EHXIBIT 10.12
APPENDIX G
ENSERCH EXPLORATION, INC.
DEFERRED COMPENSATION PLAN
THIS PLAN, made and executed at Dallas, Texas by
Enserch Exploration, Inc., a Texas corporation (the
"Company"), is being established primarily for the purpose
of providing deferred compensation for a select group of
management or highly compensated employees of the Company
and its participating affiliates.
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. Unless the context
clearly indicates otherwise, when used in this Plan:
(a) "Account" means a Participant's Deferral
Account and/or Employer Account, as the case may be.
(b) "Adjustment Date" means the last day of each
calendar quarter and such other dates as the
Administrative Committee in its discretion may
prescribe.
(c) "Affiliated Company" means any corporation or
organization which together with the Company would be
treated as a single employer under Section 414 of the
Code.
(d) "Administrative Committee" means the
committee designated pursuant to Section 2.1 to
administer this Plan.
(e) "Change of Control" means a change in control
of the Company after the Transaction Date of a nature
that would be required to be reported in response to
Item l(a) of the Securities and Exchange Commission
Form 8-K, as in effect on the date hereof, 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 Rule 12b-2 of Regulation 12B under the Exchange
Act; provided that, without limitation, such a change
in control shall be deemed to have occurred if (i) 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 Company representing
20% or more of the combined voting power of the
Company's then outstanding securities ordinarily (apart
from rights accruing under special circumstances)
having the right to vote at elections of directors,
("Voting Securities"), or (ii) individuals who
constitute the Board of Directors of the Company on the
date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for
election by the Company'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
Company in which such person is named as a nominee for
director, without objection to such nomination) shall
be, for purposes of this clause (ii), considered as
though such person were a member of the Incumbent
Board, or (iii) a recapitalization of the Company
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 held 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 (iv) the shareholders
of the Company have approved an agreement to merge or
consolidate with or into another Person or an agreement
to sell or otherwise dispose of all or substantially
all of the Company's assets (including a plan of
liquidation) to a Person. For purposes of this
subsection (e), 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 Company, a subsidiary of the Company or any
employee benefit plan(s) sponsored or maintained by the
Company or any subsidiary thereof, and the term
"Independent Shareholder" shall mean any shareholder of
the Company except any employee(s) or director(s) of
the Company or any employee benefit plan(s) sponsored
or maintained by the Company or any subsidiary thereof.
(f) "Code" means the Internal Revenue Code of
1986, as amended from time to time.
(g) "Company" means Enserch Exploration, Inc., a
Texas corporation, and its successors.
(h) "Compensation Committee" means the
Compensation Committee of the Board of Directors of the
Company.
(i) "Deferral Account" means the account
established and maintained on the books of an Employer
to record a Participant's interest under this Plan
attributable to amounts credited to such Participant
pursuant to Sections 3.1, 3.2, and 3.3.
(j) "Disability" means total and permanent
disability of the Participant as determined under the
provisions of his or her Employer's group long-term
disability plan.
(k) "Effective Date" means July 1, 1997.
(l) "Election Period" means such period
immediately prior to the beginning of a Plan Year (or,
with respect to the Short Plan Year, the period
immediately prior to the Effective Date) specified by
the Administrative Committee for the making of deferral
elections for such Plan Year pursuant to Sections 3.1
and 3.2.
(m) "Eligible Employee" means any employee of an
Employer who is one of a select group of management or
highly compensated employees and (i) whose annual base
salary equals or exceeds $125,000 or (ii) whose annual
base salary equals or exceeds $100,000 and whose
position is of significant impact on the operations of
his or her Employer as determined by the Administrative
Committee in its absolute discretion.
(n) "Employer" includes the Company and any
Affiliated Company which adopts this Plan with the
consent of the Compensation Committee in accordance
with Section 6.4.
(o) "Employer Account" means the account
established and maintained on the books of an Employer
to record a Participant's interest under this Plan
attributable to amounts credited to such Participant
pursuant to Section 3.4.
(p) "Net Amount Payable" means the amount that
otherwise would be payable in cash to a Participant
absent a deferral election under Section 3.2.
(q) "Participant" means an Eligible Employee or
former Eligible Employee for whom an Account is being
maintained under this Plan.
(r) "Plan" means this Enserch Exploration, Inc.
Deferred Compensation Plan, as in effect from time to
time on and after the Effective Date.
(s) "Plan Year" means each calendar year
commencing after the Short Plan Year.
