EXHIBIT 10.11
RELIANT ENERGY, INCORPORATED
SAVINGS PLAN
(As Amended and Restated Effective April 1, 1999)
Third Amendment
The Benefits Committee of Reliant Energy, Incorporated, having
reserved the right under Section 10.3 of the Reliant Energy, Incorporated
Savings Plan, as amended and restated effective April 1, 1999, and as thereafter
amended (the "Plan"), to amend the Plan, does hereby amend the Plan, to make
certain design and law changes, including those which reflect certain provisions
of the Economic Growth and Tax Relief Reconciliation Act of 2001, effective as
of the dates set forth below, as follows:
1. Effective as of January 1, 2001, the definition of
"Anniversary Date" in Section 1.5 of the Plan is hereby deleted, and all
subsequent definitions are hereby redesignated and all affected references are
hereby amended accordingly.
2. Effective as of January 1, 2002, clause (v) in the third
sentence of the definition of "Compensation" in Section 1.11 of the Plan (prior
to the redesignation in Paragraph 1 herein) is hereby amended to read as
follows:
"(v) Compensation taken into account under the Plan for any Participant
during a given Plan Year exceeding $200,000 (or such other amount
provided under Code Section 401(a)(17)), as adjusted for cost-of-living
increases in accordance with Code Section 401(a)(17)(B)."
3. Effective as of March 1, 2001, the definition of
"Contribution" in Section 1.12 of the Plan (prior to the redesignation in
Paragraph 1 herein) is hereby amended in its entirety to read as follows:
"1.12 CONTRIBUTION: Any amount contributed to the Trust Fund
pursuant to the provisions of this Plan by the Employer or by a
Participant from his Compensation, including After-Tax Matched
Contributions, After-Tax Unmatched Contributions, Employer Matching
Contributions, ESOP Contributions, Pre-Tax Matched Contributions,
Pre-Tax Unmatched Contributions and Profit Sharing Contributions."
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4. Effective as of March 1, 2001, the definition of "Employer
Contributions" in Section 1.18 of the Plan (prior to the redesignation in
Paragraph 1 herein) is hereby amended in its entirety to read as follows:
"1.18 EMPLOYER CONTRIBUTIONS: Collectively, Employer Matching
Contributions, ESOP Contributions and Profit Sharing Contributions."
5. Effective as of March 1, 2001, the definition of "Employer
Matching Account" in Section 1.19 of the Plan (prior to the redesignation in
Paragraph 1 herein) is hereby amended in its entirety to read as follows:
"1.19 EMPLOYER MATCHING ACCOUNT: A Reliant Employer Matching
Account and/or Resources Employer Matching Account, individually or
collectively, as indicated by the context in which the term is used."
6. Effective as of March 1, 2001, the definition of "Employer
Matching Contributions" in Section 1.20 of the Plan (prior to the redesignation
in Paragraph 1 herein) is hereby amended in its entirety to read as follows:
"1.20 EMPLOYER MATCHING CONTRIBUTIONS: Collectively, Reliant
Employer Matching Contributions and Resources Employer Matching
Contributions."
7. Effective as of March 1, 2001, the definition of
"Participant" in Section 1.39 of the Plan (prior to the redesignation in
Paragraph 1 herein) is hereby amended in its entirety to read as follows:
"1.39 PARTICIPANT: An Employee who, pursuant to the provisions
of Article III hereof, has met the eligibility requirements and is
participating in the Plan. A former Employee shall be deemed a
Participant under the Plan as long as he has an Account in the Trust
Fund that has not been forfeited under Section 6.1 hereof and will be
entitled to exercise all the rights and privileges granted active
Employees who are Participants except as otherwise specifically
provided in the case of contributions to the Plan under Article IV and
Participant loans under Section 7.5 hereof."
8. Effective as of March 1, 2001, the following new definition
of "Profit Sharing Contributions" is hereby added as Section 1.48 of the Plan
(prior to the redesignation in Paragraph 1 herein), and all subsequent
definitions are hereby redesignated and all affected references are hereby
amended accordingly:
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"1.48 PROFIT SHARING CONTRIBUTIONS: Any amount contributed to
the Trust Fund by the Resources Employer pursuant to Section 4.1(d), in
the form of an 'Annual Profit Sharing Contribution' or a 'Payroll
Profit Sharing Contribution' (as each is described in Section 4.1(d))."
9. Effective as of March 1, 2001, the following new definition
of "Profit Sharing Account" is hereby added as Section 1.49 of the Plan (prior
to the redesignation in Paragraph 1 herein), and all subsequent definitions are
hereby redesignated and all affected references are hereby amended accordingly:
"1.49 PROFIT SHARING ACCOUNT: The account maintained to
reflect the Profit Sharing Contributions to the Plan for a Participant,
and any adjustments thereto made pursuant to the provisions of the
Plan."
10. Effective as of March 1, 2001, the following new
definition of "Reliant Employee" is hereby added as Section 1.50 of the Plan
(prior to the redesignations in Paragraphs 1, 8 and 9 herein), and all
subsequent definitions are hereby redesignated and all affected references are
hereby amended accordingly:
"1.50 RELIANT EMPLOYEE: An Employee who is not classified as a
Resources Employee."
11. Effective as of March 1, 2001, the following new
definition of "Reliant Employer" is hereby added as Section 1.51 of the Plan
(prior to the redesignations in Paragraphs 1, 8 and 9 herein), and all
subsequent definitions are hereby redesignated and all affected references are
hereby amended accordingly:
"1.51 RELIANT EMPLOYER: The Company and each other Employer
that is not a Resources Employer."
