XVI
Trustee and Administration of Trust Fund
16.1 Appointment, Resignation, Removal and Replacement of Trustee................................XVI-1
------------------------------------------------------------
16.2 Trust Agreement.............................................................................XVI-1
---------------
XVII
Fiduciary Provisions
17.1 Article Controls...........................................................................XVII-1
----------------
17.2 General Allocation of Duties...............................................................XVII-1
----------------------------
17.3 Fiduciary Duty.............................................................................XVII-1
--------------
17.4 Delegation and Allocation..................................................................XVII-1
-------------------------
17.5 Investment Manager.........................................................................XVII-2
------------------
XVIII
Amendments
Amendments.........................................................................................XVIII-1
XIX
Discontinuance of Contributions,
Termination and Merger or Consolidation
19.1 Declaration Or Intent.......................................................................XIX-1
---------------------
19.2 Administration of Plan in Case of Discontinuance of Contributions or
--------------------------------------------------------------------
Termination.................................................................................XIX-1
-----------
19.3 Merger, Consolidation or Transfer...........................................................XIX-2
---------------------------------
XX
Participating Affiliates
20.1 Adoption by Participating Affiliates.........................................................XX-1
------------------------------------
20.2 Single Plan..................................................................................XX-1
-----------
(iv)
<PAGE>
XXI
Miscellaneous
21.1 Not Contract of Employment..................................................................XXI-1
--------------------------
21.2 Payments Solely from Trust Fund.............................................................XXI-1
-------------------------------
21.3 Alienation of Interest Forbidden............................................................XXI-1
--------------------------------
21.4 No Benefits to the Company or Participating Affiliates......................................XXI-1
------------------------------------------------------
21.5 Severability................................................................................XXI-1
------------
21.6 Jurisdiction................................................................................XXI-2
------------
XXII
Top-Heavy Status
22.1 Article Controls...........................................................................XXII-1
----------------
22.2 Definitions................................................................................XXII-1
-----------
22.3 Top-Heavy Status...........................................................................XXII-2
----------------
22.4 Termination of Top-Heavy Status............................................................XXII-4
-------------------------------
22.5 Effect of Article..........................................................................XXII-4
-----------------
XXIII
Securities Regulations
Securities Regulations.............................................................................XXIII-1
</TABLE>
(v)
<PAGE>
EMPLOYEES' SAVINGS PLAN
OF
PANHANDLE EASTERN CORPORATION
AND
PARTICIPATING AFFILIATES
WITNESSETH:
WHEREAS, PANHANDLE EASTERN CORPORATION, hereinafter referred to as the
"Company", has heretofore adopted the EMPLOYEES' SAVINGS PLAN OF PANHANDLE
EASTERN CORPORATION AND PARTICIPATING AFFILIATES, hereinafter referred to as the
"Plan," for the benefit of its employees; and
WHEREAS, the Company has heretofore entered into a trust agreement that
is incorporated into the Plan with the Trustee establishing a trust to hold and
invest contributions made under the Plan and from which benefits have been
distributed under the Plan;
WHEREAS, the Company desires to amend the Plan in order to separate
said trust agreement from the Plan document and in several other respects and to
restate the Plan incorporating said Plan amendments and all prior Plan
amendments, intending thereby to provide an uninterrupted and continuing program
of benefits;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of September 1, 1994, except as
otherwise indicated herein:
(vi)
<PAGE>
I
Definitions and Construction
1.1 Definitions. Where the following words and phrases appear
in the Plan, they shall have the respective meanings set forth below, unless
their context clearly indicates to the contrary.
(1) Accounts: The individual accounts established and maintained in the
name of each Member, the aggregate current value of which
constitutes the Member's benefit under the Plan and which, as applied
to the Member, may consist of all the following: (i) the Member's
Employee Contribution After-Tax, After-Tax (A), Before-Tax, Before-Tax
(A), and ESOP Accounts; (ii) the Member's Company Contribution ESOP,
Post 1990 Matching, Prior Company and Prior Company (A) Accounts; and
(iii) the Member's Rollover Accounts. A Member shall at all times have
a 100% vested and nonforfeitable interest in the aggregate net asset
value of all Investment Fund units held in his Accounts, which as
applied to an Account is sometimes referred to as aggregate Account
value.
(2) Act: The Employee Retirement Income Security Act of 1974, as amended.
(3) After-Tax Contributions: Contributions made to the Plan by the Members
in accordance with their elections pursuant to Section 3.2.
(4) Benefit Commencement Date: With respect to each Member or beneficiary,
the first day of the first period for which such Member's or
beneficiary's benefit is payable to him from the Trust Fund.
(5) Code: The Internal Revenue Code of 1986, as amended.
(6) Commencement Date: The date on which an Employee first performs an Hour
of Service.
(7) Committee: The administrative committee appointed by the Directors to
administer the Plan.
(8) Company: Panhandle Eastern Corporation.
(9) Company Contribution Prior Company Account: An individual account in
the name of a Member (i) which is credited for amounts that are not
credited to any other Account and that were originally credited as the
employer contribution portion of the Member's
I-1
<PAGE>
interest under a Prior Plan, (ii) which is adjusted for applicable
investment performance of the Trust Fund, and (iii) which is debited
for withdrawals and other distributions.
(10) Company Contribution Prior Company (A) Account: An individual account
in the name of a Member (i) which is credited for amounts that
represent shares of common stock of Anadarko Petroleum Corporation
(including the proceeds of the liquidation of, but not dividends paid
on, such shares and earnings on such proceeds) distributed in
connection with the spin off of such corporation by the Company and
allocated to the Member's employer contribution account in the
Employee's Stock Purchase and Savings Plan of Panhandle Eastern
Corporation and Participating Subsidiaries, (ii) which is adjusted for
applicable investment performance of the Trust Fund, and (iii) which is
debited for withdrawals and other distributions.
(11) Company Contribution Post 1990 Matching Account: An individual account
in the name of a Member (i) which is credited with Company Matching
Contributions made to the Plan on the Members' behalf, (ii) which is
adjusted for applicable investment performance of the Trust Fund, and
(iii) which is debited for withdrawals and other distributions.
(12) Company Contribution ESOP Account: An individual account in the name of
a Member (i) which is credited for any allocation of Company TRASOP
Contributions to the account, (ii) which is credited for amounts that
were originally credited as the employer contribution portion of the
Member's interest under the Employees' Stock Ownership Plan of
Panhandle Eastern Plan and Participating Subsidiaries and the Texas
Eastern Employee Stock Ownership Plan, (iii) which is adjusted for
applicable investment performance of the Trust Fund, and (iv) which is
debited for withdrawals and other distributions.
(13) Company Contributions: The total of Company Safeharbor Contributions
and Company Matching Contributions.
(14) Company Matching Contributions: Contributions made to the Plan by the
Company or a Participating Affiliate pursuant to Section 3.3.
(15) Company Safeharbor Contributions: Contributions made to the Plan by the
Company or a Participating Affiliate pursuant to Section 3.4.
(16) Company Stock: The common stock of Panhandle Eastern Corporation.
(17) Company TRASOP Contributions: Contributions made to the Plan by the
Company or a Participating Affiliate pursuant to Section 13.3.
I-2
<PAGE>
(18) Compensation: The total of all cash amounts paid by the Company or a
Participating Affiliate to or for the benefit of a Member for services
rendered or labor performed while a Member (including amounts which he
could have received in cash (A) in lieu of a Deferred Contribution made
on his behalf by the Company or a Participating Affiliate and (B) had
he not entered into a salary reduction agreement pursuant to a
cafeteria plan under section 125 of the Code), excluding, however,
expense reimbursements, accrued vacation pay paid at separation, stock
option income, extraordinary payments, foreign compensation, moving
allowances, severance pay and contributions (other than Deferred
Contributions) to this or any other deferred compensation program. The
Compensation of any Member taken into account for purposes of the Plan
shall be limited to $150,000 for any Plan Year beginning after December
31, 1994, with such limitation to be:
(i) adjusted automatically to reflect any amendments to
section 401(a)(17) of the Code and any cost-of-living
increases authorized by section 401(a)(17) of the
Code;
(ii) prorated for a Plan Year of less than twelve months
and to the extent otherwise required by applicable
law; and
(iii) in the case of a Member who is either a five-percent
owner of the Company (within the meaning of section
416(i)(10)(A)(iii) of the Code) or is one of the ten
most Highly Compensated Employees for the Plan Year
and who has spouse and/or lineal descendants who are
under the age of nineteen as of the end of a Plan
Year who receive Compensation during such Plan Year,
prorated and allocated among such Member, his spouse,
and/or lineal descendants under the age of nineteen
based on the Compensation for such Plan Year of each
such individual.
(19) Controlled Entity: Each corporation that is a member of a
controlled group of corporations, within the meaning of
section 1563(a) (determined without regard to sections
1563(a)(4) and 1563(e)(3)(C)) of the Code, of which the
Company is a member, each trade or business (whether or not
incorporated) with which the Company is under common control
and each member of an affiliated service group, within the
meaning of section 414(m) of the Code, of which the Company is
a member.
(20) Deferred Contributions: Contributions made to the Plan by the
Company or a Participating Affiliate on a Member's behalf in
accordance with the Member's elections to defer Compensation
under the Plan's qualified cash or deferred arrangements
described in Section 3.1.
(21) Directors: The Board of Directors of the Company.
I-3
<PAGE>
(22) Effective Date: September 1, 1994, as to this amendment and
restatement of the Plan.
(23) Eligible Employee: Any Employee other than (A) an Employee
whose terms and conditions of employment are governed by a
collective bargaining agreement unless such agreement provides
for his coverage under the Plan, (B) any non- resident alien
who has no United States source income, (C) any Employee who
is a Leased Employee and (D) any Employee whose terms of
employment are subject to a written employment contract or
agreement that provides that such Employee shall not be
eligible to be a Member of the Plan.
(24) Employee: Any individual employed by the Company or a
Participating Affiliate and any Leased Employee.
(25) Employee Contribution After-Tax Account: An individual account
in the name of a Member (i) which is credited for the
After-Tax Contributions made to the Plan by the Member, (ii)
which is credited for amounts that were originally credited as
the employee after-tax contribution portion of the Member's
interest in a Prior Plan and that are not credited to the
Member's Employee Contribution After-Tax (A) Account or the
Member's Employee Contribution ESOP Account, (iii) which is
adjusted for applicable investment performance of the Trust
Fund, and (iv) which is debited for withdrawals and other
distributions.
(26) Employee Contribution After-Tax (A) Account: An individual
account in the name of a Member (i) which is credited for
amounts that represent shares of common stock of Anadarko
Petroleum Corporation (including the proceeds of the
liquidation of, but not dividends paid on, such shares and
earnings on such proceeds) distributed in connection with the
spin off of such corporation by the Company and allocated to
the Member's employee after-tax contribution account in the
Employees' Stock Purchase and Savings Plan of Panhandle
Eastern Corporation and Participating Subsidiaries, (ii) which
is adjusted for applicable investment performance of the Trust
Fund, and (iii) which is debited for withdrawals and other
distributions.
(27) Employee Contribution Before-Tax Account: An individual
account in the name of a Member (i) which is credited for the
Deferred Contributions and Company Safeharbor Contributions,
if any, made to the Plan on the Member's behalf, (ii) which is
credited for amounts that were originally credited as the
before-tax employee contribution portion of the Member's
interest in a Prior Plan and that are not credited to the
Member's Employee Contribution Before-Tax (A) Account, (ii)
which is adjusted for applicable investment performance of the
Trust Fund, and (iii) which is debited for withdrawals and
other distributions.
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(28) Employee Contribution Before-Tax (A) Account: An individual
account in the name of a Member (i) which is credited for
amounts that represent shares of common stock of Anadarko
Petroleum Corporation (including the proceeds of the
liquidation of, but not dividends paid on, such shares and
earnings on such proceeds) distributed in connection with the
spin off of such corporation by the Company and allocated to
the Member's employee before-tax contribution account in the
Employee's Stock Purchase and Savings Plan of Panhandle
Eastern Corporation and Participating Subsidiaries, (ii) which
is adjusted for applicable investment performance of the Trust
Fund, and (iii) which is debited for withdrawals and other
distributions.
(29) Employee Contribution ESOP Account: An individual account in
the name of a Member (i) which is credited for the Member's
Member TRASOP Contributions made to the Plan, (ii) which is
credited for amounts that were originally credited as the
employee after-tax contribution portion of the Member's
interest under the Employees' Stock Ownership Plan of
Panhandle Eastern Corporation and Participating Subsidiaries,
(ii) which is adjusted for applicable investment performance
of the Trust Fund and (iii) which is debited for withdrawals
and other distributions.
(30) Highly Compensated Employees: Any Employee who performs
services during the Plan Year for which the determination of
who is highly compensated is being made (the "Determination
Year") and who (A) is a five-percent owner of the Company
(within the meaning of section 416(i)(1)(A)(iii) of the Code)
at any time during the Determination Year or the twelve-month
period immediately preceding the Determination Year (the
"Look-Back Year"), (B) receives compensation (within the
meaning of section 415(c)(3) of the Code, including elective
or salary reduction contributions to a cafeteria plan, cash or
deferred arrangement or tax-sheltered annuity, "compensation"
for purposes of this Paragraph) in excess of $75,000 (with
such amount to be adjusted automatically to reflect any
cost-of-living adjustments authorized by section 414(q)(1) of
the Code) during the Look- Back Year, (C) receives
compensation in excess of $50,000 (with such amount to be
adjusted automatically to reflect any cost-of-living
adjustments authorized by section 414(q)(1) of the Code)
during the Look-Back Year and is a member of the top 20% of
Employees for the Look-Back Year (other than Employees
described in section 414(q)(8) of the Code) ranked on the
basis of compensation received during the year, (D) is an
officer (within the meaning of section 416(i) of the Code)
during the Look-Back Year and receives compensation in the
Look- Back Year greater than 50% of the amount in effect under
section 415(b)(1)(A) of the Code for the calendar year in
which the Look-Back Year begins or (E) is described in clauses
(B), (C) or (D) above (after modifying such clauses to
substitute the Determination Year for the Look-Back Year) and
is one of the 100
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<PAGE>
Employees who receives the most compensation from the Company
during the Determination Year. For purposes of the preceding
sentence, (i) no more than 50 Employees (or, if lesser, the
greater of three Employees or 10% of the Employees) shall be
treated as officers, (ii) if no officer has compensation in
excess of 50% of the amount in effect under section
415(b)(1)(A) of the Code, then the highest-paid officer shall
be deemed to be a Highly Compensated Employee, (iii) all
employers aggregated with the Company under section 414(b),
(c), (m) or (o) of the Code shall be treated as a single
employer and (iv) a former Employee who had a separation year
(generally, the Determination Year such Employee separates
from service) prior to the Determination Year and who was an
active Highly Compensated Employee for either such separation
year or any Determination Year ending on or after such
Employee's fifty-fifth birthday shall be deemed to be a highly
Compensated Employee. Further, if any individual is a member
of the family of a five-percent owner or of a Highly
Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest compensation during
the year, then such individual shall not be considered a
separate employee and any compensation paid to such individual
(and any applicable contribution or benefit on behalf of such
individual) shall be treated as if it were paid to (or on
behalf of) the five-percent owner or Highly Compensated
Employee. For purposes of the preceding sentence, the term
"family" means, with respect to any active or former Employee,
such Employee's spouse and lineal ascendant and descendants
and the spouses of such lineal ascendant and descendants. To
the extent that the provisions of this Paragraph are
inconsistent or conflict with the definition of a "highly
compensated employee" set forth in section 414(q) of the Code
and the Treasury Regulations thereunder, the relevant terms
and provisions of section 414(q) of the Code and the Treasury
Regulations thereunder shall govern and control.
(31) Hour of Service: An Hour of Service is each hour for which an
Employee is directly or indirectly paid, or entitled to
payment, by the Company or a Controlled Entity for the
performance of duties or for reasons other than the
performance of duties.
(32) Investment Fund: Any of the investment funds described in
Section 5.3(a).
(33) Leased Employee: Any person who is not an employee of the
Company or a Controlled Entity but who performs services for
the Company or a Controlled Entity pursuant to an agreement
(oral or written) between the Company or a Controlled Entity
and any leasing organization, provided that such person has
performed such services for the Company or a Controlled Entity
or for related persons (within the meaning of section
144(a)(3) of the Code) on a substantially full-time basis for
a period of at least one year and such services are of a type
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historically performed by the Company's or Controlled Entity's
employees in the Company's or Controlled Entity's field of
business.
(34) Member: Any individual who has met the eligibility
requirements for participation in the Plan and elected to
participate in the Plan pursuant to the provisions of Articles
II and III, any individual who has ceased active participation
in the Plan but who continues to have a balance credited to an
Account under the Plan and any individual who is eligible to
make and receive allocations of contributions pursuant to
Article XIII.
(35) Member TRASOP Contributions: Contributions made to the Plan by
Members pursuant to Section 13.2.
(36) Month of Participation: With respect to a Member, a month
during which he contributed to or had Deferred Contributions
(or the equivalent thereof) made on his behalf to the Plan or
a Prior Plan.
(37) Participating Affiliate: Any Controlled Entity whose board of
directors or noncorporate counterpart has adopted the Plan for
the benefit of its Employees pursuant to Article XX.
(38) Period of Service: Each period of an Employee's Service
commencing on his Commencement Date or a Reemployment
Commencement Date, if applicable, and ending on a Severance
from Service Date. Notwithstanding the foregoing, a period
during which an Employee is absent from Service by reason of
the Employee's pregnancy, the birth of a child of the Employee
or the placement of a child with the Employee in connection
with the adoption of such child by the Employee or for the
purposes of caring for such child for the period immediately
following such birth or placement shall not constitute a
Period of Service between the first and second anniversary of
the first date of such absence.
(39) Period of Severance: Each period of time commencing on an
Employee's Severance from Service Date and ending on a
Reemployment Commencement Date.
(40) Plan or Panhandle Plan: The Employees' Savings Plan of
Panhandle Eastern Corporation and Participating Affiliates, as
amended from time to time.
(41) Plan Year: The twelve-consecutive month period commencing
January 1 of each year.
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(42) Prior Plan: As applicable with respect to a Member, the
Employees' Stock Purchase and Savings Plan of Panhandle
Eastern Corporation and Participating Subsidiaries, the Texas
Eastern Investment Plan, the Texas Eastern Employees' Savings
Plan, the Employees' Savings Plan of Algonquin Gas
Transmission Company, the Employees' Tax Incentive Plan of
Algonquin Gas Transmission Company, the Employees' Stock
Ownership Plan of Panhandle Eastern Corporation and
Participating Subsidiaries, the Texas Eastern Stock Purchase
Plan and the Texas Eastern Employee Stock Ownership Plan.
(43) Reemployment Commencement Date: The first date upon which an
Employee performs an Hour of Service following a Severance
from Service Date.
(44) Rollover Account: An individual account for a Member (i) to
which is credited with the rollover contributions of such
Member made to the Plan pursuant to Section 3.9 or to a Prior
Plan pursuant to provisions similar to Section 3.9, (ii) which
is adjusted for applicable investment performance of the Trust
Fund, and (iii) which is debited for withdrawals and other
distributions.
(45) Severance from Service Date: The first date on which an
Employee terminates his Service following his Commencement
Date or a Reemployment Commencement Date, if applicable.
Notwithstanding the foregoing, the Severance from Service Date
of an Employee who is absent from Service by reason of the
Employee's pregnancy, the birth of a child of the Employee or
the placement of a child with the Employee in connection with
the adoption of such child by the Employee or for purposes of
caring for such child for the period immediately following
such birth or placement shall be the second anniversary of the
first date of such absence.
(46) Trust: The trust(s) established under the Trust Agreement to
hold and invest contributions made under the Plan, and
earnings thereon, and from which Plan benefits are
distributed.
(47) Trust Agreement: The agreement entered into between the
Company and the Trustee establishing the Trust, as such
agreement may be amended from time to time.
(48) Trust Fund: The funds and properties held pursuant to the
provisions of the Trust Agreement for the use and benefit of
the Members, together with all income, posts and increments
thereto.
(49) Trustee: The trustee or trustees qualified and acting under
the Trust Agreement at any time.
