EXHIBIT 10.13
THIS DEFERRED COMPENSATION PLAN (the “Plan”) is hereby adopted as of the 1st day of January, 2016, by The York Water Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (the “Plan Sponsor”).
WHEREAS, the Plan Sponsor adopt and establish a non-tax qualified plan of deferred compensation to provide additional retirement benefits for a select group of management and highly compensated employees; and
WHEREAS, the Plan Sponsor shall permit otherwise eligible employees who are Participants in any other York Water Company deferred compensation plan to terminate their participation in said plan and become a Participant in this Plan, including Account Balances from the prior plan, the Deferred Compensation Plan for Employees not Eligible for a Defined Benefit Pension Plan.
WHEREAS, effective as of January 1, 2016, the Plan Sponsor intends that the Plan shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation plan for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Plan is not intended to qualify for favorable tax treatment pursuant to Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor section or statute. This Plan is intended to comply with the requirements of Section 409A of the Code and the Treasury Regulations (as defined below) or any other authoritative guidance issued under that section.
NOW, THEREFORE, the Plan Sponsor hereby adopts the following Deferred Compensation Plan.
Definitions
For the purpose of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:
Sponsor is a member; and any other organization that is required to be aggregated with the Plan Sponsor under Section 414(o) of the Code and whose Eligible Employees are authorized to participate in this Plan by the Plan Administrator.
1.6 |
(a) |
(b) |
(c) |
dishonesty or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor or an Affiliate);
(e) |
(f) |
1.9 |
1.10 |
1.15 |
1.16 |
1.17 |
(B) a former Eligible Employee who continues to be entitled to a benefit under this Plan. A spouse or former spouse of a Participant shall not be treated as a Participant in this Plan or have an Account balance under this Plan, even if he or she has an interest in the Participant’s benefits under this Plan as a result of applicable law or property settlements resulting from legal separation or marital dissolution or divorce.
1.19 |
1.21 |
1.22 |
participate in any activity or decision relating solely to his or her individual benefits under the Plan; matters solely affecting the applicable Participant will be resolved by the remaining Plan Administrator members or by the Board.
1.23 |
1.24 |
1.25 |
1.26 |
1.28 |
Employee is entitled upon a Separation from Service will be delayed by six (6) months. A Participant meeting the definition of Specified Employee on December 31 or during a 12 month period ending December 31 will be treated as a Specified Employee for the 12 month period commencing the following April 1.
1.32 |
1.33 |
1.35 |
Selection, Enrollment, Eligibility
2.2 |
the Plan Administrator. In addition, the Plan Administrator shall establish such other enrollment requirements as it determines necessary or advisable. All elections to defer Base Salary with respect to a Plan Year shall be irrevocable, except as permitted under Section 5.8 below (Unforeseeable Emergency).
Contributions and Credits
3.2 |
all subsequent periods unless changed by the Plan Sponsor. In no case shall the Plan Sponsor credit interest of more than a six (6) percent rate in any plan year to the Participant’s Plan Sponsor Contribution Account and the Participant’s Separation from Service Account. No interest shall be credited to any Participant’s account(s) after a Separation from Service.
Vesting and Taxes
(a) |
(b) |
(c) |
(d) |
Permissible Payment Events, Changes in Time and Form of Payments, Method of Payments
5.1 |
(b) | the Participant’s Vested Account balance (including gross up as set forth in Section 5.15 below) with payment being made in a single lump sum within ninety (90) days following the date of death of the Participant (without regard to whether the Participant was a Specified Employee) to the Participant’s Beneficiary. |
is a Specified Employee, Section 1.31 such payment shall instead be made or commence six (6) months after the Participant’s Separation from Service.
5.10 |
(a) |
(B) the date is 2 ½ months after the Participant’s Separation from Service from the Plan Sponsor; and (iii) the payment is not greater than $50,000.
(b) |
Participant or Beneficiary shall have any rights whatsoever in said policy or the proceeds there from. The Plan Sponsor, or Trustee, shall be the primary owner and beneficiary of any such insurance policy or property and shall possess and may exercise all incidents of ownership therein.
(c) |
5.12 |
(i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Plan Sponsor and the Plan Administrator from further liability on account thereof.
contractual terms, the violation would not result in material harm to the Plan Sponsor, or the payment would not result in a violation of Federal securities law or other applicable laws.
The Plan Sponsor agrees that in determining the benefits payable under Section 5.3, above, that the amount of each monthly payment actually made to the Participant or his or her Beneficiary will be determined by dividing his or her Scheduled Withdrawal Account balance prior to the first payment by 240.
The Participant may request the benefit be paid over a fifteen (15) year period (180 equal payments) instead of the benefit being paid over a twenty (20) year period (240 equal payments) which is the default payment schedule. The Participant must make a written request to the Plan Sponsor no less than three (3) months prior to receiving the first payment of the benefit.