12. Effective as of March 1, 2001, the following new
definition of "Reliant Employer Matching Account" is hereby added as Section
1.52 of the Plan (prior to the redesignations in Paragraphs 1, 8 and 9 herein),
and all subsequent definitions are hereby redesignated and all affected
references are hereby amended accordingly:
"1.52 RELIANT EMPLOYER MATCHING ACCOUNT: The account
maintained to reflect Reliant Employer Matching Contributions to the
Plan (and to reflect all 'Employer Matching Contributions' made to, and
maintained in, the 'Employer Matching Account' prior to March 1, 2001,
as each such term was defined under
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the Plan immediately prior to March 1, 2001) for each Participant, and
any adjustments thereto made pursuant to the provisions of the Plan."
13. Effective as of March 1, 2001, the following new
definition of "Reliant Employer Matching Contributions" is hereby added as
Section 1.53 of the Plan (prior to the redesignations in Paragraphs 1, 8 and 9
herein), and all subsequent definitions are hereby redesignated and all affected
references are hereby amended accordingly:
"1.53 RELIANT EMPLOYER MATCHING CONTRIBUTIONS: Any amount,
with the exception of ESOP Contributions, contributed to the Trust Fund
by a Reliant Employer pursuant to Section 4.1(b)."
14. Effective as of March 1, 2001, the following new
definition of "Resources" is hereby added as Section 1.54 of the Plan (prior to
the redesignations in Paragraphs 1, 8 and 9 herein), and all subsequent
definitions are hereby redesignated and all affected references are hereby
amended accordingly:
"1.54 RESOURCES: Reliant Resources, Inc., a Delaware
corporation, or a successor to Reliant Resources, Inc., in the
ownership of substantially all of its assets."
15. Effective as of March 1, 2001, the following new
definition of "Resources Employee" is hereby added as Section 1.55 of the Plan
(prior to the redesignations in Paragraphs 1, 8 and 9 herein), and all
subsequent definitions are hereby redesignated and all affected references are
hereby amended accordingly:
"1.55 RESOURCES EMPLOYEE: An Employee of a Resources Employer,
excluding, however, any Employee whose employment is covered by a
collective bargaining agreement by and between an Employer and Local 66
of the International Brotherhood of Electrical Workers, AFL-CIO, that
provides, pursuant to good faith bargaining, for such Employee's
participation in the Plan."
16. Effective as of March 1, 2001, the following new
definition of "Resources Employer" is hereby added as Section 1.56 of the Plan
(prior to the redesignations in Paragraphs 1, 8 and 9 herein), and all
subsequent definitions are hereby redesignated and all affected references are
hereby amended accordingly:
"1.56 RESOURCES EMPLOYER: Resources and each of its eligible
subsidiaries that is an Employer and Reliant Energy Tegco, Inc., or its
successor."
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17. Effective as of March 1, 2001, the following new
definition of "Resources Employer Matching Account" is hereby added as Section
1.57 of the Plan (prior to the redesignations in Paragraphs 1, 8 and 9 herein),
and all subsequent definitions are hereby redesignated and all affected
references are hereby amended accordingly:
"1.57 RESOURCES EMPLOYER MATCHING ACCOUNT: The account
maintained to reflect Resources Employer Matching Contributions to the
Plan for a Participant, and any adjustments thereto made pursuant to
the provisions of the Plan."
18. Effective as of March 1, 2001, the following new
definition of "Resources Employer Matching Contributions" is hereby added as
Section 1.58 of the Plan (prior to the redesignations in Paragraphs 1, 8 and 9
herein), and all subsequent definitions are hereby redesignated and all affected
references are hereby amended accordingly:
"1.58 RESOURCES EMPLOYER MATCHING CONTRIBUTIONS: Any amount
contributed to the Trust Fund by a Resources Employer pursuant to
Section 4.1(c)."
19. Effective as of March 1, 2001, the following new
definition of "Resources Stock" is hereby added as Section 1.59 of the Plan
(prior to the redesignations in Paragraphs 1, 8 and 9 herein), and all
subsequent definitions are hereby redesignated and affected references are
hereby amended accordingly:
"1.59 RESOURCES STOCK: Common stock of Resources, which is
readily tradable on an established securities market."
20. Effective as of January 1, 2002, Section 2.15 of the Plan
is hereby amended in its entirety to read as follows:
"2.15 Presenting Claims for Benefits: Any Participant or any
other person claiming under any deceased Participant (collectively, the
'Applicant') may submit written application to the Committee for the
payment of any benefit asserted to be due him under the Plan. Such
application shall set forth the nature of the claim and such other
information as the Committee may reasonably request.
The Committee shall notify the Applicant of the benefits
determination within a reasonable time after receipt of the claim, such
time not to exceed 90 days unless special circumstances require an
extension of time for processing the application. If such an extension
of time for processing is required, written notice
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of the extension shall be furnished to the Applicant prior to the end
of the initial 90-day period. In no event shall such extension exceed a
period of 90 days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension
of time and the date by which the Committee expects to render its final
decision. Notice of the Committee's decision to deny a claim in whole
or in part shall be set forth in a manner calculated to be understood
by the Applicant and shall contain the following:
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent Plan provisions on
which the denial is based;
(c) a description of any additional material or information
necessary for the Applicant to perfect the claim and an
explanation of why such material or information is
necessary; and
(d) an explanation of the claims review procedures set forth
in Section 2.16 hereof, including the claimant's right
to bring a civil action under Section 502(a) of ERISA
following a denial on review.
If notice of denial is not furnished and if the claim is not granted
within the period of time set forth above, the claim shall be deemed
denied for purposes of proceeding to the review stage described in
Section 2.16. Applicants shall be given timely written notice of the
time limits set forth herein for determination on claims, appeal of
claim denial and decisions on appeal."
