WORKING COPY OF
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE SAVINGS PLAN
AS AMENDED AND RESTATED
(EFFECTIVE EXCEPT WHERE OTHERWISE INDICATED AS OF JANUARY 1, 1989)
INCLUDING FIRST AMENDMENT
WORKING COPY OF
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE SAVINGS PLAN
AS AMENDED AND RESTATED
INCLUDING FIRST AMENDMENT
TABLE OF CONTENTS
SECTION Page
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1 PURPOSE OF PLAN 1
2 DEFINITIONS 1
3 ELIGIBILITY AND PARTICIPATION 18
4 SALARY REDUCTION AND EMPLOYEE CONTRIBUTIONS;
TESTING; ROLLOVER CONTRIBUTIONS 20
5 MATCHING CONTRIBUTIONS BY THE COMPANY 41
6 LIMITATION ON CONTRIBUTIONS 43
7 INVESTMENT OF CONTRIBUTIONS 54
8 ACCOUNTS AND PARTICIPANTS 59
9 VESTING OF INTERESTS 66
10 DISTRIBUTION OF ACCOUNTS 67
11 WITHDRAWAL BY A PARTICIPANT 75
12 ADMINISTRATION 81
13 TRUST AGREEMENT 85
14 FIDUCIARY RESPONSIBILITIES 85
15 TERMINATION OR AMENDMENT OF PLAN 88
16 GENERAL PROVISIONS 91
17 TOP HEAVY PLAN REQUIREMENTS 93
WORKING COPY OF
CONNECTICUT NATURAL GAS CORPORATION
EMPLOYEE SAVINGS PLAN
AS AMENDED AND RESTATED
(Effective except where otherwise indicated as of January 1, 1989)
INCLUDING FIRST AMENDMENT
Section 1
PURPOSE OF PLAN
1.01 The Connecticut Natural Gas Corporation (hereafter called "CNG")
Employee Savings Plan (the "Plan") is designed to (i) encourage and assist
eligible employees in a long-range program of savings, and (ii) enable them to
acquire an ownership interest in the Company. The participating employees may
use this Plan as a means of adding to their retirement income, although the
Plan permits earlier withdrawals.
1.02 This document amends and restates, effective except where otherwise
indicated as of January 1, 1989, the Plan which was originally adopted on
June 30, 1980. The purpose of this restatement is to bring the Plan into
compliance with the Tax Reform Act of 1986, as amended, and to make other
desired revisions to the Plan.
Section 2
DEFINITIONS
2.01 "Account" shall mean the account established and maintained for each
Participant's share of contributions made to the Plan, and earnings thereon,
and such term shall include the various subaccounts contemplated by Section 8,
which subaccounts are sometimes referred to as "sources of money."
2.02 "Anniversary Date" shall mean the last day of December of any year.
2.03 "Beneficiary" shall mean the beneficiary or beneficiaries entitled
to the Benefits upon the death of a Participant, as designated by the
Participant by written designation on file with the Committee, of if no such
designation shall be on file, the Participant shall be conclusively deemed to
have so designated his surviving spouse, if any, and if none, his living issue
equally, per stirpes, and if none, his estate. Notwithstanding the foregoing,
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in the event of the death of a Participant who has at least one Hour of Service
under the Plan or at least one hour of paid leave on or after August 23, 1984,
his Account shall be paid to his surviving spouse, unless (1) the spouse of the
Participant consents in writing to a different designation of Beneficiary
(including any class of beneficiaries or contingent beneficiaries), the
spouse's consent acknowledges the effect of such election, and such election
is witnessed by a Plan representative or a notary public; or (2) the
Participant does not have a spouse at the time of his death. Any consent by
a Participant's spouse shall only be effective with respect to that spouse.
2.04 "Benefits" shall mean the distributions provided for herein to each
Participant, or to his Beneficiary.
2.05 "Board of Directors" shall mean the Board of Directors of CNG.
2.06 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and as interpreted from time to time by any regulations issued
pursuant thereto, and references to any section thereof shall be deemed to
refer to the like section of any subsequent federal Internal Revenue law.
2.07 "Committee" shall mean the Administrative Committee described in
Section 12.
2.08 "Company" shall mean CNG, and any subsidiary of CNG (or any division
of CNG or its subsidiaries) which, with the consent of CNG, shall adopt this
Plan for its employees.
2.09 "Compensation" shall mean:
(a) the basic regular remuneration in the form of salary or wages
paid to an Employee for services rendered to the Company, increased by the
amount set aside by the Company under salary reduction agreement with such
Employee for contribution to this Plan or under a cafeteria plan as described
in Section 125 of the Code, and excluding commissions, bonuses, pay for
overtime or special pay, the Company's cost for any public or private employee
benefit plan including this Plan and any other form of additional compensation.
Basic regular remuneration under the foregoing sentence shall also be
determined as base salary divided by the appropriate base salary component as
stipulated in the Company's Marketing Services Commission Plans, not to exceed
actual remuneration.
(b) When "Net Compensation" is referred to herein, it shall mean
such basic regular remuneration without any increase on account of amounts set
aside under any salary reduction agreement.
(c) Effective January 1, 1989, or such earlier time as the Plan is
a Top Heavy Plan, no more than $200,000 of Compensation shall be taken into
account in the case of any Participant. The $200,000 limit shall be subject
to automatic increase in accordance with Sections 401(a)(17) and 415(d) of the
Code. For purposes of the $200,000 compensation limit, effective January 1,
1989, if any individual is a member of the family of a 5-percent owner or of
a Highly Compensated Employee in the group consisting of the ten (10) Highly
Compensated Employees paid the greatest compensation during the year, then (i)
such individual shall not be considered a separate Employee, and (ii) any
compensation paid to such individual shall be treated as if paid to such
5-percent owner or other Highly Compensated Employee. For purposes of this
Section 2.09, the term "family" shall include the spouse of the Employee, and
any lineal descendants of the Employee who have not attained age 19 before the
close of the year. The terms "5-percent owner" and "Highly Compensated
Employee" shall be defined in accordance with Section 414(q) of the Code. If
as a result of the application of such rules the adjusted $200,000 limitation
is exceeded, then the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
(d) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-
of-living adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12. The family
aggregation rules and proration rules described above shall apply as well with
respect to this limit. For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
2.10 "CNG Pension Plan" shall mean the CONNECTICUT NATURAL GAS
CORPORATION PENSION PLAN, as it may be amended hereafter.
2.11 "Continuous Service" shall mean the aggregate Periods of Employment
by the Company in any capacity which may not be disregarded under subsection
(c) of this Section and subject to the provisions of subsection (b) of this
Section.
Continuous Service shall be measured in full years and completed months,
rounded, after termination of Continuous Service, to the nearest full month (16
or more days being deemed an additional month).
Continuous Service prior to January 1, 1978 shall be computed under the
rules of the CNG Pension Plan relating to Continuous Service as in effect from
time to time, including service under those rules for The Hartford Gas Company,
The New Britain Gas Light Company and The Greenwich Gas Company.
(a) Definitions. The terms used in this Section 2.11 shall have the
following meanings:
(i) Employment Commencement Date - the day on which a person
first completes an Hour of Service in any capacity for the Company.
(ii) Reemployment Commencement Date - the day on which a
person formerly employed by the Company again first completes an Hour of
Service in any capacity for the Company.
(iii) Severance from Service Date - the first to occur of
(A) the date of quit, discharge, retirement or death, and
(B) the first anniversary of the beginning date of a
continuous period in which a person employed by the
Company in any capacity is absent from active employment
(with or without pay) other than for a cause set forth in
(A). Failure to return to active employment when due
shall constitute a quit on that date.
(iv) Period of Employment - the period of service from an
Employment or Reemployment Commencement Date to a Severance from Service
Date.
(v) Period of Severance - the period of absence from service
commencing on a Severance from Service Date and ending on the day before
the first Hour of Service is completed after such severance.
(b) Temporary Absences.
(i) If a person employed by the Company quits, is discharged
or retires, his Service shall include any continuous period of less than
twelve (12) months during which he is absent from active employment by
the Company, with or without pay (a Period of Severance or other absence)
within which less than twelve (12) month period such person returns to
active employment. If a person employed by the Company is absent for any
other reason (such as vacation, leave of absence, lay-off, etc.), and
then quits, is discharged or retires, the period of time during which he
may return and receive credit for Service (for the period between the
Severance from Service Date and the return) begins on the Severance from
Service Date and ends twelve (12) months after the first day of absence.
Continuous service shall be preserved during any leave of absence
authorized by the Company in excess of twelve (12) months, and during any
lay-off (but not in excess of two (2) years from the date of initial
absence) .
(ii) Requests for leaves of absence shall be dealt with by the
Company on a uniform, nondiscriminatory basis.
(iii) Military Service: Military service in the armed forces
of the United States while reemployment rights are protected by law shall
be deemed to be authorized leave of absence expiring with the expiration
of such reemployment rights. Furthermore, during any such period of
military service and thereafter while reemployment rights are so
protected, Continuous Service shall be counted to the extent required by
such law.
(iv) Absence due to Disability: Continuous Service shall be
preserved during any period of disability.
Any period of disability during which a person receives sick leave
in accordance with the Company's established sick leave policy (other
than under the Company's Long Term Disability Plan) shall be counted as
Continuous Service. Any other period of disability (including while a
person is receiving benefits under the Company's Long Term Disability
Plan) shall be deemed to be authorized leave of absence expiring upon
recovery from disability, including the counting of Continuous Service
for the balance of the first twelve (12) months of any disability.
As used in this clause (iv), disability shall mean the inability by
reason of physical or mental illness or injury to perform the normal
duties of one's employment by the Company or any other comparable
employment. The Committee may, no more frequently than once each three
months, require an Employee to undergo a physical examination at Company
expense by a medical doctor, registered nurse or paramedic selected by
the Committee to verify the continuation of a disability. If an Employee
shall refuse to submit to such examinations, he will be deemed to have
quit.
(v) Change in Job Category: Any period during which a person
is employed by CNG or any of its subsidiaries, but not as an Employee
within the meaning of Section 2.14, shall be considered as Continuous
Service.
(vi) Less Than Full Time Employment: All periods of less than
full time employment will count as Continuous Service so long as there is
no Severance from Service.
(vii) If an individual is considered to be employed by the
Company pursuant to Section 414(n) of the Code, then he shall receive
credit for Continuous Service pursuant to this Section 2.11 as if he were
employed by the Company.
(viii) In the case of a person who is absent from employment
for any period (1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption
of such child by the individual, or (4) for purposes of caring for such
child for a period immediately following such birth or placement,
Continuous Service shall be preserved for a period of twelve (12) months
measured from the date which would otherwise constitute the Severance
from Service; provided that such period shall not be counted as
Continuous Service.
(c) Reinstatement of Service. Upon reemployment by the Company,
the following rules shall apply:
(i) Prior to beginning of vesting:
(1) In the event a person who had not attained any vested
interest under Section 9.03 on his Severance from Service date is reemployed
after a period of absence of less than a complete twelve (12) months or of
lesser duration than his prior Continuous Service, he shall be reinstated in
his prior Continuous Service.
(2) In the event a person who had not attained any such
vested interest on his Severance from Service date is reemployed after a period
of absence of a complete twelve (12) months duration and of equal or greater
duration than his prior Continuous Service, his prior Continuous Service shall
be disregarded unless, effective January 1, 1985, his period of absence is less
than five (5) years, in which case it shall not be disregarded.
(ii) After beginning of vesting: In the event a person who had
attained any such vested interest on his Severance from Service date is
reemployed at any time, his Continuous Service shall be reinstated.
(d) The manner of determining Continuous Service hereunder shall be
consistent with the manner of so doing under the CNG Pension Plan, except that
the special rule set forth therein relating to the counting of service for
vesting purposes with G. Fox & Company (The May Company) shall not apply.
2.12 "Disability" shall mean total and permanent disability within the
meaning of the CNG Pension Plan, and any final determination of disability
under said Plan of a Participant who is also a member of said Plan shall be
conclusive for purposes of this Plan and shall be binding upon the Company and
the Participant. Disability shall be determined without regard to any
applicable age requirement under the CNG Pension Plan.
2.13 "Effective Date" shall mean the effective date of this restatement,
which is January 1, 1989 unless otherwise indicated.
