EXHIBIT 10(F)
SALARY DEFERRAL PROGRAM
OF THE
TEXAS UTILITIES COMPANY SYSTEM
(AS RESTATED EFFECTIVE JANUARY 1, 1995)
SECTION 1. PURPOSE
1.1 Purpose. The Salary Deferral Program of the Texas Utilities
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Company System (the "Plan") is established, effective April 1, 1991, for the
purpose of motivating executive employees and recognizing the contributions of
such employees to the Company. The Plan is designed as an unfunded arrangement
maintained "primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees" as determined under
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
ERISA Section 201(2).
SECTION 2. DEFINITIONS
2.1 Definitions. Whenever used hereinafter, the following terms shall
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have the meanings set forth below:
(a) "Account" means the individual accounts maintained for recording
interests of each Participant in the Plan.
(b) "Actual Rate" means the actual earnings rate, as determined by the
Trustee, for assets held in Trust under the Seven-Year Option.
(c) "Alternative Rate" means the average earnings rate, as determined by
the Trustee, of interest rates payable on Treasury Notes of the United
States Government with a maturity period of ten years. Income credited
under the Alternative Rate shall be determined by multiplying the
Alternative Rate for the Plan Year within the Deferral Period times
the average balance in the Account for such Plan Year, including
income earned for prior periods. Income on all Accounts under the
Plan shall be deemed to have been earned on a consistent basis.
(d) "Beneficiary" means the person or persons named by the Participant as
the recipient(s) of any distribution remaining to be paid to the
Participant under the Plan upon the Participant's death.
(e) "Board of Directors" means the Board of Directors of Texas Utilities
Company.
(f) "Committee" means the Salary Deferral Program Administrative
Committee, which shall be comprised, initially, of members who serve
on the Employees' Thrift Plan Committee. Subsequently, members of the
Committee shall be appointed by the Board of Directors.
(g) "Company" means Texas Utilities Company and its subsidiaries.
(h) "Deferral Period" means the period of deferral, beginning with the
first day of the applicable Plan Year, which shall be seven years for
the Seven Year Option and which shall be the period ending with
Retirement for the Retirement Option. Notwithstanding the foregoing,
the Deferral Period shall end on the date of death, total and
permanent disability, or termination of employment and, to the extent
that amounts otherwise eligible for distribution under this Plan
combined with the Participant's other remuneration exceeds the
Applicable Employee Remuneration for such year, and subject to the
subsequent Transition Provision, the Deferral Period for such excess
amount shall end with Retirement or such earlier date as of which such
amounts, or any part thereof, combined with other remuneration does
not exceed the Applicable Employee Remuneration. For purposes of this
definition, "Applicable Employee Remuneration" means applicable
employee remuneration as that term is defined in Section 162(m), or
any successor provision, of the Internal Revenue Code. Transition
Provision: Notwithstanding any other provisions contained herein, the
Deferral Period for amounts subject to an Election made for periods
prior to April 1, 1995, shall be the Deferral Period applicable at the
time of the Election.
(i) "Disability" means disability as determined under the provisions of
the Texas Utilities System Employee Long-Term Disability Income Plan.
(j) "Early Retirement" means Retirement at age fifty-five or later but
prior to Normal Retirement.
(k) "Election Form" means the form prescribed by the Plan Administrator
for participation in the Plan.
(l) "Eligible Employee" means an Employee whose Salary as of January 1,
1991, is $80,000 or more. For each year subsequent to 1991, an
Eligible Employee is an Employee whose Salary as of January 1 of such
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year is $80,000 or more, as indexed consistent with the Consumer Price
Index for such year.
(m) "Employee" means an employee of the Company.
(n) "Matching Award" means contribution made by the Company pursuant to
Section 5.1 herein.
(o) "Matching Account" means an Account maintained for Matching Awards.
(p) "Normal Retirement" means Retirement at age sixty-two or later.
(q) "Participant" means an Eligible Employee who elects to participate in
the Plan and whose Account(s) has not been completely distributed.
(r) "Plan Administrator" means the person or persons appointed by the
Committee to assist in carrying out the operation of the Plan.
(s) "Plan Year" means the twelve-month period beginning April 1 and ending
March 31.
(t) "Rate" means the earnings rate which shall be the greater of the
Actual Rate or the Alternative Rate for the Deferral Period.
(u) "Retirement" shall have the meaning given it under the Retirement Plan
for Employees of the Texas Utilities Company System.
(v) "Retirement Option" means the option to defer receipt of certain
amounts of Salary until Retirement as set forth in Section 4.3(b)
herein.
(w) "Salary" means the annualized rate of normal base pay earnings, prior
to any deferrals, of an Employee exclusive of overtime, bonuses or any
fringe benefits determined as of January 1 of each year prior to the
beginning of each Plan Year.
