EXHIBIT 10.12
RELIANT ENERGY, INCORPORATED
SAVINGS PLAN
(As Amended and Restated Effective April 1, 1999)
Fourth Amendment
The Benefits Committee of Reliant Energy, Incorporated (the
"Committee"), 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, in accordance with the January 9, 2002 and May 1, 2002
resolutions of the Board of Directors of the Company, effective as of the dates
specified herein, as follows:
1. Effective as of May 6, 2002, Article I of the Plan is hereby amended
to add the following new definition of "Reliant Energy Common Stock Fund" as
Section 1.56, and all subsequent definitions are hereby redesignated and all
affected references are hereby amended accordingly:
"1.56 RELIANT ENERGY COMMON STOCK FUND: An Investment Fund
that is invested and reinvested primarily in Common Stock and
constitutes an employee stock ownership plan, within the meaning of
Section 4975(e) of the Code, with such fund a part of, and included
within, the ESOP Fund and ESOP Account."
2. Effective as of July 1, 2002, the fourth sentence in the first
paragraph of Section 4.2 of the Plan is hereby amended to read as follows:
"Effective as of July 1, 2002, 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), except to the extent permitted under this Section 4.2 with
respect to Catch-Up Contributions."
3. Effective as of July 1, 2002, Section 4.2 of the Plan is hereby
amended by adding the following new paragraph after the second paragraph
thereof:
"Notwithstanding the foregoing paragraph, from and after July
1, 2002, all Employees who are eligible to make Pre-Tax Contributions
under this Plan and who have attained age 50 before the close of the
Plan Year shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Section 414(v) of
the Code ('Catch-Up Contributions') in the form and manner prescribed
by the Committee. Such Catch-Up Contributions shall not be taken into
account for purposes of the provisions of the Plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The Plan
shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of Section 401(k)(3), 401(k)(11),
401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the
making of such Catch-Up Contributions."
4. Effective as of May 6, 2002, Section 5.3(b) of the Plan is hereby
amended to read as follows:
"(b) ESOP Accounts: Other than with respect to the portion of
the ESOP Account attributable to the Reliant Energy Common Stock Fund,
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. Except as provided below with
respect to the Reliant Energy Common Stock Fund, allocations 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 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). Allocations to
the portion of the ESOP Fund that is the Reliant Energy Common Stock
Fund shall be made in accordance with Section 5.3(a)(i)."
2
5. Effective as of May 6, 2002, clauses (i) and (ii) of subsection (d)
of Section 5.3 of the Plan are hereby amended to read as follows:
"(i) Earnings of the Investment Fund: The earnings
(or loss) of the Investment Fund, including the Reliant Energy
Common Stock Fund, since the preceding Valuation Date
(including the appreciation or depreciation in value of the
assets of the Investment Fund) shall be allocated to the
Accounts of Participants (other than a terminated
Participant's Accounts which have become current obligations
of the Investment Fund) in proportion to the balances in such
Accounts on the preceding Valuation Date, but after first
reducing each such Account balance by any distribution from
such Account since the preceding Valuation Date.
(ii) Income and Appreciation in Value of Stock
Suspense Account and ESOP Accounts, Other Than the Reliant
Energy Common Stock Fund, in the Trust Fund: Other than with
respect to the Reliant Energy Common Stock Fund, the income of
the ESOP Fund shall be allocated in proportion to the
balances, as of the preceding Valuation Date, in the Stock
Suspense Account and the ESOP Accounts, but after first
reducing each such Account balance by any distributions or
charges from such Accounts since the preceding Valuation Date.
Notwithstanding anything to the contrary in the Plan, if and
to the extent that dividends credited to Participants' ESOP
Accounts are used to amortize an Exempt Loan pursuant to
Section 5.6, an interest in the ESOP Fund with a fair market
value not less than the amount of such dividends must be
allocated to the Participants' ESOP Accounts (resulting from
the release of Financed Stock attributable to such use of
dividends to amortize the Exempt Loan) for the year of payment
of such dividends to the Plan, and the Company shall make such
additional Employer Matching Contributions as are necessary to
accomplish such result. Any dividends with respect to Financed
Stock that are used to amortize an Exempt Loan shall be used
first to repay current principal and then to repay current
interest with respect to such loan."