2.14 "Employee" shall mean any individual who is actively employed and
compensated by the Company and who is on the Management Payroll of the Company
or is subject to the Company Salary Administration Program. The term shall
also include any individual whose employment by the Company is subject to the
terms of a collective bargaining agreement between the Company and employee
representatives, but only if participation in the Plan is specifically provided
for in the collective bargaining agreement for said employees.
2.15 "Fiscal Year" shall mean the fiscal year of the Company.
2.16 "Highly Compensated Employee" shall mean any individual who is a
Highly Compensated active Employee or Highly Compensated former Employee.
(a) A Highly Compensated active Employee includes any Employee who
performs service for the Company during the determination year and who, during
the look-back year: (i) received compensation (as defined in Section 414(q)(7)
of the Code) from the Company in excess of $75,000 (as adjusted pursuant to
Section 415(d) of the Code); (ii) received compensation (as defined in
Section 414(q)(7) of the Code) from the Company in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Company and
received compensation (as defined in Section 414(q)(7) of the Code) during such
year that is greater than 50 percent of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee also
includes: (i) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 Employees who received the most compensation
from the Company during the determination year; and (ii) Employees who are 5
percent owners at any time during the look-back year or determination year.
(b) If no officer has satisfied the compensation requirement of
(a)(iii) above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly Compensated
Employee.
(c) For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the prior Plan Year.
(d) A Highly Compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Company during the
determination year, and was a Highly Compensated active Employee for either the
separation year or any determination year ending on or after the Employee's
55th birthday.
(e) If an Employee is, during a determination year or look-back
year, a family member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of compensation paid by the Company
during such year, then the family member and the 5 percent owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the family
member and 5 percent owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving compensation and plan contributions or
benefits equal to the sum of such compensation and contributions or benefits
of the family member and 5 percent owner or top-ten Highly Compensated
Employee. For purposes of this Section, "family member" includes the spouse,
lineal ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
(f) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated as
officers and the compensation that is considered, will be made in accordance
with Section 414(q) of the Code and the regulations thereunder.
2.17 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, directly or indirectly,
or entitled to be paid by the Company
(i) on account of services as an Employee;
(ii) on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence,
provided that not more than 501 Hours of Service shall be credited under
this clause (ii) for any single continuous period (whether or not such
period occurs in a single computation period);
(iii) as a result of any award of back pay, without regard to
mitigation of damages;
(b) Each hour which an Employee would have normally been scheduled
to work during absence from service while in the Armed Services of the United
States and during such period as reemployment rights are protected under the
Selective Service Act, but only if such Employee returns to service with the
Company within the time after discharge from the Armed Services as reemployment
rights are so protected; and
(c) Solely for purposes of determining whether an Employee has
incurred a Break in Service, and in addition to any other Hours of Service
credited hereunder, each hour which an Employee would normally have been
scheduled to work but for absence (l) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual, or (4) for purposes of
caring for such child for a period beginning immediately following such birth
or placement. If the Committee is unable to determine the hours described in
this paragraph (c), it shall credit 8 hours for each day of absence. The total
number of hours to be credited pursuant to this paragraph (c) shall not exceed
501 hours. These hours shall be credited in the Plan Year in which the absence
from work begins, if necessary in order to prevent a Break in Service from
occurring in that Plan Year; and otherwise in the Plan Year immediately
following; and
(d) Each hour for which an individual employed by CNG or any of its
subsidiaries would have received credit for an Hour of Service under the
preceding rules but for the fact that he was employed in a job category not
included in the definition of Employee set forth in Section 2.14, and each hour
for which an individual would have received credit for an Hour of Service under
such rules but for the fact that, rather than being employed by the Company,
he was an employee of a corporation or other entity which at that time was a
member of a controlled group, determined pursuant to Section 414(b) and (c) of
the Code, of which controlled group CNG was also then a member, or he was an
employee of a member of an affiliated service group (as defined in
Section 414(m) of the Code) with the Company, or any other entity required to
be aggregated with the Company pursuant to Section 414(o) of the Code. If an
individual is considered to be employed by the Company pursuant to Section
414(n) of the Code, then he shall also receive credit for Hours of Service
pursuant to this Section 2.17 as if he were employed by the Company, but he
shall not be entitled to participate.
(e) Each hour shall be credited for the Computation Period for which
earned or for which payment was made or awarded. No hour shall be credited
more than once, and hours worked at premium pay rates shall be counted the same
as regular time hours. In lieu of maintenance of actual Hours of Service
records for all or any class of individuals entitled to Hours of Service credit
hereunder, credit may be given for 45 Hours of Service for each week for which
credit would be required for at least one Hour of Service under this Section.
Any uncertainties regarding the crediting of hours shall be resolved in
accordance with regulations of the U.S. Department of Labor (currently Section
2530.200b-2 et. seq.), where applicable, and in the absence of regulations,
under uniform, non-discriminatory practices adopted by the Committee.
2.18 "Normal Retirement Date" of each Participant shall mean the first
day of the calendar month next following the date he attains age 65.
2.19 "Participant" shall mean any eligible Employee who elects to make
contributions under the Plan. If an Employee is eligible to participate but
does not elect to have salary reduction contributions made on his behalf or to
make employee after-tax contributions, he shall nevertheless be considered to
be a Participant who is reducing zero percent (0%) of his salary or
contributing zero percent (0%) on an after-tax basis.
2.20 "Payroll Period" shall mean any period on account of which
Compensation is paid to a Participant.
2.21 "Plan Year" shall mean the fiscal period on which the records of the
Plan are maintained and shall be the twelve (12) month period ending with an
Anniversary Date.
2.22 "Trust" shall mean the Trust created by the Company pursuant to this
Agreement for the purpose of receiving and investing contributions to the Plan
and income and gain therefrom, and Trustee shall mean the trustee from time to
time administering the Trust.
2.23 "Trust Fund" shall mean the assets of the Trust consisting of all
contributions thereto and earnings and gains thereon, net of investment losses
and net of expenses of the Trust not paid for by the Company, less amounts
withdrawn by or distributed to Participants or their Beneficiaries.
2.24 "Change Date" shall mean January 1, April 1, July 1 and October 1
of each year.
2.25 "Valuation Date" shall mean the date as of which a Participant's
Account is valued hereunder, as determined in accordance with the provisions
of Section 8.
2.26 Whenever the context requires, the masculine gender herein shall
include the feminine and the singular form shall include the plural.
Section 3
ELIGIBILITY AND PARTICIPATION
3.01 Each Employee shall be eligible to become a Participant hereunder
on the last to occur of the following:
(a) when he has been employed by the Company one year or more;
(b) when he has completed 1,000 or more Hours of Service during the
twelve (12) months beginning on the day of his first Hour of Service, or if he
does not complete 1,000 or more Hours of Service during such twelve (12)
months, when he first completes 1,000 or more Hours of Service during any Plan
Year beginning after the day he completes his first Hour of Service;
(c) when he attains the age of twenty-one (21) years; and
(d) when he becomes an Employee within the meaning of Section 2.14.
3.02 Participation in the Plan shall cease when the Participant ceases
to be an Employee. A rehired Employee who retains any Continuous Service from
his prior period of employment shall be eligible to resume active participation
hereunder on his date of rehire. Any other rehired Employee must again satisfy
the requirements of Section 3.01.
3.03 An Employee who is eligible may elect to participate in the Plan by
executing such authorization forms as shall be prescribed for that purpose by
the Company. Such forms shall consist generally of a salary reduction
agreement and a payroll deduction election to be executed and delivered to the
Company (which shall inform the Committee of such authorization and any changes
therein or suspensions thereof). The time or times within which an eligible
Employee may elect to participate in the Plan shall be governed by the
applicable Plan provisions relating thereto.
3.04 Unless otherwise provided by the Committee, participation in the
Plan shall commence as of the first full payroll period of the month following
the date upon which the Employee satisfies the requirements for eligibility,
provided that the Company has received the notice referred to in Section 3.03
at least fifteen (15) days prior to the commencement of that payroll period.
An Employee who does not elect to participate at that time may elect to
participate as of the first full payroll period coincident with or next
following any subsequent Change Date, provided that the Company has received
the notice referred to in Section 3.03 at least fifteen (15) days prior to the
applicable Change Date.
Section 4
SALARY REDUCTION AND EMPLOYEE CONTRIBUTIONS;
TESTING; ROLLOVER CONTRIBUTIONS
4.01 Each Participant shall, by salary reduction agreement and payroll
deduction authorization, cause to be contributed to the Plan the amount that
may be authorized by him in the manner provided for by Section 3.03. Unless
otherwise permitted under rules prescribed by the Committee, the following
limitations shall apply to such contributions:
(a) Contributions which are matched by the Company, or "Mandatory
CODA" contributions, shall be permitted only at levels of 2%, 3%, 4-1/2%, or
6% of a Participant's Compensation, but in no event in excess of the amount
matched by the Company in accordance with Section 5.01.
(b) Additional unmatched contributions (referred to as "Voluntary
CODA" contributions) are permitted in whole percentage amounts between 1% and
10% of a Participant's Compensation.
(c) Voluntary unmatched after-tax contributions are permitted in
whole percentage amounts of between 1% and 10% of such Participant's
Compensation. The maximum amount of voluntary unmatched after-tax
contributions which may be made by payroll deduction on account of any calendar
year shall be 10% of such Participant's Compensation for such Year, except that
if the Company shall have in effect for the same Participants more than one
employee retirement plan which is "qualified" under Section 401(a) of the Code,
voluntary (unmatched) contributions by a Participant during any year to all
such plans including this Plan shall not exceed ten percent (10%) of such
Participant's Compensation for such Year.
(d) Subject to the limits under Section 415 of the Code, the maximum
amount of such contributions which may be made on account of any calendar year
shall be the sum of the amounts allowed under paragraphs (a), (b) and (c).
(e) Any contribution amounts shall be set as a whole percentage of
the Participant's Compensation; except that Participants who are eligible for
at least a 4-1/2% of Compensation match shall be entitled to contribute at that
level as Mandatory CODA contributions by salary reduction.
(f) Effective April 1, 1993, any reference to "Mandatory CODA" and
"Voluntary CODA" contributions shall be deleted, and shall be replaced by the
term "CODA" contributions (or "salary reduction" contributions). CODA
contributions may be made in whole percentage amounts of between 1% and 16% of
a Participant's Compensation. However, Participants who are entitled to at
least a 4 1/2% match under Section 5.01(b) shall be entitled to have CODA
contributions made at the 4 1/2% level.
4.02 A Participant may change the amounts of his authorized salary
reduction and payroll deduction (within the limits specified in Section 4.01)
as of the first full Payroll Period coincident with or following a Change Date,
provided that the Company has received notice of such change at least fifteen
(15) days prior to the applicable Change Date. Unless otherwise prescribed by
the Committee, only one change may be made in any twelve (12) month period.
A change in both authorized salary reduction and payroll deduction amounts may
be made at the same time. A Participant may suspend his salary reduction and
payroll deduction authorization at any time, provided that at least fifteen
(15) days prior written notice is given to the Company. Such suspension shall
be effective as of the beginning of the first Payroll Period of the month
coincident with or next following the expiration of the fifteen (15) day notice
period. Unless otherwise provided by the Committee, a Participant who has
suspended his contributions may re-enter the Plan as of the first day of the
first full Payroll Period coincident with or next following a subsequent Change
Date, provided that the suspension has been in effect for a period of at least
three (3) months on that subsequent Change Date and the Company has received
notice thereof at least fifteen (15) days prior to that subsequent Change Date.
Notwithstanding the foregoing, if a Participant becomes eligible for an
increased match due to satisfaction of the age or service requirements, he may
increase his Mandatory CODA contribution or, effective April 1, 1993, his CODA
contribution without regard to the limit that one change be made in a twelve
(12) month period, provided that such increase is made as of the date the
Participant first becomes eligible for such increased match.
4.03 Without becoming subject to the limitations of Section 4.02, a
Participant may, by written notice to the Company, suspend or change the amount
of his authorized salary reduction and payroll deduction for any period or
periods during which
(a) he is on authorized leave of absence at less than full pay; or
(b) no contributions are made under the Plan by the Company. Any
such suspension or change shall become effective with the beginning of the
Payroll Period following receipt of such notice by the Company.