(x) "Salary Deferral Account" means an Account maintained for Salary
Deferrals.
(y) "Seven Year Option" means the option to defer receipt of certain
amounts of Salary for seven years as set forth in Section 4.3(a)
herein.
(z) "Trust" means the trust established by Texas Utilities Company to
assist it in meeting its obligations under the Plan.
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(aa) "Trustee" means the trustee appointed by the Committee to hold assets
of the Plan.
(bb) "Vesting Period" means the period beginning with the date of the
beginning of the Plan Year of deferral and ending with the end of the
seventh Plan Year.
SECTION 3. DEFERRAL ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. An Eligible Employee shall be eligible to participate
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in the Plan as of the beginning of the Plan Year upon compliance with the
provisions of Section 4 herein.
3.2 Participation. All Eligible Employees may elect on the Election
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Form to defer a percentage of Salary, in the Retirement Option, the Seven Year
Option, or a combination thereof, in one percent (1%) increments, ("Salary
Deferral") not to exceed a maximum of ten percent (10%).
SECTION 4. ELECTION TO DEFER
4.1 Deferral Election. An Eligible Employee may elect, irrevocably, by
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written notice to the Plan Administrator on an Election Form and in the manner
prescribed by the Plan Administrator, to defer a percentage of Salary during the
Plan Year.
4.2 Salary Deferrals. Salary deferred under the Plan will be ratably
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deducted in each pay period in the Plan Year.
SECTION 5. COMPANY MATCHING AWARDS, VESTING, AND FORFEITURES.
5.1 Matching Awards. The Company shall contribute to each Participant's
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Account, as a Matching Award, an amount equal to one hundred percent (100%) of
the amount of Salary deferred by the Participant. Such contribution shall be
credited at the time of the crediting of the Salary Deferral amount to be
matched.
5.2 Vesting. Subject to the forfeiture provisions of Section 5.3, a
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Participant shall be one hundred percent (100%) vested in contributions to his
Salary Deferral Account and, at the end of the Vesting Period, shall be one
hundred percent (100%) vested in his Matching Account, and on income earned for
such period. A Participant's Accounts become one hundred percent (100%) vested
upon the Participant's Normal Retirement, death, or Disability regardless of the
applicable Vesting Period.
5.3 Forfeitures. The following amounts shall be forfeited from an
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Account as of the date upon which the forfeiture is created:
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(a) Seven Year Option Forfeitures.
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(1) Early Retirement. An amount equal to four percent (4%) of the
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total Account balance for each full year Retirement occurs prior
to Normal Retirement shall be forfeited.
(2) Termination for other than Death, Disability or Retirement. If
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termination of service with the Company occurs for reasons other
than death, Disability, or Retirement, income on and
contributions to the Matching Account shall be forfeited and
income in excess of six percent (6%) per annum credited to Salary
Deferrals shall be forfeited.
(b) Retirement Option Forfeitures.
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(1) Early Retirement. An amount equal to four percent (4%) of the
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total Account balance for all non-vested Plan Years for each full
year Retirement occurs prior to Normal Retirement shall be
forfeited.
(2) Termination for other than Death, Disability or Retirement. If
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termination of service with the Company occurs for reasons other
than death, Disability, or Retirement, income earned on and
contributions to the Matching Account, for Plan Years which are
nonvested, shall be forfeited and income in excess of six percent
(6%) per annum credited to Salary Deferrals shall be forfeited
for all nonvested Plan Years.
SECTION 6. INVESTMENTS, EARNINGS, AND VALUATION
6.1 Investments. The Trustee shall invest, as soon as administratively
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feasible, all contributions received for Accounts held in Trust under the Seven
Year Option of the Plan in a fixed income fund of investment grade securities
under investment guidelines established by the Committee. Interest received on
the investments shall be reinvested in such fund. All other contributions shall
be invested pursuant to the Trust Agreement.
6.2 Earnings. At the time of distribution, the Participant will receive
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Account balances including income determined by applying the Rate.
6.3 Valuation. The total of all assets held by the Trustee for Accounts
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held in Trust will be deemed held in an unsegregated
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fund for valuation purposes. Each month the Trustee shall determine the value
of each unit by dividing the current value of the fund by the total number of
units held in all such Accounts. The value of Accounts held in Trust under the
Retirement Option of the Plan shall be determined in the same manner as amounts
deferred under the Seven Year Option of the Plan.
SECTION 7. PARTICIPANT ACCOUNTS
7.1 Separate Accounts. The Plan Administrator shall establish and
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maintain separate individual Accounts for each Participant for Salary Deferrals
and for Matching Awards for each Plan Year.