(t) "Retirement Age" means the age used as the
retirement age for the Participant under Section 216(l)
of the Social Security Act.
(u) "Short Plan Year" means the period commencing
on the Effective Date and ending on December 31, 1997.
(v) "Transaction Date" means the date of the
distribution of all shares of stock of the Company
owned by ENSERCH Corporation to the shareholders of
ENSERCH Corporation.
ARTICLE II.
PLAN ADMINISTRATION
Section 2.1 Administrative Committee. This Plan
shall be administered by an Administrative Committee
composed of at least three individuals appointed by the
Compensation Committee. Each member of the Administrative
Committee so appointed shall serve in such office until his
or her death, resignation or removal by the Compensation
Committee. The Compensation Committee may remove any member
of the Administrative Committee at any time by giving
written notice thereof to the members of the Administrative
Committee. Vacancies shall likewise be filled from time to
time by the Compensation Committee. The Administrative
Committee shall have discretionary and final authority to
interpret and implement the provisions of the Plan,
including without limitation, authority to determine
eligibility for benefits under the Plan. The Administrative
Committee shall act by a majority of its members at the time
in office and such action may be taken either by a vote at a
meeting or in writing without a meeting. The Administrative
Committee may adopt such rules and procedures for the
administration of the Plan as are consistent with the terms
hereof and shall keep adequate records of its proceedings
and acts. Every interpretation, choice, determination or
other exercise by the Administrative Committee of any power
or discretion given either expressly or by implication to it
shall be conclusive and binding upon all parties having or
claiming to have an interest under the Plan or otherwise
directly or indirectly affected by such action, without
restriction, however, on the right of the Administrative
Committee to reconsider and redetermine such action.
Section 2.2 Independent Committee. Any provision of
this Plan to the contrary notwithstanding, on and after the
date of a Change of Control, the Independent Committee
appointed by the Compensation Committee pursuant to the
provisions of the Enserch Exploration, Inc. Deferred
Compensation Trust shall be responsible for the
administration of this Plan and shall have all of the
powers, duties, responsibilities and obligations of the
Administrative Committee as provided hereunder.
ARTICLE III.
DEFERRED COMPENSATION PROVISIONS
Section 3.1 Compensation Deferral Election. During
the Election Period prior to the beginning of each Plan Year
(and the Short Plan Year), an Eligible Employee may elect to
have the payment of an amount of up to 50% of the annual
base salary otherwise payable by an Employer to such
Eligible Employee for such Plan Year (or the Short Plan
Year) deferred for payment in the manner and at the time
specified in Article IV; provided, however, that the minimum
amount that may be deferred by an Eligible Employee for a
Plan Year pursuant to this Section 3.1 is $5,000 (or such
other amount as shall be determined by the Administrative
Committee in its discretion. The amount of annual base
salary a Participant elects to defer pursuant to this
Section 3.1 shall be deducted from the Participant's pay in
substantially equal amounts over all pay periods during the
Plan Year (or Short Plan Year). All elections made pursuant
to this Section 3.1 shall be made in writing on a form
prescribed by and filed with the Administrative Committee
and shall be irrevocable; provided, however, that effective
as of the first day of any calendar quarter during a Plan
Year, an Eligible Employee may revoke his or her deferral
election and thereby suspend further salary deferrals for
the remainder of such Plan Year by providing written notice
thereof to the Administrative Committee no later than 15
days prior to the effective date of such suspension. Any
Eligible Employee who so suspends his or her salary
deferrals pursuant to this Section shall not be permitted to
elect future salary deferrals pursuant to this Section to be
effective earlier than the first day of the next Plan Year.
Section 3.2 Bonus Deferral Election. During the
Election Period prior to the beginning of the Short Plan
Year, an Eligible Employee may elect to have the payment of
an amount up to 100% of the cash portion of any future bonus
otherwise payable by an Employer during such Plan Year and
any future bonus otherwise payable with respect to services
to be performed by such Eligible Employee during such Plan
Year deferred for payment in the manner and at the time
specified in Article IV. During the Election Period prior
to the beginning of each Plan Year, an Eligible Employee may
elect to have the payment of an amount up to 100% of the
cash portion of any future bonus otherwise payable by an
Employer with respect to services to be performed by such
Eligible Employee during such Plan Year deferred for payment
in the manner and at the time specified in Article IV. Any
provision of this Plan to the contrary notwithstanding, (i)
the minimum amount that maybe deferred by an Eligible
Employee for a Plan Year (or Short Plan Year) pursuant to
this Section 3.2 shall be $5,000 (or such other amount as
shall be determined by the Administrative Committee in its
discretion) unless such Eligible Employee elects to defer in
the same Plan Year (or Short Plan Year) at least $5,000 (or
such other amount as shall be determined by the
Administrative Committee in its discretion) pursuant to
Section 3. 1, and (ii) in no event shall the amount deferred
by a Participant pursuant to this Section 3.2 exceed the Net
Amount Payable to such Participant. All elections made
pursuant to this Section 3.2 shall be made in writing on a
form prescribed by and filed with the Administrative
Committee and shall be irrevocable.