4.04 If a Participant remains an Employee but ceases to receive
Compensation, his salary reduction and payroll deduction shall be automatically
suspended.
4.05 Commencing January 1, 1982, Participant contributions to this Plan
which (i) are not made pursuant to salary reduction agreement and (ii) are not
matched by Employer contributions and (iii) otherwise conform to applicable
Code requirements, (a) shall be treated as qualified voluntary employee
contributions as contemplated by Code Section 219, and (b) shall not be
included as voluntary (unmatched) contributions in applying the limitations of
Section 4.01(c) on voluntary (unmatched) contributions. The Committee shall
establish procedures (including time limits) consistent with applicable law
whereby Participants may designate any part or all of such contributions made
during a calendar year as not being qualified voluntary employee contributions.
Once during each calendar year a Participant may make one contribution to the
Plan, other than through payroll deduction, which contribution will be subject
to the overall limitations of Section 4.01, will be treated as qualified
voluntary employee contribution and will not in any event be subject to
matching contribution by the Company. No contributions may be made to the Plan
pursuant to this Section 4.05 after December 31, 1986.
4.06 In the event the total Company contributions (including salary
reduction contributions, matching contributions, and any top-heavy
contributions) made for any Plan Year exceed fifteen percent (15%) of the total
W-2 earnings of all Participants, or such lesser or greater percentage of total
compensation paid to Participants during such Plan Year as may from time to
time qualify for deduction from gross income under the provisions of the Code,
then the Company shall arrange for a limitation on the amount of salary
reduction contributions, or shall suspend such contributions entirely, in order
that such limitation is not exceeded.
4.07 (a) No Participant shall be permitted to have Elective Deferrals
made under this Plan, or any other qualified plan maintained by the Company,
during any taxable year of the Participant, in excess of the dollar limitation
contained in Section 402(g) of the Code in effect at the beginning of such
taxable year. This amount is $7,000 for 1987, $7,313 for 1988, $7,627 for
1989, and as indexed thereafter.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by notifying the
Administrator on or before March 1 of the following taxable year of the amount
of the Excess Elective Deferrals to be assigned to the Plan, and certifying
such amounts are Excess Elective Deferrals. If a Participant has Excess
Elective Deferrals under this Plan and other plans of the Company, however,
then the Participant shall be deemed to have made such designation. An
Employee who has Excess Elective Deferrals for a taxable year may receive a
corrective distribution of Excess Elective Deferrals during the same year,
provided that the corrective distribution is made after the date on which the
Plan received the Excess Elective Deferral, and the Plan designates the
distribution as a distribution of Excess Elective Deferrals.
(c) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose account Excess
Elective Deferrals were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year, or on whose behalf Excess Elective
Deferrals are deemed to have been claimed.
(d) Definitions:
(1) "Elective Deferrals" shall mean any Company contributions
made to the Plan at the election of the Participant, in lieu of cash
compensation, and shall include contributions made pursuant to a wage or
salary reduction agreement or other deferral mechanism. With respect to
any taxable year, a Participant's Elective Deferral is the sum of all
Company contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Section 401(k)
of the Code, any simplified employee pension cash or deferred arrangement
as described in Section 402(h)(1)(B), any eligible deferred compensation
plan under Section 457, any plan as described under Section 501(c)(18),
and any employer contributions made on the behalf of a Participant for
the purchase of an annuity contract under Section 403(b) pursuant to a
salary reduction agreement.
(2) "Excess Elective Deferrals" shall mean those Elective
Deferrals that are includible in a Participant's gross income under
Section 402(g) of the Code to the extent such Participant's Elective
Deferrals for a taxable year exceed the dollar limitation under such Code
Section.
(e) Determination of income or loss: Excess Elective Deferrals
shall be adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Elective Deferrals under this Plan is the
sum of: (1) income or loss allocable to the Participant's Pre-Tax Account for
the taxable year multiplied by a fraction, the numerator of which is such
Participant's Excess Elective Deferrals for the year and the denominator is the
Participant's Pre-Tax Account without regard to any income or loss occurring
during such taxable year; and (2) ten percent of the amount determined under
(1) multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Notwithstanding the foregoing, effective for periods beginning after taxable
years beginning on or after January 1, 1992, no income or loss shall be taken
into account for the period between the end of the Participant's taxable year
and the date of distribution.
4.08 (a) The Actual Deferral Percentage (hereinafter "ADP") for
Participants who are Highly Compensated Employees for each Plan Year and the
ADP for Participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(1) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants who
are Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants who
are Non-highly Compensated Employees for the same Plan Year multiplied by
2.0, provided that the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who are Non-highly
Compensated Employees by more than two (2) percentage points.
(b) Special Rules:
(1) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have salary reduction
contributions allocated to his or her accounts under two or more
arrangements described in Section 401(k) of the Code, that are maintained
by the Company, shall be determined as if such contributions were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate
if mandatorily disaggregated under regulations under Section 401(k) of
the Code.
(2) In the event that this Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with
one or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ADP of
employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant who
is a 5-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the salary reduction contributions and
compensation of such Participant shall include the salary reduction
contributions and compensation for the Plan Year of Family Members (as
defined in Section 414(q)(6) of the Code). Family Members, with respect
to such Highly Compensated Employees, shall be disregarded as separate
employees in determining the ADP both for Participants who are Non-highly
Compensated Employees and for Participants who are Highly Compensated
Employees.
(4) For purposes of determining the ADP test, salary reduction
contributions must be made before the last day of the twelve-month period
immediately following the Plan Year to which contributions relate.
(5) The Company shall maintain records sufficient to
demonstrate satisfaction of the ADP test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
(c) "Actual Deferral Percentage" shall mean, for a specified group
of Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the amount of Company
contributions actually paid over to the trust on behalf of such Participant for
the Plan Year to (2) the Participant's compensation for such Plan Year.
Company contributions on behalf of any Participant shall include: (1) any
Elective Deferrals made pursuant to the Participant's salary reduction
election, including Excess Elective Deferrals of Highly Compensated Employees,
but excluding (a) Excess Elective Deferrals of Non-highly Compensated Employees
that arise solely from Elective Deferrals made under the Plan or Plans of the
Company and (b) Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied both with and
without exclusion of these Elective Deferrals).
(d) Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed more than
2-1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the Company with
respect to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each of such employees. Excess Contributions
shall be allocated to Participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code in proportion to the
Elective Deferrals (and amounts treated as such) of each family member that is
combined to determine the combined ADP.
(e) Determination of Income or Loss: Excess Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Contributions is the sum of: (1) income or loss
allocable to the Participant's Pre-Tax Account for the Plan Year multiplied by
a fraction, the numerator of which is such Participant's Excess Contributions
for the year and the denominator is the Participant's Pre-Tax Account without
regard to any income or loss occurring during such Plan Year; and (2) ten
percent of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of
such month. Notwithstanding the foregoing, effective for periods beginning
after Plan Years beginning on or after January 1, 1992, no income or loss shall
be taken into account for the period between the end of the Plan Year and the
date of distribution.
(f) Accounting for Excess Contributions: Excess Contributions shall
be distributed from the Participant's Pre-Tax Account for the Plan Year.
(g) "Excess Contributions" shall mean, with respect to any Plan
Year, the excess of:
(1) The aggregate amount of Company contributions actually
taken into account in computing the ADP of Highly Compensated Employees
for such Plan Year, over
(2) The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest of
such percentages).
4.09(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and the
ACP for Participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants who
are Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants who
are Non-highly Compensated Employees for the same Plan Year multiplied by
two (2), provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for participants who are
Non-highly Compensated Employees by more than two (2) percentage points.
(b) Special Rules:
(1) Multiple Use: If one or more Highly Compensated Employees
participate in both a Section 401(k) arrangement and a plan subject to
the ACP test maintained by the Company and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the ACP of those Highly Compensated
Employees who also participate in a Section 401(k) arrangement will be
reduced (beginning with such Highly Compensated Employee whose ACP is the
highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage Amounts is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
either the ADP or ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the Non-highly Compensated
Employees. The restrictions on multiple use are effective January 1,
1989.
(2) For purposes of this Section, the Contribution Percentage
for any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his Account
under two or more plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code that are maintained
by the Company, shall be determined as if the total of such Contribution
Percentage Amounts were made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under regulations under
Section 401(m) of the Code.
(3) In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with
one or more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the Contribution
Percentage of employees as if all such plans were a single plan. For
Plan Years beginning after December 31, 1989, plans may be aggregated in
order to satisfy Section 401(m) of the Code only if they have the same
Plan Year.
(4) For purposes of determining the Contribution Percentage of
a Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and compensation of such Participant shall include the
Contribution Percentage Amounts and compensation for the Plan Year of
Family Members (as defined in Section 414(q)(6) of the Code. Family
Members, with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the Contribution
Percentage both for Participants who are Non-highly Compensated Employees
and for Participants who are Highly Compensated Employees.
(5) For purposes of determining the Contribution Percentage
test, Employee Contributions are considered to have been made in the Plan
Year in which contributed to the trust. Matching contributions will be
considered made for a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the close of the Plan
Year.
(6) The Company shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of Elective
Deferrals used in such test.
(7) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(c) Definitions:
(1) "Aggregate Limit" shall mean the greater of (1) or (2)
below, where (1) equals the sum of (i) 125 percent of the greater of (A)
the ADP of the Non-highly Compensated Employees for the Plan Year or (B)
the ACP of Non-highly Compensated Employees under the Plan subject to
Code section 401(m) for the Plan Year beginning with or within the Plan
Year of the CODA, and (ii) two plus the lesser of (A) or (B) above, but
in no event more than twice the lesser of (A) or (B) above; and (2)
equals the sum of (i) 125 percent of the lesser of (A) or (B) above, and
(ii) two plus the greater of (A) or (B) above, but in no event more than
twice the greater of (A) or (B) above.
(2) "Average Contribution Percentage" shall mean the average
of the Contribution Percentages of the Eligible Participants in a group.
(3) "Contribution Percentage" shall mean the ratio (expressed
as a percentage) of the Participant's Contribution Percentage Amounts to
the Participant's compensation for the Plan Year.
(4) "Contribution Percentage Amounts" shall mean the sum of
the Employee Contributions and Matching Contributions made under the Plan
on behalf of the Participant for the Plan Year. The Company also may
elect to use Elective Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Elective Deferrals are used in the
ACP test and continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
(5) "Eligible Participant" shall mean any Participant who is
eligible to participate hereunder.
(6) "Employee Contribution" shall mean any contribution made
to the Plan by or on behalf of a Participant that is included in the
Participant's gross income in the year in which made and that is
maintained under a separate account to which earnings and losses are
allocated.
(7) "Matching Contribution" shall mean a Company contribution
made to this or any other defined contribution plan on behalf of a
Participant on account of an Employee Contribution made by such
Participant, or on account of a Participant's wage or salary deferral,
under a plan maintained by the Company.
(d) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the family
member aggregation rules of Section 414(q)(6) of the Code shall be allocated
among them in proportion to the Employee and Matching Contributions (or amounts
treated as Matching Contributions) of each family member that is combined to
determine the combined ACP. If such Excess Aggregate Contributions are dis-
tributed more than 2-1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be imposed on the
Company with respect to those amounts.
(e) Determination of Income or Loss: Excess Aggregate Contributions
shall be adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Aggregate Contributions is the sum of: (1)
income or loss allocable to the Participant's Employee Contributions and
Earnings Accounts, and Employee Common Stock Account for the Plan Year,
determined separately for each type of contribution, and then each to be
multiplied by a separate fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year attributable to that type of
contribution (determined pursuant to paragraph (g) below) and the denominator
is the Participant's Account balance attributable to that type of
contribution, without regard to any income or loss occurring during such Plan
Year, with such amounts to then be added together; and (2) ten percent of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
Notwithstanding the foregoing, effective for periods beginning after Plan Years
beginning on or after January 1, 1992, no income or loss shall be taken into
account for the period between the end of the Plan Year and the date of
distribution. Effective January 1, 1993, the term "Employee Contributions and
Earnings Accounts" shall be replaced by the term "Employee After-Tax
Contribution Account" and the term "Employee Common Stock Account" shall be
replaced by the term "Company Matching Account."
