12/27/96
Consolidated Edison Company of New York, Inc.
Con Edison Thrift Savings Plan
for Management Employees
and
Tax Reduction Act Stock Ownership Plan
As Amended and Restated Effective as of December 1, 1996 Except as Otherwise
Noted.
12/27/96
PURPOSE.................................................................... 1
ARTICLE 1.................................................................. 3
Definitions.......................................................... 3
ARTICLE 2.................................................................. 18
Eligibility and Participation........................................ 18
2.01 Eligibility.............................................. 18
2.02 Participation............................................ 18
2.03 Reemployment of Former Employees and Former
Participants............................................. 19
2.04 Transferred Participants................................. 19
2.05 Termination of Participation............................. 19
ARTICLE 3.................................................................. 20
Contributions........................................................ 20
3.01 Pre-Tax Contributions.................................... 20
3.02 After-Tax Contributions.................................. 22
3.03 Company Contributions.................................... 22
3.04 Participating and Nonparticipating Contributions......... 23
3.05 Rollover Contributions and Trust to Trust Transfers...... 23
3.06 Changes in Contributions................................. 25
3.07 Suspension in Contributions.............................. 25
3.08 Payment to Trust......................................... 26
3.09 No Contributions to TRASOP............................... 26
3.10 Transition Period........................................ 26
ARTICLE 4.................................................................. 26
Company Contributions................................................ 26
4.01 Company Contributions Election........................... 26
4.02 Change of Election....................................... 27
4.03 Certification to Company. .............................. 27
4.04 Forfeitures.............................................. 27
ARTICLE 5.................................................................. 27
The Trust Fund; Investments.......................................... 27
5.01 Trust Agreement.......................................... 27
5.02 Investment of Trust Fund................................. 28
5.03 Company Stock Fund....................................... 31
5.04 Accounts and Subaccounts................................. 32
5.05 Pre-January 1, 1985 Contributions........................ 32
5.06 Statements of Account.................................... 32
5.07 Responsibility for Investments........................... 33
ARTICLE 6.................................................................. 33
Vesting.............................................................. 33
6.01 Participant Contributions................................ 33
6.02 Company Contributions.................................... 34
6.03 TRASOP Account........................................... 34
ARTICLE 7.................................................................. 34
Distributions, Withdrawals and Forfeitures........................... 34
7.01 Retirement............................................... 34
7.02 Voluntary Termination or Termination by the Company;
Forfeitures.............................................. 35
7.03 Death................................................... 36
7.04 Withdrawals.............................................. 36
7.05 Hardship Withdrawals..................................... 41
7.06 Distribution from Company Stock Fund..................... 44
7.07 Leaves of Absence and Transfers to Weekly Payroll........ 44
7.08 Age 70 1/2 Required Distribution......................... 45
7.09 Form and Timing of Distributions......................... 46
7.10 Status of Account Pending Distribution................... 47
7.11 Proof of Death and Right of Beneficiary or Other
Person................................................... 48
7.12 Distribution Limitation.................................. 48
7.13 Direct Rollover of Certain Distributions................. 48
ARTICLE 8.................................................................. 50
Non-Discrimination and Limitation.................................... 50
8.01 Actual Deferral Percentage Test.......................... 50
8.02 Actual Contribution Percentage Test...................... 52
8.03 Aggregate Contribution Limitation........................ 54
8.04 Additional Discrimination Testing Provisions............. 54
8.05 Maximum Annual Additions................................. 57
8.06 Defined Benefit Plan Limitation.......................... 60
ARTICLE 9.................................................................. 60
Loans ............................................................... 60
9.01 Loans Permitted.......................................... 60
9.02 Amount of Loans.......................................... 61
9.03 Source of Loans.......................................... 61
9.04 Interest Rate............................................ 62
9.05 Repayment................................................ 62
9.06 Multiple Loans........................................... 63
9.07 Pledge................................................... 63
9.08 Loan Reserve............................................. 64
9.09 Minimum Account Balance.................................. 64
9.10 Consent.................................................. 64
9.11 Other Terms.............................................. 64
ARTICLE 10................................................................. 65
Administration of the Plan........................................... 65
10.01 Named Fiduciaries and Plan Administrator................ 65
10.02 Authority of Plan Administrator......................... 65
10.03 Reliance on Reports..................................... 66
10.04 Delegation of Authority................................. 66
10.05 Administration Expenses................................. 66
10.06 Fiduciary Insurance..................................... 67
10.07 Claim Review............................................ 68
10.08 Appointment of Trustee.................................. 70
10.09 Limitation of Liability................................. 70
ARTICLE 11................................................................. 70
Miscellaneous........................................................ 70
11.01 Exclusive Benefit; Amendments........................... 70
11.02 Termination; Sale of Assets of Subsidiary............... 71
11.03 Beneficiaries........................................... 72
11.04 Assignment of Benefits.................................. 74
11.05 Merger.................................................. 74
11.06 Conditions of Employment Not Affected by Plan........... 75
11.07 Facility of Payment..................................... 75
11.08 Information............................................. 75
11.09 Additional Participating Employers...................... 76
11.10 IRS Determination....................................... 76
11.11 Mistaken Contributions.................................. 78
11.12 Prevention of Escheat................................... 78
11.13 Limitations Imposed on Insider Participants............. 78
11.14 Construction............................................ 79
ARTICLE 12................................................................. 79
Top-Heavy Provisions................................................. 79
12.01 Application of Top-Heavy Provisions..................... 79
12.02 Minimum Benefit for Top-Heavy Year...................... 79
12.03 Aggregation Groups...................................... 80
12.04 Special Benefit Limits.................................. 80
12.05 Special Distribution Rule............................... 81
ARTICLE 13................................................................. 81
Tax Reduction Act Stock Ownership Plan............................... 81
13.01 Purpose; Separate Entity................................ 81
13.02 TRASOP Accounts; Application of Dividends............... 82
13.03 Voting Rights; Options; Rights; Warrants................ 83
13.04 Distribution of Shares.................................. 83
13.05 Diversification of TRASOP Accounts...................... 90
12/27/96
CON EDISON THRIFT SAVINGS PLAN
FOR MANAGEMENT EMPLOYEES
AND
TAX REDUCTION ACT STOCK OWNERSHIP PLAN
PURPOSE
The purpose of this Plan is to establish a convenient way for
management employees of the Company to supplement their retirement income by
saving on a regular and long-term basis and to provide additional financial
security for emergencies, thereby offering these employees an additional
incentive to continue their careers with the Company. This Plan is intended to
satisfy the requirements of Sections 401(k) and 401(m) of the Code and to
qualify under Section 401(a) of the Code, and the trust described in Article 5
of this Plan is an integral part of this Plan and is intended to qualify under
Section 501(a) of the Code, so as to provide Participants an option to defer a
portion of their compensation on a pre-tax and/or after-tax basis and to invest
and reinvest their savings under the Plan on a tax-deferred basis. It is
intended that a Participant's Pre-Tax Contributions, as defined in this Plan,
shall constitute payments by the Company as contributions to the Trust Fund on
behalf of the Participant, within the meaning of Section 401(k) of the Code.
Effective as of July 1, 1988, the Company's Tax Reduction Act Stock
Ownership Plan ("TRASOP") for management employees has been included within this
plan document, and all TRASOP Accounts and all transactions with respect to
TRASOP and TRASOP Accounts shall be governed by this plan document, but this
Plan and the TRASOP shall be separate plans. All TRASOP matters relating to the
period up to June 30, 1988 shall be governed by TRASOP as amended to February
19, 1988. There shall be no transfers between TRASOP Accounts and other Plan
Accounts and Subaccounts, and Plan Accounts and Subaccounts and TRASOP Accounts
shall continue to be operated as separate entities, albeit within a single plan
document and trust.
On December 28, 1994, the Plan was amended and restated in its
entirety effective as of January 1, 1994 except as otherwise provided therein.
The Plan, as so amended and restated, was submitted to the Internal Revenue
Service for a determination of its qualified status. Following consideration of
comments received from the Internal Revenue Service after its review of the
Plan, the Company decided to change the effective date of the Plan. Accordingly,
the Plan was amended and restated in its entirety, as amended through October
18, 1995, and this amendment and restatement waseffective as of January 1, 1989,
except as otherwise provided therein and except that Sections 301(b), (c) and
(d), 8.05 and 8.06 were effective as of January 1, 1987.
Effective as of December 1, 1996 the Plan is amended and restated in
its entirety to make a transition to Vanguard Fiduciary Trust Company to provide
trustee, recordkeeping, investment management and participant educational
services for the Plan, to add new investment funds, to change to daily valuation
and make certain other changes to the Plan.
ARTICLE 1
Definitions
The following words and phrases have the following meanings unless a
different meaning is plainly required by the context:
1.01 "Account" means the record maintained pursuant to Section 5.04 by the
Recordkeeper for each Participant relating to thrift savings contributions to
the Plan.
1.02 "Act" means the Tax Reduction Act of 1975, as amended from time to
time.
1.03 "Actual Contribution Percentage," or "ACP," means, with respect to a
specified group of Employees, the average of the ratios, calculated separately
for each Employee in the group, of (a) the sum of the Employee's After-Tax
Contributions and Company Contributions for that Plan Year (excluding any
Company Contributions forfeited under the provisions of Sections 3.01 and 8.01),
to (b) his Statutory Compensation for that entire Plan Year; provided that, upon
direction of the Plan Administrator, Statutory Compensation for a Plan Year
shall only be counted if received during the period an Employee is, or is
eligible to become, a Participant. The Actual Contribution Percentage for each
group and the ratio determined for each Employee in the group shall be
calculated to the nearest one one-hundredth of one percent.
1.04 "Actual Deferral Percentage," or "ADP," means, with respect to a
specified group of Employees, the average of the ratios, calculated separately
for each Employee in that group, of (a) the amount of Pre-Tax Contributions made
pursuant to Section 3.01 for a Plan Year (including Pre-Tax Contributions
returned to a Highly Compensated Employee under Section 3.01(c) and Pre-Tax
Contributions returned to any Employee pursuant to Section 3.01(d)), to (b) the
Employee's Statutory Compensation for that entire Plan Year, provided that, upon
direction of the Plan Administrator, Statutory Compensation for a Plan Year
shall only be counted if received during the period an Employee is, or is
eligible to become, a Participant. The Actual Deferral Percentage for each group
and the ratio determined for each Employee in the group shall be calculated to
the nearest one one-hundredth of one percent. For purposes of determining the
Actual Deferral Percentage for a Plan Year, Pre-Tax Contributions may be taken
into account for a Plan Year only if they:
(a) relate to compensation that either would have been received by the
Employee in the Plan Year but for the deferral election, or are attributable to
services performed by the Employee in the Plan Year and would have been received
by the Employee within 2 1/2 months after the close of the Plan Year but for the
deferral election,
(b) are allocated to the Employee as of a date within that Plan Year and
the allocation is not contingent on the participation or performance of service
after such date, and
(c) are actually paid to the Trustee no later than 12 months after the end
of the Plan Year to which the contributions relate.
1.05 "Adjustment Factor" means the cost of living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of the Code for
calendar years beginning on or after January 1, 1988, and applied to such items
and in such manner as the Secretary shall provide.
1.06 "Affiliated Employer" means any company which is a member of a
controlled group of corporations (as defined in Section 414(b) of the Code)
which also includes as a member the Company; any trade or business under common
control (as defined in Section 414(c) of the Code) with the Company; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes the
Company; and any other entity required to be aggregated with the Company
pursuant to regulations under Section 414(o) of the Code. Notwithstanding the
foregoing, for purposes of Sections 1.31 and 8.05, the definitions in Sections
414(b) and (c) of the Code shall be modified by substituting the phrase "more
than 50 percent" for the phrase "at least 80 percent" each place it appears in
Section 1563(a)(1) of the Code.
1.07 "After-Tax Contribution" shall have the meaning set forth in
Section 3.02.
1.08 "After-Tax Subaccount" shall have the meaning set forth in
Section 5.04.
1.09 "Annual Dollar Limit" means for Plan Years beginning on or after
January 1, 1989 and before January 1, 1994, $200,000 multiplied by the
Adjustment Factor. Commencing with the 1994 Plan Year, the Annual Dollar Limit
means $150,000, except that if for any calendar year after 1994 the
Cost-of-Living Adjustment as hereafter defined is equal to or greater than
$10,000, then the Annual Dollar Limit (as previously adjusted under this
Section) for any Plan Year beginning in any subsequent calendar year shall be
increased by the amount of such Cost-of-Living Adjustment, rounded to the next
lowest multiple of $10,000. The Cost-of-Living Adjustment shall equal the excess
of (i) $150,000 increased by the adjustments made under Section 415(d) of the
Code for the calendar years after 1994 except that the base period for purposes
of Section 415(d)(1)(A) of the Code shall be the calendar quarter beginning
October 1, 1993 over (ii) the Annual Dollar Limit in effect for the Plan Year
beginning in the calendar year.
1.10 "Annuity Starting Date" means the first day of the first period for
which an amount is paid following a Participant's Retirement or other
termination of employment.
1.11 "Beneficiary" means the person or persons determined in accordance
with the provisions of Section 11.03 to succeed to a Participant's benefits
under the Plan in the event of death of such Participant prior to the entire
distribution of such benefits.
1.12 "Board" means the Board of Trustees of the Company.
1.13 "Break in Service" means an event affecting forfeitures, which
shall occur to the extent that a Participant's nonforfeitable rights in his
Company Contributions Subaccount are determined under the cliff vesting
provisions of Section 6.02, as of the Participant's Severance Date if he is not
reemployed by the Company or an Affiliated Employer within one year after a
Severance Date. However, if an Employee is absent from work immediately
following his or her active employment, irrespective of whether the Employee's
employment is terminated, because of the Employee's pregnancy, the birth of the
Employee's child, the placement of a child with the Employee in connection with
the adoption of that child by the Employee or for purposes of caring for that
child for a period beginning immediately following that birth or placement and
that absence from work began on or after the first day of the Plan Year which
began in 1985, a Break in Service shall occur to the extent that a Participant's
nonforfeitable rights in his Company Contributions Subaccount are determined
under the cliff vesting provisions of Section 6.02 only if the Participant does
not return to work within two years of his Severance Date. A Break in Service
shall not occur during an approved leave of absence or during a period of
military service which is included in the Employee's Vesting Service pursuant to
Section 1.57.
1.14 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.15 "Company" means Consolidated Edison Company of New York, Inc. or
any successor by merger, purchase or otherwise, with respect to its
employees; or any other company participating in the Plan as provided in
Section 11.09 with respect to its employees.
1.16 "Company Contribution" means any contributions to the Trust Fund by
the Company pursuant to Section 3.03.
1.17 "Company Contribution Subaccount" shall have the meaning set forth in
Section 5.04.
1.18 "Compensation" means base salary paid to an Employee for services
rendered to the Company, determined prior to any reduction for Pre-Tax
Contributions pursuant to Section 3.01 or amounts contributed on the Employee's
behalf on a salary reduction basis to a cafeteria plan under Section 125 of the
Code and excluding bonuses, overtime pay, incentive compensation, deferred
compensation and all other forms of special pay. However, for Plan Years
beginning after 1988, Compensation shall not exceed the Annual Dollar Limit. The
Annual Dollar Limit applies to the aggregate Compensation paid to a Highly
Compensated Employee referred to in Section 8.04, his spouse and his lineal
descendants who have not attained age 19 before the end of the Plan Year. If, as
a result of the application of the family aggregation rule, the Annual Dollar
Limit is exceeded, then the Limit 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 the Limit.
1.19 "Defined Benefit Plan" means a "defined benefit plan" as defined in
Section 414(j) of the Code which is maintained by the Company or an Affiliated
Employer for its employees.