Section 3.3 Deferred Compensation Awards. The
President of the Company may enter into A Deferred
Compensation Award Agreements' with such Eligible Employees
as may from time to time be approved by the Compensation
Committee. Such Agreements shall provide for the grant of a
deferred compensation award, either fixed as to amount or
determinable pursuant to a formula, to the Eligible Employee
subject to such vesting requirements, including performance
criteria, as shall be approved by the Compensation
Committee.
Section 3.4 Employer Contributions. For each Plan
Year (and the Short Plan Year) each Employer shall credit to
the Employer Accounts as an Employer contribution such
amount, if any, to be determined by the Compensation
Committee. Any Employer contribution so determined for a
Plan Year shall be credited to Participants' Employer
Accounts at the time and in the manner described in Section
3.5.
Section 3.5 Accounts and Allocations.
(a) An Employer shall establish and maintain on its
books a Deferral Account and an Employer Account for each
Eligible Employee employed by such Employer who elects to
participate in this Plan. Each such Account shall be
designated by the name of the Participant for whom it is
established. The Administrative Committee may require
separate subaccounts to be maintained within a Participant's
Deferral Account and Employer Account.
(b) Any amount deferred for a Participant pursuant to
Section 3.1 and/or 3.2 shall be credited by the Employer to
such Participant's Deferral Account as of the date such
amount would otherwise have been paid to such Participant by
such Employer. In addition, the amount of any deferred
compensation award pursuant to Section 3.3 hereof which
vests pursuant to the terms of a Deferred Compensation Award
Agreement entered into with an Eligible Employee shall be
credited to such Participant's Deferral Account as of the
date of such vesting, if such individual is an Eligible
Employee as of the date of vesting.
(c) Any Employer contribution declared for a Plan Year
pursuant to Section 3.4 shall be credited to the Employer
Accounts of those Participants specified by the Compensation
Committee at the time and in the manner determined by the
Compensation Committee in its absolute discretion.
(d) An Employer shall continue maintaining a
Participant's Accounts as long as a positive balance remains
credited to such Accounts.
Section 3.6 Account Adjustments. As of each
Adjustment Date, the amount credited to a Participant's
Accounts as of the preceding Adjustment Date shall be
adjusted by the net investment experience of such Accounts
taking into account gain, loss and/or expenses incurred
based on the experience of the investments selected by the
Participant at the time and in the manner prescribed by the
Administrative Committee for the investment of his or her
Accounts, and then such amount shall be increased or
decreased to take into account additional deferrals and
contributions credited to and distributions made from such
Accounts since such preceding Adjustment Date. The
Administrative Committee shall have sole and absolute
discretion with respect to the number and type of investment
choices made available for selection by Participants
pursuant to this Section, the timing of Participant
elections and the method by which adjustments are made. The
designation of investment choices by the Administrative
Committee shall be for the sole purpose of adjusting
Accounts pursuant to this Section and this provision shall
not obligate the Employers to invest or set aside any assets
for the payment of benefits hereunder; provided, however,
that an Employer may invest a portion of its general assets
in investments, including investments which are the same as
or similar to the investment choices designated by the
Administrative Committee and selected by Participants, but
any such investments shall remain part of the general assets
of such Employer and shall not be deemed or construed to
grant a property interest of any kind to any Participant,
designated beneficiary or estate. The Administrative
Committee shall notify the Participants of the investment
choices available and the procedures for making and changing
investment elections.
Section 3.7 Vesting. Subject to Section 4.5, all
amounts credited to a Participant's Deferral Account shall
be fully vested and nonforfeitable at all times. Any
amounts attributable to Employer contributions made for a
Plan Year pursuant to Section 3.4 which are credited to
Participants' Employer Accounts shall be subject to such
vesting schedule as the Compensation Committee shall
establish for such contributions in its sole and absolute
discretion; provided, however, that all amounts credited to
Participants' Employer Accounts shall be 100% vested and
nonforfeitable on and after the date of a Change of Control.