(f) Forfeitures of Excess Aggregate Contributions: Forfeitures of
Excess Aggregate Contributions shall be applied to reduce Company contributions
hereunder.
(g) Accounting for Excess Aggregate Contributions: If any Excess
Aggregate Contributions on behalf of a Highly Compensated Employee are
attributable to Employee Contributions, then such Excess Aggregate
Contributions shall be distributed from the Participant's Employee
Contributions and Earnings Accounts to the extent this will eliminate Excess
Aggregate Contributions. Effective January 1, 1993, the term "Employee
Contributions and Earnings Accounts" in the preceding sentence shall be
replaced by the term "Employee After-Tax Contribution Account." If any Excess
Aggregate Contributions still exist, then such Excess Aggregate Contributions
shall be forfeited, if forfeitable or distributed from the Participant's
Employee Common Stock Account (or, effective January 1, 1993, the Participant's
Company Matching Account).
(h) "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of:
(1) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such Plan
Year, over
(2) The maximum Contribution Percentage Amounts permitted by
the ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
4.10 (a) If during the course of the Plan Year the Company determines
that the ADP or ACP tests may not be met, the Company may take appropriate
action by limiting salary reduction contributions and/or payroll deduction
contributions by Highly Compensated Employees in order that the Plan meet one
of the percentage tests described earlier.
(b) In performing the ADP and ACP tests, the Administrator may elect
to (1) take into account compensation while the individual is an eligible
Participant in the Plan for the Plan Year, and (2) use any definition of
compensation that satisfies Section 414(s) of the Code; provided that all
Participants are treated on a uniform basis for the Plan Year.
(c) If, after corrections are made for Excess Deferrals, Excess
Contributions, and Excess Aggregate Contributions, the Administrator determines
that the effective rate of match for any Highly Compensated Employee exceeds
the appropriate rate of match provided under the Plan to such Participant, then
such excess matching contributions shall be forfeited immediately, without
regard to the Plan's otherwise applicable vesting schedule, and utilized to
reduce future Company contributions.
4.11 Sections 4.07, 4.08 , 4.09 and 4.10 are effective except where
otherwise indicated as of January 1, 1987.
4.12 Effective January 1, 1993, a Participant may contribute to the Plan,
or have transferred directly on his behalf from another qualified plan, cash
amounts which constitute an "eligible rollover distribution" as defined in
Section 402(c)(4) of the Code. In the case of amounts which the Participant
contributes by way of rollover, such amount must be received by the Trustee
within sixty (60) days of the Participant's receipt of the distribution. Only
cash may be rolled over or transferred directly, and no property transfers will
be accepted. In no event shall the portion of any distribution that represents
the return of after-tax contributions be transferred or rolled over.
Section 5
MATCHING CONTRIBUTIONS BY THE COMPANY
5.01 The Company shall contribute for the benefit of each Participant,
an amount equal to the amount of his salary reduction for the Payroll Period,
plus the lesser of (A) his "Mandatory CODA" salary reduction contributions for
the Payroll Period, and (B) whichever of the following amounts is applicable.
Effective April 1, 1993, the Company shall contribute for the benefit of each
Participant an amount equal to the lesser of (A) his CODA contributions and (B)
whichever of the following amounts is applicable:
(a) six percent (6%) of the Participant's Compensation during the
Payroll Period in the case of a Participant who as of the preceding Change Date
had either (i) attained the age of fifty (50) years or (ii) completed thirty
(30) years of Continuous Service;
(b) four and one-half percent (4-1/2%) of the Participant's
Compensation during the Payroll Period in the case of a Participant who as of
the preceding Change Date had either (i) attained the age of forty-five (45)
years or (ii) completed twenty (20) years of Continuous Service;
(c) three percent (3%) of the Participant's Compensation during the
Payroll Period in the case of a Participant who as of the preceding Change Date
had either (i) attained the age of thirty-five (35) years or (ii) completed ten
(10) years of Continuous Service; or
(d) two percent (2%) of the Participant's Compensation during the
Payroll Period with respect to all other Participants.
(e) Effective January 1, 1989, such contributions need not be made
out of net operating profits; the Plan is intended to be a discretionary
contribution Plan in accordance with Section 401(a)(27) of the Code, and is not
intended to be a plan subject to the funding requirements of Section 412 of the
Code.
(f) Effective January 1, 1992, the matching levels set forth in this
Section 5.01 shall not be determined as of the preceding Change Date. Instead,
the matching levels for a calendar year shall be determined as of June 30 of
that year, based upon whether the Participant either has satisfied the
requirements or is expected to satisfy the requirements as of that date.
5.02 The portion of any Participant's Employee Common Stock Account or,
effective January 1, 1993, his Company Matching Account (as defined in Section
8) which is forfeited because of termination of employment before full vesting
as provided for in Section 9 shall be regarded as a contribution by the Company
and applied as a credit against the next succeeding contribution or contri-
butions of the Company under Section 5.01.
Section 6
LIMITATION ON CONTRIBUTIONS
6.01 If the Participant does not participate in, and has never
participated in another qualified plan maintained by the Company or a welfare
benefit fund, as defined in Section 419(e) of the Code maintained by the
Company, or an individual medical account, as defined in Section 415(l)(2) of
the Code, maintained by the Company, which provides an Annual Addition, the
amount of Annual Additions which may be credited to a Participant's Account for
any Limitation Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation in this Plan. If the Company contribution that
would otherwise be contributed or allocated to the Participant's Account would
cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed or allocated will be reduced so that
annual additions for the Limitation Year will equal the Maximum Permissible
Amount. The Committee may suspend or reduce salary reduction and/or payroll
deduction contributions in order to satisfy such limitations.
6.02 Prior to determining the Participant's actual compensation for the
Limitation Year, the Company may determine the Maximum Permissible Amount on
the basis of a reasonable estimation of the Participant's annual compensation
for the Limitation Year, uniformly determined for all Participants similarly
situated.
6.03 As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will
be determined on the basis of the Participant's actual compensation for the
Limitation Year.
6.04 If, pursuant to Section 6.03 or as a result of allocation of
forfeitures, there is an Excess Amount with respect to a Participant for the
Limitation Year, such Excess Amount will be disposed of as follows:
(a) Any voluntary after-tax contributions, to the extent they would
reduce the Excess Amount, will be returned to the Participant, and effective
January 1, 1992, if an Excess Amount still exists, any salary reduction
contributions, to the extent they would reduce the Excess Amount, will be
distributed to the Participant.
(b) If after the application of paragraph (a) an Excess amount still
exists, and the Participant is covered by the Plan at the end of the Limitation
Year, the Excess Amount in the Participant's Account will be used to reduce
Company contributions (including any allocation of forfeitures) for such
Participant in the next Limitation Year, and each succeeding Limitation Year
if necessary.
(c) If after the application of paragraph (a) an Excess Amount still
exists, and any Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future Company
contributions (including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding Limitation Year,
if necessary.
(d) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will participate in the allocation
of the trust's investment gains or losses. If a suspense account is in
existence at any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participants' Accounts
before any Employer or Employee contributions may be made to the Plan for that
Limitation Year. Except as provided in paragraph (a) above, Excess amounts may
not be distributed to Participants or former Participants.
6.05 This Section applies if, in addition to this Plan, the Participant
is covered under another qualified defined contribution plan maintained by the
Company, a welfare benefit fund, as defined in Section 419(e) of the Code
maintained by the Company, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Company, which provides an
Annual Addition, during any such Limitation Year. The Annual Additions which
may be credited to a Participant's Account under this Plan for any such
Limitation Year will not exceed the Maximum Permissible Amount, reduced by the
Annual Additions credited to a Participant's Account under such other plans and
welfare benefit funds for the same Limitation Year. If the Annual Additions
with respect to the Participant under other defined contribution plans and
welfare benefit funds maintained by the Company are less than the Maximum
Permissible Amount and the Company contribution that would otherwise be
contributed or allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the Annual
Additions under all such plans and funds for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
6.06 Prior to determining the Participant's actual compensation for the
Limitation Year, the Company may determine the Maximum Permissible Amount in
the manner described in Section 6.02.
6.07 As soon as administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year will be determined
on the basis of the Participant's actual compensation for the Limitation Year.
6.08 If, pursuant to Section 6.07 or as a result of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and such other
plans result in an Excess Amount, the Excess Amount will be deemed to consist
of the Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund or individual medical account will be
deemed to have been allocated first regardless of the actual allocation date.
6.09 If any Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another Plan, the
Excess Amount attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of the date under this Plan, to (ii) the
total Annual Additions allocated to the Participant for the Limitation Year as
of such date under this and all the other qualified defined contribution plans.
6.10 Any Excess Amount attributed to this Plan under Section 6.09 will
be disposed in the manner described in Section 5.04.
6.11 If the Company maintains, or at any time maintained, a qualified
defined benefit plan which covered any Participant in this Plan, the sum of the
Defined Contribution Fraction and the Defined Benefit Fraction with respect to
any Participant for a Limitation Year may not exceed l.0. If the sum of the
Defined Contribution Fraction and the Defined Benefit Fraction with respect to
any Participant in this Plan for a Limitation Year shall exceed l.0, the
Company shall adjust the numerator of the Defined Benefit Fraction by limiting
benefits under defined benefit plans maintained by the Company so that the sum
of both fractions shall not exceed l.0 in any year for such Participant.
6.12 For purposes of this Section 6, the following definitions shall
apply:
(a) Annual Additions: The sum of the following amounts credited to
a Participant's Account for the Limitation Year:
(1) Company contributions (including without limitation salary
reduction contributions);
(2) forfeitures; and
(3) voluntary after-tax contributions.
For this purpose, any Excess Amount applied under Section 6.04 in the
Limitation Year to reduce Company contributions will be considered Annual
Additions for such Limitation Year. Amounts allocated, after March 31, 1984,
to an individual medical account, as defined in Section 415(l)(2) of the Code,
which is part of a pension or annuity plan maintained by the Company, are
treated as Annual Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a Key Employee, as defined in
Section 419A(d)(3) of the Code, under a welfare benefit fund, as defined in
Section 419(e) of the Code, maintained by the Company, are treated as Annual
Additions to a defined contribution plan.
(b) Company: For purposes of this Article, Company shall mean the
Company that adopts this Plan, and all members of a controlled group of
corporations (as defined in section 414(b) as modified by section 415(h) of the
Code), all commonly controlled trades or businesses (as defined in
Section 414(c) as modified by 415(h) of the Code), or all members of an
affiliated service group (as defined in Section 414(m) of the Code) of which
the Company is a part, and any other entity required to be aggregated with the
Company pursuant to the regulations under Section 414(o) of the Code.
(c) Compensation: A Participant's wages as defined in Section
3401(a) of the Code and all other payments of compensation to an Employee by
the Company (in the course of the Company's trade or business) for which the
Company is required to furnish the Employee a written statement under Sections
6041(d) and 6051(a)(3) of the Code, but determined without regard to any rules
that limit the remuneration included in wages based on the nature or location
of the employment or the service performed (such as the exception for
agricultural labor in Section 3401(a)(2)) .
For purposes of applying the Limitations of this Article, Compensation for
a Limitation Year is the Compensation actually paid or includible in gross
income during such year.
(d) Excess Amount: The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e) Limitation Year: The Plan Year.
(f) Maximum Permissible Amount: The Maximum Annual Addition that
may be contributed or allocated to a Participant's Account under the Plan for
any Limitation Year shall not exceed the lesser of (l) $30,000 (or, if greater,
one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code which shall automatically be taken into account
hereunder for the applicable Limitation Year), or (2) twenty-five percent (25%)
of the Participant's compensation (as defined in Section 5.12(c) hereof) for
the Limitation Year. The compensation limitation referred to in (2) shall not
apply to any contribution for medical benefits (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated
as an annual addition under section 415(l)(1) or section 419A(d)(2) of the
Code. If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the Maximum
Permissible Amount will not exceed the defined contribution dollar limitation
set forth in (1) multiplied by the following fraction: number of months in
short Limitation Year divided by 12.
(g) Defined Benefit Fraction: a fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Company, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Sections 415(b) and (d) of the Code
or 140 percent of the highest average compensation, including any adjustments
under Section 415(b) of the Code. Notwithstanding the above, if the Participant
was a Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans maintained by the
Company which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all Limitation Years
beginning before January 1, 1987.
