Registration No. 333-_________
As filed with the Securities and Exchange Commission on January 9, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LG&E ENERGY CORP.
(Exact name of registrant as specified in its charter)
Kentucky 61 - 1174555
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 West Main Street 40232
P.O. Box 32030 (Zip Code)
Louisville, KY
(Address of principal
executive offices)
LG&E ENERGY CORP. SAVINGS PLAN
and
401(K) SAVINGS PLAN FOR EMPLOYEES OF LOUISVILLE GAS AND ELECTRIC COMPANY
WHO ARE REPRESENTED BY LOCAL 2100 OF IBEW
(Full title of the plans)
John R. McCall
Executive Vice President,
General Counsel and Corporate Secretary
LG&E Energy Corp.
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(502) 627-3665
(Name, address and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed
Title of Maximum Proposed
securities Amount offering maximum Amount of
to be to be price aggregate registration
registered registered per share offering price fee
Common Stock, 2,000,000 $23.9375 (3) $47,875,000 $14,123.13
without par value shares
per share (1)(2)
(1) In addition, pursuant to Rule 416(c), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plans described herein.
(2) 1,000,000 shares are being registered on behalf of each of the LG&E
Energy Corp. Savings Plan and the 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company who are Represented by Local 2100
of the IBEW.
(3) Estimated solely for purposes of calculating the amount of the
registration fee pursuant to Rule 457(c), based upon the average of
the high and low prices of the Common Stock as reported by The Wall
Street Journal as New York Stock Exchange Composite Transactions for
January 6, 1998.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, as filed with the Securities and
Exchange Commission, are incorporated herein by reference:
(i) the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996;
(ii) the Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997 and
September 30, 1997;
(iii) Exhibit 99.02 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, which
contains a description of the Registrant's common stock;
(iv) the Registrant's Current Reports on Form 8-K dated
January 6, 1997, February 10, 1997, February 14, 1997,
February 25, 1997, March 20, 1997, April 28, 1997, May
20, 1997, May 30, 1997, September 9, 1997, September 22,
1997, October 14, 1997 and December 19, 1997; and
(v) Registrant's Proxy Statement dated August 22, 1997.
All documents filed by the Registrant or the plans pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, after the date hereof and prior to the filing of a post-
effective amendment which indicates that all securities offered
have been sold or which deregisters all such securities remaining
unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing such documents.
Item 4. Description of Securities
The Registrant's Common Stock is registered under Section 12 of
the Exchange Act. The Registrant also has Rights to Purchase
Series A Preferred Stock which are registered under Section 12 of
the Exchange Act, and which automatically trade at this time with
the Common Stock.
Item 5. Experts
The financial statements and schedules of the Registrant included
or incorporated by reference in the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, to the
extent and for the periods indicated in their report, have been
audited by Arthur Andersen LLP, independent public accountants,
and are incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing in
giving said report.
Item 6. Indemnification of Directors and Officers
Chapter 271B.8-500 to 580 of the Kentucky Revised Statutes
provides that the Registrant may, and in some circumstances must,
indemnify its directors and officers against liabilities and
expenses incurred by any such person by reason of the fact that
such person was serving in such capacity, subject to certain
limitations and conditions set forth in the statutes.
Substantially similar provisions that require such
indemnification are contained in the Registrant's Restated
Articles of Incorporation (filed as Exhibit 3.06 to the
Registrant's Form 10-Q for the quarter ended September 30, 1996
(file no. 1-10568)), which provisions are incorporated hereby by
this reference. The Registrant's Articles of Incorporation also
contain provisions limiting the liability of its directors in
certain instances. The Registrant has an insurance policy
covering its officers and directors against certain personal
liability, which may include liabilities under the Securities Act
of 1933, as amended.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit
Number Description
4.01 Copy of LG&E Energy Corp. Savings Plan
4.02 Copy of 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company who are
Represented by Local 2100 of IBEW.
4.03 Copy of Restated Articles of Incorporation, as
amended, [Filed as Exhibit 3.06 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 (file no. 1-
10568) and incorporated by reference herein.]
4.04 Copy of By-laws [Filed as Exhibit 3.03 to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1991 (file no. 1-10568)
and incorporated by reference herein.]
4.05 Copy of Rights Agreement, dated December 5, 1990,
in the form executed by LG&E Energy Corp. and
Louisville Gas and Electric Company, as Rights
Agent [Filed as Exhibit 4.04 to Registration
Statement No. 33-38557 and incorporated by
reference herein.]
4.06 Copy of Amendment No. 1 to Rights Agreement, dated
June 7, 1995, in the form executed by LG&E Energy
Corp. and Louisville Gas and Electric Company, as
Rights Agent [Filed as Exhibit 2 to Amendment No.
2 to Registrant's Registration Statement on Form 8-
A/A dated June 20, 1995 and incorporated by
reference herein.]
4.07 Copy of Amendment No. 2 to Rights Agreement, dated
as of May 20, 1997, in the form executed by LG&E
Energy Corp. and Louisville Gas and Electric
Company, as Rights Agent [filed as Exhibit 1 to
Registrant's Registration Statement on Form 8-A/A
dated May 20, 1997 and incorporated by reference
herein].
23.01 Consent of Arthur Andersen LLP.
24.01 Power of attorney.
Item 9. Undertakings
A. INDEMNIFICATION
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
provisions referred to in Item 6, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
B. SUBSEQUENT EXCHANGE ACT DOCUMENTS
The undersigned Registrant hereby undertakes 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 Section 15(d) of the Securities Exchange Act of
1934 and each filing of the plans' annual reports pursuant to
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
C. OTHER
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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 Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represented 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 1(i) and 1(ii) do not apply if
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the 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.
(4) That it (i) will submit or has submitted the plans and any
amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and (ii) has made or will make all changes required
by the IRS in order to qualify the plans.
SIGNATURES
THE REGISTRANT
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 Louisville, Commonwealth of Kentucky, on January 9, 1998.
LG&E ENERGY CORP.
By:/s/ Victor A. Staffieri
Victor A. Staffieri,
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on January 9, 1998, by the
following persons in the capacities indicated.
Signature Title
Roger W. Hale Chairman of the Board, Presi
dent and Chief Executive
Officer
Victor A. Staffieri Chief Financial Officer
(Principal Financial Offi
cer)
Dr. Donald C. Swain Director
Anne H. McNamara Director
William C. Ballard, Jr. Director
Owsley Brown, II Director
J. David Grissom Director
Gene P. Gardner Director
T. Ballard Morton, Jr. Director
S. Gordon Dabney Director
David B. Lewis Director
Jeffery T. Grade Director
January 9, 1998
By:/s/ John R. McCall
John R. McCall (Attorney-in-Fact)
/s/ S. Bradford Rives
S. Bradford Rives
Vice President - Finance and
Controller
(Principal Accounting Officer)
THE PLANS
Pursuant to the requirements of the Securities Act of 1933, all
of the members of the Committee having the responsibility for
administration of the LG&E Energy Corp. Savings Plan have duly
caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of
Louisville, Commonwealth of Kentucky on January 9, 1998.
LG&E ENERGY CORP. SAVINGS PLAN
By: /s/ Wendy C. Heck
Wendy C. Heck
By: /s/ Charles A. Markel
Charles A. Markel
By: /s/ S. Bradford Rives
S. Bradford Rives
By: /s/ Stephen R. Wood
Stephen R. Wood
Pursuant to the requirements of the Securities Act of 1933, all
of the members of the Committee having the responsibility for
administration of the 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company who are Represented by Local
2100 of IBEW have duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Louisville, Commonwealth of Kentucky,
on January 9, 1998.
401(K) SAVINGS PLAN FOR EMPLOYEES OF LOUISVILLE GAS AND ELECTRIC
COMPANY WHO ARE REPRESENTED BY LOCAL 2100 OF IBEW
By: /s/ Wendy C. Heck
Wendy C. Heck
By: /s/ Charles A. Markel
Charles A. Markel
By: /s/ S. Bradford Rives
S. Bradford Rives
By: /s/ Stephen R. Wood
Stephen R. Wood
EXHIBIT INDEX
Exhibit Method of
Number Description Filing
4.01 Copy of LG&E Energy Corp. Savings Plan DT
4.02 Copy of 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company who are
Represented by Local 2100 of IBEW DT
4.03 Copy of Restated Articles of Incorporation, as amended
[Filed as an Exhibit 3.06 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1996 (file no. 1-10568) and incorporated by
reference herein.]
4.04 Copy of By-laws [Filed as Exhibit 3.03 to the
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1991 (file no. 1-10568) and
incorporated by reference herein.]
4.05 Copy of Rights Agreement, dated December 5, 1990,
in the form executed by LG&E Energy Corp. and
Louisville Gas and Electric Company, as Rights
Agent [Filed as Exhibit 4.04 to Registration Statement
No. 33-38557 and incorporated by reference herein.]
4.06 Copy of Amendment No. 1 to Rights Agreement, dated
June 7, 1995, in the form executed by LG&E Energy
Corp. and Louisville Gas and Electric Company, as
Rights Agent [Filed as Exhibit 2 to Amendment No. 2
to Registrant's Registration Statement on Form 8-A/A
dated June 20, 1995 and incorporated by reference
herein.]
4.07 Copy of Amendment No. 2 to Rights Agreement, dated as
of May 20, 1997, in the form executed by LG&E Energy Corp.
and Louisville Gas and Electric Company, as Rights Agent
[filed as Exhibit 1 to Registrant's Registration Statement
on Form 8-A/A dated May 20, 1997 and incorporated by
reference herein].
23.01 Consent of Arthur Andersen LLP. DT
24.01 Power of attorney. DT
Exhibit 4.01
LG&E ENERGY CORP.
SAVINGS PLAN
Composite Copy
(Including Amendments Effective 1/1/98)
TABLE OF CONTENTS
Page No.
INTRODUCTION 1
DEFINITIONS 2
Section 1.1 Adjustment 2
Section 1.2 Annual Additions 2
Section 1.3 Annuity Starting Date 2
Section 1.4 Beneficiary 2
Section 1.5 Board 2
Section 1.6 Break in Service 2
Section 1.7 Code 2
Section 1.8 Committee 2
Section 1.9 Company 3
Section 1.10 Company Stock 2
Section 1.11 Compensation 3
Section 1.12 Defined Benefit Plan 3
Section 1.13 Defined Contribution Plan 3
Section 1.14 Dividend Eligible Participant 3
Section 1.15 Early Retirement Date 3
Section 1.16 Effective Date 3
Section 1.17 Employee 3
Section 1.18 Employee Voluntary Contributions 4
Section 1.19 Employee Voluntary Contributions Account 4
Section 1.20 Employer 4
Section 1.21 Employer Contributions 4
Section 1.22 Employment Commencement Date 4
Section 1.23 Entry Date 4
Section 1.24 ESOP 4
Section 1.25 ESOP Dividends 4
Section 1.26 Fiduciary 4
Section 1.27 Former Participant 4
Section 1.28 Highly Compensated Employees 4
Section 1.29 Individual Account 7
Section 1.30 Investment Fund 7
Section 1.31 Investment Manager 7
Section 1.32 Key Employee 7
Section 1.33 LG&E Energy Corp. Common Stock Fund 8
Section 1.34 Leased Employee 8
Section 1.35 Limitation Year 8
Section 1.36 Mandatory Employer Contribution 8
Section 1.37 Matching Contribution Account 8
Section 1.38 Matching Contributions 8
Section 1.39 Normal Retirement Date 8
Section 1.40 Participant 8
Section 1.41 Participating Employer 9
Section 1.42 Paying Agent 9
Section 1.43 Permissive Aggregation Group 9
Section 1.44 Plan 9
Section 1.45 Plan Year 9
Section 1.46 Prior LPI Plan 9
Section 1.47 Prior LNI Plan 9
Section 1.48 Prior Plan 9
Section 1.49 Profit Sharing Account 9
Section 1.50 Profit Sharing Contributions 9
Section 1.51 Qualified Joint and Survivor Annuity 9
Section 1.52 Qualified Preretirement Survivor Annuity 9
Section 1.53 Required Aggregation Group 10
Section 1.54 Rollover Contribution 10
Section 1.55 Rollover Contribution Account 10
Section 1.56 Salary Redirection 10
Section 1.57 Salary Redirection Account 10
Section 1.58 Severance From Service Date 10
Section 1.59 Sponsoring Employer 10
Section 1.60 Top Heavy Plan 10
Section 1.61 Total and Permanent Disability 11
Section 1.62 Trust Agreement 11
Section 1.63 Trust Fund 11
Section 1.64 Trustee 11
Section 1.65 Valuation Date 12
Section 1.66 Vested Individual Account 12
Section 1.67 Year of Service 12
PARTICIPATION 13
Section 2.1 Eligibility Requirements 13
Section 2.2 Plan Binding 13
Section 2.3 Reemployment 13
Section 2.4 Beneficiary Designation 13
Section 2.5 Notification of Individual Account Balance 14
CONTRIBUTIONS 15
Section 3.1 Salary Redirection 15
Section 3.2 Matching Contributions 16
Section 3.3 Rollover Amount From Other Plans 17
Section 3.4 Nondiscrimination Test for Salary
Redirection 18
Section 3.5 Nondiscrimination Test for Other
Contributions 20
Section 3.6 Maximum Individual Deferral 22
Section 3.7 Mistake of Fact 23
ALLOCATIONS TO INDIVIDUAL ACCOUNTS 24
Section 4.1 Individual Accounts 24
Section 4.2 Investment of Accounts 24
Section 4.3 Valuation of Accounts 25
Section 4.4 Trustee and Committee Judgment Controls 26
Section 4.5 Maximum Additions 26
Section 4.6 Corrective Adjustments 26
Section 4.7 Defined Contribution and Defined Benefit
Plan Fraction 27
DISTRIBUTIONS 29
Section 5.1 Normal Retirement 29
Section 5.2 Early Retirement 29
Section 5.3 Late Retirement 29
Section 5.4 Death 29
Section 5.5 Disability 29
Section 5.6 Termination of Employment 29
Section 5.7 Commencement of Benefits 29
Section 5.8 Minimum Distributions 30
Section 5.9 Methods of Payment 30
Section 5.10 Benefits to Minors and Incompetents 32
Section 5.11 Unclaimed Benefits 32
Section 5.12 Participant Directed Rollovers 33
WITHDRAWALS AND LOANS 34
Section 6.1 Hardship Withdrawal 34
Section 6.2 Participant Loans 35
EMPLOYEE STOCK OWNERSHIP PLAN 38
Section 7.1 Purpose and Effective Date 38
Section 7.2 Investment in Company Stock 38
Section 7.3 Prior ESOP Accounts 38
Section 7.4 General ESOP Provisions 38
Section 7.5 Put Option 39
Section 7.6 Loans 39
Section 7.7 Disposition of Dividends on Company Stock 40
Section 7.8 Voting of Stock and Other Stock Rights 41
Section 7.9 Section 16 Compliance 41
PROVISIONS RELATING TO ENERGY MARKETING EMPLOYEES 43
Section 8.1 Eligibility 43
Section 8.2 Profit Sharing Contributions 43
Section 8.3 Salary Redirection Contributions 43
Section 8.4 Matching Contributions 45
Section 8.5 Employee Voluntary Contributions 45
Section 8.6 Submission of Form 46
Section 8.7 Vesting 47
Section 8.8 Forfeitures 47
PROVISIONS RELATING TO PRIOR LPI PLAN PARTICIPANTS 49
Section 9.1 Prior LPI Plan Balances 49
Section 9.2 Service 49
Section 9.3 Vesting 49
Section 9.4 Forfeitures 49
PROVISIONS RELATING TO PRIOR LNI PLAN PARTICIPANTS 51
Section 10.1 Prior LNI Plan Balances 51
Section 10.2 Service 51
Section 10.3 Vesting 51
Section 10.4 Forfeitures 51
Section 10.5 Distributions 52
FUNDING 54
Section 11.1 Contributions 54
Section 11.2 Trustee 54
FIDUCIARIES 55
Section 12.1 General 55
Section 12.2 Employer 55
Section 12.3 Trustee 55
Section 12.4 401(k) Savings Committee 56
Section 12.5 Claims Procedures 57
Section 12.6 Records 58
AMENDMENT AND TERMINATION OF THE PLAN 59
Section 13.1 Amendment of the Plan 59
Section 13.2 Termination of the Plan 59
Section 13.3 Return of Contributions 59
MISCELLANEOUS 61
Section 14.1 Governing Law 61
Section 14.2 Construction 61
Section 14.3 Administration Expenses 61
Section 14.4 Participant's Rights 61
Section 14.5 Spendthrift Clause 61
Section 14.6 Merger, Consolidation or Transfer 62
Section 14.7 Counterparts 62
TOP HEAVY PLAN PROVISIONS 63
Section 15.1 General 63
Section 15.2 Minimum Contribution 63
Section 15.3 Super Top Heavy Plans 63
PROVISIONS CONCERNING CERTAIN CHANGES IN EMPLOYMENT 64
Section 16.1 Transfer to Non-Participating Employer 64
Section 16.2 Transfer to Another Participating Employer 64
Section 16.3 Transfer From Non-Participating Employer 64
Section 16.4 Change in Employment Classification 64
APPENDIX A 66
APPENDIX B 67
INTRODUCTION
Effective April 1, 1987, the Board of Directors of Louisville Gas
and Electric Company ("Sponsoring Employer") adopted the
Louisville Gas and Electric Company Thrift Savings Plan
("Original Plan").
Effective January 1, 1992, the Employer amended and restated the
Original Plan in its entirety as the Louisville Gas and Electric
Company 401(k) Savings Plan (Plan). The Plan has subsequently
been amended substantively, technically and administratively.
Effective January 1, 1995 the name of the Plan was changed to
LG&E Energy Corp. and Louisville Gas and Electric Company 401(k)
Savings Plan, the terms which are hereinafter set forth.
Effective January 1, 1998 the name of the Plan is being changed
to the LG&E Energy Corp., Savings Plan. Effective the same day,
the Louisville Gas and Electric Company Employees' Stock
Ownership Plan participant balances were merged into the Plan.
Also effective January 1, 1998, the LG&E Natural Inc. Employee
401(k) Savings Plan ("Prior LNI Plan") and the LG&E Power Systems
Inc. Revised 401(k) Savings Plan ("Prior LPI Plan") were merged
into the Plan.
It is intended that this Plan, together with the Trust Agreement,
meet all the requirements of the Internal Revenue Code of 1986,
as amended (the "Code") and the Employee Retirement Income
Security Act of 1974 as amended ("ERISA") and shall be
interpreted, wherever possible, to comply with the terms of the
said laws, as amended, and all formal regulations and rulings
issued thereunder. It is also intended that this Plan shall be a
profit sharing plan under Code Section 401(a).
ARTICLE 1
DEFINITIONS
Section 1.1 Adjustment means the net increases and decreases in
the market value of the Trust Fund during a Plan Year or other
period exclusive of any contribution or distribution during such
year or other period. Such increases and decreases shall include
such items as realized or unrealized investment gains and losses
and investment income, and may include expenses of administering
the Trust Fund and the Plan.
Section 1.2 Annual Additions means for any Employee in any
Limitation Year, the sum of Employer Contributions, Salary
Redirection, and forfeitures allocated to the Employee's
Individual Account. Amounts allocated to an individual medical
account, as defined in Section 415(l) of the Code, which is part
of an annuity or pension plan maintained by the Employer are
treated as Annual Additions to a Defined Contribution Plan.
Also, amounts derived from contributions paid or accrued which
are attributable to post-retirement medical benefits allocated to
the separate account of a Key Employee as required by Section
419A(d) of the Code, maintained by the Employer, are treated as
Annual Additions to a Defined Contribution Plan.
Section 1.3 Annuity Starting Date means the first day of the
first period for which an amount is paid as an annuity or the
first day on which all events have occurred which entitle the
Participant to such benefit.
Section 1.4 Beneficiary means any person designated by a
Participant to receive such benefits as may become payable
hereunder after the death of such Participant, provided, however,
that a married Participant may not name as his Beneficiary
someone other than his spouse unless the spouse consents in
writing to such designation, which consent shall be acknowledged
by a Plan representative or by a notary public.
Section 1.5 Board means the Board of Directors of the Employer.
Section 1.6 Break in Service means a twelve (12) consecutive
month period beginning on the Employee's Severance From Service
Date and each anniversary thereof during which an Employee fails
to perform at least one (1) Hour of Service for the Employer.
Section 1.7 Code means the Internal Revenue Code of 1986 as
amended and revised.
Section 1.8 Committee means the Benefits Committee provided for
in Article 12 hereof.
Section 1.9 Company means LG&E Energy Corp. and all of the legal
entities which are part of a controlled group or affiliated
service group with LG&E Energy Corp. pursuant to the provisions
of Code Sections 414(b), (c), (m), or (o).
Section 1.10 Company Stock means the common stock issued by the
Company having a combination of voting power and dividend rates
equal to or in excess of: (a) that class of common stock of the
Company having the greatest voting power, and (b) that class of
common stock of the Company having the greatest dividend rights.
Section 1.11 Compensation means, for any Plan Year, base
compensation paid to an Employee by an Employer, increased by (i)
amounts deferred pursuant to Code Section 125 (flexible benefit
plans), Section 402(g) (salary redirection), and Section
402(h)(1)(B) (simplified employee plans), (ii) team incentive
awards, (iii) amounts deferred under the Louisville Gas and
Electric Company Nonqualified Savings Plan, (iv) cost-of-living
adjustments, and (v) commissions, and excluding any long term
incentive compensation paid by an Employer. Effective January 1,
1995, Compensation shall also include overtime compensation paid
to a Participant. In the Plan Year in which an Employee becomes
a Participant, only remuneration paid in the portion of the Plan
Year in which he was a Participant shall be considered
Compensation. Effective for Plan Years beginning on or after
January 1, 1989, and prior to January 1, 1994, Compensation shall
be limited to two hundred thousand dollars ($200,000) or such
larger amount as determined pursuant to Code Section 401(a)(17).
Effective for Plan Years beginning on and after January 1, 1994,
Compensation shall be limited to one hundred fifty thousand
dollars ($150,000) or such other amount as may be authorized
pursuant to Code Section 401(a)(17).
Section 1.12 Defined Benefit Plan means a plan established and
qualified under Section 401 of the Code, except to the extent it
is, or is treated as, a Defined Contribution Plan.
Section 1.13 Defined Contribution Plan means a plan which is
established and qualified under Section 401 of the Code, which
provides for an individual account for each participant therein
and for benefits based solely on the amount contributed to each
participant's account and any income, expenses, gains or losses
(both realized and unrealized) which may be allocated to such
account.
Section 1.14 Dividend Eligible Participant means a Participant
who will reach the maximum individual deferral amount as
described in Section 3.6 or a Participant who has not reached the
maximum Compensation amount described in Section 1.11 herein, and
all Alternate Payees and Former Participants.
Section 1.15 Early Retirement Date means the first day of the
month on or following the earlier of (i) the date the Participant
attains age fifty-five (55), or (ii) the date the Participant is
credited with thirty-five (35) years of vesting service under the
LG&E Energy Corp. and Louisville Gas and Electric Company
Retirement Income Plan.
Section 1.16 Effective Date means April 1, 1987, the effective
date of the Prior Plan. The effective date of this amended and
restated Plan is January 1, 1998.
Section 1.17 Employee means any person employed by the Employer,
subject to the following:
(1) The term "Employee" shall exclude any person who is a Leased
Employee.
(2) The term "Employee" shall exclude any employee who is a part
of a collective bargaining unit for which benefits have been the
subject of good faith negotiation unless and until the Employer
and the collective bargaining unit representative for that unit
through the process of good faith bargaining agree in writing for
coverage hereunder.
Section 1.18 Employee Voluntary Contributions means all amounts
contributed by Participants on an after-tax basis.
Section 1.19 Employee Voluntary Contributions Account means that
portion of a Participant's Individual Account attributable to (i)
Employee Voluntary Contributions allocated to such Participant
pursuant to Section 8.4, Article 9, and Article 10, and (ii) the
Participant's proportional share, attributable to his Employee
Voluntary Contributions Account, or the adjustments required by
Article 4, Article 5 and Article 6.
Section 1.20 Employer means LG&E Energy Corp. and each of the
legal entities, or any successor thereto which is part of the
Company and which has adopted the Plan for its eligible Employees
with the consent of the Sponsoring Employer.
Section 1.21 Employer Contributions means Matching Contributions
made to the Trust Fund by the Employer. Salary Redirection shall
not be included in the term Employer Contributions when used in
this Plan.
Section 1.22 Employment Commencement Date means the date on
which an Employee first performs an Hour of Service for the
Employer. If an Employee is reemployed by the Employer after he
incurs one or more Breaks in Service, the Employment Commencement
Date means the first day after his immediately preceding
Severance from Service Date on which he first performs an Hour of
Service for the Employer.
Section 1.23 Entry Date means the first day of each calendar
month during each Plan Year.
Section 1.24 ESOP means the Employee Stock Ownership Plan
established pursuant to Article 7 of the Plan.
Section 1.25 ESOP Dividends means those amounts distributed
during the Plan Year to a Participant as dividends on stock
allocated to such Participant's account under the Louisville Gas
& Electric Company Employees' Stock Ownership Plan, or effective
January 1, 1998, pursuant to Article 7 of the Plan.
Section 1.26 Fiduciary means the Employer, the Trustee, the
Committee and any individual, corporation, firm or other entity
which assumes, in accordance with Article 12, responsibilities of
the Employer, the Trustee or the Committee with respect to
management of the Plan or the disposition of its assets.
Section 1.27 Former Participant means a Participant, other than
a Limited Participant, whose participation in the Plan has
terminated but who has not received payment in full of the
balance in his Individual Account to which he is entitled.
Section 1.28 Highly Compensated Employees will be determined in
accordance with the following:
(a) Highly Compensated Employee means an employee who during the
look back year or the determination year:
(1) Was at any time a five percent (5%) owner of the Employer;
(2) Received compensation from the Company in excess of seventy-
five thousand dollars ($75,000) (or such higher amount as may be
provided under Code Section 414(q));
(3) Received compensation from the Company in excess of fifty
thousand dollars ($50,000) (or such higher amount as may be
provided under Code Section 414(q)) and was in a group consisting
of the top twenty percent (20%) of the employees of the Company
when ranked on the basis of compensation; or
(4) Was at any time an officer and received compensation greater
than fifty percent (50%) of the maximum amount under Code Section
415(b)(1)(A). Not more than fifty (50) officers (or, if lesser,
the greater of three (3) employees or ten percent (10%) of the
employees) shall be considered under this Subsection as Highly
Compensated Employees. If no officer is described above, then
the highest paid officer shall be treated as described in this
item (4).
(b) If the employee was not a Highly Compensated Employee for
the look back year, then he shall not be considered a Highly
Compensated Employee for the determination year unless he is a
five percent (5%) owner of the Employer or one of the highest
paid one hundred (100) employees and meets the criteria of items
(2), (3) or (4) of Subsection (a) of this Section.
(c) If the Highly Compensated Employee is a five percent (5%)
owner or one of the ten (10) most highly compensated employees,
then the compensation and contributions of employees who are
spouses, lineal descendants, ascendants or spouses of lineal
descendants or ascendants of such Highly Compensated Employees
shall be attributed to the Highly Compensated Employee and the
employees who are such relatives shall not be considered as
separate employees. In the event that family aggregation is
required, the limitation on compensation pursuant to Code Section
401(a)(17) will be allocated among those family members who have
not attained age nineteen (19) by the close of the Plan Year by
multiplying the limitation by a fraction, the numerator of which
is the individual family member's compensation and the
denominator of which is the total compensation of all members of
the family group or in such other manner as provided by
regulation and pronouncements of the Internal Revenue Service.
(d) For purposes of determining Highly Compensated Employees,
compensation shall mean compensation paid by the Company for
purposes of Code Section 415(c)(3) and shall include amounts
deferred pursuant to Code Sections 125 (flexible benefit plans);
402(a)(8) (salary redirection); and 402(h)(1)(B) (simplified
employee plans).
(e) For purposes of determining the top twenty percent (20%) of
employees and the number of officers counted as Highly
Compensated Employees, the following employees shall be excluded:
(1) Employees who have not completed six (6) months of service,
(2) Employees who normally work less than seventeen and one-half
(17-1/2) hours per week,
(3) Employees who normally work during not more than six (6)
months during the Plan Year,
(4) Employees who have not attained age twenty-one (21),
(5) Employees included in a collective bargaining unit covered
by an agreement with the Company (to the extent permitted by
regulations), and
(6) Employees who are non-resident aliens.
(f) A former employee shall be treated as a Highly Compensated
Employee if (1) such employee was a Highly Compensated Employee
when such employee separated from Service, or (2), such employee
was a Highly Compensated Employee at any time after attainment of
age fifty-five (55).