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(50) Valuation Dates: Each business day of each Plan Year and any
other interim Valuation Date determined by the Committee on a
nondiscriminatory basis.
(51) Vesting Service: The period of an Employee's service as
determined pursuant to Section 2.1.
1.2 Number and Gender. Wherever appropriate herein, words used
in the singular shall be considered to include the plural and the plural to
include the singular. The masculine gender, where appearing in this Plan, shall
be deemed to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are
included solely for convenience and if there is any conflict between such
headings and the text of the Plan, the text shall control.
I-9
<PAGE>
II
Service Crediting and
Participation Eligibility
2.1 Service Crediting.
(a) For the period preceding January 1, 1976, an Employee
shall be credited with years of Vesting Service in an amount equal to all
service credited to him for such period for Company contribution allocation
purposes under the Plan or, if applicable, a Prior Plan.
(b) Subject to the remaining Paragraphs of this Section, an
Employee shall be credited with years of Vesting Service for the period from and
after January 1, 1976 in an amount equal to his aggregate Periods of Service
whether or not such Periods of Service are completed consecutively; provided,
however, that for the period preceding the Effective Date and after January 1,
1976, an Employee shall be credited with years of Vesting Service in an amount
that is not less than the service credited to him for such period for Company
contribution allocation purposes under the Plan or, if applicable, a Prior Plan.
(c) Paragraph (b) above notwithstanding and for the period
from and after January 1, 1976, if an Employee terminates his Service (other
than during a leave of absence) and subsequently resumes his Service, if his
Reemployment Commencement Date is within twelve months of his Severance from
Service Date, such Period of Severance shall be treated as a Period of Service
for purposes of Paragraph (b) above.
(d) Paragraph (b) above notwithstanding and for the period
from and after January 1, 1976, if an Employee terminates his Service during a
leave of absence and subsequently resumes his Service, if his Reemployment
Commencement Date is within twelve months of the beginning of such leave of
absence, such Period of Severance shall be treated as a Period of Service for
purposes of Paragraph (b) above.
(e) In the case of an Employee who terminates employment and
who then incurs a Period of Severance which equals or exceeds the greater of (1)
five years or (2) his Period of Service prior to such Period of Severance, such
Employee's Period of Service completed before such Period of Severance shall be
disregarded in determining his years of Service for the period from and after
January 1, 1976.
(f) Nothing in this Section 2.1 shall affect the Service
credited for vesting purposes under the Plan or a Prior Plan, if applicable, of
an individual who terminated employment with the Company or a Controlled Entity
Prior to the Effective Date unless such individual becomes reemployed by the
Company or a Participating Affiliate and completes an Hour of Service after the
Effective Date.
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<PAGE>
2.2 Eligibility. Any Eligible Employee shall be eligible to become a
Member of the Plan for purposes of making After-Tax Contributions and Deferred
Contribution and receiving allocations of Company Contributions upon the first
day of the first month coincident with or next following the later of the date
on which such Eligible Employee has completed a one year of Period of Service or
the date on which such Eligible Employee has become an Eligible Employee.
Notwithstanding the foregoing:
(a) an Eligible Employee who was a Member of the Plan on the
day prior to the Effective Date shall remain a Member as of the Effective Date;
(b) an Eligible Employee who was a Member of the Plan or a
Prior Plan, or who was eligible to become a Member of the Plan or a Prior Plan,
prior to a termination of employment shall be eligible to remain or become a
Member immediately upon his reemployment as an Eligible Employee unless his
Period of Service prior to his termination of employment is disregarded pursuant
to Section 2.1(e); and
(c) an Eligible Employee who was a Member of the Plan or a
Prior Plan or who was eligible to become a Member of the Plan or a Prior Plan
prior to a termination of employment and whose Period of Service prior to such
termination of employment is disregarded pursuant to Section 2.1(e) shall be
eligible to become a Member of the Plan upon the first day of the first month
immediately following his completion of a one-year Period of Service following
his reemployment.
Any Eligible Employee may become a Member of the Plan for purposes of making
After-Tax Contributions and Deferred Contributions and receiving allocations of
Company Contributions upon the date on which he first becomes eligible by
executing and filing with the Committee, the Compensation reduction agreement or
After-Tax Contribution election form, in such manner and within the time limits
for filing, all as prescribed by the Committee. Any Eligible Employee who does
not so become a Member upon the date on which he first becomes eligible may
become a Member of the Plan for purposes of making After-Tax Contributions and
Deferred Contributions and receiving allocations of Company Contributions on the
first day of any subsequent month by executing and filing with the Committee a
Compensation reduction agreement or After-Tax Contribution election in the form,
in the manner and within the time limits for filing, all as prescribed by the
Committee.
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III
Contributions
3.1 Deferred Contributions.
(a) A Member may elect to defer an integral percentage of from
1% to 15% of his Compensation for a Plan Year by having the Company or a
Participating Affiliate contribute the amount so deferred to the Plan.
Compensation for a Plan Year not so deferred by such election shall be received
by such Member in cash. A Member's election to defer an amount of his
Compensation pursuant to this Section shall be made by executing a Compensation
reduction agreement pursuant to which the Member authorizes the Company or a
Participating Affiliate to reduce his Compensation in the elected amount and the
Company or a Participating Affiliate, in consideration thereof, agrees to
contribute an equal amount to the Plan. The reduction in a Member's Compensation
for a Plan Year pursuant to his election under a Compensation reduction
agreement shall be effected by Compensation reductions as of each payroll period
within such Plan Year following the effective date of such agreement. The amount
of Compensation elected to be deferred by a Member for a Plan Year pursuant to
this Section shall become a part of the Company's and Participating Affiliates'
Deferred Contributions for such Plan Year.
(b) A Member's Compensation reduction agreement shall remain
in force and effect for all periods following the date of its execution until
modified or terminated or until such Member terminates his employment. A Member
who has elected to defer a portion of his Compensation may change his deferral
election percentage (within the percentage limits set forth in Paragraph (a)
above), effective as of the first day of any month, by executing and filing with
the Committee a new Compensation reduction agreement in the manner and within
the time limits for filing prescribed by the Committee.
(c) A Member may cancel his Compensation reduction agreement,
effective as of the first day of any month, by executing and filing with the
Committee a Compensation reduction agreement cancellation in the form, in the
manner and within the time limits for filing, all as prescribed by the
Committee. A Member who so cancels his Compensation reduction agreement may
resume active participation in the Plan, effective as of the first day of any
month following the expiration of at least 30 days from the date he canceled his
Compensation reduction agreement, by executing and filing with the Committee a
new Compensation reduction agreement, in the manner and within the time limits
for filing, all as prescribed by the Committee.
(d) In restriction of the Members' elections provided in
Paragraphs (a), (b) and (c) above, the Deferred Contributions on behalf of any
Member for any calendar year shall not exceed $7,000 (with such amount to be
adjusted automatically to reflect any cost-of-living
III-1
<PAGE>
adjustments authorized by section 402(g)(5) of the Code), reduced by any "excess
deferrals" from other plans allocated to the Plan by March 1 of the next
following calendar year within the meaning of, and pursuant to the provisions
of, section 402(g)(2) of the Code.
(e) In further restriction of the Members' elections provided
in Paragraphs (a), (b) and (c) above, it is specifically provided that one of
the "actual deferral percentage" tests set forth in section 401(k)(3) of the
Code and the Treasury Regulations thereunder must be met in each Plan Year. If
multiple use of the alternative limitation (within the meaning of section
401(m)(9) of the Code and Treasury regulation section 1.401(m)-2(b)) occurs
during a Plan Year, such multiple use shall be corrected in accordance with the
provisions of Treasury regulation section 1.401(m)-2(c); provided, however, that
if such multiple use is not eliminated by making Employer Safe Harbor
Contributions, then the "actual contribution percentages" of all Highly
Compensated Employees participating in the Plan shall be reduced, and the excess
contributions distributed, in accordance with the provisions of Section 3.8 and
applicable Treasury regulations so that there is no such multiple use.
(f) As of the last business day of each semi-monthly period,
the Company and Participating Affiliates shall contribute, as Deferred
Contributions with respect to each Member, an amount equal to the amount of
Compensation elected to be deferred, pursuant to Paragraphs (a) and (b) above,
by such Member for such period. Such contributions, as well as the contributions
pursuant to Sections 3.3 and 3.4, shall be made without regard to current or
accumulated profits of the Company. Notwithstanding the foregoing, the Plan is
intended to qualify as a profit sharing plan for purposes of section 401(a),
402, 412, and 417 of the Code.
(g) If the restrictions set forth in Paragraph (d) or (e)
above would not otherwise be met for any Plan Year, the Compensation deferral
elections made pursuant to Paragraphs (a), (b) and (c) above of Members who are
Highly Compensated Employees may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall determine.
3.2 After-Tax Contributions.
(a) A Member may contribute to the Plan, as his After-Tax
Contributions, an integral percentage of his Compensation which, when added to
the integral percentage of his Compensation for such Plan Year designated as
Deferred Contributions, does not exceed 15%. After-Tax Contributions shall be
made by authorizing the Company or a Participating Affiliate to withhold such
contributions from the Member's Compensation as of each payroll period. Each
Member may elect the amount (within the percentage limits of this Paragraph) of
his After- Tax Contributions by executing and filing with the Committee the
form, in the manner and within the time limits for filing, all as prescribed by
the Committee.
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<PAGE>
(b) A Member may change the amount of his After-Tax
Contributions (within the percentage limits set forth in Paragraph (a) above)
effective as of the first day of any month by executing and filing with the
Committee the form, in the manner and within the time limits for filing, all as
prescribed by the Committee.
(c) A Member may suspend his After-Tax Contributions effective
as of the first day of any month by executing and filing with the Committee the
form, in the manner and within the time limits for filing, all as prescribed by
the Committee. Resumption of suspended After-Tax Contributions shall be made
effective as of the first day of any subsequent month following the expiration
of at least 30 days from the date of such suspension by executing and filing
with the Committee the form in the manner and within the time limits for filing,
all as prescribed by the Committee.
(d) If the restrictions set forth in Section 3.5 would not
otherwise be met for any Plan Year, the Member After-Tax Contribution elections
made pursuant to Paragraphs (a), (b), and (c) above of Members who are Highly
Compensated Employees may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall determine.
3.3 Company Matching Contributions.
(a) For each semi-monthly period, the Company and
Participating Affiliates shall contribute on behalf of each Member who has
completed less than five years of Vesting Service as of the anniversary of his
Commencement Date immediately preceding the month in which such period occurs,
as Company Matching Contributions, an amount which equals the sum of 110% of the
Deferred Contributions which were made pursuant to Section 3.1 on behalf of such
Member during such period plus 100% of the After-Tax Contributions which were
made pursuant to Section 3.2 by such Member during such period and which in the
aggregate were not in excess of 4% of each such Member's Compensation for such
period. If the amount of Deferred Contributions which can be made on such
Member's behalf in accordance with the limitation of Section 3.1(d) for a Plan
Year is less than 4% of his Compensation for such Plan Year and such Member
elects to defer the maximum amount of Compensation permitted under Section
3.1(d) as Deferred Contributions, the Member's After-Tax Contributions shall be
deemed to be Deferred Contributions solely for purposes of determining the
amount of Company Matching Contributions to be made on behalf of such Member for
a semi-monthly period.
(b) For each semi-monthly period, the Company shall contribute
on behalf of each Member who has completed five or more years of Vesting Service
but less than ten years of Vesting Service as of the anniversary of his
Commencement Date immediately preceding the month in which such period occurs,
as Company Matching Contributions, an amount which equals the sum of 110% of the
Deferred Contributions which were made pursuant to Section 3.1 on behalf of such
Member during such period plus 100% of the After-Tax Contributions which
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<PAGE>
were made pursuant to Section 3.2 by such Member during such period and which in
the aggregate were not in excess of 5% of each such Member's Compensation for
such period. If the amount of Deferred Contributions which can be made on such
Member's behalf in accordance with the limitation of Section 3.1(d) for a Plan
Year is less than 5% of his Compensation for such Plan Year and such Member
elects to defer the maximum amount of Compensation permitted under Section
3.1(d) as Deferred Contributions, the Member's After- Tax Contributions shall be
deemed to be Deferred Contributions solely for purposes of determining the
amount of Company Matching Contributions to be made on behalf of such Member for
a semi-monthly period.
(c) For each semi-monthly period, the Company shall contribute
on behalf of each Member who has completed ten or more years of Vesting Service
as of the anniversary of his Commencement Date immediately preceding such
period, as Company Matching Contributions, an amount which equals the sum of
110% of the Deferred Contributions which were made pursuant to Section 3.1 on
behalf of such Member during such period plus 100% of the After-Tax
Contributions which were made pursuant to Section 3.2 by such Member during such
month and which in the aggregate were not in excess of 6% of each such Member's
Compensation for such period. If the amount of Deferred Contributions which can
be made on such Member's behalf in accordance with the limitation of Section
3.1(d) for a Plan Year is less than 6% of his Compensation for such Plan Year
and such Member elects to defer the maximum amount of Compensation permitted
under Section 3.1(d) as Deferred Contributions, the Member's After-Tax
Contributions shall be deemed to be Deferred Contributions solely for purposes
of determining the amount of Company Matching Contributions to be made on behalf
of such Member for a semi-monthly period.
(d) At the discretion of the Chief Executive Officer of the
Company, for each period, the Company shall contribute on behalf of each Member
who has completed twenty or more years of Vesting Service as of the anniversary
of his Commencement Date immediately preceding the month in which such period
occurs, as Company Matching Contributions, an amount which equals the sum of
110% of the Deferred Contributions which were made pursuant to Section 3.1 on
behalf of such Member during such period plus 100% of the After-Tax
Contributions which were made pursuant to Section 3.2 by such Member during such
period and which in the aggregate were more than 6% but not in excess of 8% of
each such Member's Compensation for such period. If the amount of Deferred
Contributions which can be made on such Member's behalf in accordance with the
limitation of Section 3.1(d) for a Plan Year is less than 8% of his Compensation
for such Plan Year and such Member elects to defer the maximum amount of
Compensation permitted under Section 3.1(d) as Deferred Contributions, the
Member's After-Tax Contributions shall be deemed to be Deferred Contributions
solely for purposes of determining the amount of Company Matching Contributions
to be made on behalf of such Member for a semi-monthly period.
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<PAGE>
(e) At the discretion of the Chief Executive Officer of the
Company, for any semi-monthly period, the Company shall contribute as
supplemental Company Matching Contributions on behalf of each Member on whose
behalf the Company has made Company Matching Contributions for such period
pursuant to Paragraph (a), (b) or (c) above, a specified dollar amount (which
shall be uniform for all Members), a specified percentage (which shall be
uniform for all Members) of Compensation or a specified percentage (which shall
be uniform for all Members) of Deferred Compensation and/or After-Tax
Contributions.
3.4 Company Safeharbor Contributions. In addition to the Company
Matching Contributions made pursuant to Section 3.3, and as authorized by the
Directors, for each Plan Year, the Company and Participating Affiliates may
contribute as a "safe harbor contribution" for such Plan Year, on behalf of
Members who are not Highly Compensated Employees, the amount necessary to cause
the Plan to satisfy the restrictions set forth in Section 3.1(e) and Section
3.5. Any amounts contributed pursuant to this Paragraph shall be allocated to
the Employee Contribution Before-Tax Accounts of the Members who are not Highly
Compensated Employees.
3.5 Restrictions on Company Contributions and After-Tax Contributions.
In restriction of Company Contributions and After-Tax Contributions, it is
specifically provided that one of the "actual contribution percentage" tests set
forth in section 401 (m) of the Code and the Treasury Regulations thereunder
must be met in each Plan Year. The Committee may elect, in accordance with
applicable Treasury Regulations, to treat Deferred Contributions to the Plan as
Company Matching Contributions for purposes of meeting this requirement.
3.6 Payments to Trustee. Contributions under the Plan shall be
paid by the Company and Participating Affiliates directly to the Trustee as soon
as practicable.
3.7 Return to Contributions. Anything to the contrary herein
notwithstanding, the Company's and Participating Affiliates' contributions to
the Plan are contingent upon the deductibility of such contributions under
section 404 of the Code. To the extent that a deduction for contributions is
disallowed, such contributions shall upon the written demand of the Company or a
Participating Affiliate, be returned to the Company or Participating Affiliate
by the Trustee within one year after the date of disallowance, reduced by any
net losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto. Moreover, if Company or
Participating Affiliate contributions are made under a mistake of fact, such
contributions shall, upon the written demand of the Company or Participating
Affiliate, be returned to the Company or Participating Affiliate by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto.
III-5
<PAGE>
3.8 Distribution of Excess Contributions.
(a) Anything to the contrary herein notwithstanding, any
Deferred Contributions to the Plan for a calendar year on behalf of a Member in
excess of the limitations set forth in Section 3.1(d) shall be distributed in
cash to such Member not later than April 15 of the next following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for
any Plan Year, the aggregate Deferred Contributions made by the Company and
Participating Affiliates on behalf of Highly Compensated Employees exceeds the
maximum amount of Deferred Contributions permitted on behalf of such Highly
Compensated Employees pursuant to Section 3.1(e) (determined by reducing
Deferred Contributions on behalf of Highly Compensated Employees in order of the
"actual deferral percentages" (as that term is defined in section 401(k)(3)(B)
of the Code and the Treasury Regulations thereunder) beginning with the highest
of such percentages), such excess shall be distributed to the Highly Compensated
Employees on whose behalf such excess was contributed at the time and in
accordance with the procedures established by applicable Treasury Regulations
promulgated pursuant to section 401(k) of the Code.
(c) Anything to the contrary herein notwithstanding, if, for
any Plan Year, the sum of the aggregate Company Contributions and After-Tax
Contributions allocated to the Accounts of Highly Compensated Employees exceeds
the maximum amount of such contributions permitted on behalf of such Highly
Compensated Employees pursuant to Section 3.5 (determined by reducing, first,
After-Tax Contributions made by, and second, Company Contributions made on
behalf of, Highly Compensated Employees in order of the "contribution
percentages" (as that term is defined in section 401(m)(3) of the Code and
Treasury Regulations thereunder) beginning with the highest of such
percentages), such excess shall be distributed in cash to the Highly Compensated
Employees on whose behalf such excess contributions were made or who made such
excess contributions, as applicable (or, if such excess contributions are
forfeitable, they shall be forfeited) before the end of the next following Plan
Year. Any excess contribution which is forfeitable shall be considered forfeited
on March 15 of the next following Plan Year.
(d) In coordinating the disposition of excess deferrals and
excess contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) First, Deferred Contributions which constitute
excess deferrals described in Paragraph (a) above that are not considered in
determining the amount of Company Matching Contributions pursuant to Section 3.3
shall be distributed.
(2) Next, excess Deferred Contributions which
constitute excess deferrals described in Paragraph (a) above that are considered
in determining the amount of
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<PAGE>
Company Matching Contributions pursuant to Section 3.3 shall be distributed, and
the Company Matching Contributions with respect to such Deferred Contributions
shall be forfeited;
(3) Next, excess Deferred Contributions described in
Paragraph (b) above that are not considered in determining the amount of Company
Matching Contributions pursuant to Section 3.3 shall be distributed;
(4) Next, excess Deferred Contributions described in
Paragraph (b) above that are considered in determining the amount of Company
Matching Contributions pursuant to Section 3.3 shall be distributed, and the
Company Matching Contributions with respect to such Deferred Contributions shall
be forfeited;
(5) Next, excess After-Tax Contributions described in
Paragraph (c) above that are not considered in determining the amount of Company
Matching Contributions pursuant to Section 3.3 shall be distributed; and
(6) Finally, After-Tax Contributions described in
Paragraph (c) above that are considered in determining the amount of Company
Matching Contributions pursuant to Section 3.3 shall be distributed, and the
Company Matching Contributions with respect to such After-Tax Contributions
shall be forfeited.