1.20 "Defined Benefit Plan Fraction" means, for any Participant, for any
calendar year, a fraction:
(a) The numerator of which is the Projected Annual Benefit of the
Participant under all Defined Benefit Plans (determined as of the close of the
year); and
(b) The denominator of which is the lesser of:
(i) The product of 1.25 multiplied by $90,000
as adjusted by the Adjustment Factor; or
(ii) The product of 1.4 multiplied by the average of the
Participant's aggregate renumeration as defined in Section
8.05 for his highest three consecutive years.
1.21 "Defined Contribution Plan" means a "defined contribution plan" as
defined in Section 414(i) of the Code which is maintained by the Company or an
Affiliated Employer for its employees.
1.22 "Defined Contribution Plan Fraction" means, for any Participant, for
any calendar year, a fraction:
(a) The numerator of which is the sum of the Participant's Annual
Additions for the year determined as of the end of such year; and
(b) The denominator of which is the sum of the lesser of the following
amounts determined for such year and for each prior year of Service:
(i) The product of 1.25 multiplied by
$30,000, as adjusted by the Adjustment
Factor; or
(ii) The product of 1.4 multiplied by 25% of the Participant's
aggregate renumeration as defined in Section 8.05 for the
year.
1.23 "Disability" means total and permanent physical or mental disability,
as evidenced by (a) receipt of a Social Security disability pension or (b)
receipt of disability payments under the Company's long-term disability program.
1.24 "Earnings" means the amount of income to be returned with any excess
deferrals, excess contributions or excess aggregate contributions under Section
3.01, 8.01, 8.02 or 8.03. Earnings on excess deferrals and excess contributions
shall be determined by multiplying the income earned on the Pre-Tax Subaccount
for the Plan Year by a fraction, the numerator of which is the excess deferrals
or excess contributions, as the case may be, for the Plan Year and the
denominator of which is the Pre-Tax Subaccount balance at the end of the Plan
Year, disregarding any income or loss occurring during the Plan Year. Earnings
on excess aggregate contributions shall be determined in a similar manner by
substituting the sum of the Company Contributions Subaccount and After-Tax
Subaccount for the Pre-Tax Subaccount, and the excess aggregate contributions
for the excess deferrals and excess contributions in the preceding sentence.
1.25 "Employee" means a salaried employee of the Company who is on the
management payroll and receives stated compensation other than a pension,
severance pay, retainer, or fee under contract; however, the term "Employee"
excludes any Leased Employee and any person who is included in a unit of
employees covered by a collective bargaining agreement which does not provide
for his participation in the Plan.
1.26 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.27 "Highly Compensated Employee" means any employee of the Company or an
Affiliated Employer (whether or not eligible for participation in the Plan) who
satisfies the criteria of paragraph (a), (b), (c) or (d):
(a) During the look-back year the employee:
(i) received Statutory Compensation in excess of $75,000
multiplied by the Adjustment Factor;
(ii) received Statutory Compensation in excess of $50,000
multiplied by the Adjustment Factor and was among the highest
20 percent of employees for that year when ranked by Statutory
Compensation paid for that year excluding, for purposes of
determining the number of such employees, such employees as
the Company may determine on a consistent basis pursuant to
Section 414(q)(8) of the Code; or
(iii) was at any time an officer of the Company or an Affiliated
Employer and received Statutory Compensation greater than 50
percent of the dollar limitation on maximum benefits under
Section 415(b)(1)(A) of the Code for such Plan Year. The
number of officers is limited to 50 (or, if lesser, the
greater of 3 employees or 10 percent of employees excluding
those employees who may be excluded in determining the
top-paid group). If no officer has Statutory Compensation in
excess of 50 percent of the dollar limitation on maximum
benefits under Section 415(b)(1)(A) of the Code, the highest
paid officer is treated as a Highly Compensated Employee.
(b) During the determination year, the employee satisfies the criteria
under (i), (ii), or (iii) of (a) above and is one of the 100 highest paid
employees of the Company or an Affiliated Employer.
(c) During the determination year or the look-back year the employee was
at any time a five percent owner of the Company.
(d) For purposes of Section 8.04(a), a Highly Compensated Employee shall
include a former employee who separated from service prior to the determination
year and who was a five percent owner for either (i) the year he separated from
service or (ii) any determination year ending on or after the employee's 55th
birthday.
(e) Notwithstanding the foregoing, employees who are nonresident aliens
and who receive no earned income from the Company or an Affiliated Employer
which constitutes income from sources within the United States shall be
disregarded for all purposes of this Section.
(f) For purposes of this Section, the "determination year" means the Plan
Year and "look-back year" means the 12 month period immediately preceding the
determination year. However, to the extent permitted under regulations, the Plan
Administrator may elect to determine the status of Highly Compensated Employees
on a current calendar year basis.
(g) The provisions of the Section shall be further subject to such
additional requirements as shall be described in Section 414(q) of the Code and
its applicable regulations, which shall override any aspects of this Section
inconsistent therewith.
1.28 "Hour of Service" means each hour for which the employee is paid or
entitled to payment for the performance of duties for the Company or an
Affiliated Employer.
1.29 "Investment Fund" means an investment fund available under the Plan
for investment of assets held in the Trust Fund.
1.30 "Investment Manager" means an investment manager as defined in
Section 3(38)of ERISA, which is appointed by the Named Fiduciaries to manage the
assets invested in an Investment Fund.
1.31 "Leased Employee" means any person performing services for the
Company or an Affiliated Employer as a leased employee as defined in Section
414(n) of the Code. In the case of any person who is a Leased Employee before or
after a period of service as an Employee, the entire period during which he has
performed services as a Leased Employee shall be counted as service as an
Employee for all purposes of the Plan, except that he shall not, by reason of
that status, become a Participant of the Plan.
1.32 "Loan Reserve" shall have the meaning set forth in Section 9.08.
1.33 "Named Fiduciaries" means the persons designated as named
fiduciaries of the Plan pursuant to Section 10.01.
1.34 "Nonparticipating Contribution" shall have the meaning set forth
in Section 3.04.
1.35 "Participant" means any person who has a balance to his credit in the
Trust Fund and/or shares beneficially owned under a TRASOP Account.
1.36 "Participating Contribution" shall have the meaning set forth in
Section 3.04.
1.37 "Plan" means the Con Edison Thrift Savings Plan for Management
Employees and, effective as of July 1, 1988, the TRASOP, as amended from time to
time, as set forth herein.
1.38 "Plan Administrator" means the Plan Administrator appointed pursuant
to Section 10.01 to administer the Plan.
1.39 "Plan Year" means the calendar year.
1.40 "Pre-Tax Contribution" shall have the meaning set forth in
Section 3.01.
1.41 "Pre-Tax Subaccount" shall have the meaning set forth in Section
5.04.
1.42 "Projected Annual Benefit" means, for any Participant, for any
calendar year, the annual benefit payable in the form of a straight life annuity
to which the Participant would be entitled under a Defined Benefit Plan on the
assumptions that he continues in the employment of the Company until the normal
retirement age under the Defined Benefit Plan (or his current age, if later),
that his compensation, as defined in such Defined Benefit Plan, continues at the
same rate in effect for the year under consideration until such age, and that
all other relevant factors used to determine benefits under the Defined Benefit
Plan remain constant as of the year under consideration for all future years.
1.43 "Recordkeeper" means the individual(s) or firm selected by the Plan
Administrator to provide recordkeeping and Participant accounting services for
the Plan, including maintenance of separate accounts for Participants in
accordance with the provisions of Section 5.04.
1.44 "Retirement" means a termination of service by a Participant either
(a) by reason of disability, or (b) under circumstances in which he is entitled
to receive a retirement pension under any Defined Benefit Plan, or (c) in the
case of any Participant who is employed after age 60 and who is not entitled to
receive a retirement pension under any Defined Benefit Plan, on or after his
sixty-fifth birthday.
1.45 "Rollover Subaccount" means the account credited with the Rollover
Contributions made by a Participant and earnings on those contributions.
1.46 Rollover Contributions" means amounts contributed pursuant to
Section 3.05.
1.47 "Severance Date" means the earlier of (a) the date an employee quits,
retires, is discharged or dies, or (b) the first anniversary of the date on
which an employee is first absent from service, with or without pay, for any
reason such as vacation, sickness, disability, layoff or leave of absence.
1.48 "Statutory Compensation" means the wages, salaries, and other amounts
paid in respect of an employee for services actually rendered to the Company or
an Affiliated Employer, including by way of example, overtime and bonuses, but
excluding deferred compensation, stock options and other distributions which
receive special tax benefits under the Code. For purposes of determining Highly
Compensated Employees under Section 1.27 and key employees under Article 12,
Statutory Compensation shall include Pre-Tax Contributions and amounts
contributed on a Participant's behalf on a salary reduction basis to a cafeteria
plan under Section 125 of the Code. For all other purposes, each Plan Year the
Plan Administrator may direct that Statutory Compensation shall include Pre-Tax
Contributions and amounts contributed on a Participant's behalf on a salary
reduction basis to a cafeteria plan under Section 125 of the Code. For Plan
Years beginning on or after January 1, 1989, Statutory Compensation shall not
exceed the Annual Dollar Limit, provided that such Limit shall not be applied in
determining Highly Compensated Employees under Section 1.27. The Annual Dollar
Limit applies to the aggregate Statutory Compensation paid to a Highly
Compensated Employee referred to in Section 8.04(a), his spouse and his lineal
descendants who have not attained age 19 before the close of the Plan Year. If,
as a result of the application of the family aggregation rule, the Annual Dollar
Limit is exceeded, then the Limit shall be prorated among the affected
individuals in proportion to each such individual's Statutory Compensation as
determined under this Section prior to the application of the Limit.
1.49 "Shares" means issued and outstanding shares of common stock of the
Company and shall include fractional shares of such common stock.
1.50 "Top-Heavy Plan" means any Defined Contribution Plan or Defined
Benefit Plan under which more that 60% of the sum of (i) its aggregate account
balances and (ii) the present value of its aggregate accrued benefits is
allocated to key employees. For the purposes of this definition "present value"
shall be determined on the basis of the applicable interest rate and applicable
mortality table as set forth in the Company's Defined Benefit Plan.
1.51 "Top Heavy Group" means any "required aggregation group" (as defined
in Section 12.03) or any "permissive aggregation group" (as defined in Section
12.03) in which more than 60% of the sum of (i) the aggregate account balances
under all plans in the group and (ii) the aggregate present value of accrued
benefits under all plans in the group is allocated to key employees. For the
purpose of this definition, "present value" shall be determined on basis of the
applicable interest rate and applicable mortality table as set forth in the
Company's Defined Benefit Plan.
1.52 "TRASOP" means the Tax Reduction Act Stock Ownership Plan of the
Company, as included within this plan document effective as of July 1, 1988.
1.53 "TRASOP Account" means an account maintained on behalf of an Employee
by the Trustee under the TRASOP, in which is held Shares beneficially owned
thereunder by the Employee, as determined under the provisions and requirements
of the TRASOP.
1.54 "Trust Fund" means the trust fund described in Article 5.
1.55 "Trustee" means the trustee at any time appointed and acting as
trustee of the Trust Fund.
1.56 "Vested Portion" means the portion of the Account in which the
Participant has a nonforfeitable interest as provided in Article 6 or, if
applicable, Article 12.
1.57 "Vesting Service" means, with respect to any employee, his period of
employment with the Company or any Affiliated Employer, whether or not as an
Employee, beginning on the date he first completes an Hour of Service and ending
on his Severance Date, provided that:
(a) if his employment terminates and he is reemployed within one year of
the earlier of (i) his date of termination or (ii) the first day of an absence
from service immediately preceding his date of termination, the period between
his Severance Date and his date of reemployment shall be included in his Vesting
Service;
(b) if he is absent from the service of the Company or any Affiliated
Employer because of service in the Armed Forces of the United States and he
returns to service with the Company or an Affiliated Employer having applied to
return while his reemployment rights were protected by law, the absence shall be
included in his Vesting Service;
(c) if he is on a leave of absence covered by the Family and Medical Leave
Act of 1993, as it may be amended from time to time, the period of leave shall
be included in his Vesting Service;
(d) if he is on leave of absence approved by the Company, under rules
uniformly applicable to all Employees similarly situated, the Company may
authorize the inclusion in his Vesting Service of any portion of that period of
leave which is not included in his Vesting Service under (a), (b) or (c) above;
and
(e) if his employment terminates and he is reemployed after he has
incurred a Break in Service, his Vesting Service after reemployment shall be
aggregated with his previous period or periods of Vesting Service if (i) he was
vested in his Company Contribution Subaccount or (ii) the period from his Break
in Service to his subsequent reemployment does not equal or exceed the greater
of five years or his period of Vesting Service before his Break in Service.
1.58 "Weekly Plan"means the Con Edison Retirement Income Savings Plan for
Weekly Employees as from time to time in effect.
1.59 The masculine pronoun wherever used includes the feminine pronoun.
ARTICLE 2
Eligibility and Participation
2.01 Eligibility. Any Employee shall be eligible for
participation in the Plan, except that only an Employee who was a Participant
in, and had an account under TRASOP on June 30, 1988, shall be eligible to
continue to participate in TRASOP and have a TRASOP Account under this Plan,
because applicable laws do not permit additional tax credit contributions to
TRASOP.
2.02 Participation. An Employee may become a Participant by
completing such enrollment process as may be prescribed by the Plan
Administrator and by electing to make monthly contributions to the Trust Fund in
an amount equal to any percentage of his Compensation permitted by Sections 3.01
and/or 3.02. An Employee may also become a Participant by electing to contribute
to the Trust Fund amounts allocated to the Employee by the Company under a
cafeteria plan of the Company under Section 125 of the Code and otherwise
available under such plan to be contributed under this Plan. A Participant's
contributions shall be made by regular payroll deductions authorized from time
to time by such Participant in such manner and on such conditions as may be
prescribed by the Plan Administrator, including a form furnished by the Company
under a cafeteria plan of the Company under Section 125 of the Code. An Employee
may become a Participant beginning with any calendar month by making such
election on or before such day of the preceding calendar month as may be
specified by the Plan Administrator.
2.03 Reemploymentof Former Employees and Former Participants. Any person
reemployed by the Company as an Employee, who was previously a Participant or
who was previously eligible to become a Participant, shall become a Participant
upon completing the enrollment process and making an election in accordance with
Section 2.02. Transferred Participants. A Participant who remains in the employ
of the Company or an Affiliated Employer but ceases to be an Employee shall
continue to be a Participant of the Plan but shall not be eligible to make
After-Tax Contributions, Pre-Tax Contributions or to have Company Contributions
made on his behalf while his employment status is other than as an Employee.
2.05 Termination of Participation. A Participant's participation shall terminate
on the date he is no longer employed by the Company or any Affiliated Employer
unless the Participant is entitled to benefits under the Plan, in which event
his participation shall terminate when those benefits are distributed to him.
ARTICLE 3
Contributions
3.01 Pre-Tax Contributions.
(a) A Participant may elect in accordance with Section 2.02 to reduce his
Compensation payable while a Participant by at least 1% and, effective January
1, 1994, not more than 18%, in multiples of 1% and have that amount contributed
to the Plan by the Company as Pre-Tax Contributions. An amount contributed to
the Plan pursuant to the election of a Participant under a cafeteria plan of the
Company under Section 125 of the Code may be designated as a Pre-Tax
Contribution by the Participant. Pre-Tax Contributions shall be further limited
as provided below and in Sections 8.01, 8.04 and 8.05.
(b) In no event shall the Participant's Pre-Tax Contributions and similar
contributions made on his behalf by the Company or an Affiliated Employer to all
plans, contracts or arrangements subject to the provisions of Section 401(a)(30)
of the Code in any calendar year exceed $7,000 multiplied by the Adjustment
Factor. If a Participant's Pre-Tax Contributions in a calendar year reach that
dollar limitation, his election of Pre-Tax Contributions for the remainder of
the calendar year will be canceled and, if so elected by the Participant, then
recharacterized as an election to make After-Tax Contributions under Section
3.02 at the same rate as was previously in effect for his Pre-Tax Contributions.
