EXHIBIT 4(a)-4
AMENDMENT NO. 3
TO
PP&L
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, PP&L, Inc. ("Company") has adopted the PP&L Employee Stock
Ownership Plan ("Plan") effective January 1, 1975; and
WHEREAS, the Plan was amended and restated effective January 1, 1998, and
subsequently amended by Amendment Nos. 1 and 2; and
WHEREAS, the Company desires to further amend the Plan;
NOW, THEREFORE, the Plan is hereby amended as follows:
I. Effective September 14, 1998 the following sections of Articles II, III, IV,
V, VII, VIII, IX, X, XII and XIII are amended to read:
2.3 "Affiliated Company" or "Affiliated Companies" shall mean with respect
to any Participating Company, (a) any corporation that is a member of a
controlled group of corporations, as determined under section 414(b) of the
Code, which includes such Participating Company; (b) any member of an affiliated
service group, as determined under section 414(m) of the Code, of which such
Participating Company is a member; (c) any trade or business (whether or not
incorporated) that is under common control with such Participating Company, as
determined under section 414(c) of the Code; and (d) any other organization or
entity which is required to be aggregated with the Participating Company under
section 414(o) of the Code and regulations issued thereunder. "50% Affiliated
Company" means an Affiliated Company, but determined with "more than 50%"
substituted for the phrase "at least 80%" in section 1563(a) of the Code, when
applying sections 414(b) and (c) of the Code.
2.7 "Compensation" shall mean the annual compensation received by an
Employee from a Participating Company as reported on Internal Revenue Service
Form W-2 or a successor form plus the Employee's elective deferrals under the
Employee Savings Plan or Deferred Savings Plan; provided, however, that
Compensation shall not
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include fringe benefits not normally included in compensation, such as tuition
refunds, moving expenses, etc. and shall not, for purposes of allocation under
Section 5.2(a), include any amount in excess of (i) for the 1975 and 1976 Plan
Years, $16,000 and (ii) commencing with the 1977 Plan Year, the median annual
compensation of all Participants during the Plan Year or $100,000, whichever is
less. Such median compensation shall be determined as of the close of a Plan
Year and shall be rounded to an even thousand dollars. For an Employee
classified as a Managers Compensation Plan employee, Compensation shall also
include the full amount of any single-sum award paid to the Participant from the
fund credited annually with a percentage of annualized base pay salaries in
accordance with the Managers Compensation Plan.
2.11 "Dividend-based Contribution" shall mean the contribution made by a
Participating Company or Resources in accordance with Section 4.4.
2.14 "Employee" shall mean any person classified by a Participating Company
as an employee of such Participating Company, including officers, shareholders,
or directors who are employees, but excluding:
(a) persons covered by a collective bargaining agreement unless such
agreement specifically provides for participation under the Retirement Plan;
(b) persons classified by the Participating Company as independent
contractors, regardless of whether they are subsequently determined to be
employees for employment tax or any other purpose;
(c) persons classified by the Participating Company as leased employees,
whether or not as described in section 414(n) of the Code;
(d) persons classified by the Participating Company as specific
professional employees, cooperative associates, or college interns, as those
terms are defined under Participating Company policy.
2.26 "Participating Company" shall mean PP&L, PP&L EnergyPlus Co., and each
other Affiliated Company which is authorized by the Board to adopt this Plan by
action of its board of directors.
2.31 "Qualified Military Service" means any service (either voluntary or
involuntary) by an individual in the Uniformed Services if such individual is
entitled to reemployment rights with a Participating Company with respect to
such service.
2.34 "Returning Veteran" means a former Employee who on or after December
12, 1994, returns from Qualified Military Service to employment by a
Participating Company within the period of time during which his reemployment
rights are
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protected by law.