(g) Except as otherwise provided in this Section, the term "look
back year" shall mean the twelve (12) month period immediately
preceding the determination year.
(h) Except as otherwise provided in this Section the term
"determination year" shall mean the current Plan Year.
(i) To the extent permitted by regulations under Code Section
414(q), the Employer may elect to make the look back year
calculation on the basis of the calendar year ending with or
within the applicable determination year (or, in the case of a
determination year that is shorter than twelve (12) months, the
calendar year ending with or within the twelve (12) month period
ending with the end of the determination year). In such case,
the Employer must make the determination year calculation on the
basis of the period (if any) by which the applicable
determination year extends beyond such calendar year. If the
Employer makes the election provided for in this Subsection, such
election must be made with respect to all plans, entities and
arrangements of the Employer.
(j) The determination of Highly Compensated Employees shall be
determined on a Company wide basis and shall not be determined on
an Employer by Employer or plan by plan basis.
(k) If the Employer so elects for a year, item (2) of Subsection
(a) of this Section shall be applied by substituting fifty
thousand dollars ($50,000) in place of seventy-five thousand
dollars ($75,000), and item (3) of Subsection (a) of this Section
shall not apply, provided that:
(1) At all times during such year, the Employer maintained
substantial business activities and employed employees in at
least two (2) significantly separate geographic areas, and
(2) The Employer satisfies such other conditions as may be
prescribed by the Secretary of the Treasury.
(l) The determination of Highly Compensated Employees shall be
governed by Code Section 414(q) and the regulations issued
thereunder.
Section 1.29 Individual Account means the detailed record kept
of the amounts credited or charged to each Participant in
accordance with the terms hereof. Such Individual Account is
comprised of the following accounts: a Salary Redirection
Account, a Matching Contribution Account, a Rollover Contribution
Account, and effective January 1, 1998, the Prior ESOP account,
Voluntary Employee Contribution Account, the Prior LPI Plan
account, and the Prior LNI Plan account.
Section 1.30 Investment Fund means the investment fund
established pursuant to Section 4.2.
Section 1.31 Investment Manager means a Fiduciary (other than
the Trustee or other named Fiduciary) as defined in Section 3(38)
of the Employee Retirement Income Security Act of 1974 who is
appointed by the Sponsoring Employer pursuant to Section 12.3.
Section 1.32 Key Employee shall mean any employee, former
employee or beneficiary thereof in an Internal Revenue Service
qualified plan adopted by the Company who at any time during the
Plan Year or any of the four (4) preceding Plan Years is
(a) An officer of the Company having an annual compensation from
the Company during the Plan Year greater than fifty percent (50%)
of the amount in effect under Code Section 415(b)(1)(A) for the
calendar year in which such Plan Year ends;
(b) One (1) of the ten (10) employees having an annual
compensation from the Company for a Plan Year of more than the
limitation in effect under Code Section 415(c)(1)(A) for the
calendar year in which such Plan Year ends and owning (or
considered as owning within the meaning of Code Section 318) both
more than a one-half percent (1/2%) interest, and the largest
interest in the Employer;
(c) A five percent (5%) owner of the Employer; or
(d) A one percent (1%) owner of the Employer having an annual
compensation from the Company for a Plan Year of more than one
hundred fifty thousand dollars ($150,000).
(e) For purposes of this Section, compensation means
compensation as defined in Code Section 415.
(f) This definition shall be interpreted consistent with Code
Section 416 and rules and regulations issued thereunder.
Further, such law and regulations shall be controlling in all
determinations under this definition, inclusive of any provisions
and requirements stated thereunder but hereinabove absent.
Section 1.33 LG&E Energy Corp. Common Stock Fund means the fund
invested primarily in shares of common stock of LG&E Energy Corp.
Section 1.34 Leased Employee shall mean any person (other than
an employee of the recipient) who provides services to the
recipient if such services are provided pursuant to an agreement
between the recipient and any other person ("leasing
organization"), such person has performed such services for the
recipient (or for the recipient and any related persons
determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of one (1) year, and
such services are of a type historically performed by employees
in the business field of the recipient employer.
Section 1.35 Limitation Year means the twelve (12) month period
beginning on January 1 and ending on December 31.
Section 1.36 Mandatory Employer Contribution means the portion
of the Prior LPI Plan or Prior LNI Plan account attributable to
profit sharing contributions.
Section 1.37 Matching Contribution Account means that portion of
a Participant's Individual Account attributable to (i) Matching
Contributions allocated to such Participant pursuant to Section
3.2 and 8.4 and (ii) the Participant's proportionate share,
attributable to his Matching Contribution Account, of the
Adjustments, reduced by any distributions from such Account
pursuant to Article 5 and any withdrawals from such Account
pursuant to Article 6. Effective January 1, 1998, (i) the
portion of a Participant's Individual Account attributable to
matching contributions allocated to such Participant pursuant to
the Prior LPI Plan and the Prior LNI Plan and (ii) the
Participant's proportionate share, attributable to his matching
contribution, of the Adjustments, reduced by any distributions
from such Account pursuant to Article 5 and any withdrawals from
such Account pursuant to Article 6.
Section 1.38 Matching Contributions means contributions made to
the Trust Fund by the Employer pursuant to Section 3.2 and
Section 8.4.
Section 1.39 Normal Retirement Date means the first day of the
month coincident with or next following the Participant's
sixty-fifth (65th) birthday. The Normal Retirement Age shall be
age sixty-five (65).
Section 1.40 Participant means any Employee who becomes a
Participant as provided in Article 2 hereof.
Section 1.41 Participating Employer means an Employer who has
adopted the Plan and has been approved by the Board.
Section 1.42 Paying Agent means the payroll department of the
Company or a Participating Employer, acting as agent for a
Participant, or the trustees of the Louisville Gas & Electric
Company Employees' Stock Ownership Plan and Trust, or effective
January 1, 1998, the Trustee of the Plan.
Section 1.43 Permissive Aggregation Group means the Required
Aggregation Group and each other plan or plans of the Company
that are not required to be included in the Required Aggregation
Group, and which, if treated as being part of such group, would
not cause such group to fail to meet the requirements of Code
Section 401(a) and 410.
Section 1.44 Plan means, effective January 1, 1998, the LG&E
Energy Corp. Savings Plan.
Section 1.45 Plan Year means the twelve (12) month period
beginning on January 1 and ending on December 31.
Section 1.46 Prior LPI Plan means the LG&E Power Systems Inc.
Revised 401(k) Savings Plan, which was merged into the Plan
effective January 1, 1998.
Section 1.47 Prior LNI Plan means the LG&E Natural Inc. Employee
401(k) Savings Plan, which was merged into the Plan effective
January 1, 1998.
Section 1.48 Prior Plan means the Louisville Gas and Electric
Company Thrift Savings Plan as amended through December 31, 1993,
and effective January 1, 1995 the LG&E Energy Corp. and
Louisville Gas & Electric Company 401(k) Savings Plan.
Section 1.49 Profit Sharing Account means the portion of the
Individual Account established to hold Profit Sharing
Contributions.
Section 1.50 Profit Sharing Contributions means Employer
contributions made pursuant to Article 8 of the Plan effective
for the 1998 Plan Year.
Section 1.51 Qualified Joint and Survivor Annuity means an
immediate annuity for the life of the Participant with a survivor
annuity for the life of the Participant's spouse which is fifty
percent (50%) of the amount of the annuity payable during the
joint lives of the Participant and his spouse and which is the
amount of benefit which can be purchased as of the Annuity
Starting Date with the Participant's Vested Individual Account.
A Qualified Joint and Survivor Annuity for a Participant who is
not married is an annuity for the life of the Participant. Any
annuity contract distributed must be nontransferable.
Section 1.52 Qualified Preretirement Survivor Annuity means an
annuity for the life of a Participant's surviving spouse, which
is equal to fifty percent (50%) of the amount of benefit which
can be purchased as of the Annuity Starting Date with the
Participant's Vested Individual Account. Any security interest
held by the Plan by reason of a loan outstanding to a Participant
shall be taken into account in determining the amount of the
Qualified Preretirement Survivor Annuity. Any annuity contract
distributed from the Plan must be nontransferable.
Section 1.53 Required Aggregation Group means
(a) Each plan of the Company in which a Key Employee is a
participant; and
(b) Each other plan of the Company which enables any plan in (a)
to meet the requirements of Code Section 401(a)(4) or 410; and
(c) Each terminated plan maintained by the Company within the
last five (5) years ending on the determination date for the Plan
Year in question and which, but for the fact that it terminated,
would be part of a Required Aggregation Group for such Plan Year.
Section 1.54 Rollover Contribution means contributions made to
the Trust Fund by an Employee pursuant to Section 3.3.
Section 1.55 Rollover Contribution Account means that portion of
an Employee's Individual Account attributable to (i) Rollover
Contributions pursuant to Section 3.3 and (ii) the Participant's
proportionate share, attributable to his Rollover Contribution
Account, of the Adjustments, reduced by any distributions from
such Account pursuant to Article 5 and any withdrawals from such
account pursuant to Article 6.
Section 1.56 Salary Redirection means contributions made to the
Trust Fund by the Employer pursuant to Section 3.1 and Section
8.3.
Section 1.57 Salary Redirection Account means that portion of a
Participant's Individual Account attributable to (i) Salary
Redirection amounts made on his behalf pursuant to Section 3.3
and Section 8.3 and (ii) the Participant's proportionate share,
attributable to his Salary Redirection Account, of the
Adjustments, reduced by any distributions from such Account
pursuant to Article 5 and any withdrawals from such Account
pursuant to Article 6.
Section 1.58 Severance From Service Date means the date on which
an Employee quits, retires, is discharged, fails to return from a
leave of absence, or dies; provided he is not credited with an
Hour of Service within twelve (12) months of such date.
Section 1.59 Sponsoring Employer means LG&E Energy Corp.
Section 1.60 Top Heavy Plan means any plan under which, as of
any determination date (the last day of the preceding Plan Year),
the present value of the cumulative accrued benefits under the
plan for Key Employees exceeds sixty percent (60%) of the present
value of cumulative accrued benefits under the Plan for all
Employees. For purposes of this definition the following
provisions shall apply:
(a) If such plan is a Defined Contribution Plan, the present
value of cumulative accrued benefits shall be deemed to be the
market value of all employee accounts under the Plan, other than
voluntary deductible employee contributions. If such plan is a
Defined Benefit Plan, the present value of cumulative accrued
benefits shall be the present value determined pursuant to
actuarial assumptions adopted by the Company for purposes of
determining whether the plan is a Top Heavy Plan and the accrued
benefit of any employee other than a Key Employee shall be
determined under the method which is used for accrual purposes
for all plans of the Company or, if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional accrual rule of Code Section
411(b)(1)(C). Moreover, the present value of the cumulative
accrued benefits shall be increased by the amount of all plan
distributions made with respect to an employee during the five
(5) year period ending on the determination date, including
distributions made under a terminated plan that is part of a
Required Aggregation Group.
(b) A plan shall be considered to be a Top Heavy Plan for any
Plan Year if, on the last day of the preceding Plan Year, the
above rules were met. For the first Plan Year that the Plan
shall be in effect, the determination of whether the Plan is a
Top Heavy Plan shall be made as of the last day of such Plan
Year.
(c) Each plan of the Company required to be included in a
Required Aggregation Group shall be treated as a Top Heavy Plan
if such group is a top heavy group.
(d) With regard to a Participant or former Participant who (i)
has not performed any service for the Employer at any time during
the five (5) year period ending on the determination date, or
(ii) was formerly a Key Employee, but who is not a Key Employee
on the determination date, the present value of the cumulative
accrued benefit for such Participant or former Participant shall
not be taken into account for the purposes of determining whether
this Plan is a Top Heavy Plan.
(e) This definition shall be interpreted consistent with Code
Section 416 and rules and regulations issued thereunder.
Further, such law and regulation shall be controlling in all
determinations under this definition inclusive of any provisions
and requirements stated thereunder but hereinabove absent.
Section 1.61 Total and Permanent Disability or Totally and
Permanently Disabled means a physical or mental condition for
which the Participant is under the care of a licensed physician
and which, in the opinion of the Committee, results in the
Participant being unable to perform the material duties of his or
her regular occupation.
Section 1.62 Trust Agreement means the agreement entered into
between the Sponsoring Employer and the Trustee pursuant to
Article 11 hereof.
Section 1.63 Trust Fund means the trust fund created in
accordance with Article 11 hereof.
Section 1.64 Trustee means such individual or corporation as
shall be designated in the Trust Agreement to hold in trust any
assets of the Plan for the purpose of providing benefits under
the Plan, and shall include any successor trustee designated
thereunder.
Section 1.65 Valuation Date means the date the Investment
Manager values the assets of the Investment Fund. The Valuation
Date will occur at least once a year.
Section 1.66 Vested Individual Account means the aggregate value
of the Participant's Employee contributions, Rollover
Contributions, Prior ESOP Account, the nonforfeitable balance of
the Employer Contributions based on Years of Service.
Section 1.67 Year of Service means a period of three hundred
sixty-five (365) days of Service.
ARTICLE 2
PARTICIPATION
Section 2.1 Eligibility Requirements
Each Employee shall be eligible to participate as of the Entry
Date coincident with or next following the completion of six (6)
months, three (3) months effective January 1, 1998, of employment
in the twelve (12) month period commencing on the date he first
performs an Hour of Service as defined in Department of Labor
regulation Section 2530.200b-2, or in any calendar year.
Notwithstanding the preceding, if an Employee was first employed
by the Company on or after January 1, 1991, and prior to October
1, 1991, said Employee shall be eligible to participate in the
Plan on January 1, 1992.
Section 2.2 Plan Binding
Upon becoming a Participant, a Participant shall be bound then
and thereafter by the terms of this Plan and the Trust Agreement,
including all amendments to the Plan and the Trust Agreement made
in the manner herein authorized.
Section 2.3 Reemployment
(a) Termination of employment shall be deemed to occur when an
Employee has an interruption in continuity of his employment by
the Company. Such termination may have resulted from retirement,
death, voluntary or involuntary termination of employment,
unauthorized absence, or by failure to return to active
employment with the Company or to retire by the date on which an
authorized leave of absence expired.
(b) If an Employee who was not eligible to become a Participant
in the Plan during his prior period of employment is reemployed,
he shall be eligible to participate in the Plan after he has met
the requirements of Section 2.1.
(c) If an Employee who was a Participant in the Plan during his
prior period of employment is reemployed, he shall be eligible to
again become a Participant as of the date he again becomes an
Employee.
(d) If a person employed by the Employer becomes an Employee as
defined under this Plan, he shall be eligible to participate in
the Plan as of the date of his change in status, provided he has
met the requirements of Section 2.1. If person employed by the
Employer ceases to be an Employee as defined under the Plan he
will cease to be an active Participant effective as of the first
payroll coincident with or next following his change in status.
Section 2.4 Beneficiary Designation
Upon commencing participation, each Participant shall designate a
Beneficiary on forms furnished by the Committee. Such
Participant may then from time to time change his Beneficiary
designation by written notice to the Committee and, upon such
change, the rights of all previously designated Beneficiaries to
receive any benefits under this Plan shall cease. A married
Participant may not name as his Beneficiary someone other than
his spouse unless the spouse consents in writing to such
designation, which consent shall be acknowledged by a Plan
representative or by a notary public. If the Beneficiary
designation consented to by the spouse is not limited to a
specific Beneficiary ("general consent"), the consent must
acknowledge that the spouse has a right to limit consent to a
specific Beneficiary. The consent of the spouse must be obtained
each time the Beneficiary is changed, unless a general consent is
given. If, at the time of a Participant's death while benefits
are still outstanding, his named Beneficiary does not survive
him, the benefits shall be paid to his named contingent
Beneficiary. If a deceased Participant is not survived by either
a named Beneficiary or contingent Beneficiary (or if no
Beneficiary was effectively named), the benefits shall be paid in
a single sum to the person or persons in the first of the
following classes of successive preference beneficiaries then
surviving: the Participant's (i) surviving spouse, (ii)
children, (iii) parents, (iv) brothers and sisters, (v) executors
and administrators. If the Beneficiary or contingent Beneficiary
is living at the death of the Participant, but such person dies
prior to receiving the entire death benefit, the remaining
portion of such death benefits shall be paid in a single sum to
the estate of such deceased Beneficiary or contingent
Beneficiary.
Section 2.5 Notification of Individual Account Balance
At least once each Plan Year or more frequently as determined by
the Committee, the Committee shall notify each Participant of the
amount of his share in the Adjustments and Contributions for the
period just completed, and the new balance of his Individual
Account.
ARTICLE 3
CONTRIBUTIONS
Section 3.1 Salary Redirection
Each Employee employed by an Employer listed on Appendix A who
satisfies the requirements of Section 2.1 may elect to have
Salary Redirection made on his behalf, commencing on the date
specified in Section 2.1. Such election shall be made by
entering into a Salary Redirection agreement with the Employer in
which it is agreed that the Employer will redirect a portion of
the Participant's Compensation and contribute that designated
amount to the Trust Fund on behalf of the Participant in
accordance with the following.
(a) Salary Redirection Agreement. Each eligible Employee may
enter into a Salary Redirection agreement under which the
Employee's Employer will redirect a portion of the Participant's
Compensation during each payroll period in an amount equal to an
integral percentage from one percent (1%) to sixteen percent
(16%) of such Compensation and contribute such percentage to the
Trust Fund on behalf of the Participant.
(b) Submission of Form. In order for Salary Redirection to
commence on the appropriate date (the beginning of a payroll
period), the Salary Redirection agreement must be received by the
Committee at least fifteen (15) days prior to the date Salary
Redirection is to start. Notwithstanding the above, a terminated
Participant who is reemployed and is eligible to participate upon
reemployment may enter into a Salary Redirection Agreement on his
reemployment date to be applicable to Compensation earned on and
after such date. In the event a Participant does not so elect
when initially eligible, he may subsequently elect to have Salary
Redirection made on his behalf commencing with the first day of
any payroll period which is at least fifteen (15) days after the
date his election form is delivered to the Committee. The Salary
Redirection agreement shall be on a form provided by the
Committee. Such agreement shall authorize the Employer to reduce
Compensation otherwise payable to the Participant during each pay
period by the amount of Salary Redirection elected.
(c) Change in Redirected Amounts. A Participant electing to
have Salary Redirection made on his behalf to the Plan pursuant
to this Section, may, on a Salary Redirection agreement provided
by and submitted to the Committee, increase or decrease his
Salary Redirection amount (within the appropriate minimum and
maximum) as of the first day of any payroll period which is at
least fifteen (15) days after the date his election form is
received by the Committee, but not retroactively. The Salary
Redirection agreement shall state the amount of Salary
Redirection he desires to have made.
(d) Cessation of Redirection. Any Participant may elect to
cease future Salary Redirection to the Plan effective with the
first regular payroll period that it is administratively possible
to do so following notification. In the event any such
Participant desires thereafter to recommence having Salary
Redirection made on his behalf, he shall be allowed to do so
effective with the first day of any payroll period which is at
least fifteen (15) days after receipt of written notice by the
Committee on the appropriate form stating the amount of Salary
Redirection he desires to have made.
(e) Notice Requirements. Any of the notice requirements in this
Section may be lengthened or shortened by the Committee if it
finds it administratively necessary or feasible to do so, with
such discretion being exercised in a nondiscriminatory manner.
(f) Payment to Trustee. The Employer shall pay to the Trustee
any Salary Redirection made on behalf of any Participant within a
reasonable time following the end of each regular pay period, but
no later than ninety (90) days beginning on the date on which
such Salary Redirection would otherwise be paid to the
Participant in cash. Effective February 3, 1997, the Employer
shall pay to the Trustee any Salary Redirection made on behalf of
any Participant as of the earliest date on which such Salary
Redirection can reasonably be segregated from the Employer's
general assets, but no later than the fifteenth (15th) business
day of the month following the month in which the Salary
Redirection is received by the Employer or the fifteenth (15th)
business day of the month following the month in which the Salary
Redirection would otherwise have been payable to the Participant
in cash.
(g) Amounts of ESOP Dividends Deemed Deferred. Effective
January 1, 1996, a Participant will be deemed to have elected to
have a Salary Redirection made on his behalf in the amount of the
ESOP Dividends paid to him in cash, subject to the limits of
Sections 401(k), 402(g) and 415 of the Code and the regulations
thereunder, unless the Participant elects otherwise by making the
appropriate election with the Committee in the manner prescribed
by the Committee. Effective January 1, 1998, a Participant will
be deemed to have elected to have a Salary Redirection made on
his behalf in the amount of the ESOP Dividends paid to him in
cash, subject to the limits of Sections 401(k), 402(g) and 415 of
the Code and the regulations thereunder Deemed deferrals made
pursuant to this Subsection 3.1(g), shall not be taken into
account in the calculation of the percentage of salary redirected
pursuant to Subsection 3.1(a).
Section 3.2 Matching Contributions
For each Accounting Year in which the Employer listed on Appendix
A has net profits or accumulated net profits, as determined under
generally accepted accounting principles, said Employer shall
make an Employer Matching Contribution from such net profits or
accumulated net profits to the Trust Fund on behalf of eligible
Participants. The Matching Contribution will be an amount
necessary to match thirty-three percent (33%), fifty percent
(50%) effective January 1, 1998, of said eligible Participants'
net eligible Salary Redirection made to the Trust Fund for the
Plan Year. Net eligible Salary Redirection means Salary
Redirection not to exceed six percent (6%) percent of
Compensation during the Plan Year, which Salary Redirection has
not been withdrawn. For purposes of calculating net eligible
Salary Redirection, withdrawals shall be deemed to have been made
from the earliest Salary Redirection not yet withdrawn. Any
Matching Contribution which is made as of a Valuation Date shall
be allocated to the Matching Contribution Account of each
eligible Participant. For purposes of this Section, an eligible
Participant shall mean a Participant who has made Salary
Redirection contributions during the Plan Year and is being
employed by an Employer listed on Appendix A.
Section 3.3 Rollover Amount From Other Plans
An Employee eligible to participate in the Plan, regardless of
whether he has satisfied the participation requirements of
Section 2.1, may transfer to the Trust Fund an "eligible rollover
distribution," defined in Code Section 402(c)(4), provided that
such distribution is from a plan that meets the requirements of
Code Section 401(a).
(a) The procedures approved by the Committee shall provide that
such a transfer may be made only if the following conditions are
satisfied:
(1) The transfer occurs on or before the sixtieth (60th) day
following the distribution from the other plan;
(2) The amount transferred is equal to any portion of the
distribution made from the other plan, subject to the maximum
rollover provision of Section 402 of the Code; and
(3) Any contribution rolled over pursuant to this provision is
entirely in cash.
(b) Notwithstanding the foregoing, if an Employee had deposited
a distribution previously received from another qualified plan
into an individual retirement arrangement, as defined in Code
Section 408, he may transfer the amount of such distribution,
plus earnings thereon, to this plan; provided such rollover
amount is deposited with the Trustee on or before the sixtieth
(60th) day following the Employee's receipt thereof from the
individual retirement arrangement.
(c) The Committee shall develop such procedure, and may require
such information from an Employee desiring to make such a
rollover or transfer, as it deems necessary or desirable to
determine that the rollover or transfer will meet the
requirements of this Section. Upon approval by the Committee,
the amount rolled over or transferred shall be deposited in the
Trust Fund and shall be credited to a Rollover Account. The value
of such Account shall be one hundred percent (100%) vested in the
Employee and shall share in income allocations in accordance with
Section 4.3. Upon the employee's termination of employment with
the Company, the total amount of the Rollover Account shall be
distributed in accordance with Article 5.
(d) Upon such a rollover or transfer by an Employee who is
otherwise eligible to participate in the Plan but who has not yet
completed the participation requirements of Section 2.1, his
Rollover Account shall represent his sole interest in the Plan
until he becomes a Participant.
Section 3.4 Nondiscrimination Test for Salary Redirection
(a) Periodically as determined by the Employer, the Employer
shall check the actual deferral percentages against the tests
identified below. In the event that neither test is met, the
Employer shall reduce the Salary Redirection percentages of
Highly Compensated Employees that are above the maximum deferral
percentage allowed under the tests; provided that the initial
reductions shall be in unmatched Salary Redirection, and only if
such redirections are not sufficient shall matched Salary
Redirection be reduced. Beginning with the highest such
percentage, each contribution percentage shall be reduced to the
next highest percentage, and so forth, until the excess is
eliminated. If it is necessary to reduce the matched Salary
Redirection, the Participant shall nevertheless receive from the
Plan a distribution equal to the Employer Matching Contribution
plus any income thereon that would have been allocated to him had
such reduction in contribution not been necessary.
(b) The term "eligible Employees," for purposes of this Section,
shall mean all employees of the Employer who are eligible to make
Salary Redirection contributions during the Plan Year for which
the tests are being made.
(c) The term "actual deferral percentage," means the average of
the following percentages (calculated separately for each
eligible Employee): Salary Redirection contributions on behalf
of each eligible Employee divided by the compensation of the
eligible Employee. Matching Contributions will be included in
the numerator to the extent that those contributions are not
included for purposes of calculating the actual contribution
percentage under Section 3.5. In calculating the actual deferral
percentage of a Highly Compensated Employee who participates in
more than one cash or deferred arrangement of the Company, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
(d) The term "compensation" for purposes of this Section shall
include amounts paid by the Company to the Employee during the
period he is eligible to make Salary Redirection contributions
and which amounts are currently includable in the Employee's
gross income. For all Plan Years, the Company shall have the
right to increase the Employee's compensation, for purposes of
this Section, by the amount of an Employee's salary redirection
election under Code Section 125 (flexible benefit plans), Section
402(g) (salary redirection) and Section 402(h)(1)(B) (simplified
employee plans), or to use such alternative definition of
compensation as may be provided under Code Section 414(s).
Alternate definitions of compensation under Code Section 414(s)
include (i) compensation within the meaning of Code Section
415(c)(3) including or excluding reimbursements or other expense
allowances, fringe benefits (cash or non-cash), moving expenses,
deferred compensation and welfare benefits, and (ii) any other
definition of compensation that is reasonable, does not by design
favor Highly Compensated Employees and satisfies the
nondiscrimination requirements of Code Section 414(s) and the
regulations thereunder. Effective for Plan Years beginning on
and after January 1, 1989, and ending prior to January 1, 1994,
compensation for purposes of this Section shall be limited to two
hundred thousand dollars ($200,000) or such larger amount as
determined pursuant to Code Section 401(a)(17). Effective for
Plan Years beginning on and after January 1, 1994, compensation
for purposes of this Section shall be limited to one hundred
fifty thousand dollars ($150,000) or such other amount as
authorized pursuant to Code Section 401(a)(17).
(e) Only one (1) of the following two (2) tests need be
satisfied not to have a reduction in Salary Redirection.
Test I - The actual deferral percentage for the group of Highly
Compensated Employees is not more than the actual deferral
percentage of all other eligible Employees multiplied by one and
twenty-five hundredths (1.25).
Test II - The excess of the actual deferral percentage for the
group of Highly Compensated Employees over the actual deferral
percentage for all other eligible Employees is not more than two
(2) percentage points, and the actual deferral percentage for the
group of Highly Compensated Employees is not more than the actual
deferral percentage for all other eligible Employees multiplied
by two (2.0). Effective for Plan Years beginning after
December 31, 1988, if Test II in Subsection 3.5 (e) is used in
testing other contributions pursuant to that Section, Test II
under this Section shall be limited as provided for in Code
Section 401(m)(9) and the regulations issued by the Secretary of
the Treasury or notices issued by the Internal Revenue Service.
If a multiple use of Test II occurs, such multiple use shall be
corrected by reducing either the actual deferral percentage or
actual contribution percentage of the Highly Compensated
Employees in an amount calculated in the manner provided in
Subsection (a) of this Section or Subsection 3.5(a).
(f) If neither Test I nor Test II is satisfied for any Plan
Year, the Plan shall nevertheless be deemed to comply with the
requirements of Section 401(k)(3)(A)(ii) of the Code for such
Plan Year if, before the last day of the following Plan Year, the
amount of any excess contribution (adjusted for income or loss
for the Plan Year computed using any reasonable method that
satisfies Code Section 401(a)(4) provided it is used consistently
for all Participants and for all corrective distributions under
the Plan for the Plan Year and provided it is used by the Plan
for allocating income or loss to Participants' Individual
Accounts) is distributed to the Participant. Unless a Participant
elects otherwise in the manner prescribed by the Committee, a
Participant receiving a distribution pursuant to this Subsection
3.4(f) shall be deemed to have made a Salary Redirection
agreement of Compensation (earned in the taxable year in which
such distribution is received) of up to the amount of such
distribution, subject to the limits of Code Section 401(k),
402(g) and 415 for the Plan Year such Salary Redirections are
made. In the event any excess contributions will be distributed
to the Participant, the Administrator may pay these amounts to a
Paying Agent. Prior to January 1, 1997, in the case of family
aggregation pursuant to Subsection 1.28(c), excess contributions
under this Section shall be allocated to Participants who are
subject to the family aggregation rules of Code Section 414(q)(6)
in the manner prescribed by the regulations.