Each Participant affected by this paragraph (b) may elect to change or suspend
the rate at which he makes After-Tax Contributions. As of the first pay period
of the calendar year following such cancellation, the Participant's election of
Pre-Tax Contributions shall again become effective at the rate in accordance
with his most recent election for Pre-Tax Contributions.
(c) In the event that the sum of the Pre-Tax Contributions and similar
contributions to any other qualified Defined Contribution Plan maintained by the
Company or an Affiliated Employer exceeds the dollar limitation in Section
3.01(b) for any calendar year, the Participant shall be deemed to have elected a
return of Pre-Tax Contributions in excess of such limit ("excess deferrals")
from this Plan. The excess deferrals, together with Earnings, shall be returned
to the Participant no later than the April 15 following the end of the calendar
year in which the excess deferrals were made. The amount of excess deferrals to
be returned for any calendar year shall be reduced by any Pre-Tax Contributions
previously returned to the Participant under Section 8.01 for that calendar
year. In the event any Pre-Tax Contributions returned under the this paragraph
(c) were matched by Company Contributions under Section 3.03, those Company
Contributions, together with Earnings, shall be forfeited and used to reduce
future Company contributions.
(d) If a Participant makes tax-deferred contributions under another
qualified defined contribution plan maintained by an employer other than the
Company or an Affiliated Employer for any calendar year and those contributions
when added to his Pre-Tax Contributions exceed the dollar limitation under
Section 3.01(b) for that calendar year, the Participant may allocate all or a
portion of such excess deferrals to this Plan. In that event, such excess
deferrals, together with Earnings, shall be returned to the Participant no later
than the April 15 following the end of the calendar year in which such excess
deferrals were made. However, the Plan shall not be required to return excess
deferrals unless the Participant notifies the Plan Administrator, in writing, by
March 1 of that following calendar year of the amount of the excess deferrals
allocated to this Plan. The amount of such excess deferrals to be returned for
any calendar year shall be reduced by any Pre-Tax Contributions previously
returned to the Participant under Section 8.01 for that calendar year. In the
event any Pre-Tax Contributions returned under this paragraph (d) were matched
by Company Contributions under Section 3.03, those Company Contributions,
together with Earnings, shall be forfeited and used to reduce future Company
contributions.
3.02 After-Tax Contributions. Any Participant may make After-Tax Contributions
under this Section whether or not he has elected to have Pre-Tax Contributions
made on his behalf pursuant to Section 3.01. The amount of After-Tax
Contributions shall be at least 1% and, effective January 1, 1994, not more than
18% of his Compensation while a Participant, in multiples of 1%. An amount
contributed to the Plan pursuant to the election of a Participant under a
cafeteria plan of the Company under Section 125 of the Code may be designated as
any After-Tax Contribution by the Participant. If the Participant has made an
election under Section 3.01, the maximum percentage of Compensation which the
Participant may elect to contribute under this Section shall be equal to the
excess of 18% over the percentage elected by the Participant under Section 3.01.
3.03 Company Contributions. The Company shall
contribute on behalf of each of its Participants who elects to make Pre-Tax
Contributions or After-Tax Contributions an amount equal to 50% of the sum of
the Pre-Tax Contributions and After-Tax Contributions made on behalf of or by
the Participant to the Plan during each month, not to exceed 6% of the
Participant's Compensation for such month, in the following order of priority:
(a) Pre-Tax Contributions, and then (b) After-Tax Contributions. In no event,
however, shall the Company Contributions for a month pursuant to this Section
exceed 3% of the Participant's Compensation for such month. The Company
Contributions are made expressly conditional on the Plan satisfying the
provisions of Sections 3.01, 8.01, 8.02 and 8.03. If any portion of the Pre-Tax
Contribution or After-Tax Contribution to which the Company Contribution relates
is returned to the Participant under Section 3.01, 8.01, 8.02 or 8.03, the
corresponding Company Contribution shall be forfeited, and if any amount of the
Company Contribution is deemed an excess aggregate contribution under Section
8.03, such amount shall be forfeited in accordance with the provisions of that
Section. Company Contributions shall be paid to the Trustee each calendar month.
3.04 Participating and Nonparticipating Contributions. The portion of a
Participant's Pre-Tax Contribution or After-Tax Contribution to which the
Company Contribution relates shall be Participating Contributions, and the
portion of a Participant's Pre-Tax Contribution or After-Tax Contribution in
excess of the Participant's Participating Contributions shall be
Nonparticipating Contributions.
3.05 Rollover Contributions and Trust to Trust Transfers.
(a) Subject to such terms and conditions as the Plan Administrator may
determine to be appropriate, applied in a uniform and non-discriminatory manner
to all Participants, and without regard to any limitations on contributions set
forth in this Article 3, the Plan may receive from a Participant for credit to
his Rollover Subaccount, in cash, any amount previously distributed (or deemed
to have been distributed) to him from a qualified plan. The Plan may receive
such amount either directly from the Participant or in the form of a direct
rollover from an individual retirement account or from a qualified plan.
Notwithstanding the foregoing, the Plan shall not accept any amount unless such
amount is eligible to be rolled over in accordance with applicable law and the
Participant provides evidence satisfactory to the Plan Administrator that such
amount qualifies for rollover treatment. Unless received by the Plan in the form
of a direct rollover, the Rollover Contribution must be paid to the Trustee on
or before the 60th day after the day it was received by the Participant or be
rolled over through the medium of an individual retirement account that contains
no assets other than those representing employer contributions to a qualified
plan, any earnings thereon and any earnings from employee contributions to that
plan. At the time received by the Plan, the Participant shall, in such manner
and on such conditions as may be prescribed by the Plan Administrator, elect to
invest the Rollover Contribution in the Investment Funds then available under
the Plan to the Participant. If the Participant fails to make an investment
election, 100% of the Rollover Contribution shall be invested in the Investment
Fund that has the most conservative investment risk.
(b) Rollovers and direct rollovers shall only be accepted from a
Participant who is an Employee except that the Plan shall accept a rollover or
direct rollover from a former Employee who is a Participant of an amount
received from either a Defined Benefit Plan or the TRASOP.
(c) Subject to such terms and conditions as the Plan Administrator may
determine to be appropriate, applied in a uniform and non-discriminatory manner
to all Participants, the Plan shall receive on behalf of a Participant a
trust-to-trust transfer from the Weekly Plan of the Participant's benefits and
liabilities under the Weekly Plan. Any Participant whose benefits are the
subject of a trust-to-trust transfer from the Weekly Plan to this Plan will be
entitled to receive benefits, rights and features from the Plan that are no less
than the benefits, rights and features he would be entitled to receive from the
Weekly Plan immediately preceding the transfer. Following the transfer, the
Participant's rights to the non-vested portion of any benefits transferred from
the Weekly Plan shall vest in accordance with Section 6.02 of this Plan. To the
extent feasible, such transfer shall be made on an in-kind basis. To the extent
that such transfer is made in the form of cash, at the time received by the Plan
the Participant shall, in such manner and on such terms as may be prescribed by
the Plan Administrator, elect to invest the cash in the Investment Funds then
available under the Plan except that the Participant may elect to invest in the
Company Stock Fund only cash derived from the sale of shares in the Company
Stock Fund under the Weekly Plan.
3.06 Changes in Contributions. A Participant may
increase or reduce his contributions within the limits prescribed by Sections
3.01 and 3.02, effective as of the first day of any calendar month, by making a
new election on or before such day of the preceding calendar month in such
manner and on such conditions as may be prescribed by the Plan Administrator. A
Participant may make changes in contribution levels once a month.
3.07 Suspension in Contributions. A Participant
may at any time suspend his contributions as of the last day of any calendar
month by making an election on or before such day of such month, in such manner
and on such conditions as may be prescribed by the Plan Administrator. A
Participant may resume making contributions, effective as of any calendar month,
by making an election on or before such day of the preceding calendar month, in
such manner and as such conditions as may be prescribed by the Plan
Administrator. A suspension or resumption of contributions is counted as one of
the changes in contribution levels permitted within each Plan Year under the
Plan.
3.08 Payment to Trust.
(a) Amounts contributed by Participants shall be paid by the Company to
the Trustee promptly and credited by the Trustee to their Accounts in accordance
with the certification of the Plan Administrator as to the names of the
contributing Participants and the respective amounts contributed by each
Participant as Participating Contributions, Nonparticipating Contributions,
Pre-Tax Contributions and After-Tax Contributions.
(b) Each Company Contribution shall be paid by the Company promptly to the
Trustee and shall be allocated among the Participants and credited to their
respective Accounts in proportion to their Participating Contributions made
during the calendar month for which the Company Contribution is being made.
3.09 No Contributions to TRASOP. No contributions to TRASOP by the Company or by
Participants are permitted.
3.10 Transition Period. In order to carry out the
transition to Vanguard Fiduciary Trust Company as Successor Trustee,
Recordkeeper and Investment Manager, the Plan Administrator shall have authority
to impose such rules and restrictions in the administration of the Plan as he
may deem appropriate, so long as such rules and restrictions are applied on a
uniform and nondiscriminatory basis.
ARTICLE 4
Company Contributions
4.01 Company Contributions Election. A
Participant may elect to have Company Contributions allocated to his Account
invested, in multiples of 1%, in any Investment Fund or Funds. If the
Participant fails to make an election as to Company Contributions, 100% of such
Contributions shall be invested in the Investment Fund that has the most
conservative investment risk. Any such election shall be made in such manner and
on such conditions as may be prescribed by the Plan Administrator.
4.02 Change of Election. A Participant may change his
investment election regarding future Company Contributions once a month during a
calendar year. Any such election shall be made in such manner and on such
conditions as may be prescribed by the Plan Administrator.
4.03 Certification to Company. The Recordkeeper
shall certify to the Company the amount of Company Contributions that each
Participant has most recently elected, pursuant to Section 4.01 or 4.02, to have
invested for his Account in the Investment Funds.
4.04 Forfeitures. The total amount of the Trust Fund forfeited
by Participants pursuant to Section 7.02 or otherwise, shall be invested in the
Investment Fund that has the most conservative investment risk and then shall be
applied forthwith to reduce future Company Contributions due under the Plan. The
Trustee shall promptly advise the Company of any such forfeiture and the amount
thereof. ARTICLE 5 ARTICLE 5 The Trust Fund; Investmentshe Trust Fund;
Investments
5.01 Trust Agreement. Contributions and TRASOP
Accounts shall be held in a Trust Fund by the Trustee under a written trust
agreement between the Company and the Trustee. No person shall have any rights
to or interest in the Trust Fund except as provided in the Plan. The provisions
of the trust agreement between the Company and the Trustee shall be considered
an integral part of the Plan as if fully set forth herein.
5.02 Investment of Trust Fund.
(a) Except for that portion of the Trust Fund to be invested in a
Participant's Loan Reserve pursuant to Section 9.08 or in TRASOP Shares pursuant
to Section 13.02, the Trust Fund shall be invested and reinvested in Investment
Funds in accordance with the Participants' investment directions. All such
investment directions by Participants shall be made in accordance with rules and
procedures prescribed by the Plan Administrator applied on a uniform and
non-discriminatory basis. To the extent that any Participant fails to provide
investment directions in accordance with such rules and procedures, the Named
Fiduciaries shall be responsible for directing the investment of amounts
allocated to the Participant's Account under the Plan. A Participant shall be
permitted to change investment directions both as to his existing Account
balance and future contributions by or on behalf of the Participant under the
Plan. Any such change in investment directions shall be made in accordance with
rules and procedures prescribed by the Plan Administrator applied on a uniform
and non-discriminatory basis.
(b) Notwithstanding Section 5.02(a) above, to carry out the transition to
Vanguard Fiduciary Trust Company as Successor Trustee, Recordkeeper and
Investment Manager, contributions and loan repayments made after November 30,
1996 shall be invested by the Trustee in the mutual fund designated as the
"Vanguard Money Market Reserves-U.S. Treasury Portfolio". As soon as practicable
following establishment of Participant Accounts by the Recordkeeper, the
contributions and loan repayments so invested, together with any earnings
thereon, shall be transferred to the Investment Funds and allocated to a
Participant's Account in accordance with the Participant's election.
(c) Notwithstanding Section 5.02(a) above, to carry out the transition to
Vanguard Fiduciary Trust Company as Successor Trustee, Recordkeeper and
Investment Manager, on December 31, 1996 the Trustee shall invest the assets of
the Trust Fund in the following Investment Funds:
(i) Assets in the Treasury Bill Fund shall be invested in
Vanguard Money Market Reserves-U.S. Treasury Portfolio;
(ii) Assets in the Fixed Income Fund shall be invested in the Fixed
Income Fund, an investment contract fund that invests primarily in a diversified
portfolio of traditional and alternative investments contracts issued by
insurance companies and banks and other similar types of fixed principal
investments;
(iii) Assets in the Balanced Fund shall be invested in Vanguard
LifeStrategy Funds-Moderate Growth Portfolio, a balanced fund that invests in a
combination of Vanguard funds with the overall objective of providing growth of
capital and a reasonable level of current income;
(iv) Assets in the Equity Index Fund shall be invested in Vanguard
Index Trust-500 Portfolio, a growth and income stock fund that holds 500 of the
largest stocks in the U.S. in an attempt to match the performance and risk
characteristics of Standard & Poor's 500 Composite Stock Price Index; and
(v) Assets in the Company Stock Fund shall be invested in the
Company Stock Fund that invests in Company common stock to provide the
possibility of long-term growth through increases in the value of the stock and
reinvestments of dividends and in a short-term reserves to help accommodate
daily transactions.
(d) As soon as practicable after December 31, 1996 as determined by the
Plan Administrator, the following additional Investment Funds shall be
established:
(i) Vanguard Bond Index Fund-Total Bond Market Portfolio, a bond
fund that invests in a broad array of bonds from a variety of industries in an
attempt to match the performance and risk characteristics of the Lehman Brothers
Aggregate Bond Index;
(ii) Vanguard Index Trust-Extended Market Portfolio, a growth stock
fund that invests in about 2000 companies in an attempt to match the performance
and risk characteristics of the Wilshire 4500 Index; and
(iii) Vanguard STAR Fund-Total International Portfolio, an
international stock fund that invests in stocks of about 1500 companies located
in approximately 30 countries around the world, excluding the U.S. and Canada.
The Portfolio invests in a combination of three portfolios of Vanguard
International Equity Index Fund in proportions that mirror the composition of
two indices compiled by Morgan Stanley Capital International: the Europe,
Australia and Far East Index and the Emerging Markets (Select) Index.
(e) The Named Fiduciaries may establish other Investment Funds (or modify
the investment objectives or mix of Investment Funds), in addition to or in lieu
of the Investment Funds described above. Such other Investment Funds shall be
established without the necessity of an amendment to the Plan and shall have the
objectives prescribed by the Named Fiduciaries. The Named Fiduciaries may
eliminate one or more Investment Funds existing at any time without the
necessity of an amendment to the Plan.
5.03 Company Stock Fund.
(a) Investments in Fund. The Trustee shall regularly purchase Shares for
the Company Stock Fund in accordance with a nondiscretionary purchasing program.
Such purchases may be made on any securities exchange where Shares are traded,
in the over-the-counter market, or in negotiated transactions, and may be on
such terms as to price, delivery and otherwise as the Trustee may determine to
be in the best interests of the Participants. Dividends, interest and other
income received on assets held in the Company Stock Fund shall be reinvested in
the Company Stock Fund. All funds to be invested in the Company Stock Fund shall
be invested by the Trustee in one or more transactions promptly after receipt by
the Trustee, subject to any applicable requirement of law affecting the timing
or manner of such transactions. All brokerage commissions and other direct
expenses incurred by the Trustee in the purchase or sale of Shares under the
Plan will be borne by the Plan except to the extent the Company determines to
pay such expenses.