7.2 Unsecured Interest. No Participant or Beneficiary shall have any
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security interest whatsoever in any assets of the Company. To the extent that
any person acquires a right to receive payments under the Plan, such right shall
not be secured or represented by any assets of the Company.
SECTION 8. DISTRIBUTION OF ACCOUNTS
8.1 Value of a Participant's Accounts. The cash value of a
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Participant's Accounts shall be determined as of the last day of the applicable
Deferral Period, or, if earlier, at termination of employment.
8.2 Form and Timing of Distribution. The value of the Participant's
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Accounts at distribution shall be paid in cash, as follows:
(a) Seven-Year Option - in a lump-sum distribution as soon as practicable
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after the end of the Deferral Period or, if earlier, termination of
employment, but in no event later than sixty days following such date.
In the event of a lump sum distribution, no interest shall accrue or
be paid for the period from such date until actual distribution.
(b) Retirement Option -
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(i) If Participant Retires - in twenty annual installments
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beginning twelve months after the date of such
Retirement; provided, however, such installments shall
be in an amount to amortize the value of the
Participant's Account at distribution over twenty
annual installments using, as a projected earnings rate
of return, the Rate as
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determined in Section 6.2 above; provided, however, in
the event of the death of a Participant or Beneficiary
during the distribution period, the Plan Administrator
may, upon application to the Plan Administrator and in
the sole discretion of the Plan Administrator, direct
that the remainder of the Account be distributed to the
estate of the Participant or Beneficiary in a lump-sum
distribution as soon as practicable after death occurs
but in no event later than thirty days following such
date.
(ii) If Participant Terminates - in a lump-sum distribution
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as soon as practicable after termination occurs but in
no event later than sixty days following such date. In
the event of a lump sum distribution, no interest shall
accrue or be paid for the period from such date until
actual distribution.
8.3 Retirement or Voluntary Termination Under 1992 Voluntary
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Separation Plan. Notwithstanding any provision herein to the contrary, a
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Participant under this Plan who elects a retirement or termination date of
October 1, 1992, or November 1, 1992, notifies the Company of such election
between July 1, 1992, and September 1, 1992, inclusive and retires or otherwise
terminates his employment on October 1, 1992, or November 1, 1992 (unless the
Company requests and the Participant agrees to extend such date from month to
month thereafter for a period ending on or before November 1, 1993), shall be
entitled to the following additional and adjusted benefits under this Plan:
(a) The forfeitures prescribed in Section 5.3 hereof shall not apply; and
(b) The value of the Participant's Account shall be distributed to the
Participant in a lump sum as soon as practicable after the Participant's
retirement or termination date.
Additionally, an Eligible Employee for the Plan Year beginning April 1,
1992, who elects a retirement or termination date of October 1, 1992, or
November 1, 1992, notifies the Company of such election between July 1, 1992,
and September 1, 1992, inclusive, and retires or otherwise terminates his
employment on October 1, 1992 or November 1, 1992 (unless the Company requests
and the Eligible Employee agrees to extend such date from month to month
thereafter for a period ending on or before November 1, 1993), shall, in
addition to the additional and adjusted benefits described hereinabove, be
entitled to receive an additional lump
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sum payment in an amount (the "Additional Matching Amount") equal to 50% of the
present value (calculated at a discount rate equal to 6 1/2 per annum) of the
Matching Awards for such Eligible Employee over a ten year period calculated on
the basis of a Salary Deferral equal to 10% and the Salary in effect for such
Eligible Employee on the last day of the month immediately preceding such
Eligible Employee's retirement or termination; provided that, in no event may
the Additional Matching Amount exceed $40,000.
SECTION 9. NONTRANSFERABILITY
9.1 Nontransferability. In no event shall the Company make any
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distribution or payment under this Plan to any assignee or creditor of a
Participant or a Beneficiary. Prior to the time of a distribution or payment
hereunder, a Participant or a Beneficiary shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under
this Plan.
SECTION 10. DESIGNATION OF BENEFICIARIES
10.1 Specified Beneficiary. A Participant shall designate a Beneficiary
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or Beneficiaries who, upon the Participant's death are to receive the amounts
that otherwise would have been paid to the Participant. All Beneficiary
designations shall be in writing and signed by the Participant, and shall be
effective only if and when delivered to the Plan Administrator during the
lifetime of the Participant. A Participant may, from time to time during his
lifetime, change his Beneficiary or Beneficiaries by a signed, written
instrument delivered to the Plan Administrator. The payment of amounts shall be
in accordance with the last unrevoked written designation of the Beneficiary
that has been signed and so delivered.
