AMENDMENT NO. 17
TO
PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Pennsylvania Power & Light Company ("Company") has
adopted the Pennsylvania Power & Light Company Employee Stock
Ownership Plan ("Plan") effective January 1, 1975; and
WHEREAS, the Plan was amended and restated effective Janu-
ary 1, 1987, and subsequently amended by Amendment Nos. 1, 2, 3,
4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16; and
WHEREAS, the Company desires to further amend the Plan;
NOW, THEREFORE, the Plan is hereby amended effective
January 1, 1989 as follows:
I. Effective January 1, 1996, the following sections of
Articles II, III, V, VII, XII are amended to read:
2.3 "Affiliated Company" or "Affiliated Companies" shall
mean (a) such subsidiaries of the Company (or companies under
common control with the Company) which would qualify as
includible corporations within the meaning of Section 1563(a) of
the Code; (b) such trades or businesses under common control with
the Company, as determined under Section 414(c) of the Code; and
(c) such members of an affiliated service group, as determined
under Section 414(m) of the Code, of which the Company is a mem-
ber. "50% Affiliated Company" shall mean an Affiliated Company,
but with the phrase "more than 50%" substituted for the phrase
"at least 80%" of Section 1563(a) of the Code.
2.8 "Compensation" shall mean the following.
(a) Compensation shall mean the annual compensation
received by an Employee from the Company as reported on Internal
Revenue Service Form W-2 or a successor form plus the Employee's
elective deferrals under the Employee Savings Plan or Deferred
Savings Plan; provided, however, that Compensation shall not
include fringe benefits not normally included in compensation,
such as tuition refunds, moving expenses, etc. and shall not, for
purposes of allocation under Section 5.2(a), include any amount
in excess of (i) for the 1975 and 1976 Plan Years, $16,000 and
(ii) commencing with the 1977 Plan Year, the median annual com-
pensation of all Participants during the Plan Year or $100,000,
whichever is less. Such median compensation shall be determined
as of the close of a Plan Year and shall be rounded to an even
thousand dollars. For an MCP Employee, Compensation shall also
include the full amount of any lump-sum award paid to the Partic-
ipant from the fund credited with 2% of annualized base pay sala-
ries for 1996.
(b) With respect to a Highly Compensated Eligible
Employee who is one of the 10 most highly compensated employees
of the Company and Affiliated Companies or a 5% owner, the
Compensation of such individual plus the Compensation, if any, of
his spouse and lineal descendants who have not attained age 19
before the close of the Plan Year, that is taken into account
under the Plan, shall not exceed $200,000 as indexed (for Plan
Years beginning on or after January 1, 1989 and before January 1,
1994), or $150,000 as indexed (for Plan Years beginning on or
after January 1, 1994). This limit shall be allocated among
family members in proportion to their Compensation as defined in
Subsection (a).
2.25 "MCP Employee" shall mean an Employee who is entitled
to all benefits of the Managers Compensation Plan of the Company.
3.1 Eligibility.
(a) All persons who were participants in the Plan
immediately prior to the Effective Date and who are in the employ
of the Company on the Effective Date shall be Participants
hereunder as of such date. All Employees as of the Effective
Date (but who are not eligible to participate under the preceding
sentence) who have completed one year of Credited Service shall
be Participants as of that date. Other Employees shall become
Participants on the first day of the calendar month next
following the date on which an Employee completes one year of
Credited Service, or if later, on which an individual becomes an
Employee. A "year of Credited Service," for the purposes of this
Article, shall require completion of at least 1,000 Hours of
Service during the 12 months from commencement of employment. An
Employee who fails to complete 1,000 Hours of Service during his
initial 12 months of employment shall complete a year of Credited
Service as of the end of any Plan Year in which he completes
1,000 Hours of Service; provided, however, that the first Plan
Year during which such Employee shall have the opportunity to
complete such 1,000 Hours of Service shall include the
anniversary of his commencement of employment.
(b) An Employee may elect in writing not to become a
Participant by filing such election with the Employee Benefit
Plan Board.
5.5 Maximum Allocation.
(m) For the purpose of this Section 5.5, "compensation"
shall be defined in accordance with Section 415(c)(3) of the Code
and regulations thereunder.
7.4 Disability.
(a) If a Participant suffers a Total Disability prior to
his termination of employment with the Company and all
Affiliated Companies and is on inactive status on account of such
Total Disability, the full amount of his interest in the Fund
shall be paid to him or applied for his benefit upon
Participant's consent in writing to such payment or application
following the determination of his Total Disability in accordance
with the provisions of this Article VII.
7.7 Timing of Distribution.
(a) Subject to Subsection (b), a Participant entitled to
receive benefits under this Article shall commence to receive
benefits as soon as administratively practicable, but in no event
shall any Participant receive benefits later than the earliest of
the dates determined under (1), (2) or (3) below:
(1) the 60th day after the close of the Plan Year in
which occurs the later of (A) the Participant's attainment of age
65 or (B) the Participant's termination of employment with the
Company and all Affiliated Companies;
12.7 Voting or Tendering Shares. Each Participant (or, in
the event of his or her death, his or her beneficiary) is, for
purposes of this Section 12.7, hereby designated a "named fidu-
ciary," within the meaning of Section 403(a)(1) of ERISA with
respect to his or her proportionate number of shares (such pro-
portionate shares being determined at the respective times such
fiduciary rights are exercisable, as set forth below).
(a) Voting Rights. Each Participant (or beneficiary)
shall have the right, to the extent of his or her proportionate
number of shares (as determined in the last sentence of this
Section 12.7(a)) to instruct the Trustee in writing as to the
manner in which to vote such shares at any stockholders' meeting
of the Company. The Company shall use its best efforts to timely
distribute or cause to be distributed to each Participant (or
beneficiary) the information distributed to stockholders of the
Company in connection with any such stockholders' meeting,
together with a form requesting confidential instructions to the
Trustee on how such shares shall be voted on each such matter.
Upon timely receipt of such instructions, the Trustee shall, on
each such matter, vote as directed the appropriate number of
shares (including fractional shares). The instructions received
by the Trustee from individual Participants (or beneficiaries)
shall be held by the Trustee in strict confidence and shall not
be divulged to any person, including employees, officers and
directors of the Company or any affiliate; provided, however,
that, to the extent necessary for the operation of the Plan, such
instructions may be relayed by the Trustee to a recordkeeper,
auditor or other person providing services to the Plan if such
person (i) is not the Company, an affiliate or any employee,
officer or director thereof, and (ii) agrees not to divulge such
directions to any other person, including employees, officers and
directors of the Company and its affiliates. An individual's
proportionate number of shares held in the trust shall be equal
to the product of multiplying the total number of shares by a
fraction, the numerator of which shall be the respective number
of shares which are held in such individual's account for which
he or she provides instructions to the Trustee and the denomina-
tor of which shall be the number of such shares in all such
accounts for which instructions are provided to the Trustee.
II. Effective January 1, 1996, section 11.4 of Article XI
is deleted.
III. Except as provided for in this Amendment No. 17, all
other provisions of the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, this Amendment No. 17 is executed this
23rd day of May, 1996.
PENNSYLVANIA POWER & LIGHT COMPANY
By:/s/ John M. Chappelear_________
John M. Chappelear
Vice President-Investments &
Pensions