(b) Units. The interests of Participants in the Company Stock Fund shall
be measured in Units, the number and value of which shall be determined daily.
(c) Voting of Shares. Each Participant shall be entitled to direct the
Trustee as to the manner in which any Shares or fractional Share represented by
Units allocated to the Participant's Account are to be voted. Any such Shares or
fractional Share for which the Participant does not give voting directions shall
be voted by the Trustee in the same manner and proportions as all other Shares
held by the Trustee for which voting directions are given by Participants. The
Trustee shall keep confidential a Participant's voting instructions and
information regarding a Participant's purchases, holdings and sales of Shares.
The Plan Administrator shall be responsible for monitoring the Trustee's
performance of its confidentiality obligations.
5.04 Accounts and Subaccounts. The
Recordkeeper shall maintain in any equitable manner, which shall include a daily
revaluation at current market values, as determined by the Trustee, a separate
TRASOP Account for each Participant eligible therefor and a separate Account for
each Participant, and within each such Account a Pre-Tax Subaccount, an
After-Tax Subaccount, a Rollover Subaccount and a Company Contribution
Subaccount, in which the Recordkeeper shall keep a separate record of the
respective shares of such Participant in the Trust Fund, including each
Investment Fund, and the Loan Reserve, attributable to amounts credited to his
Pre-Tax Subaccount, his After-Tax Subaccount, his Rollover Subaccount and his
Company Contribution Subaccount. A Participant's Pre-Tax Contributions shall be
credited to his Pre-Tax Subaccount. A Participant's After-Tax Contributions
shall be credited to his After-Tax Subaccount. A Participant's Rollover
Contributions shall be credited to his Rollover Subaccount. A Participant's
share of Company Contributions made on or after January 1, 1985 shall be
credited to his Company Contribution Subaccount.
5.05 Pre-January 1, 1985 Contributions.
Any contributions to the Trust Fund made by a Participant prior to January 1,
1985 shall, as of January 1, 1985, be credited to his After-Tax Subaccount. Any
contributions to the Trust Fund made by the Company and allocated to a
Participant's Account prior to January 1, 1985 shall be credited to the
Participant's Company Contribution Subaccount.
5.06 Statements of Account. As soon as practicable
after each calendar quarter the Recordkeeper shall cause to be sent to each
Participant a written statement showing, as of such date, the respective amounts
of the Trust Fund, including each investment Fund and the Loan Reserve,
attributable to the Participant's Pre-Tax Subaccount, his After-Tax Subaccount,
his Rollover Subaccount and his Company Contribution Subaccount and the
Participant's balance in his TRASOP Account, if any. With respect to the
Participant's After-Tax Subaccount, the statement shall show separately the
amount of the Participant's own contributions (less any withdrawals) credited to
his After-Tax Subaccount. The Plan Administrator may direct the Recordkeeper
from time to time to issue comparable statements to Participants as of other
dates during the calendar year.
5.07 Responsibility for Investments. Each
Participant is solely responsible for the selection of his Investment Funds. The
Trustee, the Recordkeeper, any Investment Manager, the Named Fiduciaries, the
Plan Administrator, the Company and the trustees, officers and other employees
of the Company, the Trustee, the Recordkeeper and any Investment Manager, are
not empowered to advise a Participant as to the decision in which his Account
shall be invested. The fact that an Investment Fund is available to Participants
for investment under the Plan shall not be construed as a recommendation for a
particular Participant to invest in that Investment Fund.
ARTICLE 6
Vesting
6.01 Participant Contributions. The amount to the
credit of a Participant's Account which is attributable to his Pre-Tax
Contributions, After-Tax Contributions and Rollover Contributions to the Trust
Fund made by the Participant shall be 100% vested at all times.
6.02 Company Contributions. The amount to the credit
of a Participant's Account which is attributable to Company Contributions,
including contributions to the Trust Fund made by the Company prior to January
1, 1985, shall become 100% vested, subject to Article 8, on the later of (i)
January 1, 1985, and (ii) the first day of the calendar month in which the
Participant completes three years of Vesting Service; provided, however, that
all amounts to the credit of a Participant's Account which are attributable to
Company Contributions, shall become 100% vested upon the Participant's
attainment of age 65, his Disability, termination of his service by reason of
Retirement or death or by the Company for reasons other than cause. Except to
the extent that they shall have become vested, amounts to the credit of a
Participant's Account which are attributable to Company Contributions are
subject to forfeiture as provided in Section 7.02.
6.03 TRASOP Account. A Participant's balance in his TRASOP
Account, if any, shall always be 100% vested.
ARTICLE 7
---------
Distributions, Withdrawals and Forfeitures
7.01 Retirement. If a Participant's service is terminated
by reason of Retirement, the entire amount to the credit of his Account
(including any amount due under any outstanding loan pursuant to Article 9)
shall be distributed to him in accordance with Section 7.09.
7.02 Voluntary Termination or Termination by the Company; Forfeitures.
(a) If a Participant's service is terminated by the Company for cause or
if the Participant voluntarily terminates his service otherwise than by reason
of Retirement, the non-vested portion of the Participant's Company Contributions
Subaccount shall not be forfeited until the Participant incurs a period of Break
in Service of five years or receives a distribution of the Vested Portion of his
Account, if earlier. The Vested Portion to the credit of such Participant's
Account (including any amount due under any outstanding loan pursuant to Article
9) shall be distributed to such Participant in accordance with Section 7.09.
Termination of service for cause shall be determined by the Plan Administrator
under rules uniformly applied to all Participants. If the Participant is not
reemployed by the Company or an Affiliated Employer before he incurs a period of
Break in Service of five years or receives a distribution, the non-vested
portion of his Company Contribution Subaccount shall be forfeited.
(b) If an amount to the credit of a Participant's Company Contributions
Subaccount has been forfeited in accordance with paragraph (a) above, such
amount shall subsequently be restored to his Company Contribution Subaccount by
the Company provided (i) he is reemployed by the Company or an Affiliated
Employer prior to incurring a period of Break in Service of five years and (ii)
either he has elected or is deemed to have elected a deferred distribution in
accordance with Section 7.09 or during his reemployment and within five years
after his reemployment date he makes a lump sum payment to the Trust Fund in
cash in an amount equal to that portion of the distribution received which
represents the Participant's Participating Contributions relating directly to
Company Contributions which were forfeited at the time of distribution. The
forfeited amount so restored shall vest in accordance with Section 6.02 as a
Company Contribution and shall be credited to the Participant's Company
Contribution Subaccount. The lump sum payment by the Participant shall
immediately be 100% vested and shall be credited to the Participant's Account.
(c) If any amounts to be restored by the Company to a Participant's
Company Contributions Subaccount have been forfeited under paragraph (a) above,
those amounts shall be taken first from any forfeitures which have not as yet
been applied against Company contributions and if any amounts remain to be
restored, the Company shall make a special Company contribution equal to those
amounts.
(d) A Participant may elect, in such manner and on such terms as may be
prescribed by the Plan Administrator, to invest a repayment in the Investment
Funds available under the Plan to the Participant at the time of the repayment.
7.03 Death. Upon the death of a Participant the entire amount to the
credit of his Account (including any amount due under any outstanding loan
pursuant to Article 9) shall be distributed to his Beneficiary in accordance
with Section 11.03 as soon as practicable (but in any event within 90 days)
after the calendar month in which his death occurs.
7.04 Withdrawals. A Participant may request cash withdrawals
from his Account by making a withdrawal application in such manner and on such
conditions as may be prescribed by the Plan Administrator. Payment of the amount
withdrawn shall be made as soon as practicable after such application has been
completed and processed. Withdrawals shall be permitted not more than four times
in any calendar year and only in accordance with the following terms:
(a) Withdrawals will be made on an average cost basis within each category
below and pro rata from the Participant's balances available for withdrawal.
(b) A Participant may at any time withdraw an amount up to the entire
amount to the credit of his After-Tax and Company Contribution Subaccounts,
except that a Participant may not withdraw an amount attributable to a Company
Contribution until December 31 of the second calendar year beginning after the
calendar month for which the Company Contribution was made. A Participant shall
not be permitted to make any such withdrawal amounting to less than $300 unless
the maximum amount available under this paragraph (b) is less than $300 in which
case the Participant shall only be permitted to withdraw such maximum amount.
Withdrawals shall be made in the following order from a Participant's Account:
1. If the Participant requests a nontaxable withdrawal:
(i) Nonparticipating After-Tax Contributions made before
January 1, 1987, excluding any earnings thereon, and (ii)
Participating After-Tax Contributions made before January
1, 1987, excluding any earnings thereon.
2. If the Participant requests a taxable withdrawal, without
incurring a suspension as provided in (f) below:
(i) Nonparticipating After-Tax Contributions made before
January 1, 1987, excluding any earnings thereon;
(ii) Participating After-Tax Contributions made before January
1, 1987, excluding earnings thereon;
(iii) Nonparticipating After-Tax Contributions made on or after
January 1, 1987, including any earnings thereon;
(iv) Participating After-Tax Contributions made on or after January
1, 1987 that have been in the Account two full calendar years
after the year contributed, including any earnings thereon;
(v) Any earnings attributable to Nonparticipating After-Tax
Contributions made before January 1, 1987;
(vi) Any earnings attributable to Participating After-Tax
Contributions made before January 1, 1987; and
(vii) Company Contributions in the Account for two full calendar
years after the contribution year, including any earnings
thereon.
3. If the Participant requests a taxable withdrawal resulting in a
suspension as provided in (f) below:
(i) Nonparticipating After-Tax Contributions made before
January 1, 1987, excluding any earnings thereon;
(ii) Participating After-Tax Contributions made before January
1, 1987, excluding any earnings thereon;
(iii) Nonparticipating After-Tax Contributions made on or after
January 1, 1987, including any earnings thereon;
(iv) Participating After-Tax Contributions made on or after
January 1, 1987, including any earnings thereon;
(v) Any earnings attributable to Nonparticipating After-Tax
Contributions made before January 1, 1987;
(vi) Any earnings attributable to Participating After-Tax
Contributions made before January 1, 1987; and
(vii) Company Contributions in the Account for two full calendar
years after the contribution year, including any earnings
thereon.
(c) A Participant who has withdrawn at least the entire amount available
under (b) above without incurring a suspension may at any time withdraw an
amount up to the entire amount to the credit of his Rollover Subaccount.
(d) A Participant who has attained the age of 59 years and six months and
who has withdrawn at least the entire amounts available for withdrawal under
paragraphs (b) and (c) above without incurring a suspension, may withdraw an
amount up to the entire amount to the credit of his Pre-Tax Subaccount in the
following order:
1. If the Participant requests a withdrawal, without resulting in a
suspension under (f) below:
(i) Nonparticipating Pre-Tax Contributions, including any
earnings thereon, and
(ii) Participating Pre-Tax Contributions that have been in the
Account for two full calendar years after the year
contributed, including any earnings thereon.
2. If the Participant requests a withdrawal resulting in a
suspension under (f) below:
(i) Participating After-Tax Contributions, made on or after
January 1, 1987 that have been in the Account for less than
two full calendar years after the contribution year, including
any earnings thereon;
(ii) Nonparticipating Pre-Tax Contributions, including any
earnings thereon; and
(iii) Participating Pre-Tax Contributions including any earnings
thereon. A Participant shall not be permitted to make any such
withdrawal amounting to less than $300 unless the maximum
amount available under this Section 7.04 is less than $300 in
which case the Participant shall only be permitted to withdraw
such maximum amount.
(e) Notwithstanding the preceding paragraphs (b), (c) and (d), a
Participant may not withdraw any amount that would cause the balance of his
Account to be less than the minimum amount required under Section 9.09.
(f) In the event a Participant withdraws any amounts which represent
After-Tax Participating Contributions made at any time during the two full
calendar years preceding the calendar year in which the withdrawal is made, the
Participant's right to make any contributions to the Plan shall be suspended for
the six full calendar months as soon as practicable following the withdrawal. To
resume contributions following such suspension, the Participant must elect, on
or before such day, in such manner and on such conditions as may be prescribed
by the Plan Administrator, to resume making contributions.
7.05 Hardship Withdrawals. A Participant may, in the
event of hardship, withdraw all or any part of the amount of Pre-Tax
Contributions to the credit of the Account of the Participant (excluding any
earnings after December 31, 1988 attributable to Pre-Tax Contributions) in
excess of any minimum Account balance required under Section 9.09. A Participant
may apply for a hardship withdrawal in such manner and on such conditions as may
be prescribed by the Plan Administrator. For purposes of the Plan a Participant
shall be deemed to have a hardship if the Participant has an immediate and heavy
financial need and if the withdrawal is necessary to satisfy such financial need
as set forth below. The Plan Administrator or his delegate shall determine
whether the Participant satisfies the requirements for a hardship and the amount
of any hardship withdrawal. Any withdrawal under this Section shall be made
pro-rata from the Participant's balances in the Investment Funds from which
withdrawal may be made as provided in Section 7.04. A withdrawal pursuant to
this Section 7.05 shall not be subject to the limitations on number of
withdrawals permitted under Section 7.04.
(a) Immediate and Heavy Financial Need - A Participant will be deemed to
have an immediate and heavy financial need if the withdrawal is to be made on
account of any of the following:
(1) Medical expenses described in Section 213(d) of the Code
previously incurred by the Participant, the Participant's
spouse or any dependent (as defined in Section 152 of the
Code) of the Participant, or expenses necessary for those
persons to obtain medical care described in Section 213(d) of
the Code;
(2) Costs directly related to the purchase
(excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition and related educational fees for the next
twelve-months of post- secondary education for the
Participant, or the Participant's spouse, children or
dependents;
(4) Payment of amounts necessary to prevent the eviction of the
Participant from his principal residence or to avoid
foreclosure on the mortgage of the Participant's principal
residence; or
(5) Any other need added to the foregoing items of deemed
immediate and heavy financial needs by the Commissioner of the
Internal Revenue Service through the publication of revenue
rulings, notices and other documents of general availability,
rather than on an individual basis.
A Participant shall not be permitted to make a withdrawal in the event of a
hardship on account of any reason other than as set forth above.
(b) Necessary to Satisfy Such Need - The requested withdrawal will not be
treated as necessary to satisfy the Participant's immediate and heavy financial
need to the extent that the amount of the requested withdrawal is in excess of
the amount required to relieve the financial need or to the extent such need may
be satisfied from other sources that are reasonably available to the
Participant. 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 hardship withdrawal. The Participant
must request, on such form or otherwise as the Plan Administrator or his
delegate may prescribe, that the Plan Administrator or his delegate make its
determination of the necessity for the withdrawal solely on the basis of the
Participant's certification, without any supporting documents. In that event,
the Plan Administrator or his delegate shall make such determination, provided
all of the following requirements are met: (1) the Participant has obtained all
distributions and withdrawals, other than distributions available only on
account of hardship, and all nontaxable loans currently available under all
plans of the Company and Affiliated Employers, (2) the Participant is prohibited
from making Pre-Tax Contributions and After-Tax Contributions to the Plan and
all other plans of the Company and Affiliated Employers under the terms of such
plans or by means of an otherwise legally enforceable agreement for at least 12
months after receipt of the distribution, and (3) the limitation described in
Section 3.01(b) under all plans of the Company and Affiliated Employers for the
calendar year following the year in which the distribution is made must be
reduced by the Participant's elective deferrals made in the calendar year of the
distribution for hardship. For purposes of clause (2), "all other plans of the
Company and Affiliated Employers" means all qualified and non-qualified plans of
deferred compensation maintained by the Company and Affiliated Employers and
includes a stock option, stock purchase (including the Company's Discount Stock
Purchase Plan though it isn't a deferred compensation plan) and such other plans
as may be designated under regulations issued under Section 401(k) of the Code,
but shall not include health and welfare benefit plans and the mandatory
employee contribution portion of a Defined Benefit Plan.
