FIFTH AMENDMENT TO
CONNECTICUT NATURAL GAS CORPORATION EMPLOYEE SAVINGS PLAN
(AS AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 1989)
The Connecticut Natural Gas Corporation Employee Savings
Plan is hereby amended as follows:
1. The Fourth Amendment to the Plan is deleted.
2 The following new Section 7.09 is added to the Plan,
effective March 1, 1996:
"7.09 (a) Effective March 1, 1996, the Company
Matching Account shall be divided into two separate
sub-accounts, entitled the Company Directed Matching
Contribution Account and the Participant Directed
Matching Contribution Account. Plan Participants
(including terminated Participants, Retirees and
Beneficiaries with Account balances under the Plan)
shall be entitled to direct the investment of the
Participant Directed Matching Contribution Account.
The investment options available with respect to the
Participant Directed Matching Contribution Account
shall include CNG Common Stock and the same other
investments available to Participants with respect to
other contributions under the Plan for which investment
direction is available. Participants shall have the
option of reallocating the investment of the
Participant Directed Matching Contribution Account once
per quarter, at the same time as the option is
exercised with respect to the other existing Accounts
under the Plan for which the Participant has the
ability to direct investments (i.e., the Pre-Tax
Account, the Employee After-Tax Contribution Account,
the IRA Account and the Rollover Account). However,
the Participant may elect separate investment
allocation percentages for the Participant Directed
Matching Contribution Account and for such other
Accounts. All investment elections shall be in
increments of 5%. Subject to the provisions of
subparagraph (b)(7) below, unless the Participant
elects otherwise, his Participant Directed Matching
Contribution Account shall continue to be invested in
CNG Common Stock.
(b) Periodically, a portion of a Participant's
Company Directed Matching Contribution Account, all of which
is invested in CNG Common Stock, will be transferred to the
Participant Directed Matching Contribution Account as CNG
Common Stock. The portions of a Participant's Company
Directed Matching Contribution Account which are to be
transferred shall be determined as follows:
(1) Effective March 1, 1996, the total
number of shares of CNG Common Stock in all Company
Directed Matching Contribution Accounts plus all Paysop
Transfer Accounts shall be determined. One-fourth
(1/4) of that amount will be transferred from the
Company Directed Matching Contribution Accounts to the
Participant Directed Matching Contribution Accounts as
CNG Common Stock. Such transfer shall not all occur
immediately, however. Forty percent (40%) of the
amount to be transferred shall be transferred effective
March 1, 1996; thirty percent (30%) effective July 1,
1996; and thirty percent (30%) effective October 1,
1996. These dates are referred to herein as "transfer
dates". The amount of shares to be transferred for
1996 shall be fixed on March 1, 1996 and shall not
increase for any reason, such as (for example)
dividends on shares held in the Company Directed
Matching Contribution Account which are used to
purchase additional shares of CNG Common Stock.
Furthermore, if a Participant receives a distribution
from his Company Directed Matching Contribution Account
during 1996 and subsequent to March 1, 1996, for
example due to termination of employment, it shall
reduce the total number of shares to be subsequently
transferred in 1996.
(2) When shares are transferred, the
methodology for allocating those shares among
Participants shall be determined as follows. As of
March 1, 1996, the total number of shares in the
Company Directed Matching Contribution Accounts
allocated to Participants at that time shall be
determined; and for each Participant, the number of
shares to be transferred to his Participant Directed
Matching Contribution Account for the year shall be
based upon his pro rata share of the shares of CNG
Common Stock held in the Company Directed Matching
Contribution Account and allocated to Plan Participants
at that time. As indicated above, forty percent (40%)
thereof shall be transferred at that time; thirty
percent (30%) effective July 1, 1996; and thirty
percent (30%) effective October 1, 1996.
(3) Amounts transferred over to the
Participant Directed Matching Contribution Account are
transferred initially as CNG Common Stock. Those
shares shall continue to be so invested unless the
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Participant affirmatively elects otherwise (as part of
the Participant's once per quarter election change with
respect to existing Accounts).
(4) Effective January 1, 1997, the same
approach set forth in subparagraphs (1) through (3)
shall be taken, with one-third (1/3) of the total
number of shares of CNG Common Stock in all Company
Directed Matching Contribution Accounts PLUS all Paysop
Transfer Accounts at that time to be transferred and
allocated in accordance with the general approach
provided for in subparagraphs (1) through (3).