(h) Projected Annual Benefit: A Participant's annual benefit
(adjusted to the actuarial equivalent of a straight life annuity if expressed
in a form other than a straight life or qualified joint and survivor annuity)
under a defined benefit Plan of the Company, assuming that the Participant will
continue employment until later of his current age or the normal retirement age
under the Plan, and that the Participant's compensation for the Limitation Year
and all other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
(i) Defined Contribution Fraction: a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the defined contribution plans (whether or not terminated) maintained by the
Company for the current and all prior Limitation Years (including the annual
additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the Company, and the Annual Additions attributable to all welfare
benefit funds, as defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(1)(2) of the Code, maintained by the
Company), and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior limitation years of service with the
Company (regardless of whether a defined contribution plan was maintained by
the Company). The maximum aggregate amount in any Limitation Year is the
lesser of 125 percent of the dollar limitation determined under Sections 415(b)
and (d) of the Code in effect under Section 415(c)(1)(A) of the Code or 35
percent of the Participant's compensation for such year. If the Employee was
a Participant as of the end of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined contribution plans
maintained by the Company which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this fraction, will
be permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after May 5, 1986, but
using the Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987. The Annual Addition for any Limitation
Year beginning before January 1, 1987, shall not be recomputed to treat all
Employee contributions as Annual Additions.
6.13 In case that the Plan is or becomes a Top Heavy Plan, the term "125
percent" contained in subparagraphs (g) and (i) of Section 6.12 shall be
deleted and the term "100 percent" substituted in lieu thereof.
6.14 This Section 6 is effective January 1, 1987.
Section 7
INVESTMENT OF CONTRIBUTIONS
7.01 The Company shall pay over to the Trustee monthly the amount of the
total salary reductions and payroll deductions withheld by the Company during
such month, together with the corresponding contributions to be made by the
Company. At its option, the Company may, in lieu of cash, deliver to the
Trustee on account of any contribution payable by it hereunder, or any portion
thereof, shares of CNG common stock, such shares to be applied against such
contribution at an amount equal to their market value at the time of delivery,
such market value to be determined by taking the mean between the high and low
trading price of the stock on the New York Stock Exchange for the next
preceding trading day.
7.02 The Trustee is required by the Trust Agreement to divide the Trust
Fund into two separate funds known as the Employee Savings Fund and the CNG
Common Stock Fund, respectively. The Trustee divides the contributions between
the respective funds, invests and reinvests the principal and income of the
respective funds, and keeps such funds invested, without distinction between
principal and income, in accordance with the following:
(a) The Employee Savings Fund. All contributions by or on behalf
-------------------------
of a Participant by payroll deduction or salary reduction are to be placed into
the Employee Savings Fund which will be invested in part in interest bearing
investments and in part in shares of CNG Common Stock depending on the election
of the Participants as described in Section 7.03. Interest bearing investments
include without limitation any of the following: government securities,
corporate bonds, certificates of deposit, commercial paper, or, on direction
of the Committee, a contract or contracts issued by any legal reserve life
insurance company or companies authorized to do business in the State of
Connecticut, including but not limited to investment contracts of the deposit
administration or immediate participation guaranty type, providing for a
guaranteed rate of return on investment. Such investment may be made, on
direction of the Committee, by means of a common trust fund maintained by the
Trustee, as authorized in the Trust Agreement. All interest and other income
received from time to time by the Trustee on the assets of the Employee Savings
Fund invested in interest bearing investments are to be likewise invested. CNG
Common Stock investment will be made by purchase by the Trustee, in the open
market or otherwise, at not more than market price at the time of purchase, of
shares of such stock, and dividends and other increments thereon will be
likewise invested. On written direction of the Committee, the Trustee shall
also invest the Employee Savings Fund in part in real estate investments,
including notes and mortgages, real estate investment trusts, and such other
investments in real estate as the Committee shall deem advisable.
(b) CNG Common Stock Fund. Company contributions (other than salary
---------------------
reduction contributions) are to be placed in the CNG Common Stock Fund. As
soon as practicable after receipt of cash contributions, the Trustee is
required to apply the same to the purchase of shares of CNG common stock in the
open market or otherwise at not more than market price. All dividends and cash
increment of any kind received from time to time by the Trustee on such shares
are to be likewise applied. If any increment is in the form of stock (other
than CNG common stock) or securities or other property of any kind, or rights
or interests therein, then such increment is to be converted into cash by the
Trustee and such cash applied as soon as practicable after such conversion in
the same manner as cash contributions. Notwithstanding, if for any reason it
proves impracticable in the opinion of the Trustee so to convert such increment
into cash, then the Trustee is permitted in its sole discretion to determine
the method and time of sale, disposition, use, application or conversion of the
same, provided that Participants shall in no way lose or be deprived of their
proportionate interests therein or in the proceeds thereof and provided further
that, in the event of payment to a Participant prior to the receipt by the
Trustee of cash therefor, the Trustee will fairly and properly value such
increment in such manner as it may in its sole discretion determine and the
Participant will be entitled to his proportionate interest therein in cash, in
kind, by certificate evidencing such interest, or otherwise.
7.03 Each Participant shall, upon joining the Plan, indicate on a form
prescribed by the Committee how his Employee Contributions Account, his
Employee Earnings Account, his Pre-Tax Account and his Employee IRA Account,
if any, are to be invested. The investment options are interest bearing
investments and CNG Common Stock investment described in Section 7.02. The
Participant may direct that 0%, 25%, 50% or 75% of all of his above Accounts
are to be invested in CNG Common Stock with the balance thereof to be invested
in interest bearing investments. Any investment election may be changed,
effective March 3lst of any year, as to future contributions only, by
completion and filing with the Committee between February 15th and March 15th
of a new investment election form. The Committee shall periodically instruct
the Trustee, in writing, as to the manner in which the Employee Savings Fund
investments are to be allocated between interest bearing investment and CNG
Common Stock.
Notwithstanding the foregoing, in the event that contributions by or
on behalf of a Participant by payroll deduction or salary reduction or both
aggregate less than ten dollars ($10.00) per week, then unless otherwise
prescribed by the Committee, the entire amount of his payroll deduction shall
be invested in interest bearing investments. This provision shall no longer
apply effective January 1, 1992.
7.04 In transmitting each contribution to the Trustee the Company shall
state, in writing, how much is to be allocated to the Employee Savings Fund and
how much is to be allocated to the CNG Common Stock Fund.
7.05 The provisions of Sections 7.02 through 7.04 shall no longer apply
effective April 1, 1993.
7.06 Effective April 1, 1993, Participants (including terminated
Participants, retirees and Beneficiaries with Account balances under the Plan)
may direct the Trustee as to the investment of the following Accounts from
among the investment options provided under the Plan: (1) Pre-Tax Account; (2)
Employee After-Tax Contribution Account; (3) IRA Account; and (4) Rollover
Account. The investment options under the Plan are a Company Stock fund and
such additional funds as the Committee agrees to offer for investment under the
Plan. Such funds shall not be limited to investment alternatives described in
Section 7.02(a). The underlying investment for each such additional fund shall
be a mutual fund or other pooled investment fund, and as of April 1, 1993 four
(4) such funds shall be offered. Separate investment elections may be chosen
for existing Account balances (sources of money) and future contributions,
although a single investment election shall apply with respect to all existing
investment fund Account balances for which investment directions are permitted
and a single investment election shall apply with respect to all future
contributions for which investment elections are permitted. Investment
elections shall be made in increments of 5%. Changes in the investment
elections for existing Account balances and for future contributions are
permitted but no more frequently than once in any calendar quarter. Any
changes in the investment elections may be made on a daily basis (any business
day), subject to any restrictions imposed by the Trustee on the movement
between funds or timing thereof. A Participant's Company Matching Account and
Paysop Transfer Account shall be invested entirely in CNG Common Stock and a
Participant's investment elections shall not apply with respect to such
Accounts. CNG Common Stock investments shall be made by purchase by the
Trustee, in the open market or otherwise, at not more than market price at the
time of purchase, of shares of such stock, and dividends and other increments
thereon will be likewise invested.
7.07 (a) Each Participant (including a terminated Participant, retiree
or Beneficiary) shall be entitled to direct the Trustee as to the manner in
which any shares of CNG Common Stock allocated to his Account (including any
fractional shares) are to be voted, or tendered in the case of a tender offer,
in accordance with the rules and procedures set forth in the Trust Agreement.
Section 8
ACCOUNTS AND PARTICIPANTS
8.01 The Committee shall maintain a separate but unsegregated account for
each Participant which shall reflect all contributions made by the Participant
and by the Company on his behalf, and also all allocations thereto of shares
of CNG common stock held in the Employee Savings Fund and in the CNG Common
Stock Fund.
8.02 The Committee shall cause the Account of each Participant to be
separated into separate subaccounts, also referred to as sources of money to
which shall be credited respectively:
(a) the number of shares of CNG common stock (calculated to the
third decimal place) in the CNG Common Stock Fund contributed by the Company
or purchased with cash contributions made by the Company to match contributions
by or on behalf of an employee by salary reduction or purchased with dividends
received on any of the shares held in this subaccount (the "Employee Common
Stock Account");
(b) the amount in the Employee Savings Fund, including the number
of shares of CNG common stock (calculated to the third decimal place),
attributable solely to the Participant's own contributions made pursuant to
Section 4.01 which were not (i) salary reduction contributions or (ii)
qualified voluntary employee contributions under Section 4.05 (the "Employee
Contributions Account");
(c) the amount attributable to the Participant's allocable share of
the earnings realized by the Employee Savings Fund on account of the balances
in his Employee Contribution Account and this sub-account, as determined under
Section 8.03 and the number of shares of CNG common stock (calculated to the
third decimal place) included therein (the "Employee Earnings Account");
(d) the amount in the Employee Savings Fund, including the number
of shares of CNG common stock (calculated to the third decimal place),
attributable solely to the Participant's own contributions made prior to
December 31, 1986, pursuant to Section 4.01 which are treated as qualified
voluntary employee contributions under Section 4.05 and earnings thereon (the
"Employee IRA Account");
(e) the amount in the Employee Savings Fund, including the number
of shares of CNG common stock (calculated to the third decimal place),
attributable solely to contributions made to the Plan pursuant to salary
reduction agreement between the Company and the Participant, and earnings
thereon (the "Pre-Tax Account"). This Account shall be further subdivided as
between matched, or mandatory, contributions and earnings ("Mandatory Pre-Tax
Account") and unmatched, or voluntary, contributions and earnings ("Voluntary
Pre-Tax Account").
8.03 The Trustee is required at the end of each calendar quarter to
evaluate at fair market value as of the end of such quarter the assets held by
it in the Employee Savings Fund at the end of such quarter, less contributions
to the Employee Savings Fund for the quarter then ended, and to report the
results of such evaluation to the Committee. Forthwith after receipt of such
report, the Committee shall allocate the net increase or decrease in this Fund
among the Participants in accordance with the following provision of this
Section 8.03 and credit the same to their accounts. The increase or decrease
in each such Fund (including net income from investments, net gain or loss on
liquidation of assets held in the fund and unrealized net gain or loss in
market value of assets held in the fund as of the valuation date) since the
previous revaluation shall be allocated among the Participants as of the next
preceding valuation date, net of withdrawals during the calendar quarter then
ended. The income or loss for the first calendar quarter following the
original effective date of the Plan shall be allocated as part of the
allocation with respect to the second calendar quarter. Net gain or loss
allocated to a Participant shall be further allocated among such Participant's
various subaccounts described in Section 8.02 in proportion to the respective
balances in those subaccounts immediately following the last such revaluation
and allocation. In doing so, gain or loss on CNG common stock shall be
allocated in proportion to shares of CNG stock and gain or loss on investments
other than CNG stock shall be allocated in proportion to such other
investments.
8.04 The Trustee is required to report to the Committee promptly after
the end of each calendar quarter the total shares of CNG common stock purchased
by the Trustee with any dividend or increment for which the record date falls
within such quarter (or which are received by the Trustee during such quarter
if there be no record date) and the amount of cash or other increment on the
CNG Common Stock Fund not applied in purchase of such stock. Forthwith after
receipt of such report, the Committee shall allocate to the Account of each
Participant, as of the end of each calendar quarter, a proportionate number
(calculated to the third decimal place) of such shares of CNG Common Stock
based upon the number of shares in the Participant's account as of the end of
such quarter (after including any allocation made for such quarter pursuant to
Section 8.02(c) but without including any allocation made pursuant to this
Section 8.04) in relation to the aggregate number of shares in the accounts of
all Participants. Any increment not converted into cash and applied to the
purchase of CNG common stock shall be similarly allocated.
