<PAGE>
Registration No. 333-_________
As filed with the Securities and Exchange Commission on October 8, 1999
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
and
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
(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
<TABLE>
<CAPTION>
Proposed
Maximum Proposed
Title of Amount offering maximum
securities to be price aggregate Amount of
to be registered per share offering registration
registered (1)(2) (3) price (3) fee
<S> <C> <C> <C> <C>
Common Stock, 4,500,000 $ 21.41 $ 96,345,000 $ 26,783.91
without par value shares
per share and
Rights to Purchase 1,500,000
Series A Preferred rights
Stock (4)
</TABLE>
<PAGE>
(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. Pursuant to Rule 416,
this Registration Statement also covers an indeterminate amount of
additional securities in order to adjust the number of securities
reserved for issuance pursuant to the plans as a result of a stock
split, stock dividend or similar transaction affecting the Common Stock.
(2) 3,000,000, 1,000,000 and 500,000 shares are being registered on behalf
of (a) the LG&E Energy Corp. Savings Plan, (b) the 401(k) Savings Plan
for Employees of Louisville Gas and Electric Company who are Represented
by Local 2100 of the IBEW, and (c) the WKE Corp. Bargaining Employees'
Savings Plan, respectively.
(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
October 4, 1999.
(4) One-third of a Right to Purchase Series A Preferred Stock automatically
trades with each share of the Common Stock.
<PAGE>
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, 1998;
(ii) the Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999;
(iii) Exhibit 99.02 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, which contains a description of
the Registrant's Common Stock and the Rights to Purchase Series A
Preferred Stock which automatically trade at this time with the Common
Stock; and
(iv) the Registrant's Current Reports on Form 8-K dated February 8, 1999,
March 15, 1999, April 13, 1999, and July 9, 1999.
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. Interests of Named Experts and Counsel
The financial statements and schedules of the Registrant included in the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 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
<PAGE>
Registrant's Amended and Restated Articles of Incorporation (filed as Exhibit
4.1 to the Registrant's Current Report on Form 8-K dated May 4, 1998), 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
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
4.01 Copy of LG&E Energy Corp. Savings Plan as amended through July 1,
1998.
4.02 Copy of 401(k) Savings Plan for Employees of Louisville Gas and
Electric Company who are Represented by Local 2100 of IBEW as
amended through January 1, 1998.
4.03 Copy of WKE Corp. Bargaining Employees' Savings Plan as amended through
July 17, 1998.
4.04 Copy of Amended and Restated Articles of Incorporation, as amended,
[Filed as Exhibit 4.1 to the Registrant's Current 8-K dated
May 4, 1998 and incorporated by reference herein.]
4.05 Copy of By-laws of Registrant as amended and restated through
June 2, 1999. [Filed as Exhibit 4.04 to Registrant's Registration
Statement No. 333-88653 and incorporated by reference herein.]
4.06 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.]
4.07 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.]
4.08 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
</TABLE>
<PAGE>
8-A/A dated May 20, 1997 and incorporated by reference
herein].
23.01 Consent of Arthur Andersen LLP.
24.01 Powers 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,
<PAGE>
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.
<PAGE>
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
October 8, 1999.
LG&E ENERGY CORP.
By: /s/ R. Foster Duncan
-------------------------
R. Foster Duncan,
Executive Vice President and
Chief Financial Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed on October 8, 1999, by the following persons in
the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
Roger W. Hale Chairman of the Board and Chief Executive Officer
Mira S. Ball Director
William C. Ballard, Jr. Director
Owsley Brown, II Director
J. David Grissom Director
David B. Lewis Director
Anne H. McNamara Director
T. Ballard Morton, Jr. Director
Frank V. Ramsey, Jr. Director
William L. Rouse, Jr. Director
Charles L. Shearer Director
Lee T. Todd, Jr. Director
October 8, 1999
</TABLE>
By: /s/ Charles A. Markel
-------------------------------------
Charles A. Markel (Attorney-in-Fact)
By: /s/ R. Foster Duncan
----------------------------
R. Foster Duncan
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Michael D. Robinson
-----------------------------
Michael D. Robinson
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
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 October 8, 1999.
LG&E ENERGY CORP. SAVINGS PLAN
By: /s/ R. Foster Duncan
-------------------------------
R. Foster Duncan
By: /s/ Charles A. Markel
-------------------------------
Charles A. Markel
By: /s/ Frederick J. Newton, III
-------------------------------
Frederick J. Newton, III
By: /s/ S. Bradford Rives
-------------------------------
S. Bradford Rives
By: /s/ Victor A. Staffieri
---------------------------
Victor A. Staffieri
By: /s/ Robert M. Hewett
---------------------------
Robert M. Hewett
<PAGE>
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
October 8, 1999.
401(K) SAVINGS PLAN FOR EMPLOYEES OF
LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF IBEW
By: /s/ R. Foster Duncan
-----------------------------
R. Foster Duncan
By: /s/ Charles A. Markel
-----------------------------
Charles A. Markel
By: /s/ Frederick J. Newton, III
------------------------------
Frederick J. Newton, III
By: /s/ S. Bradford Rives
------------------------------
S. Bradford Rives
By: /s/ Victor A. Staffieri
------------------------------
Victor A. Staffieri
By: /s/ Robert M. Hewett
---------------------------
Robert M. Hewett
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, all of the
members of the Committee having the responsibility for administration of the
WKE Corp. Bargaining Employees' 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 October 8, 1999.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
By: /s/ R. Foster Duncan
--------------------------------
R. Foster Duncan
By: /s/ Charles A. Markel
--------------------------------
Charles A. Markel
By: /s/ Frederick J. Newton, III
--------------------------------
Frederick J. Newton, III
By: /s/ S. Bradford Rives
-------------------------------
S. Bradford Rives
By: /s/ Victor A. Staffieri
-------------------------------
Victor A. Staffieri
By: /s/ Robert M. Hewett
---------------------------
Robert M. Hewett
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Method of
Number Description Filing
<S> <C> <C>
4.01 Copy of LG&E Energy Corp. Savings Plan as amended through DT
July 1, 1998
4.02 Copy of 401(k) Savings Plan for Employees of Louisville Gas
and Electric Company who are Represented by Local 2100 of
IBEW as amended through January 1, 1998 DT
4.03 Copy of WKE Corp. Bargaining Employees' Savings Plan, as
amended through July 17, 1998 DT
4.04 Copy of Amended and Restated Articles of Incorporation, as
amended, [Filed as Exhibit 4.1 to the Registrant's Current
8-K dated May 4, 1998 and incorporated by reference herein.]
4.05 Copy of By-laws of Registrant as amended and restated through
June 2, 1999. [Filed as Exhibit 4.04 to Registrant's
Registration Statement No. 333-88653 and incorporated by
reference herein.]
4.06 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.]
4.07 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.]
4.08 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 Powers of attorney. DT
</TABLE>
<PAGE>
EXHIBIT 4.01
LG&E ENERGY CORP.
SAVINGS PLAN
Composite Copy
(Including Amendments Effective 8/1/98)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C>
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 Company Stock. . . . . . . . . . . . . . . . . . . . . . . . . 3
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 . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.17 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.25 ESOP Dividends . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.26 Fiduciary. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.27 Former Participant . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.28 Highly Compensated Employees . . . . . . . . . . . . . . . . . 5
Section 1.29 Individual Account . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.30 Investment Fund. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.31 Investment Manager . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.32 Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.33 LG&E Energy Corp. Common Stock Fund. . . . . . . . . . . . . . 9
Section 1.34 Leased Employee. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.35 Limitation Year. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.36 Mandatory Employer Contribution. . . . . . . . . . . . . . . . 9
Section 1.37 Matching Contribution Account. . . . . . . . . . . . . . . . . 9
Section 1.38 Matching Contributions . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
Section 1.39 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . 9
Section 1.40 Participant. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.41 Participating Employer . . . . . . . . . . . . . . . . . . . . 9
Section 1.42 Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.43 Permissive Aggregation Group . . . . . . . . . . . . . . . . .10
Section 1.44 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.45 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.46 Prior LPI Plan . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.47 Prior LNI Plan . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.48 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . .10
Section 1.49 Profit Sharing Account . . . . . . . . . . . . . . . . . . . .10
Section 1.50 Profit Sharing Contributions . . . . . . . . . . . . . . . . .10
Section 1.51 Qualified Joint and Survivor Annuity . . . . . . . . . . . . .10
Section 1.52 Qualified Preretirement Survivor Annuity . . . . . . . . . . .11
Section 1.53 Required Aggregation Group . . . . . . . . . . . . . . . . . .11
Section 1.54 Rollover Contribution. . . . . . . . . . . . . . . . . . . . .11
Section 1.55 Rollover Contribution Account. . . . . . . . . . . . . . . . .11
Section 1.56 Salary Redirection . . . . . . . . . . . . . . . . . . . . . .11
Section 1.57 Salary Redirection Account . . . . . . . . . . . . . . . . . .11
Section 1.58 Severance From Service Date. . . . . . . . . . . . . . . . . .12
Section 1.59 Sponsoring Employer. . . . . . . . . . . . . . . . . . . . . .12
Section 1.60 Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . .12
Section 1.61 Total and Permanent Disability . . . . . . . . . . . . . . . .13
Section 1.62 Trust Agreement. . . . . . . . . . . . . . . . . . . . . . . .13
Section 1.63 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 1.64 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 1.65 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . .13
Section 1.66 Vested Individual Account. . . . . . . . . . . . . . . . . . .13
Section 1.67 Year of Service. . . . . . . . . . . . . . . . . . . . . . . .13
PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 2.1 Eligibility Requirements . . . . . . . . . . . . . . . . . . .14
Section 2.2 Plan Binding . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 2.3 Reemployment . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 2.4 Beneficiary Designation. . . . . . . . . . . . . . . . . . . .15
Section 2.5 Notification of Individual Account Balance . . . . . . . . . .15
CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 3.1 Salary Redirection . . . . . . . . . . . . . . . . . . . . . .16
Section 3.2 Matching Contributions . . . . . . . . . . . . . . . . . . . .18
Section 3.3 Rollover Amount From Other Plans . . . . . . . . . . . . . . .18
Section 3.4 Nondiscrimination Test for Salary Redirection. . . . . . . . .19
Section 3.5 Nondiscrimination Test for Other Contributions . . . . . . . .22
Section 3.6 Maximum Individual Deferral. . . . . . . . . . . . . . . . . .25
Section 3.7 Mistake of Fact. . . . . . . . . . . . . . . . . . . . . . . .25
ii
<PAGE>
ALLOCATIONS TO INDIVIDUAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.1 Individual Accounts. . . . . . . . . . . . . . . . . . . . . . 26
Section 4.2 Investment of Accounts . . . . . . . . . . . . . . . . . . . . 26
Section 4.3 Valuation of Accounts. . . . . . . . . . . . . . . . . . . . . 27
Section 4.4 Trustee and Committee Judgment Controls. . . . . . . . . . . . 28
Section 4.5 Maximum Additions. . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.6 Corrective Adjustments . . . . . . . . . . . . . . . . . . . . 29
Section 4.7 Defined Contribution and Defined Benefit Plan Fraction . . . . 29
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.1 Normal Retirement. . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.2 Early Retirement . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.3 Late Retirement. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.4 Death. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.5 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6 Termination of Employment. . . . . . . . . . . . . . . . . . . 31
Section 5.7 Commencement of Benefits . . . . . . . . . . . . . . . . . . . 32
Section 5.8 Minimum Distributions. . . . . . . . . . . . . . . . . . . . . 32
Section 5.9 Methods of Payment . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.10 Benefits to Minors and Incompetents. . . . . . . . . . . . . . 34
Section 5.11 Unclaimed Benefits . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.12 Participant Directed Rollovers . . . . . . . . . . . . . . . . 35
WITHDRAWALS AND LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.1 Hardship Withdrawal. . . . . . . . . . . . . . . . . . . . . . 37
Section 6.2 Participant Loans. . . . . . . . . . . . . . . . . . . . . . . 39
EMPLOYEE STOCK OWNERSHIP PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.1 Purpose and Effective Date . . . . . . . . . . . . . . . . . . 42
Section 7.2 Investment in Company Stock. . . . . . . . . . . . . . . . . . 42
Section 7.3 Prior ESOP Accounts. . . . . . . . . . . . . . . . . . . . . . 42
Section 7.4 General ESOP Provisions. . . . . . . . . . . . . . . . . . . . 43
Section 7.5 Put Option . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.6 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 7.7 Disposition of Dividends on Company Stock. . . . . . . . . . . 45
Section 7.8 Voting of Stock and Other Stock Rights . . . . . . . . . . . . 45
Section 7.9 Section 16 Compliance. . . . . . . . . . . . . . . . . . . . . 46
PROVISIONS RELATING TO ENERGY MARKETING EMPLOYEES. . . . . . . . . . . . . . . . . 47
Section 8.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.2 Profit Sharing Contributions . . . . . . . . . . . . . . . . . 47
Section 8.3 Salary Redirection Contributions . . . . . . . . . . . . . . . 47
Section 8.4 Matching Contributions . . . . . . . . . . . . . . . . . . . . 49
Section 8.5 Employee Voluntary Contributions . . . . . . . . . . . . . . . 50
Section 8.6 Submission of Form . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.7 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
iii
<PAGE>
Section 8.8 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . 52
PROVISIONS RELATING TO PRIOR LPI PLAN PARTICIPANTS . . . . . . . . . . . . . . . . 54
Section 9.1 Prior LPI Plan Balances. . . . . . . . . . . . . . . . . . . . 54
Section 9.2 Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.3 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.4 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . 54
PROVISIONS RELATING TO PRIOR LNI PLAN PARTICIPANTS . . . . . . . . . . . . . . . . 56
Section 10.1 Prior LNI Plan Balances. . . . . . . . . . . . . . . . . . . . 56
Section 10.2 Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.3 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.4 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.5 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 57
FUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.1 Contributions. . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.2 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
FIDUCIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.2 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.3 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.4 401(k) Savings Committee . . . . . . . . . . . . . . . . . . . 61
Section 12.5 Claims Procedures. . . . . . . . . . . . . . . . . . . . . . . 62
Section 12.6 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
AMENDMENT AND TERMINATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . . 65
Section 13.1 Amendment of the Plan. . . . . . . . . . . . . . . . . . . . . 65
Section 13.2 Termination of the Plan. . . . . . . . . . . . . . . . . . . . 65
Section 13.3 Return of Contributions. . . . . . . . . . . . . . . . . . . . 65
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.3 Administration Expenses. . . . . . . . . . . . . . . . . . . . 67
Section 14.4 Participant's Rights . . . . . . . . . . . . . . . . . . . . . 67
Section 14.5 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.6 Merger, Consolidation or Transfer. . . . . . . . . . . . . . . 68
Section 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 68
TOP HEAVY PLAN PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 15.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 15.2 Minimum Contribution . . . . . . . . . . . . . . . . . . . . . 69
Section 15.3 Super Top Heavy Plans. . . . . . . . . . . . . . . . . . . . . 69
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PROVISIONS CONCERNING CERTAIN CHANGES IN EMPLOYMENT. . . . . . . . . . . . . . . . 71
Section 16.1 Transfer to Non-Participating Employer . . . . . . . . . . . . 71
Section 16.2 Transfer to Another Participating Employer . . . . . . . . . . 71
Section 16.3 Transfer From Non-Participating Employer . . . . . . . . . . . 71
Section 16.4 Change in Employment Classification. . . . . . . . . . . . . . 72
PROVISIONS RELATING TO PRIOR KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 17.1 Participation of Former Employees. . . . . . . . . . . . . . . 73
Section 17.2 Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 17.3 Merger of Prior Plan Balances. . . . . . . . . . . . . . . . . 73
PROVISIONS RELATING TO WKE CORP. EMPLOYEES . . . . . . . . . . . . . . . . . . . . 74
Section 18.1 Participation of Former Employees. . . . . . . . . . . . . . . 74
Section 18.2 Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>
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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.