3.9 Rollover Contributions.
(a) Rollover contributions may be made to the Plan by any
Eligible Employee of amounts that are "eligible rollover distributions" within
the meaning of section 402(f)(2)(A) of the Code from an employees' trust
described in section 401(a) of the Code, which is exempt from tax under section
501(a) of the Code. A Rollover Contribution may be made to the Plan irrespective
of whether such eligible rollover distribution was paid to the Eligible Employee
or paid to the Plan as a "direct" Rollover Contribution, but only if any such
Rollover Contributions is made pursuant to and in accordance with applicable
provisions of the Code and Treasury regulations promulgated thereunder. A direct
Rollover Contribution to the Plan may be effectuated only by wire transfer
directed to the Trustee or by issuance of a check made payable to the Trustee,
which is negotiable only by the Trustee and which identifies the Eligible
Employee for whose benefit the Rollover Contribution to the Plan must execute
and file with the Committee the form prescribed by the Committee for such
purpose. The Committee may require as a condition to accepting any Rollover
Contribution that such Eligible Employee furnish any evidence that the Committee
in its discretion deems satisfactory to establish that the proposed Rollover
Contribution is in fact such an eligible rollover distribution and is made
pursuant to and in accordance with applicable provisions of the Code and
Treasury regulations. All Rollover Contributions to the Plan must be made in
cash. A Rollover Contribution shall be credited to the Rollover Account of the
Eligible Employee for whose benefit such Rollover Contribution is being made and
the Eligible Employee may direct the investment of amounts
III-7
<PAGE>
credited to his Rollover Account in accordance with the provisions of Section
5.3 as if his Rollover Account was a separate Employee Contribution Before-Tax
Account.
(b) An Eligible Employee who has made a Rollover Contribution
in accordance with this Section, but who has not otherwise become a Member of
the Plan in accordance with Article II, shall become a Member coincident with
such Rollover Contribution; provided, however, that such Member shall not have a
right to defer Compensation, make After- Tax Contributions or have Company
Contributions made on his behalf until he has otherwise satisfied the
requirements imposed by Article II.
3.10 Forfeiture Reinstatement Contributions. In the event that an
amount credited under the Plan as in effect prior to the Effective Date or under
a Prior Plan to a terminated Member was forfeited as a result of termination of
employment prior to the Effective Date, the terminated Member, upon subsequent
reemployment with the Company or a Participating Affiliate prior to incurring a
Period of Severance of five consecutive years shall have the forfeited amount
restored to such Member's respective Account. Any such restoration shall be made
by a special contribution by the Company or Participating Affiliate and shall be
made as of the Valuation Date coincident with or next succeeding the Member's
date of employment.
III-8
<PAGE>
IV
Allocations
4.1 Suspense Account. All contributions to the Plan shall be held in a
suspense account until allocated to the Accounts of the Members as provided in
Section 4.2.
4.2 Allocation of Contributions and Forfeitures.
(a) Deferred Contributions made by the Company or a
Participating Affiliate on a Member's behalf pursuant to Section 3.1 shall be
allocated to such Member's Employee Contribution Before-Tax Account as of the
last business day of the semi-monthly period for which they were made.
(b) After-Tax Contributions made by a Member pursuant to
Section 3.2 shall be allocated to the Employee Contribution After-Tax Account of
such Member as of the last business day of the semi-monthly for which they were
made.
(c) The Company Matching Contributions made on behalf of a
Member pursuant to Section 3.3 shall be allocated Company Contribution Post 1990
Matching Account of such Member as of the last business day of the semi-monthly
period for which they were made.
(d) As of the last day of each Plan Year, the Company
Safeharbor Contribution, if any, made pursuant to Section 3.4 for such Plan Year
in order to satisfy the restrictions set forth in Section 3.1(e) shall be
allocated to the Employee Contribution Before- Tax Accounts of Members who are
not Highly Compensated Employees on the basis of such Members' Deferred
Contributions for such Plan Year and each such Member's Deferred Contribution
Before-Tax Account shall be allocated that portion of such contribution which
such Member's Deferred Contributions for such Plan Year is of all such Members'
Deferred Contributions for such Plan Year.
(e) As of the last day of each Plan Year, the Company
Safeharbor Contribution, if any, made pursuant to Section 3.4 for such Plan Year
in order to satisfy the restrictions set forth in Section 3.5 shall be allocated
to the Employee Contribution Before-Tax Accounts of Members who are not Highly
Compensated Employees on the basis of such Members' share of Company Matching
Contributions for such Plan Year and each such Member's Employee Contribution
Before-Tax Account shall be allocated that portion of such contribution which
such Member's share of Company Matching Contributions for such Plan Year is of
all such Members' share of Company Matching Contributions for such Plan Year.
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<PAGE>
(f) Member TRASOP Contributions and Company TRASOP
Contributions shall be allocated in accordance with the provisions of Article
XIII.
4.3 Limitations.
(a) For purposes of this Section, the following terms and
phrases shall have these respective meanings:
(1) "Annual Additions" of a Member for any Limitation
Year shall mean the total of (A) the Company Contributions, Deferred
Contributions, Company TRASOP Contributions and forfeitures allocated to such
Member's Accounts for such year, (B) Member's After-Tax Contributions and Member
TRASOP Contributions, if any, (excluding any Rollover Contributions) for such
year and (C) amounts referred to in sections 415(l)(1) and 419A(d)(2) of the
Code.
(2) "Limitation Year" shall mean the Plan Year.
(3) "Maximum Annual Additions" of a Member for any
Limitation Year shall mean the lesser of (A) $30,000 (or, if greater, one-fourth
of the dollar limitation in effect under section 415(b)(1)(A) of the Code for
such Limitation Year) or (B) 25% of such Member's compensation, within the
meaning of section 415(c)(3) of the Code and applicable Treasury Regulations
thereunder and as limited by section 401(a)(17) of the Code for Limitation Years
beginning after December 31, 1988, during such year except that the limitation
in this Clause (B) shall not apply to any contribution for medical benefits
(within the meaning of section 419A(f)(2) of the Code) after separation from
service with the Company or a Controlled Entity which is otherwise treated as an
Annual Addition or to any amount otherwise treated as an Annual Addition under
section 415(l)(1) of the Code.
(b) Contrary Plan provisions notwithstanding, in no event
shall the Annual Additions credited to a Member's Accounts for any Limitation
Year exceed the Maximum Annual Additions for such Member for such year. If as a
result of a reasonable error in estimating a Member's compensation, a reasonable
error in determining the amount of elective deferrals (within the meaning of
section 402(g)(3) of the Code) that may be made with respect to any individual
under the limits of section 415 of the Code, or because of other limited facts
and circumstances, the Annual Additions that would be credited to a Member's
Accounts for a Limitation Year would nonetheless exceed the Maximum Annual
Additions for such Member for such year, the excess Annual Additions which, but
for this Section, would have been allocated to such Member's Accounts shall be
disposed of as follows:
(1) first, by returning to such Member his After-Tax
Contributions, adjusted for income or loss allocated thereto, which would not
have been considered in
IV-2
<PAGE>
determining the amount of Company Matching Contributions allocated to such
Member's Accounts pursuant to Section 4.2;
(2) next, any such excess Annual Additions in the
form of Deferred Contributions on behalf of such Member, adjusted for income or
loss allocated thereto, which would not have been considered in determining the
amount of Company Matching Contributions allocated to such Member's Accounts
pursuant to Section 4.2, shall be distributed to such Member;
(3) next, (i) by returning to such Member his
After-Tax Contributions, adjusted for income or loss allocated thereto, which
would have been considered in determining the amount of Company Matching
Contributions allocated to such Member's Accounts pursuant to Section 4.2, and
(ii) the Company Matching Contributions, adjusted for income or loss allocated
thereto, which would have been allocated to such Member's Accounts based upon
such distributed After-Tax Contributions shall, to the extent such amounts would
have otherwise been allocated to such Member's Accounts, be allocated to a
suspense account and shall be held there until used to reduce future Company
Matching Contributions;
(4) next (i) any such excess Annual Additions in the
form of Deferred Contributions on behalf of such Member, adjusted for income or
loss allocated thereto, which would have been considered in determining the
amount of Company Matching Contributions allocated to such Member's Accounts
pursuant to Section 4.2, shall be distributed to such Member, and (ii) the
Company Matching Contributions, adjusted for income or loss allocated thereto,
which would have been allocated to such Member's Accounts based upon such
Deferred Contributions so distributed shall, to the extent such amounts would
have otherwise been allocated to such Member's Accounts, be allocated to a
suspense account and shall be held there until used to reduce future Company
Matching Contributions;
(5) finally, any such excess Annual Additions in the
form of Company TRASOP Contributions shall, to the extent such amounts would
otherwise have been allocated to such Member's TRASOP Account, shall be
allocated instead to the TRASOP Accounts of Members whose Annual Additions are
not limited by this Section in the manner provided in Section 14.7(a),
disregarding the Compensation of Members whose Annual Additions are limited by
this Section.
(c) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in allocations
of the net income (or net loss) of the Trust Fund.
(d) For purposes of determining whether the Annual Additions
under this Plan exceed the limitations herein provided, as defined contribution
plans of the Company are to be treated as one defined contribution plan. In
addition, all defined contribution plans of Controlled
IV-3
<PAGE>
Entities shall be aggregated for this purpose. For purposes of this Section
only, a "Controlled Entity" (other than an affiliated service group member
within the meaning of section 414(m) of the Code) shall be determined by
application of a more than 50% control standard in lieu of an 80% control
standard. If the Annual Additions credited to a Member's Accounts for any
Limitation Year under this Plan plus the additions credited on his behalf under
other defined contribution plans required to be aggregated pursuant to this
Paragraph would exceed the Maximum Annual Additions for such Member for such
Limitation Year, the Annual Additions under this Plan and the additions under
such other plans shall be reduced on a pro rata basis and allocated, reallocated
or returned in accordance with applicable plan provisions regarding Annual
Additions in excess of Maximum Annual Additions; provided, however, that
allocation of Company TRASOP Contributions shall be reallocated or returned only
after all other Annual Additions of such Member have been reallocated or
returned.
(e) In the case of a Member who also participated in a defined
benefit plan of the Company or a Controlled Entity (as defined in Paragraph (d)
above), the Company shall reduce the Annual Additions credited to the Accounts
of such Member under this Plan pursuant to the provisions of Paragraph (b) to
the extent necessary to prevent the limitation set forth in section 415(e) of
the Code from being exceeded. Notwithstanding the foregoing, the provisions of
this Paragraph shall only apply if such defined benefit plan does not provide
for a reduction of benefits thereunder to ensure that the limitation set forth
in Section 415(e) of the Code is not exceeded.
(f) If the limitations set forth in this Section would not
otherwise be met for any Limitation Year, the Compensation deferral elections
pursuant to Section 3.1 of affected Members shall be revised prospectively by
the Committee on a temporary basis to the extent necessary to meet such
limitations in the manner described in Section 3.1(f).
IV-4
<PAGE>
V
Investment of Funds
5.1 Prior Actions.
On or before the Effective Date, the Committee shall transfer the
investment of each Account from each investment option available under the Plan
immediately prior to the Effective Date, to the Investment Fund described in
Section 5.3 that, in the sole judgment of the Committee, most closely resembles
the option and shall restate the Account balance in terms of units of the
respective Investment Fund. As of the Effective Date, any Member designation as
to the investment of future contributions to the Member's Employee Contribution
Before-Tax and After-Tax Accounts that is expressed in terms of an investment
option available under the Plan immediately prior to the Effective Date, shall
be deemed to refer to the Investment Fund described in Section 5.3 (other than a
Closed Investment Fund) that, in the sole judgment of the Committee, most
closely resembles the option.
5.2 Company Contributions Post 1990 Matching Accounts.
(a) Company Contribution Post 1990 Matching Accounts of the
Members shall be invested in the Panhandle Eastern Stock Fund as described in
Section 5.3.
(b) A Member who has satisfied the requirements for
eligibility to receive early retirement benefits or normal retirement benefits
pursuant to the terms of any qualified defined benefit pension plan sponsored by
the Company or a Participating Affiliate may elect to transfer for investment in
any of the Investment Funds described in Section 5.3 (other than an Investment
Fund identified therein, or designated by the Committee, as closed ("Closed
Investment Fund")) any whole percentage, not greater than 25%, of the net asset
value of the Panhandle Eastern Stock Fund units held by his Company Contribution
Post 1990 Matching Account and, if permitted by Section 12.2, his Company
Contribution and Employee Contribution ESOP Accounts. A Member who elects to
make a transfer pursuant to this Paragraph (b) may designate the Investment
Funds in which the transferred amount is to be invested and the whole percentage
of such amount that is to be invested in each. A Member may elect to make a
transfer pursuant to this Paragraph (b) on any business day during any Plan
Year. Any transfer made by a Member pursuant to this Paragraph (b) shall be made
in accordance with the procedures prescribed by the Committee.
5.3 Investment Funds.
(a) In accordance with the procedures prescribed by the
Committee, each Member shall designate the manner in which the amounts allocated
to his Employee Contribution
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<PAGE>
Before-Tax Account and his Employee Contribution After-Tax Account shall be
invested from among the following Investment Funds (other than a Closed
Investment Fund):
Money Market Fund Invested in units
representing an undivided interest
in a pooled fund with an investment
portfolio of money market
instruments (which may include
investment in any common/commingled,
money market/short term investment
fund managed by the Trustee or an
affiliate of the Trustee).
Bond Fund Invested in units representing
an undivided interest in a pooled
fund with an investment portfolio
consisting of medium and long term
debt obligations issued by the U.S.
Government and governmental agencies
and diversified medium and long term
corporate debt obligations (but no
Company debt obligations), whether
or not secured, and cash (which may
include investment in any
common/commingled, money
market/short term investment fund
managed by the Trustee or an
affiliate of the Trustee).
Diversified Equity Fund Invested in units representing an
undivided interest in a pooled fund
with an investment portfolio
consisting of diversified common
stocks and other securities
convertible into common stock (but
no Company stock or other
securities) and cash (which may
include investment in any
common/commingled, money
market/short term investment fund
managed by the Trustee or an
affiliate of the Trustee).
Panhandle Eastern Stock Fund Invested in units representing an
undivided interest in a pooled fund
with an investment portfolio
consisting of shares of Company
Stock and cash (which may include
investment in any common/commingled,
money market/short term investment
fund managed by the Trustee or an
affiliate of the Trustee).
Anadarko Stock Fund Investment in units representing an
(Closed Investment Fund) individual interest in a pooled fund
with an investment portfolio
consisting of shares of
Anadarko Petroleum Corporation
common stock and cash (which may
include investment in any
common/commingled, money
market/short term investment fund
managed by the Trustee or an
affiliate of the Trustee).
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<PAGE>
A Member may designate one of such Investment Funds (other than a Closed
Investment Fund), for all future contributions to his Employee Contribution
Before-Tax and Contribution After-Tax Accounts or he may split the investment of
the contributions to his Employee Contribution Before-Tax and After-Tax Accounts
among such Investment Funds, in whole percentages. No other type of designation
shall be permitted. If a Member fails to make a designation, future
contributions to his Employee Contribution Before-Tax Account and his Employee
Contribution After-Tax Account shall be invested in the Money Market Fund.
(b) In accordance with the procedures prescribed by the
Committee, a Member may change his Investment Fund designation for future
contributions to his Employee Contribution Before-Tax and After-Tax Accounts.
(c) In accordance with the procedures prescribed by the
Committee, a Member may elect on any business day to transfer all or any whole
percentage of the investment of his Employee Contribution Before-Tax, Before-Tax
(A), After-Tax, After-Tax (A) Accounts and his Company Contribution Prior
Company and Prior Company (A) Accounts and, except to the extent invested in the
Panhandle Eastern Stock Fund, his Employee Contribution ESOP Account and, except
to the extent invested in the Panhandle Eastern Stock Fund, his Company
Contribution Post 1990 Matching and ESOP Accounts and his Rollover Accounts from
any Investment Fund to any Investment Fund(s) (other than a Closed Investment
Fund) and, if to more than one such Investment Fund, with the respective whole
percentage to each such fund. Notwithstanding the foregoing a Member may not
elect to transfer less than all of the investment of his Accounts in the
Anadarko Stock Fund to any other Investment Fund(s).
(d) Any purchase of Company Stock for the Plan may be made by
the Trustee either in the open market or, if agreed to by the Company, by
purchasing directly from the Company authorized but unissued shares or shares
previously issued and reacquired by the Company. If the Company sells Company
Stock directly to the Trustee for the Plan, no commission may be charged and the
purchase price per share shall be equal to the lower of:
(i) the unweighted average of the reported daily high and
low sales prices for Company Stock on the New York
Stock Exchange, Inc. for the five consecutive trading
days up to and including the date on which the
Trustee and the Company agree to the sale, or, if the
New York Stock Exchange, Inc. is closed on such date,
the period of five consecutive trading days
immediately preceding such date; or
(ii) the unweighted average of the reported daily high and
low sales prices for Company Stock on the New York
Stock Exchange, Inc. for the trading day on which the
Trustee and the Company agree to the sale, or, if the
New York Stock Exchange, Inc. is closed on such date,
the trading day immediately preceding such date.
V-3
<PAGE>
5.4 Units and Net Asset Value.
(a) Following close of business on a Valuation Date and before
effecting any addition/reduction to the Investment Fund for the Valuation Date
described in Paragraphs (b), (c), (d) or (e), below, the Trustee shall determine
the fair market value of the Plan assets held in the Investment Fund and, by
dividing such value by the number of outstanding units of the Investment Fund
immediately prior to the Valuation Date, shall determine the net asset value of
a unit of the Investment Fund for the Valuation Date. The number of outstanding
units of the Investment Fund for a Valuation Date shall initially equal the
number of outstanding units of the Investment Fund immediately prior to the
Valuation Date, but shall be subject to increase and decrease according to
Paragraphs (b), (c), (d) or (e), below.
(b) After determining the net asset value of a unit of the
Investment Fund for the Valuation Date, the Trustee shall account for any
additions to the Investment Fund for the Valuation Date resulting from
contributions (or allocation of contributions), loan repayments and transfers
from other Investment Funds by increasing the number of outstanding units of the
Investment Fund for the Valuation Date, on the basis of the net asset value of a
unit of the Investment Fund for the Valuation Date, and shall allocate such
increase in units among Accounts on the basis of an Account's activity that
resulted in such increase.
(c) After determining the net asset value of a unit of the
Investment Fund for the Valuation Date, the Trustee shall account for any
reductions to the Investment Fund for the Valuation Date resulting from
withdrawals, distributions, funding of loans or transfers to any other
Investment Fund by decreasing the number of outstanding units of the Investment
Fund for the Valuation Date, on the basis of the net asset value of a unit of
the Investment Fund for the Valuation Date, and shall allocate such decrease in
units among Accounts on the basis of an Account's activity that resulted in such
decrease.
(d) After determining the net asset value of a unit of the
Panhandle Stock Fund for the Valuation Date, the Trustee shall account for any
addition to the Panhandle Eastern Stock Fund for the Valuation Date resulting
from dividends on Company Stock held in the Panhandle Stock Fund by increasing
the number of outstanding units of the Panhandle Eastern Stock Fund, on the
basis of the net asset value of a unit of the Panhandle Eastern Stock Fund for
the Valuation Date, and shall allocate such additional units among Accounts in
proportion to the number of Panhandle Eastern Stock Fund units held by an
Account immediately prior to the Valuation Date.
(e) After determining the net asset value of a unit of the
Anadarko Stock Fund for the Valuation Date, the Trustee shall account for any
addition to the Anadarko Stock Fund for the Valuation Date resulting from
dividends on Anadarko Petroleum Corporation common stock held in the Anadarko
Stock Fund by increasing the number of outstanding units of the Andarko Stock
Fund, on the basis of the net asset value of a unit of the Anadarko Stock Fund
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<PAGE>
for the Valuation Date, and shall allocate such additional units among Accounts
in proportion to the number of Anadarko Stock Fund units held by each Account
immediately prior to the Valuation Date. Notwithstanding the foregoing, any such
additional units which would otherwise be allocated to a Member's Employee
Contribution After-Tax (A) Account shall be, instead, allocated to the Member's
Employee Contribution After-Tax Account, any such additional units which would
otherwise be allocated to the Member's Employee Contribution Before-Tax (A)
Account shall be, instead, allocated to the Member's Employee Contribution
Before-Tax Account, and any such additional units which would otherwise be
allocated to the Member's Company Contribution Prior Company (A) Account shall
be, instead, allocated to the Member's Company Contribution Prior Company
Account.
