EXHIBIT 10.18
RETIREMENT INCOME RESTORATION PLAN
OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
ENSERCH Corporation, a Texas corporation having its principal
executive office in Dallas, Texas, and its subsidiary, Ebasco Services
Incorporated, hereinafter referred to collectively as the "Companies," hereby
adopt the Retirement Income Restoration Plan of ENSERCH Corporation and
Participating Subsidiary Companies, hereinafter referred to as the "Plan,"
effective January 1, 1984, as follows:
Article I
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Definitions
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Unless qualified by the context or otherwise defined herein, the terms
used herein shall have the meanings assigned to them as applicable under the
provisions of the Retirement and Death Benefit Program of 1969 of ENSERCH
Corporation and Participating Subsidiary Companies and the Ebasco Services
Incorporated Pension Plan for Salaried Employees, as now in effect and as may be
amended hereafter from time to time, hereinafter referred to collectively as the
"Basic Plans" and individually as the "Basic P]an."
"Limitations" shall mean the reductions imposed on the benefits
provided under the Basic Plans in order to comply with Sections 415 and
401(a)(17) of the Internal Revenue Code of 1986.
A "Participating Employee" is an employee who is entitled to benefits
under this Plan as a result of Limitations.
The terms "Change in Control," "Cause," and "Good Reason" shall have
the meanings assigned to them under the provisions of the change in control
agreements dated December 13, 1988, between Messrs. R. G. Fowler, W. T.
Satterwhite, et. al., and the Corporation.
"Service" shall have the meaning assigned to the terms Benefit Service
or Credited Service in and by the Basic Plans.
Article II
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Purpose
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The purposes of this Plan are (a) to restore benefits to those
employees and their designated beneficiaries who are entitled to receive
benefits under the Basic Plans to the extent that those benefits are, or will
be, reduced by Limitations, and (b) if a Participating Employee's employment is
terminated by the Corporation without Cause or by the Participating Employee for
Good Reason within three years of a Change in Control of the Corporation, to
provide increased retirement benefits as set forth in Section 4.1.
Article III
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Administration
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This Plan shall be administered by the Compensation Committee of the
Board of Directors of ENSERCH Corporation, hereinafter referred to as the
"Committee." Subject to the provisions of Article VI hereof, the Committee
shall administer this Plan in a manner consistent with the administration of the
1969 Plan, as from time to time amended and in effect, except that this Plan
shall be administered as a plan that is not intended to meet the requirements of
Section 401(a) of the Internal Revenue Code of 1954. The Committee shall have
full power and authority to interpret, construe, and administer this P]an, and
the Committee's interpretations and constructions hereof, and its actions
hereunder, including all determinations of the amounts and the recipients of
payments to be made hereunder, shall be binding and conclusive with respect to
all persons for all purposes. No member of the Committee shall be liable to any
person for any action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to his own willful misconduct or
lack of good faith.
Article IV
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Benefits
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Section 4.1 Amount of Benefits. Subject to the provisions of Section
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4.3 hereof any employee or beneficiary who is entitled to receive a benefit
under a Basic Plan shall be entitled to receive a benefit hereunder equal to the
excess, if any, of:
(i) the amount of such employee's or beneficiary's benefit under the
Basic Plan, determined without regard to the Limitations, plus the
additional benefit that would be payable under the Basic Plan if
an increase in his Service pursuant to Section 4.2 below is
applicable, less
(ii) the amount of the benefit actually payable to the employee or
beneficiary under the Basic Plan and the amount of reduction of
Plan payments described in the agreement or agreements between
the Corporation and the employee relating to any individual
annuity contracts purchased on behalf of the employee by the
Corporation.