Effective August 1, 1998 the Kentucky Utilities Company Employee Savings
Plan and the Kentucky Utilities Company Employee Stock Ownership 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).
<PAGE>
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
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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 not
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 Beneficiaries 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
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<PAGE>
the Participant is credited with thirty-five (35),effective
June 1, 1996 the date the Participant is credited with thirty
(30), 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 August 1, 1998.
Section 1.17 EMPLOYEE means any person employed by the Employer on a full time
or regular part-time basis who works 20 hours per week, 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 8.5, 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.
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<PAGE>
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
5
<PAGE>
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
<PAGE>
(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.
7
<PAGE>
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. Effective August 1, 1998, Individual
Account shall include the Prior KU Savings 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
8
<PAGE>
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.
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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 ESOP ACCOUNT means effective January 1, 1998, a balance
transferred from the Louisville Gas and Electric Company
Employees' Stock Ownership Plan and Trust plus any investment
gains, and minus investment losses and distributions. Effective
August 1, 1998 the term Prior ESOP Account shall also mean a
balance transferred from the Kentucky Utilities Company Employee
Stock Ownership Plan plus any investment gains, and minus
investment losses and distributions.
Section 1.47 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 1.48 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 with 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
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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.
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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,
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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.
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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 a person
employed by the Employer ceases to be an Employee as defined
under the Plan he will cease to be an active
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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.
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<PAGE>
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, or effective June 1, 1998, the designee of
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, or effective June 1,1998, in a manner
prescribed 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 prescribed by and submitted in
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<PAGE>
a manner established by 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. Effective June 1, 1998, a Participant
electing to have Salary Redirection made on his behalf to
the Plan pursuant to this Section, may in a manner
prescribed by the Committee, enter into a Salary Redirection
agreement to 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 days after the date of such election, 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, or
effective June 1, 1998, in the manner prescribed by the
Committee, 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 Dividend Eligible Participant will be
deemed to have elected to
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<PAGE>
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 Dividend Eligible
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:
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(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 account, 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 account.
(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, or effective June 1, 1998, upon the approval
pursuant to a method authorized 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
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<PAGE>
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
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<PAGE>
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
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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.
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(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,
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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.
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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.
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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, and effective
August 1, 1998 Article 17.
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.
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(12) Janus Worldwide Fund, effective August 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, 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
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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.
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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:
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(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.
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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,
total and permanent Disability, 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.
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Section 5.7 COMMENCEMENT OF BENEFITS
(a) Any benefits payable under this Article shall be paid as
soon as reasonably possible following the date of
severance from the Company, subject to the
Participant's consent. Unless the Participant elects
otherwise, payment shall begin no later than 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. The Participant may defer distribution to
a subsequent date unless his benefit may be cashed out
without his consent pursuant to Subsection 5.9, or
unless he is subject to Section 5.8 as a result of
attaining age seventy and one-half (70-1/2).
(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.
Effective June 1, 1998 for a Participant who attains
age seventy and one-half (70-1/2) while actively at
work, 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 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
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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. Effective June 1, 1998, the request by the
Participant or the Beneficiary shall be in a manner and
time prescribed by the Committee. 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) or effective June 1, 1998 five
thousand dollars ($5,000). If the vested value of the
Participant's Individual Account is less than three
thousand five hundred dollars ($3,500) ) or effective
June 1, 1998 five thousand dollars ($5,000), 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.
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(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;
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(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
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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.
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ARTICLE 6
WITHDRAWALS AND LOANS
Section 6.1 HARDSHIP WITHDRAWAL
(a) Except as otherwise provided in this Section, in such time
and manner 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 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.
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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.
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Section 6.2 PARTICIPANT LOANS
(a) Upon proper 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
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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 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.
(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
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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.
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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 (ESOP)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 this 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 at the
time of the transfer of their prior ESOP balance. ,
(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, including but not limited to the
establishment of minimum amounts, 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.
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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. Unless the Participant elects
otherwise, 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.
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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)
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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
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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.
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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(b) such Participating
Employer's net profit for the taxable year ending with or
within such Plan Year in the amount of three percent
(3%). In the discretion of the Board of Directors, such
contribution may be increased or decreased. 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
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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, or effective June 1, 1998 the
designee of 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. Effective
June 1, 1998, a Participant may 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 of an election made in a manner
prescribed by the Committee. 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 in the form prescribed by the Committee.
The Salary Redirection agreement shall be made in a
manner prescribed 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. Effective June 1,
1998, a Participant electing to have Salary Redirection
made on his behalf to the Plan pursuant to this Section,
may, in a manner prescribed by the Committee enter into a
Salary Redirection agreement to increase or decrease his
Salary Redirection amount (within
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the appropriate minimum and maximum) as of the first day
of any payroll period which is at least (15) days after
the date of such election, 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, or effective
June 1, 1998 in the manner prescribed by the Committee
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 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.
(t) AMOUNTS OF ESOP DIVIDENDS DEEMED DEFERRED. 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
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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, or effective June
1,1998 the designee of 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
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after the date his election form is delivered to the
Committee. Effective June 1, 1998, a Participant may
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 of an
election made in a manner prescribed by the Committee. 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 in
the form prescribed by 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.
Effective June 1, 1998 a Participant electing to have
Employee Voluntary Contributions made on his behalf to
the Plan pursuant to this Section, may, in a manner
prescribed by the Committee, enter into a Employee
Voluntary Contributions agreement to 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 of such election, 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,
or effective June 1, 1998 in the manner prescribed by the
Committee, stating the amount of Employee Voluntary
Contributions he desires to have made.
(c) NOTICE REQUIREMENTS. Any of the notice requirements in
this Section
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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. Furthermore, 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 made prior to
January 1, 1998 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
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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.
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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
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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.
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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
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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
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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 Starting
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.
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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.
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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
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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 BENEFITS 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 of Directors, 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
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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.
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(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
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by the Sponsoring Employer, for the effective discharge of their
respective duties.
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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. 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
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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.
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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
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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.
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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
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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.
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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
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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.
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ARTICLE 17
PROVISIONS RELATING TO PRIOR KENTUCKY UTILITIES
COMPANY EMPLOYEE SAVINGS PLAN PARTICIPANTS
Section 17.1 PARTICIPATION OF FORMER EMPLOYEES
Effective May 4, 1998, each Employee who was employed by
KU Energy Corp. or its subsidiaries, and who was a
participant in the Kentucky Utilities Company Employee
Savings Plan immediately prior to becoming an Employee,
shall be eligible to participate in the Plan upon the
date he becomes an Employee if the Employee elects to
participate in the Plan upon his first date of
employment. If the Employee so situated declines
participation on this first date of employment, he may
thereafter elect to participate as of the next Entry
Date, which is administratively feasible in accordance
with Section 2.1 of the Plan. If an Employee was not
eligible to participate in the Kentucky Utilities Company
Employee Savings Plan immediately prior to becoming an
Employee, the provisions of Section 2.1 shall apply.
Section 17.2 SERVICE
Notwithstanding the definition of Service, Service for
any Employee who was employed by KU Energy Corp. or its
subsidiaries, immediately prior to becoming a Participant
in the Plan shall be defined to include the aggregate of
the employment period with the Employer and the
employment period with such prior employer.
Section 17.3 MERGER OF PRIOR PLAN BALANCES
Effective August 1, 1998 the Kentucky Utilities Company
Employee Stock Ownership Plan and the Kentucky Utilities
Company Employee Savings Plan (collectively "Prior KU
Plans") were merged into the Plan, and the Individual
Accounts were credited with the amounts transferred by
the trustees of the Prior KU Plans. An Employee who was
a participant in the Kentucky Utilities Company Employee
Savings Plan immediately prior to the merger of the Prior
KU Plans, shall be eligible to participate in the Plan
upon the date of the merger of the Prior KU Plans into
the Plan. If the Employee so situated declines
participation on the date of the merger of the Prior KU
Plans into the Plan he may thereafter elect to
participate as of the next Entry Date, which is
administratively feasible in accordance with Section 2.1
of the Plan. If an Employee was not eligible to
participate in the Kentucky Utilities Company Employee
Savings Plan immediately prior to the date of the merger
of the Prior KU Plans into the Plan, the provisions of
Section 2.1 shall apply.
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ARTICLE 18
PROVISIONS RELATING TO WKE CORP. EMPLOYEES
Section 18.1 PARTICIPATION OF FORMER EMPLOYEES
Effective July 17, 1998, each Employee who was employed by
Big Rivers Electric Corporation, and who was a
participant in a savings plan sponsored by Big Rivers
Electric Corporation immediately prior to becoming an
Employee, shall be eligible to participate in the Plan
upon the date he becomes an Employee if the Employee
elects to participate in the Plan upon his first date of
employment. If the Employee so situated declines
participation on this first date of employment, he may
thereafter elect to participate as of the next Entry
Date, which is administratively feasible in accordance
with Section 2.1 of the Plan. If an Employee was not
eligible to participate in a Big Rivers Electric
Corporation plan immediately prior to becoming an
Employee, the provisions of Section 2.1 shall apply.