5.5 Act Section 404(c) and Voting and Other Rights.
(a) The Plan is intended to meet the requirements of Act
section 404(c) and 29 C.F.R section 2550.404c-1, except to the extent of Plan
provisions that directly conflict with any such requirement, in order that Plan
fiduciaries may be relieved of any liability for losses which are the direct and
necessary result of investment instructions given by Members, and the Plan shall
be interpreted and administered accordingly.
(b) Subject to the provision of the Trust Agreement, a Member
shall be entitled to direct the Trustee as to the manner in which any Company
Stock held in the Panhandle Eastern Stock Fund that represents the proportional
interest of the units of such Investment Fund held in the Member's Accounts, as
determined by the Committee, shall be voted. The Committee shall furnish to each
Member explanatory materials adequate for such purpose together with such form
of voting instructions as the Committee shall prescribe. The Trustee shall vote
specifically in accordance with each Member's instructions to the extent of such
Members whole shares of Company Stock and shall, to the extent possible, vote
Members' fractional shares the Trust Fund in such manner as to reflect the
Members' expressed desires with respect to whole shares. Company Stock held in
the Panhandle Eastern Stock Fund that represents the proportional interest of
units of such Investment Fund held in a Member's Employee Contribution ESOP
Account or Company Contribution ESOP Account, as determined by the Committee
("Excluded Shares") shall not be voted by the Trustee in the absence of the
Member's instructions. Otherwise, the Trustee shall vote shares of Company Stock
held in the Panhandle Eastern Stock Fund with respect to which the Trustee does
not receive instructions and shares of Company Stock [which have not been
allocated to Members' Accounts under the Plan] in the same proportion as are
voted the shares of Company Stock held in the Panhandle Eastern Stock Fund,
other then Excluded Shares, with respect to which instructions were received by
the Trustee from Members.
(c) Subject to the provisions of the Trust Agreement, if a
"cash tender offer" or "exchange offer" for shares of Company Stock is made,
Company Stock held in the Panhandle Eastern Stock Fund that represents the
proportional interest of the units of such Investment Fund
V-5
<PAGE>
held in a Member's Account shall be tendered or exchanged by the Trustee
pursuant to such "cash tender offer" or "exchange offer" only in accordance with
the written instructions and directions of such Member to the Trustee to so
tender or exchange. If written instructions or directions are not timely
received from a Member, the Member's shares of Company Stock shall not be
tendered or exchanged pursuant to such "cash tender offer" or "exchange offer".
For purposes of this Paragraph (b), the term "cash tender offer" shall include a
tender offer for, or request or invitation for tenders of, shares of Company
Stock in exchange for cash, as made to the Plan or to holders of shares of
Company Stock generally; the term "exchange offer" shall include a tender offer
for, or request or invitation for tenders of, any shares of Company Stock in
exchange for any consideration other than for all cash, as made to the Plan or
to holders of shares of Company Stock is made, the Trustee shall use its best
efforts to take those steps reasonably necessary to furnish information to, and
allow decision by, each Member with respect to such "cash tender offer" or
"exchange offer" and the Member's shares of Company Stock in substantially the
same manner as would be available to holders of Company Stock generally, and, in
that connection, the Trustee shall:
(1) inform each Member as to the existence of such
"cash tender offer" or "exchange offer";
(2) transmit to each Member as soon as practicable
such written information, explanation and other material relative to such "cash
tender offer" or "exchange offer" as are made available by Panhandle Eastern
Corporation or by the persons or entities making such "cash tender offer" or
"exchange offer" to the holders of shares of Company Stock generally;
(3) request detailed written instructions and
directions from each Member as to whether to tender or exchange the Member's
shares of Company Stock and, if so instructed and directed, as to the time and
manner of such tender or exchange, and such instructions, and directions of the
individual Members shall be given to the election judge or the Trustee and shall
be kept confidential from the Company; and
(4) use its best efforts to effect on a confidential
and nondiscriminatory basis the tender or exchange of Company Stock held under
the Plan with respect to such "cash tender offer" or "exchange offer" solely in
accordance with written instructions and directions received from the Members.
(d) The Corporate Secretary of the Company is the Plan
fiduciary responsible for ensuring (i) that information relating to the
purchase, holding and sale of units of the Panhandle Eastern Stock Fund and to
the exercise of voting, tender and similar rights with respect to shares of
Company Stock held in the Panhandle Eastern Stock Fund by Members, is maintained
in accordance with procedures which are designated to safeguard the
confidentiality of such information except to the extent necessary to comply
with federal laws or state laws not
V-6
<PAGE>
preempted by the Act, and (ii) that an independent fiduciary is appointed to
carry out activities relating to any situations which the Corporate Secretary of
the Company determines involves a potential for undue employer influence upon
Members with regard to the direct or indirect exercise of shareholder rights.
V-7
<PAGE>
VI
Benefits
6.1 Benefits. A Member who terminates employment for any reason shall
be entitled to an Article VII benefit equal in value to the aggregate net asset
value of all Investment Fund units held in his Accounts.
6.2 Designation of Beneficiaries.
(a) If a Member terminates employment by reason of death, his
Article VII benefit shall be paid to his designated beneficiary. Each Member
shall have the right to designate the beneficiary or beneficiaries to receive
payment of his Article VII benefit in the event of his death. Each such
designation shall be made by executing the beneficiary designation form
prescribed by the Committee and filing same with the Committee. Any such
designation may be changed at any time by execution of a new designation in
accordance with this Section. Notwithstanding the foregoing, if a Member who is
married on the date of his death designates other than his surviving spouse as
his beneficiary, such designation shall not be effective unless (1) such spouse
has consented thereto in writing and such consent (A) acknowledges the effect of
such specific designation, (B) either consents to the specific designated
beneficiary (which designation may not subsequently be changed by the Member
without spousal consent) or expressly permits such designation by the Member
without the requirement of further consent by the spouse and (C) is witnessed by
a notary public or (2) such consent may not be obtained because such spouse
cannot be located or because of other circumstances described by applicable
Treasury Regulations. Any such consent by such surviving spouse shall be
irrevocable.
(b) If no such designation is on file with the Committee at
the time of the death of the Member or such designation is not effective for any
reason as determined by the Committee, the designated beneficiary or
beneficiaries to receive such Article VII benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his
Article VII benefit shall be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his
Article VII benefit shall be paid to such Member's executor or administrator or
to his heirs at law if there is no administration of such Member's estate.
VI-1
<PAGE>
VII
Time and Manner of Payment of Benefits
7.1 Time Of Payment.
(a) Each Member or designated beneficiary who becomes entitled
to a benefit pursuant to Article VI shall elect when to receive same by filing
with the Committee the form prescribed by the Committee. If a Member is married,
his benefit payment election shall be valid only if his spouse has consent to
same in writing with such consent being witnessed by a notary public. Subject to
the provisions of the remaining Paragraphs of this Section, payment of a
Member's benefit hereunder shall commence as soon as administratively feasible
after the commencement date specified in his, or his designated beneficiary's
benefit payment election or, in the case of a benefit being paid pursuant to
Section 7.2, as soon as administratively feasible following the date the Member
or his designated beneficiary becomes entitled to the benefit.
(b) Unless a Member (1) has attained age sixty-five or died or
(2) consents to a distribution pursuant to Paragraph (a) within the ninety-day
period ending on the date payment of his benefit hereunder is to commence
pursuant to Paragraph (a), his Benefit Commencement Date shall be deferred to
the date which is as soon as administratively feasible after the earlier of the
date the Member attains age sixty-five or the Member's date of death, or such
earlier commencement date as the Member may elect by written notice to the
Committee. No less than thirty days and no more than ninety days before his
Benefit Commencement Date, the Committee shall inform the Member of his right to
defer his Benefit Commencement Date and shall describe the Member's Direct
Rollover election rights pursuant to Section 7.6 below.
(c) A Member's Benefit Commencement Date shall in no event be
later than the day following the close of the Plan Year during which such Member
attains, or would have attained, age sixty-five or, if later, terminates his
employment with the Company or a Controlled Entity.
(d) Paragraphs (a), (b) and (c) notwithstanding, a Member may
elect to defer his Benefit Commencement Date beyond the date specified in such
Paragraphs, subject to the provisions of Paragraph (f).
(e) Subject to the provisions of Paragraph (c) above, a
Member's Benefit Commencement Date shall not occur before the expiration of the
latest to end of the period during which the Member is employed by the Company
or any Controlled Entity:
(2) a period during which the Member is employed by a
purchaser of assets from the Company or a Controlled Entity if
such Member transfers to employment with such purchaser in
connection with such purchase.
VII-1
<PAGE>
(f) A Member's Benefit Commencement Date shall be in
compliance with the provisions of section 401 (a) (9) of the Code and applicable
Treasury Regulations thereunder shall in no event be later than:
(1) In the case of a Member who attains the age of seventy and
one half prior to January 1, 1988 and is not a "five-percent
owner" (within the meaning of section 416(i) of the Code) at
any time during the five Plan Year period ending in the
calendar year in which such Member attains the age of seventy
and one-half, April 1st following the later of (i) the
calendar year in which such Member attains the age of seventy
and one-half, or (ii) the calendar year in which such Member
terminates his employment with the Company, or if such Member
becomes a "five-percent owner" following the end of such five
Plan Year period, April 1st of the calendar year following the
calendar year in which such Member becomes a "five-percent
owner";
(2) In the case of a Member who does not attain the age of
seventy and one-half prior to January 1, 1988 or is a
"five-percent owner" (within the meaning of section 416(i) of
the Code) at any time during the five Plan Year period ending
in the calendar year in which such Member attains the age of
seventy and one-half, April 1st of the calendar year following
the calendar year in which such Member attains the age of
seventy and one-half; and
(3) In the case of a benefit by reason of death, (A) if
payable to other than the Member's spouse, the last day of the
one-year period following the death of such Member or (B) if
payable to the Member's spouse, after the date upon which such
Member would have attained the age of seventy and one-half,
unless such surviving spouse dies before payments commence, in
which case the Benefit Commencement Date may not be deferred
beyond the last day of the one-year period following the death
of such surviving spouse.
For purposes of Paragraph (f)(2) above, a Member who attains the age of seventy
and one-half in 1988, is not a "five-percent owner" (within the meaning of
section 416(i) of the Code) at any time during the five Plan Year period ending
in 1988 and does not terminate employment with the Company prior to January 1,
1989, shall be considered to attain the age of seventy and one-half in 1989.
Further, the preceding provisions of this Section notwithstanding, a Member may
not elect to defer the receipt of his benefit hereunder to the extent that such
deferral creates a death benefit that is more than incidental within the meaning
of section 401(a)(9)(G) of the Code and applicable Treasury regulations
thereunder.
(g) Benefits shall be paid in cash except that the portions of
a Member's Employee Contribution ESOP Account and Company Contribution Post 1990
Matching and ESOP Accounts which are invested in the Panhandle Eastern Stock
Fund shall be distributed in
VII-2
<PAGE>
full shares of Company Stock with the value of any fractional shares paid in
cash. At the Member's election in accordance with the procedures prescribed by
the Committee, the portion of the Member's other Accounts which are invested in
the Panhandle Eastern Stock Fund shall be distributed in full shares of Company
Stock with the value of any fractional share paid in cash, and the portion of
the Member's other Accounts which are invested in the Anadarko Stock Fund shall
be distributed in full shares of Anadarko Petroleum Corporation common stock
with the value of any fractional share paid in cash. Except as otherwise
provided in the Plan, a Member's benefit shall be paid in a single lump sum
payment.
7.2 Cash-Out of Benefit. If a Member terminates his employment with the
Company and the value of his Article VII benefit is $3,500 or less as of the
date of such termination of employment, such Member's benefit shall be paid in
one lump sum payment at the time specified in Section 7.1(a) without regard to
the consent restrictions of Section 7.1(b). The provisions of this Section shall
not be applicable to a Member following his Benefit Commencement Date.
7.3 Benefits from Account Balances. With respect to any benefit payable
pursuant to the Plan, whichever form of payment is selected, such benefit shall
be provided from the Accounts to which the particular Member or beneficiary is
entitled.
7.4 Unclaimed Benefits. In the case of a benefit payable on behalf of a
Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee's determination thereof, the
Account(s) from which such benefit is to be provided shall be, as soon as
administrative feasible, reinvested exclusively in the Money Market Fund and,
promptly thereafter, such benefit shall be forfeited, held in a suspense account
and applied to reduce first, Plan expenses and, second, Company Matching
Contributions next coming due. For all Valuation Dates prior to such
application, forfeited amounts held in the suspense account shall not
participate in the investment performance of any Investment Fund.
Notwithstanding the foregoing, if subsequent to any such forfeiture the Member
or beneficiary to whom such benefit is payable presents a valid claim for such
benefit, such forfeited benefit shall be restored to the Plan in the manner
provided in Section 3.10.
7.5 Claims Review. In any case in which a claim for Plan benefits of a
Member or beneficiary is denied or modified, the Committee shall furnish written
notice to the claimant within ninety days (or within 180 days if additional
information requested by the Committee necessitates an extension of the
ninety-day period). The Committee shall, within a reasonable period of time
after receipt of such claim, furnish to the claimant a notice of its decision
which shall:
(a) state the specific reason or reasons for the denial or
modification;
(b provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
VII-3
<PAGE>
(c) provide a description of any additional material or
information necessary for the Member, his beneficiary or representative to
perfect the claim and an explanation of why such material or information is
necessary; and
(d) explain the Plan's claim review procedure as contained
herein.
If such notice is not furnished to the claimant within a reasonable period of
time following receipt of the claim by the Committee, the claim shall be deemed
denied.
In the event the request is denied or modified, if the Member,
his beneficiary or representative desires to have such denial or modification
reviewed, he must, within days following receipt of the notice of such denial or
modification, submit a written request for review by the Committee of its
initial decision. In connection with such request, the Member, his beneficiary,
or the representative of such Member or beneficiary may review any pertinent
documents upon which such denial or modification was based and may submit issues
and comments in writing. Within thirty days following such request for review
the Committee shall, after providing a full and fair review, render its final
decision in writing to the Member, his beneficiary or representative stating
specific reasons for such decision. If special circumstances require an
extension of such sixty-day period, the Committee's decision shall be rendered
as soon as possible, but not later than 120 days after receipt of the request
for review. If an extension of time for review is required, written notice of
the extension shall be furnished to the Member, beneficiary or representative
prior to the commencement of the extension period. The Committee's decision on
review of an appealed claim shall be communicated to the appealing claimant in
writing, shall include specific reasons for the decision, shall be written in a
manner calculated to be understood by the appealing claimant and shall include
specific references to the payment Plan provisions on which such decision was
based. If the Committee's decision on review of an appealed claim is not
furnished to the claimant within the sixty-day period following the appealing
claimant's request for review or the 120 days following such request if the
sixty day period is extended, the appealed claim shall be deemed denied on
review.
7.6 Direct Rollover Election. The requirements of this Section 7.6
apply to any Plan withdrawal or other benefit distribution whether pursuant to
Articles VI, VII, VIII, IX, X, XI, XII, XIII, or any other provision of the
Plan, but only to the extent required to satisfy the requirements of Section 401
(a) (31) of the Code. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Section 7.6, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. The following definitions apply to this Section 7.6:
'Eligible rollover distribution': An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of
the distributee, except that an eligible
VII-4
<PAGE>
rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancies) 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; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
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).
'Eligible retirement plan': An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code,
an individual retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
'Distributee': A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in section 401(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
'Direct rollover': A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
VII-5
<PAGE>
VIII
Withdrawals and Loans
8.1 Withdrawals.
(a) No more frequently than once per calendar year, a Member
may elect to withdraw from his Employee Contribution After-Tax and After-Tax (A)
Accounts and Rollover Accounts, all or any part of the aggregate Account value,
except to the extent invested in the Panhandle Eastern Stock Fund and, unless
the Member is at least age 59 1/2, except for any After- Tax Contributions made
by the Member during the preceding twenty-four consecutive months.
(b) No more frequently than once per calendar year, a Member
may elect to withdraw from his Company Contribution Prior Company, Prior Company
(A) and Post 1990 Matching Accounts, all or any part of the aggregate Account
value, except to the extent invested in the Panhandle Eastern Stock Fund and,
unless the Member is at least age 59 1/2 or has at least 60 months of
Participation, except for any Company Contributions made or allocated to the
Members Company Contribution Post 1990 Matching Account during the preceding
twenty-four consecutive months.
(c) No more frequently than once per calendar year, a Member
may elect to withdraw from his Employee Contribution After-Tax and After-Tax (A)
Accounts and any Rollover Account, to the extent invested in the Panhandle
Eastern Stock Fund, all or any part of the aggregate Account value, except, if
the Member is not at least age 59 1/2, for any Employee After-Tax Contributions
made by the Member during the preceding twenty-four consecutive months.
(d) No more frequently than once per calendar year, a Member
may elect to withdraw from his Company Contribution Prior Company, Prior Company
(A) and Post 1990 Matching Accounts, to the extent invested in the Panhandle
Eastern Stock Fund, all or any part of the aggregate Account value, except,
unless the Member is at least age 59 1/2 or has at least 60 Months of
Participation, for any Company Contributions made or allocated to the Member's
Company Contribution Post 1990 Matching Account during the preceding twenty-four
consecutive months.
(e) A Member who has a financial hardship, as determined by
the Committee, and who has made all other available withdrawals pursuant to this
Section and from any other plan of the Company and any Controlled Entities of
which he is a member and who has obtained all available loans pursuant to
Section 8.2 and from such other plan, may apply to withdraw from his Accounts,
all or any part of the value of his Accounts, except for any portion thereof
which reflects earnings credited to his Employee Contribution Before-Tax and
Before-Tax (A) Accounts and any portion thereof which reflects contributions
made or allocated to his Employee
VIII-1
<PAGE>
Contribution ESOP Account during the preceding eighty-four consecutive months,
that the Committee determines available for withdrawal pursuant to this
Paragraph. For purposes of this Paragraph, financial hardship means the
immediate and heavy financial needs of the Member. A withdrawal based upon
financial hardship pursuant to this Paragraph shall not exceed the amount
required to meet the immediate financial need created by the hardship and not
reasonably available from other resources of the Member. The determination of
the existence of a Member's financial hardship and the amount required to be
distributed to meet the need created by the hardship shall be made by the
Committee. A withdrawal shall be deemed to be made on account of an immediate
and heavy financial need of a Member if the withdrawal is on account of:
(1) medical expenses described in section 213(d) of
the Code incurred by the Member, the Member's spouse or any dependents of the
Member (as defined in section 152 of the Code) and not reimbursed by insurance;
(2) purchase (excluding mortgage payments) of a
principal residence of the Member;
(3) payment of tuition for the next school year of
post-secondary education of the Member, or the Member's spouse, children or
dependents (as defined in section 152 of the Code);
(4) the need to prevent the eviction of the Member
from his principal residence or foreclosure on the mortgage of the Member's
principal residence; or
(5) such other financial needs that the Commissioner
of Internal Revenue may deem to be immediate and heavy financial needs through
the publication of revenue rulings, notices, and other documents of general
applicability.
Any decision of the Committee pursuant to this Paragraph shall be final and
binding, provided that all Members similarly situated shall be treated in a
uniform and nondiscriminatory manner.
(f) A Member who has attained at least age 59 1/2 may elect to
withdraw from his Accounts, all or any part of his aggregate Account value,
except to the extent invested in the Panhandle Eastern Stock Fund and except for
any portion thereof which reflects contributions made or allocated to his
Employee Contribution ESOP Account or his Company Contribution ESOP Account
during the preceding eighty-four consecutive months.
(g) A Member who has attained at least age 59 1/2 may elect to
withdraw from his Accounts all or any part of his aggregate Account value, to
the extent invested in the Panhandle Eastern Stock Fund, except for any portion
thereof which reflects contributions made
VIII-2
<PAGE>
or allocated to his Employee Contribution ESOP Account or his Company
Contribution ESOP Account during the preceding eighty-four consecutive months.
(h) No more frequently than once per calendar year, a Member
may elect to withdraw from his Employee Contribution ESOP Account and his
Company Contribution ESOP Account all or any part of his aggregate Account
value, except for any portion thereof which reflects contributions made or
allocated to his Employee Contribution ESOP Account or his Company Contribution
ESOP Account during the preceding eighty-four consecutive months.