Section 4.2 Additional Service. In the event a Participating
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Employee's employment is terminated within three (3) years after a Change in
Control of the Corporation by the Corporation without Cause or by the
Participating Employee for Good Reason, his years of Service for purposes of
Section 4.1 shall mean his actual years of Service plus
(a) in the case of the Chief Executive Officer of the Corporation and
Participating Employees reporting directly to him, 3 additional
years of Service; and
(b) in the case of Participating Employees other than the Chief
Executive Officer and Participating Employees reporting directly to
him, 2 additional years of Service;
provided further that (i) in no case shall any Participating Employee as a
result of this Change in Control provision be deemed to have more years of
Service than he would have had if his employment had terminated on the first of
the month coinciding with or Next following his sixty-fifth (65) birthday, and
(ii) the foregoing clauses (a) and (b) shall have no effect on the computation
of a Participating Employee's Average Monthly Earnings or are for purposes of
determining any amounts payable to him under the Basic Plan.
Section 4. 3 Payment of Benefits. Payment of benefits to an employee
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or beneficiary under this Plan shall be coincident with the payment of benefits
made to the employee or beneficiary under the Basic Plan.
Section 4.4 Employee's Rights to Benefits. An employee's rights under
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this Plan, including his rights to vested benefits, shall be the same as his
rights under the Basic Plan, except that no payments due under this Plan shall
be paid from any fund maintained under the Basic Plan. In no event shall an
individual who is not entitled to benefits under the Basic Plan be entitled to a
benefit under this Plan. Benefits under this Plan shall be paid sole]y from the
general assets of the Companies, and no
employee or beneficiary shall have any title to or beneficial interest in any
assets of the Companies as a result of this Plan.
Article V
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Amendment and Termination
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While the Companies intend to maintain this Plan in conjunction with
the Basic Plans for as long as necessary, the Board of Directors of ENSERCH
Corporation reserves the right to amend or terminate this Plan if, in its sole
judgment, amendment or termination is appropriate. However, if the Board should
amend or discontinue this Plan, the Companies shall be liable for all benefits
accrued under this Plan as of the date of such action (determined on the basis
of the assumption that on such date each employee's employment terminated).
Article XI
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Rights of Employees
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The Companies may, but are not required to, set aside funds for their
convenience in order to facilitate the payment of any benefits that may be due
hereunder. However, in the event that the Companies set aside funds, no
employee or beneficiary shall have any right, title or interest in such funds
while held by the Companies. Any employee or beneficiary who is entitled to
receive a benefit under this Plan shall have the rights solely of a general and
unsecured creditor.
Article VII
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Miscellaneous
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Section 7.1 Assignment. The interest of an employee or beneficiary may
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not be sold, transferred, assigned, or encumbered in any manner, either
voluntarily or involuntarily, and any attempt so to anticipate, alienate sell,
transfer, assign, pledge, encumber, or charge the same shall be null and void;
neither shall the benefits hereunder be liable for or subject to the debts,
contracts, liabilities, engagements, or torts of any person to whom such
benefits or funds are payable, nor shall they be subject to garnishment,
attachment, or other legal or equitable process nor shall they be an asset in
bankruptcy, except that no amount shall be payable hereunder until and unless
any and all amounts representing debts or other obligations owed to any Company
by the individual to whom such amount would otherwise be payable shall have been
fully paid and satisfied.
Section 7.2 No Employment Rights. Nothing contained herein shall be
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construed as conferring upon any employee the right to continue in the employ of
the Companies in any capacity.
Section 7.3 Binding on Companies, Employees and Their Successors. The
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Plan shall be binding upon and inure to the benefit of the Companies, their
successors and assigns and the employee and his heirs, executors,
administrators, and legal representatives. The provisions of the Plan shall be
applicable with respect to each Company separately, and amounts payable
hereunder shall be paid by the Company that employed the individual employee in
respect of whom benefits are due hereunder.