Section 18.2 SERVICE
Notwithstanding the definition of Service, Service for
any Employee who was employed by Big Rivers Electric
Corporation, immediately prior to becoming a Participant
in the Plan shall be defined to include the aggregate of
the employment period with the Employer and the
employment period with such prior employer.
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*********************
SIGNATURES
IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
this 10th day of September, 1999, effective as of the dates set forth
above.
Witness: By /s/ Frederick J. Newton, III
---------------------------------
/s/ Gregory J. Meiman Title Senior Vice President and
- ----------------------------- Chief Administrative Officer
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APPENDIX A
PARTICIPATING EMPLOYERS
LG&E Energy Corp.
Louisville Gas and Electric Company
LG&E Home Services Inc., effective February 1, 1996
Enertech Inc., effective February 1, 1996
WKE Corp., WKE Station Two Inc., Western Kentucky Energy, Corp., effective
July 17, 1998
Kentucky Utilities Company, effective August 1, 1998
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APPENDIX B
PARTICIPATING EMPLOYERS
LG&E Power Inc., effective January 1, 1998.
LG&E Natural Inc., effective January 1, 1998.
LG&E Natural Marketing Inc., effective January 1, 1998.
Hadson Financial Corporation, effective January 1, 1998.
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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
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
INTRODUCTION 1
DEFINITIONS 2
Section 1.1 ADJUSTMENT 2
Section 1.2 ANNUAL ADDITIONS 2
Section 1.3 BENEFICIARY 2
Section 1.4 BOARD 2
Section 1.5 CODE 2
Section 1.6 COMMITTEE 2
Section 1.7 COMPANY 2
Section 1.8 COMPANY STOCK 2
Section 1.9 COMPENSATION 3
Section 1.10 CORPORATION 3
Section 1.11 DEFINED BENEFIT PLAN 3
Section 1.12 DEFINED CONTRIBUTION PLAN 3
Section 1.13 DIVIDEND ELIGIBLE PARTICIPANT 3
Section 1.14 EARLY RETIREMENT DATE 4
Section 1.15 EFFECTIVE DATE 4
Section 1.16 EMPLOYEE 4
Section 1.17 EMPLOYER 4
Section 1.18 EMPLOYER CONTRIBUTIONS 4
Section 1.19 ENTRY DATE 4
Section 1.20 ESOP 4
Section 1.21 ESOP DIVIDENDS 4
Section 1.22 FIDUCIARY 4
Section 1.23 FORMER PARTICIPANT 4
Section 1.24 HIGHLY COMPENSATED EMPLOYEES 4
Section 1.25 INDIVIDUAL ACCOUNT 7
Section 1.26 INVESTMENT FUND 7
Section 1.27 INVESTMENT MANAGER 7
Section 1.28 LEASED EMPLOYEE 7
Section 1.29 LG&E ENERGY CORP. COMMON STOCK FUND 7
Section 1.30 LIMITATION YEAR 7
Section 1.31 MATCHING CONTRIBUTION ACCOUNT 7
Section 1.32 MATCHING CONTRIBUTIONS 8
Section 1.33 NORMAL RETIREMENT DATE 8
Section 1.34 PARTICIPANT 8
Section 1.35 PAYING AGENT 8
Section 1.36 PLAN 8
Section 1.37 PLAN YEAR 8
Section 1.38 PRIOR ESOP ACCOUNT 8
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 1.39 PRIOR PLAN 8
Section 1.40 ROLLOVER CONTRIBUTION 8
Section 1.41 ROLLOVER CONTRIBUTION ACCOUNT 8
Section 1.42 SALARY REDIRECTION 8
Section 1.43 SALARY REDIRECTION ACCOUNT 9
Section 1.44 TOTAL AND PERMANENT DISABILITY 9
Section 1.45 TRUST AGREEMENT 9
Section 1.46 TRUST FUND 9
Section 1.47 VALUATION DATE 9
Section 1.48 TRUSTEE 9
PARTICIPATION 10
Section 2.1 ELIGIBILITY REQUIREMENTS 10
Section 2.2 PLAN BINDING 10
Section 2.3 REEMPLOYMENT 10
Section 2.4 TRANSFERS 10
Section 2.5 BENEFICIARY DESIGNATION 11
Section 2.6 NOTIFICATION OF INDIVIDUAL ACCOUNT BALANCE 11
CONTRIBUTIONS 12
Section 3.1 SALARY REDIRECTION 12
Section 3.2 MATCHING CONTRIBUTIONS 14
Section 3.3 ROLLOVER AMOUNT FROM OTHER PLANS 14
Section 3.4 NONDISCRIMINATION TEST FOR SALARY REDIRECTION 15
Section 3.5 MAXIMUM INDIVIDUAL DEFERRAL 18
Section 3.6 MISTAKE OF FACT 18
ALLOCATIONS TO INDIVIDUAL ACCOUNTS 19
Section 4.1 INDIVIDUAL ACCOUNTS 19
Section 4.2 INVESTMENT OF ACCOUNTS 19
Section 4.3 VALUATION OF ACCOUNTS 20
Section 4.4 TRUSTEE AND COMMITTEE JUDGMENT CONTROLS 21
Section 4.5 MAXIMUM ADDITIONS 21
Section 4.6 CORRECTIVE ADJUSTMENTS 21
Section 4.7 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN FRACTION 22
DISTRIBUTIONS 24
Section 5.1 NORMAL RETIREMENT 24
Section 5.2 EARLY RETIREMENT 24
Section 5.3 LATE RETIREMENT 24
Section 5.4 DEATH 24
Section 5.5 DISABILITY 24
Section 5.6 TERMINATION OF EMPLOYMENT 24
Section 5.7 COMMENCEMENT OF BENEFITS 24
Section 5.8 MINIMUM DISTRIBUTIONS 25
Section 5.9 METHODS OF PAYMENT 25
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
Section 5.10 BENEFITS TO MINORS AND INCOMPETENTS 27
Section 5.11 UNCLAIMED BENEFITS 28
Section 5.12 PARTICIPANT DIRECTED ROLLOVERS 28
WITHDRAWALS 30
Section 6.1 HARDSHIP WITHDRAWAL 30
Section 6.2 PARTICIPANT LOANS 31
EMPLOYEE STOCK OWNERSHIP PLAN 35
Section 7.1 PURPOSE AND EFFECTIVE DATE 35
Section 7.2 INVESTMENT IN COMPANY STOCK 35
Section 7.3 PRIOR ESOP ACCOUNTS 35
Section 7.4 GENERAL ESOP PROVISIONS 35
Section 7.5 PUT OPTION 36
Section 7.6 LOANS 36
Section 7.7 DISPOSITION OF DIVIDENDS ON COMPANY STOCK 38
Section 7.8 VOTING OF STOCK AND OTHER STOCK RIGHTS 38
Section 7.9 SECTION 16 COMPLIANCE 39
FUNDING 40
Section 8.1 CONTRIBUTIONS 40
Section 8.2 TRUSTEE 40
FIDUCIARIES 41
Section 9.1 GENERAL 41
Section 9.2 EMPLOYER 41
Section 9.3 TRUSTEE 41
Section 9.4 401(k) SAVINGS COMMITTEE 42
Section 9.5 CLAIMS PROCEDURES 43
Section 9.6 RECORDS 44
AMENDMENT AND TERMINATION OF THE PLAN 45
Section 10.1 AMENDMENT OF THE PLAN 45
Section 10.2 TERMINATION OF THE PLAN 45
Section 10.3 RETURN OF CONTRIBUTIONS 45
MISCELLANEOUS 48
Section 11.1 GOVERNING LAW 48
Section 11.2 CONSTRUCTION 48
Section 11.3 ADMINISTRATION EXPENSES 48
Section 11.4 PARTICIPANT'S RIGHTS 48
Section 11.5 SPENDTHRIFT CLAUSE 48
Section 11.6 MERGER, CONSOLIDATION OR TRANSFER 49
Section 11.7 COUNTERPARTS 49
SIGNATURES 49
</TABLE>
iii
<PAGE>
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).
<PAGE>
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 Benefits 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,
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(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) or the one hundred and fifty
thousand dollar ($150,000) 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 not
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, alternate payees and Beneficiaries.
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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), effective June 1,
1996 the date the Participant is credited with thirty (30) 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, 1993m the effective date of the
Prior Plan. The effective date of this amended and restated Plan
is 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;
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<PAGE>
(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
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<PAGE>
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.
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(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 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 Company Stock.
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
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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.
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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
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 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 1.48 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.
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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
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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.
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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 or effective June 1, 1998, the
designee of 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 or effective June 1, 1998, in a
manner prescribed 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. Effective June 1,
1998, a Participant electing to have Salary Redirection
made on his behalf to the
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Plan pursuant to this Section may in a manner prescribed
by the Committee, enter into a Salary Redirection
Agreement to 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 of his election, 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 or
effective June 1, 1998, in the manner prescribed be the
Committee 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 Dividend Eligible 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 Dividend Eligible Participant will be deemed to
have elected to
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<PAGE>
have a Salary Redirection made on his behalf in the
amount of the ESOP 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%),
effective as of the first pay period of 1999 fifty percent
(50%), 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.
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<PAGE>
(b) Notwithstanding the foregoing, if an Employee had
deposited a distribution previously received from another
qualified plan into an individual retirement account, as
defined in Section 408 of the Code, 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 receipt thereof from the individual retirement
account.
(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, or effective June 1, 1998, upon approval
pursuant to a method authorized by the Committee, the
amount rolled over or 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
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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.
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<PAGE>
(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 the 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
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.
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(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(g)(1).
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 and Section 8.3 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(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 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).
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.
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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
Participant pursuant to Article 7.
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.
(12) Janus Worldwide Fund, effective August 1, 1998.
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(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.
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(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
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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
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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.
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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 as 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 for any reason (other than
Normal Retirement, Early Retirement, Late Retirement, Total &
Permanent 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
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(a) Any benefits payable under this Article shall be paid as
soon as reasonably possible following the Participant's
Severance from Service Date, subject to the Participant's
consent. Unless the Participant elects otherwise, payment
shall begin no later than 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. The Participant may defer distribution to a
subsequent date unless his benefit may be cashed out without
his consent pursuant to Subsection 5.10(a), or unless he is
subject to Section 5.9 as a result of attaining age seventy
and one-half (70-1/2).
(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. Effective June 1, 1998 a Participant
who attains age seventy and one-half (701/2) while
actively at work, 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
the Participant becomes a five percent (5%) owner of the
Company.
(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
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(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. Effective
June 1, 1998m the request by the Participant or the
Beneficiary shall be in a manner and time prescribed by
the Committee. 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) or effective
June 1, 1998 five thousand dollars ($5,000). If the
vested value of the Participant's Individual Account is
less than three thousand five hundred dollars ($3,500) or
effective June 1, 1998 five thousand dollars ($5,000),
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.
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(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
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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)
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(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.
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ARTICLE 6
WITHDRAWALS AND LOANS
Section 6.1 HARDSHIP WITHDRAWAL
(a) Except as otherwise provided in this Section, in the time
and manner and 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.
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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
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(a) Effective February 1, 1996, upon proper 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
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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
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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.
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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 and
all accounts under this 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 at the
time of the transfer of their prior ESOP balance. For
purposes of the Plan, Prior ESOP Account shall mean
effective January 1, 1998, the balance transferred from
the Louisville Gas and Electric Company Employees' Stock
Ownership Plan and Trust, plus any investment gains, and
minus investment losses and distributions.
(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, including but not limited to the
establishment of minimum amounts, 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 Funds in the Plan.
Section 7.4 GENERAL ESOP PROVISIONS
(a) PAYMENT OF BENEFITS
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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
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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
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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
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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.
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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.
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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 Employer established and maintains the Plan for the
benefit of its Employees 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
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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 BENEFITS 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 or Committee, and
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 properly to carry out such duties. Except as provided
in Section 10.1, 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 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; (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,
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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 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.
(n) 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;
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(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
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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.
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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 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
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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 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.
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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
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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
10th day of September, 1999, but effective January 1, 1998.