7.06 Distribution from Company Stock Fund. Where an amount to be distributed
pursuant to Section 7.01, 7.02, or 7.03 is represented in part by Units, the
distributee may elect, in such manner and on such conditions as may be
prescribed by the Plan Administrator, to have distributed the number of whole
Shares represented by such Units, together with an amount of dollars
representing the balance of the current value of such Units. In the absence of
such an election, the distribution shall be made entirely in dollars.
Withdrawals pursuant to Section 7.04 or 7.05 and loans pursuant to Article 9 to
be made from the Company Stock Fund shall be made entirely in cash.
7.07 Leaves of Absence and Transfers to Weekly Payroll.
If a Participant shall be granted a leave of
absence by the Company or shall transfer from the management payroll to the
weekly payroll, neither such event shall be deemed a termination of service, but
such Participant's Pre-Tax Contributions and After-Tax Contributions under this
Plan shall be suspended as of the last day of the calendar month in which such
leave commences, or transfer occurs, as the case may be. Such Participant may
resume making Pre-Tax Contributions and After-Tax Contributions, as of the first
day of any calendar month following the termination of such leave of absence or
his return to the management payroll, as the case may be, by making a new
payroll deduction authorization in such manner and on such conditions as may be
prescribed by the Plan Administrator.
7.08 Age 70 1/2 Required Distribution
(a) In no event shall the provisions of this Article operate so as to
extend the time by which a distribution is to be made under any other provision
of the Plan or to allow the distribution of a Participant's Account to begin
later than the April 1 following the calendar year in which he attains age 70
1/2, provided that such commencement in active service shall not be required
with respect to a Participant (i) who does not own more than five percent of the
outstanding stock of the Company (or stock possessing more than five percent of
the total combined voting power of all stock of the Company), and (ii) who
attained age 70 1/2 prior to January 1, 1988.
(b) In the event a Participant in active service is required to begin
receiving payments while in service under the provisions of paragraph (a) above,
the Plan shall distribute to the Participant in each distribution calendar year
the minimum amount required to satisfy the provisions of Section 401(a)(9) of
the Code provided, however, that the payment for the first distribution calendar
year shall be made on or before April 1 of the following calendar year. Such
minimum amount will be determined on the basis of the joint life expectancy of
the Participant and his Beneficiary. Such life expectancy will be recalculated
once each year; however, the life expectancy of the Beneficiary will not be
recalculated if the Beneficiary is not the Participant's spouse. The amount of
the withdrawal shall be allocated among the Investment Funds in proportion to
the value of the Accounts as of the date of each withdrawal. The commencement of
payments under this Section shall not constitute an Annuity Starting Date for
purposes of Sections 72, 401(a)(11) and 417 of the Code. Upon the Participant's
subsequent termination of employment, payment of the Participant's Account shall
be made in accordance with the provisions of Section 7.09.
7.09 Form and Timing of Distributions.
(a) Distributions pursuant to Sections 7.01 and 7.02 shall be made as
follows:
(i) the Vested Portion of the Participant's Account balance which
equals $3500 or less shall be distributed in a single lump sum
as soon as practicable, but not later than 60 days after the
end of the calendar year in which the Participant's
termination of employment occurs; or
(ii) unless the Participant makes an election under Section
7.09(b), the Vested Portion of the Participant's Account
balance which exceeds $3500 shall be deferred until the
Participant attains age 65 and the amount to the credit of
the Participant's Account as of the day he attains age 65
shall be distributed to him in a single lump sum as soon as
practicable thereafter. If the Participant fails to make
an election under Section 7.09(b), the Participant shall be
deemed to have elected the deferred distribution under this
Section 7.09(a)(ii).
(b) In lieu of the deferred distribution upon attaining age 65 provided in
Section 7.09(a)(ii), the Participant may elect, in such manner and on such
conditions as may be
prescribed by the Plan Administrator, one of the following:
(i) a distribution in a single lump sum as soon as practicable,
but not later than 60 days after the end of the calendar
year in which the Participant's termination occurs;
(ii) a distribution deferred until the last day of a calendar
month not later than the calendar month in which the
Participant attains age 70 as designated by the
Participant, in which event distribution of the
Participant's Account balance as of the last day of the
calendar month so designated by the Participant shall be
made in a single lump sum as soon as practicable after such
calendar month; or
(iii) a distribution in five annual installments as promptly as
practicable after the end of each calendar year commencing in
the calendar year immediately following the calendar year in
which the termination occurs, in which event each such annual
installment shall be an amount equal to the Participant's
Account balance as of December 31 of the previous year divided
by the number of annual installments remaining to be made
hereunder, except that the fifth such installment shall equal
the entire balance in the Participant's Account as of the
preceding December 31. Each such annual installment shall be
taken pro rata from the Participant's balances in the
Investment Funds under the Plan. 7.10 Status of Account Pending Distribution.
Until completely distributed the Account of a Participant who is entitled to a
distribution shall continue to be invested as part of the funds of the Plan.
7.11 Proof of Death and Right of Beneficiary or Other Person. The Plan
Administrator may require and rely upon such proof of death and such evidence of
the right of any Beneficiary or other person to receive the value of the Account
of a deceased Participant as the Plan Administrator may deem proper and his
determination of the right of that Beneficiary or other person to receive
payment shall be conclusive.
7.12 Distribution Limitation. Notwithstanding any
other provision of this Article 7, all distributions from this Plan shall
conform to the regulations issued under Section 401(a)(9) of the Code, including
the incidental death benefit provisions of Section 401(a)(9)(G) of the Code.
Further, such regulations shall override any Plan provision that is inconsistent
with Section 401(a)(9) of the Code.
7.13 Direct Rollover of Certain Distributions. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, in such manner and on such
conditions as may be prescribed by the Plan Administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. The following
definitions apply to the terms used in this Section:
(a) "Eligible rollover distribution" means 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);
(b) "Eligible retirement plan" means 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;
(c) "Distributee" means 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; and
(d) "Direct rollover" means a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE 8
Non-Discrimination and Limitation
8.01 Actual Deferral Percentage Test. The
Actual Deferral Percentage for Highly Compensated Employees who are Participants
or eligible to become Participants shall not exceed the Actual Deferral
Percentage for all other Employees who are Participants or eligible to become
Participants multiplied by 1.25. If the Actual Deferral Percentage for Highly
Compensated Employees does not meet the foregoing test, the Actual Deferral
Percentage for Highly Compensated Employees may not exceed the Actual Deferral
Percentage for all other Employees who are Participants or eligible to become
Participants by more than two percentage points, and the Actual Deferral
Percentage for Highly Compensated Employees may not be more than 2.0 times the
Actual Deferral Percentage for all other Employees (or such lesser amount as the
Plan Administrator shall determine to satisfy the provisions of Section 8.03).
The Plan Administrator may implement rules limiting the Pre-Tax Contributions
which may be made on behalf of some or all Highly Compensated Employees so that
this limitation is satisfied. If the Plan Administrator determines that the
limitation under this Section 8.01 has been exceeded in any Plan Year, the
following provisions shall apply:
(a) The amount of Pre-Tax Contributions made on behalf of some or all
Highly Compensated Employees shall be reduced until the provisions of this
Section are satisfied as follows. The actual deferral ratio of the
Highly-Compensated Employee with the highest actual deferral ratio shall be
reduced to the extent necessary to meet the test or to cause such ratio to equal
the actual deferral ratio of the Highly Compensated Employee with the next
highest ratio. This process will be repeated until the actual deferral
percentage test is passed. Each ratio shall be rounded to the nearest one
one-hundredth of one percent of the Participant's Statutory Compensation.
(b) Pre-Tax Contributions subject to reduction under this Section,
together with Earnings thereon, ("excess contributions") shall be paid to the
Participant before the close of the Plan Year following the Plan Year in which
the excess contributions were made and, to the extent practicable, within 2 1/2
months of the close of the Plan Year in which the excess contributions were
made. However, any excess contributions for any Plan Year shall be reduced by
any Pre-Tax Contributions previously returned to the Participant under Section
3.01 for that Plan Year. In the event any Pre-Tax Contributions returned under
this Section 8.01 were matched by Company Contributions, such corresponding
Company Contributions, with Earnings thereon, shall be forfeited and used to
reduce Company contributions. The Participant may elect, in lieu of a return of
the excess contributions, to have the Plan treat all or a portion of the excess
contributions to the Plan as After-Tax Contributions for the Plan Year in which
the excess contributions were made, subject to the limitations of Section 3.02.
Recharacterized excess contributions shall be considered After-Tax Contributions
made in the Plan Year to which the excess contributions relate for purposes of
Section 8.02 and shall be subject to the withdrawal provisions applicable to
After-Tax Contributions under Article 7. The Participant's election to
recharacterize Pre-Tax Contributions shall be made within 2 1/2 months of the
close of the Plan Year in which the excess contributions were made, or within
such shorter period as the Plan Administrator may prescribe. In the absence of a
timely election by the Participant, the Plan shall return his excess
contributions as provided in the paragraph (b).
8.02 Actual Contribution Percentage
Test. The Actual Contribution Percentage for Highly Compensated Employees who
are Participants or eligible to become Participants shall not exceed the Actual
Contribution Percentage for all other Employees who are Participants or eligible
to become Participants multiplied by 1.25. If the Actual Contribution Percentage
for the Highly Compensated Employees does not meet the foregoing test, the
Actual Contribution Percentage for Highly Compensated Employees may not exceed
the Actual Contribution Percentage of all other Employees who are Participants
or eligible to become Participants by more than two percentage points, and the
Actual Contribution Percentage for Highly Compensated Employees may not be more
than 2.0 times the Actual Contribution Percentage for all other Employees (or
such lesser amount as the Plan Administrator shall determine to satisfy the
provisions of Section 8.03). The Plan Administrator may implement rules limiting
the After-Tax Contributions which may be made by some or all Highly Compensated
Employees so that this limitation is satisfied. If the Plan Administrator
determines that the limitation under this Section 8.02 has been exceeded in any
Plan Year, the following provisions shall apply:
(a) The amount of After-Tax Contributions and Company Contributions made
by or on behalf of some or all Highly Compensated Employees in the Plan Year
shall be reduced until the provisions of this Section are satisfied as follows.
The actual contribution ratio of the Highly Compensated Employee with the
highest actual contribution ratio shall be reduced to the extent necessary to
meet the test or to cause such ratio to equal the actual contribution ratio of
the Highly-Compensated Employee with the next highest actual contribution ratio.
This process will be repeated until the actual contribution percentage test is
passed. Each ratio shall be rounded to the nearest one one-hundredth of one
percent of a Participant's Statutory Compensation.
(b) Any After-Tax Contributions and Company Contributions subject to
reduction under this Section, together with Earnings thereon ("excess aggregate
contributions"), shall be reduced and allocated in the following order:
(i) Nonparticipating After-Tax Contributions, to the extent of the
excess aggregate contributions, together with Earnings, shall
be paid to the Participant; and then, if necessary,
(ii) so much of the Participating After-Tax Contributions and
corresponding Company Contributions, together with
Earnings, as shall be necessary to meet the test shall be
reduced, with the After-Tax Contributions, together with
Earnings, being paid to the Participant and the Company
Contributions, together with Earnings, being reduced, with
vested Company Contributions being paid to the Participant,
and Company Contributions which are forfeitable under the
Plan being forfeited and applied to reduce Company
contributions; then if necessary,
(iii) so much of the Company Contributions, together with Earnings,
as shall be necessary to equal the balance of the excess
aggregate contributions shall be reduced, with vested Company
Contributions being paid to the Participant and Company
Contributions which are forfeitable under the Plan being
forfeited and applied to reduce Company contributions.
(c) Any repayment or forfeiture of excess aggregate contributions shall be
made before the close of the Plan Year following the Plan Year for which the
excess aggregate contributions were made and, to the extent practicable, any
repayments or forfeiture shall be made within 2 1/2 months of the close of the
Plan Year in which the excess aggregate contributions were made.
8.03 Aggregate Contribution Limitation.
Notwithstanding the provisions of Sections 8.01 and 8.02, in no event shall the
sum of the Actual Deferral Percentage of the group of eligible Highly
Compensated Employees and the Actual Contribution Percentage of such group,
after applying the provisions of Sections 8.01 and 8.02, exceed the "aggregate
limit" as provided in Section 401(m)(9) of the Code and the regulations issued
thereunder. In the event the aggregate limit is exceeded for any Plan Year, the
Actual Contribution Percentages of the Highly Compensated Employees shall be
reduced to the extent necessary to satisfy the aggregate limit in accordance
with the procedure set forth in Section 8.02.
8.04 Additional Discrimination Testing Provisions.
(a) If any Highly Compensated Employee is either (i) a five percent owner
or (ii) one of the 10 highest paid Highly Compensated Employees, then any
Statutory Compensation paid to or any contribution made by or on behalf of any
member of his "family" shall be deemed paid to or made by or on behalf of such
Highly Compensated Employee for purposes of Sections 8.01, 8.02 and 8.03, to the
extent required under regulations prescribed by the Secretary of the Treasury or
his delegate under Sections 401(k) and 401(m) of the Code. The contributions
required to be aggregated under the preceding sentence shall be disregarded in
determining the Actual Deferral Percentage and Actual Contribution Percentage
for the group of non-highly compensated employees for purposes of Sections 8.01,
8.02 and 8.03. Any return of excess contributions or excess aggregate
contributions required under Sections 8.01, 8.02 and 8.03 with respect to the
family group shall be made by allocating the excess contributions or excess
aggregate contributions among the family members in proportion to the
contributions made by or on behalf of each family member that is combined. For
purposes of this paragraph, the term "family" means, with respect to any
employee, such employee's spouse, any lineal ascendants or descendants and
spouses of such lineal ascendants or descendants.
(b) If any Highly Compensated Employee is a member of another qualified
plan of the Company or an Affiliated Employer, other than an employee stock
ownership plan described in Section 4975(e)(7) of the Code or any other
qualified plan which must be mandatorily disaggregated under Section 410(b) of
the Code, under which deferred cash contributions or matching contributions are
made on behalf of the Highly Compensated Employee or under which the Highly
Compensated Employee makes after-tax contributions, the Plan Administrator shall
implement rules, which shall be uniformly applicable to all employees similarly
situated, to take into account all such contributions for the Highly Compensated
Employee under all such plans in applying the limitations of Section 8.01, 8.02
and 8.03. If any other such qualified plan has a plan year other than the Plan
Year, the contributions to be taken into account in applying the limitations of
Sections 8.01, 8.02 and 8.03 will be those made in the plan years ending with or
within the same calendar year.
(c) In the event that this Plan is aggregated with one or more other plans
to satisfy the requirements of Sections 401(a)(4) and 410(b) of the Code (other
than for purposes of the average benefit percentage test) or if one or more
other plans is aggregated with this Plan to satisfy the requirements of such
sections of the Code, then the provisions of Sections 8.01, 8.02 and 8.03 shall
be applied by determining the Actual Deferral Percentage and Actual Contribution
Percentage of employees as if all such plans were a single plan. If this Plan is
permissively aggregated with any other plan or plans for purposes of satisfying
the provisions of Section 401(k)(3) of the Code , the aggregated plans must also
satisfy the provisions of Section 401(a)(4) and 410(b) of the Code as though
they were a single plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated under this paragraph (c) only if they have the same plan year.
(d) The Company may elect to use Pre-Tax Contributions to satisfy the
tests described in Sections 8.02 and 8.03, provided that the test described in
Section 8.01 is met prior to such election, and continues to be met following
the Company's election to shift the application of those Pre-Tax Contributions
from Section 8.01 to Section 8.02.