(g) This Section shall be governed by the rules of Code Section
401(k), 401(a)(4) and any rules or regulations issued pursuant
thereto, including the aggregation rules of Code Section
401(k)(3) and the regulations thereunder.
Section 3.5 Nondiscrimination Test for Other Contributions
(a) Periodically as determined by the Employer, the Employer
shall check the actual contribution percentages against the tests
identified below. In the event that neither test is met, the
Employer shall reduce the Matching Contribution percentages of
Highly Compensated Employees that are above the maximum
contribution percentage allowed under the tests. Beginning with
the highest such percentage, each contribution percentage shall
be reduced to the next highest percentage, and so forth, until
the excess is eliminated. If it is necessary to reduce the
Employer Matching Contribution the Participant shall nevertheless
receive from the Plan a distribution equal to the Employer
Matching Contribution plus any income thereon that would have
been allocated to him had such reduction in contribution not been
necessary.
(b) The term "eligible Employees," for purposes of this Section,
shall mean all employees of the Employer who are eligible to:
make Salary Redirection contributions, if the Employer elects to
take Salary Redirection into account, and receive Matching
Contributions during the Plan Year for which the tests are being
made.
(c) The term "actual contribution percentage," means the average
of the following percentages (calculated separately for each
eligible Employee): Matching Contributions (and Salary
Redirection to the extent elected by the Employer and permitted
by Regulations under Code Section 401(m)) on behalf of each
eligible Employee divided by compensation of the eligible
Employee. In calculating the actual contribution percentage of a
Highly Compensated Employee who participates in more than one
arrangement of the Company subject to Code Section 401(m), all
arrangements subject to Code Section 401(m) ending with or within
the same calendar year shall be treated as a single arrangement.
(d) The term "compensation" for purposes of this Section shall
include amounts paid by the Company to the Employee during the
period he is eligible to make Salary Redirection contributions
and which amounts are currently includable in the Employee's
gross income. For all Plan Years, the Company shall have the
right to increase the Employee's compensation, for purposes of
this Section, by the amount of an Employee's salary redirection
elections under Code Section 125 (flexible benefit plans),
Section 402(g) (salary redirection) and Section 402(h)(1)(B)
(simplified employee plans), or to use such alternative
definition of compensation as may be provided under Code Section
414(s). Alternate definitions of compensation under Code Section
414(s) include (i) compensation within the meaning of Code
Section 415(c)(3) including or excluding reimbursements or other
expense allowance, fringe benefits (cash or non-cash), moving
expenses, deferred compensation and welfare benefits, and (ii)
any other definition of compensation that is reasonable, does not
by design favor Highly Compensated Employees and satisfies the
nondiscrimination requirements of Code Section 414(s) and the
regulations thereunder. Effective for Plan Years beginning on
and after January 1, 1989, and ending prior to January 1, 1994,
compensation for purposes of this Section shall be limited to two
hundred thousand dollars ($200,000 or such larger amount as
determined pursuant to Code Section 401(a)(17). Effective for
Plan Years beginning on and after January 1, 1994, compensation
for purposes of this Section shall be limited to one hundred
fifty thousand dollars ($150,000) or such other amount as
authorized pursuant to Code Section 401(a)(17).
(e) Only one (1) of the following two (2) tests need be
satisfied not to have a reduction in contributions tested
pursuant to this Section.
Test I - The actual contribution percentage for the group of
Highly Compensated Employees is not more than the actual
contribution percentage of all other eligible Employees
multiplied by one and twenty-five hundredths (1.25).
Test II - The excess of the actual contribution percentage for
the group of Highly Compensated Employees over the actual
contribution percentage for all other eligible Employees is not
more than two (2) percentage points, and the actual contribution
percentage for the group of Highly Compensated Employees is not
more than the actual contribution percentage for all other
eligible Employees multiplied by two (2.0). Effective for Plan
Years beginning after December 31, 1988, if Test II in Subsection
3.4 (e) is used in testing salary redirection pursuant to that
Section, Test II under this Section shall be limited as provided
in Code Section 401(m)(9) and the regulations issued by the
Secretary of the Treasury or notices issued by the Internal
Revenue Service. If a multiple use of Test II occurs, such
multiple use shall be corrected by reducing either the actual
deferral percentage or actual contribution percentage of the
Highly Compensated Employees in an amount calculated in the
manner provided in Subsection (a) of this Section or Subsection
3.4(a).
(f) If neither Test I nor Test II is satisfied for any Plan
Year, the Plan shall nevertheless be deemed to comply with the
requirements of Section 401(m) of the Code for such Plan Year if,
before the last day of the following Plan Year, the amount of any
excess contribution (adjusted for income or loss for the Plan
Year computed using any reasonable method that satisfies Code
Section 401(a)(4) provided it is used consistently for all
Participants and for all corrective distributions under the Plan
for the Plan Year and provided it is used by the Plan for
allocating income or loss to Participants' Individual Accounts)
is distributed to the Participant, or if forfeitable, is
forfeited. In the case of family aggregation pursuant to Section
1.28(c), excess contributions under this Section shall be
allocated to Participants who are subject to the family
aggregation rules of Code Section 414(q)(6) in the manner
prescribed by regulations. For purposes of this Section, the
term "excess contributions" means, with respect to any Plan Year,
the excess of:
(1) The aggregate amount of Matching Contributions actually paid
to the Trust Fund on behalf of Highly Compensated Employees for
the Plan Year, over
(2) The maximum amount of such contributions permitted under
Subsection (e) of this Section.
In the event that the tests in Subsection (e) of this Section are
performed on a restructured basis pursuant to the regulations
under Code Section 401(a)(4), excess contributions pursuant to
this Subsection may be determined on a restructured basis.
(g) This Section shall be governed by Code Section 401(m),
401(a)(4) and any rules or regulations issued pursuant thereto,
including the aggregation rules of Code Section 401(m)(2)(B) and
the regulations thereunder.
Section 3.6 Maximum Individual Deferral
A Participant shall not be permitted to have his Employer
redirect an amount in excess of seven thousand dollars ($7,000)
in any calendar year pursuant to the provisions of Section 3.1
and Section 8.3, including contributions to any other plan of the
Company, which are made pursuant to Code Section 402(g)(1). The
seven thousand dollar ($7,000) limitation shall be adjusted in
accordance with cost-of-living adjustments made by the Secretary
of the Treasury pursuant to Code Section 402(g)(5). If any
amount is redirected pursuant to Section 3.1 and Section 8.3 in
excess of seven thousand dollars ($7,000), as adjusted, or if a
Participant notifies the Committee, in writing, by March 1
following the close of the taxable year, of its portion of the
amount contributed in excess of seven thousand dollars ($7,000),
as adjusted, to all plans pursuant to Code Section 402(g)(1),
such amount shall be deemed an "excess deferral" and the 401(k)
Savings Committee shall direct the Trustee to distribute to the
Participant (not later than April 15 following the calendar year
in which the excess deferral was made) the amount of the excess
deferral (adjusted for income or loss for the Plan Year computed
using any reasonable method that satisfies Code Section 401(a)(4)
provided it is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year and
provided it is used by the Plan for allocating income or loss to
Participants' Accounts and reduced by any deferrals distributed
pursuant to Section 3.4).
Section 3.7 Mistake of Fact
If due to a mistake of fact, Employer Contributions to the Trust
Fund for any Plan Year exceed the amount intended to be
contributed, notwithstanding any provision to the contrary, the
Employer, as soon as such mistake of fact is discovered, shall
notify the Trustee. The Employer shall direct that the Trustee
return such excess to the Employer, provided such return is made
within one (1) year of the date on which the Employer made the
contribution.
ARTICLE 4
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
Section 4.1 Individual Accounts
The Committee shall establish and maintain an Individual Account
in the name of each Participant to which the Committee shall
credit all amounts allocated to each such Participant pursuant to
Article 3 and the following Sections of this Article. Effective
January 1, 1998 the Committee shall also credit all amounts
allocated to each such Participant pursuant to Article 7, Article
8, Article 9, and Article 10.
Section 4.2 Investment of Accounts
The Individual Account shall be invested by the Trustee in
accordance with the following:
(a) There shall be established the following Investment Funds
within the Trust Fund:
(1) Fidelity Retirement Government Money Market Portfolio,
(2) Fidelity Ginnie Mae Portfolio, frozen effective October 1,
1996,
(3) Fidelity Puritan Fund,
(4) Fidelity Spartan U. S. Equity Index Portfolio,
(5) Fidelity Magellan Fund.
(6) Fidelity Contrafund, effective October 1, 1996,
(7) Fidelity Equity-Income II Fund, effective October 1, 1996,
(8) Warburg Pincus Emerging Growth, effective October 1, 1996,
(9) Tempelton Foreign, effective October 1, 1996,
(10) Fidelity Intermediate Bond Fund, effective October 1, 1996,
(11) LG&E Energy Corp. Common Stock Fund, effective January 1,
1998.
(b) The Participant may direct the investments of current
contributions to his Individual Account and the cumulative
balance of his Individual Account in increments of ten percent
(10%), one percent (1%) effective October 1, 1996, by giving the
Investment Manager such notice as it shall require to be
effective as soon as reasonably possible. No investment
direction shall be allowed pursuant to the terms of the Prior
Plan on December 31, 1991.
(c) A Participant may transfer the cumulative balance of his
Individual Account, excluding the portion attributable to his
Prior ESOP Account. There shall be no limit on the number of
times a Participant can change the direction as to the investment
of current contributions to his Individual Account.
(d) A Participant who does not make any election under this
Section shall have the Individual Account and current
contributions made on his behalf invested in the Retirement
Government Money Market Portfolio.
Section 4.3 Valuation of Accounts
(a) Individual Account. As of each Valuation Date, the
Committee shall determine the fair market value of the Individual
Account of each Participant as follows:
(1) The value of the Individual Account of each Participant as
of the last Valuation Date;
(2) Minus the amount of any withdrawals and distributions made
from the Participant's Individual Account since the last
Valuation Date;
(3) Plus any contributions to the separate account in the
Participant's Individual Account established for contributions
pursuant to the following Sections since the last Valuation Date:
3.1, 3.2, 3.3, 8.3, 8.4, 8.5;
(4) Plus any investment earnings allocated to such Individual
Account since the last Valuation Date;
(5) Minus any investment losses allocated to such Individual
Account since the last Valuation Date.
(b) Investment Earnings or Losses. The investment earnings (or
losses, if such computation is negative) from each Investment
Fund shall mean the net gain or loss of each Investment Fund from
investments, as reflected by interest payments, dividends,
realized and unrealized gains and losses on securities, other
investment transactions and expenses paid from the fund. In
determining the investment earnings or losses of the Investment
Fund as of any date, assets shall be valued on the basis of their
fair market value as of said date.
(c) Allocation of Investment Earnings or Losses. The investment
earnings and losses from each Investment Fund shall be allocated
to the Individual Account of each Participant invested in the
respective investment fund in such reasonable and consistently
applied manner as the Investment Manager shall determine,
provided that the allocation is based on the relative market
values of the Participant's Individual Account.
Section 4.4 Trustee and Committee Judgment Controls
In determining the fair market value of the Trust Fund and of
Individual Accounts, the Trustee and the Committee shall exercise
their best judgment, and all such determinations of value (in the
absence of bad faith) shall be binding upon all Participants and
their beneficiaries. All allocations shall be deemed to have
been made as of the Valuation Date, regardless of when actual
allocations were undertaken.
Section 4.5 Maximum Additions
Anything herein to the contrary notwithstanding, the total Annual
Additions of a Participant for any Limitation Year when combined
with any similar annual additions credited to the Participant for
the same period from another qualified Defined Contribution Plan
maintained by the Company, shall not exceed the lesser of the
amounts determined pursuant to Subsection (a) or (b) of this
Section.
(a) Thirty thousand dollars ($30,000) or, if greater, twenty-
five percent (25%) of the dollar limitation in effect under Code
Section 415(b)(1)(A); or
(b) Twenty-five percent (25%) of the Participant's compensation
received from the Company for such Limitation Year, as determined
pursuant to Section 415 of the Code.
(c) In the event a Participant is covered by one or more Defined
Contribution Plans maintained by the Company, the maximum annual
additions as noted above shall be decreased in any other Defined
Contribution Plan as determined necessary by the Company, prior
to a reduction of this Plan, to ensure that all such plans will
remain qualified under the Code.
Section 4.6 Corrective Adjustments
In the event that corrective adjustments in the Annual Addition
to any Participant's Individual Account are required as the
result of allocating forfeitures, a reasonable error in
estimating a Participant's compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning
of Code Section 402(g)(3)) that may be made with respect to an
individual under the limits of Code Section 415, or such other
facts and circumstances as may be provided for by rules or
regulations issued pursuant to Code Section 415, the corrective
adjustments shall be made pursuant to and in the order of the
Subsections in this Section 4.6. Effective January 1, 1996,
unless a Participant elects otherwise in the manner prescribed by
the Committee, a Participant receiving a distribution under this
Section 4.6 shall be deemed to have made a Salary Redirection
agreement of Compensation (earned in the taxable year in which
such distribution is received) equal to the amount of such
distribution, subject to the limits of Code Section 401(k),
402(g) and 415 for the Plan Year such Salary Redirections are
made. In the event any excess Annual Additions will be
distributed to the Participant, the Committee may pay these
amounts to the Paying Agent."
(a) The portion of the Participant's unmatched Salary
Redirection shall be reduced to insure compliance with Section
4.5. Any affected Salary Redirection will be distributed to the
Participant.
(b) The portion of the Participant's matched Salary Redirection
and his Matching Contributions shall be proportionally reduced to
insure compliance with Section 4.5. Any affected Salary
Redirection will be distributed to the Participant. Any affected
Matching Contributions shall be used to reduce future Matching
Contributions.
Section 4.7 Defined Contribution and Defined Benefit Plan
Fraction
If a Participant is a participant in a Defined Benefit Plan
maintained by the Company, the sum of his defined benefit plan
fraction and his defined contribution plan fraction for any
Limitation Year may not exceed one (1.0).
(a) For purposes of this Section, the term "defined contribution
plan fraction" shall mean a fraction the numerator of which is
the sum of all of the Annual Additions of the Participant under
this Plan and any other Defined Contribution Plan maintained by
the Company as of the close of the Limitation Year and the
denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and for each prior
Limitation Year of employment with the Company:
(1) The product of one and twenty-five hundredths (1.25)
multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the Code; or
(2) The product of one and forty hundredths (1.4) multiplied by
the amount which may be taken into account under Code Section
415(c)(1)(B) with respect to each individual under the Plan for
such Limitation Year.
(b) For purposes of this Section, the term, "defined benefit
plan fraction" shall mean a fraction the numerator of which is
the Participant's projected annual benefit (as defined in the
Defined Benefit Plan) determined as of the close of the
Limitation Year and the denominator of which is the lesser of:
(1) The product of one and twenty-five hundredths (1.25)
multiplied by the dollar limitation in effect pursuant to Section
415(b)(1)(A) of the Code for such Limitation Year; or
(2) The product of one and forty hundredths (1.4) multiplied by
the amount which may be taken into account pursuant to Section
415(b)(1)(B) of the Code with respect to each individual under
the Plan for such Limitation Year.
(c) The limitation on aggregate benefits from a Defined Benefit
Plan and a Defined Contribution Plan which is contained in
Section 2004 of ERISA, as amended, shall be complied with by a
reduction (if necessary) in the Participant's benefits under the
Defined Benefit Plan.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Normal Retirement
When a Participant lives to his Normal Retirement Date and
retires, he shall become entitled to the full value of his
Individual Account as of the Valuation Date on which the
distribution is made.
Section 5.2 Early Retirement
When a Participant lives to his Early Retirement Date and
retires, he shall become entitled to the full value of his
Individual Account as of the Valuation Date on which the
distribution is made.
Section 5.3 Late Retirement
A Participant may continue his employment past his Normal
Retirement Date on a year to year basis. He shall continue to be
an active Participant under the Plan. Upon his actual
retirement, he shall become entitled to the full value of his
Individual Account of the Valuation Date on which the
distribution is made.
Section 5.4 Death
If a Participant dies while an active Participant under the Plan,
his Beneficiary shall be entitled to the full value of his
Individual Account as of the Valuation Date on which the
distribution is made.
Section 5.5 Disability
When it is determined that a Participant is Totally and
Permanently Disabled, the Committee shall certify such fact to
the Trustee and such Disabled Participant shall be entitled to
receive the full value of his Individual Account as of the
Valuation Date on which the distribution is made.
Section 5.6 Termination of Employment
Upon termination of employment with the Company for any reason
(other than normal retirement, late retirement, disability
retirement, or death), a Participant shall be entitled to a
benefit equal to the full value of his Individual Account as of
the Valuation Date on which the distribution is made.
Section 5.7 Commencement of Benefits
(a) Any benefits payable under this Article shall be paid as
soon as reasonably possible following the actual date of
severance with the Company, subject to the Participant's consent
if his actual date of severance is prior to his Normal Retirement
Age and subject to Subsection 5.9(a). In no event, however,
shall payment begin beyond sixty (60) days after the last day of
the Plan Year in which occurs the latest of (i) the Participant's
reaching his Normal Retirement Age; (ii) the tenth (10th)
anniversary of the date the Employee became a Participant; and
(iii) termination of the Participant's employment with the
Company. Notwithstanding anything in the Plan to the contrary
and notwithstanding the Participant's lack of consent, benefits
under this Plan shall be paid as soon as reasonably possible
following the later of the Participant's actual date of severance
or his Normal Retirement Date.
(b) If the Participant does not consent to a distribution as
provided above, such distribution shall be made based on the
value of the Individual Account as of the Valuation Date
coincident with or immediately preceding the receipt of notice by
the Committee of the election to receive a distribution. Such
distribution shall be made as soon as reasonably possible
following such Valuation Date.
Section 5.8 Minimum Distributions
(a) The Individual Account of all Participants must be
distributed or commence to be distributed no later than April 1
following the calendar year in which such individual attains age
seventy and one-half (70-1/2) unless such individual has
effectively executed a waiver prior to January 1, 1984, in
accordance with the Code and notices and regulations issued
thereunder. However, if the Participant was not a five percent
(5%) owner in any Plan Year after attaining age sixty-five and
one-half (65-1/2) and had attained age seventy and one-half
(70-1/2) prior to January 1, 1988, distributions to said
Participant must commence no later than the April 1 following the
calendar year in which the later of termination of employment or
age seventy and one-half (70-1/2) occurs, or the Participant
becomes a five percent (5%) owner.
(b) All distributions required under this Article shall be
determined and made in accordance with the Proposed Regulations
under Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
Section 5.9 Methods of Payment
(a) A Participant or Beneficiary shall elect a distribution of
the Individual Account as provided hereinafter. No other manner
of distribution shall be provided. The request by the
Participant or the Beneficiary shall be in writing and shall be
filed with the Committee at least thirty (30) days before
distribution is to be made. The Committee may not require a
distribution without the consent of the Participant prior to his
reaching the later of Normal Retirement Age or, if the
Participant is deceased, without the consent of his spouse, if
living, or of his Beneficiary, unless the vested value of the
Individual Account is not more than three thousand five hundred
dollars ($3,500). If the vested value of the Participant's
Individual Account is less than three thousand five hundred
dollars ($3,500), the benefits payable will be paid as soon as
reasonably possible following the actual date of severance,
notwithstanding lack of consent. If the vested value of the
Participant's Individual Account has been more than three
thousand five hundred dollars ($3,500) at the time of any
distribution, the value the Participant's Individual Account will
be deemed to be more than three thousand five hundred dollars
($3,500) at the time of any subsequent distribution for purposes
of the consent requirements of this paragraph. Notwithstanding
the above, no lump sum distribution may be made after periodic
payments have commenced unless the Participant or the
Participant's surviving spouse consents in writing to the
distribution. The alternative forms of distribution are as
follows:
(1) A lump sum distribution in cash or in kind; or
(2) Periodic installment payments (either monthly or annually)
for a period not to exceed ten (10) years as selected by the
Participant or Beneficiary; or
(3) Any combination of the above.
(b) If the Participant dies after the periodic installment
payments commence but before the Individual Account is fully
distributed, the balance remaining in the Individual Account
shall be paid out over the periods remaining pursuant to the
Participant's election under item (2) or (3) of Subsection (a) of
this Section, or, if the Beneficiary elects, such other period as
is allowed under this Section.
(c) Any payment provided for in this Section may not extend
beyond the life expectancy of the Participant or the joint and
last survivor expectancy of the Participant and designated
Beneficiary.
(d) If the Participant dies before distribution occurs or
commences, the Participant's entire interest will be distributed
no later than five (5) years after the Participant's death,
except to the extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made in
substantially equal installments over the life or life expectancy
of the designated Beneficiary commencing no later than one (1)
year after the Participant's death.
(2) If the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to be made or
commence shall not be earlier than the date on which the
Participant would have attained age sixty-five (65). If the
spouse dies before payments begin, any subsequent distribution
shall be made as if the spouse had been the Participant.
(e) Notwithstanding any settlement option contained in this
Plan, the benefits payable to the Beneficiary of any Participant
must be incidental to the primary purpose of distributing
accumulated funds to the Participant, and if the Participant's
designated Beneficiary or survivor is other than his spouse, the
settlement option shall not violate Code Section 401(a)(9).
(f) This Plan specifically permits a distribution to an
alternate payee under a qualified domestic relations order at any
time, irrespective of whether the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section
5.9 gives a Participant a right to receive a distribution at a
time otherwise not permitted under the Plan nor does it permit
the alternate payee to receive a form of payment not permitted
under the Plan.
Section 5.10 Benefits to Minors and Incompetents
(a) In case any person entitled to receive payment under the
Plan shall be a minor, the Committee, in its discretion, may
dispose of such amount in any one or more of the ways specified
in items (1) through (3) of this Subsection.
(1) By payment thereof directly to such minor;
(2) By application thereof for benefit of such minor;
(3) By payment thereof to either parent of such minor or to any
adult person with whom such minor may at the time be living or to
any person who shall be legally qualified and shall be acting as
guardian of the person or the property of such minor; provided
only that the parent or adult person to whom any amount shall be
paid shall have advised the Committee in writing that he will
hold or use such amount for the benefit of such minor.
(b) In the event that it shall be found that a person entitled
to receive payment under the Plan is physically or mentally
incapable of personally receiving and giving a valid receipt for
any payment due (unless prior claim therefor shall have been made
by a duly qualified committee or other legal representative),
such payment may be made to the spouse, son, daughter, parent,
brother, sister or other person deemed by the Committee to have
incurred expense for such person otherwise entitled to payment.
Section 5.11 Unclaimed Benefits
If, after diligent effort, a Participant, spouse or Beneficiary
who is entitled to a distribution cannot be located within a
reasonable period of time after the date such distribution was to
commence, the distributable Individual Account balance shall be
deposited in such separate account as the Trustee shall
determine. The separate account shall be registered in the name
of the person entitled to the distribution. The balance in such
separate account shall be forfeited on the fifth (5th)
anniversary of the Participant's termination of employment, or
such later date as the Committee may determine, and shall be used
to reduce future Employer Contributions. If the Participant,
spouse or Beneficiary subsequently presents a valid claim for the
benefit to the Committee, the Committee shall cause the benefit,
equal to the amount which was forfeited under this Section, to be
restored, first from forfeitures and then from Employer
Contributions.
Section 5.12 Participant Directed Rollovers
(a) Any Participant, spouse or alternate payee under a qualified
domestic relations order entitled to receive an eligible rollover
distribution on or after January 1, 1993, may elect, pursuant to
Code Section 401(a)(31) and the rules and regulations issued
pursuant thereto, to have such distribution paid directly to an
eligible retirement plan. The election shall be made in such
form and in such manner as the Employer may require, consistent
with the rules and regulations issued pursuant to Code Section
401(a)(31).
(b) For purposes of Subsection (a) of this Section, an eligible
rollover distributions is a distribution of all or any portion of
the balance to the credit of the distributee, excluding any
distribution which is (i) one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) or the joint lives (or joint life
expectancies) of the recipient and the recipient's designated
beneficiary; (ii) for a specified period of ten (10) years or
more; or (iii) is required to be made under Code Section
401(a)(9). An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b)
(other than an endowment contract), a trust described in Code
Section 401(a) that is exempt from tax under Code Section 501(a),
or an annuity plan described in Code Section 403(a).
(c) 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 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
(d) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Article, 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.
(e) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
ARTICLE 6
WITHDRAWALS AND LOANS
Section 6.1 Hardship Withdrawal
(a) Except as otherwise provided in this Section, and upon
proper written application of a Participant made at least thirty
(30) days in advance of the withdrawal date, in such form as the
Committee may specify, the Committee in its sole discretion may
permit the Participant to withdraw a portion or all of the
balance of his Salary Redirection Account; provided that earnings
allocated to such Account after December 31, 1988, may not be
withdrawn. Such withdrawal shall be based on the value of the
Account on the Valuation Date as of which the withdrawal is paid;
provided, however, the Committee may defer the withdrawal if it
is in the best interest of the Participant or the other
Participants.
(b) The reason for a withdrawal pursuant to this Section must be
to enable the Participant to meet unusual or special situations
in his financial affairs resulting in immediate and heavy
financial needs of the Participant. Such situations shall be
limited to:
(1) Medical expenses (described in Code Section 213(d))
previously incurred by the Participant, the Participant's spouse
or any dependents of the Participant (as defined in Code Section
152) or necessary for these persons to obtain medical care
described in Code Section 213(d);
(2) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse, children, or dependents (as
defined in Code Section 152);
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(5) Any additional items which may be added to the list of
deemed immediate and heavy financial needs by the Commissioner of
Internal Revenue through the publication of revenue rulings,
notices, and other documents of general applicability.
Any withdrawal hereunder may not exceed the amount required to
meet the immediate financial need created, and provided further
that such amount must not be reasonably available from other
resources of the Participant. The amount of an immediate and
heavy financial need shall include any federal, state, or local
taxes or penalties reasonably anticipated to result from the
distribution.
(c) The minimum amount of withdrawal a Participant may make
pursuant to this Section shall be one thousand dollars ($1,000).
(d) The Committee may shorten the notice period if it finds it
is administratively feasible. In granting or refusing any
request for withdrawal or in shortening the notice period, the
Committee shall apply uniform standards consistently and such
discretionary power shall not be applied so as to discriminate in
favor of Highly Compensated Employees.
(e) The withdrawals under this Section shall in no way affect
said Participant's continued participation in this Plan except by
the reduction in account balances caused by such withdrawals and
except as provided in Subsection (f) of this Section.
(f) If a Participant withdraws Salary Redirection pursuant to
the provisions of this Section, the following provisions of this
Subsection shall apply and the Committee shall deem that such
amount requested for withdrawal is not reasonably available from
other resources of the Participant.
(1) A withdrawal may be made pursuant to this Section only after
the Participant has obtained all distributions other than
hardship distributions, and all non-taxable loans available under
this Plan and all other plans maintained by the Company.
(2) Elective contributions and employee contributions under this
Plan and all other plans maintained by the Company will be
suspended for twelve (12) months after receipt of the withdrawal
of Salary Redirection pursuant to this Section.
(3) The limitation provided for in Section 3.6 for the taxable
year of the Participant following the taxable year of the
withdrawal pursuant to this Section shall be reduced by the
amount of the Participant's Salary Redirection and other elective
contributions for the taxable year of the Participant during
which the withdrawal pursuant to this Section is taken.
Section 6.2 Participant Loans
(a) Upon proper written application of a Participant or
Beneficiary (which, for purposes of this Section, shall mean any
person who is a party in interest as defined in Section 3(14) of
the Employee Retirement Income Security Act of 1974 and who has a
vested interest in his Individual Account), made in such form as
the Investment Manager may specify, the Investment Manager may
make a loan to the Participant or Beneficiary from his Individual
Account. Notwithstanding the preceding sentence, a loan shall
not be made to a non-active Participant that may result in
discrimination under Code Section 401(a)(4). The application,
and the resulting loan, must meet the terms and conditions
specified in the following of this Section and the approval or
denial of a loan request will be made on the basis of whether the
loan would meet these requirements.
(b) The total amount of all loans shall not exceed the lesser
of:
(1) Fifty thousand dollars ($50,000), reduced by the highest
outstanding balance of loans from the Plan during the one (1)
year period ending on the day before the loan is made; or
(2) One-half (1/2) the value of the Participant's Individual
Account under the Plan as of the date of the loan minus the
outstanding balance of all other loans from the Plan as of the
date of the loan.