Witness: LOUISVILLE GAS AND ELECTRIC COMPANY
/s/ Gregory J. Meiman By: /s/ Frederick J. Newton, III
- ---------------------- ----------------------------------
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EXHIBIT 4.03
WKE CORP. SAVINGS PLAN
Effective as of July 17 1998
<PAGE>
INTRODUCTION
Effective July 17, 1998 the Board of Directors of LG&E Energy Corp.,
authorized the adoption of the WKE Corp. Bargaining Employee's Savings Plan for
the Bargaining Unit Employees of WKE Corp., Western Kentucky Energy Corp., and
WKE Station Two, Inc.
<PAGE>
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 Participant in any Limitation
Year, the sum of Employer Contributions, 401(k) Savings
Contributions, Thrift Savings Contributions and forfeitures
allocated to the Participant's Individual Account. Amounts
allocated to an individual medical account, as defined in Section
415(l)(2) 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 LG&E Energy Corp. (the
"Corporation") or its successors or assigns.
Section 1.5 BREAK IN SERVICE means a Plan Year during which an employee has
not been credited with at least one (1) Hour of Service.
Solely to determine whether a Break in Service has occurred,
an employee who is absent from work for maternity or paternity
reasons, or for family and medical reasons specified in the
Family and Medical Leave Act of 1993, shall receive credit for
the Hours of Service which would otherwise have been credited
to such employee but for such absence, or in any case in which
Hours of Service cannot be determined, eight (8) Hours of
Service credited to an employee pursuant to the immediately
preceding sentence exceed five hundred and one (501). For
purposes of this Section, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the employee, (2) by reason of the birth of a
child of the employee, (3) by reason of the placement of a
child with the
<PAGE>
employee in connection with the adoption or foster care of such
child by the employee, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited (1) in the Plan Year or other applicable
computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or
(2) in all other cases, in the next following Plan Year or other
applicable computation period.
Section 1.6 CODE means the Internal Revenue Code of 1986, as amended and
revised.
Section 1.7 COMMITTEE means the Benefits Committee provided for in Article 9
hereof.
Section 1.8 COMPANY means WKE Corp. and all of the legal entities which are
part of a controlled group or affiliated service group with WKE
Corp. pursuant to the provisions of Code Sections 414(b), (c),
(m), or (o).
Section 1.9 COMPENSATION, unless otherwise defined by a particular provision
of this Plan, means cash remuneration (salary or straight time
rate of pay) paid for services rendered to an Employer by an
Employee during a Plan Year (exclusive of all forms of
extraordinary earnings such as overtime, shift premiums,
commissions and bonuses). Compensation shall not include
benefits paid under this Plan, severance pay, pensions or other
forms of deferred compensation. Where payments not for service,
such as payments for travel or expense, are not separately
stated, the Committee shall determine and make appropriate
reduction for such payments on a uniform and consistent basis.
Only remuneration paid in the portion of the Plan Year in which
the Employee is a Participant shall be considered Compensation.
Compensation shall be limited to one hundred fifty thousand
dollars ($150,000) or such other amount as determined pursuant to
Code Section 401(a)(17).
Section 1.10 DEFINED BENEFIT PLAN means a plan established and qualified under
Section 401 of the Code, except and to the extent it is, or is
treated as, a Defined Contribution Plan.
Section 1.11 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 1.12 EARLY RETIREMENT DATE means the first day of the month coincident
with or next following the Participant's fifty-fifth (55th)
birthday.
Section 1.13 EFFECTIVE DATE means July 17, 1998, the effective date of the
Original Plan.
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Section 1.14 EMPLOYEE means any hourly paid person employed by the Employer,
including those on leave of absence and those employed on a
part-time basis, whose terms and conditions of employment are the
subject of a collective bargaining agreement between the Employer
and a collective bargaining unit providing for coverage
hereunder, but the term "Employee" shall exclude any person who
is a Leased Employee.
When used with an initial lower case letter, the term "employee"
shall mean a person employed by the Employer or the Company, as
the context requires, without regard to the limitations contained
in this Section.
Section 1.15 EMPLOYER means (i) WKE Corp., or any successor thereto, and (ii)
each of the legal entities, or any successors thereto, which is
part of the Company and has adopted the Plan for its Employees
with consent of the Board. The Adopting Employers shall be shown
on Appendix "A" attached to and made a part of this document.
Section 1.16 EMPLOYER CONTRIBUTIONS means Matching 401(k) Savings
Contributions made to the Trust Fund by the Employer. 401(k)
Savings Contributions shall not be included in the term Employer
Contributions when used in this Plan.
Section 1.17 ENTRY DATE means the first (1st) day of each calendar month.
Section 1.18 ESOP means the Employee Stock Ownership Plan established pursuant
to Article 8 of the Plan.
Section 1.19 ESOP DIVIDENDS means those amounts distributed during the Plan
Year to a Participant as dividends on stock allocated to such
Participant's account pursuant to Article 8 of the Plan.
Section 1.20 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 1.21 FORMER PARTICIPANT means a Participant whose employment with the
Employer has terminated but who has not received payment in full
of the amount in his Individual Account to which he is entitled.
Section 1.22 401(k) SAVINGS CONTRIBUTIONS means pre-tax contributions made to
the Trust Fund by the Employer pursuant to Section 3.1.
Section 1.23 401(k) SAVINGS CONTRIBUTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) 401(k)
Savings Contributions made on his behalf pursuant to Section 3.1
and (ii) the Participant's proportionate share, attributable to
his 401(k) Savings Contribution Account, of the Adjustments,
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reduced by any distributions from such account pursuant to
Article 5 and any withdrawals from such account pursuant to
Article 6, if withdrawals are allowed pursuant thereto.
Section 1.24 HIGHLY COMPENSATED EMPLOYEE means an employee who during the
determination year or during the look back year (1) was at any
time five percent (5%) owner of the Employer; or (2) received
compensation from the Company in excess of eighty thousand
dollars ($80,000) (or such higher amount as may be provided under
Code Section 414(q)).
Section 1.25 HOUR OF SERVICE means any hour for which an employee is paid or
entitled to payment by the Company during the Plan Year or other
applicable computation period (1) for the performance of duties
for the Company; (2) on account of a period of time during which
no duties are performed (irrespective of whether the employment
relationship has terminated); and (3) as a result of a back pay
award which has been agreed to or made by the Company,
irrespective of mitigation of damages, to the extent that such
hour has not been previously credited under item (1) or item (2)
preceding.
(a) The number of Hours of Service to be credited on account of a
period of time during which no duties are performed (including
hours resulting from a back pay award) shall be determined as
follows. If the payment which is made or due is calculated on
the basis of units of time, the number of Hours of Service to be
credited shall be the number of regularly scheduled working hours
included in the units of time on the basis of which the payment
is calculated; if an employee does not have a regular work
schedule, the number of Hours of Service to be credited shall be
calculated on the basis of an eight (8) hour work day. If the
payment which is made or due is not calculated on the basis of
units of time, the number of Hours of Service to be credited
shall be calculated by dividing the amount of the payment by the
employee's most recent hourly rate of compensation before the
period during which no duties were performed, determined as
follows:
(1) If the employee's compensation is determined on the basis of
an hourly rate, such hourly rate shall be the employee's
most recent hourly rate of compensation.
(2) If the employee's compensation is determined on the basis of
a fixed rate for a specified period of time other than
hours, his hourly rate of compensation shall be his most
recent rate of compensation for the specified period of
time, divided by the number of hours regularly scheduled for
the performance of duties during such period of time; if an
employee does not have a regular work schedule, his hourly
rate of compensation shall be calculated on the basis of an
eight (8) hour work day.
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(3) If the employee's compensation is not determined on the
basis of a fixed rate for a specified period of time, his
hourly rate of compensation shall be the lowest hourly rate
of compensation paid to employees in his job classification,
or, if no employees in his job classification have an hourly
rate of compensation, the minimum wage in effect under
Section 6(a)(1) of the Fair Labor Standards Act of 1938, as
amended.
(b) In no event shall the application of the terms of this Subsection
(a) of this Section result in crediting an employee with a number
of Hours of Service during the period which is greater than the
number of hours regularly scheduled for the performance of
duties. If an employee has no regular work schedule, the number
of Hours of Service to be credited to him shall not exceed the
number which would be credited calculated on the basis of an
eight (8) hour work day.
(c) No employee shall be credited with more than five hundred and
one (501) Hours of Service as a result of the application of
Subsection (a) of this Section for any single continuous period
during which he performs no duties, regardless of whether such
period extends beyond one (1) Plan Year or other applicable
computation period.
(d) The Plan Year or other applicable computation period to which
Hours of Service shall be credited shall be determined as
follows:
(1) Except as hereinafter provided, Hours of Service credited in
accordance with item (1) of Subsection (a) of this Section
1.25 shall be credited in the Plan Year or other applicable
computation period in which the duties were performed.
(2) Except as hereinafter provided, Hours of Service credited in
accordance with item (2) of Subsection (a) of this Section
1.25 shall be credited: if calculated on the basis of units
of time, to the Plan Year or Plan Years or other applicable
computation periods in which the period during which no
duties are performed occurs, beginning with the first unit
of time to which the payment relates; otherwise to the Plan
Year or other applicable computation period in which the
period during which no duties are performed occurs, provided
that if the period during which no duties are performed
extends beyond one (1) Plan Year or other applicable
computation period, such Hours of Service shall be allocated
between not more than the first two (2) Plan Years or other
applicable computation periods on any reasonable basis
consistently applied.
(3) Except as hereinafter provided, Hours of Service credited in
accordance with item (3) of Subsection (a) of this Section
1.25 shall be credited to the Plan Year or other applicable
computation period to which the award or agreement for back
pay pertains rather than to the Plan Year or other
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applicable computation period in which the award, agreement,
or payment is made.
(4) Hours of Service to be credited to an employee in connection
with a period of no more than thirty-one (31) days which
extends beyond one (1) Plan Year or other applicable
computation period may be credited to the first or the
second Plan Year or other applicable computation period,
provided that such crediting is done on a reasonable and
nondiscriminatory basis.
(e) Nothing in this Section 1.25 shall be construed to alter, amend,
modify, invalidate, impair or supersede any law of the United
States or any rule or regulation issued under any such law. The
nature and extent of any credit for Hours of Service under this
Section shall be determined under such law, including Department
of Labor Regulations Section 2530.200b-2.
Section 1.26 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 401(k) Savings Contribution Account, a
Matching 401(k) Savings Contribution Account, and a Rollover
Account.
Section 1.27 INVESTMENT FUND means a fund established pursuant to Subsection
4.2(a).
Section 1.28 INVESTMENT MANAGER means such entity appointed to manage all or
part of the Trust Fund.
Section 1.29 KEY EMPLOYEE means 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 Employer having an annual compensation from the
Employer 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; or
(b) one (1) of the ten (10) employees having an annual compensation
from the Employer 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; or
(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 Employer for a Plan Year of more than one
hundred fifty thousand dollars ($150,000).
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(e) For purposes of this Section, compensation means compensation as
defined in Code Section 415, but without regard to Code Sections
125, 402(e)(3) and 402(h)(1)(B), and in the case of employer
contributions made pursuant to a salary reduction agreement,
without regard to Code Section 403(b).
(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 1.30 LEASED EMPLOYEE shall mean any person (other than such 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.
Section 1.31 LG&E ENERGY CORP. COMMON STOCK FUND means the fund invested
primarily in shares of common stock of LG&E Energy Corp.
Section 1.32 LIMITATION YEAR means the twelve (12) month period beginning on
January 1 and ending on December 1.
Section 1.33 MATCHING 401(k) SAVINGS CONTRIBUTION ACCOUNT means that portion
of a Participant's Individual Account attributable to (i)
Matching 401(k) Savings Contributions allocated to such
Participant pursuant to Section 3.3 and (ii) the Participant's
proportionate share, attributable to his Matching 401(k) Savings
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, if
withdrawals are allowed pursuant thereto.
Section 1.34 MATCHING 401(k) SAVINGS CONTRIBUTIONS means contributions made to
the Trust Fund by the Employer pursuant to Section 3.3.
Section 1.35 MATCHING THRIFT SAVINGS CONTRIBUTION ACCOUNT means that portion
of a Participant's Individual Account attributable to the
Participant's proportionate share, attributable to his Matching
Thrift Savings 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, if
withdrawals are allowed pursuant thereto.