3.1 Eligibility.
(a) All persons who were participants in the Plan immediately prior to the
Effective Date and who are in the employ of a Participating Company on the
Effective Date shall be Participants hereunder as of such date. All Employees
as of the Effective Date (but who are not eligible to participate under the
preceding sentence) who have completed one year of Credited Service shall be
Participants as of that date. Other Employees shall become Participants on the
first day of the calendar month next following the date on which an Employee
completes one year of Credited Service, or if later, on which an individual
becomes an Employee. A "year of Credited Service," for the purposes of this
Article, shall require completion of at least 1,000 Hours of Service during the
12 months from commencement of employment. An Employee who fails to complete
1,000 Hours of Service during his initial 12 months of employment shall complete
a year of Credited Service as of the end of any Plan Year in which he completes
1,000 Hours of Service; provided, however, that the first Plan Year during which
such Employee shall have the opportunity to complete such 1,000 Hours of Service
shall include the anniversary of his commencement of employment.
(b) An Employee may elect in writing not to become a Participant by filing
such election with the Employee Benefit Plan Board.
3.4 Officers, Directors, and Shareholders. Officers, directors, and
shareholders of a Participating Company who are Participants shall participate
in the Plan on the same basis as other Participants.
4.4 Dividend-based Contribution. Commencing with the 1990 Plan Year, a
Participating Company or Resources may contribute to the Plan an amount
determined at the sole discretion of PP&L or Resources relating to the reduction
in taxes arising out of the payment of dividends to participants and the
contribution thereof to the Plan. The Dividend-based Contribution is in
addition to contributions made pursuant to Sections 4.1, 4.2 and 4.3. All
contributions by PP&L, Resources or a Participating Company are expressly
conditioned upon their deductibility for federal income tax purposes.
5.3 Allocation of Earnings. Any dividends or other distributions on the
Stock allocated to a Participant's Account shall be paid no later than 90 days
after the close of the Plan Year to the Participant in cash either by the
Trustee or directly by PP&L, a Participating Company or Resources.
5.5 Maximum Allocation. The provisions of this Section shall be construed
to comply with section 415 of the Code.
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(a) Notwithstanding anything in this Article to the contrary, in no event
shall the sum of (1) any Participating Company or Resources contributions and
other employer contributions, (2) any forfeitures and (3) the Participant's own
contributions, if any, allocated for any Limitation Year to any Participant
under this and any other defined contribution plan maintained by PP&L or any 50%
Affiliated Company, exceed the lesser of (A) $30,000 plus the lesser of $30,000
or the value of the Stock contributed to the Plan for such Plan Year or (B)
twenty-five percent (25%) of any Participant's compensation for the Limitation
Year. Amounts described in sections 415(l) and 419A(d)(2) of the Code
contributed for any Plan Year for the benefit of any Participant shall be
treated as annual additions to the extent provided in such Sections.
7.2 Death. If a Participant dies either while in the employment of a
Participating Company or after termination of employment but prior to the
commencement of benefit payments, the full amount of his interest in the Fund
shall be paid to the Participant's beneficiary in a single sum.
7.7 Timing of Distribution.
(b) A Participant who terminates employment with a Participating Company on
or after age 55, and whose Account exceeds, or exceeded at the time of any prior
distribution, $5,000, shall be entitled to defer payment of his benefits until a
date not later than that specified in Section 7.7(a)(2).
8.2 Duties and Powers of Employee Benefit Plan Board and Administrative
Committee.
(a) In addition to the duties and powers described elsewhere hereunder, the
Employee Benefit Plan Board shall have all such powers as may be necessary to
discharge its duties hereunder including but not limited to the following
specific duties and powers:
(9) to establish a claims procedure under which claims will be reviewed
by the Manager-Employee Benefits of PP&L, or such other individual as may be
designated by the Vice President-Human Resources of PP&L and under which each
claimant shall receive notice in writing in the event any claim for benefits
with respect to a Participant's participation in the Plan has been denied; such
notice shall set forth the specific reasons for such denial. Such claims
procedure shall also provide an opportunity for full and fair review by the
Administrative Committee of the Employee Benefit Plan Board;
8.3 Reliance on Reports and Certificates. The members of the Employee
Benefit Plan Board and the officers and directors of PP&L, any Participating
Company and Resources shall be entitled to rely upon all valuations,
certificates and reports made
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by the Trustee or by any duly appointed accountant, and upon all opinions given
by any duly appointed legal counsel.