(e) The Company may authorize that special "qualified nonelective
contributions" shall be made for a Plan Year, which shall be allocated in such
amounts and to such Participants, who are not Highly Compensated Employees, as
the Named Fiduciaries shall determine. The Plan Administrator, shall establish
such separate accounts as may be necessary. Qualified nonelective contributions
shall be 100% nonforfeitable when made. Any qualified nonelective contributions
made on or after January 1, 1994 and any earnings credited on any qualified
nonelective contributions after such date shall only be available for withdrawal
under the provisions of Section 7.04(d). Qualified nonelective contributions
made for the Plan Year may be used to satisfy the tests described in Sections
8.01, 8.02 and 8.03, where necessary.
(f) Notwithstanding any provision of the Plan to the contrary, employees
included in a unit of employees covered by a collective bargaining agreement
shall be disregarded in applying the provisions of Sections 8.01, 8.02 and 8.03
except that the provisions of Section 8.01 above shall be applicable to that
group of employees on and after January 1, 1993 on the basis that those
employees are included in a separate cash-or-deferred arrangement.
8.05 Maximum Annual Additions.
(a) The annual addition to a Participant's Account for any Plan Year,
which shall be considered the "limitation year" for purposes of Section 415 of
the Code, when added to the Participant's annual addition for that Plan Year
under any other qualified Defined Contribution Plan of the Company or an
Affiliated Employer, shall not exceed an amount which is equal to the lesser of
(i) 25% of his aggregate remuneration for the Plan Year or (ii) the greater of
$30,000 or one-quarter of the dollar limitation in effect under Section
415(b)(1)(A) of the Code.
(b) For purposes of this Section, the "annual addition" to a Participant's
Account under this Plan or any other qualified Defined Contribution Plan
maintained by the Company or an Affiliated Employer shall be the sum of:
(i) the total contributions, including Pre-Tax Contributions,
made on the Participant's behalf by the Company and all
Affiliated Employers,
(ii) all Participant contributions, exclusive of any Rollover
Contributions, and
(iii) forfeitures, if applicable,
that have been allocated to the Participant's Account under this Plan or his
accounts under any other such qualified Defined Contribution Plan. For purposes
of this paragraph (b), any Pre-Tax Contributions distributed under Section 8.01
and any Company Contributions or After-Tax Contributions distributed or
forfeited under the provisions of Section 3.01, 8.01, 8.02 or 8.03 shall be
included in the annual addition for the year allocated.
(c) For purposes of this Section, the term "remuneration" with respect to
any Participant shall mean the wages, salaries and other amounts paid in respect
of the Participant by the Company or an Affiliated Employer for personal
services actually rendered, determined after any reduction of Compensation
pursuant to Section 3.01 or pursuant to a cafeteria plan as described in Section
125 of the Code, including (but not limited to) bonuses, overtime payments and
commissions, but excluding deferred compensation, stock options and other
distributions which receive special tax benefits under the Code.
(d) If the annual addition to a Participant's Account for any Plan Year,
prior to the application of the limitation set forth in paragraph (a) above,
exceeds that limitation due to a reasonable error in estimating a Participant's
annual compensation or in determining the amount of Pre-Tax Contributions that
may be made with respect to a Participant under Section 415 of the Code, or as
the result of the allocation of forfeitures, the amount of contributions
credited to the Participant's Account in that Plan Year shall be adjusted to the
extent necessary to satisfy that limitation in accordance with the following
order of priority:
(i) The Participant's Nonparticipating After-Tax Contributions
under Section 3.02 shall be reduced to the extent necessary.
The amount of the reduction shall be returned to the
Participant, together with any earnings on the contributions
to be returned.
(ii) The Participant's Nonparticipating Pre-Tax Contributions under
Section 3.01 shall be reduced to the extent necessary. The
amount of the reduction shall be returned to the Participant,
together with any earnings on the contributions to be
returned.
(iii) The Participant's Participating After-Tax Contributions and
corresponding Company Contributions shall be reduced to the
extent necessary. The amount of the reduction attributable to
the Participant's Participating After-Tax Contributions shall
be returned to the Participant, together with any earnings on
those contributions to be returned, and the amount
attributable to the Company Contributions shall be forfeited
and used to reduce subsequent contributions payable by the
Company.
(iv) The Participant's Participating Pre-Tax Contributions and
corresponding Company Contributions shall be reduced to the
extent necessary. The amount of the reduction attributable
to the Participant's Participating Pre-Tax Contributions
shall be returned to the Participant, together with any
earnings on those contributions to be returned, and the
amount attributable to the Company Contributions shall be
forfeited and used to reduce subsequent contributions
payable by the Company.
Any Pre-Tax Contributions returned to a Participant under this paragraph (d)
shall be disregarded in applying the dollar limitation of Pre-Tax Contributions
under Section 3.01(b), and in performing the Actual Deferral Percentage Test
under Section 8.01. Any After-Tax Contributions returned under this paragraph
(d) shall be disregarded in performing the Actual Contribution Percentage Test
under Section 8.02.
8.06 Defined Benefit Plan Limitation. If a
Participant is or ever was a participant in a Defined Benefit Plan then prior to
restricting any Annual Addition under this Plan the rate of benefit accruals
under such Defined Benefit Plan shall first be reduced so as to cause the sum,
for any limitation year, of the Participant's Defined Benefit Plan Fraction and
the Participant's Defined Contribution Plan Fraction not to exceed 1.0.
ARTICLE 9
Loans
9.01 Loans Permitted. A Participant who is not on a leave
of absence and remains on the active payroll may, with the approval of the Plan
Administrator under such uniform rules as the Plan Administrator may adopt,
borrow from his Account upon terms and conditions set forth in this Article 9.
Any loans made prior to October 19, 1989 shall be subject to this Article 9 and
the rules in effect thereunder at the time such loans were made. Any loans made,
renewed, renegotiated, modified or extended on or after October 19, 1989 shall
be subject to this Article 9 as amended effective as of such date. Effective as
of October 19, 1989 the Plan Administrator is authorized to administer the loan
program under this Article 9. Any Participant who is an Employee, and any
Participant who is a former Employee and a "party-in-interest" (as defined in
Section 3(14) of ERISA) to the Plan, may borrow from his Account, upon
application made in such manner and on such conditions as the Plan Administrator
may prescribe and under such uniform and non-discriminatory rules as the Plan
Administrator may adopt.
9.02 Amount of Loans. The minimum amount of any loan
pursuant to this Article 9 shall be $1,000. The amount of any such loan to a
Participant, together with the outstanding balance of all other such loans to
the same Participant, shall not exceed the lesser of (a) or (b) where (a) is
$50,000 reduced by the excess (if any) of (i) the highest outstanding balance of
loans to the Participant from the Plan during the one year period ending on the
day before the date on which such loan is made, over (ii) the outstanding
balance of loans to the Participant from the Plan on the date on which such loan
is made, and (b) is one-half of the Vested Portion of the Participant's Account
balance. Outstanding balance of loans means the outstanding amount of all loans
from the Plan and any other plans of the Company.
9.03 Source of Loans. Funds for loans from a Participant's
Account shall be taken from the Participant's Subaccounts in the following
order:
(i) Nonparticipating Pre-Tax Contributions and earnings thereon;
(ii) Participating Pre-Tax Contributions and earnings thereon; (iii)
Rollover Contributions and earnings thereon; (iv) Vested Company
Contributions that have been in the Account
for two full calendar years after the contribution year and
earnings thereon;
(v) Vested Company Contributions that have been in the Account for
less than two full calendar years after the contribution year
and earnings thereon;
(vi) Nonparticipating After-Tax Contributions and earnings
thereon; and
(vii) Participating After-Tax Contributions and earnings thereon. No
loan shall be made from a Subaccount or a part of a Subaccount until exhaustion
of the entire balance in the Subaccount or part of the Subaccount preceding it
on the above list. Within each Subaccount or part thereof, funds for loans will
be taken on an average cost basis and pro-rata from each Investment Fund within
the Subaccount or part of the Subaccount and such pro-rata portion of each
Investment Fund will be converted to cash for the loan based upon the market
value of the investment on the date of conversion.
9.04 Interest Rate. The interest rate to be charged on loans
pursuant to this Article 9 shall be a reasonable rate of interest determined
from time to time by the Plan Administrator. In determining such rate the Plan
Administrator shall seek to provide to the Plan a rate of return commensurate
with the interest rates charged by persons in the business of lending money for
loans that would be made under similar circumstances on the date the loan is
approved. The interest rate will be fixed for the entire term of the loan.
9.05 Repayment. The Participant may select a period of one, two,
three, four or five years for repayment of a loan, except that the Participant
may, at his option, select a longer period of whole years, not exceeding ten,
for repayment of a loan for the purpose of purchasing his principal residence.
Repayment shall be made by level monthly payments in such amount as shall be
sufficient to pay the principal and interest thereon over the period for
repayment. Repayment shall be made by payroll deductions, except that in the
case of a Participant who is not on the active payroll, repayment shall be made
by check or other similar means as the Plan Administrator shall determine.
Prepayment of a loan in full may be made without penalty at any time. Partial
prepayment of a loan may be made at any time without penalty by a cash payment
of not less than $1000.00 or by additional repayments of principal made by
payroll deduction. The amount of each monthly payment shall be restored to the
Participant's Subaccounts in the same proportion as the loan was taken from such
Subaccounts. However, the amount of each such monthly payment shall be placed
into Investment Funds, except the Company Stock Fund, in accordance with the
most recent investment election made by the Participant with respect to the
Participant's Contributions.
9.06 Multiple Loans. No more than one loan may be granted to
a Participant in a calendar year unless all earlier loans made in the same
calendar year to the Participant shall have been repaid in full.
9.07 Pledge. The Vested Portion of the Participant's Account balance
shall be pledged as security for all loans to the Participant pursuant to this
Article 9. The amount pledged shall not be greater than fifty percent of the
Participant's Vested Portion. If a default shall occur in the repayment of a
loan, the entire unpaid principal balance plus accrued interest if any: (i)
shall be charged, when the Participant becomes eligible to receive a
distribution, against that portion of the Participant's Vested Portion which
serves as security for the loan; (ii) shall be deducted, if a distribution is to
made, from the amount payable to the Participant or the Participant's
Beneficiary; or (iii) if neither (i) nor (ii) applies, shall continue to
encumber that portion of the Participant's Vested Plan Account balance Portion
that serves as security for the loan.
9.08 Loan Reserve. The amount of each loan to a Participant
shall be transferred from the portion of the Trust Fund held for the
Participant's Account and invested pursuant to Section 5.02 to a special Loan
Reserve maintained for such Participant's Account. Such Loan Reserve shall be
invested solely in the loan or loans made to the Participant. Payments on any
such loan will reduce the Participant's Loan Reserve and shall be reinvested for
the Participant's Account in accordance with Section 9.05.
9.09 Minimum Account Balance. So long as any
amount of a loan shall remain outstanding to a Participant, the Participant
may not make any withdrawal from his Account
that would reduce the value of his Vested Portion to less than his Loan Reserve.
9.10 Consent. No loan shall be made pursuant to this Article 9
without the prior consent of the Participant and the Participant's spouse, if
any, at the time of application for the loan. Such consent shall be required for
(1) the making of the loan from the Participant's Account and (2) the deduction
of the full outstanding loan balance, including interest and principal, from the
Participant's Account in the event of default, as provided in this Article 9.
Such consent may not be revoked by the Participant or the Participant's spouse
after the loan proceeds are paid to the Participant. Such consent shall be in
writing on a form furnished by the Company and shall be witnessed by a Notary
Public. Any renegotiation, extension, renewal or other revision of a loan shall
also require prior consent by the Participant and the Participant's spouse, if
any, in the manner described above. Spousal consent shall not be required for
loans made after March 1, 1994.
9.11 Other Terms. Each loan made pursuant to this Article 9
shall be evidenced by a promissory note payable to the Trustee. Such loans shall
be upon such additional terms and conditions as the Plan Administrator shall
determine, applied in a uniform and non-discriminatory manner. The terms and
conditions of any loan may be adjusted at any time, to the extent determined by
the Plan Administrator to be necessary for compliance with law or to maintain
the qualification of the Plan under the Code.
ARTICLE 10
Administration of the Plan
10.01 Named Fiduciaries and Plan Administrator. The following persons from time
to time occupying the following offices of the Company are hereby designated as
Named Fiduciaries: Chief Executive Officer, Chief Financial Officer, and Chief
Accounting Officer. The Company may designate other persons who, upon acceptance
of such designation, shall serve as Named Fiduciaries either instead of or in
addition to those named above. Any such designation and acceptance shall be in
writing and retained by the Plan Administrator. The Named Fiduciaries shall act
by majority rule. The Named Fiduciaries shall appoint from among the officers of
the Company a Plan Administrator who shall serve at the discretion of the Named
Fiduciaries. The Plan Administrator shall serve without compensation for his
services as such and shall act solely in the interest of the Participants and
their Beneficiaries.
10.02 Authority of Plan Administrator. The
Plan Administrator shall have discretionary authority to control and manage the
operation and administration of the Plan; and, without limiting the generality
of the foregoing, may interpret the Plan, determine eligibility for benefits
under the Plan, determine any facts or resolve any questions relevant to the
administration of the Plan and, in connection therewith, may remedy and correct
any ambiguities, inconsistencies, or omissions in the Plan. Any such action
taken by the Plan Administrator shall be conclusive and binding on all
Participants, Beneficiaries and other persons. The Plan Administrator is
authorized to make any changes to the Plan that he, in his sole discretion,
determines are necessary or desirable to carry out the transition to Vanguard
Fiduciary Trust Company as Trustee, Recordkeeper and Investment Manager for the
Plan, the addition of new Investment Funds and the change to daily valuation of
Accounts, and to make any other changes to facilitate administration of the
Plan.
10.03 RReliance on Reports. The Named Fiduciaries and
the Plan Administrator shall be entitled to rely upon any opinions, reports, or
other advice which shall be furnished by specialists, subject to fiduciary
responsibilities imposed by ERISA.
10.04 Delegation of Authority. With approval of the
Named Fiduciaries, the Plan Administrator may designate one or more persons to
exercise any power, or perform any duty, of the Plan Administrator. Any such
designation shall be in writing and signed by the Plan Administrator and the
Named Fiduciaries and a copy thereof shall be delivered to the Trustee.
10.05 Administration Expenses. All expenses arising
in connection with the administration of the Plan shall be paid by the Plan,
except to the extent that the Company decides to pay such expenses and except
expenses arising from administration of TRASOP within the Trust which shall be
paid in accordance with the following paragraph.
The expenses of administration of the TRASOP within the Trust shall
include, without limitation, transfer taxes, postage, brokerage commissions and
other direct selling expenses incurred by the Trustee in the sale of Shares
pursuant to Section 13.04, losses incurred by the Trustee on funds invested
pursuant to Section 13.02, and fees of the Trustee in connection with the
administration of TRASOP within this Trust, including fees for legal services
rendered to the Trustee (whether or not rendered in connection with a judicial
or administrative proceeding and whether or not incurred while it is acting as
Trustee), but shall exclude brokerage fees and commissions for purchases of
Shares pursuant to Section 13.02, which brokerage fees and commissions shall be
paid out of the dividends being reinvested thereby. Such expenses of
administration of TRASOP within the Trust shall, to the extent permitted by law,
be paid:
first, out of any available income of TRASOP;
second, out of any available dividends received by the Trustee on
Shares allocated to Participants pursuant to Section 13.02, which
dividends have not then been applied to the purchase of additional
Shares pursuant to Section 13.02; and
third, by the Company.
Provided, however, that in no event shall the amounts paid by the Trustee during
such Plan Year pursuant to clauses "first" and "second" above, exceed the
smaller of:
(a) the sum of 10 percent of the first $100,000 and 5 percent of any
amount in excess of $100,000 of the income from dividends paid to the Trustee
with respect to common stock of the Company during such Plan Year; or
(b) $100,000.
