HOUSTON INDUSTRIES INCORPORATED
SAVINGS PLAN
(As Amended and Restated Effective January 1, 1994)
Third Amendment
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Houston Industries Incorporated, a Texas corporation (the "Company"),
having established the Houston Industries Incorporated Savings Plan, as amended
and restated effective January 1, 1994 and thereafter amended (the "Plan"), and
having reserved the right to amend the Plan under Section 10.3 of the Plan, does
hereby amend the Plan, effective January 1, 1994 unless otherwise provided
herein, as follows:
1. Section 1.10 of the Plan is hereby amended by replacing the phrase
"constitute employer securities within the meaning of Section 409(l) of the
Code" with the phrase "is readily tradeable on an established securities
market".
2. Section 1.15 of the Plan is hereby amended to delete therefrom the
phrase "regularly and principally."
3. Section 1.26 of the Plan is hereby amended to read as follows:
"Section 1.26 Exempt Loan: Any loan or other extension of credit
made or guaranteed by a disqualified person as defined in Code Section
4975(e)(2) that is used to finance the purchase of Company Stock by the
Trustee and that meets the requirements of Section 5.6."
4. Section 1.29 of the Plan is hereby amended to read as follows:
"1.29 HII Participant: A Participant who is participating in this
Plan as an employee of Houston Industries Incorporated or as an employee of
any of its subsidiaries or affiliates other than KBLCOM Incorporated and
the subsidiaries of KBLCOM Incorporated."
5. Section 1.32 of the Plan is hereby amended to read as follows:
"1.32 KLBCOM Participant: A Participant who is participating in this
Plan as an employee of KBLCOM Incorporated or as an employee of any of
KBLCOM Incorporated's subsidiaries."
6. Clause (ii) of Section 1.41 of the Plan is hereby amended to read
as follows:
"(ii) the fifth anniversary of the Participant's commencement of
participation in the Plan."
7. Section 3.8 of the Plan is hereby amended to delete the second
paragraph therefrom.
8. Section 3.9 of the Plan is hereby amended to read as follows:
"3.9 Participation and Vesting Upon Re-Employment: Participation in
the Plan shall cease at the close of the month during which termination of
Service occurs. Termination of Service may result from Retirement, death
or voluntary or involuntary termination of employment with the Employer and
its Affiliates, if any, unauthorized absence, or by failure to return to
active employment with the Employer by the date on which an Authorized
Absence expired. Upon the re-employment prior to or after a Break In
Service of any person who had previously been employed by the Employer, the
following rules shall apply in determining his Participation in the Plan
and his Vesting Service under Sections 3.1 and 3.6:
(a) Participation: If the re-employed Employee was not a
Participant in the Plan during his prior period of Service, he shall
commence participation in the Plan when he meets the requirements of
Section 3.1. If the re-employed Employee was a Participant in the
Plan during his prior period of Service, he shall recommence
participation in the Plan on the date of his re-employment, and any
forfeitures from his Employer Matching Account and ESOP Account shall
be reinstated to the extent provided in Section 6.9.
(b) Vesting: Any Vesting Service attributable to a re-employed
Employee's prior period of employment shall be reinstated as of the
date of his recommencement of participation in the Plan.
9. The last paragraph of Section 4.1 of the Plan is hereby amended by
changing "6.8" to "6.9" therein.
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10. Section 4.4 of the Plan is hereby amended to read as follows:
"4.4 Actual Deferral Percentage: The Actual Deferral Percentage for
a specified group of Employees for a Plan Year shall be the average of the
ratios (calculated separately for each Employee in such group) of:
(a) the amount of Pre-Tax Contributions (i) allocated to each such
Employee's Account under the Plan as of a date during the Plan Year,
without contingency on future participation in the Plan or performance of
future services, (ii) actually paid to the Plan on behalf of each such
Employee for such Plan Year no later than the end of the 12-month period
immediately following such Plan Year and (iii) that relate to Compensation
that either would have been received by the Employee in such Plan Year (but
for the deferral election) or are attributable to services performed by the
Employee in the Plan Year and would have been received by the Employee
within two and one-half (2 1/2) months after the close of the Plan Year
(but for the deferral election); over
(b) the Employee's Compensation (as defined in Section 5.5(d)(6)) for
such Plan Year. Notwithstanding any provision in this Plan to the
contrary, an Employer may, to the extent permitted by the Code and
applicable regulations, elect to include as Compensation pre-tax or after-
tax contributions made under this Plan or any other plan of the Employer.
An eligible Employee for the purpose of computing the Actual
Deferral Percentage is defined in Treasury Regulation Section 1.401(k)-
1(g)(4). The Actual Deferral Percentage of an eligible Employee who makes
no Pre-Tax Contributions is zero (0). The individual ratios and Actual
Deferral Percentages shall be calculated to the nearest one-hundredth
(1/100) of one percent (1%) of an Employee's Compensation."
11. Subsection C. of Section 4.9 of the Plan is hereby amended by
adding the words "and Section 4.8" immediately following "Section 4.6" therein.
12. Subsection (d)(iii) of Section 5.3 of the Plan is hereby amended
by changing "6.8" to "6.9" therein.