(c) The amount of any loan must be at least one thousand dollars
($1,000).
(d) No more than four (4) loans may be outstanding to any
Participant at any one time. No Participant may refinance a loan
at any time.
(e) The Investment Manager shall credit interest and principal
payments made by a Participant, including payments made pursuant
to Subsection (g) of this Section, against his loans evidenced by
promissory notes held as earmarked assets of his Individual
Account, to the Trust Fund.
(f) The maximum term of repayment for any loan shall be five (5)
years. Notwithstanding the preceding sentence, the maximum term
of any loan for a principal residence made under the Prior LNI
Plan or Prior LPI Plan made prior to January 1, 1998, shall be
fifteen (15) years.
(g) The Participant shall authorize his Employer to deduct
approximately equal interest and principal payments from his
compensation payable at the end of each regular pay period (no
less frequently than quarterly) in an amount equal to at least
ten dollars ($10.00) with respect to each outstanding loan. In
the event an inactive Participant or Beneficiary receives a loan
hereunder or in the event that a Participant who received a loan
ceases to be actively employed by the Company, repayments shall
be made to the Committee pursuant to the terms of the promissory
note (no less frequently than quarterly). The Committee shall
transfer payments under this Subsection to the Investment Manager
within a reasonable period of time.
(h) A Participant may repay, at any time, any portion or all of
the then outstanding principal balance of any of his loans,
together with interest due to date on the prepaid portion. Any
such prepayments shall be made to the Investment Manager. Except
as otherwise provided in Subsection (j) of this Section, such
right of prepayment shall be entirely in the discretion of the
Participant and shall be without premium or penalty.
(i) The collateral for each loan shall be the assignment of a
percentage, sufficient for the amount of the loan, of up to fifty
percent (50%) of the Participant's Individual Account as of the
date the loan is made, supported by the Participant's promissory
note for the amount of such loan, including interest, payable to
the order of the Trustee.
(j) Each loan shall bear interest at a reasonable rate to be
fixed by the Investment Manager which shall be based on interest
rates currently being charged for similar loans by commercial
lending institutions in the same geographical area as the situs
of the Trust. The Investment Manager shall not discriminate
among Participants in the matter of interest rate; but loans
granted at different times may bear different interest rates if,
in the opinion of the Investment Manager, different rates are
required based on the rates being charged by commercial lending
institutions for similar loans.
(k) The terms of the promissory note for each loan shall provide
that if a Participant with an outstanding loan balance defaults
on the loan prior to the earlier of termination of employment
with the Company or attainment of age fifty-nine and one-half (59-
1/2), interest shall continue to accrue on the outstanding
principal balance at the stated rate, and shall be added to the
principal balance as it accrues. If the Participant resumes loan
repayments, such repayment of both principal and interest shall
be based on the outstanding loan balance on the date repayments
resume. The term of the loan, as originally stated, shall be
adjusted so that the period during which the Participant was in
default will be disregarded. If, on the earlier of termination
of employment with the Company or attainment of age fifty-nine
and one-half (59-1/2), loan repayments have not resumed, the end
of the term of the loan will be deemed to have been reached. In
such event, either Subsection (k) of this Section shall apply or,
if applicable, the Participant shall be deemed to have made a
withdrawal equal to the then outstanding principal balance of the
loan. Such deemed withdrawal shall be treated as a distribution
to which Subsection (l) of this Section applies.
(l) No distribution under Article 5 shall be made to any
Participant, Former Participant or Beneficiary unless and until
all unpaid loans, including accrued interest, have been repaid.
Such Participant, Former Participant or Beneficiary shall have
the option of paying the unpaid loan balance and accrued interest
directly or having such amount deducted from the distribution.
The terms of each promissory note shall provide that in the event
of default, the Participant shall be deemed to consent to a lump
sum distribution at the earliest date a distribution can be made
under the Plan equal to the unpaid loan balance and accrued
interest.
(m) In granting or refusing any request for a loan, the
Investment Manager shall apply uniform standards consistently and
such discretionary power shall not be applied to discriminate in
favor of Highly Compensated Employees.
ARTICLE 7
EMPLOYEE STOCK OWNERSHIP PLAN
Section 7.1 Purpose and Effective Date
Effective January 1, 1998, the Company hereby establishes and
designates the LG&E Energy Corp. Common Stock Fund as an Employee
Stock Ownership Plan to enable eligible Participants to acquire
stock ownership interests in the Company.
Section 7.2 Investment in Company Stock
The ESOP is designed to invest primarily in Company Stock and all
accounts under the Article shall be invested in the LG&E Energy
Corp. Common Stock Fund.
Section 7.3 Prior ESOP Accounts
(a) Participation
An individual with a Prior ESOP Account shall automatically
become a Participant in the Plan, effective January 1, 1998.
(b) Vesting
That portion of the Participant's Individual Account attributable
to the Prior ESOP Account shall be fully-vested and non-
forfeitable under the Plan.
(c) Withdrawals
Pursuant to the procedures adopted by the Administrator, a
Participant may elect to have distributed to him any portion or
all of his Prior ESOP Account.
(d) Transfers
Notwithstanding the provisions of Subsection 4.2(c) and Section
7.2, effective January 1,1998, a Participant, Former Participant,
or Beneficiary after reaching age fifty five (55), may transfer
the balance of his Prior ESOP Account from the LG&E Energy Corp.
Common Stock Fund to any of the Investment Funds in the Plan.
Section 7.4 General ESOP Provisions
(a) Payment of Benefits
Effective January 1, 1998, Payments of amounts invested in the
LG&E Energy Corp. Common Stock Fund shall be in the form of a
lump sum. If the Participant elects, the distribution shall be
made no later than one (1) year after the close of the Plan Year
in which the Participant terminates employment due to death,
Total and Permanent Disability or Retirement and no later than
five (5) years after the close of the Plan Year in which
Participant terminates employment for any other reason.
(b) Contributions
Effective January 1, 1998, the Company shall contribute to the
Trustee cash equal to, or Company Stock having an aggregate fair
market value equal to, such amounts required by Section 3.2 and
Section 8.4 of the Plan to the ESOP. Contributions by
Participants are not required, but shall be permitted in
accordance with Section 3.1 and Section 8.3.
Section 7.5 Put Option
Effective January 1, 1998 if the Company Stock is or becomes not
readily tradable on an established market, then any Participant,
who is otherwise entitled to a distribution for the Plan, shall
have the right (hereinafter referred to as "Put Option") to
require that the Corporation repurchase any Company Stock at the
price established by a valuation conducted by an independent
appraiser (as established in Section 401(a)(28) of the Code).
The Put Option shall only be exercisable during the sixty (60)
day period immediately following the date of distribution and if
the Put Option is not exercised within such sixty (60) day
period, then it can be exercised for an additional period of
sixty (60) days in the following Plan Year. This Put Option
shall be nonterminable with the meaning of Regulation 54.4975-
(11)(a)(ii).
The amount paid for the Company Stock under the Put Option shall
be paid in substantially equal payments (not less frequently than
annually) over a period beginning not later than thirty (30) days
after the exercise of the Put Option and not exceeding five (5)
years. There shall be adequate security provided and reasonable
interest paid on the unpaid balance due under this paragraph.
Section 7.6 Loans
(a) Authorization of Loan
Effective January 1, 1998, the Board of Directors may direct the
Trustee to incur a loan on behalf of the Trust in a manner and
under conditions which will cause the loan to be an "exempt loan"
within the meaning of Section 4975(d)(2) of the Code and
Regulations thereunder. A loan shall be used primarily for the
benefit of Plan Participants and their Beneficiaries. The
proceeds of each such loan shall be used, within a reasonable
time after the loan is obtained, only to purchase Company Stock,
to repay the loan or to repay any prior loan. Any such loan
shall provide for a reasonable rate of interest, an ascertainable
period of maturity and shall be without recourse against the
Plan. Any such loan shall be secured solely by shares of Company
Stock acquired with the proceeds of the loan and shares of such
stock that were used as collateral on a prior loan which was
repaid with the proceeds of the current loan. Such stock pledged
as collateral shall be placed in a Suspense Account and released
pursuant to Subsection 7.06(b), as the loan is repaid. Company
Stock released from the Suspense Account shall be allocated in
the ratio that each eligible Participant's Compensation, bears to
the total Compensation, paid to all Participants during the Plan
Year. No person entitled to payment under a loan made pursuant to
this Section shall have recourse against any Trust Fund assets
other than the stock used as collateral for the loan, Sponsoring
Employer contributions of cash that are available to meet
obligations under the loan and earnings attributable to such
collateral and the investment of such contributions. Employer
contributions made with respect to any Plan Year during which the
loan remains unpaid, and earnings on such contributions, shall be
deemed available to meet obligations under the loan, unless
otherwise provided by the Employer at the time such contributions
are made.
(b) Release of Company Stock
Any pledge of stock as collateral under this Section shall
provide for the release of shares so pledged upon the payment of
any portion of the loan. Shares so pledged shall be released in
the proportion of the principal and interest, paid on the loan
for the Plan Year bears to the aggregate principal and interest,
paid for the current Plan Year and each Plan Year thereafter, as
provided in Regulation 54.4975-7(b)(8).
(c) Repayment of the Loan
Payments of principal and interest on any loan under this Section
shall be made by the Trustee at the direction of the Committee
solely from: (i) employer contributions available to meet
obligations under the loan, (ii) earnings from the investment of
such contributions, (iii) earnings attributable to stock pledged
as collateral for the loan, (iv) other dividends on stock to the
extent permitted by law, (v) the proceeds of a subsequent loan
made to repay the loan, and (vi) the proceeds of the sale of any
stock pledged as collateral for the loan. The contributions and
earnings available to pay the loan must be accounted for
separately by the Committee until the loan is repaid.
(d) Allocations to Individual Account
Subject to the limitations in Section 4.5 on annual additions to
a Participant's Individual Account, assets released from a
Suspense Account by reason of payment made on a loan shall be
allocated immediately upon such payment to the account of all
Participants who then would be entitled to an allocation of
contributions if such payment had been made on the last day of
the Plan Year.
Section 7.7 Disposition of Dividends on Company Stock
(a) Distribution to Dividend Eligible Participant
Effective January 1, 1998, the Trustee shall distribute dividends
paid on Company Stock to a Dividend Eligible Participant, no
later than ninety (90) days after the end of the Plan year which
said dividends are paid.
(b) Allocation of Dividend to Individual Accounts
Effective January 1, 1998, the Trustee shall allocate dividends
paid on Company Stock, which are not otherwise distributed to
Dividend Eligible Participants under Subsection 7.7(a) of this
Section, to the Individual Account as provided for in Section 4.3
of the Plan.
Section 7.8 Voting of Stock and Other Stock Rights
(a) Voting
Common Stock, including fractional shares, held by the Trustee
for a Participant's Individual Account and invested in the LG&E
Energy Corp. Common Stock Fund, shall be voted by the Trustee at
each annual meeting and at each special meeting of the
stockholders of the Company at the direction of the Participant
to whose Individual Account such stock is credited to the extent
such vote would be consistent with the Trustee's duties under
ERISA. The Trustee shall cause each Participant to be provided
with a copy of a notice of each such stockholder meeting and the
proxy statement of the Company, together with the appropriate
form for the Participant to indicate his voting instructions. If
the instructions are not timely received by the Trustee with
respect to such stock, the Trustee shall vote the uninstructed
stock in the same proportion as the instructed stock to the
extent such vote would be consistent with the Trustee's duties
under ERISA.
(b) Tender Offer
Common Stock, including fractional shares, held by the Trustee
for a Participant's Individual Account and invested in the LG&E
Energy Corp. Commons Stock Fund, shall be tendered by the Trustee
pursuant to a tender offer as directed by the Participant to
whose Individual Account such stock is credited to the extent
such tender would be consistent with the Trustee's duties under
ERISA. The Trustee shall cause each Participant to be provided
with notice of any such tender offer as the Trustee receives as a
holder of record, and which the Trustee reasonably believes also
was received by shareholders generally, as soon as practicable
after the Trustee receives such statements or information,
together with an appropriate form for the Participant to indicate
his or her instruction regarding any such tender offer. If
instructions are not timely received by the Trustee with respect
to any such stock or if there is any unallocated stock, the
Trustee shall tender the shares of such uninstructed or
unallocated stock in the same proportion as the Trustee actually
receives timely instruction to tender shares of stock to the
extent such tender would be consistent with the Trustee's duties
under ERISA.
Section 7.9 Section 16 Compliance
It is the intention of the Company that the Plan and the
administration of the Plan comply in all respects with Section 16
of the Securities Exchange Act of 1934 (the "Act"), as amended
and the rule and regulation promulgated thereunder. If any Plan
provision, or any aspect of the administration of the Plan, is
found not to be in compliance with Section 16 of the Act, the
provision or administration shall be deemed null and void, and in
all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3 promulgated under the Act.
Notwithstanding anything in the Plan to the contrary, the
Committee, in its discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan
to Participants who are subject to Section 16 of the Act without
so restricting, limiting or conditioning the Plan with respect to
other Participants.
ARTICLE 8
PROVISIONS RELATING TO ENERGY MARKETING EMPLOYEES
Section 8.1 Eligibility
Effective for the 1998 Plan Year a Participant who is employed
with a Participating Employer listed on Appendix B shall be
eligible to participate under this Article 8.
Section 8.2 Profit Sharing Contributions
(a) Amount of Profit Sharing Contributions
As of each December 31 Valuation Date for each Plan Year,
beginning with the 1998 Plan Year, each Participating Employer
shall contribute to the respective Profit Sharing Account of
Participants who are entitled to allocations under Subsection
8.2(c) such Participating Employer's net profit for the taxable
year ending with or within such Plan Year in the amount of three
percent (3%). Such Profit Sharing Contribution shall not exceed
the lesser of the amount deductible under Section 404 of the
Code, or the amount that are allowable as Annual Additions.
(b) Allocation of Profit Sharing Contributions
Each Participating Employer's contribution under Subsection
8.2(a) shall be allocated to the Profit Sharing Account of
Participants who are actively employed as of December 31 of the
Plan Year who have been credited with at least one thousand
(1,000) Hours of Service during their Employment Year that ends
in the Plan Year for which the Profit Sharing Contribution is
being made, and those who have retired on or after their Normal
Retirement Dates, died or become Totally and Permanently Disabled
during the Plan Year.
Section 8.3 Salary Redirection Contributions
Each Employee employed by an Employer listed on Appendix B who
satisfies the requirements of Section 2.1 may elect to have
Salary Redirection made on his behalf, commencing on the date
specified in Section 2.1. Notwithstanding the foregoing, an
Employee who was a Participant in the Prior LNI Plan shall be
immediately eligible to participate in the Plan. Such election
shall be made by entering into a Salary Redirection agreement
with the Employer in which it is agreed that the Employer will
redirect a portion of the Participant's Compensation and
contribute that designated amount to the Trust Fund on behalf of
the Participant in accordance with the following.
(n) Salary Redirection Agreement. Each eligible Employee may
enter into a Salary Redirection agreement under which the
Employee's Employer will redirect a portion of the Participant's
Compensation during each payroll period in an amount equal to an
integral percentage from one percent (1%) to sixteen percent
(16%) of such Compensation and contribute such percentage to the
Trust Fund on behalf of the Participant.
(o) Submission of Form. In order for Salary Redirection to
commence on the appropriate date (the beginning of a payroll
period), the Salary Redirection agreement must be received by the
Committee at least fifteen (15) days prior to the date Salary
Redirection is to start. Notwithstanding the above, a terminated
Participant who is reemployed and is eligible to participate upon
reemployment may enter into a Salary Redirection Agreement on his
reemployment date to be applicable to Compensation earned on and
after such date. In the event a Participant does not so elect
when initially eligible, he may subsequently elect to have Salary
Redirection made on his behalf commencing with the first day of
any payroll period which is at least fifteen (15) days after the
date his election form is delivered to the Committee. The Salary
Redirection agreement shall be on a form provided by the
Committee. Such agreement shall authorize the Employer to reduce
Compensation otherwise payable to the Participant during each pay
period by the amount of Salary Redirection elected.
(p) Change in Redirected Amounts. A Participant electing to
have Salary Redirection made on his behalf to the Plan pursuant
to this Section, may, on a Salary Redirection agreement provided
by and submitted to the Committee, increase or decrease his
Salary Redirection amount (within the appropriate minimum and
maximum) as of the first day of any payroll period which is at
least fifteen (15) days after the date his election form is
received by the Committee, but not retroactively. The Salary
Redirection agreement shall state the amount of Salary
Redirection he desires to have made.
(q) Cessation of Redirection. Any Participant may elect to
cease future Salary Redirection to the Plan effective with the
first regular payroll period that it is administratively possible
to do so following notification. In the event any such
Participant desires thereafter to recommence having Salary
Redirection made on his behalf, he shall be allowed to do so
effective with the first day of any payroll period which is at
least fifteen (15) days after receipt of written notice by the
Committee on the appropriate form stating the amount of Salary
Redirection he desires to have made.
(r) Notice Requirements. Any of the notice requirements in this
Section may be lengthened or shortened by the Committee if it
finds it administratively necessary or feasible to do so, with
such discretion being exercised in a nondiscriminatory manner.
(s) Payment to Trustee. The Employer shall pay to the Trustee
any Salary Redirection made on behalf of any Participant within a
reasonable time following the end of each regular pay period as
it can reasonably be segregated from the Employer's general
assets, but no later than the fifteenth (15th) business day of
the month following the month in which the Salary Redirection is
received by the Employer or the fifteenth (15th) business day of
the month following the month in which the Salary Redirection
would otherwise have been payable to the Participant in cash.
(g) Amounts of ESOP Dividends Deemed Deferred. Effective
January 1, 1996, a Participant will be deemed to have elected to
have a Salary Redirection made on his behalf in the amount of the
ESOP Dividends paid to him in cash, subject to the limits of
Sections 401(k), 402(g) and 415 of the Code and the regulations
thereunder, unless the Participant elects otherwise by making the
appropriate election with the Committee in the manner prescribed
by the Committee. Effective January 1, 1998, a Participant will
be deemed to have elected to have a Salary Redirection made on
his behalf in the amount of the ESOP Dividends paid to him in
cash, subject to the limits of Sections 401(k), 402(g) and 415 of
the Code and the regulations thereunder Deemed deferrals made
pursuant to this Subsection 8.3(g), shall not be taken into
account in the calculation of the percentage of salary redirected
pursuant to Subsection 8.3(a).
Section 8.4 Matching Contributions
For each Accounting Year in which the Employer has net profits or
accumulated net profits, as determined under generally accepted
accounting principles, the Employer shall make an Employer
Matching Contribution from such net profits or accumulated net
profits to the Trust Fund on behalf of eligible Participants.
The Matching Contribution will be an amount necessary to match
one-hundred percent (100%) of the eligible Participants' net
eligible Salary Redirection made to the Trust Fund for the Plan
Year. Net eligible Salary Redirection means Salary Redirection
not to exceed four percent (4%) percent of Compensation during
the Plan Year, which Salary Redirection has not been withdrawn.
For purposes of calculating net eligible Salary Redirection,
withdrawals shall be deemed to have been made from the earliest
Salary Redirection not yet withdrawn. Any Matching Contribution
which is made as of a Valuation Date shall be allocated to the
Matching Contribution Account of each eligible Participant. For
purposes of this Section, an eligible Participant shall mean a
Participant who has made Salary Redirection contributions during
the Plan Year.
Section 8.5 Employee Voluntary Contributions
Each Participant employed by an Employer listed on Appendix B
may, but shall not be required to, make after-tax Employee
Voluntary Contributions to the Plan by payroll deduction in an
amount equal to an integral percentage from one percent (1%) to
sixteen percent (16%) (or such lower percentage as the Committee,
in its discretion, may determine for any Plan Year) of his
Compensation for the Plan Year. Notwithstanding the preceding
sentence, a Participant may not make Employee Voluntary
Contributions that would cause his total Employee Voluntary
Contributions and Salary Redirection Contributions for the Plan
Year to exceed sixteen percent (16%) (or such other percentage as
the Committee, in its discretion, may establish for any Plan
Year) of his Compensation for the Plan Year. The Committee may
limit Employee Voluntary Contributions at any time, if such
limits are necessary of advisable in order for the Plan to comply
with Section 3.5.
Section 8.6 Submission of Form
In order for Employee Voluntary Contributions to commence on the
appropriate date (the beginning of a payroll period), the
Employee Voluntary Contributions agreement must be received by
the Committee at least fifteen (15) days prior to the date
Employee Voluntary Contribution is to start. Notwithstanding the
above, a terminated Participant who is reemployed and is eligible
to participate upon reemployment may enter into a Employee
Voluntary Contributions Agreement on his reemployment date to be
applicable to Compensation earned on and after such date. In the
event a Participant does not so elect when initially eligible, he
may subsequently elect to have Employee Voluntary Contributions
made on his behalf commencing with the first day of any payroll
period which is at least fifteen (15) days after the date his
election form is delivered to the Committee. The Employee
Voluntary Contributions agreement shall be on a form provided by
the Committee. Such agreement shall authorize the Employer to
reduce the amount otherwise payable to the Participant during
each pay period by the amount of the Employee Voluntary
Contribution elected.
(a) Change in Employee Voluntary Contribution Amounts. A
Participant electing to have Employee Voluntary Contributions
made on his behalf to the Plan pursuant to this Section, may, on
a Employee Voluntary Contributions agreement provided by and
submitted to the Committee, increase or decrease his Employee
Voluntary Contributions amount (within the appropriate minimum
and maximum) as of the first day of any payroll period which is
at least fifteen (15) days after the date his election form is
received by the Committee, but not retroactively. The Employee
Voluntary Contributions agreement shall state the amount of
Employee Voluntary Contributions he desires to have made.
(b) Cessation of Redirection. Any Participant may elect to
cease future Employee Voluntary Contributions to the Plan
effective with the first regular payroll period that it is
administratively possible to do so following notification. In
the event any such Participant desires thereafter to recommence
having Employee Voluntary Contributions made on his behalf, he
shall be allowed to do so effective with the first day of any
payroll period which is at least fifteen (15) days after receipt
of written notice by the Committee on the appropriate form
stating the amount of Employee Voluntary Contributions he desires
to have made.
(c) Notice Requirements. Any of the notice requirements in this
Section may be lengthened or shortened by the Committee if it
finds it administratively necessary or feasible to do so, with
such discretion being exercised in a nondiscriminatory manner.
(d) Payment to Trustee. The Employer shall pay to the Trustee
any Employee Voluntary Contributions made on behalf of any
Participant within a reasonable time following the end of each
regular pay period as it can reasonably be segregated from the
Employer's general assets, but no later than the fifteenth (15th)
business day of the month following the month in which the
Employee Voluntary Contribution is received by the Employer or
the fifteenth (15th) business day of the month following the
month in which the Employee Voluntary Contribution would
otherwise have been payable to the Participant in cash.
Section 8.7 Vesting
That portion of the Individual Account established pursuant to
Section 8.2 and Section 8.4, shall vest in accordance with the
following schedule:
Years of Service Vested Percentage
Less than 1 year 0%
1 year but less than 2 20%
2 years but less than 3 40%
3 years but less than 4 60%
4 years but less than 5 80%
5 years or more 100%
Notwithstanding the foregoing, the portion of the Individual
Account established pursuant to Section 10.1, which is
attributable to Employer Matching Contributions for Participants
in the Prior LNI Plan hired prior to May 15, 1995 shall be one
hundred percent (100%) vested in their Individual Account.
Section 8.8 Forfeitures
(a) A Participant who terminates employment pursuant to this
Article with a zero (0) vested percentage shall be deemed to have
received a distribution on the date he terminates employment. If
a terminated Participant receives a distribution of the vested
portion of his Individual Account prior to incurring five (5)
Breaks in Service or if the terminated Participant is zero
percent (0%) vested in his Individual Account, the non-vested
balance of such terminated Participant's Individual Account shall
be forfeited as of the date he receives or is deemed to receive
said distribution. If the Participant does not repay the
distributed amount, upon a subsequent termination of employment
prior to the Participant's becoming one hundred percent (100%)
vested, the gross distribution shall be determined by multiplying
the vested percentage at the subsequent termination by the amount
of the account balance as of the date of distribution plus the
distribution previously received. The amount to be distributed
to the Participant shall be the gross distribution minus the
amount previously distributed.
(b) If a terminated Participant is reemployed and again becomes
a Participant prior to incurring five (5) consecutive Breaks in
Service, any amount forfeited pursuant to this Section will be
restored to his Individual Account if he repays, prior to the
earlier of the last day of the Plan Year in which he incurs his
fifth (5th) consecutive Break in Service commencing on the date
of the distribution or the date which is five (5) years after the
date on which the Participant is reemployed, the amount
previously distributed to him from such Account. Restoration of
a forfeiture will come from forfeitures in the year in which he
is reemployed and, to the extent such forfeitures are not
sufficient, from a special Employer Contribution. For purposes
of this Subsection, a Participant who is deemed to have received
a distribution pursuant to this Section will be deemed to have
repaid the distribution upon reemployment.
(c) The non-vested balance of the Individual Account of a
terminated Participant shall be forfeited as of the December 31
Valuation Date following the Participant's incurring five (5)
consecutive Breaks in Service if the Participant is vested in any
portion of his Individual Account and does not receive a
distribution prior to incurring five (5) consecutive Breaks in
Service.
(d) Any amount forfeited as a Matching Contribution or Profit
Sharing Contribution will be reallocated as a Matching
Contribution or a Profit Sharing Contribution respectively.
ARTICLE 9
PROVISIONS RELATING TO PRIOR LPI PLAN PARTICIPANTS
Section 9.1 Prior LPI Plan Balances
Effective January 1, 1998, individual account balances of the
Prior LPI Plan shall be transferred to the Plan, and shall become
part of the Participant's Individual Account under the Plan.
Section 9.2 Service
Notwithstanding the definition of Year of Service in Section
1.67, Service for any Employee who was employed by an Employer
participating in the Prior LPI Plan, prior to becoming a
Participant in the Plan shall be defined to include the aggregate
of the employment period with the Employer.
Section 9.3 Vesting
That portion of the Individual Account established pursuant to
Section 9.1, which is attributable to Employer Matching and
Mandatory Employer Contributions shall continue to vest in
accordance with the following schedule:
Years of Service Vested Percentage
Less than 1 year 0%
1 year but less than 2 20%
2 years but less than 3 40%
3 years but less than 4 60%
4 years but less than 5 80%
5 years or more 100%
Section 9.4 Forfeitures
(a) A Participant who terminates employment pursuant to this
Article with a zero (0) vested percentage shall be deemed to have
received a distribution on the date he terminates employment. If
a terminated Participant receives a distribution of the vested
portion of his Individual Account prior to incurring five (5)
Breaks in Service or if the terminated Participant is zero
percent (0%) vested in his Individual Account, the non-vested
balance of such terminated Participant's Individual Account shall
be forfeited as of the date he receives or is deemed to receive
said distribution. If the Participant does not repay the
distributed amount, upon a subsequent termination of employment
prior to the Participant's becoming one hundred percent (100%)
vested, the gross distribution shall be determined by multiplying
the vested percentage at the subsequent termination by the amount
of the account balance as of the date of distribution plus the
distribution previously received. The amount to be distributed
to the Participant shall be the gross distribution minus the
amount previously distributed.
(b) If a terminated Participant is reemployed and again becomes
a Participant prior to incurring five (5) consecutive Breaks in
Service, any amount forfeited pursuant to this Section will be
restored to his Individual Account if he repays, prior to the
earlier of the last day of the Plan Year in which he incurs his
fifth (5th) consecutive Break in Service commencing on the date
of the distribution or the date which is five (5) years after the
date on which the Participant is reemployed, the amount
previously distributed to him from such Account. Restoration of
a forfeiture will come from forfeitures in the year in which he
is reemployed and, to the extent such forfeitures are not
sufficient, from a special Employer Contribution. For purposes
of this Subsection, a Participant who is deemed to have received
a distribution pursuant to this Section will be deemed to have
repaid the distribution upon reemployment.
(c) The non-vested balance of the Individual Account of a
terminated Participant shall be forfeited as of the December 31
Valuation Date following the Participant's incurring five (5)
consecutive Breaks in Service if the Participant is vested in any
portion of his Individual Account and does not receive a
distribution prior to incurring five (5) consecutive Breaks in
Service.
(d) Any amount forfeited as a Matching Contribution or Profit
Sharing Contribution will be reallocated as a Matching
Contribution or a Profit Sharing Contribution respectively.
ARTICLE 10
PROVISIONS RELATING TO PRIOR LNI PLAN PARTICIPANTS
Section 10.1 Prior LNI Plan Balances
Effective January 1, 1998, individual account balances of the
Prior LNI Plan shall be transferred to the Plan, and shall become
part of the Participant's Individual Account under the Plan
("Prior LNI Balance").