Example Without Tax Savings:
Scheduled Withdrawal Account Value at age 60 = $500,000 (Participant Separated from Service Prior to vesting of Tax Saving Multiplier)
Step 1: Actual Benefit to be paid each year: $500,000/20 years = $25,000 Step 2: Actual Benefit to be paid each month: $500,000/240 = $2,083.34
(b) The Plan Sponsor agrees that in determining the benefits payable under Sections 5.1, 5.4, 5.5, and 5.6 above, that the amount of each monthly payment actually made to the Participant or his or her Beneficiary will be determined by dividing his or her Scheduled Withdrawal Account balance prior to the first payment by 240 and then increasing the amount by the amount of federal and state income tax saved by the Plan Sponsor, if any. The savings will be calculated based on the marginal federal and state income tax bracket for the Plan Sponsor at the time the Participant initially enters the Plan.
Example With Tax Savings:
Scheduled Withdrawal Account Value at age 60 = $500,000 Corporate Marginal Tax Rate is 0.4059. Participant Separated at age 60.
Step 1: Determine Tax Savings Multiplier (1 minus Tax Bracket %, or 1-
.4059 = .5941)
Step 2: | Calculate Actual Benefit To Be Paid (Divide Account Value by the Tax Savings Multiplier, or $500,000 divided by .5941 = |
$841,609.16)
Step 3: Actual Benefit to be paid each year: $841,609.16/20 years =
$42,080.45
Step 4: | Actual Benefit to be paid each month: $841,609.16/240=$3,506.70 Beneficiary Designation |
Termination, Amendment or Modification
6.1 |
(ii) |
(b) |
(i) | All plans sponsored by the Plan Sponsor that would be aggregated with any terminated arrangements under Treasury Regulations Section 1.409A- 1(c) are terminated; |
(ii) |
(iv) |
(v) |
The Plan Sponsor also reserves the right to suspend the operation of the Plan for a fixed or indeterminate period of time.
(c) |
(i) |
(12) months following a change in control that constitutes a “change in control event” within the meaning of such term under Treasury Regulations Section 1.409A-3(i)(5); and
(iii) |
Administration
7.2 |
(b) |
(d) |
(e) |
(h) |
7.6 |
Claims Procedures
(30) | day extension. If the Plan Administrator denies the claim, it must provide to the Claimant, in writing or by electronic communication: |
(iii) |
(v) |
the case of a claim for Disability benefits) and must explain the special circumstances and provide an expected date of decision. The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Plan Administrator. The reviewer shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the benefit determination. Upon completion of its review of an adverse initial claim determination, the Plan Administrator will give the Claimant, in writing or by electronic notification, a notice containing:
(iv) |
(v) |
Unless a Claimant voluntarily avails himself or herself of the procedures set forth in Section 9.2 below, all interpretations, determinations and decisions of the Plan Administrator in respect of any claim shall be made in its sole discretion based on the applicable Plan documents and shall be final, conclusive and binding on all parties.
(e) |
provide reasonable claims procedure that would yield a decision on the merits of the claim.
(f) |
The Trust
9.3 |
Miscellaneous
10.4 |
10.7 |
10.8 |
[Signature Page Follows]
IN WITNESS WHEREOF, the Plan Sponsor has signed this Plan document as of
, 20 .
ATTEST/WITNESS | For: Participant | |
(Signature) | (Signature) | |
(Print Name) | (Print Name) | |
(Title) | ||
(Date) | ||
ATTEST/WITNESS | For: The York Water Company | |
(Signature) | (Signature) | |
(Print Name) | (Print Name) | |
(Title) | ||
(Date) |
The York Water Company
Deferred Compensation Plan For Employees Ineligible For A Defined Benefit Pension Plan
Participant Data Participation Agreement
Plan Year Initial Enrollment Form
PLEASE COMPLETE EACH FORM INCLUDED IN THIS KIT. PLEASE PRINT IN INK. UPON COMPLETION OF THIS PLAN ENROLLMENT KIT, PLEASE REVIEW TO ENSURE THAT EACH FORM IS COMPLETELY FILLED OUT AND THAT YOU HAVE SIGNED WHERE APPLICABLE. |
PARTICIPANT DATA |
INSTRUCTIONS: Please complete all information below.
(Please print)
Last Name | First Name | Middle Initial | ||
Address | City | State | Zip Code | |
Date of Birth (mm/dd/yyyy) | Date of Hire (mm/dd/yyyy) |
PARTICIPATION AGREEMENT | ||
(Please print) | ||
Last Name | First Name | Middle Initial |
The Plan Sponsor and the Plan Administrator designate the above named Eligible Employee as a Plan Participant. All capitalized terms used herein are defined in the The York Water Company Deferred Compensation Plan For Employees Not Eligible For A Defined Benefit Pension Plan..