21. Effective as of January 1, 2002, Section 2.16 of the Plan
is hereby amended in its entirety to read as follows:
"2.16 Claims Review Procedure: If an application filed by an
Applicant under Section 2.15 above shall result in a denial of the
benefit applied for, either in whole or in part, such Applicant shall
have the right, to be exercised by written request filed with the
Committee within 60 days after receipt of notice of the denial of his
application or, if no such notice has been given, within 60 days after
the application is deemed denied under Section 2.15, for the review of
his application and of his entitlement to the benefit for which he
applied, by the Committee. Such request for review may contain such
additional information and comments as the Applicant may wish to
present. The Committee shall reconsider the application in light of
such additional information and comments as the Applicant may have
presented and, if the Applicant shall have so requested, may grant the
Applicant a formal hearing before the Committee in its discretion. The
Committee shall also permit the Applicant or his designated
representative to review pertinent documents in its possession,
including copies of the Plan document and information provided by the
Employer relating to the Applicant's entitlement to such benefit. The
Committee shall render a decision no later than
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the date of the Committee meeting next following receipt of the request
for review, except that (i) a decision may be rendered no later than
the second following Committee meeting if the request is received
within 30 days of the first meeting and (ii) under special
circumstances which require an extension of time for rendering a
decision (including but not limited to the need to hold a hearing), the
decision may be rendered not later than the date of the third Committee
meeting following the receipt of the request for review. If such an
extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to
the Applicant prior to the commencement of the extension. Notice of the
Committee's final decision shall be furnished to the Applicant in
writing, in a manner calculated to be understood by him, and if the
Applicant's claim on review is denied in whole or in part, the notice
shall set forth the specific reason or reasons for the denial and the
specific reference to the pertinent plan provisions on which the denial
is based, the Applicant's right to receive upon request, free of
charge, reasonable access to, and copies of, all relevant documents,
records and other information to his claim, and his right to bring a
civil action under Section 502(a) of ERISA. If the decision on review
is not furnished within the time period set forth above, the claim
shall be deemed denied on review. Benefits under this Plan will only be
paid if the Committee decides in its discretion that the Applicant is
entitled to them."
22. Effective as of January 1, 2002, Section 2.17 of the Plan
is hereby amended in its entirety to read as follows:
"2.17 Disputed Benefits: If any dispute shall arise between an
Applicant and the Committee after review of a claim for benefits, or in
the event any dispute shall develop as to the person to whom the
payment of any benefit under the Plan shall be made, the Trustee may
withhold the payment of all or any part of the benefits payable
hereunder to the Applicant until such dispute has been resolved by a
court of competent jurisdiction or settled by the parties involved."
23. Effective as of March 1, 2001, Section 3.1 of the Plan is
hereby amended in its entirety to read as follows:
"3.1 Eligibility of Employees: An Employee eligible to
participate under the applicable Prior Plan immediately preceding the
Effective Date shall be eligible to become a Participant in this Plan
as of the Effective Date. From and after the Effective Date, each
Employee who is an Eligible Employee and who is not a Participant and
who began Service with an Employer on or after April 1, 1999 shall be
initially eligible to participate in the Plan as soon as practicable
following the later of the Effective Date or the date he first began
Service with an Employer. From and after March 1, 2001, each Eligible
Employee who is a Resources Employee shall become a Participant for
purposes of Profit Sharing Contributions (if any) as of the later of
(a) March 1, 2001 or (b) the date he first began Service with a
Resources Employer.
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Notwithstanding the foregoing, each of the following
individuals shall be ineligible to participate in this Plan: (i) an
Employee who is employed as a building trades worker under a
construction industry collective bargaining agreement providing
specifically for retirement benefit payments to be made thereunder for
such building trades worker; (ii) an Employee who is a Leased Employee;
(iii) an individual who is designated, compensated or otherwise
classified or treated as an independent contractor or a leased employee
by an Employer or an Affiliate; and (iv) an individual who is a
nonresident alien and who receives no United States source earned
income from the Employer."
24. Effective as of March 1, 2001, Section 3.4 of the Plan is
hereby amended in its entirety to read as follows:
"3.4 Application by Participants to Make Pre-Tax and/or
After-Tax Contributions: Each Participant pursuant to this Article III
who desires to make Pre-Tax Contributions and/or After-Tax
Contributions to the Plan shall complete an application in such form as
may be prescribed by the Committee in which the Participant shall elect
to make and designate the amount of his Contributions, as contemplated
under Sections 4.2 and 4.3 hereof, and his choice of investment options
under Section 8.1 hereof."
25. Effective as of March 1, 2001, Section 4.1 of the Plan is
hereby amended in its entirety to read as follows:
"4.1 Employer Contributions.
(a) ESOP Contributions: For each Plan Year during
which an Exempt Loan is outstanding, the Reliant Employer
shall make an ESOP Contribution to the Trust Fund, in such
amount, if any, and at such times as shall be determined by
the Company.
(b) Reliant Employer Matching Contributions: In
addition to any contribution required under subsection (a)
above, the Reliant Employer shall make a Reliant Employer
Matching Contribution (subject to adjustments for forfeitures
and limitations on annual additions as elsewhere specified in
the Plan) in the amount, if any, necessary to result in a
total allocation under Article V to the ESOP Account of each
Participant who is a Reliant Employee of not less than 75% of
the total of his Pre-Tax Matched Contribution and After-Tax
Matched Contribution (not to exceed in the aggregate 6% of the
Participant's Compensation) for each payroll period.
In addition to the foregoing contribution,
for any Plan Year, the Reliant Employer, in its sole
discretion, may make a discretionary
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Reliant Employer Matching Contribution in the amount, if any,
necessary to result in a total allocation under Article V to
the ESOP Accounts of:
(i) Participants who as of the last day of
the applicable Plan Year are (1) Reliant Employees
and (2) in active Service;
(ii) Participants (1) whose Service
terminates during the applicable Plan Year other than
due to death or Disability and (2) who, as of such
termination date, are (I) age 55 or older with five
years of Service and (II) Reliant Employees; and
(iii) Participants (1) whose Service
terminates during the applicable Plan Year due to
death or Disability and (2) who, as of such
termination date, are Reliant Employees;
equal to a percentage, determined by the Chairman of the
Committee, in his sole discretion, of the total of each such
eligible Participant's Pre-Tax Matched Contributions and
After-Tax Matched Contributions for such Plan Year. Any
discretionary Reliant Employer Matching Contribution shall be
communicated to such eligible Participants within 90 days
following the close of the applicable Plan Year, with such
contribution to be made as soon as administratively
practicable on or after the date of such communication, but in
no event later than the time prescribed by law for filing the
federal income tax return of the Company for the applicable
Plan Year, including any extension which has been granted for
the filing of such tax return.