(i) A Member's withdrawal pursuant to this Section shall be
funded from available amounts taken as follows:
From the Member's Accounts (taken in descending
order, but only if, and to the extent, available)-
1. Employee Contribution After-Tax
2. Employee Contribution After-Tax (A)
3. Employee Contribution ESOP
4. Rollover
5. Company Contribution Prior Company
6. Company Contribution Prior Company (A)
7. Company Contribution ESOP
8. Company Contribution Post 1990 Matching
9. Company Contribution Before-Tax
10. Company Contribution Before-Tax (A)
Within a Member's Account, by liquidating the Account's
investment in Investment Funds (taken in the following descending order, if and
to the extent available)-
1. Money Market
2. Bond
3. Diversified Equity
4. Anadarko Stock
5. Panhandle Eastern Stock
(j) A member may elect or apply for a withdrawal pursuant to
this Section in accordance with the procedures prescribed by the Committee.
Distributions of withdrawal amounts pursuant to this Section shall be subject to
the requirements of Section 7.6 and shall be made as soon as administratively
feasible. Withdrawal amounts taken from an Account's investment in the Money
Market, Bond or Diversified Equity Investment Funds shall be distributed in all
cash. Withdrawal amounts pursuant to a financial hardship withdrawal under
Paragraph (e) above shall be distributed in all cash. Withdrawal amounts, other
than pursuant to such a financial hardship withdrawal, to the extent taken from
the investment of an Account
VIII-3
<PAGE>
in the Anadarko Stock Fund, shall be distributed pursuant to the Member's
election, in accordance with the procedures prescribed by the Committee, in
either all cash or all shares of Anadarko Petroleum Corporation common stock
(with cash for any fractional share). Withdrawal amounts, other than pursuant to
a financial hardship withdrawal, to the extent taken from the investment of an
Account, other than a Company Contribution Post 1990 Matching or ESOP Account or
an Employee Contribution ESOP Account, in the Panhandle Eastern Stock Fund shall
be distributed pursuant to the Member's election, in accordance with the
procedures prescribed by the Committee, in either all cash or all shares of
Company Stock (with cash for any fractional share). Withdrawal amounts, other
than pursuant to a Hardship Withdrawal, to the extent taken from the investment
of a Member's Company Contribution Post 1990 Matching or ESOP Accounts or the
Member's Employee Contribution ESOP Account in the Panhandle Eastern Stock Fund,
shall be distributed in all shares of Company Stock (with cash for any
fractional share).
(k) This Section shall not be applicable to a Member following
termination of employment and the value of such Member's Accounts shall then be
distributable only in accordance with the provisions of Article VII.
8.2 Loans.
(a) Upon application by (1) any Member who is an Employee or
(2) any Member no longer employed by the Company, a beneficiary of a deceased
Member or an alternate payee under a qualified domestic relations order who
retains an Account balance under the Plan and who is a party-in-interest, as
that term is defined in section 3(14) of the Act, as to the Plan (an individual
who is eligible to apply for a loan under this Section being hereinafter
referred to as a "Member" for purposes of this Section), the Committee may in
its discretion direct the Trustee to make a loan or loans to such Member, not to
exceed the lesser of $50,000.00, or 50% of the then aggregate Account value of
the Member's Accounts, reduced by the Member's highest outstanding balance of
any Plan loan(s) during the preceding twelve consecutive month period. Such
loans shall be made pursuant to the provisions of the Committee's written loan
procedure, which procedure is hereby incorporated by reference as a part of the
Plan.
(b) Paragraph (a) above to the contrary notwithstanding, the
amount of a loan made to a Member under this Section shall not exceed the
limitations described in section 72(p)(2) of the Code.
(c) Any loan made pursuant to this Section shall bear interest
at a rate established by the Committee from time to time and communicated to the
Members, which rate shall provide the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made under similar circumstances, and shall be made as an
investment of a segregated loan fund to be established in the Trust Fund for
VIII-4
<PAGE>
the Member to whom the loan is made. The Trustee shall fund a Member's
segregated loan fund by liquidating such portion of the assets of the Accounts
from which the Member's loan is to be made as is necessary to fund the loan and
transferring the proceeds to such segregated loan fund.
(d) A Member's loan pursuant to this Section shall be funded
from available amounts taken as follows:
From the Member's Accounts (in the following descending order) -
1. Employee Contribution Before-Tax
2. Employee Contribution Before-Tax (A)
3. Company Contribution Prior Company
4. Company Contribution Prior Company (A)
5. Rollover
6. Company Contribution Post 1990 Matching
7. Employee Contribution After-Tax
8. Employee Contribution After-Tax (A)
Within a Member's Account, by liquidating the Account's investment in Investment
Funds (taken in the following descending order) -
1. Money Market
2. Bond
3. Diversified Stock
4. Anadarko Stock
5. Panhandle Eastern Stock
The loan shall be secured by a pledge of the Member's segregated loan fund. The
Member shall be required, as a condition to receiving a loan, to enter into an
agreement authorizing the Company to make payroll deductions from his
Compensation so long as the Member is an Employee and to transfer such payroll
deduction amounts to the Trustee in payment of such loan plus interest.
(e) The terms of the loan shall (l) require level amortization
with payments not less frequently than quarterly, (2) require that the loan be
repaid within five years or, if the Member certifies in writing to the Committee
that the loan is to be used to acquire any dwelling unit which within a
reasonable time is to be used (determined at the time the loan is made) as a
principal residence of the Member, within fifteen years, (3) allow prepayment
without penalty, provided that any prepayment must be for the full outstanding
loan balance (including interest), and (4) require that the balance of the loan
(including interest) shall become due and payable (to the extent not otherwise
due and payable) on the date the Member or, if applicable, the
VIII-5
<PAGE>
Member's designated beneficiary, is first entitled to a distribution following
his termination of employment, irrespective of whether such Member or
beneficiary directs or consents to the distributions, with the Employer and be
repaid by offsetting the Member's outstanding loan balance (including interest)
against the amount in the Member's segregated loan fund pledged as security for
the loan. By agreeing to the pledge of the segregated loan fund as security for
the loan, a Member shall be deemed to have consented to the distribution of such
segregated loan fund prior to the time specified in section 411(a)(11) of the
Code and the applicable Treasury Regulations thereunder.
(f) If the Member does not repay a loan (including interest)
within the prescribed time, such loan or loans shall be repaid by offsetting the
Member's outstanding loan balance (including interest) against the amount in the
Member's segregated loan fund pledged as security for the loan. Any such
outstanding loan (including interest) shall be repaid prior to any withdrawal or
distribution of benefits from the pledged portion of the Member's Accounts
pursuant to the provisions of the Plan. Notwithstanding the foregoing, the
values of a Member's Employee Contribution After-Tax Account and Employee
Contribution ESOP and Company Contribution ESOP Account may not be used to
satisfy the payment of such loan (including interest) prior to the time such
values are otherwise distributable from the Plan.
(g) Amounts tendered to the Trustee by a Member in repayment
of a loan made pursuant to this Section (1) shall initially be credited to the
Member's segregated loan fund, (2) shall then be transferred as soon as
practicable following receipt thereof to the Account or Accounts from which the
Member's loan was made and (3) invested in the Panhandle Eastern Stock Fund if
such amount is credited to such Member's Company Contribution Post 1990 Matching
Account and in the Panhandle Eastern Stock Fund, the Diversified Equity Fund,
the Bond Fund or the Money Market Fund if such amount is credited to such
Member's other Accounts in accordance with the Member's current designation as
to the investment of contributions being allocated to such Accounts.
(h) A loan made to a Member may not be for an amount less than
$1,000.00. No loan shall be made to a Member who owes any amount on an
outstanding loan previously made to him from the Plan.
VIII-6
<PAGE>
IX
Grandfathered Rights
9.1 Effect of Article. Plan provisions to the contrary notwithstanding,
the provisions of this Article IX shall govern with respect to Members who were
Members of the Panhandle Plan prior to January 1, 1991.
9.2 Grandfathered Distributions.
(a) A Member who was a Member of the Panhandle Plan prior to
January 1, 1991 and who is entitled to a benefit pursuant to retirement or total
and permanent disability may elect to have the portion of his Accounts
attributable to contributions made prior to January 1, 1991 distributed in the
form of periodic installment payments for any term certain not to exceed fifteen
years to such Member or, in the event of such Member's death before the end of
such term certain, to his designated beneficiary as provided in Section 6.2;
provided, however, that the term certain shall be such that the present value of
the payments actually expected to be made to the Member shall be more than 50%
of the present value of the total payments actuarially expected to be made to
the Member and his designated beneficiary; and provided, further that such term
certain shall not exceed the greater of (i) the life expectancy of the Member or
(ii) the joint life expectancy of the Member and his designated beneficiary.
(b) A Member who was a Member of the Panhandle Plan prior to
January 1, 1991 and who is entitled to a benefit other than by reason of death,
retirement or total and permanent disability may elect to have the portion of
his Accounts attributable to contributions made prior to January 1, 1991
distributed in the form of periodic installment payments for any term certain
not to exceed fifteen years to such Member or, in the event of such Member's
death before the end of such term certain, to his designated beneficiary as
provided in Section 6.2; provided, however, that the term certain shall be such
that the present value of the payments actuarially expected to be made to the
Member shall be more than 50% of the present value of the total payments
actuarially expected to be made to the Member and his designated beneficiary;
and provided, further that such term certain shall not exceed the greater of (i)
the life expectancy of the Member or (ii) the joint life expectancy of the
Member and his designated beneficiary.
(c) A Member who was a Member of the Panhandle Plan prior to
January 1, 1991 and who is entitled to a benefit by reason of death may elect to
have the portion of his Accounts attributable to contributions made prior to
January 1, 1991, distributed in the form of approximately equal annual
installment payments for any term certain not to exceed five years; provided,
however, that if the Member's beneficiary is not his surviving spouse and if the
Benefit Commencement Date is not within one year of the Member's death the term
certain shall be such that the Member's entire Article VII benefit will be
distributed not later than the last day of the five-year period following the
death of the Member, and provided, further, that if the
IX-1
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Member's beneficiary is his surviving spouse or if the Benefit Commencement Date
is within one year of the Member's death the term certain shall not exceed the
life expectancy of the beneficiary. For purposes of the foregoing, if a Member's
beneficiary is his surviving spouse and such surviving spouse dies before
payments commence, then such Benefit Commencement Date shall be deemed to be
within one year of such Member's death if it is within one year of the death of
such surviving spouse.
9.3 Intent of Article. This Article IX is intended to preserve only
alternative forms of benefits required to be preserved for Members who were
Members of the Plan prior to the Effective Date pursuant to section 411 of the
Code and Treasury Regulations promulgated thereunder and is to be interpreted
and construed to effectuate such purpose and only such purpose.
IX-2
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X
Transfer Accounts from
Employees' Savings Plan of
Algonquin Gas Transmission Company
10.1 Effect of Article. Plan provisions to the contrary
notwithstanding, the provisions of this Article X shall govern with respect to
Members whose Accounts include amounts which were transferred to the Plan from
the Employees' Savings Plan of Algonquin Gas Transmission Company.
10.2 Distribution Rights. A Member to whom this Article X applies
may elect to have his Account balance which becomes distributable distributed as
follows:
(1) If the Member terminates employment other than by reason
of death, such Member may elect to receive quarterly installment distributions
over a period not to exceed the Member's life expectancy or the joint life
expectancy of the Member and his spouse or a combination of a lump sum and such
installments; provided, in either case, that the period over which quarterly
installments are paid contained in the table for installment payments involving
individual account plans under Treasury Regulation 1.401 (a) (9)-2; and
(2) If the Member terminates employment by reason of death,
such Member (or such Member's beneficiary) may elect to receive quarterly
installment payments payable within five years of the Member's death.
10.3 Interpretation of Article. This Article X is intended to preserve
with respect to amounts transferred from the Employees' Savings Plan of
Algonquin Gas Transmission Company all forms of benefits required to be
preserved pursuant to section 411 of the Code and Treasury Regulations
promulgated thereunder and is to be interpreted and construed to effectuate such
purpose.
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XI
Transfer Accounts from
Employees' Tax Incentive Plan of
Algonquin Gas Transmission Company
11.1 Effect of Article. Plan provisions to the contrary
notwithstanding, the provisions of this Article XI shall govern with respect to
Members whose accounts include amounts which were transferred to the Plan from
the Employees' Tax Incentive Plan of Algonquin Gas Transmission Company.
11.2 Distribution Rights. A Member to whom this Article XI applies
may elect to have his Account balance which becomes distributable distributed as
follows:
(1) If the Member terminates employment other than by
reason of death, such Member may elect to receive quarterly installment
distributions over a period not to exceed the Member's life expectancy or the
joint life expectancy of the Member and his spouse or a combination of a lump
sum and such installments; provided, in either case, that the period over which
quarterly installments are paid contained in the table for installment payments
involving individual account plans under Treasury Regulation 1.401(a)(9)-2; and
(2) If the Member terminates employment by reason of
death, such Member (or such Member's beneficiary) may elect to receive quarterly
installment payments payable within five years of the Member's death.
11.3 Interpretation of Article. This Article XI is intended to preserve
with respect to amounts transferred from the Employees' Tax Incentive Plan of
Algonquin Gas Transmission Company all forms of benefits required to be
preserved pursuant to section 411 of the Code and Treasury Regulations
promulgated thereunder and is to be interpreted and construed to effectuate such
purpose.
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XII
ESOP Accounts
12.1 Effect of Article. Plan provisions to the contrary
notwithstanding, the provisions of this Article XII shall govern with respect to
Members' Employee Contribution and Company Contribution ESOP Accounts.
12.2 ESOP Accounts. A Member's Employee Contribution and Company
Contributions ESOP Accounts shall be invested in the Panhandle Eastern Stock
Fund, provided, however, that the maximum transfer permitted in any Plan Year
pursuant to Section 5.2(b) shall not exceed the greater of the number of
Panhandle Eastern Stock Fund Units that represent contributions which have been
allocated to the Member's Employee Contribution and Company Contribution ESOP
Account at least 84 months before the month in which the transfer occurs or the
number of Panhandle Eastern Stock Fund Units held in the Member's Employee
Contribution and Company Contribution ESOP Accounts as to which diversification
of investment is required for such Plan Year pursuant to the rules of section
401(a)(28) of the Code. The provisions of Article VII of the Plan to the
contrary notwithstanding, a Member (or his beneficiary) shall have the right to
elect to have his Employee Contribution and Company Contribution ESOP Accounts
distributed not later than one year after the close of the Plan Year during
which such Member terminates employment or dies.
XII-1
<PAGE>
XIII
TRASOP Provisions
13.1 Definitions. Definitions for purposes of this Article, the
following terms and phrases shall have these respective meanings.
(1) Incremental Investment Credit: The additional
investment tax credit that is contingent upon the
establishment and funding of a tax credit employee
stock ownership plan as defined in section 409 of the
Code which is permitted and determined (i) for
periods prior to January 1, 1983, pursuant to
sections 38, 46(a)(2)(E)(l) and 48(n)(1)(A) of the
Code (or corresponding statutory predecessors of such
sections) as determined with respect to the Company
and each Controlled Entity with which the Company
files a consolidated federal income tax return and
(ii) for periods from and after January 1, 1983,
pursuant to section 41(a) of the Code.
(2) Matching Investment Credit: As determined with
respect to the Company and each Controlled Entity
with which the Company files a consolidated federal
income tax return, the additional investment tax
credit, permitted and determined pursuant to sections
38, 46(a)(2)(E)(ii) and 48(n)(1)(B) of the Code (or
corresponding statutory predecessors of such
sections) that is contingent upon the Company and
such Controlled Entities making a contribution to the
Plan in consideration of and conditioned upon Member
matching contributions.
(3) Taxable Year: The annual accounting period adopted by
the Company or other contributing entity for federal
income tax purposes.
(4) TRASOP Compensation: The total of all compensation,
as defined under section 415(c)(3) of the Code, paid
for a Plan Year by the Company or a Participating
Affiliate to or for the benefit of a Member for
services rendered or labor performed, excluding,
however, that portion of such total in excess of
$100,000.
13.2 Member TRASOP Contributions.
(a) With respect to each Taxable Year, each Member who is
entitled to an allocation of the Section 13.7(a) contribution for a TRASOP
Contribution Plan Year beginning on or after January 1, 1976 may make
contributions to the Plan for the purpose of having such contributions, along
with those of other Members, match the Company contribution made pursuant to
Section 13.7(b).
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<PAGE>
(b) With respect to each Taxable Year for which a Company
TRASOP Contribution is made to the Plan pursuant to Section 13.3(a), a matching
contribution pledge will be solicited from each Member who is entitled to an
allocation of such Company TRASOP Contribution. The estimated amount of
contribution of each Member shall be indicated to him and such Member may pledge
all or any portion of such estimated amount. Subsequent to the making of initial
pledges, each Member who pledged all of such estimated amount may also pledge an
additional amount up to his allocable share of estimated matching contributions
not pledged by or collected from other Members. Each Member's estimated matching
contribution and each Member's allocable share of contributions not pledged by
or collected from other Members shall be based upon the ratio of such Members
TRASOP Compensation to the TRASOP Compensation of all other Members involved in
the allocation of such matching contribution or portion thereof. A pledge may be
prospectively terminated at any time.
(c) In restriction of Member TRASOP Contribution, it is
specifically provided that one of the "actual contribution percentage" tests set
forth in 401 (m) of the Code and Treasury regulations must be met each Plan
Year.
(d) Matching Member TRASOP Contributions shall be made
pursuant to the pledges of Members as follows:
(1) With respect to any Member whose employment with
the Company has not terminated prior to the time determined by the Committee for
commencement of payment of his matching Member TRASOP Contributions, the total
amount of matching Member TRASOP Contributions shall be withheld from his
Compensation by means of payroll deductions over a period of time determined by
the Committee; provided, however, that the Committee may establish a procedure
whereby such Members shall make payment of their matching Member TRASOP
Contributions (or the unpaid balance thereof) by means of a single cash payment.
(2) With respect to any Member whose employment with
the Company has terminated prior to the time determined by the Committee for
commencement of payment of his matching Member TRASOP Contributions, the total
amount of matching Member TRASOP Contributions shall be paid by cash payment
prior to the time determined by the Committee. Such cash payment shall be in the
form of a single payment; provided, however, that the Committee, in its sole
discretion, may honor a former Employee's request to tender payment in
installments.
(3) With respect to any Member whose matching Member
TRASOP Contributions are initially paid by means of payroll deduction pursuant
to subparagraph (1) above and whose employment with the Company terminates prior
to the time that his matching Member TRASOP Contributions pledge has been fully
paid, the remaining portion of such contributions shall be paid by cash payment
prior to the time determined by the Committee. Such
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<PAGE>
cash payment shall be in the form of a single payment; provided, however, that
the Committee, in its sole discretion, may honor a former Employee's request to
tender payment in installments.
In any event, matching Member TRASOP Contributions must be received no
later than twenty-four months following the end of the Taxable Year with respect
to which such pledges relate were made.
(e) Member TRASOP Contributions shall be invested in the
Panhandle Eastern Stock Fund as soon as practicable, but no later than 30 days
after receipt thereof. All such purchases of Company Stock for the Panhandle
Eastern Stock Fund shall be made at fair market value from whatever source
(including the Company) such Company Stock is available.
13.3 Company TRASOP Contributions.
(a) As of the last day of each Taxable Year, the Company and
each Controlled Entity with which the Company files a consolidated federal
income tax return shall contribute to the Trustee, as its primary Company TRASOP
Contribution for such Taxable Year, an amount equal to its Incremental
Investment Credit, if any, utilized to reduce its federal income tax for such
Taxable Year. It is specifically provided, however, that the Board of Directors
of the Company or of any Controlled Entity with which the Company files a
consolidated federal income tax return may increase, decrease or eliminate
completely its primary Company TRASOP Contribution, but such contribution may
not be decreased below the Incremental Investment Credit so claimed and utilized
on the Company's consolidated federal income tax return for such Taxable Year.