Section 10.2 Service
Notwithstanding the definition of Service in Section 1.67,
Service for any Employee who was employed by an Employer
participating in the Prior LNI Plan, prior to becoming a
Participant in the Plan shall be defined to include the aggregate
of the employment period with the Employer.
Section 10.3 Vesting
That portion of the Individual Account established pursuant to
Section 10.1, which is attributable to Employer Matching
Contributions and Mandatory Employer Contributions shall continue
to vest in accordance with the following schedule:
Years of Service Vested Percentage
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
Notwithstanding the foregoing, the portion of the Individual
Account established pursuant to Section 10.1, which is
attributable to Employer Matching Contributions for Participants
in the Prior LNI Plan during the 1997 Plan Year, shall be one
hundred percent (100%) vested in said portion of their Individual
Account.
Section 10.4 Forfeitures
(a) A Participant who terminates employment pursuant to this
Article with a zero (0) vested percentage shall be deemed to have
received a distribution on the date he terminates employment. If
a terminated Participant receives a distribution of the vested
portion of his Individual Account prior to incurring five (5)
Breaks in Service or if the terminated Participant is zero
percent (0%) vested in his Individual Account, the non-vested
balance of such terminated Participant's Individual Account shall
be forfeited as of the date he receives or is deemed to receive
said distribution. If the Participant does not repay the
distributed amount, upon a subsequent termination of employment
prior to the Participant's becoming one hundred percent (100%)
vested, the gross distribution shall be determined by multiplying
the vested percentage at the subsequent termination by the amount
of the account balance as of the date of distribution plus the
distribution previously received. The amount to be distributed
to the Participant shall be the gross distribution minus the
amount previously distributed.
(b) If a terminated Participant is reemployed and again becomes
a Participant prior to incurring five (5) consecutive Breaks in
Service, any amount forfeited pursuant to this Section will be
restored to his Individual Account if he repays, prior to the
earlier of the last day of the Plan Year in which he incurs his
fifth (5th) consecutive Break in Service commencing on the date
of the distribution or the date which is five (5) years after the
date on which the Participant is reemployed, the amount
previously distributed to him from such Account. Restoration of
a forfeiture will come from forfeitures in the year in which he
is reemployed and, to the extent such forfeitures are not
sufficient, from a special Employer Contribution. For purposes
of this Subsection, a Participant who is deemed to have received
a distribution pursuant to this Section will be deemed to have
repaid the distribution upon reemployment.
(c) The non-vested balance of the Individual Account of a
terminated Participant shall be forfeited as of the December 31
Valuation Date following the Participant's incurring five (5)
consecutive Breaks in Service if the Participant is vested in any
portion of his Individual Account and does not receive a
distribution prior to incurring five (5) consecutive Breaks in
Service.
(d) Any amount forfeited as a Matching Contribution or Profit
Sharing Contribution will be reallocated as a Matching
Contribution or a Profit Sharing Contribution respectively.
Section 10.5 Distributions
Notwithstanding anything in the Plan to the contrary,
Participants described in Section 10.1 with a portion of their
Individual Account that is attributable to their Prior LNI
Balance shall receive distribution of said amounts in the manner
prescribed below.
(a) Distributions in the Form of an Annuity. That vested
portion of a Participant's Individual Account attributable to the
Prior LNI Balance shall be paid in the form of a Qualified Joint
and Survivor Annuity. The Participant may elect to have such
annuity distributed upon attainment of Early Retirement. If a
Participant dies before the Annuity Starting Date, the
Participant's vested Prior LNI Balance shall be applied toward
the purchase of a Qualified Preretirement Survivor Annuity. The
Surviving Spouse may elect to have such annuity distributed
within a reasonable time period after the Participant's death.
All annuities distributed under the Plan which begin prior to a
Participant's Required Beginning Date shall provide that the
amount of the distributions for the calendar year preceding the
calendar year which contains the Required Beginning Date comply
with the minimum distribution requirements of Section 401(a)(9)
of the Code.
(b) A Participant may avoid receiving a distribution in the form
of a Qualified Joint and Survivor Annuity by making a qualified
election in which an optional method of distribution that is
described in Section 5.9 is selected. Such qualified election
must be made within the ninety (90) day period ending on the
Annuity Stating Date. A Participant may avoid a distribution if
the form of a Qualified Preretirement Survivor Annuity by making
a qualified election in which an optional method of distribution
that is described in Section 5.9 is selected. Such qualified
election must be made during the period in which the Participant
attains age thirty-five (35) or the date the Participant
terminates his employment with the Employer, and ending on the
date of death.
ARTICLE 11
FUNDING
Section 11.1 Contributions
Contributions by the Employer and by the Participants as provided
for in Article 3 and Article 8 shall be paid over to the Trustee.
All contributions by the Employer shall be irrevocable, except as
herein provided, and may be used only for the exclusive benefit
of the Participants, Former Participants and their Beneficiaries.
Section 11.2 Trustee
The Sponsoring Employer has entered into an agreement with the
Trustee whereunder the Trustee will receive, invest and
administer as a trust fund contributions made under this Plan in
accordance with the Trust Agreement.
Such Trust Agreement is incorporated by reference as a part of
the Plan, and the rights of all persons hereunder are subject to
the terms of the Trust Agreement. The Trust Agreement
specifically provides, among other things, for the investment and
reinvestment of the Fund and the income thereof, the management
of the Trust Fund, the responsibilities and immunities of the
Trustee, removal of the Trustee and appointment of a successor,
accounting by the Trustee and the disbursement of the Trust Fund.
The Trustee shall, in accordance with the terms of such Trust
Agreement, accept and receive all sums of money paid to it from
time to time by the Employer, and shall hold, invest, reinvest,
manage and administer such moneys and the increment, increase,
earnings and income thereof as a trust fund for the exclusive
benefit of the Participants, Former Participants and their
Beneficiaries or the payment of reasonable expenses of
administering the Plan.
In the event that affiliated or subsidiary Employers become
signatory hereto, completely independent records, allocations,
and contributions shall be maintained for each Employer. The
Trustee may invest all funds without segregating assets between
or among signatory Employers.
ARTICLE 12
FIDUCIARIES
Section 12.1 General
Each Fiduciary who is allocated specific duties or
responsibilities under the Plan or any Fiduciary who assumes such
a position with the Plan shall discharge his duties solely in the
interest of the Participants, Former Participants and
Beneficiaries and for the exclusive purpose of providing such
benefits as stipulated herein to such Participants, Former
Participants and Beneficiaries, or defraying reasonable expenses
of administering the Plan. Each Fiduciary, in carrying out such
duties and responsibilities, shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with
such matters would use in exercising such authority or duties.
A Fiduciary may serve in more than one Fiduciary capacity and may
employ one or more persons to render advice with regard to his
Fiduciary responsibilities. If the Fiduciary is serving as such
without compensation, all expenses reasonably incurred by such
Fiduciary shall be paid from the Trust Fund or by the Employer.
A Fiduciary may delegate any of his responsibilities for the
operation and administration of the Plan. In limitation of this
right, a Fiduciary may not delegate any responsibilities as
contained herein relating to the management or control of the
Trust Fund except through the employment of an investment manager
as provided in Section 12.3 and in the Trust Agreement relating
to the Fund.
Section 12.2 Employer
The Sponsoring Employer established and maintains the Plan for
the benefit of its Employees and for Employees of Participating
Employers and of necessity retains control of the operation and
administration of the Plan. The Sponsoring Employer, in
accordance with specific provisions of the Plan, has as herein
indicated, delegated certain of these rights and obligations to
the Trustee, and the Committee and these parties shall be solely
responsible for these, and only these, delegated rights and
obligations.
The Employer shall supply such full and timely information for
all matters relating to the Plan as (a) the Committee, (b) the
Trustee, and (c) the accountant engaged on behalf of the Plan by
the Sponsoring Employer may require for the effective discharge
of their respective duties.
Section 12.3 Trustee
The Trustee, in accordance with the Trust Agreement, shall have
exclusive authority and discretion to manage and control the
Trust Fund, except that the Sponsoring Employer may in its
discretion employ at any time and from time to time an Investment
Manager to direct the Trustee with respect to all or a designated
portion of the assets comprising the Trust Fund.
Section 12.4 401(k) Savings Committee
(a) The Board of the Sponsoring Employer shall appoint a
Committee of not less than three (3) persons to hold office at
the pleasure of the Board, such committee to be known as the
401(k) Savings Committee, effective June 5, 1996, the Benefits
Committee, collectively, the Committee. No compensation shall be
paid members of the Committee from the Trust Fund for service on
such Committee. The Committee shall choose from among its
members a chairperson and a secretary. Any action of the
Committee shall be determined by the vote of a majority of its
members. Either the chair or the secretary may execute any
certificate or written direction on behalf of the Committee.
(b) Every decision and action of the Committee shall be valid if
concurrence is by a majority of the members then in office, which
concurrence may be had without a formal meeting.
(c) In accordance with the provisions hereof, the Committee has
been delegated certain administrative functions relating to the
Plan with all powers necessary to enable it to properly carry out
such duties. Except as provided in Section 13.1, the Committee
shall have no power in any way to modify, alter, add to, or
subtract from, any provisions of the Plan; provided, however,
that the Committee is authorized, acting by a majority of its
members then in office, to make certain technical and non-
material changes in the Plan. The Committee shall have the power
and authority in its sole, absolute and uncontrolled discretion
to control and manage the operation and administration of the
Plan and shall have all powers necessary to accomplish these
purposes. The responsibility and authority of the Committee
shall include, but shall not be limited to, (i) determining all
questions relating to eligibility of employees to participate;
(ii) determining the amount and kind of benefit payable to any
Participant, spouse or Beneficiary; (iii) establishing and
reducing to writing and distributing to any Participant or
Beneficiary a claims procedure and administering that procedure,
including the processing and determination of all appeals
thereunder; (iv) interpreting the provisions of the Plan
including the publication of rules for the regulation of the Plan
as in its sole, absolute and uncontrolled discretion are deemed
necessary or advisable and which are not inconsistent with the
express terms hereof, the Code or the Employee Retirement Income
Security Act of 1974, as amended, and (v) execution of amendments
in accordance with Section 13.1. All disbursements by the
Trustee, except for the ordinary expenses of administration of
the Trust Fund or the reimbursement of reasonable expenses at the
direction of the Sponsoring Employer, as provided herein, shall
be made upon, and in accordance with, the written directions of
the Committee. When the Committee is required in the performance
of its duties hereunder to administer or construe, or to reach a
determination, under any of the provisions of the Plan, it shall
do so on a uniform, equitable and nondiscriminatory basis.
(d) The Committee may employ such counsel, accountants, and
other agents as it shall deem advisable. The Sponsoring Employer
shall pay, or cause to be paid from the Trust Fund, the
compensation of such counsel, accountants, and other agents and
any other expenses incurred by the Committee in the
administration of the Plan and Trust.
Section 12.5 Claims Procedures
(a) The Committee shall receive all applications for benefits.
Upon receipt by the Committee of such an application, it shall
determine all facts which are necessary to establish the right of
an applicant to benefits under the provisions of the Plan and the
amount thereof as herein provided. Upon request, the Committee
will afford the applicant the right of a hearing with respect to
any finding of fact or determination. The applicant shall be
notified in writing of any adverse decision with respect to his
claim within ninety (90) days after its submission. The notice
shall be written in a manner calculated to be understood by the
applicant and shall include the items specified in items (1)
through (4) of this Subsection.
(1) The specific reason or reasons for the denial;
(2) Specific references to the pertinent Plan provisions on
which the denial is based;
(3) A description of any additional material or information
necessary for the applicant to perfect the claim and an
explanation why such material or information is necessary; and
(4) An explanation of the Plan's claim review procedures.
(b) If special circumstances require an extension of time for
processing the initial claim, a written notice of the extension
and the reason therefor shall be furnished to the claimant before
the end of the initial ninety (90) day period. In no event shall
such extension exceed ninety (90) days.
(c) In the event a claim for benefits is denied or if the
applicant has had no response to such claim within ninety (90)
days of its submission (in which case the claim for benefits
shall be deemed to have been denied), the applicant or his duly
authorized representative, at the applicant's sole expense, may
appeal the denial to the Committee within sixty (60) days of the
receipt of written notice of denial or sixty (60) days from the
date such claim is deemed to be denied. In pursuing such appeal
the applicant or his duly authorized representative:
(1) May request in writing that the Committee review the denial;
(2) May review pertinent documents; and
(3) May submit issues and comments in writing.
(d) The decision on review shall be made within sixty (60) days
of receipt of the request for review, unless special
circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but
not later than one hundred twenty (120) days after receipt of a
request for review. If such an extension of time is required,
written notice of the extension shall be furnished to the
claimant before the end of the original sixty (60) day period.
The decision on review shall be made in writing, shall be written
in a manner calculated to be understood by the claimant, and
shall include specific references to the provisions of the Plan
on which such denial is based. If the decision on review is not
furnished within the time specified above, the claim shall be
deemed denied on review.
Section 12.6 Records
All acts and determinations of the Committee shall be duly
recorded by the secretary thereof and all such records together
with such other documents as may be necessary in exercising his
duties under the Plan shall be preserved in the custody of such
secretary. Such records and documents shall at all times be open
for inspection and for the purpose of making copies by any person
designated by the Sponsoring Employer. The Committee shall
provide such timely information, resulting from the application
of its responsibilities under the Plan, as needed by the Trustee
and the accountant engaged on behalf of the Plan by the
Sponsoring Employer, for the effective discharge of their
respective duties.
ARTICLE 13
AMENDMENT AND TERMINATION OF THE PLAN
Section 13.1 Amendment of the Plan
The Sponsoring Employer shall have the right at any time by
action of the Board to modify, alter or amend the Plan, in whole
or in part; effective September 1, 1994 the Committee in the
case of non-material amendments, provided, however, that the
duties, powers and liability of the Trustee hereunder shall not
be increased without its written consent; and provided, further,
that the amount of benefits which, at the time of such
modification, alteration or amendment, shall have accrued for any
Participant, Former Participant or Beneficiary hereunder shall
not be adversely affected thereby; and provided, further, that no
such amendment shall have the effect of reverting to any Employer
any part of the principal or income of the Trust Fund.
Notwithstanding the terms of the preceding sentence, the 401(k)
Savings Committee shall have the authority, acting by a majority
of its members then in office, to amend the Plan to make
technical and non-material changes therein. No amendment to the
Plan shall decrease the balance of a Participant's Individual
Account or eliminate an optional form of distribution.
Section 13.2 Termination of the Plan
The Sponsoring Employer expects to continue the Plan
indefinitely, but continuance is not assumed as a contractual
obligation and the Sponsoring Employer reserves the right at any
time by action of the Board to terminate its participation in the
Plan. If the Sponsoring Employer terminates or partially
terminates its participation in the Plan or permanently
discontinues its Contributions at any time, each Participant
affected thereby shall be then vested with the amount to the
credit in his Individual Account.
In the event of termination or partial termination of the Plan by
the Sponsoring Employer, the Committee shall value the Trust Fund
as of the date of termination. That portion of the Trust Fund
for which the Plan has not been terminated shall be unaffected.
Section 13.3 Return of Contributions
It is intended that this Plan shall be approved and qualified
under the Code and Regulations issued thereunder with respect to
Employees' Plans and Trusts (1) so as to permit the Employers to
deduct for federal income tax purposes the amounts of
contributions to the Trust; (2) so that contributions so made and
the income of the Trust Fund will not be taxable to Participants
as income until received; (3) so that the income of the Trust
Fund shall be exempt from federal income tax. Any Employer
Contributions and Salary Redirection are made to the Plan
conditioned on their deductibility under Code Section 404. In
the event the Commissioner of Internal Revenue or his delegate
rules that the deduction for all or a part of any Employer
Contribution (or Salary Redirection) is not allowed under Code
Section 404, the Employers reserve the right to recover that
portion or all of their contributions for which no deduction is
allowed (reduced by any losses), provided such recovery is made
within one (1) year of the disallowance, but only if the
application for the qualification is made by the time prescribed
by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe.
ARTICLE 14
MISCELLANEOUS
Section 14.1 Governing Law
The Plan shall be construed, regulated and administered according
to the laws of the Commonwealth of Kentucky, except in those
areas preempted by the laws of the United States of America.
Section 14.2 Construction
The headings and subheadings in the Plan have been inserted for
convenience of reference only and shall not affect the
construction of the provisions hereof. The words and phrases
defined in Article 1 when used in this Plan with an initial
capital letter shall have the meanings specified in Article 1,
unless a different meaning is clearly required by the context.
Any words herein used in the masculine shall be read and
construed in the feminine where they would so apply. Words in
the singular shall be read and construed as though used in the
plural in all cases where they would so apply.
Section 14.3 Administration Expenses
The expenses of administering the Trust Fund and the Plan shall
be paid from the Trust Fund, unless they are paid by the
Employer.
Section 14.4 Participant's Rights
No Participant in the Plan shall acquire any right to be retained
in the Employer's employ by virtue of the Plan, nor, upon his
dismissal, or upon his voluntary termination of employment, shall
he have any right or interest in and to the Trust Fund other than
as specifically provided herein. The Employer shall not be
liable for the payment of any benefit provided for herein; all
benefits hereunder shall be payable only from the Trust Fund.
Section 14.5 Spendthrift Clause
To the extent permitted by law, none of the benefits, payments,
proceeds, or distributions under this Plan shall be subject to
the claim of any creditor of the Participant, Former Participant
or any Beneficiary hereunder or to any legal process by any
creditor of such Participant, Former Participant or any such
Beneficiary; and neither shall such Participant, Former
Participant or any such Beneficiary have any right to alienate,
commute, anticipate, or assign any of the benefits, payments,
proceeds or distributions under this Plan. The preceding
sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order,
as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, under which
payments have commenced prior to such date.
This Plan specifically permits a distribution to an alternate
payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his earliest
retirement age under the Plan. Nothing in Section 5.9 gives a
Participant a right to receive a distribution at a time otherwise
not permitted under the Plan nor does it permit the alternate
payee to receive a form of payment not permitted under the Plan.
Section 14.6 Merger, Consolidation or Transfer
In the event of the merger or consolidation of the Plan with
another plan or transfer of assets or liabilities from the Plan
to another plan, each then Participant, Former Participant or
Beneficiary shall not, as a result of such event, be entitled on
the day following such merger, consolidation or transfer under
the termination of the Plan provisions to a lesser benefit than
the benefit he was entitled to on the date prior to the merger,
consolidation or transfer if the Plan had then terminated.
Section 14.7 Counterparts
The Plan and the Trust Agreement may be executed in any number of
counterparts, each of which shall constitute but one and the same
instrument and may be sufficiently evidenced by any one
counterpart.
ARTICLE 15
TOP HEAVY PLAN PROVISIONS
Section 15.1 General
Notwithstanding anything in the Plan to the contrary, if this
Plan when combined with all other plans required to be aggregated
pursuant to Code Section 416(g) is deemed to be a top-heavy plan
for any Plan Year, the Subsections in this Article shall apply to
such Plan Year.
Section 15.2 Minimum Contribution
Regardless of hours worked or level of compensation, each active
Participant who is not a Key Employee shall be entitled to a
minimum allocation of contributions and forfeitures equal to the
lesser of (i) three percent (3%) of the Participant's
Compensation for the Plan Year; and (ii) provided that the Plan
is not part of a Required Aggregation Group with a Defined
Benefit Plan because the Plan enables the Defined Benefit Plan to
meet the requirements of Code Section 401(a)(4) or 410, the
highest percentage of Compensation contributed on behalf of, plus
forfeitures allocated to, a Key Employee [(including Salary
Redirection)]. In the case of a Participant who is also a
participant in a defined benefit plan maintained by the Employer,
the minimum accrued benefit provided in the defined benefit plan
pursuant to Code Section 416(c)(1) equal to two percent (2%) of
the Participant's average monthly compensation for the five (5)
consecutive years when his aggregate compensation was highest
multiplied by his years of credited service up to ten (10) years
for each Plan Year in which the Plan is top heavy, shall be the
only minimum benefit for both that plan and this Plan, and the
minimum allocation described above shall not apply.
Section 15.3 Super Top Heavy Plans
The multiplier of one and twenty-five hundredths (1.25) in
Section 4.7 shall be reduced to one (1.0) unless (i) all plans of
the Required Aggregation Group or the Permissive Aggregation
Group, when aggregated are ninety percent (90%) or less top
heavy, and (ii) the minimum accrued benefit referenced in Section
11.2 is modified by substituting three percent (3%) with four
percent (4%). In the case of each Participant who is also a
participant in a defined benefit plan maintained by the Employer,
the minimum accrued benefit provided in the defined benefit plan
pursuant to Code Sections 416(c)(1) and 416(h) equal to three
percent (3%) of the Participant's average monthly compensation
for the five (5) highest consecutive years when his aggregate
compensation was highest multiplied by his years of credited
service up to ten (10) years for each Plan Year in which the Plan
is top heavy shall be the only minimum benefit for both that plan
and this Plan, and the minimum allocation described above shall
not apply.
ARTICLE 16
PROVISIONS CONCERNING CERTAIN CHANGES IN EMPLOYMENT
Section 16.1 Transfer to Non-participating Employer
A Participant who becomes employed by another employer which is a
subsidiary or affiliate of the Company, although not an Employer
hereunder, shall cease to be covered by the Plan as of the date
of his change in employer. Effective as of such date, he shall
become a Limited Participant in the Plan and Article 5 shall not
be applicable. As a Limited Participant, he shall be entitled to
share in Matching Contributions in accordance with Section 3.2 or
Section 8.4 to the extent of Salary Redirection made prior to
becoming a Limited Participant. A Limited Participant shall also
be entitled to request a withdrawal and a loan as provided in
Article 6. During the period he is a Limited Participant, his
Individual Account shall continue to share in Adjustments as
provided in Article 4. If the Limited Participant terminates
employment with the Company without returning to active
Participant status, he shall be entitled to the full value of his
Individual Account as of the date of distribution.
If a Limited Participant again transfers employment to an
Employer as defined herein, he shall be eligible to have Salary
Redirection made on his behalf in accordance with the Plan as of
the date he becomes an Employee. If the Limited Participant does
not resume having Salary Redirection made on his behalf
immediately upon becoming an Employee, the terms of the Plan
shall continue to apply to any subsequent election to have Salary
Redirection begin.
Section 16.2 Transfer to Another Participating Employer
A Participant who transfers his employment to another Employer
without breaking his continuous service shall continue to be
covered by the Plan without interruption, provided he enters into
a Salary Redirection agreement with his new Employer. If the
Participant enters into such a Salary Redirection agreement, a
separate Individual Account shall be established for him to
reflect his Plan participation with that Employer.
Section 16.3 Transfer From Non-participating Employer
An employee who transfers employment from an employer which is a
subsidiary or affiliate of the Company, but which is not itself
signatory hereto, to an Employer hereunder shall, for purposes of
determining eligibility to participate, have his period of
employment with the non-participating employer recognized. The
Employee shall be eligible to participate in accordance with
Article 2.
Section 16.4 Change in Employment Classification
If an employee of the Company becomes an Employee, as defined
herein, due to a change in employment classification, he shall be
eligible to participate in accordance with the terms of Article
2. If an Employee ceases to be an Employee due to a change in
employment classification, he shall cease to be eligible to
participate effective as of the date of such change.
If a Participant is simultaneously employed by more than one
signatory Employer within the Company, an Individual Account
shall be maintained for him by each Employer to reflect his
Compensation from each such Employer. Notwithstanding the terms
of the preceding sentence, the limits on deferrals and
Compensation shall be applied in total to the Participant and his
Individual Accounts will be aggregated for purposes of testing
Plan contributions and deferral percentages.
Appendix A
PARTICIPATING EMPLOYERS
LG&E Energy Corp.
Non-Union Employees of Louisville Gas and Electric Company
LG&E Home Services Inc., effective February 1, 1996
Enertech Inc., effective February 1, 1996
Appendix B
PARTICIPATING EMPLOYERS
LG&E Power Inc.
LG&E Natural Inc.
LG&E Natural Marketing Inc.
Hadson Financial Corporation
Exhibit 4.02
401(k) SAVINGS PLAN
FOR
EMPLOYEES OF LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF IBEW
Effective January 1, 1998
TABLE OF CONTENTS
Page No.
INTRODUCTION
DEFINITIONS 1
Section 1.1 Adjustment 1
Section 1.2 Annual Additions 1
Section 1.3 Beneficiary 1
Section 1.4 Board 1
Section 1.5 Code 1
Section 1.6 Committee 1
Section 1.7 Company 1
Section 1.8 Company Stock 1
Section 1.9 Compensation 2
Section 1.10 Corporation 2
Section 1.11 Defined Benefit Plan 2
Section 1.12 Defined Contribution Plan 2
Section 1.13 Dividend Eligible Participant 2
Section 1.14 Early Retirement Date 2
Section 1.15 Effective Date 2
Section 1.16 Employee 3
Section 1.17 Employer 3
Section 1.18 Employer Contributions 3
Section 1.19 Entry Date 3
Section 1.20 ESOP 3
Section 1.21 ESOP Dividends 3
Section 1.22 Fiduciary 3
Section 1.23 Former Participant 3
Section 1.24 Highly Compensated Employees 3
Section 1.25 Individual Account 5
Section 1.26 Investment Fund 6
Section 1.27 Investment Manager 6
Section 1.28 Leased Employee 6
Section 1.29 LG&E Energy Corp. Common Stock Fund 6
Section 1.30 Limitation Year 6
Section 1.31 Matching Contribution Account 6
Section 1.32 Matching Contributions 6
Section 1.33 Normal Retirement Date 6
Section 1.34 Participant 6
Section 1.35 Paying Agent 6
Section 1.36 Plan 6
Section 1.37 Plan Year 7
Section 1.38 Prior ESOP Account 7
Section 1.39 Prior Plan 7
Section 1.40 Rollover Contribution 7
Section 1.41 Rollover Contribution Account 7
Section 1.42 Salary Redirection 7
Section 1.43 Salary Redirection Account 7
Section 1.44 Total and Permanent Disability 7
Section 1.45 Trust Agreement 7
Section 1.46 Trust Fund 7
Section 1.47 Valuation Date 7
Section 1.48 Trustee 7
PARTICIPATION 8
Section 2.1 Eligibility Requirements 8
Section 2.2 Plan Binding 8
Section 2.3 Reemployment 8
Section 2.4 Transfers 8
Section 2.5 Beneficiary Designation 9
Section 2.6 Notification of Individual Account Balance 9
CONTRIBUTIONS 10
Section 3.1 Salary Redirection 10
Section 3.2 Matching Contributions 11
Section 3.3 Rollover Amount From Other Plans 12
Section 3.4 Nondiscrimination Test for Salary
Redirection 13
Section 3.5 Maximum Individual Deferral 15
Section 3.6 Mistake of Fact 15
ALLOCATIONS TO INDIVIDUAL ACCOUNTS 17
Section 4.1 Individual Accounts 17
Section 4.2 Investment of Accounts 17
Section 4.3 Valuation of Accounts 18
Section 4.4 Trustee and Committee Judgment Controls 19
Section 4.5 Maximum Additions 19
Section 4.6 Corrective Adjustments 19
Section 4.7 Defined Contribution and Defined Benefit
Plan Fraction 20
DISTRIBUTIONS 22
Section 5.1 Normal Retirement 22
Section 5.2 Early Retirement 22
Section 5.3 Late Retirement 22
Section 5.4 Death 22
Section 5.5 Disability 22
Section 5.6 Termination of Employment 23
Section 5.7 Commencement of Benefits 23
Section 5.8 Minimum Distributions 23
Section 5.9 Methods of Payment 24
Section 5.10 Benefits to Minors and Incompetents 25
Section 5.11 Unclaimed Benefits 26
Section 5.12 Participant Directed Rollovers 26
WITHDRAWALS 28
Section 6.1 Hardship Withdrawal 28
Section 6.2 Participant Loans 29
EMPLOYEE STOCK OWNERSHIP PLAN 32
Section 7.1 Purpose and Effective Date 32
Section 7.2 Investment in Company Stock 32
Section 7.3 Prior ESOP Accounts 32
Section 7.4 General ESOP Provisions 32
Section 7.5 Put Option 33
Section 7.6 Loans 33
Section 7.7 Disposition of Dividends on Company Stock 34
Section 7.8 Voting of Stock and Other Stock Rights 35
Section 7.9 Section 16 Compliance 35
FUNDING 37
Section 8.1 Contributions 37
Section 8.2 Trustee 37
FIDUCIARIES 38
Section 9.1 General 38
Section 9.2 Employer 38
Section 9.3 Trustee 39
Section 9.4 401(k) Savings Committee 39
Section 9.5 Claims Procedures 40
Section 9.6 Records 41
AMENDMENT AND TERMINATION OF THE PLAN 42
Section 10.1 Amendment of the Plan 42
Section 10.2 Termination of the Plan 42
Section 10.3 Return of Contributions 42
MISCELLANEOUS 44
Section 11.1 Governing Law 44
Section 11.2 Construction 44
Section 11.3 Administration Expenses 44
Section 11.4 Participant's Rights 44
Section 11.5 Spendthrift Clause 44
Section 11.6 Merger, Consolidation or Transfer 45
Section 11.7 Counterparts 45
SIGNATURES 45
INTRODUCTION
Effective January 1, 1993, the Board of Directors of Louisville
Gas and Electric Company ("Sponsoring Employer") adopted the
401(k) Savings Plan for Employees of Louisville Gas and Electric
Company Who Are Represented by Local 2100 of IBEW (the "Plan"),
as hereinafter set forth.