Further, the Reliant Employer may make an
additional ESOP Contribution under Section 4.1(a) and/or
Reliant Employer Matching Contribution under this Section
4.1(b), as necessary, to make the allocation required under
Section 5.3(d)(ii) with respect to dividends used to repay an
Exempt Loan.
(c) Resources Employer Matching Contributions: The
Resources Employer shall make a Resources Employer Matching
Contribution (subject to adjustment for forfeitures and
limitations on annual additions as elsewhere specified in the
Plan) in an amount in cash to result in a total allocation
under Article V to the Resources Employer Matching Account of
each Participant who is a Resources Employee equal to 100% of
the total of his Pre-Tax Matched Contribution and After-Tax
Matched Contribution (not to exceed in the aggregate 6% of the
Participant's Compensation) for each payroll period.
(d) Profit Sharing Contributions by Resources
Employer: For any Plan Year, the Resources Employer may, in
its sole discretion, make a Profit Sharing Contribution or
Contributions (subject to adjustments for
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forfeitures and limitations on annual additions as elsewhere
specified in the Plan) as described in clause (i) and/or
clause (ii) below:
(i) Annual Profit Sharing Contribution: For
any Plan Year, the Resources Employer may, in its
sole discretion, contribute to the Trust Fund a
discretionary Profit Sharing Contribution in an
amount, if any, necessary to result in a total
allocation under Article V to the Profit Sharing
Accounts of:
(1) Participants who, as of the last day
of the applicable Plan Year, are (A)
Resources Employees and (B) in active
Service;
(2) Participants (A) whose Service
terminates during the applicable Plan
Year other than due to death or
Disability and (B) who, as of such
termination date, are (I) Resources
Employees and (II) age 55 or older
with five years of Service; and
(3) Participants (A) whose Service
terminates during the applicable Plan
Year due to death or Disability and
(B) who, as of such termination date,
are Resources Employees;
equal to a percentage, not to exceed 3%, determined
by the Chairman of the Committee, in his sole
discretion, of each such eligible Participant's
Compensation for such Plan Year ('Annual Profit
Sharing Contribution'). The Annual Profit Sharing
Contribution may be made in cash, Resources Stock or
a combination of cash and Resources Stock, as
determined by the Chairman of the Committee, in his
sole discretion. Any Annual Profit Sharing
Contribution shall be communicated to eligible
Participants within 90 days following the close of
the applicable Plan Year, with such contribution to
be made as soon as administratively practicable on or
after the date of such communication, but in no event
later than the time prescribed by law for filing the
federal income tax return of the Company for the
applicable Plan Year, including any extension which
has been granted for the filing of such tax return.
(ii) Payroll Profit Sharing Contributions:
For any Plan Year, the Resources Employer may, in its
sole discretion, contribute to the Trust Fund a
discretionary Profit Sharing Contribution in cash as
soon as administratively practicable on or after each
payroll period during such Plan Year in an amount to
result in a total allocation under Article V to the
Profit Sharing Accounts of each Participant who is a
Resources Employee as of
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the last day of each payroll period equal to a
percentage of each such Participant's eligible
Compensation (as defined below) for each such payroll
period, as determined by the Chairman of the
Committee, in his sole discretion ('Payroll Profit
Sharing Contribution'). For any Plan Year in which
the Payroll Profit Sharing Contribution is elected to
be made, Compensation for such contributions shall be
the first $85,000 (or such other amount determined by
the Chairman of the Committee, in his sole
discretion) of Compensation for such Plan Year. For
the 2001 Plan Year, (1) solely for purposes of
determining the foregoing Compensation limit (and not
for contribution purposes), all Compensation earned
by an eligible Participant for the 2001 Plan Year
shall be included, and (2) only payroll periods
beginning after February 28, 2001 shall be eligible
for the contribution under this Section 4.1(d)(ii).
With the exception of the 2001 Plan Year, any Payroll
Profit Sharing Contribution shall be communicated to
eligible Participants prior to the first day of the
applicable Plan Year.
(e) Forfeitures: To the extent specified in Section
5.3(d)(iii), any amount attributable to forfeitures will be
applied to reduce, to the extent of such forfeitures, the
Employer Matching Contributions required to be made and/or
Profit Sharing Contributions (if any) the Employer elects to
make under this Section 4.1 next following the determination
of any such forfeiture amounts and/or pay incident expenses of
the Plan. In the event that a forfeiture arising under Section
6.1 is reinstated under Section 6.9 because of the return to
the employment of the terminated Participant, or in the event
that a forfeiture arising under Section 6.11 is reinstated in
accordance with the provisions of Section 6.11 because of an
appropriate claim of forfeited unclaimed benefit by the
Participant, Beneficiary or other distributee, the Employer
shall contribute, within a reasonable time following such
reemployment or claim, an amount equal to the forfeiture to be
reinstated."
26. Effective as of January 1, 2002, the fourth sentence in
the first paragraph of Section 4.2 of the Plan is hereby amended to read as
follows:
"A Participant's Pre-Tax Contributions under this Plan and all other
plans, contracts or arrangements of the Employer shall not exceed a
maximum dollar limitation provided under Code Section 402(g), as
adjusted by the Secretary of the Treasury or his delegate for
cost-of-living increases pursuant to Code Section 402(g)."
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27. Effective as of January 1, 2002, Section 4.12 of the Plan
is hereby amended to add the following new paragraph to the end thereof:
"The multiple use test described in Treasury Regulation
Section 1.401(m)- 2 and this Section of the Plan shall not apply for
Plan Years beginning after December 31, 2001."