Section 7.4 Arbitration. Any controversy arising out of, or relating
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to, the Plan or any modification thereof, including any claim for benefits,
shall be settled by arbitration in Dallas, Texas (or, if applicable law requires
some other forum, then such other forum) in accordance with the rules then
obtaining of the American Arbitration Association. The District Court of Dallas
County, Texas or, as the case may be, the United States District Court for the
Northern District of Texas shall have jurisdiction for all purposes in
connection with arbitration. Any process or notice of motion or other
application to either of said courts, and any paper in connection with
arbitration, may be served by certified mail, return receipt requested, or by
personal service or in such other manner as may be permissible under the rules
of the applicable court or arbitration tribunal, provided a reasonable time for
appearance is allowed. Arbitration proceedings must be instituted within one
year after the claimed breach occurred, and the failure to institute arbitration
proceedings within such period shall constitute an absolute bar to the
institution of any proceedings, and a waiver of all claims, with respect to such
breach.
Section 7.5 Withholding Tax. There shall be deducted from all
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amounts paid under this Plan any taxes required to be withheld by any Federal,
state, local or other government. The employee and/or his beneficiary
(including his estate) shall bear all taxes on amounts paid under this Plan to
the extent that no taxes are withheld, irrespective of whether withholding is
required.
Section 7.6 Law Applicable. The Plan shall be construed in accordance
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with and governed by the laws of the State of Texas.
Restated and adopted this 28th day of December, 1990.
ENSERCH Corporation
By /s/ W. C. McCord
W. C. McCord
Chairman and President
AMENDMENT TO THE
RETIREMENT INCOME RESTORATION PLAN
OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
--------------------------------------
Pursuant to the provisions of Article V thereof, the Retirement Income
Restoration Plan of ENSERCH Corporation and Participating Subsidiary Companies
(the "Plan") is hereby amended in the following respect only:
The definition of "Limitations" in the Plan is hereby amended
effective as of October 1, 1994 by restatement in its entirety to read as
follows:
"Limitations" shall mean the reductions imposed on the benefits
provided under the Basic Plans in order to comply with Sections 415 and
401(a)(17) of the Internal Revenue Code of 1986, and the reduction in
"compensation" considered for purposes of determining benefits under
the Basic Plans on account of salary and bonuses deferred by an
employee pursuant to the ENSERCH Corporation Deferred Compensation
Plan.
IN WITNESS WHEREOF, this Amendment has been executed this 30th day of
September, 1994.
ENSERCH CORPORATION
By /s/ D. W. Biegler
Title: Chairman, President
and Chief Executive
Officer
AMENDMENT NO. 1--A
AMENDMENT TO THE
RETIREMENT INCOME RESTORATION PLAN
OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
Pursuant to the provisions of Article V thereof, the Retirement Income
Restoration Plan of ENSERCH Corporation and Participating Subsidiary Companies
(the "Plan") is hereby amended in the following respects only:
Each of the definitions of "Change in Control," "Cause," and "Good
Reason" is hereby amended as of February 13, 1996 by restatement each in its
entirety to read as follows:
"Change in Control" or "Change in Control of the Corporation"
shall mean a change in control of a nature that would be required to be
reported in response to Item l(a) of the Current Report on Form 8-K, as
in effect on February 13, 1996, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") or would
have been required to be so reported but for the fact that such event
had been "previously reported" as that term is defined in Rule 12b-2 of
Regulation 12B of the Exchange Act; provided that, without limitation
such a Change in Control
shall be deemed to have occurred if (a) any Person is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
20% or more of the combined voting power of the Corporation's then
outstanding securities ordinarily (apart from rights accruing under
special circumstances) having the right to vote at Sections of
directors ("Voting Securities"), or (b) individuals who constitute the
Board on February 13, 1996 (the "Incumbent Board") cease for any reason
to constitute at least two-thirds thereof, provided that any person
becoming a director subsequent to February 13, 1996 whose election, or
nomination for election by the Corporation's shareholders, was approved
by a vote of at least three-quarters of the directors comprising the
Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Corporation in which such person is named as a nominee
for director, without objection to such nomination) shall be, for
purposes of this clause (b), considered as though such person were a
member of the Incumbent Board, or (c) a recapitalization of the
Corporation occurs which results in either a decrease by 33% or more in
the aggregate percentage ownership of Voting Securities held by
Independent Shareholders (on a primary basis or on a fully diluted
basis
after giving effect to the exercise of stock options and warrants) or
an increase in the aggregate percentage ownership of Voting Securities
hod by non-Independent Shareholders (on a primary basis or on a fully
diluted basis after giving effect to the exercise of stock options and
warrants) to greater than 50%, or (d) the shareholders of the
Corporation have approved an agreement to merge or consolidate with or
into another corporation or an agreement to sell or otherwise dispose
of all or substantially all of the Corporation's assets (including a
plan of liquidation). For purposes of this definition, the term
"Person" shall mean and include any individual, corporation,
partnership, group, association or other "person," as such term is used
in Section 14(d) of the Exchange Act, other than the Corporation, a
subsidiary of the Corporation or any employee benefit plan(s) sponsored
or maintained by the Corporation or any subsidiary thereof, and the
term "Independent Shareholder" shall mean any shareholder of the
Corporation except any employee(s) or director(s) of the Corporation or
any employee benefit plan(s) sponsored or maintained by the Corporation
or any subsidiary thereof.