8.05 The provisions of Section 8.01 through 8.04 shall apply through
December 31, 1992. Effective January 1, 1993, the provisions of Sections 8.06
and 8.07 shall apply.
8.06 The Committee shall cause the unsegregated Account of each
Participant to be separated into separate unsegregated subaccounts, as follows:
(a) The Company Matching Account containing all amounts contributed
as matching contributions and earnings thereon;
(b) The Pre-Tax Account containing all salary reduction
contributions made on behalf of the Participant and earnings thereon;
(c) The Employee After-Tax Contribution Account containing after-tax
payroll deduction contributions made by the Participant and earnings thereon;
(d) The IRA Account containing contributions made pursuant to
Section 4.05 and earnings thereon;
(e) The Rollover Account containing any rollover or direct transfer
amounts added under Section 4.12 and earnings thereon; and
(f) The Paysop Transfer Account, as described below in Section 8.11.
8.07 Dividends on shares of CNG Common Stock shall be used to purchase
additional shares of CNG Common Stock for the Account of the Participant so
invested. The Account of Plan Participants (including terminated Participants,
Retirees and Beneficiaries) shall increase or decrease in value based upon the
performance of the various investment options and the allocation of such
Accounts among such investment alternatives.
8.08 Effective January 1, 1993, valuations of a Participant's Account
shall be performed on a daily basis (as of a business day). The Committee
shall require the Trustee to provide accounts of its transactions under the
Trust Agreement on a quarterly basis.
8.09 For purposes of this Section, a Participant shall be continued to
be treated as such, even after his employment has terminated, until final
valuation of his Account is made as provided for in Section 10.
8.10 The Committee may keep such additional accounts or sub-accounts as
it deems necessary or proper to accomplish the purposes of this Plan.
8.11 An additional Account shall be established for a Plan Participant
which represents shares (and fractions thereof) of CNG common stock which is
transferred to the Trustee hereunder in connection with the termination of the
Connecticut Natural Gas Corporation Tax Credit Stock Ownership Plan. Such
account shall be referred to herein as the Participant's "Paysop Transfer
Account." The amounts in a Participant's Paysop Transfer Account shall remain
invested in CNG common stock. Dividends shall be used to purchase additional
shares of CNG common stock. The Plan Participant shall have a 100% vested
interest in such Tax Credit Account. The provisions of Section 7.07, regarding
voting of CNG Common Stock, shall also apply to this Account. The payment of
benefits from said Account shall generally be governed by the rules respecting
distributions from the Plan. However, the following special rules shall apply:
(a) Each Participant shall be permitted to elect to receive a
distribution of all or a portion of his Paysop Transfer Account within ninety
(90) days after the close of each Plan Year. Effective January 1, 1993, such
election can be made once annually at any time during the Plan Year. The Plan
shall then distribute to the Participant the portion of his Paysop Transfer
Account which is covered by the election within ninety (90) days after the last
day of the period during which the election can be made or, effective January
1, 1993, as soon as practicable following such election.
(b) If a Participant separates from service for any reason, then
distribution of the Participant's Paysop Transfer Account balance will begin
not later than one (1) year after the close of the Plan Year in which the event
occurs, unless the Participant otherwise elects. Furthermore, distributions
from a Participant's Paysop Transfer Account shall be made in substantially
equal annual installments over a period of five (5) years, unless the
Participant elects to receive the distribution in a lump sum. Payments shall
be made in whole shares of CNG common stock and any fractional shares shall be
paid in cash. In no event shall such distribution period exceed the period
permitted under Section 401(a)(9) of the Internal Revenue Code.
Section 9
VESTING OF INTERESTS
9.01 A Participant shall always have a fully vested interest in his
Employee Contributions Account, Employee Earnings Account, Employee IRA
Account, Pre-Tax Account, and Paysop Transfer Account. Effective January 1,
1993, a Participant shall always have a fully vested interest in his Pre-Tax
Account, Employee After-Tax Contributions Account, IRA Account, Rollover
Account, and Paysop Transfer Account.
9.02 Upon total or partial termination of the Plan, or complete
discontinuance of contributions under the Plan by the Company, an affected
Participant's interest in his Employee Common Stock Account or, effective
January 1, 1993, his Company Matching Account shall become fully vested. Any
Participant who dies, becomes Disabled or reaches his 65th birthday while a
Participant shall likewise have a fully vested interest in such Account.
9.03 Except as provided in Section 9.02, each Participant shall have a
vested interest in his Employee Common Stock Account or, effective January 1,
1993, his Company Matching Account equal to 20% thereof for each full year of
Continuous Service determined under Section 2.11, so that a Participant shall
be fully vested in such Account after five (5) full years of Continuous
Service.
9.04 If a former Participant whose employment terminated is readmitted
to the Plan, his vested percentage in amounts credited to his Employee Common
Stock Account or, effective January 1, 1993, his Company Matching Account, for
Plan Years subsequent to his readmission shall be based on Continuous Service
determined under Section 2.11.
Section 10
DISTRIBUTION OF ACCOUNTS
10.01 (a) Upon the termination of the Participant's employment with the
Company as the result of (i) his retirement on or after his Normal Retirement
Date or Early Retirement Date, (ii) his death, or (iii) his Disability, his
Account shall be paid to the Participant or his Beneficiary in a lump sum. As
used herein, a Participant shall meet the requirements for Early Retirement if
he had attained age 55 and completed at least ten (10) years of Continuous
Service.
(b) Payment shall be made to a retired Participant as soon as
practicable following (i) the date of termination of employment or (ii) a later
date if the Participant has made the election to defer distribution provided
for in Section 10.01(d).
(c) Payment shall be made to a Disabled Participant as soon as
practicable following (i) the date on which the Participant is found to be
Disabled, or (ii) a later date if he has made the election provided for in
Section 10.01(e).
(d) In the case of termination by retirement, a Participant may, at
any time before his Account becomes distributable, elect to defer payment of
his Account until a future date by filing written notice of such election with
the Committee on the form prescribed by the Committee, and payment shall be
deferred until his Normal Retirement Date unless he elects otherwise. The
Participant need not at that time identify the date upon which payment is to
be made, and may at a future date notify the Committee of his intention to
receive such payment. Payment must in any event be made by April 1 of the
calendar year following the year in which the Participant attains age 70-1/2.
Furthermore, notwithstanding the foregoing, distribution shall in any event be
made or commence by April 1 of the calendar year following the calendar year
in which he attains age 70-1/2, if still employed at that time, in accordance
with Treasury Department Regulations over a period not extending beyond his
actuarial life expectancy (with recalculation permitted on an annual basis, and
with life expectancy determined in accordance with Section 1.72-9 of IRS
regulations). The preceding sentence shall not apply if the Participant
attained age 70-1/2 prior to January 1, 1988; and installment distributions
shall not be permitted except as provided in the preceding sentence. All plan
distributions shall comply with Section 401(a)(9) of the Code, including the
minimum distribution incidental benefit rule.
(e) In the event of termination as the result of the Disability of
the Participant, the Participant may defer payment of his Account until a
future date not later than his Normal Retirement Date, if the value of his
Account exceeds $3,500, and payment shall be deferred until his Normal
Retirement Date unless he elects otherwise. The Participant need not at that
time identify the date upon which payment is to be made, and may at a future
date notify the Committee of his intention to receive such payment, which shall
in any event be made by the time he attains his Normal Retirement Date.
(f) A retiree shall also be entitled to receive amounts held for his
benefit under the Employee Savings Fund at a time different than the time for
distribution of amounts held for his benefit under the CNG Common Stock Fund.
Effective January 1, 1993, a retiree shall be entitled to receive his Company
Matching Account at a time different than the time for distribution of his
other Accounts.
10.02 (a) If the employment of a Participant is terminated for any reason
other than a reason specified in Section 10.01, and if the Participant's vested
Account exceeds $3,500, then payment of the vested portion of his Account may
be deferred until his (1) Death, (2) Disability, or (3) Normal Retirement Date;
provided, however, that in the case of a terminated Participant who had
completed ten (10) Years of Continuous Service but who had not attained age 55,
and who subsequently attains age 55, such Participant may elect to receive such
benefits upon attaining age 55 or thereafter; and provided further that
effective April 1, 1993, a terminated Participant may defer the payment of the
vested portion of his Account until any future date not later than his Normal
Retirement Date. If such vested Account exceeds $3,500, no distribution may
be made prior to the Participant's Normal Retirement Date without his consent.
(b) If the vested Account does not exceed $3,500, the then vested
portion of his Account shall be paid as soon as practicable following the date
of termination. If the Participant's Account exceeds $3,500, it may be paid
at that time but shall not be paid until his Normal Retirement Date without his
consent.
(c) If a payment is made to a Participant prior to the time the
Participant incurs a five year Period of Severance, under the authority of
Section 10.02(b), of less than the entire balance of the Participant's Account,
and such Participant is less than 100% vested at the time of such payment, the
remaining portion of the Participant's Account shall be maintained as a
separate account until such Participant incurs a five year Period of Severance.
If the Participant remains in the service of the Company, or returns to the
Service of the Company before he has incurred a five year Period of Severance,
the following formula shall be used to determine his vested portion in such
separate account:
X = AB (Fo - F)
--------
Fo
Where X is the vested portion, AB is the separate account balance at the time
the determination is being made, Fo is the non-vested percentage at the time
of distribution and F is the non-vested percentage at the time the
determination is being made. In each case the non-vested percentage is 100%
less the vested percentage.
(d) In the event that an ex-Participant resumes participation in the
Plan following a five year Period of Severance at a time at which his Account
was more than 0% and less than 100% vested, if the vested portion was not
distributed to him prior to resumption of participation, it shall thereafter
be held in a separate subaccount within his Account so that his vested share
of subsequent contributions to his Account can be determined.
(e) The nonvested portion of such Participant's Account shall be
held therein until such Participant has incurred a Period of Severance as
defined in Section 2.11 of five years, whereupon it shall be forfeited and
applied in accordance with Section 5.02. If such Participant returns to the
employ of CNG or any subsidiary prior to a five year Period of Severance, no
forfeiture shall occur.
10.03 (a) Payments out of the CNG Common Stock Fund or, effective January
1, 1993, the Company Matching Account shall be made in whole shares of CNG
Common Stock and any fractional share shall be paid in cash. Payments from the
Paysop Transfer Account shall be made in whole shares of CNG Common Stock and
any fractional share shall be paid in cash. Payments from the Employee Savings
Fund or, effective January 1, 1993, all Accounts other than the Company
Matching Account and Paysop Transfer Account shall be made in such shares of
CNG Common Stock or cash, depending on the manner in which such amounts are
invested. A Participant or Beneficiary may elect, however, to have amounts
from the Employee Savings Fund or, effective January 1, 1993, his Accounts
other than the Company Matching Account and Paysop Transfer Account converted
to cash or CNG Common Stock, at market value, prior to such payment. Any such
election must be made prior to the end of the calendar quarter or, effective
January 1, 1993, prior to the date for which distribution is to be made. The
amount of a distribution to a Plan Participant or Beneficiary prior to January
1, 1993 shall be based upon his Account as of the quarterly valuation date
coincident with or following (1) the event on account of which the distribution
becomes payable, or (2) such later date as the Participant may elect in
accordance with this Section 10, subject nevertheless to the provisions of
paragraph (b) below.
(b) The Committee in its discretion may adopt non-discriminatory
policies, uniformly applied, which provide for the crediting of dividends on
CNG Common Stock earned after the applicable Valuation Date but prior to the
distribution date to the Participant entitled to the distribution of such CNG
Common Stock, and such dividends may similarly be used to purchase additional
shares of CNG Common Stock to be distributed. In addition, the Committee in
its discretion may also adopt non-discriminatory policies, uniformly applied,
which permits the crediting of interest on interest-bearing investments after
the applicable Valuation Date but prior to the distribution date to the
Participant entitled to the distribution for such period of time between the
Valuation Date and the distribution date as the Committee in its discretion
determines to be administratively feasible.