28. Effective as of March 1, 2001, the first paragraph of
Section 5.1(a) of the Plan is hereby amended in its entirety to read as follows:
"Accounts shall be maintained for each Participant as may be
appropriate from time to time to reflect his interest in the ESOP Fund
and each Investment Fund in which he may be participating at any time
as contemplated under Section 8.1. The interest in each Investment Fund
attributable to the Pre-Tax and/or After-Tax Contributions made by or
on behalf of each Participant under the Plan and Prior Plans shall be
reflected in a Pre-Tax Contribution Account and/or an After-Tax
Contribution Account for each Participant, respectively. The interest
in the Reliant Energy Common Stock Fund of each Participant
attributable to Reliant Employer Matching Contributions made to the
Plan shall be reflected in a Reliant Employer Matching Account for each
such Participant. The interest in the Investment Funds of each
Participant attributable to Resources Employer Matching Contributions
and/or Profit Sharing Contributions made to the Plan shall be reflected
in a Resources Employer Matching Account and/or Profit Sharing Account,
respectively, for each such Participant. The interest in the ESOP Fund
of each Participant shall be reflected in an ESOP Account for each
Participant as described in Section 5.3. An Employee or a Participant
also may have a Rollover Account to reflect any rollover contributions
he made pursuant to Section 4.16."
29. Effective as of March 1, 2001, subsections (a) and (b) of
Section 5.3 of the Plan are hereby amended in their entirety to read as follows:
"(a) Pre-Tax Contributions, After-Tax Contributions,
Employer Matching Contributions and Profit Sharing
Contributions:
(i) Pre-Tax Contributions and After-Tax
Contributions received in the Trust Fund shall be
credited as soon as practicable after the close of
each applicable payroll period to the respective
Pre-Tax Contribution Accounts and After-Tax
Contribution Accounts of the Participants, and shall
be invested in the Investment Funds in accordance
with the Participants' instructions pursuant to
Section 8.1.
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(ii) Reliant Employer Matching
Contributions, if any, received in the Trust Fund
shall be allocated and credited as soon as
practicable after the close of each applicable
payroll period or, in the case of the discretion
contribution, as soon as practicable after the end of
the applicable Plan Year, but in no event later than
the time prescribed by law for the filing of the
federal income tax return for the Company for the
applicable Plan Year, including any extension which
has been granted for the filing of such tax return,
to such Participants' Reliant Employer Matching
Accounts in accordance with Section 4.1(b) and shall
be invested in accordance with Section 8.1.
(iii) Resources Employer Matching
Contributions received in the Trust Fund shall be
allocated and credited as soon as practicable after
the close of each applicable payroll period to such
Participants' Resources Employer Matching Accounts in
accordance with Section 4.1(c) and shall be invested
in the Investment Funds in accordance with the
Participants' instructions pursuant to Section 8.1.
(iv) Payroll Profit Sharing Contributions,
if any, under Section 4.1(d)(ii) received in the
Trust Fund shall be allocated and credited as soon as
practicable after the close of each applicable
payroll period to the Profit Sharing Accounts of the
eligible Participants in an amount equal to the
percentage of each such Participant's eligible
Compensation for the applicable payroll period as
determined in accordance with Section 4.1(d)(ii), and
shall be invested in the Investment Funds in
accordance with the Participants' instructions
pursuant to Section 8.1.
(v) An Annual Profit Sharing Contribution,
if any, under Section 4.1(d)(i) received in the Trust
Fund for a Plan Year shall be allocated and credited
as soon as practicable after the end of the
applicable Plan Year, but in no event later than the
time prescribed by law for the filing of the federal
income tax return for the Company for the applicable
Plan Year, including any extension which has been
granted for the filing of such tax return, to the
Profit Sharing Accounts of the eligible Participants
in an amount equal to the ratio that the sum of each
such eligible Participant's Compensation for that
applicable Plan Year bears to the total Compensation
for all such eligible Participants for such
applicable Plan Year, and shall be invested (1) if
made in cash, in the Investment Funds in accordance
with the Participants' instructions pursuant to
Section 8.1, and (2) if made in Resources Stock, in
the appropriate Investment Fund established by the
Committee for the investment in Resources Stock.
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(b) ESOP Accounts: The ESOP Account of each
Participant who is a Reliant Employee shall have credited to
his ESOP Account his allocable portion of (i) the Company
Stock investment in the ESOP Fund purchased and paid for by
the Trust (other than Financed Stock) or contributed in kind
by the Reliant Employer, (ii) forfeitures from the ESOP Fund,
(iii) the Company Stock investment in the ESOP Fund released
from the Stock Suspense Account and (iv) any cash held in the
ESOP Fund. Such allocation shall be made in the ratio that the
sum of each such Participant's Pre-Tax Matched Contribution
and After-Tax Matched Contribution for the period bears to the
total Pre-Tax Matched Contributions and After-Tax Matched
Contributions of all such Participants for the period. The
foregoing allocations made pursuant to this Section 5.3(b)
shall be made as soon as practicable after the close of each
payroll period in an amount not to exceed 75% of the total of
each such eligible Participant's Pre-Tax Matched Contribution
and After-Tax Matched Contribution and, if applicable, after
the close of the first quarter following the end of the
applicable Plan Year in an amount equal to the discretionary
allocation percentage of the total of each such eligible
Participant's Pre-Tax Matched Contribution and After-Tax
Matched Contribution in accordance with Section 4.1(b)."
30. Effective as of March 1, 2001, Section 5.5(a)(4) of the
Plan is hereby amended in its entirety to read as follows:
"4. If there is an Excess Amount with respect to a
Participant for the Limitation Year, such Excess Amount shall
be disposed of as follows:
A. There shall first be returned to the
Participant his After-Tax Unmatched Contributions, as
defined in Section 4.3, if any, attributable to that
Limitation Year to the extent such returned and
reduced contributions would reduce the Excess Amount.