"Cause" or "termination of employment by the Corporation for
Cause" shall mean termination upon (A) the
willful and continued failure by a Participating Employee substantially
to perform his or her duties with the Corporation (other than any such
failure resulting from his or ha incapacity due to physical or mental
illness), after a demand for substantial performance is delivered to
him or her by the Chairman or President of Corporation which
specifically identifies the manner in which such executive believes
that he or she has not substantially performed his or her duties, and a
reasonable period of opportunity for such substantial performance is
provided, or
(B) the willful engaging by the Participating Employee in illegal
misconduct materially and demonstrably injurious to the Corporation.
For purposes of this paragraph, no act, or failure to act, on the part
of a Participating Employee shall be considered "willful" unless done,
or omitted to be done, by the Participating Employee not in good faith
and without reasonable belief that his or her action or omission was in
the best interest of the Corporation. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel for the Corporation shall be
conclusively presumed to be done, or omitted to be done, by the
Participating Employee in good faith and in the best
interest of the Corporation. Notwithstanding the foregoing, the
Participating Employee shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him or her a
copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for that purpose (after reasonable notice
to the Participating Employee and an opportunity for the Participating
Employee, together with his or her counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the
Participating Employee was guilty of conduct set forth above in clauses
(A) or (B) in this paragraph and specifying the particulars thereof in
detail.
"Good Reason" for a Participating Employee to terminate his or her
employment shall mean:
(A) an adverse change in status or position(s) of a
Participating Employee as an executive of the Corporation as in
effect immediately prior to a Change in Control, including,
without limitation, any adverse change in the status or position
of such Participating Employee as a result of a material
diminution in his or her duties or responsibilities (other than,
if
applicable, any such change directly attributable to the fact that
less than 50% of the Corporation's voting securities are publicly
owned or the fact that his or her position becomes a position with
a subsidiary or division), or a material change in his or her
business location or the assignment to the Participating Employee
of any duties or responsibilities which are inconsistent with such
status or position(s), or a substantial increase in his or her
business travel or any removal of the Participating Employee from
or any failure to reappoint or reelect the Participating Employee
to such position(s) (except in connection with the termination of
his or her employment for Cause, Disability or Retirement or as a
result of his or her death or by the Participating Employee other
than for Good Reason);
(B) a reduction by the Corporation in base salary of a
Participating Employee as in effect immediately prior to the
Change in Control or in the number of vacation days to which the
Participating Employee is then entitled under the Corporation's
normal vacation policy as in effect immediately prior to the
Change in Control;
(C) the taking of any action by the Corporation (including the
elimination of a plan without providing substitutes therefor or
the reduction of awards thereunder) that would diminish or the
failure by the Corporation to take any action which would maintain
the aggregate projected value of the awards of a Participating
Employee under the Corporation's bonus, stock option or management
incentive unit plans in which the Participating Employee was
participating at the time of a Change in Control of the
Corporation;
(D) the taking of any action by the Corporation that would
diminish or the failure by the Corporation to take any action
which would maintain the aggregate value of the benefits provided
a Participating Employee under the Corporation's medical, health,
dental, accident, disability, life insurance, stock purchase or
retirement plans in which the Participating Employee was
participating at the time of a Change in Control of the
Corporation;
(E) the taking of any action by the Corporation that would
diminish or the failure of the Corporation
to take any action that would maintain indemnification or
insurance for officers' liability; or
(F) a failure by the Corporation to obtain from any Successor
(as defined in a Participating Employee's Change in Control
Agreement) the assent to such Change in Control Agreement
contemplated by Section 7 thereof; or
(G) any purported termination by the Corporation of the
employment of a Participating Employee that is not effected
pursuant to a Notice of Termination satisfying the requirements of
paragraph (iv) (and, if applicable, paragraph (ii)) of Section 3
of such Participating Employee's Change in Control Agreement .