Section 1.36 NORMAL RETIREMENT DATE means the first day of the month
coincident with or next following the Participant's sixty-fifth
(65th) birthday.
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Section 1.37 NORMAL RETIREMENT AGE means age sixty-five (65).
Section 1.38 PARTICIPANT means any Employee eligible to participate in the
Plan pursuant to Article 2 hereof.
Section 1.39 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 1.40 PLAN means the WKE Corp. Bargaining Employees' Savings Plan.
Section 1.41 PLAN YEAR means the twelve (12) month period beginning on January
1 and ending on December 31.
Section 1.42 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 1.43 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
Subsection (a) of this Section 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 1.44 ROLLOVER CONTRIBUTION means contributions made to the Trust Fund
by an Employee pursuant to Section 3.3.
Section 1.45 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.
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Section 1.46 SALARY REDIRECTION means contributions made to the Trust Fund by
the Employer pursuant to Section 3.1.
Section 1.47 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 (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 1.48 SERVICE means the aggregate of an employee's periods of Service
under Subsection (a) of this Section, subject to Subsection (b)
of this Section.
(a) A year of Service is each Plan Year during which an employee has
been credited with one (1) or more Hours of Service for the
Company.
(b) Service with a predecessor employer will be credited to an
employee as Service for the Company as required pursuant to Code
Section 414(a).
(c) Prior service with Big Rivers Electric Corporation.
Section 1.49 SPONSORING EMPLOYER means WKE Corp.
Section 1.50 THRIFT SAVINGS CONTRIBUTIONS means after-tax contributions made
to the Trust Fund by a Participant pursuant to Section 3.2.
Section 1.51 THRIFT SAVINGS CONTRIBUTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) Thrift
Savings Contributions pursuant to Section 3.2 and (ii) the
Participant's proportionate share, attributable to his Thrift
Savings 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, if
withdrawals are allowed pursuant thereto.
Section 1.52 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 lump sum present
value determined pursuant to the plan. 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
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(5) year period ending on the determination date, including
distributions under a terminated plan which, if it had not
been terminated, would have been required to be included in a
Required Aggregation Group.
(b) The 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. No plan in a Required Aggregation
Group shall be treated as a Top Heavy Plan if such group is
not 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 1.53 TOTAL AND PERMANENT DISABILITY or TOTALLY AND PERMANENTLY
DISABLED means a physical or mental condition of the Participant
which is expected to totally and permanently prevent him from
engaging in any occupation or employment for remuneration or
profit, except for the purpose of rehabilitation not incompatible
with a finding of Total and Permanent Disability. The
determination as to whether a Participant is Totally and
Permanently Disabled shall be made on evidence that the
Participant is eligible for disability benefits under the Social
Security Act.
Section 1.54 TRUST AGREEMENT means the agreement entered into between LG&E
Energy Corp. and Fidelity Trust Company pursuant to Article 7
hereof.
Section 1.55 TRUST FUND means the trust fund created in accordance with
Article 7 hereof.
Section 1.56 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.
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Section 1.57 VALUATION DATE means the date the Trustee values the assets of
the Trust Fund. As of each Valuation Date the Trust Fund shall
be valued at fair market value. The Committee may direct the
Trustee to value the Trust Fund as of any date it deems
desirable. To the extent that the Investment Funds are invested
with an Investment Manager which values the assets of the
Investment Funds, Valuation Date shall mean the date the
Investment Manager values such funds.
Section 1.58 CONSTRUCTION. Capitalized words and phrases used in this Plan
shall have the meanings specified in this Article, 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.
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ARTICLE 2
PARTICIPATION
Section 2.1 ELIGIBILITY REQUIREMENTS
Each employee shall be eligible to participate as of the later of
(i) the Effective Date, or (ii) the Entry Date coincident with or
next following the completion of a twelve (12) consecutive month
period during which he has been credited with at least one
thousand (1,000) Hours of Service. The first eligibility
computation period shall be the twelve (12) consecutive month
period beginning on the date he completes his first Hour of
Service. Thereafter, the eligibility computation periods shall
be Plan Years, beginning with the Plan Year in which occurs the
first anniversary of the date the Employee completes his first
Hour of Service.
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 AND CHANGE IN STATUS
(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, or voluntary or involuntary termination of employment.
(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
eligibility requirements determined pursuant to Section 2.1
beginning with the date of his original employment with the
Company.
(c) If an employee who was eligible to become a Participant in the
Plan during his prior period of employment is reemployed, he
shall again be eligible to become a Participant as of the date he
again becomes an Employee.
(d) If a person employed by the Company becomes an Employee as
defined under this Plan because of a change in employment status,
and he has met the eligibility requirements of Section 2.1 on or
before the date of his change in status, he shall be eligible to
participate in the Plan as of the date he becomes an Employee.
If a Participant ceases to be an Employee as defined under the
Plan, he will cease to be eligible to make contributions to the
Trust Fund or to have contributions made to the Trust Fund on his
behalf, effective as of the beginning of the payroll period
coincident with or next following the date he ceases to be an
Employee.
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Section 2.4 BENEFICIARY DESIGNATION
Upon commencing participation, each Participant shall designate a
Beneficiary in a manner prescribed by the Committee. Such
Participant may from time to time change his Beneficiary
designation in a manner prescribed by 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 equal shares, 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 calendar quarter 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.
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ARTICLE 3
CONTRIBUTIONS
Section 3.1 SALARY REDIRECTION
(a) SALARY REDIRECTION AGREEMENT. Each Employee who satisfies the
requirements of Section 2.1 may, but shall not be required to,
elect to have a Salary Redirection made to the Trust Fund on his
behalf. An eligible Employee shall make such an election by
agreeing to have his Employer redirect, and contribute to the
Trust Fund on the Employee's behalf, a portion of the Employee's
Compensation. The amount shall be a whole percentage of his
Compensation, but shall not exceed fifteen percent (15%). The
Committee may limit the amount of Salary Redirection
Contributions at any time, if such limits are advisable in order
for the Plan to Comply with the requirements of Sections 3.4, 3.6
or 4.5. The maximum amount of contributions that can be made
during a period pursuant to this Section shall be offset by any
Thrift Savings Contributions made during the same period.
(b) ELECTION TO PARTICIPATE. The election to have the Employer make
401(k) Savings Contributions shall be made in a manner prescribed
by the Committee. The contributions shall commence with the
first pay in the calendar month beginning at least fifteen (15)
days after an election made in the manner prescribed by the
Committee, subject to the following:
(1) A reemployed Employee who was eligible to participate in the
Plan during his prior period of employment may elect on his
reemployment date to have the contributions commence with
his first pay; and
(2) An employee who becomes an Employee as defined under this
Plan because of a change in employment status, and who is
eligible to participate in the Plan as of the date of his
change in status, may elect on his change in status date to
have the contributions commence with his first pay after
that date. An employee participating in the LG&E Energy
Corp. Savings Plan will automatically be enrolled in this
Plan upon becoming an Employee as defined under this Plan.
(c) CHANGE IN SALARY REDIRECTION CONTRIBUTIONS. A Participant
electing to have contributions made to the Trust Fund on his
behalf pursuant to this Section may, in a manner prescribed by
the Committee, increase or decrease his Salary Redirection
Contributions amount (within permissible limits) effective with
the first pay in the calendar month beginning at least fifteen
(15) days after the date the form is received by the Committee. A
single application could include a change under both this
Subsection and Subsection 3.2(c). If a Participant has both
401(k) Savings Contributions and Thrift Savings Contributions, an
election to decrease the amount of one but not the other to zero
percent (0%) shall be
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construed to be a change in contributions and shall not be
construed to be a cessation of contributions pursuant to either
Subsection 3.1(d) or 3.2(d).]
(d) CESSATION OF SALARY REDIRECTION CONTRIBUTIONS. A Participant may
elect to cease future Salary Redirection Contributions effective
with the first pay in the calendar month beginning at least
fifteen (15) days after an election is made in a manner
prescribed by the Committee. (Contributions will automatically
be suspended during an unpaid leave of absence.) In the event
the Participant desires thereafter to recommence having Salary
Redirection Contributions made on his behalf, he shall be allowed
to do so effective with the first pay in the calendar month
beginning at least fifteen (15) days after an election is made in
a manner prescribed by the Committee, provided that any cessation
under this Subsection must be for a period of at least three (3)
months. Notwithstanding the preceding sentence, the minimum
three (3) month cessation of contributions shall not be required
if the cessation is due to a leave of absence, nor in the amount
of the deemed dividends deferred pursuant to Section 3.1(g).
Cessation of 401(k) Savings Contributions will also result in a
cessation of any Thrift Savings Contributions.
(e) NOTICE REQUIREMENTS. Any 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
401(k) Savings Contributions made on behalf of the 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 is received
by the Employer.
(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. 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 THRIFT SAVINGS CONTRIBUTIONS
(a) THRIFT SAVINGS CONTRIBUTION AGREEMENT. Each Employee who
satisfies the requirements of Section 2.1 may, but shall not be
required to, elect to make Thrift Savings Contributions to the
Trust fund in an amount that shall be a whole percentage of his
Compensation, but shall not exceed fifteen percent (15%). The
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committee may limit the amount of Thrift Savings Contributions at
any time, if such limits are advisable in order for the Plan to
comply with the requirements of Sections 3.5 or 4.5. The maximum
amount of contributions that can be made during a period pursuant
to this Section shall be offset by any 401(k) Savings
Contributions made during the same period.
(b) ELECTION TO PARTICIPATE. The election to make Thrift Savings
Contributions shall be made in a manner prescribed by the
Committee. The contributions shall commence with the first pay
in the calendar month beginning at least fifteen (15) days after
an election made in the Manner prescribed by the Committee,
subject to the following:
(1) A reemployed Employee who was eligible to participate in the
Plan during his prior period of employment may elect on his
reemployment date to have the contributions commence with
his first pay; and
(2) An employee who becomes an Employee as defined under this
Plan because of a change in employment status, and who is
eligible to participate in the Plan as of the date of his
change in status, may elect on his change in status date to
have the contributions commence with his first pay after
that date. An employee participating in the LG&E Energy
Corp. Savings Plan will automatically be enrolled in this
Plan upon becoming an Employee as defined under this Plan.
(c) CHANGE IN THRIFT SAVINGS CONTRIBUTIONS. A Participant electing
to make contributions to the Trust Fund pursuant to this Section
may, in a manner prescribed by the Committee, increase or
decrease his Thrift Savings Contributions amount (within
permissible limits) effective with the first pay in the calendar
month beginning at least fifteen (15) days after the date the
form is received by the Committee.
(d) CESSATION OF THRIFT SAVINGS CONTRIBUTIONS. A Participant may
elect to cease future Thrift Savings Contributions effective with
the first pay in the calendar month beginning at least twenty (2)
days after receipt of written notice by the Committee.
(Contributions will automatically be suspended during an unpaid
leave of absence.) In the event the Participant desires
thereafter to recommence making Thrift Savings Contributions, he
shall be allowed to do so effective with the first pay in the
calendar month beginning at least (20) days after receipt of an
enrollment form by the Committee, provided that any cessation
under this Subsection must be for a period of at least three (3)
month. Notwithstanding the preceding sentence, the minimum three
(3) month cessation of contributions shall not be required if the
cessation is due to a leave of absence. Cessation of Thrift
Savings Contributions will also result in a cessation of any
401(k) Savings Contributions.
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(e) NOTICE REQUIREMENTS. Any 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
401(k) Savings Contributions made on behalf of the 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 is received
by the Employer.
Section 3.3 MATCHING SALARY REDIRECTION CONTRIBUTIONS
The Employer shall make Matching Salary Redirection Contributions
to the Trust Fund on behalf of any Participant who elects to have
Savings Contributions made to the Trust Fund. The Matching
Salary Redirection Contributions will be the amount necessary to
match fifty percent (50%) of the Participant's eligible Salary
Redirection Contributions. Eligible Salary Redirection
Contributions, for purposes of this Section, means Salary
Redirection Contributions not to exceed six percent (6%) of
Compensation. The Employer shall pay the Matching Salary
Redirection Contributions to the Trustee on the same day the
401(k) Savings Contributions are paid pursuant to Subsection
3.1(f).