If any such Excess Amount shall then remain, the
Participant's Profit Sharing Contributions, as
defined in Section 4.1(d), if any, attributable to
that Limitation Year shall be released and allocated
to a suspense account in the manner set forth in
Paragraph B below to the extent such returned and
reduced contributions would reduce the Excess Amount.
If any such Excess Amount shall then remain, the
Participant's Pre-Tax Unmatched Contributions, as
defined in Section 4.2, if any, attributable to that
Limitation Year shall be returned to the Participant
to the extent such returned contributions would
reduce the Excess Amount. If any such Excess Amount
shall then remain, the Participant's After-Tax
Matched Contributions, as defined in Section 4.3, if
any, attributable to that Limitation Year shall be
returned to the Participant, and the Employer
Matching Contributions made with respect to said
14
After-Tax Matched Contributions shall be reduced and
allocated to a suspense account in the manner set
forth in Paragraph B below, both to the extent such
returned and reduced contributions would reduce the
Excess Amount. If any such Excess Amount shall then
remain, the Participant's Pre-Tax Matched
Contributions, as defined in Section 4.2, if any,
attributable to that Limitation Year shall be
returned to the Participant, and the Employer
Matching Contributions made with respect to said
Pre-Tax Matched Contributions shall be reduced and
allocated to a suspense account in the manner set
forth in Paragraph B below, both to the extent such
returned and reduced contributions would reduce the
Excess Amount. All such amounts shall be adjusted for
any income or loss allocated thereon.
B. The amount of the reduction of the
Employer Matching Contributions and/or Profit Sharing
Contributions for the Participant shall be
reallocated out of the ESOP Account, Employer
Matching Account or Profit Sharing Account, as
applicable, of such Participant and shall be held in
a suspense account that shall be applied as a part of
(and to reduce to such extent what would otherwise
be) the Employer Matching Contributions and/or Profit
Sharing Contributions for all Participants required
to be made to the Plan during the next subsequent
calendar quarter or quarters. No portion of such
Excess Amount may be distributed to Participants or
former Participants. If a suspense account is in
existence at any time during the Limitation Year
pursuant to this Paragraph B, such suspense account
shall not participate in the allocation of investment
gains or losses of the Trust Fund."
31. Effective as of March 1, 2001, the definition of "Annual
Additions" in Section 5.5(d)(2) of the Plan is hereby amended in its entirety to
read as follows:
"2. Annual Additions: With respect to each Plan Year
(Limitation Year), the total of the Employer Matching
Contributions, ESOP Contributions (except to the extent herein
provided), Pre-Tax Contributions, After-Tax Contributions,
Profit Sharing Contributions, forfeitures and amounts
described in Sections 415(e)(1) and 419(d)(2) of the Code,
which are allocated to the Participant's Account; excluding,
however, any amounts contributed to reinstate an amount
forfeited or an unclaimed benefit. Provided Code Section
415(c)(6) is satisfied, ESOP Contributions used to repay
interest on an Exempt Loan as described in Section 5.6 of the
Plan shall not constitute an Annual Addition. Subject to the
provisions of Section 415(c)(6) of the Code, Annual Additions
shall not include (i) forfeitures of Financed Stock or (ii)
ESOP Contributions
15
used to pay interest on the Exempt Loan and charged against
the Participant's Account."
32. Effective as of January 1, 2002, the definition of
"Maximum Permissible Amount" in Section 5.5(d)(5) of the Plan is hereby amended
in its entirety to read as follows:
"5. Maximum Permissible Amount: For a Limitation
Year, the Maximum Permissible Amount with respect to any
Participant shall be the lesser of:
A. $40,000, as adjusted by the Secretary of
the Treasury or his delegate pursuant to Code Section
415(d); or
B. 100% of the Participant's Compensation
for the Limitation Year."
33. Effective as of January 1, 2001, the definition of
"Compensation" in Section 5.5(d)(6) of the Plan is hereby amended to add the
following model language provided in Internal Revenue Service ("IRS") Notice
2001-37, 2000-25 I.R.B. 1340, with respect to amendments made by section 314(e)
of the Community Renewal Tax Relief Act of 2000 ("CRA") to Section 415(c)(3) of
the Internal Revenue Code of 1986 ("Code"), to the end thereof:
"For Limitation Years beginning on and after January 1, 2001,
for purposes of applying the limitations described in Section 5.5 of
the Plan, Compensation paid or made available during such Limitation
Years shall include elective amounts that are not includible in the
gross income of the Employee by reason of Code Section 132(f)(4)."
34. Effective as of January 1, 2002, the last sentence in the
second paragraph of the definition of "Compensation" in Section 5.5(d)(6) of the
Plan is hereby amended to read as follows:
"The foregoing notwithstanding, Compensation shall be limited
to $200,000 (or such other amount provided under Code Section
401(a)(17)), as adjusted for cost-of-living increases in
accordance with Code Section 401(a)(17)(B)."
16
35. Effective as of March 1, 2001, Section 6.1 of the Plan is
hereby amended to add the following new paragraph to the end thereof:
"The foregoing to the contrary notwithstanding, a Participant
who is an active Resources Employee on or after March 1, 2001 shall be
100% and fully vested in the values of his Accounts as of March 1, 2001
(if any) and in all Employer Contributions to his Accounts made on and
after March 1, 2001. Such Resources Employee who subsequently becomes a
Reliant Employee after March 1, 2001 shall continue to be 100% and
fully vested in the values of his Accounts at all times and in all
Employer Contributions to his Accounts made after he is no longer a
Resources Employee."