8.5 Indemnification of the Employee Benefit Plan Board. Each member of the
Employee Benefit Plan Board, the Administrative Committee, and each of their
designees shall be indemnified by the Participating Companies against expenses
(other than amounts paid in settlement to which a Participating Company does not
consent) reasonably incurred by him in connection with any action to which he
may be a party by reason of the delegation to him of administrative functions
and duties, except in relation to matters as to which he shall be adjudged in
such action to be personally guilty of negligence or willful misconduct in the
performance of his duties. The foregoing right to indemnification shall be in
addition to such other rights as the member of the Employee Benefit Plan Board,
the Administrative Committee, and each of their designees may enjoy as a matter
of law or by reason of insurance coverage of any kind. Rights granted hereunder
shall be in addition to and not in lieu of any rights to indemnification to
which the member of the Employee Benefit Plan Board, the Administrative
Committee and each of their designees may be entitled pursuant to the bylaws of
PP&L. Service on the Employee Benefit Plan Board shall be deemed in partial
fulfillment of the Employee Benefit Plan Board member's function as an employee,
officer and/or director of PP&L or Resources, if he serves in such other
capacity as well.
9.5 Expenses. All expenses of administration of this Plan shall be paid
from the Fund unless they are paid directly by a Participating Company.
10.1 Amendment. PP&L reserves the power to amend the Plan at any time by or
pursuant to action of the Board of Directors. In addition, the Employee Benefit
Plan Board may make such amendments to the Plan as it deems necessary or
desirable except those amendments which substantially increase the cost of the
Plan to PP&L or a Participating Company or significantly alter the benefit
design or eligibility requirements of the Plan. Each amendment to the Plan will
be binding on each Participating Company. Except as expressly provided
elsewhere in the Plan, prior to the satisfaction of all liabilities with respect
to the benefits provided under this Plan, no such amendment or termination shall
cause any part of the monies contributed hereunder to revert to PP&L or to be
diverted to any purpose other than for the exclusive benefit of Participants and
their beneficiaries. No amendment shall have the effect of retroactively
depriving Participants of benefits already accrued under the Plan. Upon
complete termination of the Plan without establishment or maintenance of a
successor plan (other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code), Participants may receive distribution of their
Accounts. Amendments to the allocation formulas contained in Article V shall
not be made more frequently than once every six months.
10.2 Termination. The Plan and the Fund forming part of the Plan may be
terminated or contributions completely discontinued at any time by or pursuant
to action
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of the board of directors of Resources. In the event of a termination, partial
termination, or a complete discontinuance of contributions or in the event
Resources is dissolved, liquidated, or adjudicated a bankrupt, the interest of
the Participants, their estates and beneficiaries, shall be nonforfeitable and
shall be fully vested, and distributions shall be made to them in full shares of
Stock and cash in lieu of fractional shares based on the price at which the
Trustee sells such Stock or the fair market value thereof. When all assets have
been paid out by the Trustee, the Fund shall cease. Any distribution after
termination of the Plan may be made at any time, and from time to time, in whole
or in part in full shares of Stock and cash in lieu of fractional shares based
on the price at which the Trustee sells such Stock or the fair market value
thereof; provided, however, that no Stock may be distributed to a Participant
within seven years after the month in which such Stock was allocated to the
Participant's Account except in the case of the Participant's retirement, Total
Disability, death or other termination of employment with PP&L and all
Affiliated Companies. In making such distributions, any and all determinations,
divisions, appraisals, apportionments and allotments so made shall be final and
conclusive.
12.1 No Employment Rights. Neither the action of PP&L in establishing the
Plan, nor any provisions of the Plan, nor any action taken by it or by the
Employee Benefit Plan Board shall be construed as giving to any employee of a
Participating Company the right to be retained in its employ, or any right to
payment except to the extent of the benefits provided in the Plan to be paid
from the Fund.
12.2 Source of Benefits. All benefits payable under the Plan shall be paid
or provided for solely from the Fund, and neither any Participating Company nor
Resources assume liability or responsibility therefor.
12.5 Incapacity. If the Employee Benefit Plan Board deems any Participant
who is entitled to receive payments hereunder incapable of receiving or
disbursing the same by reason of age, illness or infirmity or incapacity of any
kind, the Employee Benefit Plan Board may direct the Trustee to apply such
payment directly for the comfort, support and maintenance of such Participant or
to pay the same to any responsible person caring for the Participant as
determined by the Employee Benefit Plan Board to be qualified to receive and
disburse such payments for the Participant's benefit, and the receipt of benefit
such person shall be a complete acquittance for the payment of benefit.