10.06 Fiduciary Insurance. The Company may purchase and
carry fiduciary responsibility insurance under which each member of the Board,
each Named Fiduciary, the Plan Administrator, or any person to whom there may be
delegated any responsibility in connection with the administration of the Plan,
including the Trustee, will be indemnified against any cost or expense
(including counsel's fees) or liability which may be incurred arising out of any
act or failure to act in the administration of this Plan, except for gross
negligence or willful misconduct.
10.07Claim Review.
(a) Any denial by the Plan Administrator of a claim for benefits
under the Plan by a Participant or Beneficiary shall be stated in writing by the
Plan Administrator and delivered or mailed to the Participant or Beneficiary
within 90 days following the date on which the claim is filed; and such notice
shall set forth the specific reasons for the denial, written in a plain and
understandable manner, specific reference to pertinent Plan provisions on which
the denial is based, a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary and an explanation of the Plan's claim
review procedure. If special circumstances require an extension of time for
processing the claim, written notice of an extension shall be furnished to the
claimant prior to the end of the initial period of 90 days following the date on
which the claim was filed. Such an extension may not exceed a period of 90 days
beyond the end of the initial period. If the claim has not been granted, and if
written notice of the denial of the claim is not furnished within 90 days
following the date on which the claim is filed, the claim shall be deemed denied
for the purpose of proceeding to the claim review procedure.
(b) Claim Review Procedure. A Participant, Beneficiary, or the authorized
representative of either shall have 60 days after receipt of written
notification of denial of a claim to request a review of the denial by making
written request to the Plan Administrator. Within 30 days following receipt of
such requests for review, the Plan Administrator shall review his prior decision
denying the claim. The Plan Administrator shall give the Participant,
Beneficiary, or the authorized representative of either an opportunity to appear
to review pertinent documents, to submit issues and comments in writing, and to
present evidence supporting the claim.
Not later than 60 days after receipt of the request for review, the Plan
Administrator shall render and furnish to the claimant a written decision which
shall include specific reasons for the decision, and shall make specific
references to pertinent Plan provisions on which it is based. If special
circumstances require an extension of time for processing, the decision shall be
rendered as soon as possible, but not later than 120 days after receipt of the
request for review, provided that written notice and explanation of the delay
are given to the claimant prior to commencement of the extension. Such decision
by the Plan Administrator shall not be subject to further review. If a decision
on review is not furnished to a claimant within the specified time period, the
claim shall be deemed to have been denied on review.
(c) Exhaustion of Remedy. No claimant shall institute any action or
proceeding in any state or federal court of law or equity, or before any
administrative tribunal or arbitrator, for a claim for benefits under the Plan,
until he or she has first exhausted the procedures set forth in this section.
10.08 Appointment of Trustee. The Trustee and
any successor thereto shall be appointed by the Board.
10.09 Limitation of Liability. The Company, the
Board, the Named Fiduciaries, the Plan Administrator, and any officer, employee
or agent of the Company shall not incur any liability individually or on behalf
of any other individuals or on behalf of the Company for any act or failure to
act, made in good faith in relation to the Plan or the funds of the Plan.
However, this limitation shall not act to relieve any such individual or the
Company from a responsibility or liability for any fiduciary responsibility,
obligation or duty under Part 4, Title I, of ERISA.
ARTICLE 11
Miscellaneous
11.01 Exclusive Benefit; Amendments. It shall
be impossible for any part of the corpus or income of the Trust Fund to be used
for or diverted to purposes other than for the exclusive benefit of
Participants, Beneficiaries and other persons entitled to benefits under the
Plan and for paying the expenses of the Plan not paid by the Company, or to
deprive any of them of his vested interest in the Trust Fund. No person shall
have any interest in, or right to, any part of the Trust Fund except as and to
the extent expressly provided in the Plan. Subject to the foregoing, the Plan
may be amended, in whole or in part, at any time and from time to time by the
Board or pursuant to authority granted by the Board and any amendment may be
given such retroactive effect as the Board or its duly authorized delegate may
determine.
11.02 Termination; Sale of Assets of Subsidiary.
(a) The Plan may be terminated or partially terminated or contributions
under the Plan may be permanently discontinued for any reason at any time by the
Board. In the event of termination or partial termination of the Plan or
permanent discontinuance of contributions under the Plan: (i) no contribution
shall be made thereafter except for a month the last day of which coincides with
or precedes such termination or discontinuance; (ii) no distribution shall be
made except as provided in the Plan; (iii) the rights of all Participants to the
entire amounts to the credit of their Accounts as of the date of such
termination or partial termination or discontinuance shall become 100% vested;
(iv) no person shall have any right or interest except with respect to the Trust
Fund; and (v) the Trustee shall continue to act until the Trust Fund shall have
been distributed in accordance with the Plan.
(b) Upon termination of the Plan, Pre-Tax Contributions, with earnings
thereon, shall only be distributed to Participants if (i) neither the Company
nor an Affiliated Employer establishes or maintains a successor defined
contribution plan, and (ii) payment is made to the Participants in the form of a
lump sum distribution (as defined in Section 402(d)(4) of the Code, without
regard to clauses (i) through (iv) of subparagraph (A), subparagraph (B), or
subparagraph (F) thereof). For purposes of this paragraph, a "successor defined
contribution plan" is a defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code ("ESOP") or a
simplified employee pension as defined in Section 408(k) of the Code ("SEP))
which exists at the time the Plan is terminated or within the 12 month period
beginning on the date all assets are distributed. However, in no event shall a
defined contribution plan be deemed a successor plan if fewer than two percent
of the employees who are eligible to participate in the Plan at the time of its
termination are or were eligible to participate under another defined
contribution plan of the Company or an Affiliated Employer (other than an ESOP
or a SEP) at any time during the period beginning 12 months before and ending 12
months after the date of the Plan's termination.
(c) Upon the disposition by the Company of at least 85 percent of the
assets (within the meaning of Section 409(d)(2) of the Code) used by the Company
in a trade or business or upon the disposition by the Company of its interest in
a subsidiary (within the meaning of Section 409(d)(3) of the Code), Pre-Tax
Contributions, with earnings thereon, may be distributed to those Participants
who continue in employment with the employer acquiring such assets or with the
sold subsidiary, provided that (a) the Company maintains the Plan after the
disposition, (b) the buyer does not adopt the Plan or otherwise become a
participating employer in the Plan and does not accept any transfer of assets or
liabilities from the Plan to a plan it maintains in a transaction subject to
Section 414(l)(1) of the Code, an (c) payment is made to the Participant in the
form of a lump sum distribution (as defined in Section 402(d)(4) of the Code,
without regard to clauses (i) through (iv) of subparagraph (A), subparagraph
(B), or subparagraph (F) thereof).
11.03 Beneficiaries. Upon the death of a Participant his
entire nonforfeitable accrued benefit under the Plan shall be payable in a lump
sum to his surviving spouse unless there is no surviving spouse of the
Participant or such surviving spouse has consented, in the manner provided in
this Section 11.03, to a designation of a Beneficiary or Beneficiaries in
addition to or instead of such spouse and such designation is in effect at the
time of the Participant's death. Each Participant may designate a Primary and
Contingent Beneficiary or Beneficiaries to receive the Participant's benefits
under the Plan in a lump sum in the event of death of such Participant prior to
distribution of such benefits, by filing prior to his death, a written
designation with the Plan on a form furnished by the Plan Administrator or his
delegate, provided that such designation shall be effective only if (1) such
designation is accompanied by the written consent of the Participant's spouse
which acknowledges the effect on the spouse of the designation and is witnessed
by a Notary Public, or (2) the Participant is not married. Any such designation
made by an unmarried Participant shall become null and void during any
subsequent marriage (unless consented to in the manner described above by the
spouse of that marriage) and any consent of a spouse shall be effective only
with respect to such spouse. If, at the time of a Participant's death, there is
no surviving spouse of the Participant and no designation of a Beneficiary by
such Participant is in effect, then the Participant's benefits shall be payable
in a lump sum to his estate or legal representative. A Participant may revoke a
designation made pursuant to this Section 11.03 by signing and filing with the
Plan Administrator a written instrument to that effect, in such manner and on
such conditions as may be prescribed by the Plan Administrator, or by filing a
new designation pursuant to this Section 11.03. The consent of a Participant's
spouse may not be revoked, but such spouse's consent shall be required for every
designation of a Beneficiary other than the Participant's spouse and for every
change in any such designation. The requirement for spousal consent may be
waived by the Plan Administrator if he believes there is no spouse, or the
spouse cannot be located, or because of such other circumstances as may be
established by applicable law.
11.04 Assignment of Benefits.
(a) No Participant or Beneficiary shall have the right to assign,
transfer, alienate, pledge, encumber or subject to lien any benefits to which he
is entitled under the Plan, and benefits under the Plan shall not be subject to
adverse legal process of any kind, except that nothing in this Section shall
preclude payment of Plan benefits pursuant to a qualified domestic relations
order as defined in Section 414(p) of the Code and Section 206(d) of ERISA. The
Plan Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer distributions
under such qualified orders.
(b) Notwithstanding anything herein to the contrary, if the amount payable
to the alternate payee under the qualified domestic relations order is $3,500 or
less, such amount shall be paid in one lump sum as soon as practicable following
the qualification of the order. If the amount exceeds $3,500, it may be paid as
soon as practicable following the qualification of the order if the alternate
payee consents thereto; otherwise it may not be payable before the earliest of
(i) the Participant's termination of employment, (ii) the time such amount could
be withdrawn under Article 7 or (iii) the Participant's attainment of age 50.
11.05 Merger. The Plan may not be merged or consolidated with, or
its assets or liabilities may not be transferred to any other plan unless each
person entitled to benefits under the Plan would, if the resulting plan were
then terminated, receive immediately after the merger or consolidation, or
transfer of assets or liabilities, a benefit which is equal to or greater than
the benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
11.06 Conditions of Employment Not Affected by Plan. The establishment and
maintenance of the Plan shall not confer any legal rights upon any Employee or
other person for a continuation of employment, nor shall it interfere with the
rights of the Company to discharge any Employee and to treat him without regard
to the effect which that treatment might have upon him as a Participant or
potential Participant of the Plan.
11.07 Facility of Payment. If the Plan Administrator
shall find that a Participant or other person entitled to a benefit is unable to
care for his affairs because of illness or accident or is a minor, the Plan
Administrator may direct that any benefit due him, unless claim shall have been
made for the benefit by a duly appointed legal representative, be paid to his
spouse, a child, a parent or other blood relative, or to a person with whom he
resides. Any payment so made shall be a complete discharge of the liabilities of
the Plan for that benefit.
11.08 IInformation. Each Participant, Beneficiary or other
person entitled to a benefit, before any benefit shall be payable to him or on
his account under the Plan, shall file with the Plan Administrator the
information that the Plan Administrator shall require to establish his rights
and benefits under the Plan.
11.09 Additional Participating Employers.
(a) If any company is or becomes a subsidiary of or associated with the
Company, the Board may include the employees of that subsidiary or associated
company in the participation of the Plan upon appropriate action by that company
necessary to adopt the Plan. In that event, or if any persons become Employees
of the Company as the result of merger or consolidation or as the result of
acquisition of all or part of the assets or business of another company, the
Board shall determine to what extent, if any, previous service with the
subsidiary, associated or other company shall be recognized under the Plan, but
subject to the continued qualification of the trust for the Plan as tax-exempt
under the Code.
(b) Any subsidiary or associated company may terminate its participation
in the Plan upon appropriate action by it. In that event the funds of the Plan
held on account of Participants in the employ of that company, and any unpaid
balances of the Account of all Participants who have separated from the employ
of that company, shall be determined by the Plan Administrator. Those funds
shall be distributed as provided in Section 11.02 if the Plan should be
terminated, or shall be segregated by the Trustee as a separate trust, pursuant
to certification to the Trustee by the Plan Administrator, continuing the Plan
as a separate plan for the employees of that company under which the board of
directors of that company shall succeed to all the powers and duties of the
Board, including the appointment of the Named Fiduciaries and Plan
Administrator.
11.10IRS Determination. All contributions made to the
Trust Fund after December 31, 1984, and all loans made pursuant to Article 9,
which are made prior to the receipt by the Company of a determination from the
Internal Revenue Service to the effect that the Plan, as amended, is a qualified
plan under Sections 401(a) and 401(k) of the Code or the refusal of the IRS in
writing to issue such a determination, shall be made on the express condition
that such determination is received. In the event the Internal Revenue Service
determines that the Plan is not so qualified or refuses in writing to make such
determination, such contributions, increased by any earnings thereon, and
reduced by any losses thereon and by the outstanding balance (principal and
interest) on any loans made under Article 9, shall be returned to the Company
and Participants, as appropriate, as promptly as practicable after such
determination. In the event the Internal Revenue Service requires reductions in
such contributions and/or changes in the terms and conditions of such loans as a
condition of its determination that the Plan is so qualified, the required
reductions in contributions, increased by any earnings and reduced by any losses
attributable thereto, shall be returned to the Company and Participants, as
appropriate, and/or the amounts and terms and conditions of any such outstanding
loans shall be modified to meet Internal Revenue Service requirements, as
promptly as practicable after notification from the Internal Revenue Service. If
all or part of the Company's deductions under Section 404 of the Code for
Company Contributions to the Plan are disallowed by the Internal Revenue
Service, the portion of the Company Contributions to which the disallowance
applies shall be returned to the Company without earnings thereon, but reduced
by any losses attributable thereto. The return shall be made within one year
after the denial of qualification or disallowance of deduction, as the case may
be.
11.11 Mistaken Contributions. Any contribution made
by mistake of fact shall be returnable, without any earnings thereon but reduced
by any losses attributable thereto, to the Company and/or Participants, as
appropriate within one year after the payment of the contribution.
11.12 PrPrevention of Escheat. If the Plan
Administrator cannot ascertain the whereabouts of any person to whom a payment
is due under the Plan, the Plan Administrator may, no earlier than three years
from the date such payment is due, mail a notice of such due and owing payment
to the last known address of such person, as shown on the records of the Plan or
Company. If such person has not made written claim therefor within three months
of the date of the mailing, the Plan Administrator may, if he so elects and upon
receiving advice from counsel to the Plan, direct that such payment and all
remaining payments otherwise due such person be canceled on the records of the
Plan and the amount thereof applied to reduce the contributions of the Company.
Upon such cancellation, the Plan and the Trust shall have no further liability
therefor except that, in the event such person or his beneficiary later notifies
the Plan Administrator of his whereabouts and requests the payment or payments
due to him under the Plan, the amount so applied shall be paid to him in
accordance with the provisions of the Plan.
11.13 Limitations Imposed on
Insider Participants. Notwithstanding any other provision of the Plan to the
contrary, an Insider Participant's right to direct investments under the Plan,
and his right to withdrawals and loans under Articles 7 and 9 shall be subject
to such limitations and restrictions as may be imposed by the Plan Administrator
from time to time to comply with the conditions for the employee benefit plan
exemptions to the short-swing trading liability rules of Section 16(b) of the
Securities Exchange Act of 1934.
11.14Construction. The Plan shall be construed, regulated and
administered under ERISA and the laws of the State of New York, except where
ERISA controls.
ARTICLE 12
Top-Heavy Provisions
12.01 Application of Top-Heavy
Provisions. For any Plan Year beginning on or after January 1, 1984 in which the
Plan shall on the last day of such Plan Year ("Determination Date"), be either
(i) a Top-Heavy Plan or (ii) a part of a "required aggregation group" (as
defined in Section 12.03) that is a Top-Heavy Group and not also a part of a
"permissive aggregation group" (as defined in Section 12.03) that is not a
Top-Heavy Group, the provisions of Article 12 shall apply, notwithstanding any
other conflicting provisions of the Plan.