36. Effective as of March 1, 2001, the last paragraph of
Section 6.6 of the Plan is hereby amended in its entirety to read as follows:
"All amounts attributable to (i) any excess of the values
attributable to the interest in his Pre-Tax Contribution Account and/or
his After-Tax Contribution Account and Profit Sharing Account, and the
vested portion of his interest in his Employer Matching Account, ESOP
Account and Prior Plan Accounts that are invested in the Reliant Energy
Common Stock Fund and the ESOP Fund, over the interest therein provided
to be distributed to him in kind, plus (ii) any interest of such
Participant in his Pre-Tax Contribution Account and/or his After-Tax
Contribution Account in any other Investment Fund, with the exception
of the Reliant Energy Common Stock Fund, shall be distributed in cash."
37. Effective as of March 1, 2001, subsection (a) of Section
6.8 of the Plan is hereby amended in its entirety to read as follows:
"(a) Pre-Tax Contributions, After-Tax Contributions, Profit
Sharing Contributions, Employer Matching Contributions and ESOP
Contributions made subsequent to such Valuation Date;"
38. Effective as of January 1, 2001, Section 6.10 of the Plan
is hereby amended to add the following model language provided under IRS
Announcement 2001-18, 2001-10 I.R.B. 791, to adopt the proposed regulations
under Section 401(a)(9) of the Code, published January 17, 2001, for purposes of
making required minimum distributions from the Plan, to the end thereof:
"With respect to distributions under the Plan made for
calendar years beginning on or after January 1, 2001, the Plan will
apply the minimum distribution requirements of Section 401(a)(9) of the
Code in accordance with the regulations under Section 401(a)(9) that
were proposed on January 17, 2001,
17
notwithstanding any provision of the Plan to the contrary. This
amendment shall continue in effect until the end of the last calendar
year beginning before the effective date of final regulations under
Code Section 401(a)(9) or such other date as may be specified in
guidance published by the Internal Revenue Service."
39. Effective as of March 1, 2001, Section 7.2 of the Plan is
hereby amended in its entirety to read as follows:
"7.2 Withdrawal of Pre-Tax Contributions On and After Age
59 1/2: Pursuant to advance notice given in the manner prescribed by
the Committee from time to time and subject to the conditions of
Section 7.4, and subject to first withdrawing all amounts that may be
available under Sections 7.1 and 7.3, each Participant who is age
59 1/2 or older may elect to withdraw all or any amounts attributable
to his Pre-Tax Matched and Unmatched Contributions, determined as of
the Valuation Date immediately preceding the withdrawal date. Amounts
withdrawn under this Section 7.2 shall be charged and withdrawn from a
Participant's Accounts, to the extent applicable, in the following
order: (i) Pre-Tax Unmatched Contributions and then Pre-Tax Matched
Contributions in his Pre-Tax Contribution Account."
40. Effective as of March 1, 2001, the first, second and third
paragraphs of Section 8.1 of the Plan are hereby amended in their entirety to
read as follows:
"8.1 Investment of Trust Fund: Except as provided in Article
VII with respect to Plan loans and as otherwise provided below, the
Trustee shall divide the Trust Fund into Investment Funds, as set forth
in Attachment A hereto, with such attachment hereby incorporated by
reference as a part of the Plan, in accordance with the directions of
the Participant and following such rules and procedures prescribed by
the Committee. Notwithstanding any provision in this Section 8.1 to the
contrary, a Participant (a) may not direct the investment of the
amounts in his (i) Reliant Employer Matching Account (including amounts
contributed to a Participant's 'Employer Matching Account' prior to
March 1, 2001 (as such term was defined under the Plan immediately
prior to March 1, 2001)), (ii) ESOP Account, or (iii) Prior Plan 1999
Matching Account into any Investment Fund other than the Reliant Energy
Common Stock Fund, as described in Attachment A hereto, except as
provided in Section 8.2, and (b) may not direct the investment of
amounts in his Profit Sharing Account that were contributed in the form
of Resources Stock into any Investment Fund other than the Investment
Fund established by the Committee for such contribution until such
Participant attains age 55 or older.
The Committee from time to time may revise the number and type
of Investment Funds provided in Attachment A. Subject to such rules and
procedures adopted by the Committee, each Participant shall have the
right to direct the Committee or any agent appointed by the Committee
to administer the investment of the Trust Fund to instruct the Trustee
to invest his (i) Pre-Tax
18
Contributions, (ii) After-Tax Contributions, (iii) Resources Employer
Matching Contributions, (iv) Profit Sharing Contributions paid in cash
and, if age 55, paid in Resources Stock, (v) amounts in his Prior Plan
Accounts, excluding the Prior Plan 1999 Matching Account, and (vi)
Rollover Account, and the earnings and accretions thereon, in any whole
percentages totaling 100% among the Investment Funds.
With no restrictions on frequency, each Participant may, by
electronic, telephonic, written or other such manner as may be
prescribed from time to time by the Committee and subject to any
restrictions or conditions that may be established by the Committee,
direct (1) the investment of his future (i) After-Tax Contributions,
(ii) Pre-Tax Contributions, (iii) Resources Employer Matching
Contributions and (iv) Profit Sharing Contributions paid in cash, and
(2) the transfer of the current values in his (i) After-Tax
Contribution Account, (ii) Pre-Tax Contribution Account, (iii) Prior
Plan Accounts, excluding the Prior Plan 1999 Matching Account, (iv)
Resources Employer Matching Account, (v) Profit Sharing Contributions
paid in cash and, if age 55, paid in Resources Stock and/or (vi)
Rollover Account among the various Investment Funds in any whole
percentages totaling 100%. Any such change in Investment Funds shall be
effective as soon as reasonably practicable following receipt of the
change of Investment Funds, but in no event shall such change be
effective earlier than the close of business on the Valuation Date on
which such change is received. If a Participant fails to make a proper
designation, then his Account shall be invested as soon as
administratively feasible in the Investment Fund or Funds specified by
the Committee from time to time in a uniform and nondiscriminatory
manner."