(c) Effective January 1, 1993, the amount of a distribution to a
Plan Participant shall be based upon his Account as of the date of
distribution.
10.04 Anything herein to the contrary notwithstanding, unless the
Participant otherwise elects, payment of benefits to him under the Plan will
begin not later than the 60th day after the close of the Plan Year in which
occurs the last to occur of
(a) the date on which such Participant attains age 65;
(b) the tenth anniversary of the year in which such Participant
commenced participation in the Plan; and
(c) the date of termination of such Participant's employment.
If the amount of the payment required to begin on the day above stated
cannot be ascertained by such day, a payment retroactive to such day may be
made no later than sixty (60) days after the earliest date on which the amount
of such payment can be ascertained under the Plan.
10.05 In the event that the Company adopts an amendment to the Plan which
revises the vesting schedule, the following rules shall apply:
(a) the vested amount of a Participant's Account, determined as of
the later of (l) the date such amendment is adopted or (2) the date it becomes
effective, shall not be reduced thereby; and
(b) each Participant who has at least three (3) Years of Service and
whose vested percentage is or may be reduced by such amendment may elect to
have his vested percentage determined under the prior vesting schedule. Any
such election must be made by the last to occur of (l) the date which is sixty
(60) days after the day the amendment is adopted, (2) the date which is sixty
(60) days after the day the amendment becomes effective, or (3) the date which
is sixty (60) days after the date the Participant is given written notice of
the amendment by the Company or Committee.
10.06 Distributions from the Paysop Transfer Account are governed by
Section 8.11 hereof.
10.07 (a) If the value of a Participant's Account exceeds $3,500, the
Participant must consent to any distribution of such Account prior to his
Normal Retirement Date. The consent of the Participant shall be obtained
within the 90-day period ending on the first day of the first period for which
an amount is paid under the Plan. The Administrator shall notify the
Participant of such right to defer any distribution. Such notification shall
be provided not less than 30 days and no more than 90 days prior to the date
benefits are to be paid.
(b) Distributions may occur less than 30 days after the notice is
given, provided that:
(1) The Administrator informs the Participant that the
Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a
distribution, and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
Section 11
WITHDRAWAL BY A PARTICIPANT
11.01 (a) A Participant may, prior to termination of employment, elect
to withdraw a portion or all of his Employee Contributions Account, Employee
Earnings Account, and/or his Employee IRA Account as of March 31st of any Plan
Year. Elections to make withdrawals shall be made in writing, on the form
prescribed by the Committee, and shall be filed with the Committee between
February 15th and March 15th preceding the March 31st on which such withdrawal
is to be made. Upon the filing of the election with the Committee, the
Committee shall forthwith notify the Trustee of the Participant's intent to
withdraw. The Committee shall instruct the Trustee to make payment of the
amount of the withdrawal as soon as practicable after the March 31st as of
which it is to be effective. In the event of a hardship, as defined in
Section 11.02, withdrawals of a portion or all of a Participant's Employee
Contributions Account, Employee Earnings Account, and/or Employee IRA Account
may be made as of the end of any calendar quarter. The Committee shall
prescribe and adhere to non-discriminatory rules to implement the provisions
of this Section 11.01, including a procedure for approximation and partial
advance payment prior to the end of a calendar quarter in cases of extreme
need.
(b) Effective January 1, 1993, the withdrawal provisions of
paragraph (a) shall apply with respect to a Participant's Employee After-Tax
Contribution Account and IRA Account. However, such withdrawal may be made at
any time during the calendar year; provided that only one withdrawal may be
made under this paragraph (b) in any calendar year; and provided further than
no showing of hardship shall be required.
11.02 (a) Upon application of a Participant, the Committee may authorize
distribution by the Trustee of any part or all of the total amount of
contributions to a Participant's Pre-Tax Account (but in no event earnings on
such contributions earned after December 31, 1988) as soon as practicable
thereafter if in the opinion of the Committee the amount to be withdrawn is
needed to defray part or all of the expenses incurred or to be incurred by the
Participant as a result of hardship. For purpose of this Section, hardship
shall mean an immediate and heavy financial need of the Participant, but only
to the extent the amount required to meet such need is not reasonably available
from other resources of the Participant.
(b) The following are the financial needs considered immediate and
heavy: (1) expenses for medical care described in Section 213(d) of the Code
previously incurred by the Participant, his spouse, or dependents (as defined
in Section 152 of the Code) or necessary for these persons to obtain medical
care described in Section 213 of the Code; (2) costs directly related to the
purchase of a principal residence for the Participant (excluding mortgage
payments); (3) payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, or his spouse,
children or dependents (as defined in Section 152 of the Code); (4) payments
necessary to prevent the eviction of the Participant from the Participant's
principal residence or foreclosure on the mortgage on that residence; or (5)
immediate and heavy financial debt and/or taxes incurred by the Participant
which make the threat of personal bankruptcy or foreclosure imminent.
(c) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(1) The Employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans available under all
plans maintained by the Company;
(2) The Participant's salary reduction contributions and
payroll deduction contributions under this Plan and all other plans of
the Company, other than pursuant to its cafeteria plan and health
insurance program, will be suspended for twelve months after receipt of
the hardship distribution. The Participant must agree to this provision
and take action consistent with its requirements as a condition to
receipt of a hardship distribution;
(3) The distribution is not in excess of the immediate and
heavy financial need. The amount of an immediate and heavy financial
need may include any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution; and
(4) All plans maintained by the Company provide (and by
inclusion of this provision, this Plan does provide) that the Employee
may not make wage or salary deferral contributions for the Employee's
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section 402(q) of
the Code for such taxable year less the amount of such Employee's wage or
salary deferral contributions for the taxable year of the hardship
distribution.
(d) The Employee must represent that the need cannot be satisfied
through reimbursement or compensation by insurance or otherwise, by reasonable
liquidation of the Employee's assets (to the extent it would not itself cause
an immediate and heavy financial need), by cessation of contributions under the
Plan, or by other distributions or loans from plans maintained by the Company
or any other employer, or by borrowing from commercial sources on reasonable
commercial terms.
(e) No more than one withdrawal may be made by a Participant in any
twelve (12) month period. The Committee shall follow uniform,
nondiscriminatory principles and procedures in application of this Section
11.02, and shall permit the Participant to direct the Fund or Funds from which
the withdrawal will take place (if one is permitted). Except as provided in
this Section 11.02 (and Section 10.01(d)), no distribution may be made from a
Participant's Pre-Tax Account while the Participant remains in the employ of
the Company.
11.03 (a) This Section applies to distributions made under the Plan on
or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under the Plan,
a distributee may elect, at the time and in the manner prescribed by the
Committee, and subject to such rules as the Committee may adopt consistent with
the provisions of the Code and regulations thereunder, to have any portion of
an eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) Definitions. (1) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect
to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse
and the employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
Section 12
ADMINISTRATION
12.01 (a) The Company shall be designated as Plan Administrator and a
named fiduciary with respect to the Plan. The Company shall have the power,
by action of the Compensation Committee of the Board of Directors, to designate
an Administrative Committee (the "Committee") of not less than three persons.
The Committee shall be a named fiduciary and shall have full power, authority,
discretion and responsibility to direct, manage and administer the Plan, except
to the extent that such power, authority and responsibility is committed to the
Trustee under the Trust established pursuant to Section 13.
(b) Any person appointed to be a member of the Committee shall
signify his acceptance in writing to the Compensation Committee of the Board
of Directors. Any member of the Committee may resign by delivering his written
resignation to the Compensation Committee of the Board of Directors and such
resignation shall become effective upon delivery or at any later date specified
therein. The members of the Committee shall serve without compensation for
services as such, but the Committee shall be paid or reimbursed for all its
reasonable expenses in accordance with Section 12.06.
(c) A majority of the members of the Committee at the time in office
may do any act which the Plan authorizes or requires the Committee to do, and
the action of such majority of the members expressed from time to time by a
vote at a meeting, or in writing without a meeting, shall constitute the action
of the Committee and shall have the same effect for all purposes as if assented
to by all the members at the time in office.
(d) The Committee may, by a writing signed by a majority of its
members, delegate to any member or members of the Committee or to any employee
of the Company severally or jointly, the authority to perform any ministerial
or routine act in connection with the administration of the Plan. The
Committee may engage clerical assistance, and such legal, accounting, actuarial
or other assistance as may be required, or hire employees to provide such
assistance as they may require.
12.02 Subject to the limitations of the Plan, the Committee, as a named
fiduciary, may make such rules and regulations as it deems necessary or proper
for the administration of the Plan and the transaction of business thereunder;
has the discretionary authority to interpret the Plan; has the discretionary
authority to decide on questions as to the eligibility of any person to receive
benefits and the amount of such benefits; may authorize the payment of benefits
in such manner and at such times as it may determine; may prescribe forms to
be used for making various elections under the Plan, for designating benefici-
aries or for changing or revoking such designations, for applying for benefits
and for any other purposes of the Plan, which prescribed forms in all cases
must be executed and filed with the Committee (unless the Committee shall
otherwise determine); and may take such other action and make such determina-
tions in accordance with the Plan as it deems appropriate in the exercise of
its authority and fulfillment of its duties hereunder.
12.03 Any discretionary actions to be taken under this Plan by the
Committee with respect to the classification of the Employees or benefits shall
be uniform in their nature and applicable to all Employees similarly situated.
With respect to employment with the Company, leaves of absence and other
similar matters, the Committee shall administer the Plan in accordance with the
applicable personnel records and regular personnel policies at the time in
effect.
12.04 The Committee shall:
(a) maintain the records of Participants' Accounts;
(b) notify the Participants at least once each year of the balance
in their Accounts;
(c) give to the Participant's such other information concerning the
Plan and their rights thereunder as may be required by law;
(d) notify each Participant, three months prior to his Normal
Retirement Date, or anticipated actual retirement, if known, of the options
which may be available to such Participant;
(e) direct the Trustee to make such payments as may be required to
retired, disabled or terminated Participants, or to the Beneficiaries of
deceased Participants.
(f) direct the Trustee to invest the Employee Savings Fund as
permitted in accordance with Section 7.02(a) hereof.
(g) select investment funds pursuant to Section 7.06 hereof, and
perform the duties assigned to the Administrator under the Trust Agreement
referred to in Section 13.
(h) establish written procedures for determining the qualified
status of domestic relations orders and for administering distributions
pursuant thereto.
12.05 The Committee shall prepare and submit to the Compensation
Committee of the Board of Directors of the Company an annual report showing in
reasonable detail the assets and liabilities of the Fund and giving a brief
account of the operation of the Plan for such Year.
12.06 Reasonable expenses of administering the Plan and Trust shall be
paid from the Trust Fund unless paid by the Company. Effective January 1,
1993, the Company shall pay record-keeping expenses for overall Plan
transactions; however, expenses relating to distributions or other processing
relating directly to a particular Participant may be charged to that
Participant's Account.
Section 13
TRUST AGREEMENT
13.01 CNG, by trust agreement with a corporation having trust powers, has
established or will establish a Trust of which such corporation with trust
powers will be the Trustee for the purpose of holding, safe-keeping, investing
and reinvesting the Trust Fund. The authority, duties, rights and obligations
of the Trustee, as well as the authority of the Company, the Compensation
Committee, and the Committee relating to the Trust Fund, are or shall be set
forth in the Trust Agreement.
Section 14
FIDUCIARY RESPONSIBILITIES
14.01 The duties and responsibilities of the Trustee from time to time
serving hereunder shall be those set forth in the Trust Agreement.
14.02 The Committee shall have sole and exclusive responsibility and
authority for those matters committed to it in Section 12 and under the Trust
Agreement, except to the extent that it may have delegated any such
responsibilities in writing pursuant to procedures specified in Section 12, in
which case the Committee shall thereafter be responsible only to periodically
review the actions of the fiduciary so designated.
14.03 CNG, acting by the Compensation Committee of its Board of
Directors, shall have the sole and exclusive responsibility and authority to:
(a) appoint a Trustee and remove any person so appointed;
(b) appoint and remove the members of the Committee; and
(c) effective January 1, 1993, direct the Trustee as to the voting
of unvoted shares of CNG Common Stock pursuant to the Trust Agreement; and
(d) generally supervise and periodically report to the Board of
Directors on the operation of the Plan.