(b) As of the last day of each Taxable Year, the Company and
each Controlled Entity with which the Company files a consolidated federal
income tax return shall contribute to the Trustee, as its secondary Company
TRASOP Contribution, an amount equal to its Matching Investment Credit, if any,
utilized to reduce its federal income tax for such Taxable Year. It is
specifically provided, however, that the Board of Directors of the Company or of
any Controlled Entity with which the Company files a consolidated federal income
tax return may increase, decrease or eliminate completely its secondary Company
TRASOP Contribution for any Taxable Year by appropriate action, but such
contribution may not be decreased below the Matching Investment Credit claimed
and utilized on the Company's consolidated federal income tax return for such
Taxable Year.
(c) In restriction of Company TRASOP Contributions which
constitute matching contributions under section 401(m) of the Code, it is
specifically provided that one of the "actual contribution percentage" tests set
forth in section 401 (m) of the Code and Treasury regulations must be met in
each Plan Year.
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<PAGE>
13.4 Form of Company TRASOP Contributions.
(a) The contributions made pursuant to Section 13.3 shall be
made either (i) in cash, (ii) in Company Stock having a fair market value equal
to the amount of the Section 13.3 contribution or (iii) in cash and Company
Stock having an aggregate fair market value equal to the amount of the Section
13.3 contribution. The fair market value of any Company Stock contributed shall
be based on the average of closing prices of the Company Stock as reported by a
national exchange for the twenty consecutive trading days immediately preceding
the due date (including extensions) for filing the Company's consolidated
federal income tax return for the Taxable Year with respect to which (in the
case of the Section 13.3(a) contribution) or in which (in the case of the
Section 13.3(b) contribution) such contribution was made.
(b) To the extent that the Section 13.3 contribution with
respect to or in a given Taxable Year is made in cash, the Trustee must invest
such cash in the Panhandle Eastern Stock Fund as soon as practicable but no
later than 30 days after receipt thereof. All such purchases of Company Stock
for the Panhandle Eastern Stock Fund shall be made at fair market value from
whatever source (including the Company) such Company Stock is available.
13.5 Time of Company TRASOP Contributions. The Company and each
Controlled Entity with which the Company files a consolidated federal income tax
return may make payment of its contribution for any Taxable Year on any date or
dates it elects, provided that the total amount of its Section 13.3(a)
contribution to the Plan for any Taxable Year shall be paid in full not later
than the thirtieth day following the last day for filing the contributing
entity's federal income tax return for such year (including extensions thereof);
and provided that the total amount of its Section 13.3(b) contribution to the
Plan for any Taxable Year shall be paid, to the extent the corresponding
matching Member TRASOP Contributions are paid into the Plan, not later than the
thirtieth day following the last day for filing the contributing entity's
federal income tax return (including extensions thereof) for the Taxable Year in
which such matching Member TRASOP Contributions are made. It is specifically
provided, however, that if the investment tax credit of the Company or a
Controlled Entity with which the Company files a consolidated federal income tax
return for a Taxable Year exceeds the applicable limitations on the amount of
investment tax credit allowable for such Taxable Year and that if such
investment tax credit is allowable with respect to periods prior to January 1,
1983, the portion of the contribution allocable to the investment tax credit
carryback of such excess credit shall be paid not later than the 30th day
following the last day for filing the contributing entity's federal income tax
return for the unused credit year (including extensions thereof), and the
portion of the contribution allocable to the investment tax credit carryovers of
such excess credit shall be paid not later than the 30th day following the last
day for filing the contributing entity's federal income tax return for the
Taxable Year to which such portion is carried over (including extensions
thereof).
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13.6 Redetermination and Recapture of Investment Credit.
(a) If for any reason any contributing entity's contribution
to the Plan for any Plan Year is determined to be less than such entity's
Incremental Investment Credit (plus Matching Investment Credit, if applicable)
for such year, such contributing entity shall make up the deficiency by
contributing additional cash or Company Stock (based on the fair market value at
the time the contribution originally was to have been made) plus an amount equal
to dividends paid between the time that the contribution should have been made
and the actual time of contribution. If for any reason any contributing entity's
contribution to the Plan for any Plan Year is determined to be greater than such
entity's Incremental Investment Credit (plus Matching Investment Credit, if
applicable) for such year, such contributing entity may either reduce its
contributions to the Plan for the current or succeeding Plan Years by the amount
of such excess or deduct such excess subject to section 404 of the Code.
Further, if the aggregate matching Member TRASOP Contributions for any Plan Year
made within the time allowed therefor is less than the allowable Matching
Investment Credit, the excess of the Company secondary contribution made under
Section 13.3(b) over the aggregate matching Member TRASOP Contributions may be
withdrawn from the Plan by the contributing entity.
(b) Any contributing entity's contribution to the Plan for any
Plan Year shall remain in the Plan (and, if allocated under the Plan, shall
remain so allocated) even though part or all of the Incremental Investment
Credit and Matching Investment Credit utilized for such year is reduced pursuant
to a redetermination or an investment tax credit recapture in accordance with
applicable Code provisions. If the amount of such Incremental Investment Credit
and Matching Investment Credit is so reduced, in the discretion of the
contributing entity:
(i) such contributing entity may reduce its contributions
to the Plan for the current or succeeding Plan Years
by an amount equal to such reduction (or the portion
of the amount of such reduction which is attributable
to the contributing entity's contribution to the
Plan); or
(ii) such contributing entity may deduct the amount of
such reduction (or such portion thereof) subject to
section 404 of the Code. Notwithstanding the
foregoing, in the case of a reduction in the
Incremental Investment Credit and Matching Investment
Credit as a result of recapture of investment tax
credit, contributions may not be reduced under (i)
above by more than that amount which is the same
percentage of the recaptured amount as the portion of
the total credit (claimed under section 46(a)(2)(A)
(iii) of the Code for the Taxable Year for which the
recaptured amount was claimed) that has not become
distributable to former employees is of the total
credit so claimed for such Taxable Year. This
limitation shall be applicable only if and to the
extent required by regulations or other pertinent
authority.
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Notwithstanding the foregoing, contributions may not be reduced under (i) above
by more than that amount which is the same percentage of the recaptured amount
as the portion of the total credit (claimed under section 46(a)(2)(A)(iii) of
the Code for the Taxable Year for which the recaptured amount was claimed) that
has not become distributable to former employees is of the total credit claimed
under section 46(a)(2)(A)(iii) of the Code for such Taxable Year. This
limitation shall be applicable only if and to the extent required by regulations
or other pertinent authority.
13.7 Allocation of Contributions.
(a) As of the last day of each Plan Year, the Company's
primary TRASOP Contributions, plus the primary TRASOP Contributions of any
Controlled Entity with which the Company files a consolidated federal income tax
return, made to the Plan under the provisions of Section 13.3(a) for the Taxable
Year ending with or within such Plan Year shall be allocated to the Company
Contribution ESOP Account each Member or former Member (i) who remained an
Employee through the last day of such Plan Year or (ii) who terminated his
employment during such Plan Year at or after age fifty-five or by reason of
death or total and permanent disability. Such allocation shall be on the basis
of the TRASOP Compensation of such Member and each such Member's Company
Contribution ESOP Account shall receive that portion of the total primary
Company TRASOP Contribution which such Member's TRASOP Compensation for such
Plan Year is of all such Member's TRASOP Compensation for such Plan Year.
(b) Upon receipt of matching Member TRASOP Contributions, and
to the extent such Member TRASOP Contributions are received, the Company's
secondary Company TRASOP Contributions, plus the secondary Company TRASOP
Contributions of any Controlled Entity with which the Company files a
consolidated federal income tax return, made to the Plan under the provisions of
Section 13.3(b) shall be allocated to the Company Contribution ESOP Account of
each Member or former Member who made matching Member TRASOP Contributions for
the Plan Year for which the Section 13.3(b) contribution was made. Such
allocation shall be on the basis of the matching Member TRASOP Contributions of
such Member and each Member's Company Contribution ESOP Account shall receive a
portion of such secondary Company TRASOP Contribution equal to such Member's
matching Member TRASOP Contributions for such Plan Year.
(c) A Member's matching Member TRASOP Contributions shall be
allocated to his Employee Contribution ESOP Account as received.
(d) Company Stock in the Plan attributable to contributions by
any contributing entity on account of the Incremental Investment Credit,
Matching Investment Credit or matching Member TRASOP Contributions shall be
accounted for separately from other Company Stock or contributions held in the
Plan.
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13.8 Allocation and Investment of Dividends. The provisions of
Section 5.4 to the contrary notwithstanding, cash and stock dividends received
prior to the last day of a Plan Year with respect to Company Stock purchased
with advance Company contributions made prior to such date shall be allocated to
the Company Contribution ESOP Accounts of the Members in the proportion which
the Company contribution attributable to each such Company Contribution ESOP
Account bears to the total Company contribution for such Plan Year.
13.9 Statement of Account. As soon as practicable after the
end of each Plan Year, the Committee shall cause to be prepared and presented to
each Member a statement of his account showing the number of Panhandle Eastern
Stock Fund Units held in his Company Contribution and Employee Contribution ESOP
Accounts as of the beginning and the end of such Plan Year and any other
information which the Committee may deem appropriate.
13.10 Benefit Payments.
(a) Each Member shall at all times have a 100% nonforfeitable
interest in the value of his Company Contribution and Employee Contribution ESOP
Accounts.
(b) The amount of a Member's Company Contribution and Employee
Contribution ESOP Accounts which is attributable to Contributions allocated to
his Company Contribution and Employee Contribution ESOP Account for a particular
Plan Year shall be distributed as soon as practicable after January 1 of the
eighth year following the year with respect to which such Contribution was
allocated or as soon as practicable after any subsequent January 1 provided that
such Member has elected in writing to receive such distribution at such time.
Distributions to any Member who has not so elected to receive distributions
pursuant to this Section 13.10(b) shall be made at the time prescribed by
Section 13.10(d) below.
(c) It is specifically provided, however, that Section
13.10(b) shall not be applicable to any Member who is a member of the Board of
Directors of the Company or who holds the office of President, Vice President,
Secretary, Treasurer or Controller of the Company or who is otherwise an officer
of the Company within the meaning of Section 16 of the Securities Exchange Act
of 1934. Distributions to any such officer shall be made at the time prescribed
by Section 13.10(d) below. The Committee shall have the sole authority to make
all determinations regarding a Member's status for purposes of the provisions of
this Section 13.10(c).
(d) Subject to the provisions of Paragraphs (b), (c), (d), (e)
and (f) of Section 7.1, a Member whose employment is terminated for any reason
shall be entitled to receive the balance of his Company Contribution and
Employee Contribution ESOP Accounts in a lump sum payment as soon as practicable
after such termination of employment and not later than one year after the close
of the Plan Year during which he terminates employment or dies.
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<PAGE>
(e) Distributions from a Member's Company Contribution and
Employee Contribution ESOP Accounts shall be made in the form of shares of
Company Stock (with the value of any fractional shares being distributed in
cash); provided that the portion of a Member's Company Contribution and Employee
Contribution ESOP Accounts which is invested in investments other than Company
Stock pursuant to the Member's diversification elections under Paragraph (b) of
Section 5.2 shall be distributed in cash.
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XIV
Administration of the Plan
14.1 Appointment of Committee. The general administration of the Plan
shall be vested in the Committee which shall be appointed by the Directors and
shall consist of three or more persons. Any individual, whether or not an
Employee, is eligible to become a member of the Committee. Each member of the
Committee shall, before entering upon the performance of his duties, qualify by
signing a consent to serve as a member of the Committee under and pursuant to
the Plan and by filing such consent with the records of the Committee. For
purposes of the Act, the Committee shall be the Plan "administrator" and shall
be the "named fiduciary" with respect to the general administration of the Plan.
14.2 Term, Vacancies, Resignation and Removal. Each member of the
Committee shall serve until he resigns or is removed by the Directors. At any
time during his term of office, a member of the Committee may resign by giving
written notice to the Directors and the Committee, such resignation to become
effective upon the appointment of a substitute member or, if earlier, the lapse
of thirty days after such notice is given as herein provided. At any time during
his term of office, and for any reason, a member of the Committee may be removed
by the Directors. Any member of the Committee who is an Employee shall
automatically cease to be a member of the Committee as of the date he ceases to
be employed by the Company or a Controlled Entity.
14.3 Officers, Records and Procedures. The Committee may select
officers and may appoint a secretary who need not be a member of the Committee.
The Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination during
business hours to any Member or beneficiary such records as pertain to that
individual's interest in the Plan. The Committee shall designate the person or
persons who shall be authorized to sign for the Committee and, upon such
designation, the signature of such person or persons shall bind the Committee.
14.4 Meetings. The Committee shall hold meetings upon such notice and
at such time and places as it may from time to time determine. Notice to a
member shall not be required if waived in writing by that member. A majority of
the members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
members of the Committee.
14.5 Self-Interest of Members. No member of the Committee shall have
any right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any
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case in which a Committee member is so disqualified to act and the remaining
members cannot agree, the Directors shall appoint a temporary substitute member
to exercise all the powers of the disqualified member concerning the matter in
which he is disqualified.
14.6 Compensation and Bonding. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
14.7 Committee Powers and Duties. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority and duty,
to be exercised in its sole discretion:
(a) to make rules, regulations and bylaws for the
administration of the Plan which are not inconsistent with the terms and
provisions hereof;
(b) to construe all terms, provisions, conditions and
limitations of the Plan and in all cases, the construction necessary for the
Plan to qualify under the applicable provisions of the Code shall control;
(c) to correct any defect or supply any omission or reconcile
any inconsistency that may appear in the Plan, in such manner and to such extent
as it shall deem expedient to effectuate the purposes of the Plan;
(d) to employ and compensate such accountants, attorneys,
investment advisors and other agents and employees as the Committee may deem
necessary or advisable in the proper and efficient administration of the Plan;
(e) to determine all questions relating to eligibility;
(f) to prescribe procedures to be followed by distributees in
obtaining benefits hereunder and to prescribe procedures respecting the manner
by which Members shall make elections, applications or designations or issue
instructions or directions under the Plan, including, but not limited to, the
promulgation of forms, the imposition of time limitations upon such actions by
Members and the utilization of telephonic or other electronic communication with
Members;
(g) to prepare, file and distribute, in such manner as the
Committee determines to be appropriate, such information and material as is
required by the reporting and disclosure requirements of the Act;
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<PAGE>
(h) to make a determination as to the right of any person to a
benefit under the Plan;
(i) to receive and review reports from the Trustee as to the
financial condition of the Trust Fund, including its receipts and disbursements;
and
(j) to instruct the Trustee as to the loans to Members
pursuant to the provisions of Section 8.2.
14.8 Company to Supply Information. The Company and the Participating
Affiliates shall supply full and timely information to the Committee relating to
the Compensation of all Members, their ages, their retirement, death or other
cause for termination of employment and such other pertinent facts as the
Committee may require. The Company and the Participating Affiliates shall advise
the Trustee of such of the foregoing facts as are deemed necessary for the
Trustee to carry out the Trustee's duties under the Plan. When making a
determination in connection with the Plan, the Committee shall be entitled to
rely upon the aforesaid information furnished by the Company and the
Participating Affiliates.
14.9 Indemnification. The Company shall indemnify and hold harmless
each member of the Committee against any and all expenses and liabilities
arising out of his administrative functions or fiduciary responsibilities,
including any expenses and liabilities that are caused by or result from an act
or omission constituting the negligence of such member in the performance of
such functions or responsibilities, but excluding expenses and liabilities that
are caused by or result from such member's own gross negligence or willful
misconduct. Expenses against which such member shall be indemnified hereunder
shall include, without limitation, the amounts of any settlement or judgment,
costs, counsel fees, and related charges reasonably incurred in connection with
a claim asserted or a proceeding brought or settlement thereof.
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XV
Administration of Funds
15.1 Payment of Expenses. Except as otherwise provided herein, all
expenses incident to the administration of the Plan and Trust, including but not
limited to, legal, accounting, Trustee fees, expenses of the Committee and the
cost of furnishing any bond or security required of the Committee, may be paid
by the Company and the Participating Affiliates and, if not paid by the Company
and the Participating Affiliates, shall be paid by the Trustee from the Trust
Fund and, until paid, shall constitute a claim against the Trust Fund which is
paramount to the claims of Members and beneficiaries. In the event the Trustee's
compensation is to be paid, pursuant to this Section, from the Trust Fund, any
individual serving as Trustee who already receives full-time pay from an
employer or an association of employers whose employees are participants in the
Plan, or from an employee organization whose members are participants in the
Plan, shall not receive any additional compensation for serving as Trustee.
15.2 Trust Fund Property. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee hereunder shall be held for
investment purposes as a commingled Trust Fund. The Committee shall maintain
Accounts in the name of each Member, but the maintenance of an Account
designated as the Account of a Member shall not mean that such Member shall have
a greater or lesser interest than that due him by operation of the Plan and
shall not be considered as segregating any funds or property from any other
funds or property contained in the commingled fund. No Member shall have any
title to any specific asset in the Trust Fund.
15.3 Distributions from Members' Accounts. Distributions from a
Member's Accounts shall be made by the Trustee only if, when, and in the amount
and manner directed in writing by the Committee. Any distribution made to a
Member or for his benefit shall be debited to such Member's Account or Accounts.
All distributions hereunder shall be made in cash except as otherwise
specifically provided herein.
XV-1
<PAGE>
XVI
Trustee and Administration of Trust Fund
16.1 Appointment, Resignation, Removal and Replacement of Trustee. The
Trustee shall be appointed, removed and replaced by and in the sole discretion
of the Directors. Unless otherwise provided by the Trust Agreement, the Trustee
shall be the "named fiduciary" with respect to investment of the Trust Fund's
assets. No Trustee shall be required to furnish any bond or security for the
performance of its powers and duties unless the applicable law makes the
furnishing of such bond or security mandatory.
16.2 Trust Agreement. As a means of administering the assets of the
Plan, the Company has entered into a Trust Agreement with the Trustee. The
administration of the assets of the Plan and the duties, obligations, and
responsibilities of the Trustee shall be governed by the Trust Agreement. The
Trust Agreement may be amended from time to time as the Company deems advisable
in order to effectuate the purposes of the Plan. The Trust Agreement is
incorporated herein by reference and thereby made a part of the Plan hereof.
XVI-1
<PAGE>
XVII
Fiduciary Provisions
17.1 Article Controls. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
17.2 General Allocation of Duties. Each fiduciary with respect to the
Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The Directors shall
have the sole authority to appoint and remove the Trustee or members of the
Committee. Except as otherwise specifically provided, the Committee shall have
the sole responsibility for the administration of the Plan, which responsibility
is specifically described herein. Except as otherwise specifically provided, the
Trustee shall have the sole responsibility for the administration, investment
and management of the assets held under the Plan. It is intended under the Plan
that each fiduciary shall be responsible for the proper exercise of his own
powers, duties, responsibilities and obligations hereunder and shall not be
responsible for any act or failure to act of another fiduciary except to the
extent provided by law or as specifically provided herein.
17.3 Fiduciary Duty. Each fiduciary under the Plan, including but not
limited to the Committee and the Trustee as "named fiduciaries," shall discharge
his duties and responsibilities with respect to the Plan:
(a) solely in the interest of the Members, for the exclusive
purpose of providing benefits to Members, and their beneficiaries, and defraying
reasonable expenses of administering the Plan;
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) by diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is prudent
not to do so; and
(d) in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent with
applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code.
17.4 Delegation and Allocation. The Committee may appoint
subcommittees, individuals or any other agents as it deems advisable and may
delegate to any of such appointees
XVII-1
<PAGE>
any or all of the powers and duties of the Committee. Such appointment and
delegation must be in writing, specifying the powers or duties being delegated,
and must be accepted in writing by the delegatee. Upon such appointment,
delegation and acceptance, the delegating Committee members shall have no
liability for the acts or omissions of any such delegatee, as long as the
delegating Committee members do not violate their fiduciary responsibility in
making or continuing such delegation.
17.5 Investment Manager. The Committee may, in its sole discretion,
appoint an "investment manager," with power to manage, acquire or dispose of any
asset of the Plan and to direct the Trustee in this regard, so long as:
(a) the investment manager is (1) registered as an investment
adviser under the Investment Advisers Act of 1940, (2) a bank, as defined in the
Investment Advisers Act of 1940, or (3) an insurance company qualified to do
business under the laws of more than one state; and
(b) such investment manager acknowledges in writing that he
is a fiduciary with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate their
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager may
be removed by the Committee at any time and within its sole discretion.