In consideration of his or her designation as a Participant, the undersigned Eligible Employee hereby agrees and acknowledges as follows:
1. | I have received a copy of The York Water Company Deferred Compensation Plan For Employees Not Eligible For A Defined Benefit Pension Plan, as currently in effect. |
2. | I agree to be bound by all of the terms and conditions of the Plan, including the determinations of the Plan Administrator, and to perform any and all acts required by me hereunder. |
3. | I have the right to designate the Beneficiary or Beneficiaries, and thereafter to change the Beneficiary or Beneficiaries, of any death benefit payable under the Plan, by completing and delivering to the Plan Administrator a form designating his or her Beneficiary. |
4. | I understand that the Plan may have to be amended to comply with Section 409A, and I hereby agree to execute any documents necessary to make such amendments. |
5. | I understand that my participation in the Plan can have tax and financial consequences for my Beneficiaries and me. I have had the opportunity to consult with my own tax, financial and legal advisors before deciding to participate in the Plan. |
6. | I understand that my Plan benefits are subject to the claims of my Plan Sponsor’s creditors should my Plan Sponsor become bankrupt or insolvent. |
7. | I understand that the Plan Sponsor Contributions, Account Earnings and Tax Savings (if any) shall vest based on Section 4.1 of the Plan. |
8. | I understand that the Plan Agreement and any accompanying forms shall be interpreted in accordance with, and incorporate the terms and conditions required by Section 409A. I further understand that the Plan Administrator may, in its discretion, adopt such amendments to the Plan and any accompanying forms or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Plan Administrator determines are necessary or appropriate to comply with the requirements of Section 409A. Finally, I understand that the time or form of distributions that I may be allowed to elect (if any) may not be accelerated except as otherwise permitted by Section 409A. |
AGREED AND ACCEPTED BY THE PARTICIPANT | ||
Signature of Participant | Date | |
AGREED AND ACCEPTED BY THE PLAN SPONSOR | ||
For the Plan Sponsor | Date |
The York Water Company Deferred Compensation Plan For Employees Not Eligible For a Defined Benefit Pension Plan
ENROLLMENT FORM |
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(Please print)
Last Name | First Name | Middle Initial |
SECTION I: DEFERRAL ELECTIONS |
I hereby elect to defer my Base Salary as indicated below. I understand that this deferral election is subject to all of the applicable terms of the Plan, including the requirement that I may not change my election once made during a Plan Year. I understand that my election will continue until, and unless, I change my election in accordance to the provisions of the Plan. All capitalized terms used herein are defined in the The York Water Company Deferred Compensation Plan For Employees Not Eligible For a Defined Benefit Pension Plan, unless otherwise indicated by the context.
☐ | I elect to defer percent of my Base Salary as of the beginning of each Plan Year until I elect a different deferral percentage in accordance with the provisions of the Plan. |
I understand that the Company will contribute a percentage equal to my deferral election, not to exceed 5.0%, in accordance pursuant to section 3.2.
SECTION II: MARGINAL FEDERAL AND STATE TAX RATE |
The marginal federal and state tax rate for the term of this contract shall be .
SECTION III: DISTRIBUTION ELECTION |
☐ | I hereby elect that following my Separation From Service my vested benefit be paid to me, unless prohibited by 409a regulations, in one hundred and eighty (180) equal monthly payments beginning at the later of age 60 or my Separation From Service date. |
☐ | I hereby elect that following my Separation From Service my vested benefit be paid to me, unless prohibited by 409a regulations, in two-hundred and forty (240) equal monthly payments beginning at the later of age 60 or my Separation From Service date. |
I understand that distribution election changes must be made more than twelve (12) months in advance of the initial distribution date.
AGREED AND ACCEPTED BY THE PARTICIPANT | ||
Signature of Participant | Date | |
AGREED AND ACCEPTED BY THE PLAN SPONSOR | ||
For the Plan Sponsor | Date |
SECTION IV: BENEFICIARY DESIGNATION |
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I designate the Beneficiary(ies) below to receive any benefits payable under this Plan on account of my death:
PRIMARY BENEFICIARY(IES): Name | Percentage of Benefits | Relationship to Participant | Social Security Number |
CONTINGENT BENEFICIARY(IES) (Will receive indicated portions of my Vested Account balance if no primary Beneficiaries survive the Participant.)
Name | Percentage of Benefits | Relationship to Participant | Social Security Number | |||
AGREED AND ACCEPTED BY THE PARTICIPANT | ||||||
Signature of Participant | Date | |||||
AGREED AND ACCEPTED BY THE PLAN SPONSOR | ||||||
For the Plan Sponsor | Date |
Schedule 10.13
Name | Marginal Federal and State Tax Rate |
Natalee Colón | 0.4059 |
Mark A. Wheeler | 0.2889 |
Alexandra C. Chiaruttini | 0.2889 |