On January 1, 1998, the Louisville Gas and Electric Company
Employees' Stock Ownership Plan and Trust participant balances
were merged into the Plan.
It is intended that this Plan, together with the Trust Agreement,
meet all the requirements of the Internal Revenue Code of 1986,
as amended (the "Code") and the Employee Retirement Income
Security Act of 1974 as amended ("ERISA") and shall be
interpreted, wherever possible, to comply with the terms of the
said laws, as amended, and all formal regulations and rulings
issued thereunder. It is also intended that this Plan shall be a
profit sharing plan under Code Section 401(a).
ARTICLE 1
DEFINITIONS
Section 1.1
Adjustment means the net increases and decreases in the market
value of the Trust Fund during a Plan Year or other period
exclusive of any contribution or distribution during such year or
other period. Such increases and decreases shall include such
items as realized or unrealized investment gains and losses and
investment income, and may include expenses of administering the
Trust Fund and the Plan.
Section 1.2
Annual Additions means for any Employee in any Limitation Year,
the sum of Employer Contributions, Salary Redirection, and
forfeitures allocated to the Employee's Individual Account.
Amounts allocated to an individual medical account, as defined in
Section 415(l) of the Code, which is part of an annuity or
pension plan maintained by the Employer are treated as Annual
Additions to a Defined Contribution Plan. Also, amounts derived
from contributions paid or accrued which are attributable to
post-retirement medical benefits allocated to the separate
account of a Key Employee as required by Section 419A(d) of the
Code, maintained by the Employer, are treated as Annual Additions
to a Defined Contribution Plan.
Section 1.3
Beneficiary means any person designated by a Participant to
receive such benefits as may become payable hereunder after the
death of such Participant, provided, however, that a married
Participant may not name as his Beneficiary someone other than
his spouse unless the spouse consents in writing to such
designation, which consent shall be acknowledged by a Plan
representative or by a notary public.
Section 1.4
Board means the Board of Directors of the Employer.
Section 1.5
Code means the Internal Revenue Code of 1986 as amended and
revised.
Section 1.6
Committee means the 401(k) Savings Committee provided for in
Article 9 hereof.
Section 1.7
Company means Louisville Gas and Electric Company and all of the
legal entities which are part of a controlled group or affiliated
service group with Louisville Gas and Electric Company pursuant
to the provisions of Code Sections 414(b), (c), (m), or (o).
Section 1.8
Company Stock means the common stock issued by the Corporation
having a combination of voting power and dividend rates equal to
or in excess of:
(a) That class of common stock of the Corporation having the
greatest voting power, and
(b) That class of common stock of the Corporation having the
greatest dividend rights.
Section 1.9
Compensation means, for any Plan Year, base compensation paid to
an Employee by the Employer, increased by amounts deferred
pursuant to Code Sections 125 (flexible benefit plans), 402(a)(8)
(salary redirection), and 402(h)(1)(B) (simplified employee
plans), including a one thousand five hundred dollar ($1,500)
lump sum payment amount to be paid on or about January 6, 1995
and excluding, without limitation, any overtime, shift
differential and any other forms of premium compensation paid by
the Employer. In the Plan Year during which an Employee becomes
a Participant, only remuneration paid in the portion of the Plan
Year in which he was a Participant shall be considered
Compensation. Compensation shall be limited to two hundred
thousand dollars ($200,000) or such greater amount as determined
pursuant to Code Section 401(a)(17). Effective January 1, 1994
Compensation shall be limited to one hundred and fifty thousand
dollars ($150,000) or such greater amount as determined pursuant
to Code Section 401(a)(17). In determining the compensation of a
Participant for purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying such rules,
the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of the year.
If, as a result of the application of such rules the adjusted two
hundred thousand dollar ($200,000) limitation is exceeded, then
(except for purposes of determining the portion of compensation
up to the integration level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected
individuals in proportion to each individual's compensation as
determined under this Section prior to the application of this
limitation.
Section 1.10
Corporation means LG&E Energy Corp. and its successors.
Section 1.11
Defined Benefit Plan means a plan established and qualified under
Section 401 of the Code, except to the extent it is, or is
treated as, a Defined Contribution Plan.
Section 1.12
Defined Contribution Plan means a plan which is established and
qualified under Section 401 of the Code, which provides for an
individual account for each participant therein and for benefits
based solely on the amount contributed to each participant's
account and any income, expenses, gains or losses (both realized
and unrealized) which may be allocated to such account.
Section 1.13
Dividend Eligible Participant means a Participant who will reach
the maximum individual deferral amount as described in Section
3.5 or a Participant who has not reached the maximum
Compensations amount described in Section 1.9 herein, and all
Former Participants and Beneficiaries.
Section 1.14
Early Retirement Date means the earlier of (i) the date the
Participant attains age fifty-five (55) or (ii) the date the
Participant is credited with thirty-five (35) years of vesting
service under the Retirement Income Plan for Employees of
Louisville Gas and Electric Company Who Are Represented by Local
2100 of IBEW.
Section 1.15
Effective Date means January 1, 1998.
Section 1.16
Employee means any person employed by the Employer, who is a
member of Local 2100 of IBEW and who is eligible for coverage
hereunder. The term "Employee" shall exclude any person who is a
Leased Employee.
Section 1.17
Employer means Louisville Gas and Electric Company. The
Sponsoring Employer shall be Louisville Gas and Electric Company.
Section 1.18
Employer Contributions means Matching Contributions made to the
Trust Fund by the Employer. Salary Redirection shall not be
included in the term Employer Contributions when used in this
Plan.
Section 1.19
Entry Date means the first day of each calendar month during each
Plan Year.
Section 1.20
ESOP means the Employee Stock Ownership Plan established pursuant
to Article 7 of the Plan.
Section 1.21
ESOP Dividends means those amounts distributed during the Plan
Year to a Participant as dividends on stock allocated to such
Participant's account under the Louisville Gas and Electric
Company Employees' Stock Ownership Plan or effective January 1,
1998 Article 7 of the Plan.
Section 1.22
Fiduciary means the Employer, the Trustee, the Committee and any
individual, corporation, firm or other entity which assumes, in
accordance with Article 9, responsibilities of the Employer, the
Trustee or the Committee with respect to management of the Plan
or the disposition of its assets.
Section 1.23
Former Participant means a Participant whose participation in the
Plan has terminated but who has not received payment in full of
the balance in his Individual Account to which he is entitled.
Section 1.24
Highly Compensated Employees will be determined in accordance
with the following:
(a) Highly Compensated Employee means an employee who during the
look back year or the determination year:
(1) Was at any time a five percent (5%) owner of the Employer;
(2) Received compensation from the Company in excess of seventy-
five thousand dollars ($75,000) (or such higher amount as may be
provided under Code Section 414(q));
(3) Received compensation from the Company in excess of fifty
thousand dollars ($50,000) (or such higher amount as may be
provided under Code Section 414(q)) and was in a group consisting
of the top twenty percent (20%) of the employees of the Company
when ranked on the basis of compensation; or
(4) Was at any time an officer and received compensation greater
than fifty percent (50%) of the maximum amount under Code Section
415(b)(1)(A). Not more than fifty (50) officers (or, if lesser,
the greater of three (3) employees or ten percent (10%) of the
employees) shall be considered under this Subsection as Highly
Compensated Employees. If no officer is described above, then
the highest paid officer shall be treated as described in this
item (4).
(b) If the employee was not a Highly Compensated Employee for
the look back year, then he shall not be considered a Highly
Compensated Employee for the determination year unless he is a
five percent (5%) owner of the Employer or one of the highest
paid one hundred (100) employees and meets the criteria of items
(2), (3) or (4) of Subsection (a) of this Section.
(c) If the Highly Compensated Employee is a five percent (5%)
owner or one of the ten (10) most highly compensated employees,
then the compensation and contributions of employees who are
spouses, lineal descendants, ascendants or spouses of lineal
descendants or ascendants of such Highly Compensated Employees
shall be attributed to the Highly Compensated Employee and the
employees who are such relatives shall not be considered as
separate employees. In the event that family aggregation is
required, the limitation on compensation pursuant to Code Section
401(a)(17) will be allocated among those family members who have
not attained age nineteen (19) by the close of the Plan Year by
multiplying the limitation by a fraction, the numerator of which
is the individual family member's compensation and the
denominator of which is the total compensation of all members of
the family group or in such other manner as provided by
regulation and pronouncements of the Internal Revenue Service.
(d) For purposes of determining Highly Compensated Employees,
compensation shall mean compensation paid by the Company for
purposes of Code Section 415(c)(3) and shall include amounts
deferred pursuant to Code Sections 125 (flexible benefit plans);
402(a)(8) (salary redirection); and 402(h)(1)(B) (simplified
employee plans).
(e) For purposes of determining the top twenty percent (20%) of
employees and the number of officers counted as Highly
Compensated Employees, the following employees shall be excluded:
(1) Employees who have not completed six (6) months of service,
(2) Employees who normally work less than seventeen and one-half
(17-1/2) hours per week,
(3) Employees who normally work during not more than six (6)
months during the Plan Year,
(4) Employees who have not attained age twenty-one (21),
(5) Employees who are non-resident aliens.
(f) A former employee shall be treated as a Highly Compensated
Employee if (1) such employee was a Highly Compensated Employee
when such employee separated from Service, or (2), such employee
was a Highly Compensated Employee at any time after attainment of
age fifty-five (55).
(g) Except as otherwise provided in this Section, the term "look
back year" shall mean the twelve (12) month period immediately
preceding the determination year.
(h) Except as otherwise provided in this Section the term
"determination year" shall mean the current Plan Year.
(i) To the extent permitted by regulations under Code Section
414(q), the Employer may elect to make the look back year
calculation on the basis of the calendar year ending with or
within the applicable determination year (or, in the case of a
determination year that is shorter than twelve (12) months, the
calendar year ending with or within the twelve (12) month period
ending with the end of the determination year). In such case,
the Employer must make the determination year calculation on the
basis of the period (if any) by which the applicable
determination year extends beyond such calendar year. If the
Employer makes the election provided for in this Subsection, such
election must be made with respect to all plans, entities and
arrangements of the Employer.
(j) The determination of Highly Compensated Employees shall be
determined on a Company wide basis and shall not be determined on
an Employer-by-Employer or plan-by-plan basis.
(k) If the Employer so elects for a year, item (2) of Subsection
(a) of this Section shall be applied by substituting fifty
thousand dollars ($50,000) in place of seventy-five thousand
dollars ($75,000), and item (3) of Subsection (a) of this Section
shall not apply, provided that:
(1) At all times during such year, the Employer maintained
substantial business activities and employed employees in at
least two (2) significantly separate geographic areas, and
(2) The Employer satisfies such other conditions as may be
prescribed by the Secretary of the Treasury.
(l) The determination of Highly Compensated Employees shall be
governed by Code Section 414(q) and the regulations issued
thereunder.
Section 1.25
Individual Account means the detailed record kept of the amounts
credited or charged to each Participant in accordance with the
terms hereof. Such Individual Account is comprised of the
following accounts: a Salary Redirection Account, a Matching
Contribution Account, a Rollover Contribution Account, and
effective January 1, 1998 the Prior ESOP Account.
Section 1.26
Investment Fund means the investment fund established pursuant to
Section 4.2.
Section 1.27
Investment Manager means a Fiduciary (other than the Trustee or
other named Fiduciary) as defined in Section 3(38) of the
Employee Retirement Income Security Act of 1974 who is appointed
by the Sponsoring Employer pursuant to Section 9.3.
Section 1.28
Leased Employee shall mean any person (other than an employee of
the recipient) who provides services to the recipient if such
services are provided pursuant to an agreement between the
recipient and any other person ("leasing organization"), such
person has performed such services for the recipient (or for the
recipient and any related persons determined in accordance with
Code Section 414(n)(6)) on a substantially full-time basis for a
period of one (1) year, and such services are of a type
historically performed by employees in the business field of the
recipient employer.
Section 1.29
LG&E Energy Corp. Common Stock Fund means the fund invested
primarily in shares of common stock of LG&E Energy Corp.
Section 1.30
Limitation Year means the twelve (12) month period beginning on
January 1 and ending on December 31.
Section 1.31
Matching Contribution Account means that portion of a
Participant's Individual Account attributable to (i) Matching
Contributions allocated to such Participant pursuant to Section
3.2 and (ii) the Participant's proportionate share, attributable
to his Matching Contribution Account, of the Adjustments, reduced
by any distributions from such Account pursuant to Article 5 and
any withdrawals from such Account pursuant to Article 6.
Section 1.32
Matching Contributions means contributions made to the Trust Fund
by the Employer pursuant to Section 3.2.
Section 1.33
Normal Retirement Date means the first day of the month
coincident with or next following the Participant's sixty-fifth
(65th) birthday. The Normal Retirement Age shall be age
sixty-five (65).
Section 1.34
Participant means any Employee who becomes a Participant as
provided in Article 2 hereof.
Section 1.35
Paying Agent means the payroll department of the Company or a
participating subsidiary, acting as agent for a Participant, or
the trustees of the Louisville Gas and Electric Company
Employees' Stock Ownership Plan and Trust, or effective January
1, 1998, the Trustee of the Plan.
Section 1.36
Plan means the 401(k) Savings Plan for Employees of Louisville
Gas and Electric Company Who Are Represented by Local 2100 of
IBEW.
Section 1.37
Plan Year means the twelve (12) month period beginning on January
1 and ending on December 31.
Section 1.38
Prior ESOP Account means the portion of the Individual Account
attributable to the balance transferred from the Louisville Gas
and Electric Employees' Stock Ownership Plan, effective January
1, 1998.
Section 1.39
Prior Plan means the 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company Who Are Represented by Local
2100 of IBEW, effective January 1, 1993.
Section 1.40
Rollover Contribution means contributions made to the Trust Fund
by an Employee pursuant to Section 3.3.
Section 1.41
Rollover Contribution Account means that portion of an Employee's
Individual Account attributable to (i) Rollover Contributions
pursuant to Section 3.3 and (ii) the Participant's proportionate
share, attributable to his Rollover Contribution Account, of the
Adjustments, reduced by any distributions from such Account
pursuant to Article 5 and any withdrawals from such Account
pursuant to Article 6.
Section 1.42
Salary Redirection means contributions made to the Trust Fund by
the Employer pursuant to Section 3.1.
Section 1.43
Salary Redirection Account means that portion of a Participant's
Individual Account attributable to (i) Salary Redirection amounts
made on his behalf pursuant to Section 3.1 and (ii) the
Participant's proportionate share, attributable to his Salary
Redirection Account, of the Adjustments, reduced by any
distributions from such Account pursuant to Article 5 and any
withdrawals from such Account pursuant to Article 6.
Section 1.44
Total and Permanent Disability or Totally and Permanently
Disabled means totally and permanently incapacitated, physically
or mentally, from engaging in any gainful occupation or
employment and qualifies as disabled under the Retirement Income
Plan for Employees of Louisville Gas and Electric Company Who Are
Represented by Local 2100 of IBEW.
Section 1.45
Trust Agreement means the agreement entered into between the
Sponsoring Employer and the Trustee pursuant to Article 8 hereof.
Section 1.46
Trust Fund means the trust fund created in accordance with
Article 8 hereof.
Section 1.47
Valuation Date means the date the Investment Manager values the
assets of the Investment Fund. The Valuation Date will occur at
least once a year.
Section 1.48
Trustee means such individual or corporation as shall be
designated in the Trust Agreement to hold in trust any assets of
the Plan for the purpose of providing benefits under the Plan,
and shall include any successor trustee designated thereunder.
ARTICLE 2
PARTICIPATION
Section 2.1
Eligibility Requirements
Each Employee shall be eligible to participate as of the Entry
Date coincident with or next following the completion of six (6)
months of continuous employment.
Section 2.2
Plan Binding
Upon becoming a Participant, a Participant shall be bound then
and thereafter by the terms of this Plan and the Trust Agreement,
including all amendments to the Plan and the Trust Agreement made
in the manner herein authorized.
Section 2.3
Reemployment
(a) Termination of employment shall be deemed to occur when an
Employee has an interruption in continuity of his employment by
the Company. Such termination may have resulted from retirement,
death, voluntary or involuntary termination of employment,
unauthorized absence, or by failure to return to active
employment with the Company or to retire by the date on which an
authorized leave of absence expired.
(b) If an Employee who was not eligible to become a Participant
in the Plan during his prior period of employment is reemployed,
he shall be eligible to participate in the Plan after he has met
the requirements of Section 2.1.
(c) If an Employee who was a Participant in the Plan during his
prior period of employment is reemployed, he shall be eligible to
again become a Participant as of the first payroll coincident
with or next following his change in status.
(d) If a person employed by the Employer becomes an Employee as
defined under this Plan, he shall be eligible to participate in
the Plan as of the date of his change in status, provided he has
met the requirements of Section 2.1. If person employed by the
Employer ceases to be an Employee as defined under the Plan he
will cease to be an active Participant effective as of the first
payroll coincident with or next following his change in status.
Section 2.4
Transfers
When an employee is no longer eligible for participation under
the terms of this Plan but is eligible for participation under
the Louisville Gas and Electric Company 401(k) Savings Plan
(salaried plan), administrative adjustments to transfer such
employee to the salaried plan, shall be made as soon as
practicable.
Section 2.5
Beneficiary Designation
Upon commencing participation, each Participant shall designate a
Beneficiary on forms furnished by the Committee. Such
Participant may then from time to time change his Beneficiary
designation by written notice to the Committee and, upon such
change, the rights of all previously designated Beneficiaries to
receive any benefits under this Plan shall cease. A married
Participant may not name as his Beneficiary someone other than
his spouse unless the spouse consents in writing to such
designation, which consent shall be acknowledged by a Plan
representative or by a notary public. If the Beneficiary
designation consented to by the spouse is not limited to a
specific Beneficiary ("general consent"), the consent must
acknowledge that the spouse has a right to limit consent to a
specific Beneficiary. The consent of the spouse must be obtained
each time the Beneficiary is changed, unless a general consent is
given. If, at the time of a Participant's death while benefits
are still outstanding, his named Beneficiary does not survive
him, the benefits shall be paid to his named contingent
Beneficiary. If a deceased Participant is not survived by either
a named Beneficiary or contingent Beneficiary (or if no
Beneficiary was effectively named), the benefits shall be paid in
a single sum to the person or persons in the first of the
following classes of successive preference beneficiaries then
surviving: the Participant's (i) surviving spouse, (ii)
children, (iii) parents, (iv) brothers and sisters, (v) executors
and administrators. If the Beneficiary or contingent Beneficiary
is living at the death of the Participant, but such person dies
prior to receiving the entire death benefit, the remaining
portion of such death benefits shall be paid in a single sum to
the estate of such deceased Beneficiary or contingent
Beneficiary.
Section 2.6
Notification of Individual Account Balance
At least once each Plan Year or more frequently as determined by
the Committee, the Committee shall notify each Participant of the
amount of his share in the Adjustments and Contributions for the
period just completed, and the new balance of his Individual
Account.
ARTICLE 3
CONTRIBUTIONS
Section 3.1
Salary Redirection
Each Employee who satisfies the requirements of Section 2.1 may
elect to have Salary Redirection made on his behalf, commencing
on the date specified in Section 2.1. Such election shall be
made by entering into a Salary Redirection agreement with the
Employer in which it is agreed that the Employer will redirect a
portion of the Participant's Compensation and contribute that
designated amount to the Trust Fund on behalf of the Participant
in accordance with the following.
(a) Salary Redirection Agreement. Each eligible Employee may
enter into a Salary Redirection agreement under which the
Employee's Employer will redirect a portion of the Participant's
Compensation during each payroll period in an amount equal to an
integral percentage from one percent (1%) to sixteen percent
(16%) of such Compensation and contribute such percentage to the
Trust Fund on behalf of the Participant.
(b) Submission of Form. In order for Salary Redirection to
commence on the appropriate date (the beginning of a payroll
period), the Salary Redirection agreement must be received by the
Committee at least fifteen (15) days prior to the date Salary
Redirection is to start. Notwithstanding the above, a terminated
Participant who is reemployed and is eligible to participate upon
reemployment may enter into a Salary Redirection Agreement on his
reemployment date to be applicable to Compensation earned on and
after such date. In the event a Participant does not so elect
when initially eligible, he may subsequently elect to have Salary
Redirection made on his behalf commencing with the first day of
any payroll period which is at least fifteen (15) days after the
date his election form is delivered to the Committee. The Salary
Redirection agreement shall be on a form provided by the
Committee. Such agreement shall authorize the Employer to reduce
Compensation otherwise payable to the Participant during each pay
period by the amount of Salary Redirection elected.
(c) Change in Redirected Amounts. A Participant electing to
have Salary Redirection made on his behalf to the Plan pursuant
to this Section, may, on a Salary Redirection agreement provided
by and submitted to the Committee, increase or decrease his
Salary Redirection amount (within the appropriate minimum and
maximum) as of the first day of any payroll period which is at
least fifteen (15) days after the date his election form is
received by the Committee, but not retroactively. The Salary
Redirection agreement shall state the amount of Salary
Redirection he desires to have made.
(d) Cessation of Redirection. Any Participant may elect to
cease future Salary Redirection to the Plan effective with the
first regular payroll period that it is administratively possible
to do so following notification. In the event any such
Participant desires thereafter to recommence having Salary
Redirection made on his behalf, he shall be allowed to do so
effective with the first day of any payroll period which is at
least fifteen (15) days after receipt of written notice by the
Committee on the appropriate form stating the amount of Salary
Redirection he desires to have made.
(e) Notice Requirements. Any of the notice requirements in this
Section may be lengthened or shortened by the Committee if it
finds it administratively necessary or feasible to do so, with
such discretion being exercised in a nondiscriminatory manner.
(f) Payment to Trustee. The Employer shall pay to the Trustee
any Salary Redirection made on behalf of any Participant within a
reasonable time following the end of each regular pay period, but
no later than ninety (90) days beginning on the date on which
such Salary Redirection would otherwise be paid to the
Participant in cash. Effective February 3, 1997, the Employer
shall pay to the Trustee any Salary Redirection made on behalf of
any Participant as of the earliest date on which such Salary
Redirection can reasonably be segregated from the Employer's
general assets, but no later than the fifteenth (15th) business
day of the month following the month in which the Salary
Redirection is received by the Employer or the fifteenth (15th)
business day of the month following the month in which the Salary
Redirection would otherwise have been payable to the Participant
in cash.
(g) Amounts of ESOP Dividends Deemed Deferred. A Participant
will be deemed to have elected to have a Salary Redirection made
on his behalf in the amount of the ESOP Dividends paid to him in
cash, subject to the limits of Sections 401(k), 402(g) and 415 of
the Code and the regulations thereunder, unless the Participant
elects otherwise by making the appropriate election with the
Committee in the manner prescribed by the Committee. Deemed
deferrals made pursuant to this Subsection 3.1(g), shall not be
taken into account in the calculation of the percentage of salary
redirected pursuant to Subsection 3.1(a).
Section 3.2
Matching Contributions
For each Accounting Year in which the Employer has net profits or
accumulated net profits, as determined under generally accepted
accounting principles, the Employer shall make an Employer
Matching Contribution from such net profits or accumulated net
profits to the Trust Fund on behalf of eligible Participants.
The Matching Contribution will be an amount necessary to match
thirty-three percent (33%) of the eligible Participants' net
eligible Salary Redirection made to the Trust Fund for the Plan
Year. Net eligible Salary Redirection means Salary Redirection
not to exceed six percent (6%) of Compensation during the Plan
Year, which Salary Redirection has not been withdrawn. For
purposes of calculating net eligible Salary Redirection,
withdrawals shall be deemed to have been made from the earliest
Salary Redirection not yet withdrawn. Any Matching Contribution
which is made as of a Valuation Date shall be allocated to the
Matching Contribution Account of each eligible Participant. For
purposes of this Section, an eligible Participant shall mean a
Participant who has made Salary Redirection contributions during
the Plan Year.
Section 3.3
Rollover Amount From Other Plans
An Employee eligible to participate in the Plan, regardless of
whether he has satisfied the participation requirements of
Section 2.1, may transfer to the Trust Fund a "qualifying total
distribution," defined in Section 402(a)(5)(E) of the Code,
provided that such distribution is from a plan which meets the
requirements of Section 401(a) of the Code (the "Other Plan").
(a) The procedures approved by the Committee shall provide that
such a transfer may be made only if the following conditions are
met:
(1) The transfer occurs on or before the sixtieth (60th) day
following the Employee's receipt of the distribution from the
Other Plan;
(2) The amount transferred is equal to any portion of the
distribution the Employee received from the Other Plan, subject
to the maximum rollover provision of Section 402(a)(5)(B) of the
Code, limiting such amount to the fair market value of all
property received in such a distribution reduced by employee
contributions, as defined in Section 402 (a)(5)(E) of the Code;
(3) Any contribution pursuant to this Section must be entirely
in cash.
(b) Notwithstanding the foregoing, if an Employee had deposited
a distribution previously received from an Other Plan into an
individual retirement account ("IRA"), as defined in Section 408
of the Code, he may transfer the amount of such distribution,
plus earnings thereon from the IRA, to this Plan; provided such
rollover amount is deposited with the Trustee on or before the
sixtieth (60th) day following receipt thereof from the IRA.
(c) The Committee shall develop such procedures, and may require
such information from an Employee desiring to make such a
transfer, as it deems necessary or desirable to determine that
the proposed transfer will meet the requirements of this Section.
Upon approval by the Committee, the amount transferred shall be
deposited in the Trust Fund and shall be credited to a Rollover
Account. Such account shall be one hundred percent (100%) vested
in the Employee and shall share in income allocations in
accordance with Section 4.3. Upon termination of employment, the
total amount of the Rollover Account shall be distributed in
accordance with Article 5.
(d) Upon such a transfer by an Employee who is otherwise
eligible to participate in the Plan but who has not yet completed
the participation requirements of Section 2.1, his Rollover
Account shall represent his sole interest in the Plan until he
becomes a Participant.
Section 3.4
Nondiscrimination Test for Salary Redirection
(a) Periodically as determined by the Employer, the Employer
shall check the actual deferral percentages against the tests
identified below. In the event that neither test is met, the
Employer shall reduce the Salary Redirection percentages of
Highly Compensated Employees that are above the maximum deferral
percentage allowed under the tests; provided that the initial
reductions shall be in unmatched Salary Redirection, and only if
such redirections are not sufficient shall matched Salary
Redirection be reduced. Beginning with the highest such
percentage, each contribution percentage shall be reduced to the
next highest percentage, and so forth, until the excess is
eliminated. If it is necessary to reduce the matched Salary
Redirection, the Participant shall nevertheless receive from the
Plan a distribution equal to the Employer Matching Contribution
plus any income thereon that would have been allocated to him had
such reduction in contribution not been necessary.
(b) The term "eligible Employees," for purposes of this Section,
shall mean all employees of the Employer who are eligible to make
Salary Redirection contributions during the Plan Year for which
the tests are being made.
(c) The term "actual deferral percentage," means the average of
the following percentages (calculated separately for each
eligible Employee): Salary Redirection contributions on behalf
of each eligible Employee divided by the compensation of the
eligible Employee. Matching Contributions may, at the election
of the Employer, be included in the numerator. In calculating the
actual deferral percentage of a Highly Compensated Employee who
participates in more than one cash or deferred arrangement of the
Company, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement.