ARTICLE IV.
BENEFITS
Section 4.1 Source of Benefit Payments. Benefit
payments to be made with respect to a Participant's Accounts
maintained pursuant to the Plan will be paid in cash and
will be the obligation solely of the Employer maintaining
such Accounts.
Section 4.2 Amount of Benefit Payments. The amount
payable from a Participant's Accounts shall be determined
based upon the vested amount credited to such Accounts as of
the Adjustment Date last preceding the date of payment plus
any contributions and deferrals credited to and less any
distributions or withdrawals made from such Accounts since
such Adjustment Date. The amount of each payment made with
respect to a Participant's Accounts and any forfeiture
amounts applied pursuant to Section 4.5 shall be deducted
from the balance credited to such Accounts at the time of
payment or forfeiture.
Section 4.3 Termination. Upon a Participant's
termination of employment with an Employer or Affiliated
Company for any reason other than death or transfer to
employment with another Employer or Affiliated Company, the
amount payable from such Participant's Accounts, as
determined in accordance with Section 4.2, shall be paid by
the Employer to such Participant (or, in the event of his or
her subsequent death, to the beneficiary or beneficiaries
designated by such Participant pursuant to Plan Section 4.6)
in one of the following forms as elected by the Participant
during the Participant's initial Election Period:
(a) a single lump sum to be paid as soon as
practicable following the Participant's termination of
employment or Retirement Age, as elected by the
Participant; or
(b) if the amount payable from a Participant's
Accounts is $50,000 or more as of the date of the
Participant's termination of employment, annual
installments over the period certain selected by the
Participant not to exceed 15 years commencing in
payment as soon as practicable following the
Participant's termination of employment or Retirement
Age, as elected by the Participant, with each annual
installment equal to the Account balance multiplied by
a fraction the numerator of which is one and the
denominator of which is the number of payments
remaining;
provided, however, that if a Participant who is entitled to
a delayed lump sum or installment payments hereunder
encounters an unforeseeable emergency (as determined in
accordance with Section 4.7 hereof), the Administrative
Committee, in its absolute discretion, may direct the
Employer to accelerate such portion of the delayed lump sum
or installment payments as the Administrative Committee
shall determine to be necessary to alleviate the severe
financial hardship of the Participant caused by such
unforeseeable emergency.
Section 4.4 Death. Upon a Participant's termination
of employment by reason of death, the amount payable from
such Participant's Accounts, as determined in accordance
with Section 4.2, shall be paid by the Employer to the
beneficiary or beneficiaries designated by such Participant
pursuant to Section 4.6 in one of the following forms as
elected by the Participant during the Participant's initial
Election Period:
(c) a single lump sum to be paid as soon as
practicable following the Participant's death; or
(d) if the amount payable from the Participant's
Accounts is $50,000 or more as of the date of the
Participant's death, annual installments over the
period certain selected by the Participant not to
exceed 15 years commencing in payment as soon as
practicable following the Participant's death with each
annual installment equal to the Account balance
multiplied by a fraction the numerator of which is one
and the denominator of which is the number of payments
remaining;
provided, however, that if a beneficiary of a deceased
Participant who is entitled to installment payments
hereunder encounters an unforeseeable emergency (as
determined in accordance with Section 4.7 hereof), the
Administrative Committee, in its absolute discretion, may
direct the Employer to accelerate such portion of the
installment payments as the Administrative Committee shall
determine to be necessary to alleviate the severe financial
hardship of the beneficiary caused by such unforeseeable
emergency.
Section 4.5 Option to Request Immediate Payout. In
lieu of any other benefits or payments to be made pursuant
to this Plan, each Participant (or beneficiary in the case
of a deceased Participant) shall have the right at any time
to elect a lump sum payment in an amount equal to:
(a) the amount payable from the Participant's
Accounts, determined in accordance with Section 4.2,
minus
(b) a forfeiture amount equal to 20% of (a)
above, provided, however, that if the election is made
on or within two years following the date a Change of
Control occurs, such forfeiture amount shall be
determined substituting 10% for 20%.
A Participant's election for an immediate payout pursuant to
this Section must be in the form of a written notice
provided to the Administrative Committee. The
Administrative Committee shall notify any Employer
maintaining a Participant's Accounts with respect to such
Participant of the election and the amount so determined
shall be paid to the Participant (or, in the case of a
deceased Participant, to the beneficiary or beneficiaries
designated by such Participant pursuant to Section 4.6) by
the Employers no later than fifteen days following receipt
of notice by the Administrative Committee. Any amount
remaining credited to the Participant's Accounts shall be
forfeited at the time payment is made.