13. The last sentence of the second paragraph of Subsection (c) of
Section 5.4 of the Plan is hereby amended to read as follows:
"In the event that there are insufficient funds available to make payments
of principal or interest on Exempt Loans when due, the Committee may direct
(i) the Trustee to obtain a new Exempt Loan in an amount sufficient to make
such payments or (ii) the ESOP Trustee to sell any Financed Stock which has
not yet been allocated to ESOP Accounts provided such sale meets the
requirements of
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the following sentence. In directing any such sale of Financed Stock, the
Committee shall consider all of the facts and circumstances surrounding the
proposed transaction and the reasons therefor and shall act in the best
interest of Plan Participants in accordance with the applicable Treasury
Regulations and ERISA."
14. Subsection (i) of Section 5.6 of the Plan is hereby amended by
adding the phrase "subject to the requirements of the last sentence of the
second paragraph of Subsection (c) of Section 5.4 of the Plan" to the end of the
first sentence thereof.
15. The last paragraph of Section 6.1 of the Plan is hereby amended
to read as follows:
"If a Participant terminates Service and, at the time of termination,
the present value of the Participant's vested benefit is zero, the
Participant will be deemed to have then received a distribution of such
vested benefit. Any portion of the Employer Matching Account and ESOP
Account of a terminated Participant in excess of the vested portion
specified herein shall be forfeited to the extent provided in Section 6.9.
Payment of benefits due under this Section shall be made in accordance with
Section 6.6."
16. Subsection (b) of Section 6.6 of the Plan is hereby amended by
adding the following sentence immediately following the first sentence thereof:
"If Company Stock acquired with the proceeds of an Exempt Loan and
available for distribution consists of more than one class, a Participant
shall receive substantially the same proportion of each such class to the
extent the distribution is a distribution from the ESOP Fund."
17. Section 6.9 of the Plan is hereby amended in its entirety to read
as follows:
"6.9 Treatment of Nonvested Account Balances Upon Termination of
Service: This Section 6.9 does not apply to Participants who are fully
vested at the time of termination of Service.
If a Participant receives an actual or deemed distribution pursuant to
Section 6.1 prior to the close of the second Plan Year following the Plan
Year in which the Participant's Service terminates, the nonvested portion
of his Employer Matching Account and ESOP Account shall be forfeited and
shall become available for allocation as provided in Section 5.3(d)(iii).
If a Participant who has received an actual distribution as described in
this paragraph thereafter resumes Service under the Plan at any time, he
shall be entitled to have the forfeited amounts reinstated to such Accounts
upon his recommencement of participation
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in the Plan. If a Participant who has received a deemed distribution as
described in this paragraph thereafter resumes Service under the Plan
before incurring five consecutive one-year Breaks in Service, he shall be
entitled to have the forfeited amounts reinstated to such Accounts upon his
recommencement of participation in the Plan.
If a Participant does not receive a distribution of his vested benefit
by the close of the second Plan Year following the Plan Year in which his
Service terminates, but receives such a distribution before incurring five
consecutive one-year Breaks in Service, the nonvested balance in the
Participant's Employer Matching Account and ESOP Account shall be credited
to a suspense account at the time of distribution of the vested benefit.
If such a Participant is thereafter reemployed prior to incurring five
consecutive one-year Breaks in Service, the Participant's vested interest
in the suspense account, including any gains or losses thereon, at any
subsequent relevant time shall be an amount "X" determined by the following
formula: X = P(AB + D) - D. For purposes of applying this formula: P is
the vested percentage at such relevant time; AB is the account balance at
the relevant time; D is the amount of the prior distribution to the
Participant. If the Participant is not reemployed before he has incurred
five consecutive one-year Breaks in Service, his suspense account shall
then be forfeited and shall become available for allocation as described in
Section 5.3(d)(iii).
If a Participant does not receive a distribution of his vested benefit
before incurring five consecutive one-year Breaks in Service, the nonvested
balance in the Participant's Employer Matching Account and ESOP Account
shall then be forfeited and shall become available for allocation as
described in Section 5.3(d)(iii).
If more than one class of Company Stock acquired with an Exempt Loan
has been allocated to a Participant's ESOP Account and any amounts are
forfeited from such Account pursuant to this Section, the same proportion
shall be forfeited from each class."
18. Clause (ii) of the first sentence of Section 10.3 of the Plan is
hereby amended, effective September 7, 1994, to read as follows:
"(ii) the Committee shall have the right to amend or modify this Plan
and the Trust Agreement (with the consent of the Trustee, if required) to
modify the administrative provisions of the Plan, to change the Investment
Funds offered under the Plan and for any changes required by applicable law
or by the Internal Revenue Service to maintain the qualified status of the
Plan and related Trust at any time and from time to time to the extent that
it may deem advisable."
19. The first sentence of Section 10.5 of the Plan is hereby amended
by adding the following language to the end thereof:
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"provided that no Employer or Affiliate then establishes or maintains
another defined contribution plan (other than an employee stock ownership
plan within the meaning of Code Section 4975(e)(7) or Code Section 409 or a
simplified employee pension within the meaning of Code Section 408(k))".
IN WITNESS WHEREOF, Houston Industries Incorporated has caused these
presents to be executed by its duly authorized officers in a number of copies,
all of which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, on this 5th day of
January, 1995, but effective as of the dates specified herein.
HOUSTON INDUSTRIES INCORPORATED
/s/ D. D. Sykora
By______________________________________
D. D. Sykora
President and Chief Operating Officer
ATTEST:
/s/ R. B. Dauphin
______________________________
Assistant Corporate Secretary
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