XVII-2
<PAGE>
XVIII
Amendments
Amendments
No amendment of the Plan may be made which would vest in the Company,
directly or indirectly, any interest in or control of the Trust Fund. No
amendment may be made which would vary the Plan's exclusive purpose of providing
benefits to Members, and their beneficiaries, and defraying reasonable expenses
of administering the Plan or which would permit the diversion of any part of the
Trust Fund from that exclusive purpose. No amendment shall be made which would
reduce any then nonforfeitable interest of a Member. No amendment shall increase
the duties or responsibilities of the Trustee unless the Trustee consents
thereto in writing. Subject to these limitations and any other limitations
contained in the Act or the Code, the Company may from time to time amend, in
whole or in part, any or all provisions of the Plan on behalf of the Company and
the other Participating Affiliates. The Company's right to amend the Plan may be
exercised by resolution of its Board of Directors, the Pension and Benefits
Committee of its Board of Directors (or any successor committee) or its
Management Executive Committee, and any such amendment of the Plan shall be set
forth in writing. Specifically, but not by way of limitation, the Company may
make any amendment necessary to acquire and maintain a qualified status for the
Plan under the Code, whether or not retroactive.
XVIII-1
<PAGE>
XIX
Discontinuance of Contributions,
Termination and Merger or Consolidation
19.1 Declaration Or Intent. The Company and the Participating
Affiliates have established the Plan with the bona fide intention and
expectation that from year to year they will be able to, and will deem it
advisable to, make contributions as herein provided. However, the Company and
the Participating Affiliates realize that circumstances not now foreseen, or
circumstances beyond its control may make it either impossible or inadvisable to
continue to make contributions to the Trustee. Therefore, the Company and the
Participating Affiliates shall have the power to discontinue contributions to
the Plan. Further, the Company shall have the power to terminate the Plan or
partially terminate the Plan at any time hereafter on behalf of itself and the
Participating Affiliates. Each member of the Committee and the Trustee shall be
notified of such discontinuance, termination or partial termination.
19.2 Administration of Plan in Case of Discontinuance of Contributions
or Termination.
(a) If the Plan is amended so as to permanently discontinue
Company and Participating Affiliates contributions, or if such contributions are
in fact permanently discontinued, the vested interest of each affected Member
shall be 100%, effective as of the date of discontinuance. In case of
discontinuance, the Committee shall remain in existence and all other provisions
of the Plan which are necessary, in the opinion of the Committee, for equitable
operation of the Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the
vested interest of each affected Member shall be 100%, effective as of the
termination date. Unless the Plan is otherwise amended prior to dissolution of
the Company, the Plan shall terminate as of the date of dissolution of the
Company.
(c) Upon discontinuance or termination, any previously
unallocated contributions, forfeitures shall be allocated among the Accounts of
the Members on such date of discontinuance or termination according to the
provisions of Article IV. Thereafter, applicable investment performance of the
Trust Fund shall continue to be allocated to the Accounts of the Members until
the balances are distributed.
(d) In the case of a total or partial termination of the Plan,
and in the absence of a Plan amendment to the contrary, the Trustee shall pay
the balance of the Accounts of a Member for whom the Plan is terminated to such
Member, subject to the time of payment, manner of payment and consent provisions
of Article VII.
XIX-1
<PAGE>
19.3 Merger, Consolidation or Transfer. This Plan and Trust Fund may
not merge or consolidate with, or transfer its assets or liabilities to, any
other plan, unless immediately thereafter each Member would, in the event such
other plan terminated, be entitled to a benefit which is equal to or greater
than the benefit to which he would have been entitled if the Plan were
terminated immediately before the merger, consolidation or transfer. Prior to
any such merger, consolidation or transfer, the Committee shall make a
determination regarding compliance with this Section and shall also comply with
the provisions of section 6058(b) of the Code.
XIX-2
<PAGE>
XX
Participating Affiliates
20.1 Adoption by Participating Affiliates. It is contemplated that
other corporations, associations, partnerships or proprietorships may adopt this
Plan and thereby become a Participating Affiliate hereunder. Any such entity,
whether or not presently existing, may become, upon approval of the Company, a
party hereto by appropriate action of its board of directors or noncorporate
counterpart. The provisions of the Plan shall apply separately and equally to
each Participating Affiliate and its employees in the same manner as is
expressly provided for the Company and its Employees, except that the power to
appoint or otherwise affect the Committee or the Trustee and the power to amend
or terminate the Plan and Trust Agreement shall be exercised by the Company
alone. Nevertheless, any Participating Affiliate may, with the consent of the
Company, incorporate in its adoption agreement or in an amendment document
specific provisions relating to the operation of the Plan, and such provisions
shall become a part of the Plan as to such Participating Affiliate only.
Transfer from the employment of the Company or a Participating Affiliate to the
employment of the Company or any other Participating Affiliate shall not be
considered a termination of employment hereunder, and Vesting Service with one
shall be considered as Vesting Service with all others. Any Participating
Affiliate may, by appropriate action of its board of directors or noncorporate
counterpart, terminate its participation in the Plan. Moreover, the Company may,
in its discretion, terminate a Participating Affiliate's Plan participation at
any time.
20.2 Single Plan. For purposes of the Code and the Act, the Plan as
adopted by the Company and the Participating Affiliates shall constitute a
single plan rather than a separate plan of each. All assets in the Trust Fund
shall be available to pay benefits to all Members and their beneficiaries.
XX-1
<PAGE>
XXI
Miscellaneous
21.1 Not Contract of Employment. The adoption and maintenance of this
Plan shall not be deemed to be a contract between the Company or any
Participating Affiliate and any person or to be consideration for the employment
of any person. Nothing herein contained shall be deemed to give any person the
right to be retained in the employ of the Company or any Participating Affiliate
or to restrict the right of the Company or any Participating Affiliate to
discharge any person at any time nor shall the Plan be deemed to give the
Company or any Participating Affiliate the right to require any person to remain
in the employ of the Company or any Participating Affiliate or to restrict any
person's right to terminate his employment at any time.
21.2 Payments Solely from Trust Fund. All benefits payable under the
Plan shall be paid or provided for solely from the Trust Fund and neither the
Company or any Participating Affiliate nor the Trustee assumes any liability or
responsibility for the adequacy thereof. The Committee or the Trustee may
require execution and delivery of such instruments as are deemed necessary to
assure proper payment of any benefits.
21.3 Alienation of Interest Forbidden. Except as otherwise provided
with respect to "qualified domestic relations orders" pursuant to section 206(d)
of the Act and sections 401(a)(13) and 414(p) of the Code and except as
otherwise provided under other applicable law, no right or interest of any kind
in any benefit shall be transferable or assignable by any Member or any
beneficiary or be subject to anticipation, adjustment, alienation, encumbrance,
garnishment, attachment, execution or levy of any kind. Plan provisions to the
contrary notwithstanding, the Committee shall comply with the terms and
provisions of any "qualified domestic relations orders," including orders which
require distributions to an alternate payee prior to a Member's "earliest
retirement age" as such term is defined in section 206(d)(3)(E)(ii) of the Act
and section 414(p)(4)(B) of the Code, and shall establish appropriate procedures
to effect the same.
21.4 No Benefits to the Company or Participating Affiliates. No part of
the corpus or income of the Trust Fund shall be used for any purpose other than
the exclusive purpose of providing benefits for the Members and their
beneficiaries and defraying reasonable expenses of administering the Plan.
Anything to the contrary herein notwithstanding, the Plan shall never be
construed to vest any rights in the Company or Participating Affiliates other
than those specifically given hereunder.
21.5 Severability. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each
XXI-1
<PAGE>
provision shall be fully severable and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.
21.6 Jurisdiction. The situs of the Plan hereby created is Texas. All
provisions of the Plan shall be construed in accordance with the laws of Texas
except to the extent preempted by federal law.
XXI-2
<PAGE>
XXII
Top-Heavy Status
22.1 Article Controls. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under section
416 of the Code.
22.2 Definitions. For purposes of this Article, the following
terms and phrases shall have these respective meanings:
(a) Account Balance: As of any Valuation Date, the aggregate
amount credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Company or a Controlled Entity (excluding
employee contributions which were deductible within the meaning of section 219
of the Code and rollover or transfer contributions made after December 31, 1983
by or on behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Company or a Controlled Entity), increased
by (1) the aggregate distributions made to such individual from such plan during
a five-year period ending on the Determination Date and (2) the amount of any
contributions due as of the Determination Date immediately following such
Valuation Date.
(b) Accrued Benefit: As of any Valuation Date, the present
value (computed on the basis of the Assumptions) of the cumulative accrued
benefit (excluding the portion thereof which is attributable to employee
contributions which were deductible pursuant to section 219 of the Code, to
rollover or transfer contributions made after December 31, 1983 by or on behalf
of such individual to such plan from another qualified plan sponsored by an
entity other than the Company or a Controlled Entity, to proportional subsidies
or to ancillary benefits) of an individual under a qualified defined benefit
plan maintained by the Company or a Controlled Entity increased by (1) the
aggregate distributions made to such individual from such plan during a
five-year period ending on the Determination Date and (2) the estimated benefit
accrued by such individual between such Valuation Date and the Determination
Date immediately following such Valuation Date. Solely for the purpose of
determining top-heavy status, the Accrued Benefit of an individual shall be
determined under (1) the method, if any, that uniformly applies for accrual
purposes under all qualified defined benefit plans maintained by the Company and
the Controlled Entities or (2) if there is no such method, as if such benefit
accrued not more rapidly than under the slowest accrual rate permitted under
section 411(b)(l)(C) of the Code.
(c) Aggregation Group: The group of qualified plans maintained
by the Company and each Controlled Entity consisting of (1) each plan in which a
Key Employee participates and each other plan which enables a plan in which a
Key Employee participates to meet the requirements of sections 401(a)(4) or 410
of the Code or (2) each plan in which a Key Employee participates, each other
plan which enables a plan in which a Key Employee
XXII-1
<PAGE>
participates to meet the requirements of sections 401(a)(4) and 410 of the Code
and any other plan which the Company elects to include as a part of such group;
provided, however, that the Company may not elect to include a plan in such
group if its inclusion would cause the group to fail to meet the requirements of
sections 401(a)(4) and 410 of the Code with such plan being taken into account.
(d) Assumptions: The interest rate and mortality assumptions
specified for top-heavy status determination purposes in any defined benefit
plan included in the Aggregation Group including the Plan.
(e) Determination Date: For the first Plan Year of any plan,
the last day of such Plan Year and for each subsequent Plan Year of such plan,
the last day of the preceding Plan Year.
(f) Key Employee: A "key employee" as defined in section
416(i) of the Code and the Treasury Regulations thereunder.
(g) Plan Year: With respect to any plan, the annual accounting
period used by such plan for annual reporting purposes.
(h) Remuneration: Compensation within the meaning of section
415(c)(3) of the Code, as limited by section 401(a)(17) of the Code.
(i) Valuation Date: With respect to any Plan Year of any
defined contribution plan, the most recent date within the twelve-month period
ending on a Determination Date as of which the trust fund established under such
plan was valued and the net income (or loss) thereof allocated to participants'
accounts. With respect to any Plan Year of any defined benefit plan, the most
recent date within a twelve-month period ending on a Determination Date as of
which the plan assets were valued for purposes of computing plan costs for
purposes of the requirements imposed under section 412 of the Code.
22.3 Top-Heavy Status.
(a) The Plan shall be deemed to be top-heavy for a Plan Year,
if, as of the Determination Date for such Plan Year, (1) the sum of Account
Balances of Members who are Key Employees exceeds 60% of the sum of Account
Balances of all Members unless an Aggregation Group including the Plan is not
top-heavy or (2) an Aggregation Group including the Plan is top-heavy. An
Aggregation Group shall be deemed to be top-heavy as of a Determination Date if
the sum (computed in accordance with section 416(g)(2)(B) of the Code and the
Treasury Regulations promulgated thereunder) of (1) the Account Balances of Key
Employees under all defined contribution plans included in the Aggregation Group
and (2) the Accrued Benefits of Key Employees under all defined benefit plans
included in the Aggregation
XXII-2
<PAGE>
Group exceeds 60% of the sum of the Account Balances and the Accrued Benefits of
all individuals under such plans. Notwithstanding the foregoing, the Account
Balances and Accrued Benefits of individuals who are not Key Employees in any
Plan Year but who were Key Employees in any prior Plan Year shall not be
considered in determining the top-heavy status of the Plan for such Plan Year.
Further, notwithstanding the foregoing, the Account Balances and Accrued
Benefits of individuals who have not performed services for the Company at any
time during the five-year period ending on the applicable Determination Date
shall not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year,
the Company shall contribute to the Plan for such Plan Year on behalf of each
Member who is not a Key Employee and who has not terminated his employment as of
the last day of such Plan Year an amount equal to:
(1) the lesser of (A) 3% of such Member's
Remuneration for such Plan Year or (B) a percent of such Member's Remuneration
for such Plan Year equal to the greatest percent determined by dividing for each
Key Employee the amounts allocated to such Key Employee's Employee Contribution
Before-Tax Account and Company Contribution Post 1990 Matching Account (other
than Rollover Contributions) for such Plan Year by such Key Employee's
Remuneration; reduced by
(2) the Company Safeharbor Contributions allocated to
such Member's Accounts for such Plan Year.
The minimum contribution required to be made for a Plan Year pursuant to this
Paragraph for a Member employed on the last day of such Plan Year shall be made
regardless of whether such Member is otherwise ineligible to receive an
allocation of the Company's contributions for such Plan Year. The minimum
contribution required to be made pursuant to this Paragraph shall also be made
for an Eligible Employee who is not a Key Employee and who is excluded from
participation in the Plan for failing to make After-Tax Contributions or
Deferred Contributions. Notwithstanding the foregoing, if the Plan is deemed to
be top heavy for a Plan Year, the Company's contribution for such Plan Year
pursuant to this Paragraph shall be increased by substituting "4%" in lieu of
"3%" in Clause (1) hereof to the extent that the Directors determine to so
increase such contribution to comply with the provisions of section 416(h)(2) of
the Code. Notwithstanding the foregoing, no contribution shall be made pursuant
to this Paragraph for a Plan Year with respect to a Member who is a participant
in another defined contribution plan sponsored by the Company or a Controlled
Entity if such Member receives under such other defined contribution plan (for
the Plan Year of such plan ending with or within the Plan Year of this Plan) a
contribution which is equal to or greater than the minimum contribution required
by section 416(c)(2) of the Code. Notwithstanding the foregoing, no contribution
shall be made pursuant to this Paragraph for a Plan Year with respect to a
Member who is a participant in a defined benefit plan sponsored by the Company
or a Controlled Entity if such Member accrues
XXII-3
<PAGE>
under such defined benefit plan (for the Plan Year of such plan ending with or
within the Plan Year of this Plan) a benefit which is at least equal to the
benefit described in section 416(c)(1) of the Code. If the preceding sentence is
not applicable, the requirements of this Paragraph shall be met by providing a
minimum benefit under such defined benefit plan which, when considered with the
benefit provided under the Plan as an offset, is at least equal to the benefit
described in section 416(c)(1) of the Code.
22.4 Termination of Top-Heavy Status. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined to no longer be top-heavy.
22.5 Effect of Article. Notwithstanding anything contained herein to
the contrary, the provisions of this Article shall automatically become
inoperative and of no effect to the extent not required by the Code or the Act.
XXII-4
<PAGE>
XXIII
Securities Regulations
Securities Regulations
Notwithstanding any other provision hereof, it is specifically provided
that the Trustee shall not purchase Company Stock or other Company securities
during any period in which such purchase is, in the opinion of counsel for the
Company or the Committee, restricted by any law or regulation applicable
thereto. During such period, amounts that would otherwise be invested in Company
Stock or other Company securities shall be invested in such other assets as the
Trustee may in its discretion determine or the Trustee may hold such amounts
uninvested for a reasonable period pending the designated investment.
XXIII-1
<PAGE>
EMPLOYEES' SAVINGS PLAN OF
PANHANDLE EASTERN CORPORATION
AND PARTICIPATING AFFILIATES
AMENDMENT 1
Pursuant to its authority under Article VIII of the Employees' Savings
Plan of Panhandle Eastern Corporation and Participating Affiliates (the "Plan"),
Panhandle Eastern Corporation hereby amends the Plan in the following respects:
1. Section 1.1(23) of the Plan, entitled "Eligible Employees", is amended,
effective January 1, 1995, by substituting the phrase "Employee of the
Company or a Participating Affiliate" for the initial appearance
therein of the term "Employee".
2. Section 1.1(24) of the Plan, entitled "Employee", is amended, effective
January 1, 1995, by substituting the phrase "Company or a Controlled
Entity" for the term "Company or Participating Affiliate" appearing
therein.
3. Article I of the Plan is amended, effective January 1, 1995, by adding
the following new Section 1.1(29A):
"(29A) "employment", "employ", "employed" etc. refer to being
employed by the Company or a Controlled Entity and
"termination of payment", "terminate employment", "employment
terminated", "terminated" etc. refer to no longer being
employed by the Company or any Controlled Entity."
4. Section 7.1(e) of the Plan is amended, effective September 1, 1994, in
its entirety to read as follows:
"(e) subject to the provisions of Paragraph (f) below, a Member's
Benefit Commencement Date shall not occur before the
expiration of the period during which the Member is employed."
5. Article VIII of the Plan is amended, effective September 1, 1994, by
correcting the reference "9. Company Contribution Before-Tax" in
Section 8.1(i) to "9. Employee Contribution Before-Tax", the reference
"10. Company Contribution Before Tax (A)" in Section 8.1 (i) to "10.
Employee Contribution Before-Tax (A)", and the reference "Employee
Contribution After-Tax" in Section 8.2(f) to "Employee Contribution
Before- Tax."
6. Section 8.2(a) of the Plan is amended, effective January 1, 1995, by
deleting the reference "by the Company" appearing therein.
<PAGE>
7. Section 8.2(d) of the Plan is amended, effective January 1, 1995, by
deleting the reference "the Company to make" appearing therein.
8. Section 8.2(e) of the Plan is amended, effective January l, 1995, by
deleting the reference "with the Employer" appearing therein.
IN WITNESS WHEREOF, this amendment to the Plan is executed on behalf of
Panhandle Eastern Corporation.
PANHANDLE EASTERN CORPORATION
By:______________________________
Senior Vice President
(2)
<PAGE>
SECOND AMENDMENT TO
EMPLOYEES' SAVINGS PLAN OF
PANHANDLE EASTERN CORPORATION
AND PARTICIPATING AFFILIATES
(AS AMENDED AND RESTATED SEPTEMBER 1, 1994)
WHEREAS, PANHANDLE EASTERN CORPORATION and certain of its affiliates
(the "Company") have heretofore adopted the EMPLOYEES' SAVINGS PLAN OF PANHANDLE
EASTERN CORPORATION AND PARTICIPATING AFFILIATES (AS AMENDED AND RESTATED
SEPTEMBER 1, 1994) (the "Plan"); and
WHEREAS, the Company desires to amend the Plan on behalf of itself and
all affiliates which have adopted the Plan;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of
September 1, 1994:
1. The following shall be added to Paragraph (b) of Section 3.8 of the
Plan:
"For purposes of this Paragraph, the determination and correction of
excess Deferred Contributions of a Member whose actual deferral
percentage is determined under the family aggregation rules of sections
401(k) and 414(q) of the Code shall be made in accordance with the
provisions of such sections and the Treasury regulations thereunder."
2. The following shall be added to Paragraph (c) of Section 3.8 of the
Plan:
"For purposes of this Paragraph, the determination and correction of
excess Company Contributions and After-Tax Contributions allocated to
the Accounts of a Member whose contribution percentage is determined
under the family aggregation rules of sections 401(m) and 414(q) of the
Code shall be made in accordance with the provisions of such sections
and the Treasury regulations thereunder."