Section 4.6 Designation of Beneficiaries. Any
amount payable under this Plan on account of the death of a
Participant shall be paid when otherwise due hereunder to
the beneficiary or beneficiaries designated by such
Participant. Such designation of beneficiary or
beneficiaries shall be made in writing on a form prescribed
by and filed with the Administrative Committee and shall
remain in effect until changed by such Participant by the
filing of a new beneficiary designation form with the
Administrative Committee. If a Participant fails to so
designate a beneficiary, or in the event all of the
designated beneficiaries are individuals who either
predecease the Participant or survive the Participant but
die prior to receiving the full amount payable under this
Plan, any remaining amount payable under this Plan shall be
paid to such Participant's estate when otherwise due
hereunder.
Section 4.7 Hardship Distributions. If a
Participant encounters an unforeseeable emergency, the
Administrative Committee in its absolute discretion may
direct the Employer maintaining such Participant's Accounts
to pay to such Participant and deduct from such Accounts
such portion of the amount then credited to such Accounts
(including, if appropriate, the entire amount determined in
accordance with Section 4.2) as the Administrative Committee
shall determine to be necessary to alleviate the severe
financial hardship of such Participant caused by such
unforeseeable emergency. For this purpose, an
"unforeseeable emergency" shall be a severe financial
hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a
dependent of the Participant, loss of the Participant's
property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The circumstances
that will constitute an unforeseeable emergency will depend
upon the facts of each case, but in any case, payment may
not be made to the extent that such hardship is or may be
relieved (i) through reimbursement or compensation by
insurance or otherwise, (ii) by liquidation of the
Participant's assets, to the extent liquidation of such
assets would not itself cause severe financial hardship, or
(iii) by cessation of deferrals under the Plan. No
distribution shall be made to a Participant pursuant to this
Section 4.7 unless such Participant requests such a
distribution in writing and provides to the Administrative
Committee such information and documentation with respect to
his or her unforeseeable emergency as may be requested by
the Administrative Committee.
Section 4.8 Change of Distribution Form. Each
Participant may elect at any time after a Participant's
initial Election Period, but no more often than once during
each calendar year, to change the distribution forms elected
with respect to all amounts credited to such Participant's
Accounts; provided, however, that such election shall not be
effective unless made at least twelve months preceding the
date of the Participant's termination of employment.
Section 4.9 Accelerated Distribution of Reclassified
Amounts. In the event that the Internal Revenue Service
formally assesses a deficiency against a Participant on the
grounds that an amount credited to such Participant's
Accounts under this Plan is subject to federal income tax
(the "Reclassified Amount") earlier than the time payment
otherwise would be made to the Participant pursuant to this
Plan, then the Administrative Committee shall direct the
Employer maintaining such Participant's Accounts to pay to
such Participant and deduct from such Accounts the
Reclassified Amount. No payment made to a Participant
pursuant to this Section 4.9 shall be subject to forfeiture
as provided in Section 4.5 hereof.
ARTICLE V.
AMENDMENT AND TERMINATION
Section 5.1 Amendment and Termination. The
Compensation Committee shall have the right and power at any
time and from time to time to amend this Plan, in whole or
in part, on behalf of all Employers, and to terminate this
Plan or any Employer's participation hereunder. Any
amendment to or termination of this Plan shall be made by or
pursuant to a resolution duly adopted by the Compensation
Committee and shall be evidenced by such resolution or by a
written instrument executed by such person as the
Compensation Committee shall authorize for such purpose.
Any provision of this Plan to the contrary notwithstanding,
no amendment to or termination of this Plan shall reduce the
amounts actually credited to a Participant's Accounts as of
the date of such amendment or termination, or further defer
the dates for the payment of such amounts, without the
consent of the affected Participant. Upon termination of
this Plan, the Compensation Committee, in its sole
discretion, may require the Administrative Committee to
calculate final Account balances as of such Adjustment Date
as it may prescribe, and direct each Employer to make
immediate lump sum payments to each Participant (or
beneficiary in the case of a deceased Participant) with
respect to which such Employer maintains an Account in the
amount determined to be credited to such Participant's
Accounts as of such final Adjustment Date.
Section 5.2 Change of Control. The preceding
provisions of this Article to the contrary notwithstanding,
no action taken on or after a Change of Control to amend or
terminate this Plan shall be effective unless written
consent thereto is obtained from a majority of the
Participants.