12.02Minimum Benefit for Top-Heavy Year. For any Plan Year for which this
Article 12 is applicable, each Participant, who is employed by the Company
on the last day of such year and who is not a Key Employee, shall accrue
the Minimum Benefit for Top-Heavy year provided under paragraph 22 of the
Consolidated Edison Retirement Plan for Management Employees. For purposes
of this Article 12, "Key Employee" means an employee who is in the category
of employees determined in accordance with the provisions of Sections
416(i)(l) and (5) of the Code and any regulations thereunder, and where
applicable, on the basis of the Employee's Statutory Compensation from the
Company or an Affiliated Employer.
12.03 Aggregation Groups.
(a) Notwithstanding anything to the contrary herein, this Plan shall not
be a Top-Heavy Plan if it is part of either a "required aggregation group" or a
"permissive aggregation group" that is not a Top-Heavy Group.
(b) The "required aggregation group" consists of:
(i) each Defined Contribution Plan or Defined Benefit Plan in
which at least one Key Employee participates; and
(ii) each other Defined Contribution Plan or Defined Benefit Plan
which enables a plan referred to in the preceding subparagraph
(i) to meet the nondiscrimination requirements of Section
401(a)(4) or 410 of the Code.
(c) A "permissive aggregation group" consists of the plans included in the
"required aggregation group" plus any one or more other Defined Contribution
Plans or Defined Benefit Plans which, when considered as a group with the
"required aggregation group", would continue to meet the nondiscrimination
requirements of Section 401(a)(4) and 410 of the Code.
12.04 Special Benefit Limits. For any Plan Year for
which this Article 12 is applicable the definitions of "Defined Benefit Plan
Fraction" and "Defined Contribution Plan Fraction" in Sections 1.20 and 1.22,
respectively, shall be modified in each case by substituting "1.0" for "1.25".
12.05 Special Distribution Rule. For any
Plan Year for which this Article 12 is applicable, Section 7.08(a) shall
apply to Key Employees.
ARTICLE 13
Tax Reduction Act Stock Ownership Plan
13.01 Purpose; Separate Entity.
(a) TRASOP, which is a stock bonus plan established under the Act, is
intended to give eligible participants an equity interest in the Company and to
encourage them to remain in the employ of the Company. TRASOP is designed to
invest primarily in Shares. Applicable laws do not permit additional
contributions to TRASOP by the Company or by Employees, but the Company desires
to continue the TRASOP Accounts of Participants having such accounts.
Accordingly, effective as of July 1, 1988, all TRASOP Accounts were transferred
to this Plan, and all TRASOP provisions which continue to be applicable were
added to this Plan and shall, together with other applicable provisions of this
Plan, govern TRASOP Accounts.
(b) Accounts and TRASOP Accounts shall be administered separately,
although they shall be held as part of the same Trust Fund. There shall be no
transfers between TRASOP Accounts and Accounts and Sub-Accounts.
(c) All matters relating to TRASOP which relate to or arise out of facts,
circumstances or conditions in effect prior to July 1, 1988, shall be governed
by the provisions of TRASOP as in effect on June 30, 1988 prior to the merger,
unless expressly otherwise provided in this Plan.
13.02 TRASOP Accounts; Application of Dividends.
(a) The TRASOP Account of each Participant in TRASOP who remained in the
employ of the Company on July 1, 1988 was transferred to this Plan effective as
of July 1, 1988. Each such Participant shall continue to have a nonforfeitable
right to all Shares allocated and all amounts credited to such Participant's
TRASOP Account.
(b) All dividends received by the Trustee with respect to Shares allocated
to the TRASOP Accounts of Participants shall be applied to the purchase of
additional Shares. Such purchases shall be made promptly after the receipt of
each such dividend. The Trustee shall purchase, in one or more transactions, the
maximum number of whole Shares obtainable at then prevailing prices, including
brokerage commissions and other reasonable expenses incurred in connection with
such purchases. Such purchases may be made on any securities exchange where
Shares are traded, in the over-the-counter market, or in negotiated
transactions, and may be on such terms as to price, delivery and otherwise as
the Trustee may determine to be in the best interest of the Participants. The
Trustee shall complete such purchases as soon as practical after receipt of such
dividends, having due regard for any applicable requirements of law affecting
the timing or manner of such purchases. The additional Shares so purchased shall
be allocated among the respective TRASOP Accounts of the Participants in
proportion to the number of Shares in each TRASOP Account at the record date for
the payment of the dividend so applied. Such allocation shall be made as
promptly as practicable but for purposes of determining the time at which such
additional Shares shall become distributable pursuant to Section 13.04, the
additional Shares so allocated to each Participant's TRASOP Account shall be
deemed to have been allocated as of the respective allocation dates of the
Shares in such TRASOP Account at such record date, in proportion to the number
of such Shares previously allocated as of each such allocation date.
13.03 Voting Rights; Options; Rights; Warrants.
(a) Each Participant shall be entitled to direct the Trustee as to the
manner in which any Shares or fractional Shares allocated to the Participant's
TRASOP Account are to be voted.
(b) In the event that any option, right, or warrant shall be granted or
issued with respect to any Shares allocated to the Participant's TRASOP Account,
each Participant shall be entitled to direct the Trustee whether to exercise,
sell, or deal with such option, right, or warrant.
(c) The Trustee shall keep confidential the Participant's voting
instructions and instructions as to any option, right or warrant and any
information regarding a Participant's purchases, holdings and sales of Shares.
13.04 Distribution of Shares.
A. Each Share allocated to a Participant's TRASOP Account shall be
available for distribution to such Participant promptly after the earlier of (i)
the end of the 84th month beginning after the month in which such Share was
allocated to such Participant's TRASOP Account, and (ii) the death, disability
or termination of employment of such Participant. No Shares may be distributed
from a TRASOP Account before the end of the 84th month beginning after the month
in which Shares were allocated to the TRASOP Account, except in the case of
termination of employment, death or disability, and in accordance with this
Section 13.04.
B. Each Share which shall become distributable to a Participant by reason
of clause A.(i) above is herein called, from the time such Share shall become so
distributable, an "Unrestricted Share". Notwithstanding the provisions of the
aforesaid clause A.(i), Unrestricted Shares shall be distributed to Participants
as follows:
(a) From time to time, a Participant may request, in such
manner and on such conditions as may be prescribed by the
Company, that Unrestricted Shares held in the Participant's
TRASOP Account be distributed to the Participant. If such
Participant is married, the written application shall
include written consent of the Participant's spouse
witnessed by a Notary Public. Spousal consent shall not be
required with respect to withdrawal requests made on or
after March 1, 1994. Applications made in a calendar month
shall be effective as of the last day of such calendar
month. Any such request must be for whole Shares only and
must be for at least ten Shares or the number of whole
Unrestricted Shares in the TRASOP Account, whichever is
less.
(b) Certificates for Unrestricted Shares requested in accordance
with the preceding paragraph B(a) shall be delivered, or a
cash distribution in respect of such Unrestricted Shares if
elected by the Participant pursuant to Section 13.04D below
shall be made, to the Participant as soon as practicable after
the effective date of the application.
(c) Any Unrestricted Share which shall become distributable by
reason of any provision of this Plan other than clause A.(i)
above (including, without limitation, provision for
distribution upon the death, disability or termination of
employment of the Participant) shall be distributed in
accordance with such provision.
C. In the case of death of a Participant, distributions in respect of
Shares allocated to the Participant's TRASOP Account shall be made to the
Participant's Beneficiary. In the case of disability or termination of
employment with the Company of a Participant, distributions in respect of Shares
allocated to the Participant's TRASOP Account shall be made to the Participant.
All distributions under TRASOP will begin, subject to Section 7.08
and Subsection 13.04.F, not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (1) the Participant
attains age 65, (2) the 10th anniversary of the year in which the Participant
commenced participation in TRASOP, or (3) the Participant becomes disabled, dies
or terminates service with the Company.
D. All distributions from a Participant's TRASOP Account shall be made in
Shares; provided, however, that a Participant or Beneficiary shall have the
right to elect, on a form furnished by and submitted to the Company, to receive
a distribution, other than a distribution upon termination of TRASOP, in cash.
Except in the case of a final distribution from a Participant's TRASOP Account
and a distribution of the Participant's entire TRASOP Account balance after such
time as all Shares in a Participant's TRASOP Account have become Unrestricted
Shares, all distributions from such TRASOP Account shall be made in respect of
whole Shares only, and any fractional Share which is otherwise distributable
shall be retained in such TRASOP Account until it can be combined, in whole or
in part, with another fractional Share which shall subsequently become
distributable, so as to make up a whole Share. In the case of a final
distribution from a Participant's TRASOP Account (except a distribution upon
termination of TRASOP) or in the case of a distribution of the Participant's
entire TRASOP Account balance after such time as all of the Shares in the
Participant's TRASOP Account have become Unrestricted Shares, such distribution
shall be made in respect of the number of whole Shares then remaining in the
Participant's TRASOP Account, together with a cash payment in respect of any
fractional Share based on the closing price of a Share as reported on the New
York Stock Exchange consolidated tape on the last trading day of the month
immediately preceding the month in which such final distribution is made. The
Trustee, in each such case, shall purchase such fractional Share from the
Participant at a price equal to the cash payment to be made to the Participant.
Whenever the Trustee requires funds for the purchase of fractional Shares, such
funds shall be drawn from the accumulated income of the Trust, if any, and
otherwise shall be advanced by the Company upon the Trustee's request, subject
to reimbursement from future income of the Trust. All fractional Shares so
purchased by the Trustee shall be allocated to the TRASOP Accounts of the
remaining Participants at such intervals as shall be determined by the Plan
Administrator, but no later than the end of the next succeeding Plan Year. The
Trustee shall sell any Shares in respect of which a cash distribution is to be
made. The Trustee may make such sales on any securities exchange where Shares
are traded, in the over-the-counter market, or in negotiated transactions. Such
sales may be on such terms as to price, delivery and otherwise as the Trustee
may determine to be in the best interests of the Participants. The Trustee shall
complete such sales as soon as practical under the circumstances having due
regard for any applicable requirements of law affecting the timing or manner of
such sales. All brokerage commissions and other direct selling expenses incurred
by the Trustee in the sale of Shares under this Subsection 13.04D shall be paid
as provided in Section 10.05.
E. Upon any termination of TRASOP pursuant to Section 11.02, the Trust
shall continue until all Shares which have been allocated to Participants'
TRASOP Accounts have been distributed to the Participants, unless the Board
directs an earlier termination of the Trust. Upon the final distribution of
Shares, or at such earlier time as the Board shall have fixed for the
termination of the Trust, the Plan Administrator shall direct the Trustee to
allocate to the Participants any Shares then held by the Trustee and not yet
allocated, and the Trustee shall distribute to the Participants any whole Shares
which have been allocated to their TRASOP Accounts but which have not been
distributed, shall sell all fractional Shares and distribute the proceeds to the
respective Participants entitled to such fractional Shares, shall liquidate any
remaining assets (other than Shares) held by the Trust, and shall apply the
proceeds of such liquidation and any remaining funds held by the Trustee, the
disposition of which is not otherwise provided for, to a distribution to all
Participants then receiving a final distribution of Shares, in proportion to the
whole and fractional Shares to which each is entitled; and the Trust shall
thereupon terminate.
F. Notwithstanding any other provision of this Plan, unless a
Participant otherwise elects in writing on a form furnished by the Company:
(a) Distribution of a Participant's TRASOP Account balance will
commence not later than one (1)
year after the close of the Plan
Year - (i) in
which the Participant terminates
employment with the Company by
reason of Retirement upon or after
attainment of Normal Retirement
Age, death, or disability, or
(ii) which is the fifth Plan Year following the Plan Year in
which the Participant terminates employment with the
Company for any other reason, and the Participant is not
reemployed by the Company before such Plan Year.
AND
(b) Distribution of the Participant's TRASOP Account balance will be
in five (5) annual distributions as promptly as practicable after the end of
each Plan Year; provided, however, that a TRASOP Account balance that equals
$3500 or less shall be distributed in a single distribution as soon as
practicable, but not later than 60 days after the close of the Plan Year in
which the Participant's termination of employment occurs. Each such annual
distribution shall be in respect of the number of Shares, rounded down to the
nearest number of whole Shares, which most closely approximates the entire
balance in the Participant's TRASOP Account as of December 31 of the previous
year divided by the number of annual distributions remaining to be made under
this subsection, except that the fifth such distribution shall be respect of the
entire balance in the Participant's TRASOP Account as of the preceding December
31. Each such annual distribution shall be taken pro rata from all contribution
years in Participant's TRASOP Account.
G. A Participant whose employment with the Company is terminated by reason
of Retirement, disability or any other reason (other than death) may elect in
such a manner and on such conditions as may be prescribed by the Company to have
his TRASOP Account balance distributed in one of the following forms:
(i) a single lump sum distribution as soon as practicable, but not
later than 60 days after the end of the Calendar Year in which
the Participant's termination of employment occurs; or
(ii) a distribution deferred until the last day of a calendar month
not later than the calendar month in which the Participant
attains age 70, as designated by the Participant, in which
event the distribution of the Participant's TRASOP Account
balance as of the last day of the calendar month so designated
by the Participant shall be made in a single lump sum as soon
as practicable after such calendar month.
13.05 Diversification of TRASOP Accounts.
A. Definitions
The following terms shall have the following meanings for purposes of this
Section 13.05:
(a) "Qualified Participant" shall mean a Participant who has a
TRASOP Account and has attained at least age 55 and completed
at least 10 years of participation in TRASOP.
(b) "Qualified Election Period" shall mean the first ninety (90)
days following the end of Plan Year 1987 and of each Plan Year
thereafter.
(c) "Eligible Shares" shall mean Shares added to a Participant's
TRASOP Account after December 31, 1986.
(d) "Diversifiable Amount" shall, with respect to any Qualified
Election Period, mean twenty-five percent (25%) of the
number of Eligible Shares in the Participant's TRASOP
Account as of the end of the preceding Plan Year. However,
if the Diversifiable Amount for any Qualified Election
Period shall have a value which may be deemed "de minimis"
under regulations issued by the Secretary of the United
States Department of the Treasury, then there shall be no
Diversifiable Amount available for such Qualified Election
Period.
B. Eligibility for Diversification
Each Qualified Participant shall, beginning with the Qualified Election
Period in 1988, have the right to elect to diversify, by means of a distribution
of whole Eligible Shares only, all or some portion of the Diversifiable Amount
in his TRASOP Account during each of the six (6) consecutive Qualified Election
Periods following the 1987 Plan Year or the later Plan Year in which such
Participant first became a Qualified Participant, provided, however, that,
notwithstanding subsection 13.05.A.(d), the Diversifiable Amount in the sixth
Qualified Election Period for each Qualified Participant shall be fifty percent
(50%) of the number of Eligible Shares in his TRASOP Account as to the end of
the preceding Plan Year. A distribution pursuant to this Article 13.05 must be a
minimum of ten (10) Shares, or all Whole Shares comprising the Diversifiable
Amount for such Qualified Election Period if less than 10. Each Qualified
Participant who desires to elect diversification under this Section shall,
during the Qualified Election Period, complete and execute a diversification
election and consent form provided by the Company. Such election may be revoked
or modified or a new election may be made in its stead within the Qualified
Election Period, upon the expiration of which the diversification election shall
be irrevocable.
Diversification Procedure
(i) TRASOP shall, within the 90 day period following each
Qualified Election Period, distribute to each Qualified
Participant who has elected to diversify under this
Section, the number of whole Eligible Shares which most
closely approximates, but does not exceed, the number of
Eligible Shares duly elected to be diversified by each such
Qualified Participant. Failure by a Qualified Participant
to provide required consents to distribution of any
Diversifiable Amount, shall relieve TRASOP of all
obligation to make any such distribution.
(ii) To the extent a Qualified Participant has Eligible Shares
which are Unrestricted Shares in his TRASOP Account, such
Unrestricted Shares shall be distributed pursuant to this
Section 13.05. Only upon exhaustion of all such Unrestricted
Shares may additional Eligible Shares then be distributed
hereunder.