Section 3.4 NONDISCRIMINATION TEST FOR SALARY REDIRECTION CONTRIBUTIONS
(a) The Employer shall check the actual deferral percentages for the
Plan Year against the tests identified below. In the event that
neither test is met, the Employer shall reduce the actual
deferral 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 Contributions, and only if such reductions are not
sufficient shall matched Salary Redirection Contributions be
reduced. Beginning with the highest actual deferral percentage,
each percentage shall be reduced to the next highest percentage,
and so forth, until the excess is eliminated. To the extent that
it is necessary to reduce matched Salary Redirection
Contributions, the corresponding Matching 401(k) Savings
Contributions (adjusted for income or loss for the Plan Year)
shall be forfeited in accordance with the provisions of
Subsection 5.7(i).
(b) The term "eligible Employee", for purposes of this Section, shall
mean any Employee who is eligible to participate in the Plan
during the Plan Year for which the tests are being made. An
Employee who would be eligible but for a suspension due to a
withdrawal from his Individual Account, or an election not to
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<PAGE>
participate in the Plan, is treated as an eligible Employee for
purposes of this Section.
(c) The actual deferral percentage for a specified group of Employees
shall be the average of the following ratios (expressed as
percentages and calculated separately for each eligible
Employee): Contributions made on behalf of each eligible
Employee divided by the compensation of the eligible Employee.
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 all amounts includible in the Employee's gross income
that are paid by the Employer to the Employee during the period
he is an eligible Employee. 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 elections under
Code Sections 125 (flexible benefit plans), 402(e)(3) (cash or
deferred arrangements), and 402(h)(1)(B) (simplified employee
plans), 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 one hundred fifty thousand dollars
($150,000) or such other amount as determined 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 401(k) Savings Contributions.
Test I - The actual deferral percentage for the group of Highly
Compensated Employees is not more than the actual
deferral percentage for the group 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 Compensation Employees over the actual
deferral percentage for the group of 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 the group of all of the eligible
Employees multiplied by two (2). Effective for Plan
Years beginning after December 31, 1988, if Test II in
Subsection 3.5(e) is
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used in testing other contributions pursuant
to Section 3.5, 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 3.5(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 contributions allocable to a Participant (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.
(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) The Employer shall check the actual contribution percentages for
the Plan Year against the tests identified below. In the event
that neither test is met, the Employer shall reduce the actual
contribution percentages of Highly Compensated Employees that are
above the maximum contribution percentage allowed under the
tests; provided that the initial reductions shall be in Thrift
Savings Contributions, and only if such reductions are not
sufficient shall Matching Salary Redirection Contributions be
reduced. Beginning with the highest actual contribution
percentage, each percentage shall be reduced to the next highest
percentage, and so forth, until the excess is eliminated. If it
is necessary to reduce Matching 401(k) Savings Contributions, the
Participant shall receive from the Plan a distribution equal to
the vested portion of such reduction (adjusted for income or loss
for the Plan Year). Any non-vested portion of such reduction
(adjusted for income or loss for the Plan Year shall be forfeited
in accordance with the provisions of Subsection 5.7(i).
(b) The term "eligible Employee", for purposes of this Section, shall
mean any Employee who is eligible to participate in the Plan
during the Plan Year for which the tests are being made. An
Employee who would be eligible but for a suspension due to a
withdrawal from his Individual Account, or an election not to
19
<PAGE>
participate in the Plan, is treated as an eligible Employee for
purposes of this Section.
(c) The actual contribution percentage for a specified group of
Employees shall be the average of the following ratios (expressed
as percentages and calculated separately for each eligible
Employee): Matching 401(k) Savings Contributions and Thrift
Savings Contributions (and 401(k) Savings Contributions to the
extent elected by the Employer and permitted by regulations under
Code Section 401(m) on behalf of each eligible Employee divided
by the compensation of the eligible Employee. In calculating the
actual contribution percentage of a Highly Compensated Employee
who participates in more than one arrange 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 all amounts includible in the Employee's gross income
that are paid by the Employer to the Employee during the period
he is an eligible Employee. 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 elections under
Code Sections 125 (flexible benefit plans), 402(e)(3) (cash or
deferred arrangements), and 402(h)(1)(B) (simplified employee
plans), 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 one hundred fifty thousand dollars
($150,000) or such other amount as determined 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 for the group 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 Compensation Employees over the
actual contribution percentage for the group of all
other eligible Employees is not more than two (2)
percentage points, and the contribution deferral
percentage for the group of Highly
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<PAGE>
Compensated Employees is not more than the actual
contribution percentage for the group of all of the
eligible Employees multiplied by two (2). Effective for
Plan Years beginning after December 31, 1988, if Test II
in Subsection 3.4(e) is used in testing 401(k) Savings
Contributions pursuant to Section 3.4, 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 contribution 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
aggregate contributions allocable to a Participant (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. For
purposes of this Section, the term "excess aggregate
contributions" means, with respect to any Plan Year, the excess
of:
(1) the aggregate amount of 401(k) Savings Contributions and
Thrift Savings 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.
(g) This Section shall be governed by the rules of 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 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).
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(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 3.7 MAXIMUM INDIVIDUAL DEFERRAL
A Participant shall not be permitted to have his Employer
redirect an amount in excess of seven thousand dollar ($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(e)(3). 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) to all plans pursuant to Code Section 402(e)(3),
22
<PAGE>
such amount shall be deemed an "excess deferral" and the
Committee shall direct the Trustee to distribute to the
Participant (not later than April 15th 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 sued by the Plan for
allocating income or loss to Participants' Individual
Accounts, and reduced by any deferrals distributed pursuant to
Section 3.4).
Section 3.8 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 Committee. The Committee 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. The amount of such excess to be returned
will be reduced by any loss allocable to such excess, but will
not be increased by any allocable income.
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<PAGE>
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 Trustee 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 Puritan Fund,
(3) Fidelity Spartan U.S. Equity Index Portfolio,
(4) Fidelity Magellan Fund,
(5) Fidelity Contrafund,
(6) Fidelity Equity-Income II Fund,
(7) Warburg Pincus Emerging Growth,
(8) Tempelton Foreign,
(9) Fidelity Intermediate Bond Fund,
(10) LG&E Energy Corp. Common Stock Fund,
(11) Janus Worldwide Fund, effective August 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%).
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<PAGE>
(c) A Participant may transfer the cumulative balance of this
Individual 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 Trustee 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
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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 such other amount as
determined pursuant to Code Section 415B(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 Additions
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 and
regulations issued pursuant to Code Section 415, the corrective
adjustments shall be made pursuant to and in the order of the
Subsections of this Section.
(a) The Participant's Thrift Savings Contributions shall be reduced
to insure compliance with Section 4.5. Any affected Thrift
Savings Contributions will be distributed to the Participant.
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<PAGE>
(b) The Participant's unmatched 401(k) Savings Contributions shall be
reduced to insure compliance with Section 4.5. Any affected
401(k) Savings Contributions will be distributed to the
Participant.
(c) The Participant's matched 401(k) Savings Contributions and
Matching 401(k) Savings Contributions shall be proportionally
reduced to insure compliance with Section 4.5 Any affected
401(k) Savings Contributions will be distributed to the
Participant. Any affected Matching 401(k) Savings Contributions
shall be used to reduce future Matching 401(k) Savings
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 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 four tenths (1.4) multiplied by the
amount which may be taken into account under Code Section
415(c)(1)(B) with respect to the Participant 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 four tenths (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 the Participant
under the Defined Benefit Plan for such Limitation Year.
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<PAGE>
(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.
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<PAGE>
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 coincident with or,
otherwise, immediately preceding his date of retirement, plus any
401(k) Savings Contributions, Thrift Savings Contributions,
Employer Contributions, forfeitures, and Adjustments allocated to
such account since such Valuation Date, plus any payments made by
the Participant pursuant to Section 6.4 since such Valuation
Date, and less any withdrawals since such Valuation Date.
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 coincident with or,
otherwise, immediately preceding his date of retirement, plus any
401(k) Savings Contributions, Thrift Savings Contributions,
Employer Contributions, forfeitures, and Adjustments allocated to
such account since such Valuation Date, plus any payments made by
the Participant pursuant to Section 6.4 since such Valuation
Date, and less any withdrawals since such Valuation Date.
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
a Participant under the Plan. Upon his actual retirement, he
shall become entitled to the full value of his Individual Account
as of the Valuation Date coincident with or, otherwise,
immediately preceding his date of retirement, plus any 401(k)
Savings Contributions, Thrift Savings Contributions, Employer
Contributions, forfeitures, and Adjustments allocated to such
account since such Valuation Date, plus any payments made by the
Participant pursuant to Section 6.4 since such Valuation Date,
and less any withdrawals since such Valuation Date.
Section 5.4 DEATH
If a Participant dies, his Beneficiary shall be entitled to the
full value of his Individual Account as of the Valuation Date
coincident with or, otherwise, immediately preceding his date of
retirement, plus any 401(k) Savings Contribu-
29
<PAGE>
tions, Thrift Savings Contributions, Employer Contributions,
forfeitures, and Adjustments allocated to such account since such
Valuation Date, plus any payments made by the Participant
pursuant to Section 6.4 since such Valuation Date, and less any
withdrawals since such Valuation Date.
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
the full value of his Individual Account as of the Valuation Date
coincident with or, otherwise, immediately preceding his date of
retirement, plus any 401(k) Savings Contributions, Thrift Savings
Contributions, Employer Contributions, forfeitures, and
Adjustments allocated to such account since such Valuation Date,
plus any payments made by the Participant pursuant to Section 6.4
since such Valuation Date, and less any withdrawals since such
Valuation Date.
Section 5.6 PERMANENT LAYOFF
If a Participant's termination of employment is due to a
permanent layoff, he shall be entitled to the full value of his
Individual Account as of the Valuation Date coincident with or,
otherwise, immediately preceding his date of retirement, plus any
401(k) Savings Contributions, Thrift Savings Contributions,
Employer Contributions, forfeitures, and Adjustments allocated to
such account since such Valuation Date, plus any payments made by
the Participant pursuant to Section 6.4 since such Valuation
Date, and less any withdrawals since such Valuation Date.
Section 5.7 TERMINATION OF EMPLOYMENT
(a) Upon termination of employment for any reason other than normal
retirement, early retirement, late retirement, death, disability,
or permanent layoff, a Participant shall be entitled to the full
value of his Individual Account as of the Valuation Date
coincident with or, otherwise, immediately preceding his date of
retirement, plus any 401(k) Savings Contributions, Thrift Savings
Contributions, Employer Contributions, forfeitures, and
Adjustments allocated to such account since such Valuation Date,
plus any payments made by the Participant pursuant to Section 6.4
since such Valuation Date, and less any withdrawals since such
Valuation Date.
(b) A Participant shall always be one hundred percent (100%) vested
in the balance of his 401(k) Savings Contribution Account and
Thrift Savings Contribution Account.
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<PAGE>
(c) A Participant shall be vested in the balance attributable to his
Matching 401(k) Savings Contribution Account and Matching Thrift
Savings Contribution Account based on the years of Service as of
his date of termination, in accordance with the following
schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 1 year 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 years or more 100%
</TABLE>
(d) Notwithstanding the above a Participant who attains Normal
Retirement Age while employed by the Company shall be fully
vested in his Individual Account under the Plan.
(e) A Participant who terminates employment pursuant to this Section
with a zero percent (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 any part of the vested portion of his Individual Account prior
to incurring five (5) consecutive Breaks in Service or if said
terminated Participant is zero percent (0%) vested, the
non-vested balance of such terminated Participant's Individual
Account shall be forfeited as of the date he receives or is
deemed to have received said distribution.
(f) If a terminated Participant is re-employed 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 date which is five (5) years
after the date on which the Participant is subsequently
re-employed, the amount previously distributed to him from such
account. Restoration of a forfeiture will come from a special
employer contribution. For purposes of this Section, a
Participant who receives a deemed distribution pursuant to this
Section will be deemed to have repaid the distribution upon
re-employment.
(g) The non-vested balance of the Individual Account of a terminated
Participant shall be forfeited as of the Valuation Date at the
end of the Plan Year in which such terminated Participant incurs
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.
(h) A terminated Participant who is re-employed after incurring five
(5) or more consecutive Breaks in Service shall not be allowed to
repay any amount distributed to him and shall not have any amount
forfeited pursuant to this Section restored to his Individual
Account.
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<PAGE>
(i) Any Matching 401(k) Savings Contributions or Matching Thrift
Savings Contributions forfeited will be used to reduce future
Matching 401(k) Savings Contributions.