Payments pursuant to this Section 12.5 shall be complete discharge to the extent
thereof of any and all liability of the Participating Companies, Resources, the
Employee Benefit Plan Board, the Administrative Committee (if any), the Trustee,
and the Fund.
12.7 Voting or Tendering Stock.
(c) Confidentiality. All instructions received by the Trustee from
individual participants (or beneficiaries) pursuant to this Section 12.7 shall
be held by the
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Trustee in strict confidence and shall not be divulged or released to any
person; provided, that, to the extent necessary for the operation of the Plan or
compliance with applicable law, such instructions may be relayed by the Trustee
to a recordkeeper, auditor or other person providing services to the Plan or
responsible for monitoring compliance with applicable laws, if such person is
either:
(1) a person who is not a Participating Company or an
Affiliated Company or an employee, officer or director
of a Participating Company or an Affiliated Company and
who agrees not to divulge such instructions to any
other person, including a Participating Company, an
Affiliated Company, or employees, officers and
directors of a Participating Company or an Affiliated
Company; or
(2) a person who is an employee of a Participating Company
or an Affiliated Company, if such person is
specifically authorized by the Employee Benefit Plan
Board to receive such information pursuant to
confidentiality procedures designed to safeguard the
confidentiality of such information. The Employee
Benefit Plan Board shall be responsible for monitoring
compliance with such procedures, for the adequacy of
such procedures, and for appointing an independent
fiduciary to carry out activities relating to any
situation that, in the determination of the Employee
Benefit Plan Board, involves a potential for undue
employer influence on Participants (or beneficiaries)
with regard to their exercise of rights under this
Section 12.7.
13.1 Applicability and Effective Date. The rights of any Returning Veteran
who resumes employment with a Participating Company on or after December 12,
1994 shall be modified as set forth in this Article.
13.3 Restoration of TRASOP, PAYSOP, and Dividend-based Contributions. With
respect to any Plan Year for which a Returning Veteran would have been a
Participant, but failed to share in TRASOP, PAYSOP, or Dividend-based
Contributions under Sections 4.1, 4.3 and 4.4 solely by reason of his Qualified
Military Service, the Participating Company shall contribute to such
Participant's Account an amount equal to the TRASOP, PAYSOP, and Dividend-based
Contributions that would have been allocated to his Account, but for his absence
for Qualified Military Service. Such contribution shall not include the
earnings that would have accrued on such amount.
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13.4 Restoration of Matching Contributions.
(a) Each Returning Veteran who, during his period of Qualified Military
Service, would have been eligible to make Matching Contributions shall be
permitted to contribute an amount equal to the Matching Contributions that he
could have made during such absence from employment. Such "make-up"
contributions shall be made during the period that begins with his reemployment
by a Participating Company and ends with (1) the expiration of a period of five
years, or (2) if shorter, a period of three times the period of Qualified
Military Service.
(b) Any make-up contributions described in Subsection (a) hereof shall be
in addition to those Matching Contributions that the Participant may elect to
make pursuant to Section 4.2.
13.5 Determination of Compensation. For purposes of determining the amount
of any make-up contributions under Section 13.3 or Section 13.4 and for applying
the limits of Section 5.5, a Participant's compensation during any period of
Qualified Military Service shall be deemed to equal either:
(a) the compensation he would have received but for such Qualified Military
Service, based on the rate of pay he would have received from a Participating
Company; or
(b) if the amount described in (a) above is not reasonably certain, his
average compensation from a Participating Company during the 12-month period
immediately preceding the Qualified Military Service (or, if shorter, the period
of employment immediately preceding the Qualified Military Service). Such
amount shall be adjusted as necessary to reflect the length of the Participant's
Qualified Military Service.
II. Except as provided for in this Amendment No. 3, all other provisions of
the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment No. 3 is executed this _____ day of
________________, 1999.
PP&L, INC.
By:____________________________________
John M. Chappelear
Vice President-Investments & Pensions
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