14.04 The Board of Directors shall have sole and exclusive responsibility
and authority to:
(a) suspend Company contributions to be made under the
Plan;
(b) appoint and remove the members of the Compensation Committee of
the Board of Directors; and
(c) amend and terminate the Plan.
14.05 CNG, under the direction of the Compensation Committee of the Board
of Directors, shall have sole and exclusive responsibility and authority for
all matters of Plan management and administration not herein expressly
committed to another.
14.06 Each fiduciary or person named herein or identified pursuant to
procedures provided in the Plan as having any fiduciary responsibility for the
maintenance and administration of the Plan or management of any part of the
assets of the Fund shall have sole and exclusive authority and responsibility
in the area or areas committed to it. Any person or group of persons may serve
in more than one fiduciary capacity with respect to the Plan. Except as herein
expressly provided to the contrary, all fiduciary duties and responsibilities
hereunder shall be several only, and exclusively committed as above set forth,
and there shall be no joint fiduciary responsibility or liability.
14.07 No fiduciary or person named herein or identified pursuant to
procedures provided in the Plan as having any fiduciary responsibility under
the Plan shall have any responsibility or authority in any area of the
maintenance and administration of the Plan and the management of its assets
other than that responsibility and authority expressly delegated to such
fiduciary or other person.
14.08 No such fiduciary or other person guarantees the Fund in any manner
against investment loss or depreciation of asset value, nor guarantees the
sufficiency of the assets in the Fund to provide the benefits accrued under the
Plan at any given time.
Section 15
TERMINATION OR AMENDMENT OF PLAN
15.01 While the Company intends to establish a permanent Plan hereby, it
nonetheless reserves the right to terminate, partially or completely, the Plan,
or to suspend its contributions (consistent with applicable laws) to the Plan
or to amend the Plan in any particular. CNG is hereby irrevocably constituted
the agent for all other employers who have adopted this Plan for the purpose
of such termination or amendment. Any such employer may terminate this Plan
with respect to its own employees. In the event of any such action, the
following provisions shall apply:
(a) In case of a complete termination, all Participants' Accounts
shall be fully vested. The Participants' Accounts may be paid in full or may
be retained by the Trustee and paid at Normal Retirement Date or the earlier
termination of employment, depending upon the election of the Committee after
consultation with the Participant at the time of such termination of
employment.
(b) In case of a partial termination, the Accounts of those
Participants with respect to whom termination has occurred shall be fully
vested. The fully vested Accounts of Participants with respect to which
termination has occurred may be paid in full or may be retained by the Trustee
and paid at Normal Retirement Date or upon earlier termination of employment
depending upon the election of the Committee and subject to the requirements
of law.
(c) The Company reserves the right to suspend its contributions in
any year. Any such suspension shall not terminate the Trust as to funds then
held by the Trustee hereunder or operate to accelerate any distributions to or
for the benefit of Participants or their Beneficiaries. No such suspension
shall be deemed to be a "discontinuance" of further contributions. If,
however, such a suspension does in fact ripen into a "discontinuance", then the
proportionate interest of each Participant in the Trust Fund shall thereupon
automatically be wholly vested in him notwithstanding any provision of the Plan
to the contrary. Discontinuance on the part of the Company of further
contributions to the Trust shall not, in the absence of formal action by the
Company effecting termination, terminate the Trust as to the funds then held
by the Trustee, or operate to accelerate any payments or distributions to
Participants or to their Beneficiaries. Upon discontinuance, the then
proportionate interest of each Participant in the Trust Fund shall thereupon
automatically be wholly vested in him notwithstanding any provision of the Plan
to the contrary. Distribution shall continue to be made in accordance with the
applicable provisions of Section 10, and the Trustee shall continue to
administer the Trust in accordance with the Trust Agreement.
(d) Notwithstanding the foregoing, distribution of a Participant's
Employee CODA Account on account of plan termination, sale of substantially all
of the assets of a trade or business, or sale of a subsidiary, must meet the
requirements of Sections 401(k)(2)(B) and 401(k)(10) of the Code.
(e) No amendment of the Plan shall deprive any Participant or
Beneficiary of any vested interest (unless required in order to comply with any
federal law or regulation) nor cause any of the assets in the Trust to revert
to or be applied for the benefit of the Company nor shall any amendment be made
which will cause the Plan to lose its qualified status under the Internal
Revenue Code. Any amendment may be effective retroactively.
15.02 If CNG is judicially declared bankrupt or insolvent, or if it makes
a general assignment for the benefit of creditors, or if its corporate
existence shall cease or its business be substantially terminated, the Plan
will completely terminate.
15.03 Contributions by the Company are paid to the Trust on the condition
that the same qualify for deduction under Section 404 of the Internal Revenue
Code. Any such contribution for which deduction is disallowed (to the extent
disallowed), reduced by any loss attributable thereto (if any) while held in
Trust, shall be returned to the Company within one year after the disallowance
of the deduction, but not thereafter. Furthermore, if any contribution by the
Company is made under a mistake of fact, such contribution in excess of the
amount that would have been contributed had no mistake of fact occurred,
reduced by any loss attributable thereto (if any) while held in Trust, shall
be returned to the Company within one year after the payment of the
contribution, but not thereafter.
15.04 Except as provided for in Section 15.03, under no circumstances
shall any of the assets of the Trust revert to or be applied for the benefit
of the Company; provided that reasonable expenses of administering the Plan and
Trust may be charged to the Trust Fund.
Section 16
GENERAL PROVISIONS
16.01 None of a Participant's Benefits in a Plan shall be subject to the
claims of any creditor of such Participant or his Beneficiary, nor shall any
Participant or his Beneficiary have the right to anticipate, alienate, or
assign any Benefits under the Plan. Any attempted assignment or alienation,
voluntary or involuntary, shall be absolutely void and of no effect. This
Section 16.01 shall not apply to the creation, assignment, or recognition of
a right to any benefit payable with respect to a domestic relations order which
is determined to be a qualified domestic relations order, as defined in Section
414(p) of the Code.
16.02 In the event of any merger or consolidation of the Plan with, or
a transfer of the assets and liabilities of the Plan to, any other plan, each
Participant shall immediately following the effectiveness of such merger,
consolidation or transfer, be entitled to receive Benefits (if the successor
plan were then terminated) which are equal to or greater than the Benefits he
would have been entitled to receive immediately prior to the effectiveness of
such merger, consolidation or transfer (if the Plan had then been terminated).
16.03 This Plan is established by the Company and shall at all times be
operated for the exclusive benefit of the Participants, terminated Participants
and Beneficiaries of deceased Participants and to defray reasonable expenses
of the Plan and Trust and, except as provided in Section 15, at no time shall
any of the assets of the Fund revert to or be applied for the benefit of the
Company.
16.04 Any person claiming a benefit or interest in the Plan agrees to
perform any and all acts including the signing of required papers, and the
taking of necessary physical examinations in order to carry out the Plan. Each
Participant, including retired and terminated Participants, and Beneficiary
entitled to receive benefits, must keep the Committee informed of his mailing
address on a current basis. If any mailing properly addressed to a Participant
or Beneficiary at the last address give to the Committee is returned by the
postal authorities for want of satisfactory address, the Committee may withhold
further mailings of informational materials or benefits until a proper address
is provided. The terms of the Plan and the decisions of the Committee relative
to the Plan made in a uniform non-discriminatory fashion shall be binding on
all Participants and Beneficiaries and the heirs, executors and administrators
of the person claiming a benefit or interest in the Plan.
16.05 This Plan shall not be construed as a modification of any
employment relationship between any Participant and the Company nor shall it
confer upon Participants any right to be continued in the employ of the
Company.
Section 17
TOP HEAVY PLAN REQUIREMENTS
17.01 If the Plan is or becomes Top-Heavy in any Plan Year, the
provisions of this Article will supersede any conflicting provision in the
Plan.
17.02 Top-Heavy Definitions.
---------------------
(a) Key Employee: Any Employee or former Employee (and the
------------
beneficiaries of such Employee) who at any time during the determination period
was (1) an officer of the Company if such individual's annual compensation
exceeds 50% of the dollar limitation under Section 415(b)(1)(A) of the Code;
(2) an owner (or considered an owner under Section 318 of the Code) of one of
the ten largest interests in the Company if such individual's compensation
exceeds 100% of the dollar limitation under Section 415(c)(1)(A) of the Code;
(3) a 5% owner of the Company; or (4) a 1% owner of the Company who has an
annual compensation of more than $150,000. For purposes of the preceding
sentence, annual compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by the Company
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Sections 125, 402(a)(8), 402(h) or 403(b) of the
Code. The determination period is the Plan Year containing the Determination
Date and the 4 preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
(b) Top-Heavy Plan: This Plan is Top-Heavy if any of the following
--------------
conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60% and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of
plans (but not part of a Permissive Aggregation Group) and the Top-Heavy
Ratio for the Group of Plans exceeds 60%.
(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of Plans and the Top-Heavy Ratio
for the Permissive Aggregation Group exceeds 60%.
(c) Top-Heavy Ratio:
---------------
(1) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Company
has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of the account balances of all Key Employees as of
the Determination Date(s) (including any part of any account balance
distributed in the 5-year period ending on the Determination Date(s)),
and the denominator of which is the sum of all account balances
(including any part of any account balance distributed in the 5-year
period ending on the Determination Date(s)), both computed in accordance
with Section 416 of the Code and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are increased to reflect
any contribution not actually made as of the Determination Date, but
which is required to be taken into account on that date under Section 416
of the Code and the regulations thereunder.
(2) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Company
maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the Determination Date(s) has or has
had any accrued benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees, determined in
accordance with (1) above, and the present value of accrued benefits
under the aggregated defined benefit plan or plans for all Key Employees
as of the Determination Date(s), and the denominator of which is the sum
of the account balances under the aggregated defined contribution plan or
plans for all Participants, determined in accordance with (1) above, and
the present value of accrued benefits under the defined benefit plan or
plans for all Participants, as of the Determination Dates(s), all
determined in accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan in both
the numerator and denominator of the top-heavy ratio are increased for
any distribution of an accrued benefit made in the five-year period
ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will be determined as
of the most recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date, except as provided in
Section 416 of the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a Participant (1) who is not a Key Employee but who
was a Key Employee in a prior year, or (2) who has not been credited
with at least one Hour of Service with the Company at any time during the
5-year period ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be
made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall within the
same calendar year. The accrued benefit of a Participant other than a
Key Employee shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the Company, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group: The Required Aggregation Group
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of plans plus any other plan or plans of the Company which, when considered as
a group with the required aggregation group, would continue to satisfy the
requirements of Section 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group: (1) Each qualified plan of the
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Company in which at least one Key Employee participates or participated at any
time during the determination period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the Company which enables a
plan described in (1) to meet the requirements of Sections 401(a)(4) or 410 of
the Code.
(f) Determination Date: For any Plan Year subsequent to the first
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Plan Year, the last day of the preceding Plan Year. For the first Plan Year
of the plan, the last day of that year.
(g) Valuation Date: The date as of which account balances or
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accrued benefits are valued for purposes of calculating the Top-Heavy Ratio,
which shall be December 31.
(h) Present Value: Present value shall be based on the interest and
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mortality rates used in the Pension Plan.
17.03 Minimum Allocation.
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(a) Except as otherwise provided in (c) and (d) below, the Company
shall contribute on behalf of any Participant who is not a Key Employee three
(3%) percent of such Participant's compensation. The minimum allocation is
determined without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive any contribution for any
reason. This minimum contribution may not be considered to be satisfied by
salary reduction contributions or matching contributions. Any such
contributions shall be added to the Employee Common Stock Account.
(b) For purposes of computing the minimum allocation, compensation
will mean total compensation as defined in Section 6.12(c). Compensation as
used in this Section shall be subject to the limitation prescribed under
Section 401(a)(17) of the Code.
(c) The provision in (a) above shall not apply to any Participant
who was not employed by the Company on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant
to the extent the Participant is entitled to minimum top-heavy benefits under
the CNG Pension Plan.
17.04 Adjustment to Section 415 Limits. If the Plan is or becomes a
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Top-Heavy Plan, the adjustments to the limitations under Section 415 of the
Code, set forth in Section 6.13 hereunder, shall apply.