ARTICLE VI.
MISCELLANEOUS PROVISIONS
Section 6.1 Nature of Plan and Rights. This Plan is
unfunded and maintained by the Employers primarily for the
purpose of providing deferred compensation for a select
group of management or highly compensated employees of the
Employers. The Accounts established and maintained under
this Plan by an Employer are for its accounting purposes
only and shall not be deemed or construed to create a trust
fund or security interest of any kind for or to grant a
property interest of any kind to any Participant, designated
beneficiary or estate. The amounts credited by an Employer
to Accounts maintained under this Plan are and for all
purposes shall continue to be a part of the general assets
and liabilities of such Employer, and to the extent that a
Participant, designated beneficiary or estate acquires a
right to receive a payment from such Employer pursuant to
this Plan, such right shall be no greater than the right of
any unsecured general creditor of such Employer.
Section 6.2 Spendthrift Provision. No Account
balance or other right or interest under this Plan of a
Participant, designated beneficiary or estate may be
assigned, transferred or alienated, in whole or in part,
either directly or by operation of law, and no such balance,
right or interest shall be liable for or subject to any
debt, obligation or liability of such Participant,
designated beneficiary or estate.
Section 6.3 Employment Noncontractual. The
establishment of this Plan shall not enlarge or otherwise
affect the terms of any Participant's employment with an
Employer, and such Employer may terminate the employment of
such Participant as freely and with the same effect as if
this Plan had not been established.
Section 6.4 Adoption by Other Employers. With the
consent of the Compensation Committee, this Plan may be
adopted by any Affiliated Company, such adoption to be
effective as of the date specified by such Affiliated
Company at the time of adoption.
Section 6.5 Claims Procedure. If any person
(hereinafter called the "Claimant") feels that he or she is
being denied a benefit to which he or she is entitled under
this Plan, such Claimant may file a written claim for said
benefit with the Administrative Committee. Within sixty
days following the receipt of such claim the Administrative
Committee shall determine and notify the Claimant as to
whether he or she is entitled to such benefit. Such
notification shall be in writing and, if denying the claim
for benefit, shall set forth the specific reason or reasons
for the denial, make specific reference to the pertinent
provisions of this Plan, and advise the Claimant that he or
she may, within sixty days following the receipt of such
notice, in writing request to appear before the
Administrative Committee or its designated representative
for a hearing to review such denial. Any such hearing shall
be scheduled at the mutual convenience of the Administrative
Committee or its designated representative and the Claimant,
and at any such hearing the Claimant and/or his or her duly
authorized representative may examine any relevant documents
and present evidence and arguments to support the granting
of the benefit being claimed. The final decision of the
Administrative Committee with respect to the claim being
reviewed shall be made within sixty days following the
hearing thereon, and Administrative Committee shall in
writing notify the Claimant of said final decision, again
specifying the reasons therefor and the pertinent provisions
of this Plan upon which said final decision is based. The
final decision of the Administrative Committee shall be
conclusive and binding upon all parties having or claiming
to have an interest in the matter being reviewed.
Section 6.6 Reimbursement of Expenses. In the event
that a dispute arises between a Participant or beneficiary
and the Participant's Employer with respect to the payment
of benefits hereunder and the Participant or beneficiary is
successful in pursuing a benefit to which he or she is
entitled under the terms of the Plan against the
Participant's Employer or any other party in the course of
litigation or otherwise and incurs attorneys' fees, expenses
and costs in connection therewith, the Participant's
Employer shall reimburse the Participant or beneficiary for
the full amount of any such attorneys' fees, expenses and
costs.
Section 6.7 Withholding Tax. There shall be
deducted from all amounts paid under this Plan any taxes
required to be withheld by any Federal, state, local or
other government. The Participant and/or his or her
beneficiary (including his or her 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. The Participant will be required to pay to his or
her Employer the amount of any federal, state or local taxes
required by law to be withheld in connection with the Plan
in the event that such Participant is not being paid by an
Employer or amounts being paid by an Employer to such
Participant are insufficient to satisfy any such withholding
obligation.
Section 6.8 Applicable Law. This Plan shall be
governed and construed in accordance with the internal laws
(and not the principles relating to conflicts of laws) of
the State of Texas, except where superseded by federal law.
IN WITNESS WHEREOF, this Plan has been executed on this
13th day of August, 1997, to be effective as of the
Effective Date.
Enserch Exploration, Inc.
By: /s/ T. M Hamilton
Title:Chairman, President and Chief
Executive Officer