(d) The term "compensation" for purposes of this Section, shall
include amounts paid by the Employer to the Employee during the
period he is eligible to make Salary Redirection contributions
and which amounts are currently includable in the Employee's
gross income. For all Plan Years, the Employer shall have the
right to increase the Employee's compensation, for purposes of
this Section by the amount of any Employee salary redirection
elections under Section 125 (flexible benefit plans), 402(a)(8)
(salary redirection) and 402(h)(1)(B) (simplified employee plans)
of the Code, or to use such alternate definition of compensation
as may be provided under Section 414(s) of the Code. Alternate
definitions of compensation under Code Section 414(s) include (i)
compensation within the meaning of Code Section 415(c)(3)
including or excluding reimbursements or other expense
allowances, fringe benefits (cash or non-cash), moving expenses,
deferred compensation and welfare benefits, and (ii) any other
definition of compensation that is reasonable, does not by design
favor Highly Compensated Employees and satisfies the
nondiscrimination requirements of Code Section 414(s) and the
regulations thereunder. Compensation for purposes of this
Section shall be limited to two hundred thousand dollars
($200,000) or such greater amount as determined pursuant to Code
Section 401(a)(17). In determining the compensation of a
Participant for purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying such rules,
the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of the year.
If, as a result of the application of such rules, the adjusted
two hundred thousand dollar ($200,000) limitation is exceeded,
then (except for purposes of determining the portion of
compensation up to the integration level if this plan provides
for permitted disparity), the limitation shall be prorated among
the affected individuals in proportion to each such individual's
compensation as determined under this Section prior to the
application of this limitation.
(e) Only one (1) of the following two (2) tests need be
satisfied not to have a reduction in Salary Redirection.
Test I - The actual deferral percentage for the group of Highly
Compensated Employees is not more than the actual deferral
percentage of all other eligible Employees multiplied by one and
twenty-five hundredths (1.25).
Test II - The excess of the actual deferral percentage for the
group of Highly Compensated Employees over the actual deferral
percentage for all other eligible Employees is not more than two
(2) percentage points, and the actual deferral percentage for the
group of Highly Compensated Employees is not more than the actual
deferral percentage for all other eligible Employees multiplied
by two (2.0).
(f) If neither Test I nor Test II is satisfied for any Plan
Year, the Plan shall nevertheless be deemed to comply with the
requirements of Section 401(k)(3)(A)(ii) of the Code for such
Plan Year if, before the last day of the following Plan Year, the
amount of any excess contribution (adjusted for income or loss
for the Plan Year computed using any reasonable method that
satisfies Code Section 401(a)(4) provided it is used consistently
for all Participants and for all corrective distributions under
the Plan for the Plan Year and provided it is used by the Plan
for allocating income or loss to Participants' Individual
Accounts) is distributed to the Participant. Unless a Participant
elects otherwise in the manner prescribed by the Committee, a
Participant receiving a distribution pursuant to this Subsection
3.4(f) shall be deemed to have made a Salary Redirection
agreement of Compensation (earned in the taxable year in which
such distribution is received) of up to the amount of such
distribution, subject to the limits of Code Sections 401(k),
402(g) and 415 in effect for the year such Salary Redirections
are made. In the event any excess deferrals will be distributed
to the Participant, the Administrator may pay these amounts to a
Paying Agent. Prior to January 1, 1997, in the case of family
aggregation pursuant to Subsection 1.24(c), excess contributions
under this Section shall be allocated to Participants who are
subject to the family aggregation rules of Code Section 414(q)(6)
in the manner prescribed by the regulations.
(g) This Section shall be governed by the rules of Code Section
401(k), 401(a)(4) and any rules or regulations issued pursuant
thereto, including the aggregation rules of Code Section
401(k)(3) and the regulations thereunder.
Section 3.5
Maximum Individual Deferral
A Participant shall not be permitted to have his Employer
redirect an amount in excess of seven thousand dollars ($7,000)
in any calendar year pursuant to the provisions of Section 3.1,
including contributions to any other plan of the Company which
are made pursuant to Code Section 402(a)(8). The seven thousand
dollars ($7,000) limitation shall be adjusted in accordance with
cost-of-living adjustments made by the Secretary of the Treasury
pursuant to Code Section 402(g)(5). If any amount is redirected
pursuant to Section 3.1 in excess of seven thousand dollars
($7,000), or if a Participant notifies the Committee, in writing,
by March 1 following the close of the taxable year of its portion
of the amount contributed in excess of seven thousand dollars
($7,000) to all plans pursuant to Code Section 402(a)(8), such
amount shall be deemed an "excess deferral" and the 401(k)
Savings Committee shall direct the Trustee to distribute to the
Participant (not later than the April 15 following the calendar
year in which the excess deferral was made) the amount of the
excess deferral (adjusted for income or loss for the Plan Year
computed using any reasonable method that satisfies Code Section
401(a)(4) provided it is used consistently for all Participants
and for all corrective distributions under the Plan for the Plan
Year and provided it is used by the Plan for allocating income or
loss to Participants' Individual Accounts and reduced by any
deferrals distributed or reclassified pursuant to Section 3.4).
In the case of family aggregation pursuant to Subsection 1.24(c),
excess contributions under this Section shall be allocated to
Participants who are subject to the family aggregation rules of
Code Section 414(q)(6) in the manner prescribed by regulations.
Section 3.6
Mistake of Fact
If due to a mistake of fact, Employer Contributions to the Trust
Fund for any Plan Year exceed the amount intended to be
contributed, notwithstanding any provision to the contrary, the
Employer, as soon as such mistake of fact is discovered, shall
notify the Trustee. The Employer shall direct that the Trustee
return such excess to the Employer, provided such return is made
within one (1) year of the date on which the Employer made the
contribution.
ARTICLE 4
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
Section 4.1
Individual Accounts
The Committee shall establish and maintain an Individual Account
in the name of each Participant to which the Committee shall
credit all amounts allocated to each such Participant pursuant to
Article 3 and the following Sections of this Article.
Section 4.2
Investment of Accounts
The Individual Account shall be invested by the Trustee in
accordance with the following:
(a) There shall be established the following Investment Funds
within the Trust Fund:
(1) Fidelity Retirement Government Money Market Portfolio,
(2) Fidelity Ginnie Mae Portfolio, frozen effective October 1,
1996,
(3) Fidelity Puritan Fund,
(4) Fidelity Spartan U. S. Equity Index Portfolio,
(5) Fidelity Magellan Fund,
(6) Fidelity Contrafund, effective October 1, 1996,
(7) Fidelity Equity-Income II Fund, effective October 1, 1996,
(8) Warburg Pincus Emerging Growth, effective October 1, 1996,
(9) Templeton Foreign, effective October 1, 1996,
(10) Fidelity Intermediate Bond Fund, effective October 1, 1996,
(11) LG&E Energy Corp. Common Stock Fund, effective January 1,
1998.
(b) The Participant may direct the investments of current
contributions to his Individual Account and the cumulative
balance of his Individual Account in increments of ten percent
(10%)(one percent (1%) effective October 1, 1996), by giving the
Investment Manager such notice as it shall require to be
effective as soon as reasonably possible.
(c) A Participant may transfer the cumulative balance of his
Individual Account, excluding the portion attributable to his
Prior ESOP Account. There shall be no limit on the number of
times a Participant can change the direction as to the investment
of current contributions to his Individual Account.
(d) A Participant who does not make any election under this
Section shall have the Individual Account and current
contributions made on his behalf invested in the Retirement
Government Money Market Portfolio.
Section 4.3
Valuation of Accounts
(a) Individual Account. As of each Valuation Date, the
Committee shall determine the fair market value of the Individual
Account of each Participant as follows:
(1) The value of the Individual Account of each Participant as
of the last Valuation Date;
(2) Minus the amount of any withdrawals and distributions made
from the Participant's Individual Account since the last
Valuation Date;
(3) Plus any contributions to the separate account in the
Participant's Individual Account established for contributions
pursuant to the following Sections since the last Valuation Date:
3.1, 3.2, 3.3;
(4) Plus any investment earnings allocated to such Individual
Account since the last Valuation Date;
(5) Minus any investment losses allocated to such Individual
Account since the last Valuation Date.
(b) Investment Earnings or Losses. The investment earnings (or
losses, if such computation is negative) from each Investment
Fund shall mean the net gain or loss of each Investment Fund from
investments, as reflected by interest payments, dividends,
realized and unrealized gains and losses on securities, other
investment transactions and expenses paid from the fund. In
determining the investment earnings or losses of the Investment
Fund as of any date, assets shall be valued on the basis of their
fair market value as of said date.
(c) Allocation of Investment Earnings or Losses. The investment
earnings and losses from each Investment Fund shall be allocated
to the Individual Account of each Participant invested in the
respective investment fund in such reasonable and consistently
applied manner as the Investment Manager shall determine,
provided that the allocation is based on the relative market
values of the Participant's Individual Account.
Section 4.4
Trustee and Committee Judgment Controls
In determining the fair market value of the Trust Fund and of
Individual Accounts, the Trustee and the Committee shall exercise
their best judgment, and all such determinations of value (in the
absence of bad faith) shall be binding upon all Participants and
their beneficiaries. All allocations shall be deemed to have
been made as of the Valuation Date, regardless of when actual
allocations were undertaken.
Section 4.5
Maximum Additions
Anything herein to the contrary notwithstanding, the total Annual
Additions of a Participant for any Limitation Year when combined
with any similar annual additions credited to the Participant for
the same period from another qualified Defined Contribution Plan
maintained by the Company, shall not exceed the lesser of the
amounts determined pursuant to Subsection (a) or (b) of this
Section.
(a) Thirty thousand dollars ($30,000) or, if greater, twenty-
five percent (25%) of the dollar limitation in effect under Code
Section 415(b)(1)(A); or
(b) Twenty-five percent (25%) of the Participant's compensation
received from the Company for such Limitation Year, as determined
pursuant to Section 415 of the Code.
(c) In the event a Participant is covered by one or more Defined
Contribution Plans maintained by the Company, the maximum annual
additions as noted above shall be decreased in any other Defined
Contribution Plan as determined necessary by the Company, prior
to a reduction of this Plan, to ensure that all such plans will
remain qualified under the Code.
Section 4.6
Corrective Adjustments
In the event that corrective adjustments in the Annual Addition
to any Participant's Individual Account are required as the
result of allocating forfeitures, a reasonable error in
estimating a Participant's compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning
of Code Section 402(g)(3)) that may be made with respect to an
individual under the limits of Code Section 415, or such other
facts and circumstances as may be provided for by rules or
regulations issued pursuant to Code Section 415, the corrective
adjustments shall be made pursuant to and in the order of the
Subsections in this Section. Unless he elects otherwise in the
manner prescribed by the Committee, a Participant receiving a
distribution under this Section 4.6 shall be deemed to have made
a Salary Redirection agreement of Compensation (earned in the
taxable year in which such distribution is received) equal to the
amount of such distribution, subject to the limits of Code
Section 401(k), 402(g) and 415 for the Plan Year such Salary
Redirections are made. In the event any excess Annual Additions
will be distributed to the Participant, the Committee may pay
these amounts to the Paying Agent.
(a) The portion of the Participant's unmatched Salary
Redirection shall be reduced to insure compliance with Section
4.5. Any affected Salary Redirection will be distributed to the
Participant.
(b) The portion of the Participant's matched Salary Redirection
and his Matching Contributions shall be proportionally reduced to
insure compliance with Section 4.5. Any affected Salary
Redirection will be distributed to the Participant. Any affected
Matching Contributions shall be used to reduce future Matching
Contributions.
Section 4.7
Defined Contribution and Defined Benefit Plan Fraction
If a Participant is a participant in a Defined Benefit Plan
maintained by the Company, the sum of his defined benefit plan
fraction and his defined contribution plan fraction for any
Limitation Year may not exceed one (1.0).
(a) For purposes of this Section, the term "defined contribution
plan fraction" shall mean a fraction the numerator of which is
the sum of all of the Annual Additions of the Participant under
this Plan and any other Defined Contribution Plan maintained by
the Company as of the close of the Limitation Year and the
denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and for each prior
Limitation Year of employment with the Company:
(1) The product of one and twenty-five hundredths (1.25)
multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the Code; or
(2) The product of one and forty hundredths (1.4) multiplied by
the amount which may be taken into account under Code Section
415(c)(1)(B) with respect to each individual under the Plan for
such Limitation Year.
(b) For purposes of this Section, the term, "defined benefit
plan fraction" shall mean a fraction the numerator of which is
the Participant's projected annual benefit (as defined in the
Defined Benefit Plan) determined as of the close of the
Limitation Year and the denominator of which is the lesser of:
(1) The product of one and twenty-five hundredths (1.25)
multiplied by the dollar limitation in effect pursuant to Section
415(b)(1)(A) of the Code for such Limitation Year; or
(2) The product of one and forty hundredths (1.4) multiplied by
the amount which may be taken into account pursuant to Section
415(b)(1)(B) of the Code with respect to each individual under
the Plan for such Limitation Year.
(c) The limitation on aggregate benefits from a Defined Benefit
Plan and a Defined Contribution Plan which is contained in
Section 2004 of ERISA, as amended, shall be complied with by a
reduction (if necessary) in the Participant's benefits under the
Defined Benefit Plan.
ARTICLE 5
DISTRIBUTIONS
Section 5.1
Normal Retirement
When a Participant lives to his Normal Retirement Date and
retires, he shall become entitled to the full value of his
Individual Account as of the preceding Valuation Date, plus any
Salary Redirection and Rollover Contributions made by or on
behalf of the Participant but not yet allocated to the
Participant's Individual Account, and plus any Matching
Contributions to which the Participant is entitled pursuant to
Section 3.2 but not yet allocated to the Participant's Individual
Account.
Section 5.2
Early Retirement
When a Participant lives to his Early Retirement Date and
retires, he shall become entitled to the full value of his
Individual Account as of the preceding Valuation Date, plus any
Salary Redirection and Rollover Contributions made by or on
behalf of the Participant but not yet allocated to the
Participant's Individual Account, and plus any Matching
Contributions to which the Participant is entitled pursuant to
Section 3.2 but not yet allocated to the Participant's Individual
Account.
Section 5.3 Late Retirement
A Participant may continue his employment past his Normal
Retirement Date on a year-to-year basis. He shall continue to be
an active Participant under the Plan. Upon his actual
retirement, he shall become entitled to the full value of his
Individual Account of the preceding Valuation Date, plus any
Salary Redirection and Rollover Contributions made by or on
behalf of the Participant but not yet allocated to the
Participant's Individual Account, and plus any Matching
Contributions to which the Participant is entitled pursuant to
Section 3.2 but not yet allocated to the Participant's Individual
Account.
Section 5.4
Death
If a Participant dies while an active Participant under the Plan,
his Beneficiary shall be entitled to the full value of his
Individual Account as of the preceding Valuation Date, plus any
Salary Redirection and Rollover Contributions made by or on
behalf of the Participant but not yet allocated to the
Participant's Individual Account, plus any Matching Contributions
to which the Participant is entitled pursuant to Section 3.2 but
not yet allocated to the Participant's Individual Account.
Section 5.5
Disability
When it is determined that a Participant is Totally and
Permanently Disabled, the Committee shall certify such fact to
the Trustee and such Disabled Participant shall be entitled to
receive the full value of his Individual Account as of the
preceding Valuation Date, plus any Salary Redirection and
Rollover Contributions made by or on behalf of the Participant
but not yet allocated to the Participant's Individual Account,
and plus any Matching Contributions to which the Participant is
entitled pursuant to Section 3.2 but not yet allocated to the
Participant's Individual Account.
Section 5.6
Termination of Employment
Upon termination of employment for any reason (other than Normal
Retirement, Early Retirement, Late Retirement, Disability
Retirement, or Death), a Participant shall be entitled to a
benefit equal to the full value of his Individual Account as of
the preceding Valuation Date, plus any Salary Redirection and
Rollover Contributions made by or on behalf of the Participant
but not yet allocated to the Participant's Individual Account,
plus any Matching Contributions to which the Participant is
entitled pursuant to Section 3.2 but not yet allocated to the
Participant's Individual Account.
Section 5.7
Commencement of Benefits
(a) Any benefits payable under this Article shall be paid as
soon as reasonably possible following the actual date of
separation, subject to the Participant's consent if his actual
date of separation is prior to Normal Retirement Age and subject
to Subsection 5.9(a). In no event, however, shall payment begin
beyond sixty (60) days after the last day of the Plan Year in
which occurs the latest of (i) the Participant's reaching Normal
Retirement Age; (ii) the tenth (10th) anniversary of the date the
Employee became a Participant; or (iii) termination of the
Participant's employment. Notwithstanding anything in the Plan
to the contrary and notwithstanding the Participant's lack of
consent, benefits under this Plan shall be paid as soon as
reasonably possible following the later of the Participant's
actual date of separation or his Normal Retirement Date.
(b) If the Participant does not consent to a distribution as
provided above, such distribution shall be made based on the
value of the Individual Account as of the Valuation Date
coincident with or immediately preceding the receipt of notice by
the Committee of the election to receive a distribution. Such
distribution shall be made as soon as reasonably possible
following such Valuation Date.
Section 5.8
Minimum Distributions
(a) The Individual Account of all Participants must be
distributed or commence to be distributed no later than April 1
following the calendar year in which such individual attains age
seventy and one-half (70-1/2) unless such individual has
effectively executed a waiver prior to January 1, 1984, in
accordance with the Code and notices and regulations issued
thereunder. However, if the Participant was not a five percent
(5%) owner in any Plan Year after attaining age sixty-five and
one-half (65-1/2) and had attained age seventy and one-half
(70-1/2) prior to January 1, 1988, distributions to said
Participant must commence no later than the April 1 following the
calendar year in which the later of termination of employment or
age seventy and one-half (70-1/2) occurs, or the Participant
becomes a five percent (5%) owner.
(b) All distributions required under this Article shall be
determined and made in accordance with the Proposed Regulations
under Code Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
Proposed Regulations.
Section 5.9
Methods of Payment
(a) A Participant or Beneficiary shall elect a distribution of
the Individual Account as provided hereinafter. No other manner
of distribution shall be provided. The request by the
Participant or the Beneficiary shall be in writing and shall be
filed with the Committee at least thirty (30) days before
distribution is to be made. The Committee may not require a
distribution without the consent of the Participant prior to his
reaching the later of Normal Retirement Age or, if the
Participant is deceased, without the consent of his spouse, if
living, or of his Beneficiary, unless the vested value of the
Individual Account is not more than three thousand five hundred
dollars ($3,500). If the vested value of the Participant's
Individual Account is less than three thousand five hundred
dollars ($3,500), the benefits payable will be paid as soon as
reasonably possible following the actual date of severance,
notwithstanding lack of consent. If the vested value of the
Participant's Individual Account has been more than three
thousand five hundred dollars ($3,500) at the time of any
distribution, the value the Participant's Individual Account will
be deemed to be more than three thousand five hundred dollars
($3,500) at the time of any subsequent distribution for purposes
of the consent requirements of this paragraph. Notwithstanding
the above, no lump sum distribution may be made after periodic
payments have commenced unless the Participant or the
Participant's surviving spouse consents in writing to the
distribution. The alternative forms of distribution are as
follows:
(1) A lump sum distribution in cash or in kind; or
(2) Periodic installment payments (either monthly or annually)
for a period not to exceed ten (10) years as selected by the
Participant or Beneficiary; or
(3) Any combination of the above.
(b) If the Participant dies after the periodic installment
payments commence but before the Individual Account is fully
distributed, the balance remaining in the Individual Account
shall be paid out over the periods remaining pursuant to the
Participant's election under item (2) or (3) of Subsection (a) of
this Section, or, if the Beneficiary elects, such other period as
is allowed under this Section.
(c) Any payment provided for in this Section may not extend
beyond the life expectancy of the Participant or the joint and
last survivor expectancy of the Participant and designated
Beneficiary.
(d) If the Participant dies before distribution occurs or
commences, the Participant's entire interest will be distributed
no later than five (5) years after the Participant's death,
except to the extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made in
substantially equal installments over the life or life expectancy
of the designated Beneficiary commencing no later than one (1)
year after the Participant's death.
(2) If the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to be made or
commence shall not be earlier than the date on which the
Participant would have attained age sixty-five (65). If the
spouse dies before payments begin, any subsequent distribution
shall be made as if the spouse had been the Participant.
(e) Notwithstanding any settlement option contained in this
Plan, the benefits payable to the Beneficiary of any Participant
must be incidental to the primary purpose of distributing
accumulated funds to the Participant, and if the Participant's
designated Beneficiary or survivor is other than his spouse, the
settlement option shall not violate Code Section 401(a)(9).
(f) This Plan specifically permits a distribution to an
alternate payee under a qualified domestic relations order at any
time, irrespective of whether the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section
5.9 gives a Participant a right to receive a distribution at a
time otherwise not permitted under the Plan nor does it permit
the alternate payee to receive a form of payment not permitted
under the Plan.
Section 5.10
Benefits to Minors and Incompetents
(a) In case any person entitled to receive payment under the
Plan shall be a minor, the Committee, in its discretion, may
dispose of such amount in any one or more of the ways specified
in items (1) through (3) of this Subsection.
(1) By payment thereof directly to such minor;
(2) By application thereof for benefit of such minor;
(3) By payment thereof to either parent of such minor or to any
adult person with whom such minor may at the time be living or to
any person who shall be legally qualified and shall be acting as
guardian of the person or the property of such minor; provided
only that the parent or adult person to whom any amount shall be
paid shall have advised the Committee in writing that he will
hold or use such amount for the benefit of such minor.
(b) In the event that it shall be found that a person entitled
to receive payment under the Plan is physically or mentally
incapable of personally receiving and giving a valid receipt for
any payment due (unless prior claim therefor shall have been made
by a duly qualified committee or other legal representative),
such payment may be made to the spouse, son, daughter, parent,
brother, sister or other person deemed by the Committee to have
incurred expense for such person otherwise entitled to payment.
Section 5.11
Unclaimed Benefits
If, after diligent effort, a Participant, spouse or Beneficiary
who is entitled to a distribution cannot be located within a
reasonable period of time after the date such distribution was to
commence, the distributable Individual Account balance shall be
deposited in such separate account as the Trustee shall
determine. The separate account shall be registered in the name
of the person entitled to the distribution. The balance in such
separate account shall be forfeited on the fifth (5th)
anniversary of the Participant's termination of employment, or
such later date as the Committee may determine, and shall be used
to reduce future Employer Contributions. If the Participant,
spouse or Beneficiary subsequently presents a valid claim for the
benefit to the Committee, the Committee shall cause the benefit,
equal to the amount which was forfeited under this Section, to be
restored, first from forfeitures and then from Employer
Contributions.
Section 5.12
Participant Directed Rollovers
(a) Any Participant, spouse or alternate payee under a qualified
domestic relations order entitled to receive an eligible rollover
distribution on or after January 1, 1993, may elect, pursuant to
Code Section 401(a)(31) and the rules and regulations issued
pursuant thereto, to have such distribution paid directly to an
eligible retirement plan. The election shall be made in such
form and in such manner as the Employer may require, consistent
with the rules and regulations issued pursuant to Code Section
401(a)(31).
(b) For purposes of Subsection (a) of this Section, an eligible
rollover distributions is a distribution of all or any portion of
the balance to the credit of the distributee, excluding any
distribution which is (i) one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) or the joint lives (or joint life
expectancies) of the recipient and the recipient's designated
beneficiary; (ii) for a specified period of ten (10) years or
more; or (iii) is required to be made under Code Section
401(a)(9). An eligible retirement plan is an individual
retirement account described in Code Section 408(b) (other than
an endowment contract), a trust described in Code Section 401(a)
that is exempt from tax under Code Section 501(a), or an annuity
plan described in Code Section 403(a).
(c) 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 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
(d) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Article, 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.
(e) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE 6
WITHDRAWALS
Section 6.1
Hardship Withdrawal
(a) Except as otherwise provided in this Section, and upon
proper written application of a Participant made at least thirty
(30) days in advance of the withdrawal date, in such form as the
Committee may specify, the Committee in its sole discretion may
permit the Participant to withdraw a portion or all of the
balance of his Salary Redirection Account; provided that earnings
allocated to said Account may not be withdrawn. Such withdrawal
shall be based on the Valuation Date coincident with or
immediately preceding the date of application plus contributions
made to such Account since such Valuation Date; provided, however
the Committee may defer the withdrawal if it is in the best
interest of the Participant requesting the withdrawal or the
other Participants.
(b) The reason for a withdrawal pursuant to this Section must be
to enable the Participant to meet unusual or special situations
in his financial affairs resulting in immediate and heavy
financial needs of the Participant. Such situations shall be
limited to:
(1) Medical expenses (described in Code Section 213(d))
previously incurred by the Participant, the Participant's spouse
or any dependents of the Participant (as defined in Code Section
152) or necessary for these persons to obtain medical care
described in Code Section 213(d);
(2) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse, children, or dependents (as
defined in Code Section 152);
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(5) Any additional items which may be added to the list of
deemed immediate and heavy financial needs by the Commissioner of
Internal Revenue through the publication of revenue rulings,
notices, and other documents of general applicability.
Any withdrawal hereunder may not exceed the amount required to
meet the immediate financial need created, and provided further
that such amount must not be reasonably available from other
resources of the Participant. The amount of an immediate and
heavy financial need shall include any federal, state, or local
taxes or penalties reasonably anticipated to result from the
distribution.
(c) The minimum amount of withdrawal a Participant may make
pursuant to this Section shall be one thousand dollars ($1,000).
(d) The Committee may shorten the notice period if it finds it
is administratively feasible. In granting or refusing any
request for withdrawal or in shortening the notice period, the
Committee shall apply uniform standards consistently and such
discretionary power shall not be applied so as to discriminate in
favor of Highly Compensated Employees.
(e) The withdrawals under this Section shall in no way affect
said Participant's continued participation in this Plan except by
the reduction in account balances caused by such withdrawals and
except as provided in Subsection (f) of this Section.
(f) If a Participant withdraws Salary Redirection pursuant to
the provisions of this Section, the following provisions of this
Subsection shall apply and the Committee shall deem that such
amount requested for withdrawal is not reasonably available from
other resources of the Participant.
(1) A withdrawal may be made pursuant to this Section only after
the Participant has obtained all distributions other than
hardship distributions, and all nontaxable loans available under
this Plan and all other Plans maintained by the Employer.
(2) Elective contributions and employee contributions under this
Plan, and all other plans maintained by the Employer, such as the
Employee Common Stock Purchase Plan, will be suspended for twelve
(12) months after receipt of the withdrawal of Salary Redirection
pursuant to this Section.
(3) The limitation provided for in Section 3.5 for the taxable
year of the Participant following the taxable year of the
withdrawal pursuant to this Section shall be reduced by the
Participant's Salary Redirection and other elective contributions
for the taxable year of the Participant during which the
withdrawal pursuant to this Section is taken.
Section 6.2
Participant Loans
(a) Effective February 1, 1996, upon proper written application
of a Participant or Beneficiary (which, for purposes of this
Section, shall mean any person who is a party in interest as
defined in Section 3(14) of the Employee Retirement Income
Security Act of 1974 and who has a vested interest in his
Individual Account), made in such form as the Investment Manager
may specify, the Investment Manager may make a loan to the
Participant or Beneficiary from his Individual Account.
Notwithstanding the preceding sentence, a loan shall not be made
to a non-active Participant that may result in discrimination
under Code Section 401(a)(4). The application, and the resulting
loan, must meet the terms and conditions specified in the
following provisions of this Section and the approval or denial
of a loan request will be made on the basis of whether the loan
would meet these requirements.
(b) The total amount of all loans shall not exceed the lesser
of:
(1) Fifty thousand dollars ($50,000), reduced by the highest
outstanding balance of loans from the Plan during the one (1)
year period ending on the day before the loan is made; or
(2) One-half (1/2) the value of the Participant's Individual
Account under the Plan as of the date of the loan minus the
outstanding balance of all other loans from the Plan as of the
date of the loan.
(c) The amount of any loan must be at least one thousand dollars
($1,000).
(d) No more than four (4) loans may be outstanding to any
Participant at any one time. No Participant may refinance a loan
at any time.
(e) The Investment Manager shall credit interest and principal
payments made by a Participant, including payments made pursuant
to Subsection (g) of this Section, against his loans evidenced by
promissory notes held as earmarked assets of his Individual
Account, to the Trust Fund.
(f) The maximum term of repayment for any loan shall be five (5)
years.
(g) The Participant shall authorize his Employer to deduct
approximately equal interest and principal payments from his
compensation payable at the end of each regular pay period (no
less frequently than quarterly) in an amount equal to at least
ten dollars ($10.00) with respect to each outstanding loan. In
the event an inactive Participant or Beneficiary receives a loan
hereunder or in the event that a Participant who received a loan
ceases to be actively employed by the Company, repayments shall
be made to the Committee pursuant to the terms of the promissory
note (no less frequently than quarterly). The Committee shall
transfer payments under this Subsection to the Investment Manager
within a reasonable period of time.
(h) A Participant may repay, at any time, any portion or all of
the then outstanding principal balance of any of his loans,
together with interest due to date on the prepaid portion. Any
such prepayments shall be made to the Investment Manager. Except
as otherwise provided in Subsection (j) of this Section, such
right of prepayment shall be entirely in the discretion of the
Participant and shall be without premium or penalty.