Section 5.8 COMMENCEMENT OF BENEFITS
Any benefits payable under this Article shall be paid as soon as
reasonably possible following the actual date of severance,
subject to the Participant's consent. Unless the Participant
elects otherwise, payment shall begin no later than 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. The Participant may defer distribution to a
subsequent date unless his benefit may be cashed out without his
consent pursuant to Subsection 5.10(a), or unless he is subject
to Section 5.9 as a result of attaining age seventy and one-half
(70 1/2).
Section 5.9 MINIMUM DISTRIBUTIONS
The Individual Account of a Participant 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. Notwithstanding
the preceding, the distributions to an Participant who attains
age seventy and one-half (70 1/2), do not have to commence until
April 1 the following calendar year in which the later of age
seventy and one-half (70 1/2) or termination of employment
occurs; provided that if the Participant was not a five percent
(5%) owner of the Employer at any time during or after the Plan
Year in which he attained age sixty-six and one-half (66 1/2),
distributions must commence no later than April 1 following the
calendar year in which the later of the following occurs: (1) he
attains age seventy and one-half (70 1/2); or (2) he becomes a
five percent (5%) owner.
Section 5.10 METHODS OF PAYMENT
(a) A Participant or Beneficiary shall elect a distribution of the
Individual Account as provided hereinafter. Subject to the
provisions of Section 5.13, no other manner of distribution
shall be provided. The election by the Participant or
Beneficiary shall be in writing on an appropriate form to be
provided by the Committee and shall be filed with the Committee
at least thirty (30) days before distribution is to be made. The
Committee may not require an immediate lump sum distribution
without the consent of the Participant or Beneficiary, unless the
vested value of the Individual Account is not more than five
thousand dollars ($5,000). If the
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<PAGE>
vested value of the Participant's Individual Account is not
more than five thousand dollars ($5,000), 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 five thousand ($5,000) at the time of any
distribution, the value of the Participant's Individual
Account will be deemed to be more than five thousand ($5,000)
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 without the consent of the Participant
or Beneficiary. The alternative forms of distribution are as
follows:
(1) A lump sum distribution in cash or in kind; or
(2) Periodic annual installment payments for a period not to
exceed fifteen (15) years as selected by the Participant or
Beneficiary, each installment payment to be made on or about
December 31 except as otherwise provided in Sections 5.8 and
5.9; or
(3) Any combination of the above.
(b) If the Participant dies after 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 clause (2) 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's life expectancy of the Participant and designated
Beneficiary, and in no event, beyond fifteen (15) years.
(d) If the Participant dies before distribution 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 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 commence
shall not be earlier than the date on which the Participant
would have attained age seventy and one-half (70 1/2). If
the spouse dies before payments begin, any subsequent
distribution shall be made as if the spouse had been the
Participant.
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<PAGE>
(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).
Section 5.11 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 direct
the Trustee to 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 have advised the Committee in
writing that he will hold or use such amount for the benefit
of such minor.
Section 5.12 UNCLAIMED BENEFITS
If, after diligent effort, a Participant 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 last day of the Plan Year in
which the Participant incurs his fifth (5th) consecutive Break in
Service, or such later date as the Committee may determine, and
shall be used to reduce future Employer Contributions. If the
Participant 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 from a special employer contribution.
Section 5.13 PARTICIPANT DIRECTED ROLLOVERS
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible
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<PAGE>
rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(b) For purposes of this Section, an eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
Beneficiary, or for a specified period of ten (10) years or more;
any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(c) For purposes of this Section, an eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement
annuity.
For purposes of this Section, 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) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
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<PAGE>
ARTICLE 6
WITHDRAWALS AND LOANS
Section 6.1 HARDSHIP WITHDRAWAL - 401(k) SAVINGS
(a) Upon proper written application of a Participant made at least
thirty (30) days in advance of the withdrawal date, in such
manner and 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 401(k) Savings
Contribution Account and vested Matching 401(k) Savings
Contribution Account; provided that earnings allocated to said
401(k) Savings Contribution Account may not be withdrawn.
(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 needs shall be limited to:
(1) expenses for medical care 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, related educational fees, and room and
board expenses for the next twelve (12) months of
post-secondary education for the Participant, or the
Participant's 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;
(5) payment of funeral expenses for the Participant's spouse or
any dependents of the Participant (as defined in Code
Section 152); or
(6) 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.
36
<PAGE>
Any withdrawal hereunder may not exceed the amount required to
meet the financial need, and the amount must not be reasonably
available from other resources of the Participant. The amount of
an immediate and heavy financial need may include any federal,
state, or local taxes or penalties reasonably anticipated to
result from the distribution.
(c) The minimum amount that can be withdrawn pursuant to this Section
is the lesser of one hundred dollars ($100) or one hundred
percent (100%) of the Participant's 401(k) Savings Contribution
Account (excluding earnings) and vested Matching 401(k) Savings
Contribution Account. Withdrawals shall be made first from the
401(k) Savings Contribution Account and then, if necessary, from
the Matching 401(k) Savings Contribution Account.
(d) The Committee may lengthen or shorten the notice period in this
Section if it finds it administratively necessary or feasible to
do so. In granting or refusing any request for withdrawal or in
changing the notice period, the Committee shall do so on a
uniform, equitable and nondiscriminatory basis.
(e) Withdrawals in accordance with this Section shall not result in
an automatic suspension of contributions under this Plan.
(f) The determination by the Committee that the distribution will be
necessary to satisfy an immediate and heavy financial need will
be made on the basis of all relevant facts and circumstances. A
distribution generally will be treated as necessary to satisfy a
financial need if the Committee relies, without actual knowledge
to the contrary, on the Participant's written representation that
the need cannot reasonably be relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by liquidation of the Participant's assets, to the extent
such liquidation would not itself cause an immediate and
heavy financial need;
(3) by cessation of 401(k) Savings Contributions or Thrift
Savings Contributions under the Plan; or
(4) by other distributions or non-taxable loans from the Plan or
from plans maintained by the Employer or by any other
employer, or by borrowing from commercial terms.
For purposes of this Section, the Participant's resources shall
be deemed to include those of his spouse and minor children that
are reasonably available to the Participant.
Section 6.2 HARDSHIP WITHDRAWAL - THRIFT SAVINGS
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<PAGE>
(a) Upon proper written application of a Participant made at least
thirty (30) days in advance of the withdrawal date, in such
manner and 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 Thrift Savings
Contribution Account and vested Matching Thrift Savings
Contribution Account.
(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 needs shall be limited to:
(1) expense for medical care 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, related educational fees, and room and
board expenses for the next twelve (12) months of
post-secondary education for the Participant, or the
Participant's 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;
(5) payment of funeral expenses for the Participant's spouse or
any dependents of the Participant (as defined in Code
Section 152); or
(6) 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 financial need. The amount of an immediate and heavy
financial need may include any federal, state, or local taxes or
penalties reasonably anticipated to result from the distribution.
(c) The minimum amount that can be withdrawn pursuant to this Section
is the lesser of one hundred dollars ($100) or one hundred
percent (100%) of the Participant's Thrift Savings Contribution
Account and vested Matching Thrift Savings
38
<PAGE>
Contribution Account. Withdrawals shall be made first from the
Thrift Savings Contribution Account and then, if necessary, from
the Matching Thrift Savings Contribution Account.
(d) The Committee may lengthen or shorten the notice period in this
Section if it finds it administratively necessary or feasible to
do so. In granting or refusing any request for withdrawal or in
changing the notice period, the Committee shall do so on a
uniform, equitable and nondiscriminatory basis.
(e) Withdrawals in accordance with this Section shall not result in
an automatic suspension of contributions under this Plan.
Section 6.3 REGULAR THRIFT SAVINGS WITHDRAWALS
(a) Upon proper application made at least thirty (30) days in advance
of the withdrawal date, in such manner and in such form as the
Committee may specify, a Participant shall be permitted to
withdraw a portion or all of the balance of his Thrift Savings
Contribution Account.
(b) Only one (1) withdrawal may be made under this Section during any
Plan Year. The minimum amount that can be withdrawn is the
lesser of one hundred dollars ($100) or one hundred percent
(100%) of the Participant's Thrift Savings Contribution Account.
(c) Withdrawal in accordance with this Section will result in a
suspension of the Participant's Thrift Savings Contributions and
401(k) Savings Contributions, effective with the first pay in the
calendar month following the month in which their request for
withdrawal is received by the Committee, and lasting for a period
of three (3) months. Thrift Savings Contributions and 401(k)
Savings Contributions may resume effective with the first pay in
the calendar month following or coincident with the completion of
the suspension period, provided the Participant submits a new
enrollment form to the Committee at least twenty (20) days prior
to such effective date. No Employer Contributions shall be made
during any cessation of contributions under this Plan, and the
Participant shall not be allowed to make up any contributions
attributable to any such period.
(d) The Committee may lengthen or shorten the notice requirements in
this Section if it finds it administratively necessary or
feasible to do so, with such discretion being exercised in a
nondiscriminatory manner.
Section 6.4 PARTICIPANT LOANS
(a) Upon application of a Participant, made in such manner and in
such form and in a manner as the Committee may specify, the
Committee may direct the Trustee to make a loan to the
Participant from his Individual Account. The application, and
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<PAGE>
the resulting loan, must meet the terms and conditions specified
in the following provisions of this Section. Any application for
a loan under this Section by a Former Participant shall be
denied.
(b) The amount of the loan shall not exceed the lesser of:
(1) fifty thousand dollars ($50,000), reduced by the highest
outstanding balance of loans from the Plan to the
Participant during the one (1) year period ending on the day
before the day the loan is made, or
(2) one-half (1/2) the present value of the vested accrued
benefit of the Participant under the Plan as of the date of
the loan, minus the outstanding balance of all other loans
from the Plan to the Participant as of the date of the loan.
(c) The minimum amount of a Participant loan pursuant to this Section
is one thousand dollars ($1,000), and no more than two (2) loans
shall be made to a Participant during the Plan Year.
(d) The Trustee shall withdraw the amounts loaned to the Participant
from the Participant's Individual Account in the following source
order: Salary Reduction Contribution Account, Matching Salary
Reduction Contribution Account, Matching Thrift Savings
Contribution Account, and Thrift Savings Contribution Account.
The loan will be evidenced by a promissory note held as an
earmarked asset of the Trust Fund. The Trustee shall credit
interest and principal payments made by the Participant to the
Participant's Individual Account on a pro rata basis according to
the actual sources used for the loan.
(e) The Participant may choose the Investment Fund(s) from which the
loan is to be made. In the event the Participant does not choose
the Investment Fund(s) from which the loan is to be made, it
shall be made from such Investment Fund(s) as the Committee shall
determine. Repayments will be credited on a pro rata basis
according to the Participant's latest investment direction for
contributions at the time of the repayment.
(f) The Participant shall authorize the Employer to deduct from his
compensation substantially equal installments consisting of
interest and principal payable at the end of each regular pay
period (but no less frequently than quarterly). The Employer
shall transfer such payroll deductions to the Trustee within a
reasonable time following the end of each regular pay period. In
the event that the Participant ceases to be employed by the
Employer, the outstanding principal and any interest due to date
on the outstanding principal balance shall be immediately due and
payable upon demand. Notwithstanding the preceding, if a
Participant is still employed but is on an unpaid leave of
absence or is otherwise not receiving
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<PAGE>
compensation from the Employer, repayment shall be made pursuant
to the terms of the promissory note (but no less frequently than
quarterly).
(g) A Participant may repay, at any time, all of the then outstanding
principal balance of his loan, together with interest due to date
on the prepaid portion. Any such prepayments shall be made to
the Employer and the Employer shall transfer such prepaid amounts
to the Trustee within a reasonable time after receipt. Except as
otherwise provided in this Section, such right of prepayment
shall be entirely in the discretion of the Participant and shall
be without premium or penalty.
(h) The collateral shall be the assignment of up to fifty percent
(50%) of the Participant's vested Individual Account as of the
date of the loan, supported by the Participant's promissory note
for the amount of such loan, including interest, payable to the
order of the Trustee.
(i) Each loan shall bear interest at a reasonable rate to be fixed by
the Committee and 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 Fund. The Committee shall not discriminate among
Participants in the matter of interest rates; but loans granted
at different times may bear different interest rates if, in the
opinion of the Committee, different rates are required based on
the rates being charged by said commercial lending institutions
for similar loans.