However, the following differences shall exist:
(A) January 1, 1997 is substituted for
March 1, 1996;
(B) Subsequent transfer dates shall be
April 1, July 1 and October 1, rather than July 1
and October 1; and
(C) The transfers shall occur in equal
amounts of twenty-five percent (25%), rather than
in the forty percent (40%), thirty percent (30%),
and thirty percent (30%) increments.
(5) Effective January 1, 1998, the same
approach set forth in subparagraph (4) shall be taken
with one-half (1/2) of the total number of shares of
CNG Common Stock in all Company Directed Matching
Contribution Accounts PLUS all Paysop Transfer Accounts
at that time to be transferred and allocated in
accordance with the approach provided for in
subparagraph (4), substituting 1998 for 1997. However,
the amount to be transferred and allocated shall not
exceed the amount of shares of CNG Common Stock held in
the Company Directed Matching Contribution Account as
of January 1, 1998; and no amounts in the Paysop
Transfer Account shall be subject to investment
direction until January 1, 1999. Nevertheless, if the
Committee determines that shares added to the Company
Directed Matching Contribution Account during 1998 for
any reason, such as (for example) reinvestment of
dividends, would be the only shares remaining in the
Company Directed Matching Contribution Account as of
December 31, 1998, the Committee may direct that all
remaining shares held under the Company Directed
Matching Contribution Account on October 1, 1998 be
transferred to the Participant Directed Matching
Contribution Account effective October 1, 1998.
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(6) Effective January 1, 1999, all remaining
Company Directed Matching Contribution Accounts (if
any) shall be transferred to the Participant Directed
Matching Contribution Accounts.
(7) Amounts transferred to a Participant
Directed Matching Contribution Account as CNG Common
Stock shall continue to be so invested unless the
Participant affirmatively elects otherwise (as part of
the Participant's once per quarter election change with
respect to existing Accounts).
(c) Effective January 1, 1999, the total number
of shares of CNG Common Stock in all Paysop Transfer
Accounts shall be determined. That amount will be
transferred to a new Account, entitled the Participant
Directed Paysop Transfer Account, as CNG Common Stock, in
equal quarterly installments effective January 1, April 1,
July 1 and October 1. The same principles described above
shall generally be followed. However, effective October 1,
1999, additional amounts added to the Paysop Transfer
Account during 1999 for any reason, such as (for example)
dividends on shares which are used to purchase additional
shares of CNG Common Stock, shall also be transferred so
that all shares will have been transferred by October 1,
1999. Amounts transferred to a Participant Directed Paysop
Transfer Account as CNG Common Stock shall continue to be so
invested unless the Participant affirmatively elects
otherwise (as part of the Participant's once per quarter
election change with respect to existing Accounts).
(d) The Committee is authorized to adopt
administrative rules and procedures to effectuate the intent
of the provisions of this Section 7.09, including, without
limitation, reasonable estimation of shares to be
transferred and allocated, rounding of share amounts, and
the like.
(e) It is recognized that sales of CNG Common
Stock in order to effectuate investment directions shall be
done as soon as is reasonably practicable by the Trustee,
based upon market conditions and similar considerations.
(f) Effective March 1, 1996, future matching
contributions made to the Plan will be accounted for under
the Participant Directed Matching Contribution Account and
shall be invested in the same manner as the Participant has
directed with respect to future contributions made to other
Accounts under the Plan, e.g., future contributions to the
Pre-Tax Account and the Employee After-Tax Contribution
Account.
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(g) A Participant who would otherwise be
prohibited from making an investment election due to having
made an earlier investment change in 1996 (prior to March 1,
1996) may nevertheless elect to make an investment
direction, with respect to existing amounts to be held under
his Participant Directed Matching Contribution Account,
provided such election is effective during March, 1996."
3. The following three sentences are added to the end of
paragraphs (a) of Section 10.03:
"Effective January 1, 1996, payments out of all
Accounts under the Plan shall be made in 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 such amounts converted to cash or
CNG Common Stock, at market value, prior to such payment.
Any such election must be made prior to the date for which
distribution is to be made."
4. Except as hereinabove modified and amended, the Amended
and Restated Plan shall remain in full force and effect.
IN WITNESS WHEREOF, the Company hereby executes this Fifth
Amendment this 27th day of February, 1996.
ATTEST: CONNECTICUT NATURAL GAS CORPORATION
Julie A. Beach By: R. L. Babcock
-------------------------- -----------------------------
Its Vice President
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