(i) The collateral for each loan shall be the assignment of a
percentage, sufficient for the amount of the loan, of up to fifty
percent (50%) of the Participant's Individual Account as of the
date the loan is made, supported by the Participant's promissory
note for the amount of such loan, including interest, payable to
the order of the Trustee.
(j) Each loan shall bear interest at a reasonable rate to be
fixed by the Investment Manager which shall be based on interest
rates currently being charged for similar loans by commercial
lending institutions in the same geographical area as the situs
of the Trust. The Investment Manager shall not discriminate
among Participants in the matter of interest rate; but loans
granted at different times may bear different interest rates if,
in the opinion of the Investment Manager, different rates are
required based on the rates being charged by commercial lending
institutions for similar loans.
(k) The terms of the promissory note for each loan shall provide
that if a Participant with an outstanding loan balance defaults
on the loan prior to the earlier of termination of employment
with the Company or attainment of age fifty-nine and one-half (59-
1/2), interest shall continue to accrue on the outstanding
principal balance at the stated rate, and shall be added to the
principal balance as it accrues. If the Participant resumes loan
repayments, such repayment of both principal and interest shall
be based on the outstanding loan balance on the date repayments
resume. The term of the loan, as originally stated, shall be
adjusted so that the period during which the Participant was in
default will be disregarded. If, on the earlier of termination
of employment with the Company or attainment of age fifty-nine
and one-half (59-1/2), loan repayments have not resumed, the end
of the term of the loan will be deemed to have been reached. In
such event, either Subsection (k) of this Section shall apply or,
if applicable, the Participant shall be deemed to have made a
withdrawal equal to the then outstanding principal balance of the
loan. Such deemed withdrawal shall be treated as a distribution
to which Subsection (l) of this Section applies.
(l) No distribution under Article 5 shall be made to any
Participant, Former Participant or Beneficiary unless and until
all unpaid loans, including accrued interest, have been repaid.
Such Participant, Former Participant or Beneficiary shall have
the option of paying the unpaid loan balance and accrued interest
directly or having such amount deducted from the distribution.
The terms of each promissory note shall provide that in the event
of default, the Participant shall be deemed to consent to a lump
sum distribution at the earliest date a distribution can be made
under the Plan equal to the unpaid loan balance and accrued
interest.
(m) In granting or refusing any request for a loan, the
Investment Manager shall apply uniform standards consistently and
such discretionary power shall not be applied to discriminate in
favor of Highly Compensated Employees.
ARTICLE 7
EMPLOYEE STOCK OWNERSHIP PLAN
Section 7.1
Purpose and Effective Date
Effective January 1, 1998, the Corporation hereby establishes and
designates the LG&E Energy Corp. Common Stock Fund as an Employee
Stock Ownership Plan to enable eligible Participants to acquire
stock ownership interests in the Corporation.
Section 7.2
Investment in Company Stock
The ESOP is designed to invest primarily in Company Stock.
Section 7.3
Prior ESOP Accounts
(a) Participation. An individual with a Prior ESOP Account
shall automatically become a Participant in the Plan, effective
January 1, 1998.
(b) Vesting. That portion of the Participant's Individual
Account attributable to the Prior ESOP Account shall be fully-
vested and non-forfeitable under the Plan.
(c) Withdrawals. Pursuant to the procedures adopted by the
Administrator, a Participant may elect to have distributed to him
any portion or all of his Prior ESOP Account.
(d) Transfers. Notwithstanding the provisions of Subsection
4.2(c),effective January 1,1998, a Participant, Former
Participant, or Beneficiary after reaching age fifty-five (55),
may transfer the balance of his Prior ESOP Account from the LG&E
Energy Corp. Common Stock Fund to any Investment Fund in the
Plan.
Section 7.4
General ESOP Provisions
(a) Payment of Benefits
Effective January 1, 1998, Payments of amounts invested in the
LG&E Energy Corp. Common Stock Fund shall be in the form of a
lump sum. If the Participant elects, the distribution shall be
made no later than one (1) year after the close of the Plan Year
in which the Participant terminates employment due to death,
Total and Permanent Disability or Retirement and no later than
five (5) years after the close of the Plan Year in which
Participant terminates employment for any other reason.
(b) Contributions
Effective January 1, 1998, the Company shall contribute to the
Trustee cash equal to, or Company Stock having an aggregate fair
market value equal to, such amounts required by Section 3.2 of
the Plan to the ESOP. Contributions by Participants are not
required, but shall be permitted in accordance with Section 3.1.
Section 7.5
Put Option
Effective January 1, 1998, if the Company Stock is or becomes not
readily tradable on an established market, then any Participant,
who is otherwise entitled to a distribution for the Plan, shall
have the right (hereinafter referred to as "Put Option") to
require that the Corporation repurchase any Company Stock at the
price established by a valuation conducted by an independent
appraiser (as established in Section 401(a)(28) of the Code).
The Put Option shall only be exercisable during the sixty (60)
day period immediately following the date of distribution and if
the Put Option is not exercised within such sixty (60) day
period, then it can be exercised for an additional period of
sixty (60) days in the following Plan Year. This Put Option
shall be nonterminable with the meaning of Regulation 54.4975-
(11)(a)(ii).
The amount paid for the Company Stock under the Put Option shall
be paid in substantially equal payments (not less frequently than
annually) over a period beginning not later than thirty (30) days
after the exercise of the Put Option and not exceeding five (5)
years. There shall be adequate security provided and reasonable
interest paid on the unpaid balance due under this paragraph.
Section 7.6
Loans
(a) Authorization of Loan
Effective January 1, 1998, the Board of Directors of the
Corporation may direct the Trustee to incur a loan on behalf of
the Trust in a manner and under conditions which will cause the
loan to be an "exempt loan" within the meaning of Section
4975(d)(2) of the Code and Regulations thereunder. A loan shall
be used primarily for the benefit of Plan Participants and their
Beneficiaries. The proceeds of each such loan shall be used,
within a reasonable time after the loan is obtained, only to
purchase Company Stock, to repay the loan or to repay any prior
loan. Any such loan shall provide for a reasonable rate of
interest, an ascertainable period of maturity and shall be
without recourse against the Plan. Any such loan shall be
secured solely by shares of Company Stock acquired with the
proceeds of the loan and shares of such stock that were used as
collateral on a prior loan which was repaid with the proceeds of
the current loan. Such stock pledged as collateral shall be
placed in a Suspense Account and released pursuant to Subsection
7.06(b), as the loan is repaid. Company Stock released from the
Suspense Account shall be allocated in the ratio that each
eligible Participant's Compensation, bears to the total
Compensation, paid to all Participants during the Plan Year. No
person entitled to payment under a loan made pursuant to this
Section shall have recourse against any Trust Fund assets other
than the stock used as collateral for the loan, Sponsoring
Employer contributions of cash that are available to meet
obligations under the loan and earnings attributable to such
collateral and the investment of such contributions. Employer
contributions made with respect to any Plan Year during which the
loan remains unpaid, and earnings on such contributions, shall be
deemed available to meet obligations under the loan, unless
otherwise provided by the Employer at the time such contributions
are made.
(b) Release of Company Stock
Any pledge of stock as collateral under this Section shall
provide for the release of shares so pledged upon the payment of
any portion of the loan. Shares so pledged shall be released in
the proportion of the principal and interest, paid on the loan
for the Plan Year bears to the aggregate principal and interest,
paid for the current Plan Year and each Plan Year thereafter, as
provided in Regulation 54.4975-7(b)(8).
(c) Repayment of the Loan
Payments of principal and interest on any loan under this Section
shall be made by the Trustee at the direction of the Committee
solely from: (i) employer contributions available to meet
obligations under the loan, (ii) earnings from the investment of
such contributions, (iii) earnings attributable to stock pledged
as collateral for the loan, (iv) other dividends on stock to the
extent permitted by law, (v) the proceeds of a subsequent loan
made to repay the loan, and (vi) the proceeds of the sale of any
stock pledged as collateral for the loan. The contributions and
earnings available to pay the loan must be accounted for
separately by the Committee until the loan is repaid.
(d) Allocations to Individual Account
Subject to the limitations in Section 4.5 on annual additions to
a Participant's Individual Account, assets released from a
Suspense Account by reason of payment made on a loan shall be
allocated immediately upon such payment to the account of all
Participants who then would be entitled to an allocation of
contributions if such payment had been made on the last day of
the Plan Year.
Section 7.7
Disposition of Dividends on Company Stock
(a) Distribution to Dividend Eligible Participant
Effective January 1, 1998, the Trustee shall distribute dividends
paid on Company Stock to a Dividend Eligible Participant, no
later than ninety (90) days after the end of the Plan Year which
said dividends are paid.
(b) Allocation of Dividend to Individual Accounts
Effective January 1, 1998, the Trustee shall allocate dividends
paid on Company Stock, which are not otherwise distributed to
Dividend Eligible Participants under Subsection 7.7(a) of this
Section, to the Individual Account as provided for in Section 4.3
of the Plan.
Section 7.8
Voting of Stock and Other Stock Rights
(a) Voting
Common Stock, including fractional shares, held by the Trustee
for a Participant's Individual Account and invested in the LG&E
Energy Corp. Common Stock Fund, shall be voted by the Trustee at
each annual meeting and at each special meeting of the
stockholders of the Company at the direction of the Participant
to whose Individual Account such stock is credited to the extent
such vote would be consistent with the Trustee's duties under
ERISA. The Trustee shall cause each Participant to be provided
with a copy of a notice of each such stockholder meeting and the
proxy statement of the Company, together with the appropriate
form for the Participant to indicate his voting instructions. If
the instructions are not timely received by the Trustee with
respect to such stock, the Trustee shall vote the uninstructed
stock in the same proportion as the instructed stock to the
extent such vote would be consistent with the Trustee's duties
under ERISA.
(b) Tender Offer
Common Stock, including fractional shares, held by the Trustee
for a Participant's Individual Account and invested in the LG&E
Energy Corp. Commons Stock Fund, shall be tendered by the Trustee
pursuant to a tender offer as directed by the Participant to
whose Individual Account such stock is credited to the extent
such tender would be consistent with the Trustee's duties under
ERISA. The Trustee shall cause each Participant to be provided
with notice of any such tender offer as the Trustee receives as a
holder of record, and which the Trustee reasonably believes also
was received by shareholders generally, as soon as practicable
after the Trustee receives such statements or information,
together with an appropriate form for the Participant to indicate
his or her instruction regarding any such tender offer. If
instructions are not timely received by the Trustee with respect
to any such stock or if there is any unallocated stock, the
Trustee shall tender the shares of such uninstructed or
unallocated stock in the same proportion as the Trustee actually
receives timely instruction to tender shares of stock to the
extent such tender would be consistent with the Trustee's duties
under ERISA.
Section 7.9
Section 16 Compliance
It is the intention of the Company that the Plan and the
administration of the Plan comply in all respects with Section 16
of the Securities Exchange Act of 1934 (the "Act"), as amended
and the rule and regulation promulgated thereunder. If any Plan
provision, or any aspect of the administration of the Plan, is
found not to be in compliance with Section 16 of the Act, the
provision or administration shall be deemed null and void, and in
all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3 promulgated under the Act.
Notwithstanding anything in the Plan to the contrary, the
Committee, in its discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan
to Participants who are subject to Section 16 of the Act without
so restricting, limiting or conditioning the Plan with respect to
other Participants.
ARTICLE 8
FUNDING
Section 8.1
Contributions
Contributions by the Employer and by the Participants as provided
for in Article 3 shall be paid over to the Trustee. All
contributions by the Employer shall be irrevocable, except as
herein provided, and may be used only for the exclusive benefit
of the Participants, Former Participants and their Beneficiaries.
Section 8.2
Trustee
The Sponsoring Employer has entered into an agreement with the
Trustee whereunder the Trustee will receive, invest and
administer as a trust fund contributions made under this Plan in
accordance with the Trust Agreement.
Such Trust Agreement is incorporated by reference as a part of
the Plan, and the rights of all persons hereunder are subject to
the terms of the Trust Agreement. The Trust Agreement
specifically provides, among other things, for the investment and
reinvestment of the Fund and the income thereof, the management
of the Trust Fund, the responsibilities and immunities of the
Trustee, removal of the Trustee and appointment of a successor,
accounting by the Trustee and the disbursement of the Trust Fund.
The Trustee shall, in accordance with the terms of such Trust
Agreement, accept and receive all sums of money paid to it from
time to time by the Employer, and shall hold, invest, reinvest,
manage and administer such moneys and the increment, increase,
earnings and income thereof as a trust fund for the exclusive
benefit of the Participants, Former Participants and their
Beneficiaries or the payment of reasonable expenses of
administering the Plan.
In the event that affiliated or subsidiary Employers become
signatory hereto, completely independent records, allocations,
and contributions shall be maintained for each Employer. The
Trustee may invest all funds without segregating assets between
or among signatory Employers.
ARTICLE 9
FIDUCIARIES
Section 9.1
General
Each Fiduciary who is allocated specific duties or
responsibilities under the Plan or any Fiduciary who assumes such
a position with the Plan shall discharge his duties solely in the
interest of the Participants, Former Participants and
Beneficiaries and for the exclusive purpose of providing such
benefits as stipulated herein to such Participants, Former
Participants and Beneficiaries, or defraying reasonable expenses
of administering the Plan. Each Fiduciary, in carrying out such
duties and responsibilities, shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with
such matters would use in exercising such authority or duties.
A Fiduciary may serve in more than one Fiduciary capacity and may
employ one or more persons to render advice with regard to his
Fiduciary responsibilities. If the Fiduciary is serving as such
without compensation, all expenses reasonably incurred by such
Fiduciary shall be paid from the Trust Fund or by the Employer.
A Fiduciary may delegate any of his responsibilities for the
operation and administration of the Plan. In limitation of this
right, a Fiduciary may not delegate any responsibilities as
contained herein relating to the management or control of the
Trust Fund except through the employment of an investment manager
as provided in Section 9.3 and in the Trust Agreement relating to
the Fund.
Section 9.2
Employer
The Sponsoring Employer established and maintains the Plan for
the benefit of its Employees and for Employees of Participating
Employers and of necessity retains control of the operation and
administration of the Plan. The Sponsoring Employer, in
accordance with specific provisions of the Plan, has as herein
indicated, delegated certain of these rights and obligations to
the Trustee, and the Committee and these parties shall be solely
responsible for these, and only these, delegated rights and
obligations.
The Employer shall supply such full and timely information for
all matters relating to the Plan as (a) the Committee, (b) the
Trustee, and (c) the accountant engaged on behalf of the Plan by
the Sponsoring Employer may require for the effective discharge
of their respective duties.
Section 9.3
Trustee
The Trustee, in accordance with the Trust Agreement, shall have
exclusive authority and discretion to manage and control the
Trust Fund, except that the Sponsoring Employer may in its
discretion employ at any time and from time to time an Investment
Manager to direct the Trustee with respect to all or a designated
portion of the assets comprising the Trust Fund.
Section 9.4
401(k) Savings Committee
(n) The Board of the Sponsoring Employer shall appoint a
Committee of not less than three (3) persons to hold office at
the pleasure of the Board, such committee to be known as the
401(k) Savings Committee or Committee, and effective June 5,
1996, the Benefits Committee. No compensation shall be paid
members of the Committee from the Trust Fund for service on such
Committee. The Committee shall choose from among its members a
chairperson and a secretary. Any action of the Committee shall
be determined by the vote of a majority of its members. Either
the chair or the secretary may execute any certificate or written
direction on behalf of the Committee.
(o) Every decision and action of the Committee shall be valid if
concurrence is by a majority of the members then in office, which
concurrence may be had without a formal meeting.
(p) In accordance with the provisions hereof, the Committee has
been delegated certain administrative functions relating to the
Plan with all powers necessary to enable it properly to carry out
such duties. The Committee shall have no power in any way to
modify, alter, add to or subtract from, any provisions of the
Plan. The Committee shall have the power and authority in its
sole, absolute and uncontrolled discretion to control and manage
the operation and administration of the Plan and shall have all
powers necessary to accomplish these purposes. The
responsibility and authority of the Committee shall include, but
shall not be limited to, (i) determining all questions relating
to the eligibility of employees to participate; (ii) determining
the amount and kind of benefits payable to any Participant,
spouse or Beneficiary; (iii) establishing and reducing to writing
and distributing to any Participant or Beneficiary a claims
procedure and administering that procedure, including the
processing and determination of all appeals thereunder; and (iv)
interpreting the provisions of the Plan including the publication
of rules for the regulation of the Plan as in its sole, absolute
and uncontrolled discretion are deemed necessary or advisable and
which are not inconsistent with the express terms hereof, the
Code or the Employee Retirement Income Security Act of 1974, as
amended. All disbursements by the Trustee, except for the
ordinary expenses of administration of the Trust Fund or the
reimbursement of reasonable expenses at the direction of the
Sponsoring Employer, as provided herein, shall be made upon, and
in accordance with, the written directions of the Committee.
When the Committee is required in the performance of its duties
hereunder to administer or construe, or to reach a determination,
under any of the provisions of the Plan, it shall do so on a
uniform, equitable and nondiscriminatory basis.
(q) The Committee shall establish rules and procedures to be
followed by the Participants, Former Participants and
Beneficiaries in filing applications for benefits and for
furnishing and verifying proofs necessary to establish age,
Service, and any other matters required in order to establish
their rights to benefits in accordance with the Plan.
Additionally, the Committee shall establish accounting procedures
for the purpose of making the allocations, valuations and
adjustments to Participants' accounts. Should the Committee
determine that the strict application of its accounting
procedures will not result in an equitable and nondiscriminatory
allocation among the accounts of Participants, it may modify its
procedures for the purpose of achieving an equitable and
non-discriminatory allocation in accordance with the general
concepts of the Plan, provided however that such adjustments to
achieve equity shall not reduce the vested portion of a
Participant's interest.
(r) The Committee may employ such counsel, accountants, and
other agents as it shall deem advisable. The Sponsoring Employer
shall pay, or cause to be paid from the Trust Fund, the
compensation of such counsel, accountants, and other agents and
any other expenses incurred by the Committee in the
administration of the Plan and Trust.
Section 9.5
Claims Procedures
(a) The Committee shall receive all applications for benefits.
Upon receipt by the Committee of such an application, it shall
determine all facts which are necessary to establish the right of
an applicant to benefits under the provisions of the Plan and the
amount thereof as herein provided. Upon request, the Committee
will afford the applicant the right of a hearing with respect to
any finding of fact or determination. The applicant shall be
notified in writing of any adverse decision with respect to his
claim within ninety (90) days after its submission. The notice
shall be written in a manner calculated to be understood by the
applicant and shall include the items specified in items (1)
through (4) of this Subsection.
(1) The specific reason or reasons for the denial;
(2) Specific references to the pertinent Plan provisions on
which the denial is based;
(3) A description of any additional material or information
necessary for the applicant to perfect the claim and an
explanation why such material or information is necessary; and
(4) An explanation of the Plan's claim review procedures.
(b) If special circumstances require an extension of time for
processing the initial claim, a written notice of the extension
and the reason therefor shall be furnished to the claimant before
the end of the initial ninety (90) day period. In no event shall
such extension exceed ninety (90) days.
(c) In the event a claim for benefits is denied or if the
applicant has had no response to such claim within ninety (90)
days of its submission (in which case the claim for benefits
shall be deemed to have been denied), the applicant or his duly
authorized representative, at the applicant's sole expense, may
appeal the denial to the Committee within sixty (60) days of the
receipt of written notice of denial or sixty (60) days from the
date such claim is deemed to be denied. In pursuing such appeal
the applicant or his duly authorized representative:
(1) May request in writing that the Committee review the denial;
(2) May review pertinent documents; and
(3) May submit issues and comments in writing.
(d) The decision on review shall be made within sixty (60) days
of receipt of the request for review, unless special
circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but
not later than one hundred twenty (120) days after receipt of a
request for review. If such an extension of time is required,
written notice of the extension shall be furnished to the
claimant before the end of the original sixty (60) day period.
The decision on review shall be made in writing, shall be written
in a manner calculated to be understood by the claimant, and
shall include specific references to the provisions of the Plan
on which such denial is based. If the decision on review is not
furnished within the time specified above, the claim shall be
deemed denied on review.
Section 9.6
Records
All acts and determinations of the Committee shall be duly
recorded by the secretary thereof and all such records together
with such other documents as may be necessary in exercising his
duties under the Plan shall be preserved in the custody of such
secretary. Such records and documents shall at all times be open
for inspection and for the purpose of making copies by any person
designated by the Sponsoring Employer. The Committee shall
provide such timely information, resulting from the application
of its responsibilities under the Plan, as needed by the Trustee
and the accountant engaged on behalf of the Plan by the
Sponsoring Employer, for the effective discharge of their
respective duties.
ARTICLE 10
AMENDMENT AND TERMINATION OF THE PLAN
Section 10.1
Amendment of the Plan
The Sponsoring Employer shall have the right at any time by
action of the Board to modify, alter or amend the Plan in whole
or in part; effective September 1, 1994 the 401(k) Savings
Committee in the case of non-material amendments, provided,
however, that the duties, powers and liability of the Trustee
hereunder shall not be increased without its written consent; and
provided, further, that the amount of benefits which, at the time
of any such modification, alteration or amendment, shall have
accrued for any Participant, Former Participant or Beneficiary
hereunder shall not be adversely affected thereby; and provided,
further, that no such amendment shall have the effect of
reverting to the Employer any part of the principal or income of
the Trust Fund. No amendment to the Plan shall decrease the
balance of a Participant's Individual Account or eliminate an
optional form of distribution.
Section 10.2
Termination of the Plan
The Sponsoring Employer expects to continue the Plan
indefinitely, but continuance is not assumed as a contractual
obligation and the Sponsoring Employer reserves the right at any
time by action of the Board to terminate its participation in the
Plan. If the Sponsoring Employer terminates or partially
terminates its participation in the Plan or permanently
discontinues its Contributions at any time, each Participant
affected thereby shall be then vested with the amount to the
credit in his Individual Account.
In the event of termination or partial termination of the Plan by
the Sponsoring Employer, the Committee shall value the Trust Fund
as of the date of termination. That portion of the Trust Fund
for which the Plan has not been terminated shall be unaffected.
Section 10.3
Return of Contributions
It is intended that this Plan shall be approved and qualified
under the Code and Regulations issued thereunder with respect to
Employees' Plans and Trusts (1) so as to permit the Employer to
deduct for federal income tax purposes the amounts of
contributions to the Trust; (2) so that contributions so made and
the income of the Trust Fund will not be taxable to Participants
as income until received; (3) so that the income of the Trust
Fund shall be exempt from federal income tax. Any Employer
Contributions and Salary Redirection are made to the Plan
conditioned on there deductibility under Code Section 404. In
the event the Commissioner of Internal Revenue or his delegate
rules that the deduction for all or a part of any Employer
Contribution (or Salary Redirection) is not allowed under Code
Section 404, the Employer reserves the right to recover that
portion or all of their contributions for which no deduction is
allowed (reduced by any losses), provided such recovery is made
within one (1) year of the disallowance.
In the event that the Commissioner of Internal Revenue determines
that the Plan is not initially qualified under the Internal
Revenue Code, any contribution made incident to that initial
qualification by the employer must be returned to the employer
within one (1) year after the date the initial qualification is
denied, but only if the application or the qualification is made
by the time prescribed by law for filing the employer's return
for the taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
ARTICLE 11
MISCELLANEOUS
Section 11.1
Governing Law
The Plan shall be construed, regulated and administered according
to the laws of the Commonwealth of Kentucky, except in those
areas preempted by the laws of the United States of America.
Section 11.2
Construction
The headings and subheadings in the Plan have been inserted for
convenience of reference only and shall not affect the
construction of the provisions hereof. The words and phrases
defined in Article 1 when used in this Plan with an initial
capital letter shall have the meanings specified in Article 1,
unless a different meaning is clearly required by the context.
Any words herein used in the masculine shall be read and
construed in the feminine where they would so apply. Words in
the singular shall be read and construed as though used in the
plural in all cases where they would so apply.
Section 11.3
Administration Expenses
The expenses of administering the Trust Fund and the Plan shall
be paid from the Trust Fund, unless they are paid by the
Employer.
Section 11.4
Participant's Rights
No Participant in the Plan shall acquire any right to be retained
in the Employer's employ by virtue of the Plan, nor, upon his
dismissal, or upon his voluntary termination of employment, shall
he have any right or interest in and to the Trust Fund other than
as specifically provided herein. The Employer shall not be
liable for the payment of any benefit provided for herein; all
benefits hereunder shall be payable only from the Trust Fund.
Section 11.5
Spendthrift Clause
To the extent permitted by law, none of the benefits, payments,
proceeds, or distributions under this Plan shall be subject to
the claim of any creditor of the Participant, Former Participant
or any Beneficiary hereunder or to any legal process by any
creditor of such Participant, Former Participant or any such
Beneficiary; and neither shall such Participant, Former
Participant or any such Beneficiary have any right to alienate,
commute, anticipate, or assign any of the benefits, payments,
proceeds or distributions under this Plan. The preceding
sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order,
as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, under which
payments have commenced prior to such date.
This Plan specifically permits a distribution to an alternate
payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his earliest
retirement age under the Plan. Nothing in this Section 10.5
gives a Participant a right to receive a distribution at a time
otherwise not permitted under the Plan nor does it permit the
alternate payee to receive a form of payment not permitted under
the Plan.
Section 11.6
Merger, Consolidation or Transfer
In the event of the merger or consolidation of the Plan with
another plan or transfer of assets or liabilities from the Plan
to another plan, each then Participant, Former Participant or
Beneficiary shall not, as a result of such event, be entitled on
the day following such merger, consolidation or transfer under
the termination of the Plan provisions to a lesser benefit than
the benefit he was entitled to on the date prior to the merger,
consolidation or transfer if the Plan had then terminated.
Section 11.7
Counterparts
The Plan and the Trust Agreement may be executed in any number of
counterparts, each of which shall constitute but one and the same
instrument and may be sufficiently evidenced by any one
counterpart.
SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be
executed this _______ day of _________________, ______, but
effective January 1, 1998.
Witness: Louisville Gas and Electric Company
_____________________
BY_________________________________________
Exhibit 23.01
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated January 29, 1997 (except with respect to the matters
discussed in the first paragraph of Note 2 and the twelfth
paragraph of Note 16, as to which the date is March 12, 1997)
included in LG&E Energy Corp.'s Form 10-K for the year ended
December 31, 1996, and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Louisville, Kentucky
January 9, 1998
Exhibit 24.01
POWER OF ATTORNEY
AND
CONSENT
KNOW ALL MEN BY THESE PRESENTS, that, as of the 5th day of
December, 1997, the undersigned each constitutes and appoints
Roger W. Hale and John R. McCall, and each of them, individually,
his or her true and lawful attorney-in-fact and agent with full
power of substitution and re-substitution, for him or her in his
or her name, place and stead, in any and all capacities, to sign
a Registration Statement on Form S-8 relating to the
establishment of the LG&E Energy Corp. Common Stock Fund in
connection with the merger of the Louisville Gas and Electric
Company Employees' Stock Ownership Plan and Trust into the LG&E
Energy Corp. and Louisville Gas and Electric Company 401(k)
Savings Plan and the 401(k) Savings Plan for Employees of
Louisville Gas and Electric Company Who Are Represented by Local
2100 of IBEW and all amendments or appendices thereto (including
post-effective amendments), and file the same with all exhibits
thereto and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof
and such officers of LG&E Energy Corp., with the assistance of
its accountants and counsel, are further hereby authorized and
directed to prepare, execute and file with the Securities and
Exchange Commission on behalf of LG&E Energy Corp. such
Registration Statement and all amendments or appendices thereto
(including post-effective amendments) as any of them deem
appropriate or necessary.
LG&E ENERGY CORP.
/s/ Roger W. Hale /s/ Donald C. Swain
ROGER W. HALE DR. DONALD C. SWAIN
Chairman, President and Director
Chief Executive Officer
/s/ Anne H. McNamara /s/ William C. Ballard, Jr.
ANNE H. McNAMARA WILLIAM C. BALLARD, JR.
Director Director
/s/ Owsley Brown, II /s/ J. David Grissom
OWSLEY BROWN, II J. DAVID GRISSOM
Director Director
/s/ Gene P. Gardner /s/ T. Ballard Morton, Jr.
GENE P. GARDNER T. BALLARD MORTON, JR.
Director Director
/s/ S. Gordon Dabney /s/ David B. Lewis
S. GORDON DABNEY DAVID B. LEWIS
Director Director
/s/ Jeffery T. Grade
JEFFERY T. GRADE
Director