IN WITNESS WHEREOF, this Amendment has been executed as of 13th day of
February, 1996.
ENSERCH Corporation
By: /s/ D. W. Biegler
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Title: D. W. Biegler
Chairman, President
and Chief Executive
Officer
AMENDMENT NO. 2
TO THE
RETIREMENT INCOME RESTORATION PLAN
OF ENSERCH CORPORATION AND
PARTICIPATING SUBSIDIARY COMPANIES
Pursuant to the provisions of Article V thereof, the Retirement Income
Restoration Plan of ENSERCH Corporation and Participating Subsidiary Companies
(the "Plan") is hereby amended in the following respects only:
FIRST: Article V of the Plan is hereby amended by restatement in its
entirety to read as follows:
Article V
Amendment and Termination
While the Companies intend to maintain this Plan in conjunction
with the Basic Plans for as long as necessary, the Board of Directors
of ENSERCH Corporation reserves the right to amend or terminate this
Plan if, in its sole judgment, amendment or termination is appropriate;
provided, however, that if the Board should amend or terminate this
Plan, the Companies shall be liable for all benefits accrued under this
Plan as of the date of such action determined on the basis of the
assumption that on such date each employee's employment terminated; and
provided further, that (i) no amendment may be made to Section 4.2 of
this Plan within three years after a Change in Control of the
Corporation without the consent of all of the Participating Employees
and (ii) in the event of a termination of this Plan within three years
after a Change in Control of the Corporation each Participating
Employee's benefit hereunder shall be calculated as if such
Participating Employee's employment was terminated under circumstances
qualifying him for the additional years of Service provided in Section
4.2 .
SECOND: Article VII of the Plan is hereby amended by adding the
following new Section 7.7 to the end thereof:
Section 7.7 Reimbursement of Expenses. In the event that a dispute
arises with respect to the payment of benefits hereunder and the
Participating Employee (or his beneficiary) is successful in pursuing a
benefit to which he is entitled under the terms of the Plan in the
course of litigation or otherwise and incurs attorneys' fees, expenses
and costs in connection therewith, the Companies shall provide
reimbursement to the Participating Employee (or his beneficiary) for
the full amount of any such attorneys' fees, expenses and costs.
THIRD: The Plan is hereby amended by spinning off to a new plan to be
known as the Retirement Income Restoration Plan of Enserch Exploration, Inc. and
Participating Subsidiary Companies, the benefits attributable to employees and
former employees of Enserch Exploration, Inc. effective as of the date of the
distribution of all shares of stock of Enserch Exploration, Inc. Owned by
ENSERCH Corporation to the shareholders of ENSERCH Corporation.
IN WITNESS WHEREOF, this Amendment has been executed this 6th day of
December, 1996 to be effective as of January 1, 1996.
ENSERCH CORPORATION
By: /s/ D. W. Biegler
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Title: Chairman and President