3. The first sentence of Paragraph (a) of Section 3.9 of the Plan shall
be deleted and the following shall be substituted therefor:
"Rollover Contributions may be made to the Plan by any Eligible
Employee of amounts that are 'eligible rollover distributions' (as
hereinafter defined in this Paragraph (a)) from an employee's trust
described in section 401(a) of the Code which is exempt from tax under
section 501(a) of the Code. For purposes of this Section 3.9, an
eligible rollover distribution is any distribution of all or any
portion of the Accounts of a 'distributee' (as hereinafter defined in
this Paragraph (a)) other than (A) a distribution that is one of a
<PAGE>
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, (B) a distribution to the extent
such distribution is required under section 401(a)(9) of the Code, (C)
the portion of a distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities), (D) a loan treated
as a distribution under section 72(p) of the Code and not excepted by
section 72(p)(2), (E) a loan in default that is a deemed distribution,
(F) any corrective distribution provided in Sections 3.8 and 4.3, and
(G) any other distribution so designated by the Internal Revenue
Service in revenue rulings, notices, and other guidance of general
applicability. For purposes of this Section 3.9, a distributee is each
(A) Member who is entitled to an eligible rollover distribution, (B)
Member's Surviving Spouse with respect to the interest of such
Surviving Spouse in an eligible rollover distribution, and (C) former
spouse of a Member who is an alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, with regard
to the interest of such former spouse in an eligible rollover
distribution."
4. Subitem (ii) of item (4) of Paragraph (b) of Section 4.3 of the Plan
shall be deleted and the following shall be substituted therefor:
"(ii) the Company Matching Contributions, adjusted for
income or loss allocated thereto, which would have
been allocated to such Member's Accounts based upon
such Deferred Contributions so distributed shall be
forfeited and such forfeitures shall be used to
reduce future Company Matching Contributions;"
5. As amended hereby, the Plan is specifically ratified and reaffirmed.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed this 9th day of November, 1995.
PANHANDLE EASTERN CORPORATION
By________________________________
(2)
<PAGE>
EMPLOYEES' SAVINGS PLAN OF
PANHANDLE EASTERN CORPORATION
AND PARTICIPATING AFFILIATES
AMENDMENT 3
Pursuant to its authority under Article XVIII of the Employees' Savings
Plan of Panhandle Eastern Corporation and Participating Affiliates (the "Plan"),
Panhandle Eastern Corporation hereby amends the Plan in the following respects:
1. Section 3.3 of the Plan, entitled "Company Matching Contributions", is
amended, effective January 1, 1995, by adding the following new
paragraph "(f)":
(f) In the event that during a Plan Year, a Member makes
Deferred Contributions or After-Tax Contributions for a
semi-monthly period in an amount that exceeds the maximum
amount of such contributions for such period that may be
matched by Company Matching Contributions pursuant to
paragraphs (a) - (e) above, and such excess Deferred
Contributions or After-Tax Contributions, if made for
subsequent semi-monthly periods during such Plan Year, would
have been so matched, then, for purposes of determining the
Company Matching Contributions to be made on such Member's
behalf, such excess Deferred Contributions or After-Tax
Contributions shall be deemed to have been made for the
earliest such subsequent semi-monthly periods.
2. Section 5.5(b) of the Plan is amended, effective January 1, 1996, in its
entirety to read as follows:
(b) Subject to the provisions of the Trust Agreement, a Member
shall be entitled to direct the Trustee as to the manner in
which any Company Stock held in the Panhandle Eastern Stock
Fund that represents the proportional interest of the units of
such Investment Fund held in the Member's Accounts, as
determined by the Committee, shall be voted. The Committee
shall furnish to each Member explanatory materials adequate
for such purpose together with such form of voting
instructions as the Committee shall prescribe. The Trustee
shall vote specifically in accordance with each Member's
instructions to the extent of such Member's whole shares of
Company Stock and shall, to the extent possible, vote Members'
fractional shares the Trust Fund in such manner as to reflect
the Members' expressed desires with respect to whole shares.
Company Stock held in the Panhandle Eastern Stock Fund that
represents the proportional interest of units of such
Investment Fund held in a Member's Employee Contribution ESOP
Account or Company Contribution ESOP Account, as determined by
the Committee ("ESOP Shares") shall, in the absence of the
Member's instructions, be voted by the Trustee in the same
proportion as are voted the ESOP Shares with respect to which
instructions were received by the Trustee from Members.
Otherwise, the
<PAGE>
Trustee shall vote shares of Company Stock held in the
Panhandle Eastern Stock Fund with respect to which the Trustee
does not receive instructions and shares of Company Stock
which have not been allocated to Member's Accounts under the
Plan in the same proportion as are voted the shares of Company
Stock held in the Panhandle Eastern Stock Fund, other than
ESOP Shares, with respect to which instructions were received
by the Trustee from Members.
3. Article XIII of the Plan, entitled "TRASOP Provisions", is amended,
effective January 1, 1995, by adding the following new Section 13.11:
13.11 Limitation: No Member or Company Contributions shall be
made pursuant to this Article XIII on or after January 1,
1995.
IN WITNESS WHEREOF, Panhandle Eastern Corporation has caused its duly
authorized officer to execute this document on its behalf, this 20th day of
December, 1995.
PANHANDLE EASTERN CORPORATION
By:____________________________
Its: Senior Vice President
(2)
<PAGE>
EMPLOYEES' SAVINGS PLAN OF
PANHANDLE EASTERN CORPORATION
AND PARTICIPATING AFFILIATES
AMENDMENT 4
Pursuant to its authority under Article XVIII of the Employees' Savings
Plan of Panhandle Eastern Corporation and Participating Affiliates (the "Plan"),
PanEnergy Corp (formerly Panhandle Eastern Corporation) hereby amends the Plan
in the following respects:
1. Section 6.1 of the Plan, entitled "Benefits", is amended, effective January
1, 1996, in its entirety to read as follows:
6.1 Benefits. A member whose employment terminates for any
reason shall be entitled to an Article VII benefit equal in
value to the aggregate net asset value of all Investment Fund
units held in his Accounts. Notwithstanding the foregoing, no
distribution shall be permitted in contravention of the
"separation from service" requirement, or other applicable
distribution limitation, imposed by section 401(k)(2)(B) of
the Code.
(i) Article VIII of the Plan, entitled "Withdrawals and Loans", is amended,
effective March 1, 1996, by adding the following new Section 8.3:
8.3 ALTRA. Notwithstanding Section 8.1(k) or Section 8.2(a) to
the contrary, a Member who transfers employment from the
Company and all Controlled Entities to Altra Energy
Technologies L.L.C. ("Altra") shall, while employed by Altra,
continue to be eligible to obtain withdrawals pursuant to this
Article VIII and, provided Altra has agreed to honor a
Member's authorization of payroll deduction for loan repayment
plus interest, loans pursuant to this Article VIII, on the
same basis as a Member whose employment has not terminated
until such time as the Member becomes entitled to an Article
VIII benefit equal in value to the aggregate net asset value
of all Investment Fund units held in his Accounts.
IN WITNESS WHEREOF, PanEnergy Corp has caused its duly authorized
officer to execute this document on its behalf, this 16th day of August, 1996.
PANENERGY CORP
By:______________________________
Its: Senior Vice President and
Chief Financial Officer
<PAGE>
EMPLOYEES' SAVINGS PLAN OF
PANHANDLE EASTERN CORPORATION AND
PARTICIPATING AFFILIATES
AMENDMENT 5
Pursuant to its authority under Article XVIII of the Employees' Savings
Plan of Panhandle Eastern Corporation and Participating Affiliates (the "Plan"),
PanEnergy Corp, formerly Panhandle Eastern Corporation (the "Corporation")
hereby amends the Plan in the following respects:
1. Inasmuch as, effective April 25, 1996, the name of the Corporation was
changed to "PanEnergy Corp", effective as of said date, the name of the Plan
is changed to "Employees' Savings Plan of PanEnergy Corp and Participating
Affiliates" and the Plan is otherwise conformed to the Corporation's name
change.
2. Section 5.3(a) of the Plan is amended, effective January l, 1997, in its
entirety to read as follows:
(a) In accordance with the procedures prescribed by the
Committee, each Member shall designate the manner in
which the amounts allocated to his Employee
Contribution Before-Tax Account and his Employee
Contribution After-Tax Account shall be invested from
among the following Investment Funds (other than a
Closed Investment Fund):
Bond Index Fund Invested in units representing an
undivided interest in a pooled fund that is
invested and reinvested, either directly or
indirectly, primarily in a diversified
portfolio of governmental and/or corporate
debt securities, whether or not secured.
Diversified Equity Fund With respect to any such fund,
Large-Cap Equity invested in units representing an
Index Fund undivided interest in a pooled fund that is
Small- to Mid-Cap Equity invested and reinvested, either directly or
Index Fund indirectly, primarily in a diversified
International Equity portfolio of corporate equity securities
Index Fund (which may include securities convertible
into corporate equity securities).
Money Market Fund Invested in units representing an
undivided interest in a pooled fund that is
invested and reinvested, either directly or
indirectly, primarily in a diversified
portfolio of money market instruments.
Any of the foregoing Investment Funds may be invested and reinvested directly
through the Plan Trust or one or more common/collective/group trusts or pooled
separate accounts or indirectly through one or more mutual funds.
<PAGE>
PanEnergy Stock Fund Invested in units representing an
undivided interest in a pooled fund
that is invested and reinvested
primarily in shares of Company
Stock.
Anadarko Stock Fund Invested in units representing an
Closed Investment Fund- undivided interest in a pooled fund
to be discontinued 7/1/97 that is invested and reinvested
primarily in shares of Anadarko
Petroleum Corporation common stock.
In connection with the discontinuance of the Anadarko Stock Fund, effective July
1, 1997, and in accordance with such rules as the Committee shall prescribe, a
Member whose Accounts are invested in the Anadarko Stock Fund shall be provided
a special withdrawal opportunity between January 6 and June 30, 1997, to receive
the entire Anadarko Stock Fund interest of such Accounts (other than Employee
Contribution Before-Tax and Employee Contribution Before-Tax (A) Accounts if the
Member has not attained age 59 1/2) in shares of Anadarko Petroleum Corporation
common stock (with cash for any fractional share). Effective July 1, 1997, the
Anadarko Stock Fund shall be discontinued and all remaining assets of said
Investment Fund shall be converted to cash as promptly as prudently feasible
thereafter. Pending the completion of said conversion a Member shall not be
eligible to obtain fund distributions, withdrawals or loans with respect to any
position of any Account that remains invested in the Anadarko Stock Fund. Upon
completion of said conversion, the proceeds of the said conversion and all
Accounts' investment in the Anadarko Stock Fund, shall automatically be
transferred to the Money Market Fund as promptly as administratively feasible.
Any Investment Fund may hold cash, which may be invested in any
common/collective/group trust, pooled separate account or mutual fund, which is
of a money market/short term investment fund type and which may be managed by
the Trustee or an affiliate of the Trustee.
A Member may designate one of such Investment Funds (other than a Closed
Investment Fund), for all future contributions to his Employee Contribution
Before-Tax Account and his Employee Contribution After-Tax Account or he may
split the investment of the contributions to his Employee Contribution
Before-Tax and his Employee Contribution After-Tax Account among such Investment
Funds, in whole percentages. No other type of designation shall be permitted. If
a Member fails to make a designation, future contributions to his Employee
Contribution Before-Tax Account and his Employee Contribution After-Tax Account
shall be invested in the Money Market Fund.
3. Section 8.1(i) of the Plan is amended, effective January 1, 1997, in its
entirety to read as follows:
(i) A Member's withdrawal pursuant to this Section shall be funded from
available amounts taken as follows:
(3)
<PAGE>
From the Member's Accounts (taken in descending order, but only if, and
to the extent, available).
1. Employee Contribution After-Tax
2. Employee Contribution After-Tax (A)
3. Employee Contribution ESOP
4. Rollover
5. Company Contribution Prior Company
6. Company Contribution Prior Company (A)
7. Company Contribution ESOP
8. Company Contribution Post 1990 Matching
9. Employee Contribution Before-Tax
10. Employee Contribution Before-Tax (A)
Within a Member's Account, by liquidating the Account's investment in Investment
Funds (taken in the following descending order, if and to the extent available).
1. Money Market
2. Bond Index
3. Large-Cap Equity Index
4. Diversified Equity
5. Small-to Mid-Cap Equity Index
6. International Equity Index
7. Anadarko Stock
8. PanEnergy Stock
4. Section 8.2(d) of the Plan is amended, effective January 1, 1997, in its
entirety to read as follows:
(d) A Member's loan pursuant to this Section shall be funded
from available amounts taken as follows:
From the Member's Accounts (in the following descending order)
1. Employee Contribution Before-Tax
2. Employee Contribution Before-Tax (A)
3. Company Contribution Prior Company
4. Company Contribution Prior Company (A)
5. Rollover
6. Company Contribution Post 1990 Matching
7. Employee Contribution After-Tax
8. Employee Contribution After-Tax (A)
(4)
<PAGE>
Within a Member's Account, by liquidating the Account's investment in
Investment Funds (taken in the following descending order)
1. Money Market
2. Bond Index
3. Large-Cap Equity Index
4. Diversified Equity
5. Small-to Mid-Cap Equity Index
6. International Equity Index
7. Anadarko Stock
8. PanEnergy Stock
The loan shall be secured by a pledge of the Member's segregated loan
fund. The Member shall be required, as a condition to receiving a loan,
to enter into an agreement authorizing payroll deductions from his
Compensation so long as the Member is an Employee and to transfer such
payroll deduction amounts to the Trustee in payment of such loan plus
interest.
IN WITNESS WHEREOF, this Amendment to the Plan is executed on behalf of
the Corporation this 18th day of December, 1996.
PANENERGY CORP
By:_______________________________
Its: Senior Vice President &
Chief Financial Officer
(5)
EXHIBIT 5
June 19, 1997
Duke Energy Corporation
422 South Church Street
Charlotte, NC 28242-0001
Gentlemen:
I am a Deputy General Counsel of Duke Energy Corporation, a
North Carolina corporation (the "Company"), and in such capacity I have
examined the Company's Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "1933
Act"), for the registration of 1,500,000 shares of the Company's Common
Stock, without par value (the "Shares"), which Shares will be issued under
the Employees' Savings Plan of PanEnergy Corp and Participating Affiliates (the
"Plan").
I have examined and am familiar with originals or copies,
certified or otherwise identified to my satisfaction, of such documents,
corporate records, certificates of public officials and officers of the Company
and such other instruments as I have deemed necessary or appropriate as a basis
for the opinions expressed below.
Based on the foregoing, I am of the opinion that the Shares
are duly authorized and when the Shares have been issued and delivered in
accordance with the terms of the Plan, such Shares will be legally issued, fully
paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5 to
the Registration Statement. In giving such consent, I do not thereby admit that
I come within the category of persons whose consent is required under Section 7
of the 1933 Act, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Peter C. Buck
---------------------
Peter C. Buck
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Duke Energy Corporation of our report
dated February 7, 1997 appearing in the annual report on Form 10-K of Duke
Power Company for the year ended December 31, 1996.
Deloitte & Touche LLP
- ---------------------
Deloitte & Touche LLP
Charlotte, North Carolina
June 19, 1997
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in this registration statement on
Form S-8 of Duke Energy Corporation of our report dated January 17, 1997
appearing in the annual report on Form 10-K of PanEnergy Corp for the year
ended December 31, 1996.
KPMG Peat Marwick LLP
---------------------
KPMG Peat Marwick LLP
Houston, Texas
June 19, 1997
EXHIBIT 23(C)
CONSENT OF COUNSEL
The consent of Peter C. Buck, Esq., is contained in his
opinion filed as Exhibit 5 to this Registration Statement.
Exhibit 24(A)
DUKE ENERGY CORPORATION
POWER OF ATTORNEY
Registration Statements under the Securities Act of 1933
with respect to up to 7,283,130 shares of Common Stock, without par value, of
Duke Energy Corporation to be issued in connection with
various employee benefit and/or stock purchase and dividend reinvestment plans
of said Duke Energy Corporation and its subsidiaries
(Registration Statements)
The undersigned DUKE ENERGY CORPORATION, a North Carolina corporation, and
certain of its officers and/or directors, do each hereby constitute and appoint
Richard J. Osborne, Robert S. Lilien and W. Edward Poe, Jr., and each of them,
to act as attorneys-in-fact for and in the respective names, places, and stead
of the undersigned, to execute, seal, sign, and file with Securities and
Exchange Commission the Registration Statements of said Duke Energy Corporation
and any and all amendments thereto, or amendments to existing Registration
Statements, hereby granting to said attorneys-in-fact, and each of them, full
power and authority to do and perform all and every act and thing whatsoever
requisite, necessary, or proper to be done in and about the premises, as fully
to all intents and purposes as the undersigned, or any of them, might or could
do if personally present, hereby ratifying and approving the acts of said
attorneys-in-fact.
Executed the 18th day of June, 1997.
DUKE ENERGY CORPORATION
By /s/ R. B. Priory
________________________________
Chairman and Chief Executive Officer
(Corporate Seal)
ATTEST:
/s/ Robert T. Lucas III
______________________________
Assistant Secretary
<PAGE>
/s/ R. B. Priory
________________________________ Chairman and Chief Executive Officer
R. B. Priory (Principal Executive Officer and Director)
/s/ Richard J. Osborne
______________________________ Executive Vice President and Chief Financial
Richard J. Osborne Officer (Principal Financial Officer)
/s/ Jeffrey L. Boyer
______________________________ Vice President and Corporate Controller
Jeffrey L. Boyer (Principal Accounting Officer)
/s/ Paul M. Anderson
______________________________ (Director)
Paul M. Anderson
/s/ G. Alex Bernhardt
______________________________ (Director)
G. Alex Bernhardt
/s/ Robert J. Brown
______________________________ (Director)
Robert J. Brown
/s/ William A. Coley
______________________________ (Director)
William A. Coley
/s/ William T. Esrey
______________________________ (Director)
William T. Esrey
/s/ Ann Maynard Gray
______________________________ (Director)
Ann Maynard Gray
/s/ Dennis R. Hendrix
______________________________ (Director)
Dennis R. Hendrix
<PAGE>
/s/ Harold S. Hook
______________________________ (Director)
Harold S. Hook
/s/ George Dean Johnson, Jr.
______________________________ (Director)
George Dean Johnson, Jr.
/s/ W. W. Johnson
______________________________ (Director)
W. W. Johnson
/s/ Max Lennon
______________________________ (Director)
Max Lennon
/s/ Leo E. Linbeck, Jr.
______________________________ (Director)
Leo E. Linbeck, Jr.
/s/ James G. Martin
______________________________ (Director)
James G. Martin
/s/ Buck Mickel
______________________________ (Director)
Buck Mickel
/s/ Russell M. Robinson, II
______________________________ (Director)
Russell M. Robinson, II
<Certified copy of resolution of the Board of Directors
Exhibit 24(B)
DUKE ENERGY CORPORATION
CERTIFICATE
The undersigned officer of DUKE ENERGY CORPORATION, a North Carolina
corporation (the "Corporation"), does hereby certify that attached hereto is a
true and complete copy of a resolution adopted at a meeting of the Board of
Directors of the Corporation with respect to the Registration Statements, which
resolution is presently in full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal of the Corporation this 19th day of June, 1997.
/s/ Robert T. Lucas III
-------------------------------
Robert T. Lucas III
Assistant Secretary
(Corporate Seal)
FURTHER RESOLVED, that each officer and director who may be required to
execute such registration statements or amendments thereto or amendments to
existing registration statements (whether on behalf of the Corporation or as an
officer or director thereof or by attesting the seal of the Corporation or
otherwise) be and hereby is authorized to execute a power of attorney appointing
Richard J. Osborne, Robert S. Lilien and W. Edward Poe, Jr., and each of them,
as true and lawful attorneys and agents to execute in his or her name, place and
stead (in any such capacity) such registration statements or amendments thereto
or amendments to existing registration statements and all instruments necessary
or advisable in connection therewith, to attest the seal of the Corporation
thereon and to file the same with the Securities and Exchange Commission, each
of said attorneys and agents to have power to act with or without the others and
to have full power and authority to do and perform in the name and on behalf of
each of such officers and directors, or both, as the case may be, every act
whatsoever necessary or advisable to be done in the premises as fully and to all
intents and purposes as any such officer or director might or could do in
person;