41. Effective as of March 1, 2001, subsection (a) of Section
8.2 of the Plan is hereby amended in its entirety to read as follows:
"(a) Subject to Section 8.2(b), each Qualified
Participant (as defined herein) may elect, within 90 days
after the close of each Plan Year in the initial election
period (as defined herein), to direct the investment of up to
25% of the sum of the balances in the Participant's Reliant
Employer Matching Account, ESOP Account and Prior Plan 1999
Matching Account (to the extent such portion exceeds the
amount to which a prior election to diversify under this
Section 8.2(a) applies) into any or all Investment Funds with
the exception of the Reliant Energy Common Stock Fund, and
such diversification shall be made no later than as required
under Code Section 401(a)(28). In the Plan Year after the
initial election period, the percentage shall be 50% instead
of 25%. A Qualified Participant is any Participant who has
completed at least 10 years of participation in the Plan and
applicable Prior Plan and who has attained age 55. The initial
election period means the five Plan Year period beginning with
the first Plan Year on or after January 1, 1992 in which the
Participant first became a qualified Participant."
19
42. Effective as of March 1, 2001, clause (i) of Section 8.2(b) of the
Plan is hereby amended in its entirety to read as follows:
"(i) Each Participant who has (1) completed at least
10 years of participation in the Plan and applicable Prior
Plan and (2) attained age 55 (hereinafter, a 'Qualified
Participant') may elect, within 90 days after the close of
each Plan Year in the initial election period (as defined
herein), to direct the investment of up to 25% of the sum of
the balances in such Participant's Reliant Employer Matching
Account, ESOP Account and Prior Plan 1999 Matching Account (to
the extent such portion exceeds the amount to which a prior
election to diversify under this Section 8.2(b) applies), into
any or all Investment Funds with the exception of the Reliant
Energy Common Stock Fund, and such diversification shall be
made no later than as required under Code Section 401(a)(28).
In the Plan Year after the initial election period, the
percentage shall be 50% instead of 25%. The initial election
period means the five Plan Year period beginning with the
first Plan Year in which the Participant first became a
Qualified Participant."
43. Effective as of January 1, 2002, the fifth sentence in the first
paragraph of Section 11.3 of the Plan is hereby amended to read as follows:
"For this purpose, the percentage with respect to a Key Employee will
be determined by dividing the contributions (including forfeitures)
made for such Key Employee by his total compensation (as defined in
Section 415 of the Code) not in excess of $200,000 (or such other
amount provided under Code Section 401(a)(17)) for the Plan Year."
44. Effective as of January 1, 2002, the first sentence in Section 11.4
of the Plan is hereby amended to read as follows:
"Each Participant's Compensation taken into account under this Article
XI and under Section 1.11 for purposes of computing benefits under this
Plan will not exceed $200,000 (or such other amount provided under Code
Section 401(a)(17)), as adjusted by the Secretary of the Treasury or
his delegate for cost-of-living increases in accordance with Code
Section 401(a)(17)(B)."
45. Effective as of January 1, 2002, Article XI of the Plan is hereby
amended to add the following new Section 11.9 to the end thereof:
"11.9. Modification of Top-Heavy Rules.
(a) Effective Date. This Section shall apply for
purposes of determining whether the Plan is a top-heavy plan
under Section 416(g) of
20
the Code for Plan Years beginning after December 31, 2001, and
whether the Plan satisfies the minimum benefits requirements
of Section 416(c) of the Code for such years, and, as
applicable, amends this Article XI of the Plan.
(b) Determination of Top-Heavy Status.
1. 'Key Employee' means any Employee or
former Employee (including any deceased Employee) who
at any time during the Plan Year that includes the
Determination Date was an officer of a Considered
Company having annual compensation greater than
$130,000 (as adjusted under Section 416(i)(1) of the
Code for Plan Years beginning after December 31,
2002), a 5-percent owner of a Considered Company, or
a 1-percent owner of a Considered Company having
annual compensation of more than $150,000. For this
purpose, annual compensation means compensation
within the meaning of Section 415(c)(3) of the Code.
The determination of who is a Key Employee will be
made in accordance with Section 416(i)(1) of the Code
and the applicable regulations and other guidance of
general applicability issued thereunder.
2. This subparagraph (2) shall apply for
purposes of determining the present values of accrued
benefits and the amounts of account balances of
Employees as of the Determination Date.
(A) Distributions during year ending
on the Determination Date. The present
values of accrued benefits and the amounts
of account balances of an Employee as of the
Determination Date shall be increased by the
distributions made with respect to the
Employee under the Plan and any plan
aggregated with the Plan under Section
416(g)(2) of the Code during the 1-year
period ending on the Determination Date. The
preceding sentence shall also apply to
distributions under a terminated plan which,
had it not been terminated, would have been
aggregated with the Plan under Section
416(g)(2)(A)(i) of the Code. In the case of
a distribution made for a reason other than
separation from service, death, or
disability, this provision shall be applied
by substituting '5-year period' for '1-year
period.'
(B) Employees not performing
services during year ending on the
Determination Date. The accrued benefits and
accounts of any individual who has not
performed services for a Considered Company
during the
21
1-year period ending on the Determination
Date shall not be taken into account.
(c) Minimum Benefits. Employer matching contributions
shall be taken into account for purposes of satisfying the
minimum contribution requirements of Section 416(c)(2) of the
Code and the Plan. The preceding sentence shall apply with
respect to matching contributions under the Plan or, if the
Plan provides that the minimum contribution requirement shall
be met in another plan, such other plan. Employer matching
contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching
contributions for purposes of the actual contribution
percentage test and other requirements of Section 401(m) of
the Code."
IN WITNESS WHEREOF, the Benefits Committee of Reliant Energy,
Incorporated has caused these presents to be executed by its duly authorized
Chairman 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,
this 19th day of December, 2001, but effective as of the dates specified herein.
BENEFITS COMMITTEE OF
RELIANT ENERGY, INCORPORATED
By: /s/ David M. McClanahan
-----------------------------
David M. McClanahan, Chairman
ATTEST:
/s/ Lynne Harkel-Rumford
- -------------------------------
Lynne Harkel-Rumford, Secretary
22