(j) Unless a shorter period is provided in the promissory note, a
Participant shall be considered to have defaulted on the
promissory note if a payment is not made on the note during a
calendar year quarter. The terms of the promissory note shall
provide that if the Participant defaults on the loan, the unpaid
loan balance and the interest accrued since the last payment
shall be due immediately. If the amount due is not paid within
ninety (90) days after default, that amount (the unpaid loan
balance and the accrued interest as of the default date) will be
deemed to be a withdrawal by the Participant as of the date of
default.
(k) 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 of having such amount deemed to be a distribution
from the Individual Account.
(l) In granting or refusing any request for a loan, the Committee
shall do so on a uniform, equitable and nondiscriminatory basis.
(m) Loans under this Section shall be allowed starting at such time
as determined by the Committee.
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ARTICLE 7
FUNDING
Section 7.1 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, and any income therefrom, 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 7.2 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 Trust 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.
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ARTICLE 8
EMPLOYEE STOCK OWNERSHIP PLAN
Section 8.1 PURPOSE AND EFFECTIVE DATE
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 8.2 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 8.3 GENERAL ESOP PROVISIONS
(a) PAYMENT OF BENEFITS
Payments of amounts invested in the LG&E Energy Corp. Common
Stock Fund shall be in the form of a lump sum. Unless the
Participant elects otherwise, the distribution shall be made
no later than one (1) year after the close of the Plan Year
in which the Participant terminates the 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
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 8.4 PUT OPTION
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
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<PAGE>
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 8.5 LOANS
(a) AUTHORIZATION OF LOAN
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 8.05(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.
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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 Regulations 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 8.6 DISPOSITION OF DIVIDENDS ON COMPANY STOCK
(a) DISTRIBUTION TO DIVIDEND ELIGIBLE PARTICIPANT
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
The Trustee shall allocate dividends paid on Company Stock,
which are not otherwise distributed to Dividend Eligible
Participants under Subsection 8.6(a) of this Section, to the
Individual Account as provided for in Section 4.3 of the
Plan.
Section 8.7 VOTING OF STOCK AND OTHER STOCK RIGHTS
(a) VOTING
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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. Common 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 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 8.8 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.
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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.
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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 expense
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 Trust Fund.
Section 9.2 EMPLOYER
The Sponsoring Employer established and maintains the Plan for
the benefit of its Employees and for Employees of Adopting
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.
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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 (as defined in Section 3(38) of ERISA) to direct the
Trustee with respect to all or a designated portion of the assets
comprising the Trust Fund.
Section 9.4 BENEFITS 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 Benefits Committee,
collectively, the Committee. No compensation shall be paid
members of the Committee from the Trust Fund for service on the
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 10.1, 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 thereof, the Code or the
Employee Retirement Income Security Act of 1974, as amended, and
(v) execution of amendments in accordance with Section 10.1. All
disbursements by the Trustee,
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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 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
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<PAGE>
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.
Section 9.7 INDEMNIFICATION
The Employer shall indemnify and hold the Board, officers of the
Employer, the Committee and each of its members, and any employee
of the Employer acting on behalf of the Board, officers or
Committee, harmless from and against any and all expense, claim,
cause of action, or liability it or any of them may incur in the
administration of the Plan and Trust Fund, unless such expense,
claim, cause of action, or liability is the result of fraud or
willful breach of his or their fiduciary responsibilities under
the Employee Retirement Income Security Act of 1974.
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This shall include the advancement of any legal or other expenses
incurred in connection with the claim, cause of action or
liability.
52
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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; 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 10.2 TERMINATION OF THE PLAN
The Sponsoring Employer expects to continue the Plan
indefinitely, but reserves the right at any time by action of the
Board to terminate its participation in the Plan, subject to the
provisions of the collective bargaining agreement. 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 then be one hundred percent (100%) vested in the balance of
his Individual Account.
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 Fund; (2) so that Employer
Contributions and 401(k) Savings Contributions 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
401(k) Savings Contributions 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
401(k) Savings Contribution is not allowed, the Employer reserves
the right to recover that portion or all of its contributions for
which no
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deduction is allowed (reduced by any allocable losses),
provided such recovery is made within one (1) year of the
disallowance.
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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. In any necessary
construction the masculine shall include the feminine and the
singular the plural, and vice versa.
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
Sponsoring 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 (either at law or equity) 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 ordered entered before January 1, 1985, under
which payments
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have commenced prior to such date. The prohibition against
assignment or alienation under this Section does not preclude
enforcement of a federal tax levy under Code Section 6331.
Distribution of any benefit payable with respect to a Participant
may be made to an alternate payee, as defined in Code Section
414(p)(8), before the Participant ceases to be an Employee, even
if the distribution is to be made prior to the Participant's
earliest retirement age as defined in Code Section 414(p)(4)(B),
provided that the direction for such distribution is qualified
domestic relations order, and provided that the form of
distribution is a lump sum payment.
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 Participant, Former Participant or
Beneficiary shall not, as a result of such event, on the day
following such merger, consolidation or transfer, be entitled
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.
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ARTICLE 12
TOP HEAVY PLAN PROVISIONS
Section 12.1 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 following Sections of this Article shall
apply to such Plan Year.
Section 12.2 MINIMUM CONTRIBUTION
Regardless of hours worked or level of compensation, each
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; or (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. In the case of a
Participant who is also a participant in a Defined Benefit Plan
maintained by the Employer, and who is not a Key Employee, 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 12.3 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 allocation referenced in clause (i) of
Section 12.2 is modified by substituting three percent (3%) with
four percent (4%). In the case of a Participant who is also a
participant in a Defined Benefit Plan maintained by the Employer,
and who is not a Key Employee, 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)
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
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for both that plan and this Plan, and the minimum allocation
described above shall not apply.
Section 12.4 COMPENSATION
For purposes of this Article, compensation shall have the same
meaning as assigned to it by Code Section 415 and shall be
limited to one hundred fifty thousand dollars ($150,000) or such
other amount as determined pursuant to Code Section 401(a)(17).
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* * * * * * * * * * * * * * *
SIGNATURES
IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
this 30th day of December, 1998, effective July 17, 1998.
Witness: By /s/ Frederick J. Newton, III
-------------------------------
/s/ Gregory J. Meiman Title Senior Vice President and Chief
- -------------------------- ---------------------------------
Administrative Officer
---------------------------------
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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 27, 1999
(except with respect to the matters discussed in the eighth and ninth
paragraphs of Note 5, as to which the date is February 12, 1999, and Note
22, as to which the date is March 15, 1999) included in LG&E Energy Corp.'s
Form 10-K for the year ended December 31, 1998 and to all references to our
Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Louisville, Kentucky
October 7, 1999
<PAGE>
LG&E ENERGY CORP.
POWER OF ATTORNEY AND CONSENT
FOR REGISTRATION OF AN ADDITIONAL 3,000,000
SHARES OF COMMON STOCK
UNDER THE LG&E ENERGY CORP. 401(k) SAVINGS PLAN
KNOW ALL MEN BY THESE PRESENTS, that, as of the 2nd day of June 1999,
the undersigned each constitutes and appoints Roger W. Hale and Charles A.
Markel III, 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 issuance and sale of an additional 3,000,000 shares of common stock
pursuant to the LG&E Energy Corp. 401(k) Savings Plan 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/ David Baker Lewis
- --------------------------------- ---------------------------------
ROGER W. HALE DAVID BAKER LEWIS
Chairman, President and Director
Chief Executive Officer
/s/ Mira S. Ball /s/ Anne H. McNamara
- --------------------------------- ---------------------------------
MIRA S. BALL ANNE H. McNAMARA
Director Director
<PAGE>
/s/ William C. Ballard /s/ T. Ballard Morton, Jr.
- --------------------------------- ---------------------------------
WILLIAM C. BALLARD T. BALLARD MORTON, JR.
Director Director
/s/ Owsley Brown, II /s/ Frank V. Ramsey, Jr.
- --------------------------------- ---------------------------------
OWSLEY BROWN, II FRANK V. RAMSEY, JR.
Director Director
/s/ William L. Rouse, Jr.
- --------------------------------- ---------------------------------
CAROL M. GATTON WILLIAM L. ROUSE, JR.
Director Director
/s/ Jeffery T. Grade /s/ Charles L. Shearer
- --------------------------------- ---------------------------------
JEFFERY T. GRADE CHARLES L. SHEARER
Director Director
/s/ J. David Grissom /s/ Lee T. Todd, Jr.
- --------------------------------- ---------------------------------
J. DAVID GRISSOM LEE T. TODD, JR.
Director Director
<PAGE>
LG&E ENERGY CORP.
POWER OF ATTORNEY AND CONSENT
FOR REGISTRATION OF AN ADDITIONAL 1,000,000
SHARES OF COMMON STOCK
UNDER THE 401(k) SAVINGS PLAN FOR EMPLOYEES OF LOUISVILLE GAS AND
ELECTRIC COMPANY WHO ARE REPRESENTED BY LOCAL 2100 OF IBEW
KNOW ALL MEN BY THESE PRESENTS, that, as of the 2nd day of June 1999,
the undersigned each constitutes and appoints Roger W. Hale and Charles A.
Markel III, 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 issuance and sale of an additional 1,000,000 shares of common stock
pursuant to 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/ David Baker Lewis
- --------------------------------- ---------------------------------
ROGER W. HALE DAVID BAKER LEWIS
Chairman, President and Director
Chief Executive Officer
/s/ Mira S. Ball /s/ Anne H. McNamara
- --------------------------------- ---------------------------------
MIRA S. BALL ANNE H. McNAMARA
Director Director
<PAGE>
/s/ William C. Ballard /s/ T. Ballard Morton, Jr.
- --------------------------------- ---------------------------------
WILLIAM C. BALLARD T. BALLARD MORTON, JR.
Director Director
/s/ Owsley Brown, II /s/ Frank V. Ramsey, Jr.
- --------------------------------- ---------------------------------
OWSLEY BROWN, II FRANK V. RAMSEY, JR.
Director Director
/s/ William L. Rouse, Jr.
- --------------------------------- ---------------------------------
CAROL M. GATTON WILLIAM L. ROUSE, JR.
Director Director
/s/ Jeffery T. Grade /s/ Charles L. Shearer
- --------------------------------- ---------------------------------
JEFFERY T. GRADE CHARLES L. SHEARER
Director Director
/s/ J. David Grissom /s/ Lee T. Todd, Jr.
- --------------------------------- ---------------------------------
J. DAVID GRISSOM LEE T. TODD, JR.
Director Director
<PAGE>
LG&E ENERGY CORP.
POWER OF ATTORNEY AND CONSENT
FOR REGISTRATION OF 500,000
SHARES OF COMMON STOCK
UNDER THE WKE CORP. SAVINGS PLAN
KNOW ALL MEN BY THESE PRESENTS, that, as of the 2nd day of June 1999,
the undersigned each constitutes and appoints Roger W. Hale and Charles A.
Markel III, 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 issuance and sale of 500,000 shares of common stock pursuant to the WKE
Corp. Savings Plan 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/ David Baker Lewis
- --------------------------------- ---------------------------------
ROGER W. HALE DAVID BAKER LEWIS
Chairman, President and Director
Chief Executive Officer
/s/ Mira S. Ball /s/ Anne H. McNamara
- --------------------------------- ---------------------------------
MIRA S. BALL ANNE H. McNAMARA
Director Director
<PAGE>
/s/ William C. Ballard /s/ T. Ballard Morton, Jr.
- --------------------------------- ---------------------------------
WILLIAM C. BALLARD T. BALLARD MORTON, JR.
Director Director
/s/ Owsley Brown, II /s/ Frank V. Ramsey, Jr.
- --------------------------------- ---------------------------------
OWSLEY BROWN, II FRANK V. RAMSEY, JR.
Director Director
/s/ William L. Rouse, Jr.
- --------------------------------- ---------------------------------
CAROL M. GATTON WILLIAM L. ROUSE, JR.
Director Director
/s/ Jeffery T. Grade /s/ Charles L. Shearer
- --------------------------------- ---------------------------------
JEFFERY T. GRADE CHARLES L. SHEARER
Director Director
/s/ J. David Grissom /s/ Lee T. Todd, Jr.
- --------------------------------- ---------------------------------
J. DAVID GRISSOM LEE T. TODD, JR.
Director Director