6. Effective as of July 1, 2002, paragraph (5) of Section 5.5(d) of the
Plan is hereby amended to read as follows:
"5. Maximum Permissible Amount: Except to the extent permitted
under Section 4.2 with respect to Catch-Up Contributions and Code
Section 414(v), if applicable, for a Limitation Year, the Maximum
Permissible Amount with respect to any Participant shall be the lesser
of:
3
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."
7. Effective as of May 6, 2002, the first paragraph of Section 6.1 of
the Plan is hereby amended to add the following new sentence to the end thereof:
"The foregoing to the contrary notwithstanding, a Participant who is an
active Employee and eligible to participate in the Plan on or after May
6, 2002 shall be 100% and fully vested in the values of his Accounts as
of May 6, 2002 (if any) and in all Employer Contributions to his
Accounts made on and after May 6, 2002."
8. Effective as of May 6, 2002, Section 6.5 of the Plan is hereby
amended to read as follows:
"6.5 In-Service Distributions: A Participant may elect, in
such manner and pursuant to such rules and procedures prescribed by the
Committee, to have cash dividends paid with respect to shares of
Company Stock in the Participant's ESOP Account (1) paid in cash to the
Participant or (2) paid to the Participant's ESOP Account and
reinvested in Company Stock, in accordance with, and subject to, the
requirements of Code Section 404(k), as amended by the Economic Growth
and Tax Relief Reconciliation Act of 2001. Participants shall be
provided a reasonable opportunity to change their election at least
annually.
Otherwise, except to the extent that distribution of a
Participant's Account is required prior to termination of his
employment under Section 6.10 hereof (in the case of a Participant
whose required beginning date occurs prior to his termination of
employment) or under Section 10.5 hereof relating to termination of the
Plan, or at the election of the Participant under Article VII hereof
relating to certain withdrawals and loans, no distribution or
withdrawal of any benefits under the Plan shall be permitted prior to
the Participant's "separation from service, death or disability" within
the meaning of Code Section 401(k) and the regulations thereunder other
than a distribution authorized under the Plan upon the occurrence of an
event described in, and made in accordance with, Code Section
401(k)(10) or any successor provision of the Code."
4
9. Effective as of May 6, 2002, Section 8.1 of the Plan is hereby
amended 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, prior to May 6, 2002, 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.
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 Contributions, (ii) After-Tax Contributions,
(iii) Employer Contributions, (iv) amounts in his Prior Plan Accounts,
and (v) 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 and Employer Contributions, and (2) the
transfer of the current values in his (i) After-Tax Contribution
Account, (ii) Pre-Tax Contribution Account, (iii) Prior Plan Accounts,
(iv) Employer Matching Account, (v) Profit Sharing Account, (vi) ESOP
Account and/or (vii) 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.
Except as otherwise expressly provided herein, and subject to
Section 6.5, interest, dividends and other income and all profits and
gains produced by each
Investment Fund shall be paid in such Investment Fund, and such
interest, dividends and other income, and profits or gains without
distinction between principal and income, shall be invested and
reinvested, but only in property of the class hereinabove specified for
the particular Investment Fund. In making payments in respect of Exempt
Loans, the Trustee shall utilize income and ESOP Contributions as is
specified in Section 5.3 hereof; namely, that income shall be first
used to fund principal payments and ESOP Contributions shall be first
used to fund interest payments. All purchases of Company Stock shall be
made at prices which, in the judgment of the Trustee, do not exceed the
fair market value of such Company Stock. Pending such investment or
application of cash, the Trustee may retain cash uninvested without
liability for interest if it is prudent to do so, or may invest all or
any part thereof in Treasury Bills, commercial paper, or like holdings.
It is hereby explicitly provided and expressly acknowledged
that up to 100% of the assets of the Plan held in the Trust Fund may be
invested in Common Stock, as contemplated by the exception provided in
Section 407(b) of ERISA."
10. Effective as of May 6, 2002, Section 8.2 of the Plan is hereby
amended to read as follows:
"8.2 Diversification Election: 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, as applicable) 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."
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,
effective as of the dates specified above.
6
BENEFITS COMMITTEE OF
RELIANT ENERGY, INCORPORATED
By: /s/ David M. McClanahan
-------------------------------------
David M. McClanahan, Chairman
ATTEST:
/s/ Lynne Harkel-Rumford
- -------------------------------
Lynne Harkel-Rumford, Secretary
7