10.2 Estate as Beneficiary. If a Participant designates a Beneficiary
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without providing in the designation that the Beneficiary must be living at the
time of each distribution, the designation shall vest in the Beneficiary all of
the distributions whether payable before or after the Beneficiary's death, and
any distributions remaining upon the Beneficiary's death shall be made to the
Beneficiary's estate. In the event a Participant shall not designate a
Beneficiary or Beneficiaries, or if, for any reason, such designation shall be
ineffective, in whole or in part, as determined solely in the discretion of the
Plan Administrator, the distribution that otherwise would have been paid to such
Participant shall be paid to the Participant's estate.
SECTION 11. RIGHTS OF PARTICIPANTS
11.1 Employment. All Participants understand they are employees at will.
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Therefore, nothing in the Plan shall interfere
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with or limit in any way the right of the Company to terminate, for any or no
reason, any Participant's employment at any time, nor confer upon a Participant
any right to continue in the employ of the Company.
SECTION 12. ADMINISTRATION
12.1 Administration. The Committee shall be responsible for the
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administration of the Plan. The Committee is authorized, in its sole
discretion, to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, provide for conditions and assurances deemed
necessary or advisable to protect the interests of the Company, and to make all
other determinations necessary or advisable for the administration of the Plan.
The determination of the Committee, interpretation or other action made or taken
pursuant to the provisions of the Plan, shall be final and shall be binding and
conclusive for all purposes and upon all persons whomsoever. The Committee
shall appoint a Plan Administrator to assist in carrying out the operations of
the Plan and a Trustee of the Trust to accompany the Plan.
12.2 Annual Reports. The Plan Administrator shall render annually a
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written report to each Participant which shall set forth, at a minimum, the
Participant's Account balances as of the end of the most recent Plan Year.
SECTION 13. AMENDMENT OR TERMINATION OF THE PLAN
13.1 Amendment or Termination of the Plan. The Board of Directors may
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amend, terminate, or suspend the Plan at any time. Any such amendment,
termination, or suspension of the Plan shall be effective on such date as the
Board of Directors may determine. An amendment or modification of the Plan may
affect Participants at the time thereof as well as future Participants, but no
amendment or modification of the Plan for any reason may diminish any
Participant's Accounts as of the effective date thereof. Upon Plan termination,
all amounts credited to a Participant's Accounts shall be deemed to have vested.
Each Participant shall receive, as soon as practical after Plan termination, a
lump sum distribution of his Accounts based on the value of his Accounts as of
the date of Plan termination.
SECTION 14. CORPORATE CHANGES
14.1 Dissolution or Liquidation. Notwithstanding any provision herein
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to the contrary, upon the dissolution or liquidation of the Company, the
Participant's Accounts shall vest as of the day preceding the date of
dissolution or liquidation. The Company shall cause such amount to be paid in
cash in a lump sum to the Participant, or his Beneficiary, as soon as is
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practicable, but in no event later than sixty days following the date of
dissolution or liquidation.
14.2 Merger, Consolidation, and Sale of Assets. Notwithstanding anything
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herein to the contrary, in the event that the Company consolidates with, merges
into, or transfer all or substantially all of its assets to another unaffiliated
corporation, all assets credited to a Participant's Accounts hereunder
immediately shall be deemed to be vested. All Participant's Accounts shall be
paid in cash in a lump sum to the Participant, or his Beneficiary, as soon as is
practicable, but in no event later than sixty days following the date of merger,
consolidation, or sale of assets.
SECTION 15. REQUIREMENTS OF LAW
15.1 GOVERNING LAW. THE PLAN, AND ALL AGREEMENTS HEREUNDER, SHALL BE
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CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
SECTION 16. WITHHOLDING TAXES
16.1 Withholding Taxes. The Company shall have the right to deduct from
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all cash payments under the Plan or from a Participant's compensation an amount
necessary to satisfy any federal, state, or local withholding tax requirements.
SECTION 17. INVESTMENT AND FUNDING
17.1 Trust. The benefits to be derived by Participants in the Plan will
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be funded through an irrevocable grantor trust ("Trust") provided, however, that
any assets held by the Trust shall at all times be subject to the claims of
judgment creditors of the Company.
17.2 Funding of Trust. After Salary Deferrals have been credited to
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Accounts, the Company shall promptly provide the Trust with resources in amounts
to comply with the requirements set forth herein.
17.3 Distributions from Trust. If Trust assets allocated to any
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Participant's Accounts for a Plan Year are less than the amount
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required, the Company will pay such difference either through the Trust or
directly to the Participant.
EXECUTED this 8th day of June , 1995.
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TEXAS UTILITIES COMPANY
By: /s/ Peter B. Tinkham
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Peter B. Tinkham, Secretary
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